• Report: #197388

Complaint Review: Countrywide Financial, Full Spectrum Lending, LandSafe

  • Submitted: Tue, June 20, 2006
  • Updated: Thu, February 28, 2008

  • Reported By:Frederick Colorado
Countrywide Financial, Full Spectrum Lending, LandSafe
7150 Campus Dr, Suite 160, Colorado Springs, CO 80920 Colorado Springs, Colorado U.S.A.

Countrywide Financial, Full Spectrum Lending, LandSafe Fraud, Misrepresentation, or a Truly Depressed Economy? Which is it? Colorado Springs Colorado

*UPDATE Employee: Do more research

*UPDATE Employee: Full Spectrum Lending, LandSafe Fraud,

*Consumer Comment: GO TO ANOTHER BROKER

*Consumer Comment: refinance appraisals are done using the 'SALES COMPARISON APPROACH!'

*Consumer Comment: refinance appraisals are done using the 'SALES COMPARISON APPROACH!'

*Consumer Suggestion: Certified Appraiser

*Consumer Suggestion: Certified Appraiser

*Consumer Suggestion: Certified Appraiser

*Consumer Suggestion: Certified Appraiser

*UPDATE Employee: check your values

*Consumer Comment: Thank you for the feedback. In short, Yes!!

*Consumer Suggestion: Declining values in Co

*Consumer Suggestion: Home Values Drop!

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Subject: Real Estate Fraud, Misrepresentation, or a Terrible Economy? Which is it?

Stable Economy? Where? Did I pick the wrong community to buy a home in? Well, it sure looks like it...

A $40,000 loss in a single family home property appraisal value in 12 months is either fraud, misrepresentation, or proof of an economy going the wrong way. Our home may wind up vacant and this may force us into bankruptcy along with many other. My first real estate purchase in my life is turning out to be the absolute worst investment I have ever made in my life..
Read my complaint letter to Countrywide and LandSafe below:
------------------
Complaint Letter

Before venting my frustration regarding our recent Countrywide experience, I would like to make it clear that Michael Posey has and continues to be professional, courteous, and empathetic. Being a service and quality professional myself, I believe he is a great asset to your organization and you should be proud to call him an employee. In addition, my wife and I have been extremely happy with all contacts with Countrywide and Countrywide services until now. Our prior positive experiences with Countrywide and the professionalism of Michael Posey remain the only reasons we have been patient throughout this painful process, but such patience is quickly being lost as this process moves closer to negatively impacting our family both emotionally and financially.

To summarize the problem; we started the process of refinancing our home roughly two months prior to an expected rate increase. All was going well until the LandSafe organization's contracted appraiser completed and submitted his appraisal to Countrywide at a level nearly $36,000 less than the appraisal used last year to obtain the HELOC and nearly $54,000 less than the value provided by the Weld County Assessor's Office. Now, the appraiser and LandSafe are apparently not responding to repeated requests to justify the appraisal and delays beyond our control continue.

To provide some background supporting our concern, we bought this (our first) home on May 31, 2002 and refinanced roughly two years ago for a lower rate at $197K based on an appraisal of roughly $220K. Even as recent as a year ago, we obtained a HELOC through Countrywide with the same level of appraisal. Based on these numbers alone and the short timeframe between the last appraisal for the HELOC and now, this ridiculously low appraisal of $184K seems dramatically out of line for our home which is listed at a total property value of $238,347 by the Weld County Assessor's office. The home is located in a newer and growing community with comparable homes (of which this model is one of the largest in the area) being sold in the $200-250K range. Even vacant foreclosure homes with 500 less square feet, beat up interiors, destroyed landscaping, and fewer rooms are selling for the appraisal value given here. It simply does not make any sense!

First, I am requesting a second appraisal of which will be paid for by Countrywide and completion of this process no later than July 1st, 2006. Second, if this ridiculously low appraisal value stands, I am also requesting a written explanation by a Countrywide executive justifying how a single year in this growing area of Colorado could render such a dramatic loss on an individual family home. In this case, I intend to take such information to the local media to warn other potential home owners about this serious decline in value based on the information provided by Countrywide and LandSafe.

However, I am hopeful this will not be necessary and someone at a management level in the Countrywide organization will promptly move this process forward and provide us some level of comfort that Countrywide truly cares about our business as an individual family. The delays caused by the Countrywide appraisal review process and the dramatic financial loss as presented by the perceived incompetent LandSafe appraiser are substantial enough for us to seriously consider bringing our current and future business elsewhere and/or consulting with legal counsel.

As a side note, it amazes me that someone as young as 18 can go spend $100 on the Registered Appraiser application and as little as two weeks (75 hours) in a classroom to learn just enough to pass the ASI Level A exam when they have such a substantial role in the real estate market and the emotional and financial lives of home owners they come in contact with. This being said, why does an organization like Countrywide place so much stock in the opinion of individuals that simply plug information into a computer program only to return a number with little regard for validating its accuracy?

As of 6/19/06, Full Spectrum closed the refinance efforts and severed communication following my complaint above being submitted to them. I did not receive a second appraisal as requested and I have not and probably will not receive a written explanation regarding the loss from a corporate executive as requested. We are seriously looking to cash out my 401k and pension plan that has been funded for the past 6 years just to get us down to only 13k above this ridiculous appraisal value. We are also looking for additional mortgage resources and companies that are more ethical and realistic than how we now feel about Countrywide, Full Spectrum, and LandSafe. Even though we never want to do business with these companies again, we may someday again get stuck since they sell the mortgage notes all the time without the buyer's authorization. -

Brian
Frederick, Colorado
U.S.A.

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This report was posted on Ripoff Report on 06/20/2006 09:39 PM and is a permanent record located here: http://www.ripoffreport.com/r/Countrywide-Financial-Full-Spectrum-Lending-LandSafe/Colorado-Springs-Colorado-80920/Countrywide-Financial-Full-Spectrum-Lending-LandSafe-Fraud-Misrepresentation-or-a-Trul-197388. The posting time indicated is Arizona local time. Arizona does not observe daylight savings so the post time may be Mountain or Pacific depending on the time of year.

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Updates & Rebuttals

#1 UPDATE Employee

Do more research

AUTHOR: Animal - (U.S.A.)

if you knew the industry better... then you would know that the reason for appraislas coming in low now is 1 b/c they were stretched in the first place...and 2 foreclosure is up 97% from last year and your next door neighbor could be selling for $80k less because he can not afford his arm that just adjusted up 3% so he quik sells his home... so look at all factors!!! Its not Countrywide is a scam because your appraisal came in short Yell at the gov Maybe for the failing economy but lets get real...?

PS. The trueth Is C-wide is providing loans to less than perfect candidates to dig them out of these horrible situations at this time so dig a little deeper get a hug and lets all work as one!
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#2 UPDATE Employee

Full Spectrum Lending, LandSafe Fraud,

AUTHOR: Jeff - (U.S.A.)

First of all I appreciate the situation you have gone through and since I am in a market that had above average appreciation levels for a long period of time and now they are tumbling I see this every day.

First of all a Landsafe appraisal is just like any other appraisal except its accurate. The real problem arises in the broker world where they can call their favorite appraiser and name their value. Many banks have weak appraisal review guidelines especially during the refi boom.

If the appraisal came in light then you look at the comps, were they within 1 mile, are they of same age and amenities and were they in the same subdivision, there are several other factors involed. If they werent then Landsafe would have issued a value opinion as any Landsafe appraisal with adjustments over 10% needs a desk review or it cannot be cleared to close. This is a safety net to protect against values being inflated.

The problem I see every day is that Countrywide buys so many loans and most are done by brokers who lie, cheat and commit fraud to get a loan done. Every customer that calls my office has account info showing how they originated the loan. I am always alarmed when I see the word ACQUISITION as I know it was a broker loan and who knows what I will find. I see brokers stating fixed incomes at 2 to 3 times the actual income, I see mobile homes that were refinanced as single family homes, and I see appraisal where they used comps from 3 to 6 miles away,and the subject was seriously inferior to the comps but this was obviously done to make the loan easier.

Full Spectrum is not just a subprime lender as they have over 100 prime products and they are one of the most ethical companies out there. It is the only company I know that has a software that will run every prime product on a sub prime deal to see if it can be uplifted into a paper product and 50% of the time it does get the uplift if the LTV is low and mortgage history is not too bad. You cannot use stated income on wage earners or bank statements on anyone who is not self employed.

There is also a financial benefit worksheet that has to be filled out on every sub prime loan and it has to show benefit or underwriting will not approve it. I promise you I fight with underwriting on a daily basis about whats beneficial to the client and whats not. I have been in the mortgage business for 10 years and have had my own company.

I can tell you I DOUBT there are any other companies with the ethical structure that Countrywide has in place. The big problem is that the brokers and unethical appraisers have tainted the market and now that all the fun is over we are seeing the repercussions. Borrowers are just as much to blame as I have lost loans to brokers and unethical mortgage companies who run automated appraisals and can name their value.

I have had clients tell me flat out that they are going with the other guy "because he got me what I wanted" not understanding what an ignorant decision they have made and how it will impact them in the future. Get educated and stop placing blame!
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#3 Consumer Comment

GO TO ANOTHER BROKER

AUTHOR: James - (U.S.A.)

BRIAN
I too had a bad experience with Country Wide and their so called appraisals. mine came in 27,000 under where it should have been. But to make a long story short i went to another company, after searching and researching, and found one with a good rep. Homeloan Advisors and the person i dealt with was a Josh Thorne. super company and got what i needed. Good luck

jrkluge
pa
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#4 Consumer Comment

refinance appraisals are done using the 'SALES COMPARISON APPROACH!'

AUTHOR: Brad - (U.S.A.)

As a member of the mortgage industry, I would like to add that when refinancing someone; 'Sales Comparison Approach' is used when determining a value of a home. This bases the value of your home on the sales of comparable homes in your area. If your home appraised below what you think it would be or a previous appraisal; it could be attributed to foreclosures in your area, or that some homes were sold below their potential value for one reason or another.

For example: a home who's owner is going to foreclose might sell their home below the actual value because they want to get rid of it quick and avoid foreclosure. On another note, a home could need substantial repairs, and the home owner does not want to worry about completing them so they just let it go for much less than it should be sold for. All of these factors have a direct impact on the value arrived at using the sales comparison approach.
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#5 Consumer Comment

refinance appraisals are done using the 'SALES COMPARISON APPROACH!'

AUTHOR: Brad - (U.S.A.)

As a member of the mortgage industry, I would like to add that when refinancing someone; 'Sales Comparison Approach' is used when determining a value of a home. This bases the value of your home on the sales of comparable homes in your area. If your home appraised below what you think it would be or a previous appraisal; it could be attributed to foreclosures in your area, or that some homes were sold below their potential value for one reason or another.

For example: a home who's owner is going to foreclose might sell their home below the actual value because they want to get rid of it quick and avoid foreclosure. On another note, a home could need substantial repairs, and the home owner does not want to worry about completing them so they just let it go for much less than it should be sold for. All of these factors have a direct impact on the value arrived at using the sales comparison approach.
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#6 Consumer Suggestion

Certified Appraiser

AUTHOR: Russell - (U.S.A.)

There are several levels of appraiser licensing in Colorado. The next time you are required to have an appraisal, request a Certified Residential Appraiser only. Certified Residential is the highest level of appraiser licensing for residential appraisers in Colorado. More experience and education is required for the highest license level.

As a Certified Residential appraiser who has a working relationship with Landsafe, I can say that there is absolutely no pressure from Countrywide or Landsafe to "hit" a specific value or to be "conservative". We are supposed to be an unbiased third party.

Unfortunately, the same is not true for unreputable lenders, who will pressure the appraiser to hit a high value. A good appraiser will compare your property to recent sales of comparable properties in your immediate neighborhood and reach a value opinion.

The market has declined in many neighborhoods in Weld county. If you have a high number of foreclosures in your neighborhood then it's possible that they are driving the market down.
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#7 Consumer Suggestion

Certified Appraiser

AUTHOR: Russell - (U.S.A.)

There are several levels of appraiser licensing in Colorado. The next time you are required to have an appraisal, request a Certified Residential Appraiser only. Certified Residential is the highest level of appraiser licensing for residential appraisers in Colorado. More experience and education is required for the highest license level.

As a Certified Residential appraiser who has a working relationship with Landsafe, I can say that there is absolutely no pressure from Countrywide or Landsafe to "hit" a specific value or to be "conservative". We are supposed to be an unbiased third party.

Unfortunately, the same is not true for unreputable lenders, who will pressure the appraiser to hit a high value. A good appraiser will compare your property to recent sales of comparable properties in your immediate neighborhood and reach a value opinion.

The market has declined in many neighborhoods in Weld county. If you have a high number of foreclosures in your neighborhood then it's possible that they are driving the market down.
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#8 Consumer Suggestion

Certified Appraiser

AUTHOR: Russell - (U.S.A.)

There are several levels of appraiser licensing in Colorado. The next time you are required to have an appraisal, request a Certified Residential Appraiser only. Certified Residential is the highest level of appraiser licensing for residential appraisers in Colorado. More experience and education is required for the highest license level.

As a Certified Residential appraiser who has a working relationship with Landsafe, I can say that there is absolutely no pressure from Countrywide or Landsafe to "hit" a specific value or to be "conservative". We are supposed to be an unbiased third party.

Unfortunately, the same is not true for unreputable lenders, who will pressure the appraiser to hit a high value. A good appraiser will compare your property to recent sales of comparable properties in your immediate neighborhood and reach a value opinion.

The market has declined in many neighborhoods in Weld county. If you have a high number of foreclosures in your neighborhood then it's possible that they are driving the market down.
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#9 Consumer Suggestion

Certified Appraiser

AUTHOR: Russell - (U.S.A.)

There are several levels of appraiser licensing in Colorado. The next time you are required to have an appraisal, request a Certified Residential Appraiser only. Certified Residential is the highest level of appraiser licensing for residential appraisers in Colorado. More experience and education is required for the highest license level.

As a Certified Residential appraiser who has a working relationship with Landsafe, I can say that there is absolutely no pressure from Countrywide or Landsafe to "hit" a specific value or to be "conservative". We are supposed to be an unbiased third party.

Unfortunately, the same is not true for unreputable lenders, who will pressure the appraiser to hit a high value. A good appraiser will compare your property to recent sales of comparable properties in your immediate neighborhood and reach a value opinion.

The market has declined in many neighborhoods in Weld county. If you have a high number of foreclosures in your neighborhood then it's possible that they are driving the market down.
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#10 UPDATE Employee

check your values

AUTHOR: Rachel - (U.S.A.)

Dear Brian and anyone else refinancing with Full Spectrum Lending:


Countrywide's Full Spectrum Lending division OWNS Landsafe. Now you understand why they always give the most conservative value that they can get away with. Appraisers have subjective wiggle room and in most cases it is to get the MOST value as possible, but in this case they (Full Spectrum) will cut it to the bone and give you the lowest possible value that is allowed by the state appraisal guidelines.

If the value is not challenged then borrower's like you won't know. In my opinion they do this to protect their "portfolio." By the way, it is a company policy to order all appraisals thru Landsafe. They will not do the loan unless it ordered directly thru them.


My suggestion is that if you are hell bent on doing a loan thru Full Spectrum then you better get some comps in your neighborhood to support the value you think your house is really worth. I would also call a realtor in your area, as they have a good idea of the values as well. Keep in mind that you can only go back up to 6 months on completed sales, and there are other restrictions on the comp as well.

By the way, it is not true that any tom d**k or jane can get an appraisers license. In fact, the test is very difficult and as I understand studying for it is a bear.
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#11 Consumer Comment

Thank you for the feedback. In short, Yes!!

AUTHOR: Brian - (U.S.A.)

I definitely understand that values rise and fall. Now that I am further into battling this process and the companies that are out there to screw you, I have a better understanding of what happened.

1. We have had 15 foreclosures, supposedly reported in our area since the beginning of the year, which inevitably brings down the value of our home.
2. We had a second appraisal done with a different lender, Quicken, two weeks after the first with Countrywide, and MIRACULOUSLY gained $12,000 in value in our home. This supports my point that these appraisals are a joke and simply in the best interest of the lender.
a. County Assessed at $238,000 so they can collect more tax.
b. Countrywide appraised at $184,000, which locked us into the ARM with negative equity.
c. Countrywide appraised at $220,000 only 7 months ago to get us into the HELOC, so I am not buying a $36,000 loss in value in 7 months.
d. Quicken came in at $196,000. Just enough to move the refinance process forward, but we are catching "screw ya's" in their estimate paperwork already and calling them on it.

Without going into more long drawn out details, I can sum this up by saying that these lenders (at least the one's we have dealt with) do NOT work in the best interest of their customer. Therefore, learning the hard way, it is imparitive to read and re-read the documentation, question everything, engage a real estate lawyer when possible, and remember that this is a business transaction. In our situation, I honestly feel like we fell victim to equity stripping as the value of our home was quickly inflated to the point that made us stupid enough to buy into what the sale rep was selling a couple years ago that stuck us with this ARM (young, limited knowledge in this area, and naive). Looking back on things, I honestly do NOT believe our home was worth what they told us it was worth in the appraisal two years ago (and 7 months ago with Countrywide) and the comps used (after reviewing the copy) were definitely questionable. I also recently challenged the County Assessors value and got the $238,000 reduced to the $195K range, which I had no idea you could do. I now believe if more accurately reflects the market value as a result of the recent declines in our area. Bottom line, nobody truly knows what our home is worth and it all boils down to individual opinion that can easily be manipulate through collusion between the lenders and the "preferred" appraisers or appraisal services.

All-in-all, this has been quite the learning experience we will never forget. I believe we were taken advantage of to a certain degree and I do readily admit that we made some stupid mistakes along the way. Oh well. Live and learn, right?

Thank you very much for the feedback and information.

-Brian
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#12 Consumer Suggestion

Declining values in Co

AUTHOR: Steve - (U.S.A.)

Brian,

I have added >>>> and <<<< to highlight certain areas of this report that I pulled from my online mortgage banking magazine.

After you read this, do you still have the same opinion that you were screwed? The rest of the country is beginning to see declining values, which brings on defaults and foreclosures. It is unfortunate that you happen to live in the state that is leading the pack.

The article:

Single-family housing permits in Colorado Springs continued to decline in April, for the fourth consecutive month and the sixth time in the last seven months, according to the U.S. Department of Commerce. Sales of existing homes fell 0.5% through April and the median price was 3.6% above its level 12 month ago. The inventory of homes on the market was 19.4% above April 2005. Foreclosure rates in El Paso County rose 2.1% through April. One out of every 155 homes was in foreclosure in the first quarter, the 13th highest rate in the country.

Home inventories rose 18.2% over the first four months of 2006 in metro Denver, to 29,045 units. Sales increased 2.8%, although they were down for the month. The median sales price was about 2% higher than a year ago. >>>>>>The Denver Post reported that about half of homes priced under $250,000 are in foreclosure or are selling for less than the amount owned on the mortgage. One out of every 105 homes in metro Denver was in foreclosure in the first quarter, over triple the national rate of one out of 358 and the fifth highest in the country. Colorado led the nation in foreclosures in March and April.<<<<<

>>>>>Colorado had the dubious distinction of leading the nation in foreclosures in March and April, according to RealtyTrac. In Colorado they were up 96% in the first quarter, then fell 31.3% in April. Weld County <<<<<< YOUR COUNTY<<<<
>>>>>>Coloradans have the second lowest level of equity in their homes among the 50 states, according to a study by First American Real Estate. The company reports that 28.5% of Coloradans have 5% or less equity in their homes and 47% have 15% or less.<<<<<<
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#13 Consumer Suggestion

Home Values Drop!

AUTHOR: Steve - (U.S.A.)

I have been a mortgage broker for several years and we are entering another phase of weakening values in many parts of the US. This is only the beginning, how deep the cycle will run is unknown.

Brian,here are some suggestions for reviewing your appraisal. Do you have a copy? You are entitled to one from Full Spectrum/Countrywide. Look for the page that has your home with the 3-4 comparable homes. Is your home accurately represented? is the size, bedroom/bathroom count accurate? There will be an address for each of the comps. There is also a line by line comparison of the features of each house with adjustments up or down for value compared to your house. Also on this page you will find the date and sales price that each of these comparable houses was last sold.

If the homes used as comparables are within a mile of yours, are of similar size, bedroom/bathroom count, 5 years +/- in age, and the total adjustments for each are less than 8% +/-, then they are probably valid comps. Homes that are LISTED for sale have no influence on your value and not used as comparables if there are homes near you that have actually SOLD that can be used.

Full Spectrum Lending is the sub-prime "division" of Countrywide. My experience with Landsafe appraisers is that they will be a little conservative. ALL, and I mean ALL, sub-prime companies have an appraisal review process. They want to make darn sure that the collateral(the house) is sufficient to pay off the note if the home must be sold at foreclosure. Sub-prime companies hae a significant higher rate of defaults (hence "sub-prime").

I suggest that you contact a local mortgage broker that a friend, family member, co-worker recommends. The broker will have access to many, many lenders. Even lenders that will do a second mortgage to over 100% of value if you can qualify. Get another appraisal done.

Good luck on this!
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