Is Wells Fargo Playing Games? – Tell Us Your Scam Story…
So talking to a friend the other day who is one of the lucky ones thanks, potentially, to some good old-fashioned game playing on the part of his mortgage appraiser. Seems that he bought a house 3 years ago and was ready to refinance it so he called in Wells Fargo. This is where it gets strange.
Apparently the only house that they could find to comp against his house for the appraisal was HIS house based on its purchase price from 3 years before. What’s cool is that his house, even given all the stuff going on in the macro economy, hadn’t lost any value in the past three years based on that comp (neat trick!).
Of course given the increase in houses on the market how is this possible that his house was the only comp they could use? Afterall, not to far away there were many houses for sale (and many foreclosures) that were used as comps when he first bought his house (of course they weren’t in foreclosure then). Turns out that Wells decided to “tighten-up” the radius from when he had bought his house 3 years before so, one might guess, the foreclosures wouldn’t be included in the appraisal and then they couldn’t give him the loan. (another neat trick!)
But why would they want to give him a loan that exceeded the true value of the house? Well because (just like over the past few years) they weren’t going to keep it and if they didn’t get the appraisal they wouldn’t get the loan origination business. Sure enough he said that they weren’t and that it was immediately going to Fannie Mae because he had a conforming loan. VOILA!
Well its nice to know in these crazy times that some things never change.
So have you heard a recent story of financial “magic” (spelled “s-c-a-m”)? If so please share it here because you, as a taxpayer, just bought my friends house. He’s a responsible and talented guy and will make good on his loan but there are many out there that probably got the same treatment and may not be so responsible.
ARE YOU A RENTER - STOP THEY NEW YORK TIMES FROM HURTING YOU
Like this:
This entry was posted on March 11, 2009 at 11:03 pm and is filed under Stories with tags bubble, fannie mae, foreclosure, homeowner, housing bailout, housing bubble, mortgage, mortgages, refinance, refinancing, wells fargo. You can follow any responses to this entry through the RSS 2.0 feed You can leave a response, or trackback from your own site.
June 29, 2011 at 11:24 pm
I believe this is a new scam involving RELS appraisals, a company owned in part at least, by Wells Fargo, to appraise homes and designate comparables for Reverse Mortgages. This is a reverse scam from what they were doing. As Wells Fargo held my mortgage I went to them for a Reverse Mortgage. I went through the whole process. They had agreed to forgive $17,000+, and all that was needed to complete the transaction was the appraisal. I paid the $350 and the appraiser came and took measurements etc., and came up with two distressed homes of much lesser value that were out of our area which of course killed the transaction. There were many homes in my area that were sold, and were equivalent to my home but were not chosen. The appraisal turned out to be more than 20% below the value of my home, and of course the Reverse Mortgage could not be approved and the appraiser could not be challenged. It is my belief that Wells Fargo has been turning Reverse Mortgage transactions down for a long time before June 2011, theirsupposed stop date to keep the money flowing for appraisals.
March 14, 2009 at 4:37 pm
Appraisals are full of fraud. I first caught the article long before 2003 from the Wall Street Journal. Major crime element comes from … guess who ? Realtors! …. appraiserspetition.com
The concern of this petition has to do with our “independent judgment” in performing real estate appraisals. We, the undersigned, represent a large number of licensed and certified real estate appraisers in the United States, who seek your assistance in solving a problem facing us on a daily basis. Lenders (meaning any and all of the following: banks, savings and loans, mortgage brokers, credit unions and loan officers in general; not to mention real estate agents) have individuals within their ranks, who, as a normal course of business, apply pressure on appraisers to hit or exceed a predetermined value.
This pressure comes in many forms and includes the following:
the withholding of business if we refuse to inflate values,
the withholding of business if we refuse to guarantee a predetermined value,
the withholding of business if we refuse to ignore deficiencies in the property,
refusing to pay for an appraisal that does not give them what they want,
black listing honest appraisers in order to use “rubber stamp” appraisers, etc
March 13, 2009 at 7:18 pm
A response to “martin Says”: The bill that repealed the Glass-Steagall Act was introduced by Phil Gramm (R-Texas) and Jim Leach (R-Iowa). The bill was passed by Republican majority in both the House of Representatives and Senate. The voting majorities were large enough to override any presidential veto. However, Robert Rubin, Clinton’s treasury secretary had signaled that the administration was ready to sign the Glass-Steagall Act into law in any case. The effort to deregulate the financial industry was essentially bipartisan and different financial institutions such as Citigroup spent hundreds of millions of dollars in lobbying efforts to repeal Glass-Steagall. For further information/education read also about the Gramm-Leach-Bliley Act. Additional contributors to the current greed/scam environment include Alan Greenspan and the Federal Reserve. These are all interesting topics to educate oneself on. There are also many books and blogs on these topics. Finally, not much will change as long as people continue to vote in (crusty and entrenched) political incumbents and don’t do any self-education or asking of questions.
March 13, 2009 at 10:33 am
I wonder why Bill Clinton isn’t dragged before Congress and asked why he repealed the “Glass-Stegal” act in 1999 and helped usher in the beginning of this mess that occurred in Wall Street and Real Estate. I want to know why Timothy Geithner who was head of the New York Fed wasn’t aware of the nonsense and off-sheet leverage of Real Estate M.B.S. securities at major Wall Street firms. After all wasn’t that his job: oversight. And what about his mentor Robert Rubin and Larry Summers.
You mean to tell me they didn’t know what was going on at Citi. The amazing thing just as in the w.m.d. scenario is that the media never asks these questions and they expect you to always be the sucker and shock absorber for the malfeasance…I mean even Chris Dodds and Barney Frank were in bed with Countrywide…well we live in a corrupt system that is purchased by lobbyists that gave us this whole debacle…Real Estate won’t go up as long as layoffs continue!
March 13, 2009 at 5:47 am
I’d like to know where the hell the MSM is on this. This piece should be appearing in Newsweek or the WSJ.
We are so screwed.
March 13, 2009 at 7:15 am
I agree but rest assured I’m working on it. Once there are enough comments here with other such stories I can bring it to my contacts and have them dig into it with the full weight and force of the main stream media (MSM)
As a result PLEASE distribute this post to friends (or even contacts in the MSM) so we can get the background data we need.