APPRAISAL FRAUD: DEVIL IN THE DETAILS

From Brian Davies

COMMENTS ON CALIFORNIA MELLO ROOS FRAUDS PERPETRATED BY LENNAR, RYAND, SUNCAL.

THE BUILDERS AND SUNCAL THE DEVELOPER FUNDED BY LEHMAN BROTHERS GOT THE APPRAISER (IN THE 990 PAGE MELLO ROOS DOCUMENT ATTACHED) TO SAY THAT A RECENTLY SOLD DEVELOPMENT WAS WORTH $81 MILLION.

THIS APPRAISER FRAUD WAS BASED ON SALES PRICES TO THE SOLD BUILDER AREAS A FEW MONTHS BEFORE.

THIS FRAUD DID NOT INCLUDE AREA COMPS BUT COMPS SOLD TO THE SAME PLAYERS. THE BUILDERS RECEIVED CREDITS (KICKBACKS) OF $13-15,000 PER LOT. THE SCHOOL TAX WAS PAID.

OUT OF THE AMOUNT THE DEVELOPER WAS PAID 25% ADMINISTRATIVE HIDDEN FEES, AND WERE REIMBURSED FOR MANY ITEMS ALREADY PAID FOR.

THIS THIEVERY WAS SO OUTRAGEOUS THAT THERE WAS $1.6 MILLION CHARGED BY THE DEVELOPER (SUNCAL SEE WSJ ARTICLE ON LEHMAN HOLDS SUNCAL CEO PERSONALLY FOR BONDS AND OTHER DEBTS) WHICH WERE FOUND TO BE PRIVATE STREETS. THEY WERE REIMBURSED FOR MANY UNQUALIFIED PROJECTS. THAT AMOUNTED TO BREAKING THE TAX FREE STATUS OF THE BOND OFFERING.

THE WORST THING IS THAT THERE WAS AN AREA 2, ADDED TO THIS MELLO ROOS TAX AREA.

AREA 2 WAS NOT PROPERLY ANNEXED, BUT REGARDLESS IT WAS PUSHED THROUGH AND SOUTHWEST SECURITIES, FULLBRIGHT AND JAWROSKI LLP APPROVED IT. THE OFFERING WAS SOLD AND THE FUNDS DISTRIBUTED.

AREA 2 THE INELIGIBLE AREA BY ALL LAND RECORDS AND LAWFUL ANNEXATION PROCEDURES, RECIEVED $6 MIILION OF INFRASTRUCTURE UPGRADES.

THESE WERE BACK BONE STRUCTURES. THEY ARE IN THE GROUND NOW AND THE AREA 1 WHO PAID FOR THEM WILL NEVER BENEFIT. IT WAS A SCAM AND IT IS IN CALIFORNIA.

A GOOD NEWSPAPER COULD EASILY AGREE WITH THE ASSESSMENT. HOWEVER IT IS TOO DIFFICULT.

THIS AREA WAS NOT ANNEXED TO THE DEVELOPMENT PROPERLY. IN FACT THERE WAS A LETTER WHERE BY THE DEPT OF THE INTERIOR SAID THAT THEY DAMAGED ENDANGERED SPECIES.

THEY DID NOT CARE AND THE DEPT OF THE INTERIOR HAS NO POWER ONCE THE CITY WHO FACILITATED THIS MASSIVE CONSPIRACY ALLOWED THE PULLING OF PERMITS.

I HAVE ALL THIS DOCUMENTED. THE OVERSIGHT BODIES ARE WEAK. THIS $26.3 MILLION DOLLAR MELLO ROOS TAX IS NOW ITSELF OVER 2% OF THE TAX AMOUNT.

THAT MAKES THE TOTAL TAX OVER 3.5% FOR THESE PEOPLE. THIS IS WELL DOCUMENTED AND IT IS SO BAD. THIS IS ONLY PART OF THE STORY. THE DEVELOPER/BUILDERS STEERED 70% OF THE LOANS TO THEIR SUBSIDIARIES. FOR A $500,000 HOME THEY MADE $25,000.00.

CALIFORNIA DOES NOT CARE. THE AUTHORITIES DO NOT UNDERSTAND THIS COMPLEXITY, AND IT IS CRIMINAL.

http://www.scribd.com/doc/10738315/City-of-Indio

HERE IS THE BOND OFFERING. I HAVE DOCUMENTED THE ENTIRE SCAM. THE CITY HAS DEFEASED $ 3MM OF A SPECIAL ESCROW TAX. THAT WE HAD TO FIGHT SO THE DEVELOPER WOULD NOT GET IT. IF THERE WERE NOT ACTIVISTS HERE WE WOULD HAVE LOST THAT PART ALSO.

http://www.scribd.com/doc/38833584/Letters-to-Indio-City-Manager-December-5-2009-MELLO-ROOS-TAXES-BURDENED-HOMEOWNERS-2-30-YEAR-TAX

Department of the Interior Report for Area 2
United States Department of the Interior
FISH AND WILDLIFE SERVICE
Ecological Services
Carlsbad Fish and Wildlife Office
6010 Hidden Valley Road
Carlsbad, California 92009
In Reply Refer To: FWS-ERIV-4301.1
Dec 10 2004
Ms. Susan E. Williams Community Development Services
Building and Safety Director
100 Civic Center Mall
Indio, California 92201
Subject: Notice of Intent to Adopt a Mitigated Negative Declaration and Draft
Environmental Assessment for the Proposed Terra Lago East Project, City of Indio, Riverside County (EA No. 04-11-404)
Dear Ms. Williams:
This letter responds to your request for agency comment on the above referenced Notice of Intent (NOI) and draft Environmental Assessment (EA) for the proposed Terra Lago East project, dated November 4, 2004. The U.S. Fish and Wildlife Service (Service) has reviewed the subject notice and accompanying draft EA, and we offer the following recommendations to assist you in planning for the conservation of sensitive wildlife species and plant communities within the project area. In particular, the Service has concerns regarding impacts to the federally endangered Coachella Valley milk-vetch (Astragalus lentiginosus var. coachellae; hereinafter milk-vetch) and its habitat. This species is known to occur just east of the proposed project boundary and suitable habitat occurs on portions of the project site. We are concerned that impacts have recently occurred to the milk-vetch adjacent to the project site that were to be avoided under the former SunCal project. Furthermore, we are concerned with the lack of effective mitigation measures proposed in the Mitigated Negative Declaration for project impacts on the Palm Springs ground squirrel (Spermophilus tereticaudus chlorus; hereinafter ground squirrel) and the honey mesquite (Prosopis glandulosa) hummock plant community found on-site. Additionally, the Biological Resources section of the draft EA does not address Environmental Evaluation letter f: “Conflict with the provisions of an adopted Habitat Conservation Plan, Natural Community Conservation Plan, or other approved local, regional, or state habitat conservation plan?” This section should be completed and circulated for public review.
According to the EA, the proposed Terra Lago East project is a consolidation of the previously approved Hills (November 1996) and Indian Lakes (May 2000) projects, and is designed to be consistent with the SunCal Indio

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Project Master Plan that was approved December 2003. The proposed Terra Lago East project is geographically located within a subset of these previously approved projects. A biological assessment (BA) was prepared for the proposed SunCal project by James Cornett, dated June 28, 2003, which enveloped the project footprint for the proposed Terra Lago East project. A review and update of the 2003 BA was prepared for the Terra Lago East project by AMEC Earth and Environmental, Inc., dated September 20, 2004. We appreciate the opportunity to comment on the NOI and draft EA and our concerns are addressed in detail below.
Coachella Valley Milk-vetch
According to the 2003 BA (page 13) for the SunCal project, milk-vetch was detected in eastern portions of the site adjacent to Dillon Road, and ‘habitat was found to be suitable for this species on portions of the project site.” The conditions of approval (condition number 4) and Mitigation Monitoring and Reporting Program (BS-2) for the SunCal project required the project proponent to confer with the Service regarding acceptable mitigation for the milk-vetch and to ‘provide proof to the City of Indio of consultations held with the U.S. Fish and Wildlife Service regarding any mitigation measure requirements for loss of potential milk-vetch habitat.” However, a letter submitted to our office by the law office of Hewitt & O’Neil, dated March 12, 2004, stated that ‘no mitigation is offered as no impacts to the milk-vetch will occur as a result of SunCal’s project.” Nonetheless, according to the 2004 BA (page 2), site visits conducted by John Green and Dave Kajtaniak in September 2004 found that extensive blading had recently occurred in the eastern portion of the project site. Though the 2004 BA does not clarify if the occupied milk-vetch habitat was disturbed by the blading, the area has been cleared to Dillon Road, which undoubtedly adversely impacted the milk-vetch population on-site. Because the proposed Terra Lago East project is proposed to be consistent with the approved SunCal project, the City’s mitigation measures for milk-vetch have not been complied with, and this outstanding responsibility still needs to be satisfied. Please see our recommendations below.
The eastern boundary of the proposed Terra Lago East project has been moved to the west, apparently to avoid the previously identified milk-vetch occurrences, however, the 2004 updated BA (page 1) states that, ‘Habitat is similar on the adjacent Terra Lago East site, so by natural seed dispersal, there is at least a chance that it could now occur there as well. Focused surveys during the blooming season of this plant would be required to confirm this possibility.” If the grading that occurred earlier this year redistributed and leveled sandy soils without transporting this material off-site, milk-vetch seeds would remain on-site and the seed bank should remain viable, assuming that some of the bank remains within sprouting depth of the soil surface.
Mitigation measures to offset impacts to milk-vetch should be included as permit conditions for the proposed Terra Lago East project. We recommend that the City require the project proponent to restore and protect, with a permanent conservation easement, the entire milk-vetch habitat that was to be avoided, per the letter from the law office of Hewitt & O’Neil. This area includes those lands along Dillon Road that the current project was reconfigured to avoid. Additionally, focused surveys for this species should be conducted on the remainder of the site during the appropriate blooming season and survey reports, including survey methodology, date of surveys, survey results, and surveyor qualifications should be submitted to the Service and the City for review prior to permitting the proposed project. This information is required to adequately evaluate the current status of this species on the project site, and determine the significance of potential impacts and appropriate mitigation measures.
Palm Springs Ground Squirrel and Mesquite Hummocks

The 2003 BA for the SunCal project reports more than 50 observations of the ground squirrel on-site and states that this species can be expected over most of the area surveyed, which includes the proposed Terra Lago East project site. The 2004 updated BA concludes that, despite clearing of many mesquite hummocks (discussed below), ground squirrels are still likely to be present on-site. This species is a candidate for Federal listing (candidate species are those for which the Service has on file sufficient information indicating that listing as threatened or endangered is warranted by the species has not yet been proposed for listing), and is considered a species of special concern by the California Department of Fish and Game (CDFG), because it is a narrow endemic species that largely occurs in the Coachella Valley within sandy habitats, and is most abundant in mesquite hummock habitat. In addition, the ground squirrel is proposed for conservation in the draft Coachella Valley Multiple Species Habitat Conservation Plan (draft CVMSHCP) to avoid the need for future listing, and provide adequate conservation so that if the species were to be listed in the future, additional funding or habitat would not be needed in the plan area.
Though the draft CVMSHCP provides a habitat model for the ground squirrel that suggests relatively widespread distribution in the Valley, the Service has conducted a 2-year study of the ground squirrel and found that it is largely restricted to stands of mesquite, including substantially higher population densities than in other habitat types, and currently appears absent from much of the modeled suitable habitat. Given the substantial reliance of the regional ground squirrel population on mesquite habitat, the future survival of the ground squirrel appears dependent on the conservation of that habitat type. Historically, the amount of mesquite hummocks in the Valley has been dramatically reduced by agricultural and urban development, to the extent that only about 945 acres of such habitat currently remain. Most of this habitat (about 570 acres, as calculated in the draft CVMSHCP) occurs in isolated patches that were excluded from the proposed CVMSHCP reserve design because of disjunct distribution, small size, and lack of connectivity with larger blocks ofhabitat. Therefore, only about 375 acres of mesquite hummocks may be protected in the future if the draft CVMSHCP is approved. However, most of the habitat that is proposed for conservation under the draft CVMSHCP is threatened by groundwater over-draught, and substantial death and degradation of the remaining mesquite habitat currently is evident. As such, the future survival of the ground squirrel in Valley appears to be at high risk, which adds to the significance of conserving those remaining stands of mesquite that still support the ground squirrel. The CDFG considers this community to be a rare vegetation element in California and of significant importance regionally due to high ecological value and increasing rarity/threat. Please see Enclosure 1 for additional information on the regional importance of mesquite hummocks and threats to this vegetation community type.
The 2003 BA for the SunCal project identified mesquite hummocks (some as high as fifteen feet) within the northeastern and southwestern portions of the proposed Terra Lago East project site, and the 2004 updated BA reports “extensive, extant hummocks within the existing golf course, particularly in the eastern portion of the course, north of the canal, and west ofWasteway Number Three” that were not identified in the 2003 BA. According to the 2004 BA (page 2), site visits conducted in September 2004 confirmed that all of the mesquite hummocks in the northeastern project area and some hummocks in the southwestern area had been bladed. Observations by Service biologists in April 2004 found that all of the mesquite hummocks onsite were undisturbed. Therefore, blading occurred between April and September 2004. Based on available information, the bladed area between the eastern boundary of the proposed Terra Lago East project and Dillon Road is no longer part of any proposed project for unexplained reasons. That the former SunCal project boundary was moved farther west in the current Terra Lago East proposal, suggests that an attempt was made to avoid the area previously documented to support the milk vetch. However, why this area would have been bladed before the City and developer completed its coordination with the Service, pursuant to the City’s mitigation requirement for the milk-vetch, is perplexing. The 2004 BA reports that extant mesquite roots that were bladed this summer are

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currently resprouting. This regeneration indicates that despite the significant degradation caused by the grading, the mesquite stands remain alive and likely will naturally reestablish if left undisturbed, to again provide suitable habitat for the ground squirrel.
The two BAs and the draft EA do not quantify the acreage of mesquite hummocks that occurred on the property at the time of the 2003 assessment for the SunCal project, the amount of mesquite hummocks that have subsequently been bladed, nor the amount of mesquite hummocks still extant on the proposed Terra Lago East project site. Given the proposed elimination of an unquantified amount of mesquite for housing within the existing golf course matrix, and the documented presence of ground squirrels in the existing golf course/mesquite hummock complex, a thorough assessment of the extent of mesquite and ground squirrel habitat is needed to assess the adverse effects of the project proposal. The Service has performed a preliminary assessment based on available aerial photography to help determine a threshold of significance for these potentialimpacts. Though a more careful assessment is needed, we have initially estimated that at least 50 acres of contiguous mesquite hummocks
occurred in the eastern area of the project site, and this entire area was bladed, as reported in the 2004 updated BA and confirmed per personal communication with John Green ofAMEC on December 10, 2004. We did not estimate the acreage of mesquite hummocks that were reported bladed in the southwestern portion of the proposed site. Additionally, we preliminarily estimate that at least an additional 20 acres of mesquite hummocks are extant within the rest of the project site. Based on the potential significance for adverse effects that this threshold assessment has identified, a more rigorous and accurate analysis is needed to quantify adverse effects so that effective mitigation measures can be formulated.
Given our threshold analysis above, the mesquite hummocks on the project site represent one of the largest remaining contiguous blocks of such habitat in the Coachella Valley. These mesquite hummocks are contiguous with, and part of, the regional habitat linkage that supports and connects the ground squirrel population along Dillon Road with those on the Coachella Valley Preserve. This linkage is identified in the draft 2004 CVMSHCP as part of the East Indio Hills Conservation Area.
Based upon review of our records, it appears that the City did not require mitigation for impacts to the ground squirrel and mesquite hummocks, perhaps based on findings in the 2003 BA (page 17), where Cornett suggested that due to the limited size of onsite mesquite hummocks, their isolation from other such habitats, and off-road vehicle impacts, payment of the $600 per acre Coachella Valley fringe-toed lizard Habitat Conservation Plan (CVFTLHCP) fee is adequate mitigation for loss of this community type on-site. The Service does not agree with this assessment. As described above, the extensive acreage of mesquite hummocks that remain extant and those that were bladed are contiguous with, and part of, an important regional habitat complex that supports and connects the ground squirrel population in this area with the populations to the west in the Coachella Valley Preserve. The CVFTLHCP mitigation fee was designed solely for that species and planning program, which did not address the conservation needs of other species, such as the ground squirrel and milk-vetch. To suppose that mitigation for the fringe-toed lizard also offsets significant adverse effects to other species with different habitat requirements suggests an inappropriate double counting of mitigation credits. Therefore, payment of the CVFTLHCP fee does not offset the significant impacts to the ground squirrel from the proposed project.
Summary
The proposed Terra Lago East project is associated with several previously authorized projects (Hills, Indian Lakes, and SunCal), however, it appears that adequate mitigation for impacts to Palm Springs ground squirrel and mesquite hummocks was not provided in the permits associated with these related projects. Furthermore, the

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permit condition to avoid impacts to Coachella Valley milk-vetch associated with the SunCal project apparently has been violated. Any impacts that have occurred, or potentially could occur, to sensitive species and habitats should be addressed through the permit requirements for the Terra Lago East project.
Because of the regional biological significance of the project site for the ground squirrel that cannot be mitigated through off-site replacement/fee payment, we recommend that the project (1) be reconfigured to avoid and connect the extant (ungraded) mesquite hummocks throughout the project site, and (2) protect the graded mesquite hummock habitat along Dillon Road that has been avoided in the current project proposal. As discussed above, the bladed mesquite hummocks are resprouting, which we anticipate will reestablish former hummocks over time, to again provide habitat for the ground squirrel and milk-vetch. Given the unaddressed impacts and mitigation responsibilities discussed above, (3) intensive restoration and management also should be required to accelerate natural regeneration and recolonization processes, and (4) all mesquite hummocks that were bladed (both within the proposed project site and east of the project site) should be monitored for recovery. As previously discussed, on-site restoration and preservation is required to achieve conservation of the regionally significant ground squirrel population found on-site; however, any mesquite hummocks that do not recover despite adequate recovery efforts should be mitigated off-site through habitat replacement at a 3:1 ratio, and (5) the on-site and off-site mesquite hummock habitat should be permanently protected through a conservation easement or donation to a public agency. Additionally, (6) all impacts to the Coachella Valley milk-vetch habitat that were to be avoided, per the letter from the law office of Hewitt & O’Neil, should be offset through restoration and protection of the graded area along Dillon Road, as discussed in #2 above.
If the City does not require mitigation adequate to offset significant effects to Palm Springs ground squirrel and Coachella Valley milk-vetch in the Mitigated Negative Declaration, additional environmental analysis and documentation, and coordination with the Service would be needed to address the unmitigated significant effects of the proposed project.
Please contact Sandra Marquez of my staff at 760/431-9440 if you have any questions or comments concerning this letter.
Sincerely,
//s//Sorensen, for
Therese O’Rourke Assistant Field Supervisor
Enclosure
cc: Kim Nicol, CDFG, Bermuda Dunes
Brian,
I understand from my colleagues in Western Riverside County that you may have more questions about the process on the Terra Lago East project. That

falls within my Division, so I don’t think they will be able to help you. Let me know what your questions are, and I’ll try to come up with some answers!
-Carol
__________________________
Carol A Roberts
Division Chief, Coachella and Imperial Valleys Carlsbad Fish and Wildlife Office 6010 Hidden Valley Road, Suite 101 Carlsbad, CA 92011
(760) 431-9440 ext. 271/fax -5902
carol a roberts@fws.gov

8 Responses

  1. John, I had my own appraisal, but the appraiser was a crook, too. The lawyer on my closing did 3 years in the fed pen for flipping houses with dual transactions and wire fraud. My entire loan origination was fraudulent. Of course, I did not know that at the time. The FBI investigated the lawyer, Alex Newton, Greenville, SC. Google him.
    http://www.challengingforeclosure.com Sirak@challengingforeclosure.com

  2. Remember this the appraiser is contracted to appraise by the seller in my case the bulder developer ( and the table lender as it happens! Oh and the title company owned by the developer) I digress. Anyhoo …. So of course it must be the one who hits the number and guess what he’s gonna get a lot more work now isn’t he nows dependable …so my point is he works for the seller is supposed to give an oppinion on value based on comparables ( based on prior hyperinflated comparables) so the appriaser thinks that is all fine n dandy. However he is vicariously liable because nit only did I rely on it. The consequential ratings of the pool was reflected by it and thus led investors into a equally bad decision. I think the word is duped. So where us the banks due dilgence who sold those bonds as triple a to be later downgraded. The writing us on the wall. Guys I’m calling it in my lawsuit it might be tough but it must be said

  3. GEORGIA RESIDENTS, Please contact me if you are having problems with BAC. sonya36767@yahoo.com

    I know I can’t be the only one in GEORGIA who is getting foreclosed on even though I have made all of my payments.I didn’t even do their HOME MOD. SCAM!!!

    BAC has ruined my credit & know they are trying to throw me out of the house that I built in 2005, for NO DAMN REASON!!! The only thing that I can figure is they are targeting anybody with a mortgage!!!!

  4. Hey, maybe a Plaintiff needs to plead that the homeowner DID order the appraisal since the homeowner paid for it at closing. Any thoughts?

  5. Hi Neva, why did you rely on the banks appraisal? You should of ordered your own before you bought the house.

  6. The appraisal fraud was not only in large developments or inside the banks. There was appraisal fraud in the ordinary process of purchasing a home. Every home was going up in value, or that’s what everybody thought. Thanks to widespread appraisal fraud, house values were artificially inflated all over the country. It is just another area of the real estate world that needs more regulation and transparency. http://www.challengingforeclosure.com Sirak@challengingforeclosure.com

  7. Appraiser was the only ” outsider” but essential to the fraud but do you think he knew he was the outsider none the less I relied on that appraisal and that appraiser I’d bound by standads of practice for his profession which we also rely on. Just as my patients rely on my standards of my profession as an RN they do researching me to check up on my licensure and my background check. It’s a basic assumption thst those things can be expected by any reasonable person so I think due diligence is met

  8. USAP -THE ONE THING LEFT THAT CAN be USED to INDICT for APPRAISAL FRAUD
    By M.Soliman

    1. Only a Jack ass would buy off an appraisal constructed of gibberish and lacking quality comparable data. If the value don’t fit you must NOT acquit.
    2. PV=Comps / Total # comps

    MSoliman
    expert.witness@;live.com

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