Is the RE Market Changing?

[Mango]

Mortgage Fraud Huge in Florida FBI Report Says

"The Federal Bureau of Investigation's recent Financial Crimes Report states that mortgage fraud is a "pervasive and growing" problem in the current market climate, especially in the Sunshine State. In fact, the report singles out Florida as one of the nation's top 10 hot spots for mortgage fraud, along with Georgia, South Carolina, Illinois, Missouri, Michigan, California, Nevada, Colorado and Utah."______________________________________

The mortgage fraud in Florida was predominately in the Miami market in unsavory neighborhoods with buyers who did not qualify traditionally and or phony W2's and paystubs were submitted.

As far as being nervous about being blackballed by realtors, yes, that is something appraisers do worry about, but most appraisals are ordered by the Banker or broker, so they worry about not being able to bring in a value to make a deal work. if its a a difference of a few grand, they can find ways to make those kinds of deals work easily, but there are realtors out there including sq. footage of basements that are below grade, or rooms above garages that are really just for storage, calling a 2 bedroom a 3 bedroom, the list goes on, and trying to get $50K-100K more for a property, and yes unscrupulous brokers or bankers who don't care that someone is buying an over-priced house, just want the deal done.

Most appraisers are highly educated individuals who have advanced degrees, must take numerous appraisal courses to receive designations, apprentice for a while, and have to get continuing education in addition.

The realtors who have similar credentials are the ones who last in the business when markets return to normal although, I feel 4-6% is quite a bit of money in a booming market, but now in a market with normal marketing times, they have to be more creative with their marketing of a property, the commission becomes justified.

 

[Mango]

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I agree with Beachbummett, well said as usual Donna! :clap_1:

 

[spinDrAtl]

Mortgage Fraud Huge in Florida FBI Report Says

The Federal Bureau of Investigation's recent Financial Crimes Report states that mortgage fraud is a "pervasive and growing" problem in the current market climate, especially in the Sunshine State. In fact, the report singles out Florida as one of the nation's top 10 hot spots for mortgage fraud, along with Georgia, South Carolina, Illinois, Missouri, Michigan, California, Nevada, Colorado and Utah.

How Widespread Appraisal Fraud Puts Homeowners at Risk

Up to half of all appraisers have reported feeling pressures from lenders or brokers to overstate property values. Many appraisers go along with these pressures out of fear of losing future work. Appraisers who have not complied with such pressures report not being paid for work and being blacklisted by lenders and brokers.

Realty Times: Appraisal Fraud Most Likely Greater Than Reported

Realty Times: The Appraisal Crisis and the FBI


Mortgage News: Appraisal Fraud and the Need to Sort Out the Victims from the Perps

The petition states in part "Lenders have individuals within their ranks who, as a normal course of business, apply pressure on appraisers to hit or exceed a predetermined value," and lists six of what it terms "many types of pressures" that are brought to bear on appraisers:

The withholding of business if we refuse to inflate values;
The withholding of business if we refuse to guarantee a predetermined value;
The withholding ob business if we refuse to ignore deficiencies in the property;
Refusing to pay for an appraisal that does not give them what they want;
"Black listing" honest appraisers in order to use "rubber stamp" appraisals, etc.
The petition requests that "action be taken to hold lenders responsible and provide for a penalty on anyone who engages in the practice of pressuring appraisers to do dishonest appraisals that do not provide for independent judgments."

As of April 21, the petition had 8,326 signatures.

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and on, and on, and on....

First hand knowledge...I'll plead the 5th for right now.

Typical hyperbole and vagueness that tries to intimate that you have some secret that the rest of us don't. Intended or not, your original post had the implication that you knew of specific examples in the local area, spoken with your usual air of authority.

Although I have no doubt that mortgage fraud exists, it's normally a collusion of a group of criminals - lenders,brokers,agents,straw buyers, appraisers, etc. who work in a concentrated area (meaning a subdivision or two). Most of the articles you reference are based on broad sweeping generalizations without any concrete numbers. In Georgia, there were several mortgage fraud rings discovered that worked a couple different neighborhoods in the Atlanta area. While this is definitely a problem, it is in no way affecting the Atlanta metro area property values as a whole.

You point to an article that says 'up to half of all appraisers have reported....'. Upon further review, we find that in 2003 there was a survey of 500 appraisers in 44 states where 55% reported pressure. Then someone else took that article and wrote another article stating 'over half of appraisers surveyed reported....' and then to complete the chain, another article referenced that report and stated 'up to half of all appraisers ....' at which point you quoted it here. Most of your anecdotal posts reek of that school yard chain of one person telling another telling another whereupon the end result is quite different from the original. Half of all appraisers is quite different from 55% of 500 appraisers.

 

[spinDrAtl]

Deleted, double post.

 

[SHELLY]

Sold 2 lots for 350K each early 2004. Flipped for $589K late 2004.
Just put a comparable lot under contract.
Asking was 325K. We offered 270K
Seller countered at 310K
We countered and got it at $279K

​

There are some investors out there that understand the cyclic nature of the market and buy low, sell high.

....I'm guessing that the client who ended up with the $589K comparable lot in 2004 may not have a grasp of the cyclic nature of the market?