I looked at Corte Brezo. I’ve done some reviews in that neighborhood back when it was still under development so I know it reasonably well.

This property originally sold for the $818k in 07/2004, then it resold in 01/2007 for the $1,100,000. The first is $880k and the second is with the same lender at $220k. I haven’t seen a lender walk away from a 20% second yet but you never know.

I know exactly how the house was appraised for $1,100,000. The appraiser has 3 higher priced neighborhoods from different builders within a 6-block radius. Hovnanian was the low priced leader in that area. The lender was too dumb to scrutinize the appraisal.

To show exactly how stupid the lender on this sale was, there is a slightly larger model home located DIRECTLY ACROSS THE STREET that originally sold in 09/2004 for $861,000 (higher than the subject’s $818k), resold in 09/2006 for $965,000 because it had some site improvements, and resold AGAIN in 01/2007 (same time as the subject’s 01/2007 sale) for $920,000. This property DOESN’T back to RSF Rd, is a slightly larger model and it has better landscaping.

The better location (less traffic noise) and larger size of this other property is demonstrated by the higher original sale price in 2004, and in fact is typical for that neighborhood from what I’ve seen.

An appraiser who’s researching the prior sales history of our property couldn’t fail to to come across this other then-pending sale across the street. There was probably a sign in front when they went to look at the house they were appraising. There was another Hovnanian sale on Sitio Lirio in 10/2006 that also amply demonstrates this property would have been a push at $900k in 01/2007. Straight up, a$1,100,000 appraisal on this property would have obviously been a crooked appraisal, which is something I don’t often opine from afar.