Mortgage Servicing Fraud
occurs post loan origination when mortgage servicers use false statements and book-keeping entries, fabricated assignments, forged signatures and utter counterfeit intangible Notes to take a homeowner's property and equity.
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Anonymous
Discovered appraisal fraud on current refinance from 2006. 20% increase in value from '05 to '06, less than 18 months since purchase, or 174k to 220k. Used distant, newer, larger comps, wrong sq.ft., etc. Also, appraisal matched LTV to the dollar and the "construction approach" mirrored the Title insurance figure.

The title insurance amount is odd because it seems to have been established in the loan docs prior to completion of the appraisal, and I'm almost certain before the type of loan had been chosen. What I mean is the title insurance was matched to cover the neg-arm ceiling before the neg-arm was selected and before the appraiser determined the value. I suppose its safe to assume the lender 'knew' that was the loan they were going to issue no matter what.

Aside from the current refinance,

which led to investigating the original loan from '05. Even more startling was its appraisal. Previous unit sales were not used and rather discarded in favor of distant, newer, and larger comps. The previous units had sold within the 4-12 months prior to purchase. And what comps could be a better comparable to the subject than units attached to the same building? Many upgrades were noted in the appraisal that did not exist, etc. Buyer agreed to 176k, but was not aware that previous sales of neighboring units recently sold at 140k and 154k four months earlier.  

Both appraisers have not been previously charged with USPAP violations, though, curiously both work for themselves, and both have partners at their places of business that have been charged with USPAP violations. One appraiser's own husband who is a partner, and the sister of the second appraiser. Neither of these parties are affiliated however. Just food for thought.

Going back to the original loan purchase (05). One very disturbing trend emerged from the folder of loan docs. Apparently, the sellers and the real estate broker had arranged to pay closing costs. Interestingly, Wells Fargo issued four (4) seperate HUD-1 Settlement Statements, the last of course, had the seller paid closing costs removed. The buyer, paid closing costs to the lender, I do not know if the seller paid closing costs too. The sales contract signed by the sellers and the real estate broker agrees to pay up to % of closing. Why would the lender remove do that and ask for costs?

This was also a first time home purchase that the lender spit into 80/20 to "avoid PMI." I believe this was actually done based on DTI and LTV. Needless to say this was also an 5/1 ARM, but not neg.

The refinance was proposed as a 10yr I/O on the GFE, then it became a 10yr I/O, 5yr Fixed Rate, 5/6 Neg-Option Arm. Get all that? There are those three (3) disclosures. And I think its worth mentioning because a loan is supposed to be made with some benefit to the borrower. From the loan application and the GFE one can clearly see how the lender "Quicken" cleverly compared the existing mortgage payment to the "proposed payment" in both docs.

I won't go into refinancing too much, but I assure you this home was not used as an ATM or to consolidate debt. It was simply to have one single mortgage and rate and to avoid the inevitable 80/20 5/1 recast. Well, there were still four (4) years remaining before that happened, but with interest rates supposedly low for '06, It seemed like a good decision to refinance at that time. Or, so the lenders all insisted only none of them would write a traditional 30yr mortgage. After losing a month and $400 GF deposit to Lending tree, only added even more pressure to the whole closing process.  

I'm all out of ideas, and attorneys seem to be all out of interest here in FL. One attorney wanted to force foreclosure to avoid paying the mortage and then wanted to charge a monthly retainer plus almost 100k if they won. What is considered a win? "Well, a reuction in the principle you owe could That's not a win, in my opinion that's extortion. And I assure you, this was a law firm that is currently big and not under the watchful scope of the AG. At that point it was decided that all hope in stopping the unlicensed collection of the mortgage was hopeless, despite the lack of county record assignments.

If anyone could please share with me your thoughts, informative or humorous as they may be, I welcome your input. Because at this point, although foreclosure is still many months away, Pro Se just seems so pointless compared to the alternatives. Thanks, and thank you for reading my post.

-in FLA.

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Stephen
Former appraiser here.  Threw my license in the trash and went to the FBI.  Real estate appraisal is a total farce.  Appraisers are given a number to back into and if they don't hit the number, their phone stops ringing and they don't get paid.  99% of appraisals are fraudulent.  The system is designed to support the real estate industry.

Cause of Crisis at Heart of Hearings

 

SACRAMENTO, Calif. -- The president's panel on the financial crisis heard California experts who had plenty of blame to pass around. Mentioned as cultprits in testimony made at the state's capitol were appraisers, originators and investment bankers. (Sept. 23)

 

MortgageDaily.com


Read my essay "The Truth About Real Estate Appraisal" on Smashwords.com

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