Wednesday, February 13, 2008

More information you may need if appealing your "Appeal". MLS Fraud.

Hello friends and neighbors,

Looks like the tax break some were expecting for parcels more than one acre has bit the dust due to lack of data (research) and some legislators suspected of protecting the tax cheats who claim more than one primary residence.

And Senator Brown's bill to amend the ill conceived and not debated at all House Bill 466 which lets developers run over residents, planning commisssions and commissioners with impunity is being "slow rolled" to enable Powder Mountain developers to build a case for claiming undue hardship if they must restart their nefarious Town incorporation process.

And the Property Tax Reform Blue Ribbon Study Commission, I proposed back in September, has been predictably reduced to a funded interim group of incestuous and "conflicted" lawmakers and lobbyists. Which will, inevitably, simply pay themselves using our tax dollars, to end up saying, "There's nothing really wrong with the current Truth in Taxation System. It just needs a few tweaks here and there." There is no citizen oversight. There will be no citizen nor independent participation. And there will be no credible report nor findings. Just more waisted time - fraud, waste, and abuse heaped upon us taxpayers by those we have elected to represent us.

This is simply unacceptable. This corrupt behavior and lack of mature adult supervision must stop! And the only way is via the polls in November. I hate to say it, but there is so much corruption and graft infecting our legislature it is time to simply show all those with direct conflicts of interest, who take gifts and "campaign contributions" under the table, - they must all be shown the door in a massive clean sweep of the legislature.

They have truly earned our disrespect and disdain. I apologize to the few - the very few, who are fighting the good fight for ethics reform and campaign finance reforms. There are none who are fighting for property tax reform. And I hope to get either myself or someone in office with the fortitude and integrity to take these embedded nare-do-wells on and work to clean up our legislature.

With regrets for having to share the bad news,


Thursday, 20 September 2007

Utah Department of Commerce warns of investor fraud
TESSA WHITE - North County Staff
With the real estate market slowing down, many Utah real estate agents are asking how much of the slowdown is attributed to artificial price inflation brought on by real estate fraud.
With several ongoing investigations in the Alpine/Highland area, many homes are sitting vacant or struggling to stay out of bank possession with an inflated loan at above market pricing.
The Utah Division of Real Estate has recently targeted the topic in its news bulletin, indicating that investor fraud "may have played a sizeable role in aiding the double-digit price gains seen in the U.S. housing market since 2004."
Keller-Williams broker Alan Wade said he began to notice the trend of fraudulent investors last fall.
Wade said, "We turned away about 20 percent of the offers we had coming in because there were double contracts and other fraudulent activities involved."
The Utah Department of Commerce recently sent out a fraud alert identifying a "dramatic increase in illegal property flipping throughout the state ... most prevalent in areas of new construction and high end homes."
The Utah County Board of Realtors indicates that year-to-date home sales over $500,000 are up 29.4 percent over 2006. With Alpine and Highland being a hotbed of high-end homes, investors have been quick to buy.
While many are legitimate in their practices, local agents are seeing many people hurt by fraudulent investments. An agent at the Keller-Williams office in Alpine is working to help authorities stop an investor who has asked dozens of naïve clients to use their credit scores and names to secure more than 73 loans in exchange for alleged big money returns on property buys and flips.
There are several common scenarios for investment fraud.
The first scenario includes the purchase of a property at a lower price, but changing the list price on the MLS so an appraiser sees a higher value for the home. An appraisal is completed using the higher list price allowing the investor to show immediate equity, which is pulled out in the form of cash at closing. An appraisal is completed when the higher price is listed allowing the investor to pull out the extra equity.
The problem with this scenario is that it leaves a property that cannot be sold when default occurs because the home isn't worth as much as the loan. It also leaves the investor with "free money" to reinvest or spend.
A second scenario is an investor asking a seller to pull the real estate agent out of the loop and take the property off the MLS so a private, "more creative" deal can be done. Frequently, that deal includes third party private buyers with an interest stake, a request for the seller to secure a second loan with the buyer with promises of shared profits at resale, or asking for two contracts -- one with a higher price for the lender and another side agreement for a different price.
Wade said, "If you push the price of a home or land up and up, it affects people all up the chain. Not only does the price of homes inflate unnecessarily, but it creates a sense of panic when homes need to correct pricing in order to stay in line with a truer market price."
He indicated this is the slowest August and September he's seen in many years, and much of the slowdown he attributes to price "right-sizing pricing" as a consequence to investor fraud as well as an enormous amount of spec homes that were built on speculation that the current pricing was accurate rather than inflated.
Mark Wilkinson, Teri Jerman and Alan Wade, all agents and brokers in Alpine and Highland, indicate they have detected a clear increase in Multiple Listing Service (MLS) fraud. Most homes are listed through the MLS and as a result, it becomes a primary tool for appraisers to use for comparables. But when the comparables are artificially inflated to get a higher appraisal, it is illegal.
Wilkinson said, "I know of several agents who have been (offered) up to $1,000 to delist and then relist a new sales price on a home which is then available and usable information for a false appraisal."
He said this clearly affects the market because it creates a false sense of what homes are worth. Potential sellers come in and think their home should sell for more because their neighbor's home was advertised or sold for an outrageous price through investor fraud.
He said, "It is a house of cards. Lenders will lose money and because many loans are guaranteed by the government, ultimately the taxpayers end up paying for fraudulent transactions."
Although investor fraud has started to level off as prices have slowed in appreciation, the scenarios are more common than one would think. All three agents echoed the same sentiment. If the deal doesn't seem quite right, it probably isn't.
And the effect of fraud on neighborhoods can be devastating, leaving rows of high-end homes for lease or in poor condition as bank repossessions occur.
Never let anyone use your credit score or co-sign on a loan you are not willing to pay
Beware of buyers asking you to cancel your contract with a realtor before doing business
Don't sign purchase contracts that have undisclosed side agreements or addendums
Always make sure the purchase contract and closing documents list the correct price of the home
Watch out for excessive payments to third parties noted as "consultant fees" or unrecorded second mortgages
Ask your agent to check the property sales history on homes for multiple changes of ownership
Sellers should not sign any clause that indicates the home must appraise for substantially more than offer price
Watch out for buyers who ask you to end your listing with an agent or remove listing prior to an offer

1 comment:

ozboy said...

Of course the county appraisers see the phony prices and jacks up your appraisal to match - resulting in higher taxes for every one in the neighborhood. Every one wins except for the poor chumps who are not selling their property - meaning most of us.