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From: andrews@yale.ARPA (Thomas O. Andrews)
Newsgroups: net.legal
Subject: Appraisals and Citicorp
Message-ID: <535@yale.ARPA>
Date: Mon, 28-Oct-85 03:49:56 EST
Article-I.D.: yale.535
Posted: Mon Oct 28 03:49:56 1985
Date-Received: Wed, 30-Oct-85 06:04:13 EST
Distribution: net
Organization: Yale University CS Dept., New Haven CT
Lines: 72

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I tried to make the following story as objective as possible, but
at times my account is definitely biased.

List of facts (uh, as I recall them, anyway):

	1)  In the summer of 1984, Mr. W had his house
	  appraised by Citicorp.  according to his memory, they appraised,
          the house at $76,000.  He also has had his house appraised by
	  numerous other assessors, etc. and the house was always appraised
	  at over $72,000.  The house is on the south side of Chicago, near
	  the lake, in a predominantly black neighborhood.

	2)  In the fall of 1984, my Mr. W and his wife move to Providence, 
          R.I., and look for a buyer for their Chicago house.  As prospective
	  buyers role in, the house is appraised for the possible mortgage 
	  loans, and on each occasion, the house was appraised for more than
	  $72,000.  Prospective buyers roled in, but when it got right down to
	  buying the house, most of them backed down, or were rejected for 
	  bad credit history.  

	3)  In walked a Mr. E, who showed great interest in the house.  Mr. E
	  is a Citicorp customer, and wanted planned on getting his loan from
	  Citicorp.  In August of 1985, Citicorp sends an appraiser over to 
	  the house.  In his assessment, the house is valued at $65,000.

	4)  Mr. W and wife write a very rude note, implying all sorts of 
	  improprieties on the part of Citicorp.

	5)  Citicorp reappraises the house.  New appraiser determines that
	  the house is worth $56,000.  In the meantime, Citicorp claims to
	  have found original appraisal (mentioned in note 1,) and report
	  that their first appraisal was at $65,000.

	6)  Mr. W asks for copies of both of these appraisals.  Long delay.
	  Apparently, an executive of Citicorp was not pleased with the
	  recent $56,000 appraisal, and had driven by the house.  Without
	  so much as leaving his car, he was able to determine that the
	  an inaccuracy had been made, and adjusted the appraisal to $65,000.
	  (This executive had no experience in appraising houses.)

	7)  Copies arrive of the two appraisals - one handwritten, one typed.
	  This is where things get a little strange.  What one would expect:

		Appraisal 1:  From Summer 1984.
		Appraisal 2:  From Summer 1985, for Mr. E.

	  And, indeed, Mr. E's name does appear on one of the appraisals - 
	  the one dated 1984!  The document that Citicorp claims is the 
	  first appraisal is dated 1985!

  	Now, this is a confused account.  I've only heard about from my
	mother on the phone.  But Citicorp is beginning to smell bad.
	It is not a big leap of the imagination to guess that the first
	appraisal is a fake.  But, aside from this, is it common to have
	unqualified bankers adjusting appraisals without so much as examining
	the interior of the house being appraised?  The reappraisal to $56,000
	and subsequent readjustment appear to be veiled threats.  "See, we
	can hurt you even more.  But we'll be nice, and keep it at $65,000,"
	says the benevolent giant.

	Now, is this a way to run a bank?
	More specifically, can Citicorp do this to people?
	In particular, is there anybody out there who knows anything about
	appraisals?
	(By the way, I know Mr. W -  he's my stepfather.)
-- 
					      Thomas Andrews

"Gosh, I used to know how to do that."
			Favorite excuse of engineers