Posted on 12/18/2007 8:50:46 AM PST by DCPatriot
Sources with knowledge of the probe at the Villages at Rippon Landing said investigators are examining why a number of townhouses in a five-block area were bought and resold quickly, for a large profit, even as the real estate market was cooling and unsold homes dotted the neighborhood. The new buyers sometimes failed to pay the mortgages, sending homes into foreclosure and hurting lenders. Renters found themselves unexpectedly forced to move.
< snip >
A Northern Virginia appraiser who spoke on the condition of anonymity said he approached authorities several months ago after becoming suspicious when a client told him about an opportunity to make quick money from buying a townhouse in the Woodbridge subdivision. He reviewed land records in Rippon Landing and found that some of the sales prices had unexpectedly spiked at a time when the broader market was falling.
(Excerpt) Read more at washingtonpost.com ...
ping
—sounds about like Hillary’s cattle futures deal of years ago—
Crap like this makes me not even want to be assoiated with this industry at times.
Although I know most of us don’t do it...enough do that it gives us all a bad name.
Not to mention what it does to the market.
I’ve seen this stuff happen. Straw buyers come in with a good enough credit score, the property gets an unusually high appraisal, they put on a maximum loan, and they split the loot and walk away.
On the plus side, the more get-rich-quick idiots are involved, the easier it is to unravel the whole mess, send the perps to jail, and recover assets...
If more appraisers were honest like this guy, we wouldn’t be in this mess. Colluding appraisers were a key part of the subprime mortgage-driven real estate bubble.
The underwriter that signs off on the loan is supposed to catch these types of things.
Guidelines USED to be that only comparable 'SOLD' properties within the past sixty (60) days could be used...which would be another factor that could close this loophole.
Anybody up for a little racial profiling or speculation about where that money went?
How about the FBI investigating why crude oil prices and thus gasoline staying at nearly $3.00/gal since the dims regain power in Congress?
Fraud like this attracts local scumbags like Cuomo to sue our biggest banks into oblivion.
Not to mention the suits being brought by foreign bond holders.
ping
Yeah if they can freeze rates for subprime borrowers why can't they freeze gas prices for the rest of us ?
I blame it on the gas stations for not warning us that prices would rise !
Who is Virginia Mortgage and why is the FBI probing her? ... *snicker* ... Sorry, I can 't stand headlines with the word 'Probe' in them! The writers do it on purpose. ... and yes, I know it is a juvenile response but so what.
When did gas stations have the ability to know when prices change? Seriously? Most are independant owners locked into raac agreements. They have no control.
Yep, a couple of corrupt appraisers start the ball rolling. Once they have helped to facilitate even just three or four closed sales, those sales become legitimate comps for honest appraisers. From there, the snowball rolls downhill on its own.
Sorry I left off the /sarcasm tag.
Many of us are. The problem is that the ethical appraisers have either been driven out of business or are just getting by as the ones who are willing to inflate values and commit fraud have been making a killing. A general rule of thumb used by Mortgage Brokers is that the first time you don't do what is needed for their deals to close will be the last time you receive an appraisal order from them. Thank goodness that there are some banks out there who still want good work.
I remember that...even as recently as 2002.
60 days was the rule...or 90 at worst. You might have been allowed to go out to 6 months in a rural or specialty area (waterfront etc) but 60-90 days was the norm.
I live about 20 miles from Woodbridge just inside the Beltway in Fairfax County. In my neighborhood, within 2 blocks of where I live there are four houses in repo.
I looked up the sales history and was stunned to find that they were all flipped to Latinos for 150-200k above market. The new owners stayed 3-6 mos, and were repoed.
I went outside my neighborhood a few miles and found the same thing. I even found one case where it looked like the lender made the real estate agent buy it back and resell it to them at below market after the Latino defaulted.
Since the FBI has brought in the Postal Inspection Service, I would say they are completely overloaded. A mail fraud conviction is easy and usually quick.
I have also noticed that some lenders are having fire sales and selling at around 2002 prices with about a 200k loss.
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