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Aurora Mortgage Blog

March, 2006

Leslie Rousseau Update

Earlier this month I predicted the State would revoke Leslie Rousseau's license. Looks like I was giving them too much credit. The Rousseau hearing scheduled for 03/30/06 and 03/31/06 has been cancelled - the case is now scheduled for "mediation" on April 4th. It's a good bet the mediation will result in some kind of hard hitting compromise.

Right or wrong, whatever happens to Mr. Rousseau will be a clear message to the appraiser community in Denver and throughout the state of Colorado.

Monica Santiago -- Case number APR 2005-0012 is now set for a hearing on May 9th and 10th. Monica, if you are reading this - my advice is do not agree to any kind of plea bargain. At a minimum, you can stall and delay for 12-24 months. Just keep asking to reschedule until you see what happens to Mr. Rousseau. The Colorado BOREA will talk tough, but if they can't (or won't) stand up to Leslie Rousseau, it means you have nothing to worry about. Once the State figures out that you are likely to show up and defend yourself, they will back off.

Russell Jacobs case APR 2006-001 no hearing date.

Crowe's Nest 01

Add another item to the summary of homes bought by Vicki Dillard Crowe. 10 and counting.

Property Address = 12066 N 3rd St, Parker, CO 80134
Close Date = 02/22/06
Loan Amount = $925,000
Buyer/Borrower = Vicki R Dillard Crowe
Lender = First National Bank of Arizona / a/k/a Avenue Express
Indicated value = $780,000
Indicated Fraud = $145,000

MLS pg1 / listing history / deeds report /

Listing Agent = Sana Wood, sanawood.com,

Notes: Sana Wood was the owner/seller, listing agent, and selling agent on this transaction. She bumped up the price by $145,000 and reported a $15,000 seller concession.

March 22, 2006

Sharkey Milk Leads to Tenant Trash

I am now starting to get feedback and questions from people in the Denver metro area who find my Website.

Email received 3/15/06 with a question about Dennis Sharkey:

One of the houses purchased by Dennis Sharkey is next door to my brothers house and is currently sitting empty after the renters abruptly moved out a couple of months ago.

When I ask about the renters "abruptly" leaving, I get this response:

As far as the renters at the property at 3131 So. Holly Place, the only thing I know (and that is secondhand information) is that even though the renters were paying their rent apparently the bank was not receiving the mortgage payments and therefore evicted the renters. Again, not sure how accurate that is but I do know that the house has been vacant for about the last couple of months.

My comment: No surprise here - it takes about 8 months for the lender to take possession of the house - the landlord can stop making mortgage payments and milk the tenant for 6 months. And good luck to the tenant getting their security deposit back. Is it any wonder the tenants trash the place on the way out?

March 21, 2006

Ghetto Update

Florence St - This is an update to my letter #4 dated 11/10/05.

1365 Florence has sold - and this is news. The homeowner had it on the market starting August 2004 - original asking price was $152,600. 19 months later, on March 13th, 2006, the sale closed with a contract price of $130,000. HUD sold it with a $3,000 seller concession, which means an appraiser played along and inflated the value to make the loan fly. MLS and listing history.

1301 Florence is now under contract, asking price $110,000 and at this price, they fly off the shelf faster than crap on sale at Walmart. MLS and listing history.

On the west side of the street on the 1300 block of Florence, about 4 of 9 are vacant, and as near as I can tell, HUD is the proud owner of all of them. Looks like the marketing strategy is to sell them one at a time.

1301 Florence is bigger than 1365 Florence, has a second bathroom, and overall condition is about the same as 1365 Florence. This suggests the person (sucker) who bought 1365 Florence overpaid by about $15,000. Is there a problem here? No problem as long as he keeps making the monthly payments, right?

Definitions courtesy of Google:

Ghetto: A poor densely populated city district occupied by a minority ethnic group linked together by economic hardship and social restrictions

Slum: A heavily populated urban area characterized by substandard and poor housing and squalor. A district of a city marked by poverty and inferior living conditions.

Sucker: A person who is gullible and easy to take advantage of. Chump.

March 20, 2006

The Good, The Bad, and The So-So

This is a follow-up to my letter #5 dated November 14th, 2005.

The Good - 2470 S Oswego St sold for $255,000 December 22 after 165 days on market. Since then, someone has been working on improving the appearance of the property, and little by little, the property is shaping up to where it is no longer an embarrassment for the neighbors. Photos - before / after.

The Bad - 2469 S Oswego - directly across the street from the above property. The amount of the loan is beyond my ability to compute - you decide. The good people at Aurora Loan Services have a piece of this one. The listing agent is now showing signs of deferred maintenance on the sign. The current asking price is $290,000 after 260 days on market and counting. They are dropping the price in $5K increments. When they get down around $260,000 they have a shot. Heck of a deal.

The So-So - 2430 S Oswego. The low tech for sale sign has disappeared, the property has a decent appearance from the street. The current loan value is $279,000 with a market value of about $260,000 (see above). I can't tell for sure if the property is vacant - it could be tenant occupied. In any event, this property is no longer a sore thumb for the neighbors.

March 8th, 2006

Since September of 2002, 3 Colorado appraisers have lost their license. James Bunt of Elizabeth, Jerry Friberg of Pueblo, and Sandra Johann of blank location. My source is the ASC Website.

There are 3 active appraiser cases at the Office of Administrative Courts within the Colorado Department of Personnel & Administration. It is my very limited understanding of the system that in order to revoke an appraisal license, the Board must either get the appraiser to agree (i.e., plea bargain - voluntary surrender) or if the appraiser will not agree to a plea, the Board must win a trial (called a "hearing") before an administrative law judge. The administrative law judge has likely never done an appraisal in his/her life. Has the administrative law judge ever sat thru a 2 day USPAP class? Do they even know what USPAP is?

The 3 open cases are:

Leslie Rousseau case APR 2005-0011, scheduled for hearing on March 30 and 31, 2006
Monica Santiago case APR 2005-0012 no hearing date
Russell Jacobs case APR 2006-001 no hearing date

Analysis/Commentary: Leslie Rousseau is case number 11 and Monica Santiago is case number 12. Presumably Jerry Friberg and Sandra Johann and maybe even James Bunt each had a case number. What happened to the other 7 cases? Seems unlikely that BOREA went to court and lost. More likely they assigned a case number and then settled.

For the entire state, 3 licenses revoked in the past 3 1/2 years. There have been zero licenses suspended - as far as I can tell Colorado does not suspend. Given the amount of mortgage fraud going on in Denver over the past 3 1/2 years, the enforcement effort of the Colorado BOREA is somewhere between pathetic to non existent.

It is not an exaggeration to say there have been very few fines, and when they do happen, the "standard" is $500 and a USPAP class. From the appraiser's point of view - they pay a $500 fine for an appraisal where they got paid $350 - net cash loss of $150. And they take a class they would have to take anyway. It's a slap on the wrist.

Looking forward - I predict the state will "win" the Leslie Rousseau case - they are going to revoke his license The Office of Administrative Courts is located at 633 17th Street ( Filings: 13th Floor -- Hearings: 14th Floor) Denver, Colorado 80202. I encourage you to attend the trail/hearing at 8am on March 30th, 2006 and see for yourself how the system works. There could be some really good entertainment value for this 2 day trial, and it may be a long time before you get another chance.

I predict the other 2 unscheduled cases (Santiago and Jacobs) will not be heard until at least 2007. Colorado is revoking licenses at the rate of 1 per year for the entire state. This is not going to change any time soon. The appraiser community in Denver has zero respect for the enforcement process, and they act accordingly.

Don't Worry Be Happy

Property Address = 5741 S Nucla Ct, Centennial, CO 80015
Close Date (per MLS) = 04/15/04
Loan Amt = $408,000
Buyer/Borrower = Mark S Johnson and Kimberly A Gruenberg --they bought the property out of foreclosure
Lender = Pemm Tek Mortgage
Indicated value = $384,500
Indicated Fraud = $24,500

MLS listing history / MLS pg1 / foreclosure summary

Listing Agent = Aaron White of Integrity Realty.

Notes: Don't worry be happy. They added $25,000 to the asking price and reported a seller concession of zero. The buyer/borrower declared bankruptcy less than a year later, and the property went into foreclosure. I would be surprised if the borrower made 3 payments. Less than 15 months after making a $408,000 loan, this property went back on the market. Asking price started at $390,000 - $18,000 less than the loan. Current asking price is $360,000 after 7 months on the market -- a whopping $48,000 less than the loan.

My suggestion: Someone from the Office of the Attorney General should work together with someone at BOREA and make an effort to find out who did the appraisal in April, 2004. Get a court order if necessary, and make an effort to obtain a copy of the appraisal. Hunt down the person(s) responsible for that appraisal and in the likely event the appraisal report is/was not up to snuff, revoke their appraisal license. And make it all happen before the end of 2006.

Or, in the alternative, someone from the Office of the Attorney General and/or someone at BOREA should attend the upcoming conference on mortgage fraud and make a speech. Talk tough and sound like you really mean it.

More Status Quo

Property Address = 19062 E Mansfield Dr, Aurora, CO 80013
Close Date = 03/14/05
Loan Amt = $205,000
Buyer/Borrower = Migdalia Camacho and Migdalia Mendez
Lender = Fremont Investment and Loan
Indicated value = $180,000
Indicated Fraud = $25,000

MLS listing history / MLS pg1

Listing Agent = Mike Cheney / Selling Agent = Ike Eichelberger of Century 21

Notes: Don't worry be happy. They added $25,000 to the asking price and reported a seller concession of $8,000. The property went into foreclosure almost immediately. I would be surprised if the borrower made 2 payments.

McDonald Update

I received an email from Stacy McDonald dated 03/09/06. She did a nice job with this email. She asked me to post her comments - and I did.

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