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Authorities Cannot Shut Down 'Fake Appraiser Operations' in Chicago


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2006 Jun 8, 4:17am   12,127 views  229 comments

by HARM   ➕follow (0)   💰tip   ignore  

Chicago appraisers

We've discussed garden variety "hit the numbers" appraisal (and mortgage) fraud here in numerous threads. I'm also well aware that appraisers didn't CAUSE the bubble, nor are they even on the top 10 list of bubble causes --see "Housing Bubble Pre-Flight Checklist" thread. Even so, this article (thanks to Ben Jones for first posting it) has to take the cake for most egregious, "in your face" fraud I've seen to date.

Apparently, you don't need to have appraiser credentials of any kind in Illinois, nor can you even be prosecuted for practising without a license or committing fraud. Wow.

Appraisals Part of All Fraud Loans
by Lew Sichelman

"...Emblematic of the scope of the mortgage fraud problem throughout the country is what's going on in Illinois, where three out of ten appraisals are found to be forged, according to Robert Gorman, an East Hazel Crest, Ill., appraiser. "That's a significant number," he told the meeting. "And that's only the ones we know of. Who knows what we don't know?"

Gorman said in some cases, appraisers who have had their licenses lifted continue to make valuations using someone else's identification. They swipe the names from class rosters, loan files, and even industry websites, he said.

In other instances, he also said, the "appraisers" were never licensed at all, and are part of a larger scheme to fleece lenders.

Gorman told of one crew of 13 fake appraisers who are working out of a factory on Chicago's South side. The authorities would like to shut down this appraisal factory, he said, but they can't. "They're not licensed, so there's nothing we can do," he said. "So they are still there."

Discuss, enjoy...
HARM

#housing

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229   Jimbo   2006 Jun 14, 3:40am  

Jon,

I am not an investment advisor either, just an IT guy, but I have done reasonably well in the stock market, so I am going to give you the standard "advice": Keep diversified and don't try to time the market.

What are you short and mid-term financial goals? To buy a home? To pay for school? That money should not be in a volatile instrument. Put that money in investment grade bonds, or a bond fund or a CD, like you have been.

The rest of your money belongs in the stock market or other investments. Any money you plan on retiring with belongs in the stock market. I am assuming you are at least 20 years from retirement here. Where exactly you should put your money is the sticky part. Right now my retirement money is 1/4 in an S&P 500 fund, 1/4 in large cap US stocks, 1/4 in Europe and Japan and the rest in cash. Here is where I have to admit not following my own boilerplate advice and tell you that this: 1/4 was in emerging markets until about three weeks ago, when it almost all hit its "stop loss" level and put me in cash. Right now I am just waiting out the correction so I can put it back to work.

My family believes in investing in real estate: my brother has two rentals in Paso Robles (where they are building a new State Hospital) and one in Idaho along with his office in Atascadero, my father owns three rentals in Joshua Tree and my father-in-law four in the Sacramento area. I think they are all making the rookie mistake of over concentration in one asset class.

I am one of the most optimistic people on this blog though and I am also one of the only homeowners, so take that into consideration. Almost everyone here is full of doom and gloom about the US economy, the housing market, the Bay Area, California and life in general.

I am not sure what you should do if you agree with them. One gentlemen suggested stockpiling ammunition. Perhaps you should go the whole nine yards and get a survival shelter full of C rations, gold bars and AK-47s. Just don't forget the arsenic pill in case you get overrun ;-)

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