Fraudtastic Times at 176 Lewis Avenue
We were browsing the upcoming foreclosure auctions listed on Property Shark when this one at 176 Lewis Avenue in Bed Stuy caught our eye. Check out the action on it back in the fall of 2006: The lender handing out that $675,000 mortgage must have really done some hard work on that appraisal! 176 Lewis…
We were browsing the upcoming foreclosure auctions listed on Property Shark when this one at 176 Lewis Avenue in Bed Stuy caught our eye. Check out the action on it back in the fall of 2006:
The lender handing out that $675,000 mortgage must have really done some hard work on that appraisal!
176 Lewis Avenue Profile [Property Shark] GMAP
SUCKAAAAAAAAAAAAAAAA
sh*t, I’m paying for this resolution.
cry me a river please.
white collar crime is so so much juicier and ton less jail time
The Brooklyn DA got a grant to set up a mortgage fraud unit. I am not sure what results if any have been achieved.
Snappy,
Very lax lending policies, enabled by diffusion of lender responsibility due to resale market and securitization, made it easy for this kind of bs to go on, but it is not the cause of the majority of mortgages that tanked during crisis. There’s a mixture of loans that lenders misrepresented to borrowers with onerous surprise terms, there are people who were not misled but borrowed too much (both they and their lenders should have known better), there are people who bought and borrowed within their means but lost their jobs before or during recession and defaulted (couldn’t just sell to cover mortgage with declining values), as well as varying types of fraud. Very hard to tailor a program to deal with each case with moral precision, although I think theoretically there are provisions to deal with fraud. Whether those are invoked or not is another matter.
I agere with babs that banks are having trouble getting the balance right. It’s more work for a bank to take a good look at each loan and borrower and think about it. Easier to hav cookie cutter rules.
I learn so much from this website!
Are any of the fruadulant buyers/sellers being prosecuted?
I agree that there was a lot of abuse before the new appraisal rules came into play, but the pendelum has now swung too far the other way, as anyone who’s recently lived through an appraisal can most likely attest. I’ve had appraisers who’d never been to Brooklyn before and knew nothing about the neighborhoods and others who didn’t know what a co-op was (I have a colleague who had an appraiser who asked her, “So why is this called a coop?” as in chicken coop, not co-op). The problem is now that banks and mortgage brokers have no say in selecting the appraisal compnay at all; they’re chosen solely on basis of price, hence the influx of LI and Rockland-based firms. Luckily, all my appraisals have been OK, because I was able to provide good comps and point out the value elements of the property – I know a lot of FSBOs and refinancers who weren’t so lucky.
I agree MM. This sort of fraud is so damaging, it is quite annoying to see fraudsters treated with less severity because they are robbing banks with forgeries rather than guns.
Benson,sounds like a good plan re separating appraisal from the bank issuing the mtg. And yes, MM, these folks need to be prosecuted, no deals cut, restitution made if possible.
Here’s hoping clear cut cases like this will be investigated and those responsible prosecuted to the full extent of the law. Not only do they collectively hold responsibility for undermining the economy, they also destroy the fragile economy of places like Bed Stuy. Inflated prices prevent those who could otherwise afford to buy here from doing so, keeping investment by the middle class artificially low, preventing the overall growth of the community. It’s a cumulative snowball effect, all generated from greed.
Snappy;
One of the reforms that have been passed is a requirement that the appraisal company be independent of the bank. In the past the appraiser was often from a subsidiary of, or in association with, the banks who were trying to sell these outsize mortgages. As Maly mentioned, they would often get a cut of the deal in return for the favor of overstating the property’s worth.