patrick.net

Dude I can get a loan all day long, what I can't get is a house for payments I know I can make.
That scheme is played out, the suckers were all taken. The only real estate moving right now for near or low what we would be home buyers(the smart ones anyway) are cash only transactions. Short sales legally tie a bunch of would be buyers up and may or may not be approved. In the mean time those buyers are out of the right to bid for other homes while banks take three to six months to make a decision.

Investors are buying the only viable Real Estate, and trying to flip them back on the people that are now getting approved for loans. We're not Bloody stupid and the tax roll is public record. I can slap paint on the damn walls my self. And I'm willing to put up twenty percent. It still isnt' happening, the banks are passing the houses off to investment groups for pennies on the dollar, rather than let the market accept the fate of actually being sold off to a family.

In the meantime I meet hundreds of people that are the same mind set as I am. They've put in the offers to be turned down and the properties still on the market or sold for less to other investors.

The bubble this time will be short lived and only serve to bankrupt the new lot of RE moguls.
I'm sorry we're all out of Pigeons to pluck!

Trout,

>>the banks are passing the houses off to investment groups for pennies on the dollar, rather than let the market accept the fate of actually being sold off to a family.

That sounds like fraud to me. More specifically, defrauding the tax-paying public and their government, who are propping the banks, GSEs and other entities that are holding the foreclosed houses (propping up via TARP, loan guarantees, FED liquidity programs and the like).

I keep reading stories along the lines of what you are saying, meaning that banks will turn down offers and then later sell the houses for less.

But I'd REALLY like to see the evidence that they are bundling up properties and selling them for lower prices in some type of sweetheart deal with big investors. Can you provide any hard evidence? I'd hate to see it, but if the evidence is there it should be made public.

justme says

Trout,
But I’d REALLY like to see the evidence that they are bundling up properties and selling them for lower prices in some type of sweetheart deal with big investors. Can you provide any hard evidence? I’d hate to see it, but if the evidence is there it should be made public.

Your evidence is here:
http://patrick.net/?p=29317

Equity Growth Management has been massively selling (flipping) REO homes that were never on the market, and purchased for pennies on the dollar.

I'm sure you can find a lot more names out there. If you want, I will glady gut out all those firm names that take REO property off bank hands, and flip them.

I just realized it's kind of hard to spot any activity in that last forum. So I queryed all the homes sold by Equity Growth Asset Management that are all pretty recent. You can check property tax records to see how much they picked it up for, and how much they sold it for.

Keep in mind these houses were never available for sale to the public. This query is only for the San Mateo and Santa Clara counties. Imagine what they are doing in other counties. There are also many more firms like these. Buy pennies on the dollar anda flip them. The prices they ask for are one of the highest on the market.

Street Address List Price Beds Baths (F|P) Bldg SqFt Lot Size Range Age City Class Status MLS Number
820 SEAL POINTE DR 1169000 4 3|0 2660 1 to 4,500 SqFt 21 Redwood Shores 1 7-Canceled 80939429
820 SEAL POINTE DR 1169000 4 3|0 2660 1 to 4,500 SqFt 21 Redwood Shores 1 4-PendingDoNotShow 81013598
2105 CIPRIANI BL 1159000 4 3|1 2320 4,500+ to 6,500 SqFt 15 Belmont 1 5-Sold 80824979
18 N IDAHO ST 899000 0 6,500+ to 8,000 SqFt 63 San Mateo 3 5-Sold 80809947
3838 ADRIATIC WY 899000 4 3|0 2376 4,500+ to 6,500 SqFt 5 San Bruno 1 5-Sold 80847133
605 LASSEN ST 799500 4 3|1 2240 4,500+ to 6,500 SqFt 47 South San Francisco 1 5-Sold 80952319
572 KOHALA AV 699500 3 2|1 1970 1 to 4,500 SqFt 18 Pacifica 1 5-Sold 81000739
192 LINDA VISTA DR 689500 4 3|1 2290 1 to 4,500 SqFt 15 Daly City 1 5-Sold 80938637
244 CUESTA DR 679500 4 3|0 1650 1 to 4,500 SqFt 53 South San Francisco 1 5-Sold 80932953
646 VANESSA DR 669500 4 2|0 1540 4,500+ to 6,500 SqFt 53 San Mateo 1 5-Sold 80915615
186 WEMBLEY DR 659000 4 3|0 1820 1 to 4,500 SqFt 35 Daly City 1 5-Sold 80809299
150 ALMA ST #00218 649000 2 2|0 1275 33 Menlo Park 2 5-Sold 80806869
3020 LONGVIEW DR 649000 3 2|1 1300 6,500+ to 8,000 SqFt 46 San Bruno 1 5-Sold 80850955
227 B ST 599000 0 1 to 4,500 SqFt 48 South San Francisco 3 5-Sold 80831844
809 CIRCLE CT 588500 4 2|0 2050 1 to 4,500 SqFt 70 South San Francisco 1 5-Sold 81010403
25 PALISADES DR 579500 4 2|0 1510 1 to 4,500 SqFt 52 Daly City 1 5-Sold 80934382
809 CIRCLE CT 579000 4 2|0 2050 1 to 4,500 SqFt 69 South San Francisco 1 6-Expired 80908698
318 EL CORTEZ AV 569000 3 3|0 1560 1 to 4,500 SqFt 59 South San Francisco 1 5-Sold 80842383
33 SKYLINE DR 539500 4 2|0 1050 1 to 4,500 SqFt 54 Daly City 1 1-Active 81015869
3825 KENT WY 539000 4 2|0 1820 1 to 4,500 SqFt 37 South San Francisco 1 5-Sold 80823716
712 HILLSIDE BL 539000 3 2|0 1600 1 to 4,500 SqFt 52 Daly City 1 5-Sold 80849058
1028 NORTHWOOD DR 529500 2 1|0 820 4,500+ to 6,500 SqFt 60 San Carlos 1 5-Sold 80842160
81 MAR VISTA DR 529000 3 1|0 1400 1 to 4,500 SqFt 57 Daly City 1 5-Sold 80785186
47 ARLINGTON DR 529000 3 1|0 990 1 to 4,500 SqFt 57 South San Francisco 1 5-Sold 80831426
3666 GEORGETOWN CT 529000 4 2|1 1770 1 to 4,500 SqFt 35 South San Francisco 1 5-Sold 80846129
1024 GILMAN DR 525000 3 1|0 1140 4,500+ to 6,500 SqFt 64 Daly City 1 5-Sold 80951771
307 HOFFMAN ST 519500 4 3|1 1920 1 to 4,500 SqFt 6 Colma 1 4-PendingDoNotShow 81010208
150 LOS OLIVOS AV 519000 2 2|0 1180 1 to 4,500 SqFt 50 Daly City 1 5-Sold 80838738
547 SHOAL CI 499500 1 2|0 1323 17 Redwood Shores 2 5-Sold 80948177
102 ROSA FLORA CI 499500 3 2|1 1200 1 to 4,500 SqFt 20 South San Francisco 2 5-Sold 81000491
161 CLIFF SWALLOW CT 499000 2 2|0 1413 10 Brisbane 2 5-Sold 80837347
136 PLYMOUTH CI 499000 3 2|0 1160 1 to 4,500 SqFt 35 Daly City 1 5-Sold 80838728
16 COTTONWOOD DR 489000 3 2|0 1060 1 to 4,500 SqFt 63 Daly City 1 5-Sold 80843755
379 BARBARA LN 489000 3 3|0 1450 1 to 4,500 SqFt 20 Daly City 1 5-Sold 80848018
515 KING DR #1 469500 3 3|1 1530 28 Daly City 2 1-Active 81014513
164 SAN DIEGO AV 439500 2 1|0 910 1 to 4,500 SqFt 70 San Bruno 1 1-Active 81001552
1143 SARATOGA AV 439000 4 3|0 1680 4,500+ to 6,500 SqFt 58 East Palo Alto 1 5-Sold 80810330
202 TERRACE AV 429500 2 1|0 910 1 to 4,500 SqFt 68 San Bruno 1 5-Sold 80948073
442 HEMLOCK AV 419000 2 1|0 930 4,500+ to 6,500 SqFt 61 South San Francisco 1 5-Sold 80850879
317 BARBARA LN 399500 2 1|1 1180 1 to 4,500 SqFt 26 Daly City 2 4-PendingDoNotShow 81014408
1712 SADDLEBACK DR 379000 2 2|0 1081 18 Daly City 2 5-Sold 80820836
919 HANOVER ST 369000 2 1|0 960 1 to 4,500 SqFt 97 Daly City 1 7-Canceled 80916590
1223 HOLLYBURNE AV 339000 3 1|0 1100 4,500+ to 6,500 SqFt 57 Menlo Park 1 5-Sold 80902281
1022 ARNOLD WY 319000 2 1|0 730 1 to 4,500 SqFt 38 Half Moon Bay 1 7-Canceled 80833651
1022 ARNOLD WY 299000 2 1|0 730 1 to 4,500 SqFt 38 Half Moon Bay 2 5-Sold 80834926

Vain,

There are several points that are not compatible with your claim:

1. specifically, in the rather long list on top of the aforementioned thread, there is ONE house owned by Equity Growth Management. That does not seem like a lot.

2. In general, and REO for a bank is one where the bank owns the whole loan, rather than some package of bonds (CDO). Given that most of the houses are explicitly owned by banks, what is the evidence that flippers have bought them for cheap?

Now, it may be that enterprising capitalists have bought entire CDO issues or CDO tranches at a discount from whoever are the other bondholders, but I think the evidence is slight that is is occuring on a grand scale, and in any case this is NOT the same as claiming that banks are selling, under the table, REOs to investors.

I'm not saying it cannot be happening, I'm just saying that I have not seen much real evidence of it.

But by all means present evidence.

Vain, our posts crossed in cyberspace.

Can you can find evidence that these properties used to be bank REO rather than part of some CDO (bond)?

I probably posted the 2nd post while you were sifting thru the thread I linked you to.

The second post has all homes sold by Equity Growth Asset Management. You can check property tax records to see how much they picked it up for. Also, in my realtor tool, homes owned by Equity Growth Asset Management gets flagged as Bank Owned. But when they sell homes, they explicitly claim REGULAR SALE (not REO, not short sale).

I'll pull the records on a specific property for you. Give me a sec.

Okay lets look at 2105 Cipriani Blvd in Belmont, CA.

Home was purchased on 6/9/2003 for $830k
A loan of $664k was needed.

In 6/16/2004, owner withdrew $50k in equity.
In 8/14/2006, owner withdrew another $315k in equity (it is possible owner repaid $50k loan with it).

On 2/25/08, Quality Loan Services forcloses on the home.
Judgement amount: $739,554

Equity Growth Asset Management assumes new ownership.

10/29/08, home sells/flips for $1,057,500.

Vain, yes, indeed we crossed in cyberspace. And it may happen again!

Okay, so the question now is, does your realtor tool know how to distinguish betwen bondholder-owned and bank-owned? My guess is that it does not. It just uses REO to mark anything that has been previously foreclosed, whether it is now owned by a bank or some bondholders.

I think there is a very important distinction between banks selling foreclosures in bulk and bondholders doing the same. I mean, if some bond falls enough in value, some investor can potentially buy up the whole damned thing at a discount.

But for a bank not to try and market each foreclosed house individually seems like madness, and perhaps a breach of duty towards their own shareholders. It just seems somewhat unlikely.

I can get on board with the bonds-bought-at discount.

By the way, even the CDO-owned foreclosed houses would have been auctioned at the courthouse steps at some point. This auction exists to protect the homeowner from banks trying to screw them, and I think it cannot easily be bypassed.

Are we converging towards agreement?

Justme,

I had just checked foreclosure proceedings for 2105 Cipriani Blvd. It never went to Auction phase.

At the risk of further cyber-crossings: 739 + 315 = 1054

House sells for 1057

Looks to me like nobody made any profit, they barely got their money back.
I noticed you edited your post so that it no longer says "wiping out the 2nd mortage".
I think you are right. The 2nd mortage was still in effect and everyone got paid, more or less.

Is that about right?

>> It never went to Auction phase.

Well, I suppose there is such a thing as "deed in lieu of foreclosure", in which case the homedebtor agrees to hand over the deed in return for getting off the hook.

I'm not sure how it works on their back end. But the banks only recovered $739,554. I don't know how the process works and if the proceeds were to be divided amongst the lenders.

Equity Growth Asset Management was able to sell it for $1m though. That's 300k profit for Equity Growth Asset Management.

I would assume that the Realtor only earns a minimal amount from this firm because of all the properties they are funneling to them. They usually stick to 1 realtor per area.

>>homes owned by Equity Growth Asset Management gets flagged as Bank Owned. But when they sell homes, they explicitly claim REGULAR SALE (not REO, not short sale).

This is interesting. Is there any rule or law that requires a foreclosed-upon home to be market as REO ? I do not know the answer, but I can see why a bank (or whoever) would like to avoid the stigma. Or maybe they like the stigma, because they are angling for lots of interest and a bidding war.

justme says

>>homes owned by Equity Growth Asset Management gets flagged as Bank Owned. But when they sell homes, they explicitly claim REGULAR SALE (not REO, not short sale).
This is interesting. Is there any rule or law that requires a foreclosed-upon home to be market as REO ? I do not know the answer, but I can see why a bank (or whoever) would like to avoid the stigma. Or maybe they like the stigma, because they are angling for lots of interest and a bidding war.

I do not know the answer to that either. But with REO's, the banks are exempt from disclosures because they really do not know what went on in the home.

However, when Equity Growth Asset Management sells, I'm sure they do not know either, and reassures you everything about the home is great. It builds more confidence for the buyer thinking it's a private sale.

Do you know what all the loan balances where on the foreclosure date? That ought to tell us something?

justme says

Do you know what all the loan balances where on the foreclosure date? That ought to tell us something?

Since the case has been closed, these details have been cleared. I cannot see it :(

I've run into the exact same thing Tenouncetrout talked about here in Las Vegas. I tried to purchase early this year only to be snubbed by cash offers from investors. I just want my own house to live in, not an investment. I can get approved for a loan in about 10 mins and was previously approved in 10 mins. I also have 20% down if needed. Every house I looked at I was told had 3-15 offers on it. I gave up after a week and researching around 10 houses all the same story. I decided to not buy since the market is being manipulated. 80+% of mortgages are underwater here in Las Vegas. I don't think we will have a supply shortage for many years so I will not get into a bidding war. Good news is the nicer houses keep losing value so my dollar buys me a better house when I do decide to purchase.

ZombieSS. At least if it's on the market, you have a shot at getting the property. It may be over priced, but you might be able to get it.

The properties we are referring to are not even offered to the public. Just out right low ball prices to private investors with a mutual agreement with the banks to hold prices high.

I wonder if these investors are paying the banker/senior management money on the side for agreeing to "partner" up like this. Sounds like a method to launder bailout money.

Vain, I've been hearing similar stories of the same happening here too. I guy I met who is a loan officer told me he's getting his real estate lic and will be getting properties before they are available to the public and he'll be trying to flip them.

ZombieSS says

I’ve run into the exact same thing Tenouncetrout talked about here in Las Vegas. I tried to purchase early this year only to be snubbed by cash offers from investors. I just want my own house to live in, not an investment. I can get approved for a loan in about 10 mins and was previously approved in 10 mins. I also have 20% down if needed. Every house I looked at I was told had 3-15 offers on it. I gave up after a week and researching around 10 houses all the same story. I decided to not buy since the market is being manipulated. 80+% of mortgages are underwater here in Las Vegas. I don’t think we will have a supply shortage for many years so I will not get into a bidding war. Good news is the nicer houses keep losing value so my dollar buys me a better house when I do decide to purchase.

The fake offers are common with REA. Its an ethical practice thats gone way out of hand.

http://www.phoenixrealestateguy.com/can-i-get-proof-of-a-competing-offer/

Studies have shown that real estate agents want a quick sale, more than a high priced sale. They are better off getting a fast sale (fast commission) at a lower price, rather than doing more work for a tiny additional commission.

When realtors sell their own homes they take longer and do hold out for higher prices.

Yes Roberto, I can read.. and I do understand poor controls when I see in the RE market. I spend enough years in the big 8, testing how people could manipulate and create fruad if not theft. And RE ripe with price manipulation and fraud. Im sure you been around for some years now to recall standard practice in bidding/buying. Seller asks 100 and you as buyer bid 85 somewhere in between you settle for the price.

What do you think about this statement

"The most probable price (in terms of money) which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller each acting prudently and knowledgeably, and assuming the price is not affected by undue stimulus. Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby: the buyer and seller are typically motivated; both parties are well informed or well advised, and acting in what they consider their best interests; a reasonable time is allowed for exposure in the open market; payment is made in terms of cash in United States dollars or in terms of financial arrangements comparable thereto; and the price represents the normal consideration for the property sold unaffected by special or creative financing or sales concessions granted by anyone associated with the sale."

Vain, trying to tie up the loose ends from our discussion above

>> Judgement amount: $739,554

Rhymes roughly with the first mortage + maybe the 50k HELOC/MEW

>>But the banks only recovered $739,554. I don’t know how the process works and if the proceeds were to be divided amongst the lenders.

Exactly. *I* think this judgement was ONLY for the first lender and maybe the 50k MEW if from same lender.

>>Equity Growth Asset Management was able to sell it for $1m though. That’s 300k profit for Equity Growth Asset Management.

This is the key. I think it is almost 100% certain that EGAM still had to pay off the 2nd mortgage.

In other words, no profit for anyone except the commissions for the agents.

Zephyr says

Studies have shown that real estate agents want a quick sale, more than a high priced sale. They are better off getting a fast sale (fast commission) at a lower price, rather than doing more work for a tiny additional commission.

the only problem with this bit of info is it requires one to trust that the REwhores didn't lie to the pollsters making the studies. I choose to not trust know liars at any time, rather than "hoping" they "change".

>> Studies have shown that real estate agents want a quick sale, more than a high priced sale.

Buyer's agents want a quick sale. Listing agents want to be able to show that they got the max price, so that they will get other listings and can sit on their fat asses all day. That tends to temper their desire for a quick sale.

Best to follow the money. Right now, buyers are a premium. Lots of houses, fewer buyers.

So trying to eek out some extra amount when you're selling a home doesn't make sense for an agent right now. When the going is good, and there are fewer houses than buyers, then it makes more sense.

Quick sale is better than no sale. They can reword the next sale however they want. If everyone feels they got a good deal, then the agent is going to get more business. If you sell for an unreal price, but people feel they didn't get a good deal, you aren't going to get more business.

I'm betting some agents are have a good enough feel in the sales field to pull off many "scams" but most probably don't want to risk losing a deal.

pkennedy,

>>If you sell for an unreal price, but people feel they didn’t get a good deal, you aren’t going to get more business.

Uh, was that the case during the bubble? I don't think so. During the bubble it was all about which agent had the most dick in terms of forcing the higher price.

Generally, this is ALWAYS the game. Even right now, in San Diego (read Jim Klinge blog), agents are playing games about pretending to have multiple offers.

I'll rephrase what you said: If you sell for an unreal price, the banks (who are the biggest game in town) will like it and may give you more listings. They don't give a crap how the buyer feels.

Listings are easier to get right now than buyers.

So getting another listing likely isn't an issue. Finding another buyer is. So jacking up prices and having people leave isn't the way to get any sales.

robertoaribas says

it has to appraise, and that is no sure thing today especially on a pushed up vale.
. Yea, we nasty agents all make all the buyer’s pay too much by faking dozens of offers.
Meanwhile, over on EVERY home seller’s blog, “damn agents just want you to accept the first low ball offer, they don’t care about price, they just want a quick sale…”
what a crock of nonsense!

I could say the same about my profession as well, Accounting. Look at what happened with Enron and Aurther Anderson, and how many CEOS kept saying how they didnt know what was happening and didnt keep anykind of ethics, internal control, or discipline over operations.

Are all accountants or realtors crooks ? No, but your profession hasnt any teeth when it comes to quality control and transparency.

I think what he meant is that both sides are complaining. One side says their agents are saying take the first offer! You won't bet anything better! take it! And the other side is saying "You're offer is too low, you're going to miss out!". It happens to both parties, usually when it's a clear buyers or sellers market I'm guessing. But in reality, most people aren't going to sit on a property for 6 months or a year waiting for an offer. If it has been on the market for that long, the agent will just want to get anything for it, they aren't going to play games at that point. People are free to change agents, if your agent screws around and you don't sell in the first couple of months, you're much more likely to move along. If there aren't that many buyers coming along, you don't want to toy with them either.

When most of these agents only do a couple of says a year, they can't risk losing one comission. Perhaps if it's a really good one doing 50 sales a year they can do this, but they're in it for quantity not maximum dollar value per uni either...

robertoaribas says

No listing agent is going to risk losing a sale by making up a fake offer. If I sell for $200K today, I make 6K on a standard listing, and I put the money in the bank today. DOnE! If I tell you “hey there is another offer… blah blah blah…” chances are you walk, and I lose a sale. Kiss that check goodbye, and after a month or two, I might lose the listing two.

That is true. But from what I've witnessed around here, they are not risking a sale. They sale multiple offers to discourage you to even look at the house and/or make an offer. Since no offers come in, they will save themselves the hassle of doing the dreaded 'tearing up high offers' to reserve the properties for a close friend of them, or a buyer of their own. Many selling agents double dip and have a buddy with a real estate license to use as a scapegoat. It's like making a fake account on ebay.

justme says

ortgage.
In other words, no profit for anyone except the commissions for the agents.

What I still find interesting is that EGAM is owned by a realtor :)

Here's another listing by EGAM.
http://patrick.net/?p=29148

Purchased on 10/21/2004 for $630,000

The mortgages are cut off. But at foreclosure, there were two loans.
One for $640k, and another for $75k.

On 1/25/10, EGAM picks it up for $432,500.

Attempts to flip it at $579,500, but fails miserably after falling out of transaction a few times, and finally lowers the price to $539,500.

It's claimed as a regular sale, and also claims that the in-law unit is legal. However, I disagree because according to the Daly City website, in order for an in-law unit to be legal, it must have at least 4 parking spaces, with 2 of them being in-doors (covered). Even so, that doesn't warrant a kitchen at the basement level.

This property will sell for $480k from my observation. But since EGAM is the realtor, he will only lose 3% of that to the selling commission. The funny thing about this property was that I saw it in Foreclosure status. Nobody wanted it, but some how it ended up in EGAM's hands for a much lower price (no MLS assistance).

Take a look at how happy this man is getting spoon fed profits from the bank.

Here's another one.

165 Santa Barbara Ave
Daly City, CA 94014

$639,325 loan taken on this home in 2004.

Some how Sc Property Management picks it up for $272,108 on 11/17/2009.

This home just sold for $450k on 4/16/10.

At $272k, any house around here, I will pick it up without even looking at it. This is an extreme low ball price. This is obviously laundering bailout money into private hands.

2114 Cipriani BlvdBelmont, CA 94002
Similar home...at best we should be seeing pricing around $400K factoring in 40-50% inflation/appreciation since last sale at $270K. $800K is too bubbly. I could see this home
redefulting again if sold at $800K or more. So the next sucker can take a spin and fall off.

Price History
Date Description Price % Chg Source
02/22/2006 Sold $799,000 196%
11/30/1995 Sold $270,000 --

robertoaribas says

Yea I know plenty of incompetent and unethical agents. However, this claim of so many fake other offers, well I haven’t seen it, and basically it defies logic.

Defies Logic, my dear friend Roberto? LOL! Sadly, we may indeed have ethical REA, but if unethical practice helped push prices up for one group of home, such comps will be used unknownly by ethical realtors in pricing future sales.

The secret's out on phantom bids
September 15, 2007

"If Ms O'Neill had contacted RECO prior to responding to questions about RECO's complaints statistics, RECO would have provided the same information that you received," Gibney added in an emailed statement

robertoaribas says

Also, even calling to ask for such disclosure might encourage a first buyer to up his offer, “heck another buyer is about to write an offer, I guess I better not send my offer so low” So, your very idea that somehow this would help homes sell for less is likely wrong.

You, me, and many others buyers before the bubble, never put offers above asking.
Seller wanted 100, buyer always lowballed with 85 or so and the final price somewhere in between. That is how it was done years past. Oh where were these multiple offers when I and many of my friends bought their homes. There were none!

11,000 say otherwise...http://www.appraiserspetition.com/

To: Mr. Ben Henson - Executive Director
Appraisal Subcommittee (ASC)
Federal Financial Institutions Examination Council
email: benh1@asc.gov

cc: Other state or federal agencies with authority in the following matter

"The ASC's mission is to ensure that real estate appraisers, who perform appraisals in real estate transactions that could expose the United States government to financial loss, are sufficiently trained and tested to assure competency and independent judgment according to uniform high professional standards and ethics." From the ASC website.

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.
We request that action be taken to hold the lenders responsible for this type of violation and provide for a penalty on any person or business who engages in the practice of pressuring appraisers to do dishonest appraisals that do not provide for independent judgment. We believe that this practice has adverse effects on our local and national economies and that the potential for great financial loss exists. We also believe that many individuals have been adversely affected by the purchase of homes which have been over-valued.

We thank you for your cooperation and assistance.

E-man sez:

>>You guys sound like conspiracy theoriests. Alright, let me help you solve the mystery.

But E-man, you just agreed with me. We both think the conspiracy theory is wrong.

E-man:

>>If you want a good deal, go to the court house and bid for it.

Disagree. The courthouse auction exists purely to protect the homeowner from the bank trying to pay less for the house than what it is worth. You could get lucky at a courthouse auction, but most likely not.

>> The 2nd and 3rd lien holder would lose out 100% in this case

Don't think so. If 1st lien holder forecloses, the 2nd/3d/whatever lien still exists. It doesn't just go away. Your own example above even explicitly acknowledges that the other lien holders likely got paid, and probably in full, per the numbers.