Thursday, July 19, 2007

The Saga of A Mortgage Broker

Appraisal Pros Prose

Saga Of A Mortgage Broker

July 19th, 2007 10:11 AM

I found this story interesting - just another one of thousands of sad, sad stories of the greed, fraud, and crime that accompanied the housing frenzy in the last 10 years that will continue to haunt every aspect of all of our lives for another 10 years!

The Saga of A Serial Broker:

Name: Altaf Shaikh

State of Business: California

1989: Altaf comes to US from Pakistan and begins work at a Taco Bell and sells leather jackets at a flea market.

1994: Takes a job as a car salesman and averages $3,000 per month.

1997: Encouraged by a friend, takes a job as an assistant manager at Ameriquest Mortgage Co., then a small subprime mortgage lender.

1999: Moves to Atlantic Financial Mortgage's San Jose branch.

2000: Hired as assistant to a loan officer at Home Advantage Corp. in Fremont.

2001: Signs on at Hampton Financial in San Jose. In the same year, he opens his own office where his business is called West Coast Marketing. He scouts for potential customers and assists them in filling out mortgage applications to send to Hampton Financial.

2002: Hampton terminates relationship with Shaikh due to borrowers' complaints.

2003: Altaf moves on to Golden Gate Mortgage in Hayward, California. Uses an alternate name - Zak Khan. Buys a $2M home with swimming pool.

2004: Moves on yet again to Secure Financial, where he brokers loans using the name Atlya Khan.

2005: Honored by World Savings Bank, along with Secure Financial, with a "Top Broker Award".

Present: Working as a car salesman once again in the Fremont, California, area.

In May 2007, Mr. Shaikh, 46 years old, pleaded no contest to charges of grand theft in a plea agreement with 9 California counties. He lied to borrowers about the terms of their loans, forged documents, and had checks written to companies that he controlled without the borrowers' knowledge. Zak Khan will be sentenced in August 2007 and will hear the amount of restitution he must pay and find out if he will serve the one year jail term requested by prosecutors.
Not present at the hearing will be the hundreds of borrowers scammed by Mr. Shaikh, including the elderly and the poor. Though some have sued the unlicensed broker, their chances of ever collecting a dime seem slim.

One year in jail seems a very light punishment for someone who has taken such advantage of those in desperate situations......

'Til next time - it's all good!

Tuesday, July 03, 2007

Does It Really Matter Who Tells You How Much Your Property Is Worth?

Appraisers have been accused of "sour grapes" on the whole AVM vs. human valuation of residential real estate. So, just out of curiosity, I ran six addresses that we appraised in the last six months through the Zillow software to see how close the numbers would come up. I was shocked at the results! I had always assumed that Zillow would tend to overvalue property and that only fueled homeowners' beliefs that their property is worth more than it really is. But, not one property came in at the value that we appraised it for! In fact, every single property came in on Zillow for thousands less than we appraised it for! The smallest difference was a paltry $12,000.00 (enough to make or break a purchase or a refi, for sure!), and the largest difference was an astounding $280,000.00! Averaged over the six properties I researched, Zillow undervalued properties at $141,000.00. There are many factors that contribute to the differences, but no matter which side of the argument you are on, the numbers prove that there is no substitute for the human factor in property valuation!
I read a great article recently, also, in The Detroit Free Press about AVM vs. Appraisal. It was written by Kenneth R. Harney, who is the Washington Post's real estate guru. He says, "Bottom Line: Even FNC calls appraiser-collected data "the gold standard." AVMs can be useful starting points - although Zillow's free "Zestimates" have been criticized for frequent inaccuracy by a variety of groups,.......If you truly want to know what a property is worth, don't settle for less than an experienced appraiser, live and on site."
To read the entire article, visit washingtonpost.com and search for articles by Kenneth R. Harney.
I welcome comments on both sides of this argument! Have a great day!