Ask Bill your personal finance question

Real Estate Fraud Evidence

If the assessed value of the property we bought is less than the price we paid, is that evidence of fraud?

Purchased a home for $499,000 in September of 2008. The builder provided a second of $125,000. The Builder was Crestwood Communities. The first bank was Pomona First Federal. PFF was purchased by US Bank. In 30 days of closing the tax assessor of San Bernardino Co. Calif. sent us a current property assessment with a value of 317,000.00 (less than 30 days after purchase). We hired a lawyer and what we were told was we had a great case of fraud. The DA started to get involved. The builder's lawyer tried to bury us in meaningless paperwork. My husband lost his job, no longer could we afford fees. The bank has given us a modification. The modification expires 6-25-10. My husband has been fortunate enough to obtain employment, at a $30,000 reduction from prior position. The modification is ok. It does not include the 2nd at of $125,000. They say they do not need to. How could it have been a package deal to qualify and now it is completely by-passed. Where can we go to report this kind of fraud, where someone might care and review our legal documents for free? I am not sure if we qualify for the 10 homeowners you are recruiting, if so, sign us up. Think we have a great story. It does not seem right that the 2nd was a part of the deal to get in to the home. The appraisal to get the sale price was part of the fraud, and the elephant in the middle of the living room continues. Please advise.

Read full question
Bill's Answer
4.2
/5.0
(6 Votes)

Bills.com | Find Learn Save

First, in many California counties, it is common for the tax-assessed values to be far below the market values. Therefore, a discrepancy between the sales price and the tax-assessor's value is not evidence of fraud in and of itself, in my opinion.

However, the appraised value of your property should correspond with the market value closely. If evidence shows the appraiser and loan provider conspired to mislead the consumer and investors who provided the money for the loan, then that is the elephant in the room.

If you can show your county or city district attorney that the builder, an appraiser, and a mortgage lender or lenders had a scheme to overvalue property, sell it to unsuspecting consumers, and market the mortgages to unwitting investors, then any honest district attorney would love to present this criminal fraud case to a jury.

Similarly, if you can bring together several homeowners who were victims of a scheme to defraud them, any attorney with litigation skills and ambition would love to file a civil fraud lawsuit against the mortgage lenders. An attorney who believes you have a strong case will work on a contingency basis.

I would like to offer one note of caution in the form of stating the obvious. Some areas of California have experienced a relatively small dip in home values in recent years. Other areas have been devastated with property values dropping to half of what they were at the peak, and sometimes less. Just because the market value of your property dropped after your purchasing it in 2008 may not be evidence of anything other than you are in a neighborhood where residential values dropped across the board. I am not saying you have no case -- you may have an excellent case. I just want to remind you what has happened to the value of residential property since the peak in 2007.

I hope this information helps you Find. Learn & Save.

Best,

Bill

Bills.com

Get Mortgage Rates!
4.2
/5.0
(6 Votes)

People also like to Read

Betsalel Cohen

Mortgage programs have different minimum credit score requirements. However, lenders often have stricter rules. It is importa... Read more >>

Daniel Cohen

FHA Loans | FHA Loans have huge benefits, including VERY low down payments and low credit limits. Get FREE info on FHA loans... Read more >>

Betsalel Cohen

Mortgage Basics - Down-payment, Equity, and LTV | Learn about mortgage terms relating to your property's value and how it aff... Read more >>

Betsalel Cohen

Whether you are refinancing or buying a home you will ask yourself if you can afford the mortgage. Learn to prepare and evalu... Read more >>

Betsalel Cohen

Qualify for a Mortgage | You can get qualified for a mortgage and the best rates by preparing yourself. Make sure that your c... Read more >>

Mark Cappel

Applying for a mortgage with bad credit and a spouse isn't as difficult as you may think. Learn the what lenders look for whe... Read more >>

Betsalel Cohen

PMI | If you are looking to buy a house and take a mortgage loan with a low down payment then PMI can...... Read more >>

Brad Stroh

Refinance My Home? If you are asking 'Should I refinance my mortgage?' or 'Is refinancing my home a good?', then check out ... Read more >>

0 Comments

1500 characters remaining
loading...