Housing Giants - November 24, 2008 - (Page 27)

things are reported to the lender, or the one underwriting the loan. Forgetting to add the appropriate addendum could turn any of the following situations into fraud. R. Randy Lee, Pres-CEO of Leewood Real Estate Group, a builder-developer of low-rise residential homes in the greater New York and New Jersey markets, began advertising a car giveaway on Oct. 1. “Two or three years ago the market was stronger; there were a lot more buyers and we might have only had to throw in a washer or dryer,” he said. The tightening of the market has made it that he has to up his ante with bigger giveaways, and kitchen upgrades with granite countertops are now standard. “Right now one of our projects we have is called a ‘double-green program.’ We are giving away Honda Civic Hybrid cars. We are also planting a thousand trees in a national forest for everyone who buys a house and giving them a lifetime supply of environmentally safe light bulbs — the low-electrical use light bulbs. The double green program is putting green in the pocket of the buyers,” he said. Once the home closes, “We turn the people over to the dealer, they pick out the color; when the car comes we send the check for the car. The people pay the tax, delivery and prep charges and the New York sales tax. We pay the big money for the car. That car runs about $24,000.” In Maple Grove, Minn., some builders just this October are offering 4.99 percent financing if buyers use their own lender, while others are offering $15,000 landscaping credit if you close before the end of November. When this reporter toured a Lennar sales office, a sales rep named Alan said that if the builder couldn’t complete the landscaping before the ground became too hard from the mortgage Fraud by state Florida tops the list for the states with the most reported fraud, while California. Illinois, Maryland and Michigan tie for third. Michigan ranks the highest among them for appraisal misrepresentation, a common builder bailout scheme. Most fraudulent applications contain more than one type of fraud. First Quarter 2008 Mortgage Fraud Rankings by State 1 2 3 4 5 Florida California Illinois Maryland Michigan Source: MARI Quarterly Fraud Report, August 2008 www.Housinggiants.com 11.24.08.Housing giants 27 http://www.housinggiants.com

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Housing Giants - November 24, 2008

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