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

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  f/k/a  XXXX   XXXX ,  XXXX  (   XXXX   XXXX    )  for a purchase price of {$440000.00}. The  XXXX  financed their purchase of the Subject Property with a conventional mortgage loan from  PRIMELENDING VENTURES  , LLC  d/b/a  XXXX   XXXX  ( PRIMELENDING ) in the amount of {$350000.00}. 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 through  XXXX   XXXX , a licensed real estate agent who represented the  XXXX  and several other clients who have purchased homes in the  XXXX  on  XXXX   XXXX  subdivision. After reviewing another appraisal performed by  XXXX  and  XXXX   XXXX , the  XXXX  noticed that the both their appraisal and Mr. and Mrs.  XXXX  appraisal used the same comparable sales when other more appropriate comparable sales ( i.e., same floorplan, recent sale, located less than  XXXX  miles from subject property, etc. ) were available.  XXXX  and Mr.  XXXX  repeated use of  XXXX   XXXX   XXXX   XXXX ,  XXXX , Texas  XXXX  ( which had 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 Mr.  XXXX  appraisal of the Subject Property.     As a result of the fraudulently inflated appraisal for the  Subject Property,  the  XXXX  qualified for a mortgage loan in an amount higher than they would have be able to qualify for if the  Subject Property had been accurately appraised. 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. Additionally, the inflated purchase price resulted in the  XXXX  losing at least {$32000.00} when they sold th e Subject Property  on   XXXX   XXXX   XXXX   for {$410000.00}.     Mortgage Fraud Inflated Appraisal  XXXX  and Mr.  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 conventional mortgage loan.   XXXX   XXXX   earns more profit as a result of the increased sales price.  PRIMELENDING  and Ms.  XXXX   XXXX , the loan originator, earn more profit as a result of the increased amount of the  XXXX  mortgage loan.  XXXX  and Mr.  XXXX  earn more repeat business as the appraisers of   XXXX   XXXX   properties due to the lack of an appraisal management company (  XXXX  ). The inflated appraised value of the  Subject Property  benefits everyone except the  XXXX .       XXXX   XXXX   in-house lender, PRIMELENDING VENTURES , LLC d/b/a   XXXX   XXXX  ( PRIMELENDING ), the loan originator, Ms.  XXXX , and   XXXX   XXXX   sales agent, Ms.  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 the MLS, in conjunction with Mr.  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 the discrepancies and inaccuracies contained in the  Subject Propertys URAR is p rovided below. The   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  , Mr.  XXXX , Ms.  XXXX ,  XXXX , Mr.  XXXX , PRIMELENDING, and Ms.  XXXX .      XXXX   XXXX   XXXX   XXXX  Comparabl e Sale No. 2 The  Subject Propertys URAR prepared by Mr.  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 of   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, Mr.  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.     Mr.  XXXX , Ms.  XXXX ,  PRIMELENDING, and HIGHLAND HOMES intentionally use d  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 Ms.  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 the  XXXX  realtor reached out to Ms.  XXXX  regarding the {$440000.00} sale price of  XXXX   XXXX   XXXX   XXXX , Ms.  XXXX  confirmed that it sold for the amount listed on the  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  XXXX  fficial Public Records of Real Property  of  XXXX   XXXX   XXXX , Texas,  Mr. and Mrs.   XXXX  financed the purchase of  XXXX   XXXX   XXXX   XXXX  with a mortgage loan fro m PRIMELENDING  in the amount of {$380000.00}. According to the MLS,   XXXX   XXXX   sold  XXXX   XXXX   XXXX   XXXX  to  Mr. and Mrs.   XXXX  by a cash sale for {$400000.00}, which directly contradicts the deed records that 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   XXXX   XXXX   XXXX   Builder :   XXXX   XXXX     XXXX   XXXX   Gross Living Area :  XXXX  sq. ft.  XXXX  sq. ft.   Bedrooms :  XXXX   XXXX  Bathrooms :  XXXX   XXXX  Garage :  XXXX -car/attached 3-car/attached Sale Date :   XXXX   XXXX   XXXX     XXXX   XXXX   XXXX   Sale Price : {$440000.00}????     On Page  XXXX  of  XXXX  of the  URAR, Mr.   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 sales  XXXX  and  XXXX  as they were built 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  XXXX  (  XXXX  ) months apart.  Mr.   XXXX  conclusion that the subject development lacked more current comparable sales is simply not true. The  XXXX  suspect that there were likely many other available comparable sales that were not used because those buyers selected lenders other than  PRIMELENDING and Ms  XXXX   XXXX  to provide financing.      XXXX   XXXX   XXXX   XXXX  Comparable  Sale No. 4  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 {$490000.00}. The Official  XXXX  ublic Records of Real Property  of  XXXX   XXXX   XXXX , Texas show that on   XXXX   XXXX   XXXX  ,  XXXX   XXXX   XXXX  and  XXXX   XXXX   XXXX  financed their purchase of  XXXX   XXXX   XXXX   XXXX  with a mortgage loan in the amount of {$390000.00}. The  XXXX  indicates that  XXXX   XXXX   XXXX   XXXX  sold for {$490000.00} on   XXXX   XXXX   XXXX   and the purchase price was financed with a mortgage loan in the amount of {$350000.00}.     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  XXXX  data. The glaring discrepancies in the  URAR and the MLS are hi ghly suspicious when the end result is an inflated appraised value for the  Subject Property.      A comparison of the Subject Property and  XXXX   XXXX   XXXX   XXXX  shows the following : Subject Property  XXXX   XXXX   XXXX   XXXX .     Builder :   XXXX   XXXX   XXXX   XXXX   Gross Living Area :  XXXX  sq. ft.  XXXX  sq. ft.   Bedrooms :  XXXX   XXXX  Bathrooms :  XXXX   XXXX  Garage :  XXXX  car/attached  XXXX -car/detached Sale Date :   XXXX   XXXX   XXXX      XXXX   XXXX   XXXX   Sale Price : {$440000.00} {$490000.00} Mr.  XXXX  conclusion that the using   XXXX   XXXX   XXXX   XXXX  . as a comparable sale because the subject development lacked more current comparable sales is simply not true. Mr.  XXXX  appraisal also incorrectly listed  XXXX   XXXX   XXXX   XXXX . as having an attached garage when it actually had a detached garage, as shown in the photographs attached to the 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   XXXX . According to the  Official Public Records of Real Property  of  XXXX   XXXX   XXXX , Texas, Mr.  XXXX  and Mrs.  XXXX  financed the purchase of   XXXX   XXXX   XXXX   XXXX  . with a mortgage loan from   XXXX   XXXX   XXXX   XXXX   in the amount of {$340000.00}. According to the MLS,   XXXX   XXXX   sold   XXXX   XXXX   XXXX   XXXX    to Mr.  XXXX  and Mrs.  XXXX  for {$420000.00}, and the purchase price was financed with a conventional mortgage loan in the amount of {$340000.00}. A comparison of the  Subject Property  and  XXXX   XXXX   XXXX   XXXX . shows the following :  Subject Property   XXXX   XXXX   XXXX   XXXX .     Builder :   XXXX   XXXX   XXXX   XXXX   Gross Living Area :  XXXX  sq. ft.  XXXX  sq. ft.   Bedrooms :  XXXX   XXXX  Bathrooms :  XXXX   XXXX  Garage :  XXXX  car/attached   XXXX -car/attached Sale Date :   XXXX   XXXX   XXXX     XXXX   XXXX   XXXX   Sale Price : {$440000.00} {$420000.00} Although it would have been appropriate, Mr.  XXXX  intentionally avoided using   XXXX   XXXX   XXXX   XXXX  . as a comparable sale because he would not have been able to inflate the  Subject Propertys appraise d value.      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 . According to the  Official Public Records of Real Property  of  XXXX   XXXX   XXXX , Texas, Mr.  XXXX  financed the purchase of   XXXX   XXXX   XXXX   XXXX   with a mortgage loan from  XXXX ,  XXXX  in the amount of {$360000.00}. According to the MLS,   XXXX   XXXX   sold   XXXX   XXXX   XXXX   XXXX    to Mr.  XXXX  for {$420000.00}, and the purchase price was financed with a conventional mortgage loan in the amount of {$350000.00}. The data shown on the MLS for the mortgage on  XXXX   XXXX   XXXX   XXXX . does not match the deed of trust granted by Mr.  XXXX . A comparison of the  Subject Property  and  XXXX   XXXX   XXXX   XXXX . shows the following :  Subject Property   XXXX   XXXX   XXXX   XXXX .     Builder :   XXXX   XXXX   XXXX   XXXX   Gross Living Area :  XXXX  sq. ft.  XXXX  sq. ft.   Bedrooms :  XXXX   XXXX  Bathrooms :  XXXX   XXXX  Garage :   XXXX -car/attached  XXXX -car/attached Sa le Date :   XXXX   XXXX   XXXX     XXXX   XXXX   XXXX   Sale Price : {$440000.00} {$420000.00} Again, Mr.  XXXX  intentionally avoided using   XXXX   XXXX   XXXX   XXXX  . as a comparable sale because he would not have been able to inflate t he Subject Propertys  appraised value.    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 list ed   XXXX   XXXX   XXXX   XXXX   listing price to be {$470000.00}. According to the  MLS, th e list price for  XXXX   XXXX   XXXX   XXXX  was {$440000.00}. The Official  Pu  blic Records of Real Property o f  XXXX   XXXX   XXXX , Texas show that on   XXXX   XXXX   XXXX  ,  XXXX   XXXX   XXXX  and  XXXX   XXXX   XXXX  financed their purchase of  XXXX   XXXX   XXXX   XXXX  with a VA mortgage loan in the amount of {$420000.00}, which is likely relatively close to the purchase price. The MLS indicates that  XXXX   XXXX   XXXX   XXXX  sold for {$420000.00} on   XXXX   XXXX   XXXX   XXXX   and the purchase price was financed with a VA mortgage loan in the amount of {$420000.00}.     Th e MLS data appears to be accurate ; however the URARs comparable sale da ta for  XXXX   XXXX   XXXX   XXXX  does not match the  MLS  data. The glaring discrepancies in t he URAR and the MLS are highly suspicious when considering the end result is an inflated appraised value for the Subject Property.