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Appraisers: Obama plan encourages fraud

admin — Thu, 11 Mar 2010 11:27:38 +0000

Real estate appraisers today announced their opposition to part of an Obama administration plan to pay homeowners in trouble to move if they agree to a short sale, saying the program will lead to mortgage fraud.
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Under the plan, which takes effect April 5, delinquent borrowers who couldn’t get a loan modification can get $1,500 to move if they sell for less than the balance of the mortgage. Banks and second mortgage lenders would get $1,000 to process each of these short sales.

The plan will allow a lender to use real estate brokers — not appraisers – to come up with a home’s value, a figure that won’t be given to the owner. If an offer comes in equal to or higher than that amount, the lender will have to accept.

The appraisers object to the “broker price opinions” to be used to determine the value of properties to establish a minimum offer, a procedure also used in government loan modification programs.

The letter a coalition of appraisers sent to Treasury Secretary Timothy Geithner states:

“We strongly believe continuing to allow ‘broker price opinions’ (BPOs) in the property valuation component will not adequately protect the public interest (consumer, borrowers, etc.) or the interests of the various parties to the loan (lenders, loan servicers, etc.) and is likely to exacerbate mortgage fraud.

“According to an independent fraud investigation firm, bank-owned fraud attributed directly to schemes involving shorts sales and REO inventories has increased by nearly 50 percent over the past year and 100 percent over the past two years.The Financial Crimes Enforcement Network and other major law enforcement officials have also issued advisories and notices highlighting fraud scenarios involving loan modification, which oftentimes include short sales.

“Generally speaking, real estate agents and brokers are not independent or properly trained valuation specialists. They have an inherent bias towards quick results and action which produces a fee for themselves irrespective of whether the lender/services/investor/property owner/borrower gets a fair return on the short sale. We believe that such conflicts can and should be mitigated by implementing basic requirements reestablishing independence and competency in the valuation process.”

See the N.Y. Times story on the program HERE.

See the full letter HERE.

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Appraisers: Obama plan encourages fraud is a post from: Mortgage Insider

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The Mortgage Bankers Association (MBA) has released its Weekly Mortgage Applications Survey for the week ending March 5, 2010. The Market Composite Index, a measure of mortgage loan application volume, increased 0.5 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 1.2 percent compared with the previous week.Read more

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Appraisal Institute leads opposition to Obama’s short sales solution

Mortgage News Desk — Thu, 11 Mar 2010 11:27:33 +0000

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Woman Pleads Guilty to Mortgage Fraud Scam

admin — Tue, 02 Mar 2010 01:28:35 +0000

Mary J. Fox Ianniello, 46, now of Los Angeles, California, pled guilty to her role in the bank fraud scheme involving Michael Cassadei and others where they used fraudulent loan applications, appraisals, settlement statements, and other false statements and documents to induce the former First Union National Bank of Delaware to finance the sale of Capital Region, New York residential properties to third parties in amounts well in excess of their actual value, with the participants in the scheme using the proceeds from the loans to purchase the properties in much lower amounts and retaining the bulk of the funds for themselves. Ianniello admitted in Court hat she engaged in various acts in furtherance of the scheme, including submitting false loan applications, executing false settlement statements and other documents, and assisting in the distribution of the loan proceeds.

As previously reported on Mortgage Fraud Blog, on February 17, 2010, Cassadei and appraiser Elmer J. “Joe” McIndoo pled guilty to involvement in the same scheme. All three defendants face sentences of up to thirty (30) years imprisonment, a fine of up to $1 million, or both, a period of up to five years supervised release to follow any term of imprisonment, and mandatory restitution and forfeiture of assets totaling approximately $135,148.45, subject to any apportionment by the Court. Based upon the estimates presented by the government in Court, Cassadei’s advisory sentencing guidelines range was approximately 41 to 51 months imprisonment, and the range for both Ianniello and McIndoo is up to approximately 27 to 33 months. Ianniello’ssentencing was set for July 13, 2010, at 1:00 p.m., before United States District Judge Thomas J. McAvoy in Albany, New York.

The announcement was made by Richard S. Hartunian, United States Attorney for the Northern District of New York, Rene Febles, Special Agent in Charge of the Office of Inspector General, U.S. Department of Housing and Urban Development in New York, John F. Pikus, Special Agent in Charge of the Albany Division of the Federal Bureau of Investigation, and Lt. John D. Durling of the New York State Police Special Investigations Unit.

The ongoing investigation in this matter is being conducted by the Office of the Inspector General of the United States Department of Housing and Urban Development, the Albany Division of the Federal Bureau of Investigation and the New York State Police Special Investigations Unit, with the assistance of the Internal Revenue Service, Criminal Investigation Division, the United States Postal Inspection Service, and the New York State Banking Commission. It is being prosecuted by the United States Attorney’s Office for the Northern District of New York.

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