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January, 2007 Blog

Forensic Appraisal Aurora Colorado

by:  Philip G Rice, Certified Residential Appraiser, CPA, MBA

01/21/07

Justin M Juarez

Photo

Justin M Juarez is a licensed real estate agent.  In fact, he is the "employing broker" at Liberty Home Group, LLC.  This means that 21 other real estate agents are supervised by Justin, and in return, they split (usually 50/50) every commission with him.  I'm no expert at how things work in a real estate office, but I think Justin has some influence on the professional activity and development of the agents in his employ.

The Denver Post published an article by Margaret Jackson in April of 2006 which included a nice puff piece on Justin Juarez.

Juarez, 27, got into the real estate business when he was 22 and now is the youngest broker/owner franchise owner in Metro Brokers history. Other brokers in his office also are young, giving the business a leg up in the Gen-Y market.

Let's have a look at a recent (09/13/06) Justin M Juarez transaction.  11734 Elkhart St, Brighton, CO  80603. 

The MLS listing shows that Justin M Juarez was the listing agent.  The listing history shows the property went on the market with an initial asking price of $207,800.  After 33 days on market (DOM) the property sold for $222,000 - that means the contract price was $14,200 more than the asking price.  The listing agent (Justin M Juarez) reported a seller concession of $6,600.  The MLS listing says "bring your pickiest buyer".  This is a common comment seen in many MLS listings.  I am beginning to think this comment is Realtor Code for "we will work with you to create cash back at closing".

You might think that someone willing to bid up the price and buy a house for $14,000 more than asking price would be in a position to make a down payment.  In this case you would be wrong.  The deeds report shows that Olivia Troncoso bought the house with a mortgage loan in the amount of $222,000 provided by Fieldstone, the same outfit that helped Shawn Tieskotter get started.

It's my opinion that Olivia Troncoso got significant guidance and help from her real estate agent (Re/Max Avenues) in buying the house and obtaining the $222,000 mortgage.  Furthermore, there was Fieldstone, a mortgage broker, appraiser, seller (Brent D Southerland), listing agent (Justin M Juarez), and title company that played along.  Everyone knew what needed to be done, each did their part, and everyone got a piece of the $222,000.

As it turns out, this transaction was such a good deal for Olivia Troncoso, she bought another house about a week later (09/22/06), with a $238,000 mortgage loan provided by the CIT Group.  The address is 15102 E 116th Pl, Brighton, CO  80603.

Olivia Troncoso bought 2 houses in a week with zero cash, maybe (likely?) cash back at closing.

The loan that Fieldstone made for Shawn Tieskotter in April of 2005 is now in foreclosure.  It's my opinion that both of the above Troncoso loans (Fieldstone and CIT Group) are high risk to follow the Tieskotter pattern - make payments for a few months, and then go into foreclosure.

tags

Justin M Juarez

mortgage fraud real+estate Olivia+Troncoso Justin+M+Juarez Justin+Juarez Liberty+Home+Group ReMax+Avenues Brent+D+Southerland Brent+Southerland Colorado Fieldstone CIT+Group Margaret+Jackson Denver+Post

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01/20/07

Flip Fraud = $227,000

House Pic

10421 Carriage Club Dr, Littleton (Lone Tree), CO  80124

House Pic

Comments:  This property went on the market in January 2004 with an asking price of $569,000 - exactly the same as the next door neighbor.  It sold 4 months later for $505,000.  One month later it went back on the market with an asking price of $763,000.  That's an increase of $258,000 in one month.  The property "sold" right away with a $732,000 mortgage provided by the good people at Elite Mortgage Group.

I consider it likely that the "lender" (Elite Mortgage Group, LLC ) promptly sold this loan to a sucker.  Justin M Juarez was the listing agent on this $730,000 transaction.

It looks like the "buyer" (Charles & Kelly Grimes) made some payments, but the property was in foreclosure in December of 2005.  It went back on the market in early 2006.  I saw the inside of this property when it was on the market in 2006.  This property was not trashed out.  After 240 days on market, the property sold for $580,000 in November of 2006.  That's $152,000 less than the mortgage.  When you include legal fees, carry cost, real estate commissions, etc, it means the sucker got screwed to the tune of $200,000 on this mortgage loan gone bad.

tags

Flip Fraud $227,000

mortgage fraud real+estate Charles+Grimes Kelly+Grimes phil+martinez Elite+Mortgage+Group Justin+M+Juarez Justin+Juarez MB+Harvest Liberty+Home+Group Landmark+Brokers Colorado

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01/19/07

Flip Fraud = $200,000

House Pic

10415 Carriage Club Dr, Littleton (Lone Tree), CO  80124

Comments:  This property went on the market in January 2004 with an initial asking price of $569,000  - exactly the same as the next door neighbor.  It sold in May 2004 with a mortgage loan of $592,500.  The listing agent reported a seller concession of $15,000.  This transaction involved a mortgage fraud of about $30,000 - which was just a warm up.

The mortgage loan was provided by National City (NYSE symbol=NCC) and/or First Franklin a/k/a Merrill Lynch, brokered by Phil Martinez.    Appraisal was done by Brad Brooks (also a real estate agent)- who has twice been disciplined by the Appraisal Board - strike 1 and strike 2.  I have been told there was a review appraisal done by Metro Appraisers, Russell Harrist who is an appraiser and a licensed real estate agent bda Highlander Realty.

Nine days later the same property went back on the market with an asking price of $773,000.  That's an increase of $200,000 in 9 days.  The property sold right away with a $760,000 mortgage loan provided by the good people at First Horizon Home Loan Corp.  I consider it likely that the "lender" (First Horizon Home Loan Corp) promptly sold this loan to a sucker.  Justin M Juarez was the listing agent on the $773,000 transaction.

Jon Hooley Pic

It looks like Jon Hooley (the buyer/borrower) made some payments, but the property was in foreclosure in December of 2005.  In February, 2006 the property went back on the market with an asking price of $818,000.  10 months later the property sold for $595,000.  That's $165,000 less than the mortgage.  When you include legal fees, carry cost, real estate commissions, etc, it means the sucker got screwed to the tune of $200,000 on this mortgage loan gone bad.

The current owner did some fix up and remodel work.  Effective 01/17/07 the property is back on the market with an asking price of $820,000.

tags

Flip Fraud $200,000

mortgage fraud phil+martinez first+franklin merrill+lynch national+city real+estate russell+harrist highlander+realty brad+brooks Jon+Hooley First+Horizon+Home+Loan+Corp Justin+M+Juarez Justin+Juarez MB+Harvest Liberty+Home+Group Landmark+Brokers Colorado

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01/18/07

Flip Fraud = $237,000

House Pic

10376 Weeden Pl, Littleton, CO  80124

Comments:  This property sold for $465,000 in July of 2004.  The sale is reported with a $10,000 seller concession.  MLS shows Joe Ma was the listing agent.  As near as I can tell, Joe Ma has never had a real estate license.  The listing office is shown as Wilkins Realty, which has been defunct since at least 2000 - four years before this sale.  Wilkins may be located at 410 Snowmass Cir, Louisville, CO  80027.

Two weeks later the property was back on the market with an asking price of $730,000 - that's an increase of $275,000 in 2 weeks.  MLS reports the property sold in 14 days at $12,000 above asking price.  Public records shows a mortgage loan of $692,000 made by the good people at GMAC Mortgage.

I consider it likely that the "lender" (GMAC Mortgage Corp ) promptly sold this loan to a sucker.  Justin M Juarez was the listing agent on this $742,000 transaction.

I have photos that demonstrate the property was vacant on 01/09/07.  It looked to me like it had been vacant for several weeks at least.  I formed an opinion that this mortgage loan is headed for foreclosure.

tags

Flip Fraud $237,000

mortgage fraud real+estate Joe+Ma Wilkins Yan+Hong Martha+Faust Leroy+Johnson GMAC+Mortgage Justin+M+Juarez Justin+Juarez MB+Harvest Liberty+Home+Group Landmark+Brokers Colorado

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01/14/07

Complaining to a Black Hole

On the Rocky editorial page (5E) of today's Denver Newspaper, is a short essay that addresses Mortgage Fraud.  It's an important message, and they get it mostly right.

No Quick Fix on Mortgage Fraud

subhead - Such deception already illegal.

Attorney General John Suthers, teaming with a couple of legislators, is promoting a bill aimed at cracking down on the fraud that results in unjustified housing loans and subsequent foreclosures. 

Among other things, the proposed bill would give the division of real estate the authority to deny, or revoke, the registration of mortgage brokers who have been found by a court to have engaged in deceptive practices.

It will also prohibit mortgage brokers, lenders, real estate agents and investors from paying or trying to coerce an appraiser into producing an inflated appraisal -- the weapon of choice when perpetrating fraud.  Appraisers themselves would be punished when found knowingly submitting a false appraisal.  

We hope the bill does some good.  After all, Colorado is said to have a disproportionate share of foreclosures.

Still, we can't help but feel that it's as much political grandstanding as substantive reform.  As one critic says, going after appraisers is just "nibbling around the edges."  The fact is there are already plenty of laws, federal and state, aimed at fraud in the mortgage business.  But prosecutors at both levels of government have been reluctant to take on the cases -- despite repeated pleading.

At a seminar covered by the Rocky's John Rebchook last fall, lawyers, brokers and real estate agents complained the state isn't doing enough to crack down on mortgage fraud.  James Spray of America's Mortgage said bringing fraud cases to the AG "is like complaining to a black hole."  

Granted, the cases are difficult, and the AG's office complains it hasn't got the staff and funds to prosecute many fraud cases.  Still, there has to be a will to go along with the way.  

Former Sen. Bill Armstrong, who's been in the mortgage business, believes the new laws will do little good because they don't go to the root of the problem.  "It's nothing but political hot air," he says.  

The larger problem, he argues, is government-guaranteed housing loans.  "Our government encourages people to get into deals they can't afford," he says.  In order to expand home ownership, the VA and the FHA put people into houses with little or no down payment.  It may be a legitimate public policy, he says, but if you accept it, you'll have to accept the high foreclosure rates as well.  "If it weren't for the government guarantees very few of these loans would get made," Armstrong argues.  The policy encourages plenty of scam artists who are eager to help foolish borrowers leap into the quicksand. 

John Head, an attorney familiar with the industry, says enforcement is lax because the lending agencies quickly sell the loans and they end up on Wall Street as part of an investor's portfolio - an investor who has no idea default is likely.  Once the loan is upstream the original lender doesn't care what happens.  Head suggests the federal government should change its policies so that if there's a default on a loan, it gets charged back to the original lender.

Another problem: Truth-in-lending laws allow teaser ads that don't tell borrowers what they're getting into.  Let the legislature pass the additional anti-fraud laws.  But Congress should also end the policies that encourage the scam artists.

My summary:  We don't need more laws or stiffer fines or longer jail sentences - we need some enforcement.  Right now it's not much of an exaggeration to say there is zero enforcement.  Lip service, empty threats and political hot air are not going to get it done.

We need to enforce the laws and rules.  As a society - we can pay the cost of enforcement, or we can pay the cost of what happens when there is no enforcement.

01/13/07

Shawn Tieskotter Foreclosure

Mortgage Fraud

I hate it when that happens.  How many times has this happened to you?  You buy 14 houses, you borrow a lot of money, and then there is some kind of problem paying the darn mortgage.  And the next thing you know, the houses go into foreclosure.  Dang.

A quick review of the Arapahoe County foreclosure website indicates all 5 of the Tieskotter properties in Arapahoe County have gone into some (beginning?) stage of foreclosure.  What are the chances the other 9 properties (in other counties) are also showing signs of problems with the mortgage?

foreclosure

Adam+Conner Tieskotter Shawn+Tieskotter Kimberly+White Craig+Patterson Liberty+American+Mortgage DCS+Mortgage Lenders+Direct+Capital Fieldstone Stonecreek New+Century+Mortgage NEW Fremont+Investment Countrywide Ownit Peoples+Choice Sebring+Capital MILA Home+Loan+Corp+of+Texas CBSK American+Home+Loan mortgage+fraud foreclosure appraisal appraiser

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01/12/07

Categorically

Mortgage Fraud

I received this letter from a lawyer.  The lawyer tells me that Shawn Tieskotter denies any involvement with mortgage fraud.  In fact - if you read carefully, you will see that Mr Shawn Tieskotter does not just simply deny - he CATEGORICALLY denies.

Of course it's just my opinion, but I think when someone categorically denies something, that pretty well sums it up.  How can you argue with categorically?  As far as I am concerned, you can't.  It would be foolish to try.  It is clear that Shawn Tieskotter is someone who needs to be taken seriously.  I am very concerned.

I have never met Shawn Tieskotter, but I am sure he is a nice guy and all this mortgage stuff is just an innocent misunderstanding.  Before you jump to any conclusions, please carefully read and understand the disclaimer.

Anyone out there who might be thinking of doing business with Shawn Tieskotter should read that lawyer letter and they will quickly realize it's a no-brainer.

As it turns out, just the other day I got a call from Warren Bauer - 480.224.5991.  Warren is a fraud investigator at Countrywide.  Warren asked about Shawn Tieskotter, and I was glad for the opportunity to explain that Shawn Tieskotter categorically denies having anything to do with any mortgage fraud.  In fact, if anyone reading this has any evidence that Shawn Tieskotter is not involved in mortgage fraud - they should please contact Warren Bauer (see below) and provide Countrywide with that evidence because we would not want Countrywide to get the wrong idea.

Warren Bauer
Fraud Risk Management
2595 W. Chandler Blvd.
Chandler, AZ 85224
480-224-5991 TEL
480-224-6302 FAX
warren_bauer@countrywide.com

01/10/07

House Full of Mold

Snow

This is a photo from an REO assignment.  I was there in November.  This is what I saw when I opened the front door.  Click the image for a larger size photo.

As the appraiser, it's my job to figure out how much they (the Bank) can sell the house for.  This was my first mold house.  I have now done 2.  For what it's worth, I am a lot smarter now than I was then - at least smarter about the impact mold has on market value.  It helps to be able to go back a few months later and review the actual sale of the property - it's a reality check.

As every appraiser knows - this is not an exact science.  But it is possible to look at local market data and come up with a reasonable estimate of how much the market is willing to pay for a house full of mold.

I recently completed the McKissock class on mold.  They did a reasonably good job with the class, however, it was mostly about understanding the science of mold (how many microns and the lingo), and not so much help with the practical problem of developing a good estimate of market value.  A big part of the appraisal problem is learning how to effectively deal with the local MLS to get the data.  I needed to figure out a few creative solutions to get at the right data, but I have it now.

Tags:  House Full of Mold

reo mold

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01/10/07

Spam

I have been running this blog on Wordpress for about 6 months now.  For the first 3 months, there was no spam at all.  The next 3 months I got some, but not a big deal.  Over the past few weeks, comment spam has gotten completely out of control.  I delete all of it, so (as far as I can tell) it does no good to the spammer.  But even so, I am/was getting over 100 spams a day, everyday.

As of 01/10/07, I have implemented Akismet.  I am cautiously optimistic this is going to solve the problem.

01/11/07

"Obvious Mortgage Fraud"

Not Vacant

This email received from Jill Suzanne Arthurs January 2nd, 2007.  Jill is a licensed real estate agent and also a licensed mortgage broker.  I agree with most of Jill's comments, disagree with some.  Her comments about my assumptions are incorrect.

Mr. Rice-

My name is Jill Arthurs and I am a realtor with Resident Realty.  I googled my name tonight and was shocked to see it associated with mortgage fraud at one of my listings at 9601 Salem Ct. in Highlands Ranch in your August blog.

I did list the home for the sellers [James & Kathleen Eller] who were friends of mine in January 2006.  From the start I felt they wanted more than their house it was worth and counseled them to reduce the price considering the presence of major electric transmission lines in their backyard.  However, because there were comps on their block in the high $300,000's the price the home was listed for was their choice.  The home had over 50 showings in the 6 months it was listed and although we never had an offer, my sellers were determined to not lower the price below $325,000.

While it was listed with me, my clients were repeatedly solicited by DLC Property Investment Group.  They offered to buy my clients home without the use of a realtor and my clients would receive a subsequent discount for not using a realtor.  As you may know it is against ethical standards for realtors to solicit clients when the property is already listed, but because DLC Property Investment Group is not licensed agent, those ethical concerns were not relevant.  The sellers had already negotiated a deal with DLC Property Investments when my listing agreement with them expired and they completed the sale of the home for $300,000 soon after.  I had nothing to do with the sale of the home, never saw a contract and certainly was not involved in the obvious mortgage fraud that DLC Property Investment/Marc MacFarland/www.weselldreamhouses.com.  perpetrated.

I don't know how your website works, however, I am appalled my name is associated with this deal and feel before you carelessly throw allegations about situations you need to do some research.  Your assumption that because the home was listed with me and that somehow I was involved in this deal casts a incorrect pall on my reputation and business that is absolutely not warranted.  Please remove my name and my association with this alleged fraud.

Thank you

Jill Arthurs
ResidentRealty
Office: 303-870-7367
Fax: 303-683-5694
Email: jillsarthurs@yahoo.com

--- end of email ----

My comments:

My headline Obvious Mortgage Fraud is a direct quote from the email.

At least one detail is not correct.  The statement:

obvious mortgage fraud that DLC Property Investment/Marc MacFarland/www.weselldreamhouses.com perpetrated.

does not check - this URL returns an error.  URL http://www.webuydreamhomes.com/ does connect to a DLC Property Investment Web page.

Tags:

Obvious Mortgage Fraud / $50,000 Mortgage Fraud / August 20th Blog

mortgage fraud real+estate jill+arthurs resident+reality 9601+salem donald+cooper don+cooper lehman+brothers secresha DLC+Property+Investment Marc+MacFarland

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01/07/07

View From the Trenches

Snow

This property is located on the 5500 block of Kirk Circle, in Park View Terrace, Centennial, Colorado.  Map page 350, section N for those of you with Mapsco.  This is not a ghetto.

The house next door and the house directly across the street are vacant.  Imagine if you owned a nearby home and were trying to sell, and this is what prospective buyers saw.  Think this scene might cost you $20,000?

For example - a nearby house at 5532 Kirk is listed for sale.  The listing history shows this property has been on the market since October 12, 2006 - about 3 months.  The listing says it's a "short sale".  They started out asking $244,000, but quickly lowered the price to $225,000.  Timothy Scott Turpin is the owner of the property.  He bought this house 2 years ago.

The prior listing shows that Ed Bannias was the listing agent.  After 126 days on market, Ed raised the price $400 and reported a seller concession of $zero.  Timothy Scott Turpin got a mortgage loan from the good people at Fieldstone Mortgage, the same bunch of yahoos who helped fund the Tieskotter shopping spree.  According to the deeds report, 2 months after Tim Turpin bought the house for $231,900, he was able to obtain a $241,000 FHA loan thru Consumer Financial Services Corp.  Presumably Tim Turpin put $10,000 cash in his back pocket because somehow the property went up $10,000 in 2 months.  Does anyone see a problem here?

Less than 2 years later, Tim Turpin can't sell for $225,000.  And guess who will pick up the tab for the difference?  The American tax payer will get screwed (again), because HUD (the Federal Government) will be stuck with the short end of this stick.

If you look closely at this photo (click on the image for larger size) you will see that someone shoveled a path to the junk in the driveway, but the snow on the sidewalk is not shoveled.  As I drove around this neighborhood, I saw many (way too many) vacant houses with the sidewalk not shoveled.  School starts up again on Monday, January 8th, 2007.  All of the school children in this neighborhood who walk to school (or walk to a school bus stop) will be walking in the street.  I am very concerned about the safety of all the local school kids.

Shame on you Alphonso Jackson.

tags / View From the Trenches

mortgage fraud real+estate Timothy+Scott+Turpin Ed+Bannias Fieldstone Tieskotter Consumer+Financial+Services+Corp FHA HUD Alphonso+Jackson

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