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Queens, NY - Woman Suing Realtor for Using False Appraisals to Inflate Property Values

Published on: June 22, 2008 11:52 AM
By: NY Post
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Queens, NY - A woman about to lose her home to foreclosure is suing the realtor and the loan company who sold her the house, alleging that they finagled financing for her by lying about her income.

Darlene Smith claims that “Ray” G. and his company sold her a two-bedroom Far Rockaway house for $259,500. The house was owned by “Ray” under a company that flips homes - and nearly 35 percent of whose buyers since 2004 have ended up in foreclosure or mortgage trouble.

Smith also accuses the company of using false appraisals to inflate property values, and she says he “targeted naive buyers,” mostly minorities in southeast Queens.

In Smith’s case, they made an 82 percent profit from the sale of the house.

The company’s most profitable flips were in 2006, including a September deal that netted $237,000 in just 17 days, a July transaction that totaled $153,000 in 15 days and an August sale that brought in $117,000 in 11 days.
The company went out of business the same year.

Smith said she warned Ray’s real-estate company that all she could afford was $1,500 a month. “I trusted these people,” Smith said. “At one point I wanted to back out of the deal. They told me ‘No, you can afford it, you deserve a home.’ ”
Within a year, Smith’s mortgage payment soared to a whopping $2,722.22.
“Now I’m angry. They put me in this deal, now I’m in foreclosure and my credit is shot,” she said.

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Ray’s lawyer, refused to comment on the lawsuit. He said his client is a reputable real-estate professional and investor who buys homes, improves them and sells them.



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