Portland real estate broker busted

KGW is reporting that at least one local broker has finally been tripped up.

Assistant U.S. Attorney Kent Robinson said Tuesday that 45-year-old Lee Howlett worked with others to pull off a series of fraudulent home mortgage deals through falsified loan applications and fake appraisals. The appraisals on some properties were inflated, and the higher value was used to apply for larger loans.

I'm pretty sure I've seen some of these fradulent deals show up as foreclosures with crazy prices, I'm glad to see at least one of these idiots get his due.

235 NE 94TH AVE - 44% off in 2 years

This poor little house (RMLS# 9000296) lost 44% of its value in under 2 years. Bought for $232k in March 2007 (a few months before the peak) by an investor, it's not on the market for about what it sold for in 1999.

"Bought in 2007 for $232k and priced to sell fast! Mins to I-205 & I-84, max line & Mall 205shops. Updated kitchen, fenced private yard. Great first time home or investment."

The reader who send this in commented: "given its location and condition, it's probably still overpriced".

Given that it's in the shadows of I-205, he might just be right. I can't imagine what has caused the owner to lose that much value in that short a time.

Free Fall Friday - 4340 SE Madison

Here's another house with an interesting history. 4340 SE Madison.

The house sold for $305k in February 2006. It then sold again for $541 in June 2006 (with 100% financing!), a gain of 77% in just 4 months. It went into foreclosure and was bought back by the bank for $355k in October. Last month it sold to the proud new owner's for $295k. That's 45% off it's high!

Unfortunately the property taxes adjusted upwards to reflect the new $541k price, jumping from $2858 to $4373 in 2007. Ouch.

I don't have insights into what happened along the way, but judging by the state of the pool it was likely vacant for a period of time. Any Realtors out there know the details of any of the recent sales?

I also start to question Zillow's methodology with cases like this. If you look at their home value chart (you'll need to click on the 5 year view for the best picture) it was quick to reset upwards with the sale in June 06, but hasn't come back down to reflect the recent sale price. And after all the best indicator of what something is worth is what someone else will pay for it, in this case $295k, not $496k.

What's that smell you ask? Something between fishy and fraud methinks.

More shady lending practices

Clint featured a story from the Oregonian on his blog today, highlighting shady lending practices at Chase.

Over on Mish's blog, he is also highlighting shady practices at Citigroup. "Dear Citigroup Customer"

The first example doesn't surprise me, as it's calling out past practices. But the second one is just sad. Even after all the bad publicity, write-offs, and shameful business practices it seems that some organizations are still at it.

Did You Buy a Home That Was Relisted?

A few weeks ago I asked about the practice of relisting properties here.

Nightline is looking for people who were tricked by the practice of relisting a property that has been on the market for longer than the seller's would like.

If you're interested in talking to them see this website, Did You Buy a Home That Had Been on the Market for a Longer Period of Time Than You'd Thought?