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Featured news — posted April 6, 2004
IRS targeting real estate frauds

The Internal Revenue Service (IRS) has more than 4,000 returns under audit involving individuals and entities associated with the real estate business, everyone's favorite agency announced.

Audits, federal tax fraud investigations and money laundering charges are mechanisms the IRS is using to play a key role in the fight against mortgage fraud. The number of real estate fraud investigations initiated by IRS Criminal Investigation doubled in two years, from 107 during the 2001 Federal Fiscal Year to 215 during FY 2003. Similarly, the average prison term handed out by federal judges to defendants in these schemes nearly doubled over the same period, from 24 months to 46 months.

Last year, Paul A. Dailey, owner of Platinum Mortgage Brokerage Firm of Indianapolis, was sentenced to 105 months in prison, followed by three years supervised release, and ordered to pay $3.7 million in restitution. Dailey pled guilty to conspiracy to commit mail fraud and money laundering. He operated Platinum Mortgage in Indianapolis from 1998 until May 2001, during which time the company brokered more than 100 fraudulent residential mortgages on properties principally in Center Township in Indianapolis.

Dailey and other members of the conspiracy, 13 of whom have been convicted, recruited several real estate appraisers and closing agents to assist in the fraudulent scheme. Generally, the properties were appraised for two to three times their true value. Straw purchasers obtained loans on the property well in excess of their true value, the members of the conspiracy shared the profits and the purchasers defaulted on the loans, leaving the properties abandoned and boarded up.

After mortgage lending companies refused to lend money to the Platinum Mortgage customers, Dailey moved to Detroit and opened another mortgage brokerage company, Monumental Mortgage, and continued the scheme there. The total amount of loss attributed to the schemes is more than $8 million.

The IRS says its antennae are particularly up for property flipping schemes involving false statements or inflated appraisals to lenders, two sets of settlement statements — one true one provided to the purchaser and one much higher one provided to the lender; and fraudulent loan qualifications, essentially, identity fraud.

I think I'll stick with Appraiser XSites, thanks

We went shopping for websites for this edition of the
e-Newsletter. Our
Agent XSites for real estate agents and brand new Mortgage XSites have gotten some buzz lately but what about Appraiser XSites, the granddaddy of them all?

You can get an Appraiser XSite for $449, with a 100-day money back guarantee (like with everything we sell), set it up in about 15 minutes, and have one of the coolest looking, most content rich and most functional websites on the Internet (like this one, or this one).

But there are other alternatives. We found one by searching Google for "web site design" and clicked along the paid listings to the right till we found one that actually published its prices (it was the second one we tried).

There were four main plans offered. We figured as a small business we would want the "Sunshine" plan, which the company said is its "best seller."

We get 15 web pages, with four graphics per page, for $949 one-time with a six business day turnaround.

Ok, but we want it hosted, too — the coolest site in the world is useless if it's not actually on the Internet, where people can see it. This company had two options: The design cost dropped to $599 one-time and we could get hosting for $9.95 a month, or we could pay $95 per month for design plus hosting. Our mom didn't raise no dummies, so we want the $9.95, we thought. That's $119.40 per year on top of just $599.

Except that doesn't include "maintenance" — when you want to change something on your site. Your coverage area, rates, news, just want to twiddle with the color scheme and layout, etc. Fortunately, this company offered a $34.95/month maintenance plan, offering up to 10 text changes per month, or three text plus picture changes, and adding up to five new pages (as long as we stay 15 or under). The plan does not include "structural changes," so we're stuck with the layout, but maybe if we put everything together we can live with that. Ok, we're at $599 plus $44.90 per month, or another $538.80 in a year.

Well, hold on, that's about the same as $95 per month ($1,137 vs. $1,140). So let's go with $95 per month. You get 24/7 support with that! Except it's a $95 one-time "setup fee," and the maintenance program isn't as good (only three text changes per month, can only add one page per month)... ok, maybe we'll stick with a la carte and only call the support lines during business hours.

Now, we don't have time to write these 15 pages, but we'd like some material that visitors to an appraiser's site might be interested in. We can get that for $90 an hour, minimum 10 hours, with $750 due at signup.

Also, we want a Flash intro. Not available with this plan? Geez.

So we're going to pay $1,349 one time and $44.90 per month, for a total of $1,887.80. The good news is that if we never want to substantially change our site, can spread the inevitable little changes out over a number of months so as to not exceed our quota, never want customer support in off hours and can live with the text forever, only the $44.90 per month or $538.80 per year will carry over to next year.

Oh, wait — I want online appraisal ordering, assignment management and automatic statusing, too...

Every last feature we wanted is included in an Appraiser XSite, for one annual price. Unlimited changes with an easy, intuitive wizard means no six business day turnaround, and you can change whatever you want. Free domain registration, virus-free e-mail, fully customizable pre-written content pages of interest to appraisal website visitors, assignment management, online ordering... we'll stick with XSites, if it's all the same to everybody.

Check back in a future edition, when we try to learn the value of our house for free online!

Serve on Appraisal Foundation boards

The Appraisal Foundation said it is beginning its annual search for qualified candidates to serve on one of its three Boards. Completed applications for vacancies on the Board of Trustees, the Appraiser Qualifications Board (AQB) and the Appraisal Standards Board (ASB) must be received by July 15, 2004.

There are three At-Large Board of Trustees seats available this year, with one incumbent eligible for re-election. The Board of Trustees is charged with funding the work of and appointing members to the AQB and ASB, as well as providing oversight of these two Boards. Trustees serve three-year terms.

There are two vacancies on the Appraisal Standards Board (ASB), with one incumbent eligible for re-appointment. The ASB is charged with developing, interpreting and amending USPAP. Familiarity with USPAP is a prerequisite of service on the ASB, and a minimum of ten years of appraisal experience is required. ASB members serve a term of up to three years.

Finally, there are two vacancies on the Appraiser Qualifications Board (AQB), with both incumbents eligible for re-appointment. The AQB is responsible for setting minimum qualification criteria for state licensure and certification of real estate appraisers and has established voluntary qualification criteria for personal property appraisers. Familiarity with appraiser qualifications is a pre-requisite of service on the AQB, and a minimum of ten years of appraisal experience is required. AQB positions serve a term of up to three years.

The Appraisal Foundation is interested in expanding the diversity of all Boards by considering applications from individuals involved in multi-disciplinary or non-real property work. For more information or to request an application package, please contact Paula Douglas at (202) 624-3048 or via e-mail at paula@appraisalfoundation.org. If sending an e-mail, please submit your full name, phone number and mailing address.

  
News briefs
Small business health plan fairness urged
The Small Business Health Fairness Act of 2003 (S. 545) was introduced in the Senate by Sen. Olympia Snowe, R-Me., on March 6, 2003, and has stalled since. The House passed its version of the bill, and President Bush in his State of the Union Address said, "Small businesses should be able to band together and negotiate for lower insurance rates, so they can cover more workers with health insurance. I urge you to pass Association Health Plans." Bush has said he will sign the bill once it passes the Senate. More than 25 million of the nearly 47 million uninsured Americans is a small business owner, employee or dependent of an owner or employee.

The National Federation of Independent Businesses (NFIB) last week launched a petition drive and broader effort to urge favorable Senate action on S. 545. The petition drive, which was featured in a full page USA Today ad Friday, allows NFIB members to send periodic reminders to their Senators encouraging them to support and pass Small Business Health Plan legislation. Read more about Association Health Plans and what they could mean to your small appraisal business at AHPsNow.com, and see the online petition here.

New HUD Secretary as old one advises Kerry
Alphonso Jackson Thursday became the nation's highest-ranking housing official a day after the United States Senate confirmed his nomination to be the 13th Secretary of the Department of Housing and Urban Development. Jackson, who was sworn in at a private ceremony at the Department late Thursday afternoon, promised to continue building on the nation's record homeownership rate, increasing access to affordable housing for low-income families and improving sound management practices within HUD.

Meanwhile, former HUD Secretary in the Clinton administration Andrew Cuomo has Sen. John Kerry's ear when it comes to housing. A spokeswoman for the Kerry presidential campaign told American Banker Cuomo is a member of its New York steering committee. Cuomo instituted HUD's Real Estate Assessment Center (REAC) and launched an aggressive campaign for FHA appraisal quality.

Construction spending dips, but can it pirouette?
Spending on new residences, both public and private, dipped by 0.3 percent in February. Private construction fell 0.3 percent and public construction fell 6.8 percent during the month.

February declines likely reflect a combination of poor weather conditions and the stalling of new home sales in the later months of last year, Gina Martin, economist with Wachovia Securities, said. "We expect a pick up in construction spending in the next couple of months as residential construction rebounds," she said. Upticks in applications for mortgages and new home sales are factors that "will show up in higher residential spending figures shortly, most likely in the second quarter of this year."

We're AI Ready 2.7 compliant, in case you have to be
We have added support for AI Ready form ERC2003 and Environmental Compliance Record, and updated support for the 01/01 ERC report. We're now AI Ready level 2.7 compliant, one of two software vendors to have the highest compliance rating. Some of the biggest appraisal clients out there need you to use AI Ready, so we make sure you can. See how the vendors stack up by clicking
here.

Llama XSites
We call Appraiser XSites totally customizable, and the best way to prove it might be to show you a
Llama XSite.

Send tips, feedback and a link to your unique website to the editor: mattb@alamode.com.

e-Newsletter archives



e-Newsletter 3/31/04
Airing FIRREA's laundry on Capitol Hill

e-Newsletter 3/23/04
Tips for backing up your critical computer files

e-Newsletter 3/16/04
Relationship development the key to expanding beyond lender clients

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