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September 19th, 2005
Complaint / Real Estate Appraiser
Filed against Jeovani Gaytan
Colorado
Board of Real Estate Appraisers
1900 Grant St, #600
Denver, CO 80203
Attn: Enforcement
Re: My File Number -- Gaytan01
Subject Property:
4759 Orleans St, Denver (GVR), CO 80249
This is a complaint against Jeovani Gaytan, License Number AL40013244.
I have not contacted the appraiser. This matter is not under litigation.
Factual Details of the Complaint:
Who:
Appraiser: Jeovani Gaytan
Buyer: Manuel Perez
Seller: Sanchez
Listing Real Estate Agent: Ernest C Arellano
Selling Real Estate Agent: Frank
Concessionaire: Star Magic Assistance Program
Mortgage Wholesale: FHA/HUD
Person(s) with actual risk of loss: United States Taxpayer(s)
What:
The above team skillfully lied (intentionally deceived) in order to obtain $177,000. They produced a mortgage loan in the amount of $177,000. On March 21st, 2004, the $177,000 was divvied up amongst the team. The loan is secured by a $150,000 property (collateral) and the promise of Manual Perez to repay the loan.
Shortly after moving in, Manual Perez stopped making monthly payments, and then abandoned the property. This property has been thru the foreclosure process.
The appraisal report is an intentional deception produced by Jeovani Gaytan for the purpose of putting money into his own pocket (i.e., fraud). HUD absorbed a loss of $27,000 that is directly attributable to the fraudulent appraisal – plus the legal fees, carrying cost, maintenance, processing, real estate commissions, etc, etc, etc.
Where:
Subject property address: 4759 Orleans St, Denver (GVR), CO
When:
Appraisal effective date: 04/09/04
Appraisal signed: 04/12/04
Closing: 05/04/04
Why:
Each member of the team had their own motivation, but they are all paid on commission – either directly (Real Estate Agent(s), Mortgage Broker, Concessionaire) or indirectly (Appraiser). HUD is best described as politically motivated.
It is unclear if the buyer walked away from closing with net positive cash from the transaction.
For Jeovani Gaytan, the most likely scenario is he was “marketing” – an effort to ensure a steady supply of $350 orders by keeping the customer satisfied. He knows that if he appraised this property at $150,000, he would adversely affect his reputation as a team player, and therefore, reduce his personal revenue stream.
How:
Each of the team members knew what needed to be done, and they did it. Jeovani Gaytan knew the “contract price” was arrived at for the sole purpose of requesting a $179,000 appraisal to support a $179,000 (more or less) loan.
For Example: Star Magic Assistance exists for the sole purpose of allowing HUD to make loans that exceed 100% LTV. Star sits at the closing table, takes $10,000 cash from the proceeds of the loan, peels off some for themselves, and gives the rest to the buyer. As ridiculous as this sounds, everyone involved in the transaction knows it, and they make no effort to hide it. Since HUD assumes the risk, everyone else plays along.
In 2 words, the appraisal report was prepared competently and unethically. Jeovani Gaytan started the appraisal process with the requested value, and worked backwards to support that figure. This is a 19 page report with photos, boilerplate, a detailed sketch, maps, VC, essay section, and signature. The appraiser did everything necessary to allow the loan to close.
Statement Section:
Jeovani Gaytan has/is:
Violated the USPAP ethics rule.
Violated a standard(s) for the development or communication of a real estate appraisal, specifically standards 1 and 2.
Guilty of breech of trust in a business transaction.
Comments:
The appraiser (Jeovani Gaytan) is currently under sanction by HUD (Internet printout attached).
There is no scope of work statement – this is a violation of USPAP Std 2-2(b)(vii)
The report does not address “reasonable exposure time” – this is a violation of USPAP std 1-2(c) comment, SMT-6, AO-7, AO-8, and item (3) in the definition of market value.
USPAP Ethics Rule: An appraiser must perform assignments ethically. An appraiser must perform assignments with impartiality, objectivity, and independence, without accommodation of personal interests.
An appraiser must not accept an assignment that includes the reporting of predetermined opinions and conclusions.
An appraiser must not communicate assignment results in a misleading or fraudulent manner. [Note: Fraud = Intentional deception to cause a person to give up money. Something said or done to deceive.]
It is unethical for an appraiser to accept compensation for performing an assignment when it is contingent upon:
1) the reporting of a predetermined result (e.g.,
opinion of value);
2) a direction in assignment results that favor the cause of the client;
3) the amount of a value opinion;
4) the attainment of a stipulated result; or
5) the occurrence of a subsequent event (i.e., loan approval)
It is readily apparent that Jeovani Gaytan violated all of the above cited portions of the USPAP Ethics Rule. Jeovani Gaytan is a competent appraiser. Jeovani Gaytan is also an unethical appraiser. He set out to produce a report that allowed the loan to close, and he did so in a manner that was as competent and as unethical as necessary to accomplish that primary objective.
Pursuant to USPAP Std 1-5(a) and 2-2(b)(ix), the appraiser is required to review and analyze the contract and the listing (market exposure) and to “summarize the information analyzed, the appraisal procedures followed, and the reasoning that supports the analyses, opinions and conclusions.”
Pursuant to USPAP AO-1, the appraiser must take into account the listing [market exposure], the agreed price, and the pending sale of the subject. The appraiser’s failure to analyze these facts may exclude important information....(See AO-1, lines 32-39).
Pursuant to USPAP Std 1-5(a) and 2-2(b)(ix), if a copy of the contract was unobtainable, a statement on the efforts undertaken by the appraiser to obtain a copy of the contract is required. If the contract is irrelevant, a statement acknowledging the existence of the information and citing its lack of relevance is required. It is unclear if the appraiser (Jeovani Gaytan) reviewed a copy of the contract. If he did not review a copy of the contract, the required statement is not in the report.
If he did review a copy of the contract, the report violates the USPAP requirement to “summarize the information analyzed and appraisal procedures followed”, i.e., clearly state that he did review a copy of the contract.
The appraisal report makes a somewhat misleading effort to disclose a seller concession on page #1 of the URAR, however, there is no analysis of the sales contract.
How could Jeovani Gaytan conclude that the market value was $179,000 when it was obvious that you, I, or anyone else could have bought the property for $169,900? How could Jeovani Gaytan conclude that the market value was $179,000 when it is clear that the seller agreed to accept $168,300? The report does not answer to these questions.
USPAP AO-1 requires the appraiser to consider the pending sale of the subject. There is nothing in the report to suggest compliance with AO-1.
The plain meaning of USPAP 2-2(b)(ix) requires the report to provide sufficient detail for the intended user(s) to understand the reasoning and the rationale for how the market value could be higher than the publicly stated asking price.
In the appraisal report, there is no mention of the appraisal procedures followed with regard to analysis of the sales contract, market exposure, the agreed price, and the pending sale of the subject – this is a violation of USPAP Std 1-5(a) and 2-2(b)(ix), and AO-1.
Per my dictionary: Analysis = An examination of the parts to find out their nature, proportion, interrelationship, etc. A detailed examination. A statement of the results of this process.
What is the interrelationship of the asking price to the market value? The report does not examine this issue.
USPAP dictates the report must include a reconciliation of the difference between the asking price and the appraised value, i.e., a stated and plausible reason. There is no reasoning and there is no rationale – this is a violation of USPAP Std 1-5(a) and 2-2(b)(ix).
Certification:
I certify that the statements and information supplied by me in this complaint including the attachments are true and correct to the best of my knowledge and belief.
Signed
Philip G Rice
11268 E Linvale Dr
Aurora, CO 80014
720-282-3376
Attachments:
Appraisal Report (4 pages)
Sales Contract (2 pages)
HUD Printout Showing Sanction (1
page)
MLS Listing (1 page)
MLS Listing History (1 page)
Foreclosure Info (1 page)
County Records (1 page)
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