Marc P. Wyman

05/13/10

Colorado Division of Real Estate
1560 Broadway #925
Denver, CO 80202
Attn: Enforcement

Please treat this as a formal complaint against Marc P. Wyman appraisal license CR40015674.

Specifically, I am asking the Board to investigate this complaint, take corrective or disciplinary action as allowed by law, and to inform me of the outcome. In addition, I am asking the Board to promptly send me a form letter to confirm receipt of this complaint, provide me with a case number, and to make a good faith effort to spell the names correctly.

In support of this complaint, I have attached a complete (printed) copy of Mr. Wyman's appraisal report for the property located at 885 Cinnabar Dr, Castle Rock, CO 80108. The appraisal report is dated 10/24/07. A .pdf version of the appraisal report is available on request.

For your convenience this document (including all attachments) is published on the Internet at:
http://www.mkgappraisal.com/letter2010_02.htm

Mr. Wyman appraised the property at $1,068,000. The subject property was a new construction builder sale. This property was never (ever) worth a million dollars. Not even close.

The appraisal report states:

Golden Design Group has 47 lots within the Maher Ranch development also known as the Puma Ridge/Saphire Point area. There are currently 30 homes sold with 17 lots still available.

Based on what I know, this sounds about right to me. I accept this statement at face value.

Pete Capra is (was?) the CEO of a local builder doing business as Golden Design Group (GDG). During 2003 through 2006 GDG built and sold homes in (at least) 4 locations: Castle Rock, Parker, South Aurora, and North Denver. I estimate they sold 200 homes. To the best of my knowledge, Pete Capra never used a licensed real estate agent, and none of the GDG homes was listed in MLS or exposed on the open market.

I have formed an opinion that all (100%) of these homes were sold to straw buyers and/or outright crooks. Two examples that come to mind are Demetrius G Gianopoulos and Young Kim.

Presumably, all 200 of these transactions included an appraisal. All 200 of the appraisals were used to justify big dollar mortgage loans which included big dollar mortgage fraud. All 200 of these transactions resulted in early payment default and foreclosure. This can be easily verified by the public (county) records.

The subject appraisal report was prepared for a purchase mortgage on a brand new house. An 80% mortgage loan in the amount of $852,800 was made by the good people at Wells Fargo, along with an unrecorded 2nd mortgage for a total loan of $1,066,000.

This purchase transaction was a fraud. Carly Makie is a straw buyer. Carly Mackie never made a down payment. Carly Mackie never moved into the house. Carly Mackie has never set foot in Colorado.

$33,000 Per Month

Carly Mackie never made a payment. As a result, the mortgage loan went into default. The property promptly went into foreclosure. 10 months later (8/26/08) the property was back on the market with an asking price of $600,000. This property was never worth $600,000. The MLS listing describes the property as "never lived in". Indeed.

On 5/6/09 (150 days on market), the property sold for $450,000 with a $13,500 seller concession. Which is to say the property sold for $436,500. Which is $629,500 less than the mortgage.

From the date of the appraisal (10/24/07) to the date of the legit sale (05/06/09) works out to approximately 19 months. Over this 19 month period, the property was losing value at the rate of $33,000 per month.

Golden Design Group (GDG) sold a total of 30 properties in this development. I wonder if Marc P. Wyman did the other 29 appraisals. And if not Mr. Wyman, then who?

USPAP

At the summary level, USPAP says an appraiser must be 2 things: 1) Ethical, and 2) Competent. At the risk of oversimplification - an appraiser should know what's going on in the real estate market, and be willing and able to tell it like it is. This appraisal report is a complete failure.

In September of 2005, Colorado had a big problem with foreclosures. We were among the top 2 or 3 states in the country. This was not a secret - it was in the newspapers and on TV. A Rocky Mountain News article dated 9/10/05 said that Colorado was leading the nation in the rate of foreclosure.

This had been going on for 2 years when Marc Wyman did this appraisal. How could any self respecting appraiser not know? The appraisal report (dated 10/24/07) makes this statement

market conditions in Metropolitan Denver are stable and strong

This statement is not independent, objective, unbiased. This statement is all about trying to get the loan approved.

The URAR asks the appraiser if they did (or did not) analyze the sales contract. The appraiser checked the "yes" box. Presumably Mr. Wyman has retained a copy of the contract in his appraisal file.

The URAR asks the appraiser to "explain the results of the analysis of the contract..." . The appraisal report says

The sales [sic] appears to be an arms length transaction. The sales price appears to be reasonable and supportable with available current market data."

My comment: the correct spelling of arm's length includes an apostrophe. I wonder what part of the analysis/review of the contract made it "appear" to be an arm's length transaction.

One of the most important steps of every appraisal assignment is to define the geographic boundaries of the neighborhood, and then provide a range of dollar values. The appraiser reports the high end of the range, the low end, and predominant.

On page 1 of the URAR, Mr. Wyman gives the neighborhood boundaries as:

north of highway 86, south of E. Happy Canyon Road as extended, east of Daniels Park Road and west of Parker Road......the subject market area is typified by ranch and multi-level homes of very good quality, generally similar to the subject in terms of market appeal

These boundaries are excessively large - to the point of being meaningless. This area includes all of the Castle Pines Golf community which is on the other side of I-25. Castle Pines is not part of Maher Ranch, any more than Aspen or Vail.

The appraisal report says neighborhood values are $750 low, $2.3M high, and $1.0M predominant. As near as I can tell, these numbers are just made up and have no basis in reality. There has never been a property in Maher Ranch that sold for $2.3M. Not even close.

I did a CMA on this same neighborhood dated 4/17/08 and I got values of $341/$845/$418. Some of the difference can be explained as a change in the market, but it didn't change that much in 6 months. See (for example) the listing history for 6931 Sulfur Ct. This property sold 3 times - 8/15/05, 6/10/07 and 10/29/08. These 3 sales demonstrate the change in the market over time.

Consider these 5 properties:

804 Xenon sold for $540,000 9/25/07.

6931 Sulfur Ct sold for $495,000 6/5/07.

1828 Peridot Ln sold for $438,000 5/11/07.

6857 Sulfur Ct sold for $405,000.

1668 Peridot Ct sold for $349,000 on 6/1/07.

These are all 2 story properties located in Maher Ranch. All of this was readily available in MLS - copies are provided below.

My comment - the low end of the market range should have been reported as $349. The values stated in the report ($750/$2.3M/$1.0M) are a shameless attempt to portray the subject property as typical/middle of the road - and therefore loan-worthy. This is not independent, objective, unbiased. This is a deliberate violation of the USPAP ethics rule(s).

The appraisal report presents 5 comps. Two of the comps (#1 and #5) are nearby properties from the same builder. Both of these properties were also big dollar fraud sales. Mr. Wyman is using fraud to justify more fraud. I firmly believe it is unfair to expect Mr. Wyman (or any appraiser) to have known these sales were fraudulent, or to have ignored these sales. On the other hand - I firmly believe Mr. Wyman should have taken into consideration that both of his GDG comps were never listed on MLS and never exposed on the open market. Did he think all 30 of the GDG sales were successfully marketed by word of mouth?

Furthermore, Mr. Wyman should have considered that his sole source for this data had a $30M incentive to tell one side of the story. In these situations the builder (any builder) will never admit to (much less offer up) anything that might suggest the value of the subject property is less than the contract price. This does not mean all builders are liars - but it does mean appraisers need to make a diligent effort to consider all sides, and weigh the comps accordingly.

Two of the other 3 comps are from outside Maher Ranch. Comp #2 is 3 miles away, in a different neighborhood, and judging by the photo, clearly superior to the subject property. Comp #3 (5225 Knobcone) is more similar to the subject property, but it's hard to justify going outside the neighborhood when there are plenty of good comps available inside the same neighborhood. The listing for Comp #4 (6588 Tremolite) says - "Puma Ridge new custom builder community..." . The builder for comp #4 was Carlson.

On the date of this appraisal, the property at 991 Cryolite Pl was listed for sale at $525,000. The listing says "seller motivated" and it also says "agent owner".

It's reasonable to ask 2 questions -

Why would a real estate agent sell their own house on the open market for anything less than the best (highest) possible price?

Why would anyone pay $1M for the subject property when they could have bought 991 Cryolite for half that price?

On 10/24/07 (the date of the appraisal), MLS showed the property at 1841 Dolomite "under contract" with an asking price of $385,000 - after 190 days on market. This property was not trashed out - the listing says "immaculate". The listing also says the property is priced below market value - but it did not say by how much.

Better Comps

804 Xenon,
MLS pg1 and listing history

6931 Sulfur,
MLS pg1 (06/05/07) and listing history
MLS pg1 (10/29/08)
Note: This property demonstrates the change (decrease) in the market from June, 2007, to October, 2008.

6857 Sulfur,
MLS pg1 and listing history

1828 Peridot,
MLS pg1 and listing history

1668 Peridot,
MLS pg1 and listing history

991 Cryolite,
MLS pg1 and listing history

1841 Dolomite,
MLS pg1 and listing history

1235 Baguette Dr,
MLS pg1 and listing history
Asking price on 10/24/07 = $440,000. This property had been on the market for 5 months, with 5 price reductions.

7351 Soapstone Ct,
MLS pg1 and listing history
Asking price on 10/24/07 = $475,000. This property had been on the market 10 months, with 2 price reductions.

These are all 2 story properties located in Maher Ranch (see map). All of these are reported in MLS.

Sincerely,

Philip G Rice
11268 E Linvale Dr
Aurora, CO 80014
720-282-3376
phil.rice@mkgappraisal.com

Attachments

Appraisal Report - .pdf format
Subject Property - MLS pg1 and listing history
Comp #1 - MLS pg1 and listing history
Comp #2 - MLS pg1 and listing history
Comp #3 - MLS pg1 and listing history
Comp #4 - MLS pg1 and listing history
Comp #5 - MLS pg1 and listing history

-- End of Letter --

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