I’m a residential appraiser in Canada. lol I gain nothing from lying about that.

Yea the independent appraiser is the expert. However they still use information provided by the property owner. Example being when appraising using the income approach (which is the most common method for non residential properties) In layman’s terms you appraise the property based on the income it generates. If the property owner lies about their income and expenses the appraiser can’t really validate those values beyond what is provided to them.

Now do the high end appraisers have other ways of validating that information? Maybe but don’t sit there and act like you know for a fact. In all likelihood the appraiser submits “request for information” documents to the property owner. The property owner then has to submit their financials and sign an affidavit making it legally binding.

This post was edited by SharpNips on Jul 16 2024 07:47am

It's on the bank to stress those cashflows and figure out if the CF's provided by the property owner make sense, or if they make sense in a downturn for example when occupancy rates fall and so on. Again this doesn't work on 'trust me bro' basis.

I work in credit risk/underwriting for a large bank. We literally apply haircuts to US treasuries, derivates and everything in between. You think obvious high risk sectors like commercial real estate, banks wouldn't be applying proper due diligence? Now obviously the modelling doesn't take into account deep black swan events like COVID that absolutely kills office CRE with most models not built for that type of deterioration, but that's not what we're talking about here. It's on the bank to use appropriate risk and collateral assessments.

When you sign an affidavit it’s no longer a “trust me bro” basis and more of a “if I lie I risk defrauding my lender” basis

“You’re so full of shit you work in credit risk/underwriting for a large bank”
Funny how works?

Yes you know more about credit risk and underwriting than I do. Don’t act like you know more about appraisal than me.

I’m strictly talking about the appraisal profession and how much appraisers depend on information provided by property owners. If you lie to the appraiser on a legally binding document in order to receive a higher or lower value you are Atleast attempting to commit fraud.
Yes there are loop holes and acceptable error ranges but when it’s blatant, it’s fraud.

This post was edited by SharpNips on Jul 16 2024 08:16am

The bank does its own appraisal. Yes you pay for an appraiser, but the bank uses multiple also. When I buy property there’s usually three different appraisals on the property.

good that it was dismissed, rest of the thread is people arguing that it’s fraud for banks to loan money at whatever valuation they deem appropriate. like a bank would put themselves in a bad position that on purpose when they exist to make money via spreads and interest.

Yup

Doesn’t change anything about the point I made

The appraiser(s) are relying heavily on information provided by the owner. Especially on commercial buildings

what definition am i making up? i actually agree with your conclusion, it's just not as simple as stated.


noted, now this is how i see it using the "cricket".

you say cricket is worth $100 and want an $80 for it's collateral. i say it's worth $1.
you disagree with my evaluation, but you note that the cricket isn't the only item up for collateral to obtain this $80 loan. you then point towards a box of 100k more crickets and note that they are also being used as collateral for this $80 loan.

we may have discrepancies about a "specific cricket's value". but there's 100k crickets sitting there that i valued @ $1 each. that's $100k in collateral and will easily cover the $80, even if you still believe your "lucky cricket" is worth $100
there is no fraud, we just have a disagreement about the value of 1 out of the very numerous crickets. which had no effect on the amount loaned.

the thing about this cricket in context is the bank and trump both agreed on the value of the collateral. and of course collateral itself can be undervalued, even drastically, if the likelihood the loan is repaid is good enough.

if a billionaire asked to borrow 100 or even 10,000 dollars you'd loan it, with interest, because you're sure of the repayment.

we're agreed tho, no fraud, it was a silly case.

Thread derails from criminal docs case to a different civil fraud case that was already closed. Boy the reds are defensive af.

It's not paranoia if they ARE out to get you.