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  1. #1
    Join Date
    Feb 2009
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    4

    Default Appraisal Fraud/Predatory Lending

    My question involves real estate located in the State of: IN maybe OH too.

    I was am working with my parents who are getting close to being foreclosed on. After asking them a few questions I asked how much the re-fi'd their home for and the appraisal done at the time. The amount sounded absurd to me. I asked if they had the appraisal done by the county tax assessor the same year to compare. As I suspected the county assessment (39K) was about half of what the mortgage appraisers appraisal was (77K). 15 yr fixed rate with a 60k balloon payment. I just can't believe they did this.

    Is this fraudulent appraisal or sub-prime lending re-fi for more than the house is really worth, or are there different appraisal criteria between mortgage company's and tax assessors process of appraisal. I would think that both would be largely based on "fair" market value of the home and property.

    Also, my parents live in this house in IN but the mortgage co. is in OH. The paperwork says the contract is governed by OH law. So if they foreclose on a property in IN that is financed in OH does it matter if IN is a deficiency state or if OH is a deficiency state? I am confused now. Need Help!

  2. #2
    Join Date
    Apr 2008
    Location
    Texas (Dallas area)
    Posts
    1,404

    Default Re: Appraisal Fraud/Predatory Lending

    Quote Quoting lawcurious
    View Post
    My question involves real estate located in the State of: IN maybe OH too.

    I was am working with my parents who are getting close to being foreclosed on. After asking them a few questions I asked how much the re-fi'd their home for and the appraisal done at the time. The amount sounded absurd to me. I asked if they had the appraisal done by the county tax assessor the same year to compare. As I suspected the county assessment (39K) was about half of what the mortgage appraisers appraisal was (77K). 15 yr fixed rate with a 60k balloon payment. I just can't believe they did this.

    Is this fraudulent appraisal or sub-prime lending re-fi for more than the house is really worth, or are there different appraisal criteria between mortgage company's and tax assessors process of appraisal. I would think that both would be largely based on "fair" market value of the home and property.

    Also, my parents live in this house in IN but the mortgage co. is in OH. The paperwork says the contract is governed by OH law. So if they foreclose on a property in IN that is financed in OH does it matter if IN is a deficiency state or if OH is a deficiency state? I am confused now. Need Help!
    Actually Ohio and Indiana are both judicial foreclosure states and they both allow for deficiency judgments.

    Here is a link to Ohio law;

    http://stopforeclosure.com/Ohio_Foreclosure_Law.htm

    Here is a link to Indiana law;

    http://stopforeclosure.com/Indiana_Foreclosure_Law.htm

    Durring the RE boom values where going up much higher and faster then the counties could catch up. You can check the PRIOR value of the home for up to a few years back. Just look at the property value graph on this link;

    http://www.zillow.com/

  3. #3
    Join Date
    Feb 2009
    Posts
    4

    Default Re: Appraisal Fraud/Predatory Lending

    Quote Quoting OhMy
    View Post
    Actually Ohio and Indiana are both judicial foreclosure states and they both allow for deficiency judgments.

    Here is a link to Ohio law;

    http://stopforeclosure.com/Ohio_Foreclosure_Law.htm

    Here is a link to Indiana law;

    http://stopforeclosure.com/Indiana_Foreclosure_Law.htm

    Durring the RE boom values where going up much higher and faster then the counties could catch up. You can check the PRIOR value of the home for up to a few years back. Just look at the property value graph on this link;

    http://www.zillow.com/
    Should it take 7 years to catch up, or get close to the mortgage co. appraisal? The county assessor appraisals have never even come close to 77k since they have lived there. Even this last year it was only appraised at 60k. I understand the market has since busted but my mom has the county records from then until now. It has a steady rise, no market value dip in recent years. It did jump from the year prior, doubled, by the co. appraisal.

    What about predatory lending? I feel like they were "preyed" on because they are lower income of middle-class with the highest level of education is high school. They didn't know any better and simply wanted to get their monthly payments lowered through a re-fi. At 7.9% though?

    Is this just legally being taken advantage of because of their own ignorance? Caveat Emptor?

    I really appreciate your input and help. It makes me want to get my JD.

    I am beginning to think they need to begin looking for an apartment or a 55 and older community before foreclosure ruins their credit.

  4. #4
    Join Date
    Apr 2008
    Location
    Texas (Dallas area)
    Posts
    1,404

    Default Re: Appraisal Fraud/Predatory Lending

    It is very possible that a fraud was done by the mortgage broker.

    You can ask the lender for everything the broker sent them for the loan to be approved.

    You can then see if numbers where stretched, income lied about etc and then bring charges against the broker. HOWEVER, sometimes this can backfire and you can find your parents facing criminal charges as well. Finger pointing can be dangerous.

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