Evening star., 1952-08-31
Special Treatment
Of One Realty Broker
AssaiIed in Report

OssO SIS
Preferential treatment given
one Washington real estate broker
by the Veterans Administration S
local housing Office was condemned
in the House CT Committee report.
criticized.
The report did not name the
broker. But his close relationship
with Morgan B. Callahan. VA loan
guarantee officer for this area. was
scored.
The broker, identified by COM
mittee sources as Joseph Kinsky.
appeared in an open hearing be-
fore the committee last month. He
has Offices at 1910 Vermont avenue
NV. At the hearing, the COM
mittee traced his operations in a
number of real estate transactions,
attempting to show how he re-
ceived special treatment from Mr..
Callahan.
Friends for Years.
The two acknowledged being
friends of many years standing.
A partial text of this section Of
the report follows:
The broker followed the prac-
tice of acquiring existing property.
IN some cases making extensive
repairs before selling the property
to a veteran.
It was found that 40 out of
rs appraisals made for the real
estate broker were made by two
appraisers. Thrty-one appraisals
were made by one of the ap-
praisers.
A review of assignment records
reveals that the appraiser who
received 81 of the 76 appraisal
assignments was very active in
doing work for the real estate
broker until the appraiser and the
real estate broker had a disagree
ment concerning the appraisal of
two houses. This disagreement oc-
Cured about May IS. 1851.
Apparently Shifted Assignments.
After that time, the appraiser
received only one more assign
ment on applications made by the
real estate broker. Apparently, the
real estate broker was then sue
cessful in shifting assignments for
appraisal on properties in which
he was interested to another ap-
praiSer, since it was noted that
during the period September S,
1851, to December II, 1851, an
other appraiser received eight out
of nine of the appraisal assign
ments for properties in which the
real estate broker had an interest.
A review of Veterans Admin
istration records of appraisals for
the real estate broker revealed
the following typical cases where
the reasonable value had been
raised by Veterans Administra-
tion officials:
An appraisal was submitted on
property located at 522 Twenty
fifth place NE. in the amount of
$12,500. Two days later a Ger
tificate of reasonable value was
issued, and the amount was
changed by a Veterans Admin
istration official to $12,950. The
real estate brokers' books show
that he obtained the property at
q cost of $9,636.55 and spent
$274.39 improving the property.
His net profit is shown as $2,-
O43.79 There appears to be no
justification for the increase in
the reasonable value of this prop
erty.
Profit Over $1,000.
The real estate broker con-
structed two new houses located
at 3404 and 3406 Cheverly avenue,
Cheverly. Md. Appraisals were
submitted in the amount Of ST.
500 on each house. A Veterans
Administration official subsequent
ly raised the reasonable value to-
$19,950 for each house. The two
houses were sold for a combined
selling price of $39, 300, with al
net profit of $3,57720 on both
houses. The appraiser making
these appraisalS testified that
following his disagreement with
the broker over this appraisal he
received no more assignments to-
appraiSe this brokers' property.
There appears to be no justifica-
ton for the price increase.
After the real estate broker
was successful in discarding the
appraiser who refused to appraise
property in accordance with his
desires, he acquired another ap-
praiser and was apparently sue
cessful in having most of his as
signmentS routed through this
appraiser. This appraisers ap-I
praisals were consistently excess
sive and usually a great deal
higher than the selling price, asI
indicated by the following ex-
amples:
The property at 5012 Iroquoisl
street. College Park, Md, was ap-
praised at $10,250 and sold for
$500.
The property at 2630 Monroe
street NE, Washington, D. c.
was appraised for $15,15O. The
broker purchased this property for
$11,25 and sold it for $14,5O0.
Preferential Treatment Indicated.
This committee does not wish
to imply that this real estate
broker INDUCED in criminal or
fraudulent activities. He appar-
emily found it possible to take
advantage of the operation of the
Veterans Administration regional
Office to the extent that he could
influence assignments of apprais-
ers to properties in which he was
interested; he apparently was able
to have appraisal changed on a
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