Great piece in today's Bakersfield Californian by reporter Ryan Schuster, on the shady dealings in the local real estate offices.
The truth is coming out on all the real reasons for the run up in prices. All the local fraudsters will be exposed. We know who you are and the end is near. If anyone has any additional information or would like to report more cases of real estate shady dealings email me, and if you don't trust me, email Ryan @ the Bakersfield Californian:
Appraiser: local fraud rampant
Authorities alerted about suspicious mortgage cases
BY RYAN SCHUSTER CALIFORNIAN STAFF WRITER
e-mail: email@example.com Friday, Apr 20 2007 11:46 PM
Last Updated: Friday, Apr 20 2007 11:46 PM
A local home appraiser is alleging widespread mortgage fraud in Bakersfield’s housing market, accusing local real estate professionals of artificially inflating prices to generate illegal profits.
Appraiser Gary Crabtree said Friday he has alerted federal, state and local authorities to “suspicious” home sales in the Bakersfield area. But he said he believes what he has found is just the beginning.
“I think I’ve just scratched the surface,” Crabtree said. “I know there are other people in the real estate industry in Bakersfield that have knowledge of this. They are just not talking.”
After documenting 22 suspect cases in the last year, Crabtree said he has referred six of the strongest instances to the FBI, California Department of Real Estate and California Office of Real Estate Appraisers, and three to the Bakersfield Association of Realtors. He also has attempted to notify the lenders involved in each of the 22 cases.
Crabtree said some of the properties in question may have been “flipped” — purchased and sold for profit — by investors, real estate professionals or so-called straw man buyers whose identities and credit histories were used to secure loans. The cases include what Crabtree said appear to be fraudulently inflated sales prices and buyers purchasing properties with 100 percent financing.
Some buyers received money back at the close of escrow, Crabtree said, sometimes under the guise that the money would be used for installing amenities that were not installed, such as backyard landscaping.
Crabtree said he believes some real estate agents and brokers as well as lenders and appraisers may have taken part, while others were taken advantage of in the scheme.
Some of the properties have gone into foreclosure or received notices of default, Crabtree said, leaving lenders holding the bag.
“It has falsely inflated values,” Crabtree said. “Foreclosures will follow.”
Powers said a relative who earns about $10 an hour was approved for a $200,000 loan and asked to falsify documents to say he made more money.
“If anybody asks you to tell a lie or an untruth to get qualified for a loan, you shouldn’t do it,” Powers said. “If you have to tell a lie, don’t do it, even if you want the house real bad.”
Karpe confirmed that his organization received information from Crabtree, but said the potential wrongdoing falls outside the association’s policing authority. He said the Realtors association would wait to see if any punishment was handed down from higher authorities.
“Once some of the investigations go through and people get their just punishment, it will clean things up,” Karpe said. “But you are always going to have people pushing things. Most of the people in our business do good business, but a couple grab the headlines and it taints the whole industry. I don’t like it.”
Crabtree said he began tracking the questionable transactions so he wouldn’t use them as comparable properties when doing appraisals.
Crabtree said word is out in local real estate circles that he has provided information to agencies about potential improprieties.
He said he has lost business as a result and others in the industry have stopped talking to him for fear of being implicated.
But he said he believes it is the right thing to do.
“I could have just let this gone on and not said anything to anyone,” Crabtree said. “But it is my responsibility as an ethical appraiser to report these cases of suspicious activity.”
Saturday, April 21, 2007
Posted by Bakersfield Bubble at 7:48 AM