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January, 2006

Forensic Appraisal Aurora Colorado

01/30/06

On the Lam with Less than Perfect Credit

During 2002 and 2003, the Boston TV news had a recurring story about Whitey Bulger. Whitey was in the news on a regular basis. For those who don’t know the Whitey Bulger story – you can find his picture on the famous “FBI 10 most wanted” list. Whitey’s picture is directly below Usama Bin Laden

The news people loved to do stories about Whitey, because it gave them a chance to use the phrase "on the lam". It was great fun watching them deliver the line, and they never passed up a chance to use it.

During my stay in Boston, I added "on the lam" to my list of words used in the media but never in real life. Other words on the list include "hip" and "groovy". Ever since 2002 I have been looking for an opportunity to use "on the lam" in a sentence, and today is the day.

As I drive around Aurora, Colorado I listen to my car radio. I hear hundreds (maybe thousands) of 30 second commercials for mortgage companies - and nearly every commercial uses the phrase "less than perfect credit". It is readily apparent this phrase is a money maker, because they all say it as often as possible. For example - I entered the phrase "less than perfect credit" in Google and got 1.5 million hits. I am not making this up. HSH comes up number one on the Google phrase "less than perfect credit". I am sure HSH worked very hard and spent $1,000's (maybe millions) of dollars to be the top "less than perfect credit" Website.

What exactly does "less than perfect credit" mean? Does this imply there is such a thing as "perfect credit"? Is there even one person who has perfect credit? If I claimed to have perfect credit, would anyone believe me? In the mortgage business, everyone has a story. This "less than perfect credit" thing is just another story. It sounds good. It must work because they all do it, but this phrase is so broad it has no meaning. Everyone has "less than perfect credit". Right?

Listening to the radio commercials I get the impression that "less than perfect credit" is a very valuable commodity. Mortgage companies fight hard to obtain customers with "less than perfect credit". I can easily imagine a scenario where someone with "less than perfect credit" could apply for a mortgage loan, and expect fierce competition amongst the lenders. If the borrower played it right the lenders would all try to out-do each other. Before long, some lender would offer to pay him a big chunk of money to buy a house and take out a loan.

Does anyone think I am exaggerating?

Consider the case of Justin Matthew Byrd, date of birth 05/27/86. Mr Byrd is included in an article dated 11/09/04 in the Spokesman-Review: (Spokane Washington) -- OUTSTANDING WARRANTS Bonner County, (Idaho) has a backlog of outstanding warrants. Officials are asking the public for any information about the following people, who are identified by name, age, last known city of residence, the charge and the bond amount on the warrant. If you have any information, contact the sheriff's department at (208) 263-8417, or the Bonner County Communication Center (208) 255-2946.

Misdemeanors: Justin M. Byrd - 18, Sagle, assault, malicious injury to property, intentional destruction of a phone/telecommunication line, $10,000 bond.

With that lengthy introduction - here are today's entries in the Mortgage Scam-O-Rama:

Property Address = 22294 E Frost Pl, Aurora, CO 80016
Close Date = 11/29/05
Loan Amt = $430,000 Buyer/Borrower = Justin M Byrd

Lender = Axis Mortgage / Biltmore
Indicated Value = $370,000 (this is a stretch - I put the value more like $340 - $350)
Indicated Mortgage Fraud = My best estimate is that Justin M Byrd walked out of the closing room with $85,000 cash, courtesy of Axis Mortgage.

MLS listing history / MLS pg 1 / MLS 2002

Listing agent = Troy Hansford Re/Max Unlimited / Selling Agent = Kimberly White at Space Realty

Notes: Kimberly White strikes again. Existing loan on this property was about $350,000 which means there was just enough money for the real estate agents to get paid with nothing left over for the seller.

January 24th, 2006

Property Address = 19422 E Pinewood Dr, Aurora, CO 80016
Close Date = 09/30/05
Loan Amt = $594,995 Buyer/Borrower = Sabah & Asim Cambrelen
Lender = Bay Capital Corp
Indicated Value = Less than $535,000
Indicated Mortgage Fraud = $60,000

MLS listing history / MLS pg 1

Listing Agent = Michael Strear
Selling Agent/Office = Michael Strear

Notes: Michael Strear (listing agent) got a round trip. He cashed a commission check from both sides of this transaction.

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1601 E 19th Ave #3800
Denver, CO 80218
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Property Address = 5601 Biscay Ct, Aurora, CO 80015
Close Date = 01/10/05
Loan Amt = $262,000 Buyer/Borrower = Sabah & Asim Cambrelen
Lender = Fieldstone Mortgage Company
Indicated Value = $252,000
Indicated Fraud = $10,000

MLS listing history / MLS pg1

Listing Agent = Lucy Kane
Selling Office = 00513 = Colorado Choice Properties = Thadaus (TJ) Jackson.

Notes: Not much I can add to this.

There was a 3rd transaction for Asim & Sabah Cambrelen in 2005 - $147,000 loan by MILA, Inc on a related party transaction at 13704 E Lehigh #25-E, a condo at Meadow Hills I, Aurora, CO 80014. There is no MLS info on this transaction.

Sabah Khan and Asim Cambrelen were married July 15, 2001. Sabah is an analyst with Accenture in Denver.

January 20th, 2006

Property Address = 6634 S Atchison Way, Centennial and/or Englewood, CO 80111
Close Date = 03/03/05
Loan Amt = unknown and/or $445,000 / Buyer/Borrower = L Lee Loeb
Lender = unknown
Indicated value = $350,000
Indicated Mortgage Fraud = $100,000

MLS listing history / MLS pg 1 /

Listing Agent = Mitch Gilbert Re/Max Masters / Selling Agent = Same

Notes: Everything about this transaction is abnormal. I have asked questions and no one is able to answer in a way that makes sense to me. Why is this loan not recorded? I have never seen this happen. What the heck is going on here? This is a short sale - the homeowner could not sell for enough to pay off the loan balance. The "lender" listed in county records is/was Long Beach Mortgage / America's Wholesale Lndr / MBNA - a veritable "who's who" of the scam-o-rama ding-dongs.

I have a bad feeling about this.

January 17th, 2006

Property Address: 5817 S Pagosa Way, Aurora, CO 80015
Close Date = 06/03/05
Loan = $334,000, Buyer/Borrower = Demond Shead (Ivy's son)
Lender = WMC Mortgage - Amy Brandt / GE Consumer Finance - Dave Nissen / GE - Jeff Immelt
Indicated value of the property = $370,000
Reported Concession = $48,000
Indicated Fraud = Depends on how you look at it - I call it $48,000

MLS listing history / MLS pg 1 / MLS 2002
Listing Agent = Dan N Hovgaard and/or Dan V Hovgaard censured for CE violation
Selling Agent = ERA McGill

Notes: Contract price was manipulated to influence the terms of the loan. Loan value = exactly 80% of the contract price. The phony contract price saves the borrower PMI and gets a lower interest rate, worth an estimated $300 per month. Over the life of the loan = $108,000. Does this give a dishonest real estate agent a competitive advantage?

In 2002, the house was appraised at $350,000 and sold for $299,900. In 2005, the house was appraised at $416,000 and sold for $370,000. Does anyone see a problem here?

Property Address = 600 Sable Blvd, Aurora, CO 80011
Close Date = Approx 11/01/04 (same as 6194 Prince, see below)
Loan = $196,000, Buyer Borrower = Ivy Shead (Demond's mom)
Lender = America's Wholesale Lender / Countrywide / JP Morgan Chase
Indicated value of the property = $185,000
No sold info in MLS
Indicated Fraud = $11,000

MLS listing history / MLS pg 1
Listing agent = A Paul Smola
Selling agent = sale not reported, no sold info in MLS

Notes: Why is the sale not reported in MLS? My best guess (and I am guessing) is to avoid paying income tax on the commission and/or trying to hide something and/or trying to cheat someone out of a commission and/or prefer not to be bothered with the pesky paperwork.

Property Address = 1127 Xenia St, Denver, CO 80220
Close Date = Approx 12/01/05 (1 month after the 2 listed above)
Loan = $269,900, Buyer Borrower = Ivy Shead (Demond's mom)
Lender = Long Beach / Washington Mutual /
Indicated value of the property = less than $285,000
No sold info in MLS
Indicated Fraud = $unknown, maybe none

Seller = Matthew Smola
Listing Agent on failed attempt = A Paul Smola

Notes: The investor (Shead) bought the property owned by the real estate agent (Smola). Tried to sell at a profit and had no luck. This property is located in a "hot" neighborhood. There is some hope for this one to have a happy ending.

Property Address = 6194 S Prince St, Littleton, CO 80120
Close Date = Approx 11/01/04 (same as 600 Sable see above)
Loan = 250,000, Buyer Borrower = Ivy Shead (Demond's mom)
Lender = Stonecreek / Capital One /
Indicated value of the property = $160,000 ($150K plus remodel)
No sold info in MLS
Indicated Fraud = $90,000

MLS listing history / MLS pg 1 before the sale / MLS pg 1 - Shead's unsuccessful attempt to sell
Listing Agent successful sale June 2004 = Evelyn Manning
Listing agent / failed attempt 2005 = A Paul Smola
Selling agent = sale not reported, no sold info in MLS

January 10th, 2006

Property Address = 2304 East St, Golden, CO 80401
Close Date = 11/07/05
Loan Amt = $325,000 Buyer/Borrower = Colette F Schilling
Lender = Fieldstone Mortgage Company
Indicated value = $250,000
Indicated Mortgage Fraud = $75,000

MLS listing history / MLS pg1

Listing Agent = Louis C Gassner - Foothills Premier Properties / Selling Agent Office = same

Notes: Colette Schilling (buyer/borrower) is a licensed real estate agent from Fort Morgan, Colorado.

Letter #5 Update:
On 5/21/04 - New Century Mortgage (NEW) made a $306,000 refi mortgage loan on 2470 S Oswego St, Aurora, CO. The borrower made zero (or very few) payments, and walked away with the cash (roughly $60,000 thank you very much). The property went into foreclosure. The sucker who got stuck on this loan had the property on the market 6/27/05 with asking price of $310,000. The property sold for $255,000 on 12/22/05. Loss to the sucker is $51,000 on the value of the property - plus 6 months carrying cost, legal fess, real estate commission, $2,000 unreported seller concession, etc, etc, -- the total loss to the sucker is about $80,000.

01/05/06

Fast Close Required

Property Address: 5484 S Sicily St, Aurora, CO 80015
Close Date = 10/31/05
Loan = $333,000, Buyer/Borrower = Leland Richardson
Lender = Pemm Tek Mortgage Services
Indicated value of the property = $292,000
Reported Concession = $35,000
Indicated Mortgage Fraud = $41,000 (my best estimate)

MLS pg 1 / MLS listing history
Selling Agent = Colorado Choice Properties

Notes: Broker Remark (non public) says "Fast Close Required" - property on the market for 208 days. How "fast" does it need to be?

My analysis: I enjoy reading blog by Shaun - a real estate investor in Phoenix. He describes searching MLS - looking for the phrase "fast close". Shaun makes (lowball) offers and tries to "sell" the offer based on his ability to - "fast close". So when Donn Hineser (listing agent 303-316-7653) put the phrase "Fast Close Required" in the non-public remarks of the MLS listing - he was speaking to all the other real estate agents. Donn was saying -- in "realtor code" -- that he desperately wanted to sell and would not mind/maybe even play along/maybe actively cooperate with an investor offer with creative financing and pretend money and ......you get the idea. "Fast Close Required".

In response to a request from Shaun - I wish to clarify that I do not have any reason to think he is involved in any questionable practices.