WaMu & Widespread Real Estate Appraisal Fraud
WaMu reports after the bell, speaking of WaMu...
Too Gloomy in Sacramento... Sacramento appraisor Jennifer Wertz is suing WaMu, claiming she was blacklisted last year for providing a housing market forecast that was too gloomy.
Wertz says she completed appraisals on two houses in May and then quickly got a call from a WaMu sales manager...
demanding she change her outlook to "stable" so a loan could be approved.
The WaMu sales manager also demanded Wertz change her appraisal process to produce higher prices for the properties she was evaluating.
The 200% solution... Home appraiser Julian "Tony" Perez conjured $7.5 million out of thin air in the first six months of 2001 by overvaluing 33 condominiums in the Atlanta area.
Developer Phillip Hill, used the appraisals to resell the properties. Perez testimony:
"Those values are super over-inflated, probably double what the amount of that property is probably worth."
Almost 75% of appraisers say that mortgage brokers have asked them to bend the rules.
Hill landed a 28 year prison sentence for using the appraisals to defraud lenders out of $112 million and Perez pleaded guilty to conspiracy to commit wire and mail fraud and is awaiting sentencing.
The Nattering One muses... this is common practice which we have Nattered about before.
Real estate is not worth the price people are paying for it now, much less at market peak two years ago.
But then again, when people who can't read, write or count, and stop thinking like investors who in worst case need to break even, well you get the point.
Those who are buying at current "discount" prices are catching knives falling at terminal velocity and taking great risk.
The mothballing bank REO's, lenders, builders and realtors are all colluding to "soften" the landing.
This misguided effort will be to no avail, and only worsen matters, as the natural market process of price discovery will ultimately thresh the wheat from the chaff.
Last time, from market peak 1989 to bottom 1995, six years. This time is different, its exponentially worse and could take much longer to hit bottom.
According to the optimistic lemming pollyanna's real estate will turn around soon, just like the economy.
We said it before, we say it again, wake up to the fundamental economic differences which are...
too much loose money, greedy lending practices, lowered risk premimums and price increases NOT based in wage or rent increases.
Newsflash, we are just 18 months in and 15% to 50% down, depending on micro economic climate...
with the latency of the housing & service based economy officially tipping over on a national and global basis...
get ready for the best part of the ride down, for the next 4.5 years minimum.
Too Gloomy in Sacramento... Sacramento appraisor Jennifer Wertz is suing WaMu, claiming she was blacklisted last year for providing a housing market forecast that was too gloomy.
Wertz says she completed appraisals on two houses in May and then quickly got a call from a WaMu sales manager...
demanding she change her outlook to "stable" so a loan could be approved.
The WaMu sales manager also demanded Wertz change her appraisal process to produce higher prices for the properties she was evaluating.
The 200% solution... Home appraiser Julian "Tony" Perez conjured $7.5 million out of thin air in the first six months of 2001 by overvaluing 33 condominiums in the Atlanta area.
Developer Phillip Hill, used the appraisals to resell the properties. Perez testimony:
"Those values are super over-inflated, probably double what the amount of that property is probably worth."
Almost 75% of appraisers say that mortgage brokers have asked them to bend the rules.
Hill landed a 28 year prison sentence for using the appraisals to defraud lenders out of $112 million and Perez pleaded guilty to conspiracy to commit wire and mail fraud and is awaiting sentencing.
The Nattering One muses... this is common practice which we have Nattered about before.
Real estate is not worth the price people are paying for it now, much less at market peak two years ago.
But then again, when people who can't read, write or count, and stop thinking like investors who in worst case need to break even, well you get the point.
Those who are buying at current "discount" prices are catching knives falling at terminal velocity and taking great risk.
The mothballing bank REO's, lenders, builders and realtors are all colluding to "soften" the landing.
This misguided effort will be to no avail, and only worsen matters, as the natural market process of price discovery will ultimately thresh the wheat from the chaff.
Last time, from market peak 1989 to bottom 1995, six years. This time is different, its exponentially worse and could take much longer to hit bottom.
According to the optimistic lemming pollyanna's real estate will turn around soon, just like the economy.
We said it before, we say it again, wake up to the fundamental economic differences which are...
too much loose money, greedy lending practices, lowered risk premimums and price increases NOT based in wage or rent increases.
Newsflash, we are just 18 months in and 15% to 50% down, depending on micro economic climate...
with the latency of the housing & service based economy officially tipping over on a national and global basis...
get ready for the best part of the ride down, for the next 4.5 years minimum.
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