why am I not surprised at this find? this is so common place it is sickening. keep this address handy, I’m pretty sure we’ll find it on the NOD roll in 6 months.

Hey but if you need to sell, he gets you your number, legally or otherwise!

Josh

You don’t know the half of it (and neither do I). This property was not exposed to the market for “only” 109 days. It was listed 3 times, for a total of almost 13 months before it finally sold at 10% above the listing price.

No matter how you cut it, if the property was listed between $649k – $695k for over a year, and there have never been any sales in this immediate neighborhood that exceeded $650k then I think most people would interpret the listing prices as having been more then adequately tested in the market.

I know how the appraiser did it (used outside comps from better neighborhoods) and I can guess which comps they used, but I’m amazed the lender was dumb/greedy enough to buy it. Somebody is obviously asleep over there. Either that, or they’re high.

The seller originally purchased the property in 03/2004 and refinanced into a 96% loan in 12/2004; and then they hit the property in 05/2005 for another $100k. They first listed the property in 08/2005 at basically a breakeven. They literally didn’t have any room to go any lower than the bottom of their listing range. This buyer apparently did an 80/20, and they’re maxed out too.

I wonder where the extra $100k went ($775K vs. $675k?

These kinds of fraudulent transactions are becoming very common all across the country. The lender is left holding the bag.

I have recently seen a couple of properties in San Diego that were listed, had their listings cancelled or expired, and the properties then sold for 10-15% higher a few months later, at prices that could not be supported by the market, without being reported on the MLS.

Except in very rare/strange instances, an appraiser cannot legitimately appraise a property for 10% over the list price, especially when the property has been adequately exposed to the market. On the appraisal form, there is a section that asks if the subject property has been listed for sale in the past 12 months, and if so, the appraiser must give the details of the current or recent listings.

The only way a lender can get an appraised value of 10-15% over the list price is if:

A.) The appraiser is dishonest, plus an adequate appraisal review is not done by the lender, or

B.) The lender does not require an appraisal. There are a number of loans that are done without an appraisal. The lender does an “automated valuation”, with technology similar to Zillow or Cyberhomes.

I really don’t feel sorry for any lender that gets taken in a scam like this. If they’re that careless with their money, they deserve to lose it.

Do you think this only goes on in RE? Shady, back room market dealings go on everywhere in our economy from Corporate America to the Mom and Pop Convenience store on the corner.

I am an agent up here (not presently working, but licensed for 16 years) in the San Fernando Valley and I have seen a number of instances of this practice. There was actually one that was so blatant, I finally complained to the board of realtors. Of course, my complaint was most likely placed in the “round” filing bin in the office as I have never heard another word.

This particular home was listed for $1,060,000 for months and actually went in and out of escrow once. Then suddenly, the home is reported sold and simultaniously the ASKING PRICE is RAISED to $1,250,000. I actually complained to the listing agent, who dropped the newly increased price back to $1,225,000. Well, it closed, and guess what the sale price was, $1,225,000!!!

So, if the low asking price was going to raise a red flag to the lender, this agent sure found an easy solution, just raise the price AFTER the sale! Only a total idiot could not see the blatant fraud taking place here.

The Southland Reagional Assoc of Realtors couldn’t have cared less. Nice, huh?

I’m with ya’, greekfire. Something doesn’t add up here. If a member of our community with no stake in this deal can see the obvious fraud here, how can a lender who is loaning out 3/4 of a million dollars not see it? I’m thinking this loss gets thrown back on the public somehow — possibly in the form of a package of mortgage-backed securities that are then sold to pension funds.

I’d like to know who the lender was for this transaction and what they did with the loan. I would especially like to know if they sold the loan and who the ultimate (bag) holder is.

This type of activity really pisses me off. It distorts the market and keeps honest, hard-working, fiscally responsible folks like ourselves from owning homes because the prices are jacked up beyond all reason through fraudulent activity like this.