Consumer complaint received 2017-05-10
Company: PRIMELENDING, A PLAINSCAPITAL COMPANY
State: TX
Product: Mortgage
Sub-product: Conventional home mortgage
Issue: Applying for a mortgage or refinancing an existing mortgage

Complaint:
The Subject Property :  XXXX   XXXX   XXXX   XXXX  On  XXXX   XXXX ,   XXXX  , the  XXXX  purchased a new home located at  XXXX   XXXX   XXXX   XXXX ,  XXXX , Texas  XXXX  ( the Subject Property ) from  XXXX   XXXX ,  XXXX   XXXX   XXXX   XXXX ,  XXXX  (  XXXX  HOMES  )  for a purchase price of {$410000.00}. The  XXXX  financed their purchase of the Subject Property with a mortgage loan fro m PRIMELENDING VENTURES, LLC d/b/a   XXXX   XXXX   (  PRIMELENDING ) in the amount of {$390000.00}. PRIMELENDING is  XXXX   XXXX  in-house lender through an affiliated business arrangement.     After purchasing the Subject Property, the  XXXX  subsequently learned that much of the information on which they had based their decision to purchase the Subject Property was inaccurate and specifically intended to falsely inflate the Subject Propertys appraised value and purchase price.     The  XXXX  became aware of the fraudulently inflated appraisal  ( s )  performed by  XXXX   XXXX ,  XXXX   d/b/a   XXXX ,  XXXX   XXXX   XXXX   (   XXXX   )  and Mr.  XXXX   XXXX   XXXX  because  XXXX   XXXX  is a licensed real estate agent who has represented several clients who have purchased homes in the  XXXX  on  XXXX   XXXX  subdivision. After reviewing another appraisal performed by  XXXX  and  XXXX   XXXX  for one of her clients, Mrs.  XXXX  noticed that the both her appraisal and her clients appraisal used the same comparable sales when other more appropriate comparable sales ( i.e., same floorplan, recent sale, located less than 0.17 miles from subject property, etc. ) were available.  XXXX  and  XXXX   XXXX  repeated used of  XXXX   XXXX   XXXX   XXXX ,  XXXX , Texas  XXXX  with an adjusted sales price of {$450000.00} as a sales comparable was not accidental.     Review of  the Official Public Records of Real Property of   XXXX   XXXX   XXXX , Texas shows that the purchase prices of  XXXX    XXXX   new construction homes in the  XXXX  on  XXXX   XXXX  subdivision by purchasers who did not use PRIMELENDING as their lender paid substantially less because   XXXX   was not able to inflate the appraised value of the homes. None of the properties sold by  XXXX    XXXX   that were financed by a lender other than PRIMELENDING were used in  XXXX   XXXX  appraisal of the Subject Property.     As a result of the fraudulently inflated appraisal for th e Subject Property,  the  XXXX  qualified for a mortgage loan in an amount higher than they would have be able to qualify for if th e Subject Property had been accurately appraised . More specifically, the  XXXX  would not have been able to make a much more substantial down-payment that would have been requ ired on a 95/5 co nventional loan. The inflated appraisal caused the  XXXX  to pay a higher purchase price for the subject property and pay substantially more in interest and principal payments over the life of their mortgage loan.     Mortgage Fraud Inflated Appraisal  XXXX  and  XXXX   XXXX  intentionally inflated the appraised the value of the Subject Property to allow  XXXX   XXXX  to sell the  Subject Property  at its contract sales price while also ensuring that the  XXXX  would qualify for  a 95/5  conventional mortgage loan.   XXXX   XXXX   earns more profit as a result of the increased sales price.  PRIMELENDING  and  XXXX   XXXX   XXXX , the loan originator, earn more profit as a result of the increased amount of the  XXXX  mortgage loan.  XXXX  and  XXXX   XXXX  earn more repeat business as the appraisers of  XXXX   XXXX  properties due to the lack of an appraisal management compan y ( AMC ).  The inflated appraised value of the  Subject Property  benefits everyone except the  XXXX  and the mortgage company who subsequently purchased the  XXXX  mortgage on the secondary market.      XXXX   XXXX  in-house lender, PRIMELENDING VENTURE S, LLC d/b/a   XXXX   XXXX   (  PRIMELENDING ), the loan originator,  XXXX   XXXX , and  XXXX    XXXX    sales agent,  XXXX   XXXX   XXXX , intentionally ignored the inflated appraised value caused by the inaccurate comparable sales used in the Subject Propertys Uniform Residential Appraisal Report ( URAR ).      XXXX   XXXX  listing agent,  XXXX   XXXX , caused inaccurate information to be input or uploaded into the MLS. The inaccurate information listed in th e MLS, in  conjunction with  XXXX   XXXX  intentional selection of favorable comparable sales with unjustified adjustments, shows a conspiracy to fraudulently inflate appraisals for not only the  XXXX  but also for any other homes sold by  XXXX   XXXX  in the  XXXX  on  XXXX   XXXX  subdivision.     A non-exhaustive list of th e discrepancies and inaccuracies contained in the Subject Propertys URAR is provided below. T he  XXXX  are in the process of gathering additional information related to  XXXX    XXXX   sale of homes in the  XXXX  on  XXXX   XXXX  subdivision, which will illustrate a pattern of inflating appraisals and the purchase prices of new home sales by  XXXX   XXXX ,  XXXX   XXXX ,  XXXX   XXXX ,  XXXX ,  XXXX   XXXX , PRIMELENDING, and  XXXX   XXXX .      XXXX   XXXX   XXXX   XXXX  Comparabl e Sale No. 2  The Subject Propertys URAR prepared by  XXXX   XXXX  listed  XXXX   XXXX   XXXX   XXXX ,  XXXX , Texas  XXXX  as a comparable sale. According to the URAR,  XXXX   XXXX   XXXX   XXXX  sold on  XXXX   XXXX ,   XXXX   for {$440000.00}. According to the  Official Public Records of Real Property o f  XXXX   XXXX   XXXX , Texas,  XXXX   XXXX   XXXX  and  XXXX   XXXX   XXXX  financed the purchase of  XXXX   XXXX   XXXX   XXXX  with a mortgage loan from PRIMELENDING in the amount of {$300000.00}. The likelihood that  XXXX   XXXX   XXXX   XXXX  sold for almost {$450000.00} with a mortgage of almost {$310000.00} is very low. Additionally,  XXXX   XXXX  adjustments on the URAR for  XXXX   XXXX   XXXX   XXXX  were not appropriate and not in compliance with the UNIFORM STANDARDS OF PROFESSIONAL APPRAISAL PRACTICE ( USPAP ). The adjustments indicate a clear attempt to manipulate the  URAR  with  XXXX   XXXX   XXXX   XXXX  listed as a comparable sale.      XXXX   XXXX ,  XXXX   XXXX ,  XXXX , and  XXXX   XXXX  intentionally used  XXXX   XXXX   XXXX   XXXX  as a comparable sale ( with an inaccurate sales price ) to the Subject Property when more appropriate comparable sales were available, such as  XXXX   XXXX  sale of  XXXX   XXXX   XXXX   XXXX , which is addressed below. Additionally,  PRIMELENDING  and  XXXX   XXXX  were aware that  XXXX   XXXX   XXXX   XXXX  did not sell for {$440000.00} as she originated the mortgage loan on that property. However, when  XXXX   XXXX  reached out to  XXXX   XXXX  regarding the {$440000.00} sale price of  XXXX   XXXX   XXXX   XXXX ,  XXXX   XXXX  confirmed that it sold for the amount listed on  XXXX   XXXX  appraisal.      XXXX   XXXX   XXXX   XXXX  Available Comparable Sale Not Used On  XXXX   XXXX ,   XXXX  ,  XXXX    XXXX   sold the property located at  XXXX   XXXX   XXXX   XXXX ,  XXXX , Texas  XXXX  to  XXXX   XXXX   XXXX  and  XXXX   XXXX   XXXX . According to the  Official Public Records of Real Property  of  XXXX   XXXX   XXXX , Texas,  XXXX  and  XXXX   XXXX  financed the purchase of  XXXX   XXXX   XXXX   XXXX  with a mortgage loan from  XXXX ,  XXXX  in the amount of {$330000.00}. According to the MLS,  XXXX   XXXX  sold  XXXX   XXXX   XXXX   XXXX  to  XXXX  and  XXXX   XXXX  by a cash sale for {$360000.00}, which directly contradicts the deed records which clearly indicated that they financed the purchase of the home. A comparison of the Subject Property and  XXXX   XXXX   XXXX   XXXX  shows the following : Subject Property  XXXX  Trickle  XXXX   XXXX  Builder :  XXXX    XXXX     XXXX   XXXX  Gross Living Area   : 3,137 sq. ft. 3136 sq. ft.
Bedrooms : 4 4 Bathrooms : 3 3 Garage : 3-car/attached 3-car/attached Sale   Date  XXXX   XXXX ,   XXXX    XXXX   XXXX ,   XXXX   On Pa ge 3 of 6 of the URAR,   XXXX   XXXX  states : Due to the lack of more current comparable sales available at this time in the subject development, it was necessary to extract sale from another similar competing development in the subjects marketing area.     The sales utilized in this analysis are all extracted from within the subjects marketing area, are felt to be the best, most current, comparable and are considered to be good indications of value. Most weight was placed on sal es 1 and 2 as they were bu ilt by the subjects builder and are located in the subjects development.     The Subject Property and  XXXX   XXXX   XXXX   XXXX  have the same floorplan and were sold by  XXXX    XXXX   approximately  three ( 3 ) mo nths apart.  XXXX   XXXX  conclusion that the subject development lacked more current comparable sales is simply not true. The  XXXX  suspect that there were likely other available comparable sales that were not used because those buyers selected lenders other than PRIMELENDING and  XXXX   XXXX  to provide financing.      XXXX   XXXX   XXXX   XXXX  Comparable  Sale No. 5 The  Subject Propertys URAR listed  XXXX   XXXX   XXXX   XXXX ,  XXXX , Texas  XXXX  as a comparable sale. The URAR listed  XXXX   XXXX   XXXX   XXXX  sale price to be {$480000.00}. According to the MLS, the list price for  XXXX   XXXX   XXXX   XXXX  was {$400000.00}. The Officia l Public Records of Real Property  of  XXXX   XXXX   XXXX , Texas show that on  XXXX   XXXX ,   XXXX  ,  XXXX   XXXX   XXXX  and  XXXX   XXXX  financed their purchase of  XXXX   XXXX   XXXX   XXXX  with a mortgage loan in the amount of {$300000.00}. The MLS indicates that  XXXX   XXXX   XXXX   XXXX  sold for {$370000.00} on  XXXX   XXXX ,   XXXX   and the purchase price was financed with a mortgage loan in the amount of {$310000.00}.     The MLS data for  XXXX   XXXX   XXXX   XXXX  is clearly inaccurate. Even if the  MLS  data was accurate, the URARs comparable sale data for  XXXX   XXXX   XXXX   XXXX  does not match the MLS data. The glaring discrepancies in the  XXXX  and the MLS are highly suspicious when considering who is responsible for inputting and verifying the sales data and when the end result is an inflated appraised va lue for the Subject Property.  The inflated appraised value of the Subject Property benefits everyone except for the  XXXX  and  XXXX   XXXX  BANK,  XXXX .  (   XXXX   XXXX   ),  as the purchaser of the  XXXX  mortgage loan through    XXXX   XXXX  .

Company public response: Company disputes the facts presented in the complaint
Company response to consumer: Closed with explanation