The Appraisal Bubble

In Run Up to Real Estate Bust, Lenders Pushed Appraisers To Inflate Values

By Joe Eaton The Center for Public Integrity April 14, 2009

In 2004, years before plummeting real estate values turned Fort Myers, Florida, into a top five foreclosure capital, appraiser Mike Tipton faced a dilemma.

Tipton’s employer, eAppraiseIT, sent him to value a two-bedroom home in a new subdivision built by the developer D.R. Horton. Paperwork given by the appraisal management company to Tipton included a $245,000 estimated value.

But after inspecting the home and comparing it to five similar houses that had recently sold, Tipton set the value at $237,000, $8,000 less than the estimate. He knew the difference might disappoint DHI Mortgage, the prospective buyer’s lender, which is a subsidiary of developer D.R. Horton. And indeed it did.

The lender, in a process appraisers say was common in the boom days before the housing bubble burst, asked Tipton to redo the appraisal. It sent paperwork through eAppraiseIT asking him to reconsider the value. It gave him different homes to use for comparisons.

“If you read between the lines, they wanted a larger value,” Tipton said. “I told them no, I wasn’t changing my report.”

Tipton, who like many other appraisers is paid by the job, says he was never given another appraisal for a D.R. Horton home. “All I can say is D.R. Horton has remained an active developer in Lee County,” Tipton said. “I didn’t see any further appraisals for DHI Mortgage. So you tell me.”

Carrie Gaska, a spokeswoman for First American eAppraiseIT, declined to comment on why Tipton received no further orders from the company for DHI Mortgage properties.

Tipton is among dozens of appraisers who have told the Center for Public Integrity that for years lenders across the United States have pushed them into inflating the value of homes to justify higher mortgages. Appraisers and lenders alike are demanding better oversight of the industry. In addition, the Center has obtained copies of lenders’ “blacklists” containing the names of thousands of appraisers; some appraisers say lenders used those lists to exclude those who refused to inflate home values.

The Center also found many appraisers who say they bowed to lender pressure to “hit the numbers” in order to remain in business. These appraisers, along with the lenders who pressured them, helped pump air into the housing bubble that led to widespread economic devastation, according to dozens of appraisers, lenders, and others with intimate knowledge of home loan practices.

And there’s evidence that Fannie Mae and Freddie Mac, the two largest purchasers of home loans, bought mortgages without ensuring they were made with accurate appraisals, according to an investigation by New York Attorney General Andrew Cuomo.

No one knows exactly how much of a role inflated appraisals played in the mortgage meltdown. But as an increasing number of homeowners face foreclosure, many remain unaware that the appraisal they paid for during the purchase process may not have reflected the true value of their investment, and may have allowed them to borrow more money than their home was worth.

Depending on the state where the homeowners purchased, the scheme may or may not have been against the law. Pressuring an appraiser to inflate the value of a property is a crime in at least 20 states and the District of Columbia, though it is often a misdemeanor punishable by a fine, a slap on the wrist that appraisers say does little to prevent the exertion of undue pressure.

There is rampant corruption throughout the industry,” said George Dodd, a veteran appraiser in Virginia who has been advocating for more regulation. “The way it stands now, the public doesn’t stand a chance.”

Dodd said, that in addition to the appraisal ordered by the lender, consumers can protect themselves by ordering a second independent appraisal before a purchase. They will, however, still have to pay for the lender’s appraisal.

Fudging the Numbers

Richard Frank, an appraiser in Vero Beach, Florida, started appraising homes in 1998, when values were climbing. From the beginning, Frank said he stepped into a business arrangement in which lenders forced appraisers to abandon their standards if they wanted work.

Frank said lenders commonly gave appraisers an estimated value for a home on each appraisal order. Appraisers, who usually determine values by comparing homes to recent sales of comparable properties, often worked backwards from that estimated price to find recent real estate sales that would “make the value,” he said. Working backwards from the estimate was faster. Everyone made money. And since appraising homes is subjective — both an art and a science — it was easy to fudge numbers.

“The [supposedly comparable] houses might be bigger and better, but who’s going to know?” Franks said. “In an increasing market, your sins are buried.”

If an appraisal came in lower than the purchase price, the loan likely would be denied. Since loan origination staff is typically paid by commission, a failed deal meant no paycheck for them. If that happened too many times, Frank says, lenders stopped sending the appraiser work. “Put out, and you will get more dates. It’s just that simple,” he said.

Richard Bitner, a former subprime lender in Texas who has written an insider account of the mortgage industry collapse, backs up Frank’s story. Bitner says the pressure came more from the cozy relationship between lenders and appraisers than threats.

“The pressure applied didn’t really need to be overt,” Bitner said. “If suddenly [an appraiser] can’t make the values, at the end of the day, it’s pretty easy to go to someone else. You are here to make money.”

Appraisers say lenders did just that, sometimes asking appraisers to promise a value before they officially ordered the report.

Both appraisers and lenders say the two professions have not always been at odds. Appraisers traditionally served as the front-line defense for loan underwriting departments, ensuring that the value of a home was worth the loan amount in case the lender needed to foreclose. In the past, many banks had in-house appraisal departments. And, unlike today, lenders historically kept and serviced the loan for the life of the mortgage. But when lenders began bundling loans and selling them to Wall Street and other investors, lenders carried less risk and industry analysts say they became less concerned about home values. With no “skin in the game,” lenders focused on closing deals. In this climate, many in the industry say the appraisal became a barrier to jump over.

Appraisers say making money was easy, as long as they did not cross lenders. But if they did, appraisers say lenders lashed out, adding their names to the blacklists that lenders originally kept to identify incompetent appraisers. Lenders kept their own lists, but appraisers sometimes found their names on those lists even if they never worked for that lender.

Amerisave, one of the largest online mortgage lenders, has close to 12,000 appraisers on its “ineligible appraiser list,” which was removed from the Atlanta-based company’s website after the Center made inquiries about it. In December, appraiser Tom Woolford found his name on Amerisave’s list when the list also appeared on a popular online appraisal industry forum. Woolford said he has never done an appraisal for Amerisave, and the address they used for him was at least 10 years old. He doesn’t know how he ended up on the list, but he says it could be a matter of reputation: He says he never gives in to lender pressure.

“I think you will find a lot of the people on these lists do not hit numbers,” Woolford said. “I won’t lie, and I won’t push a number for nobody.”

After conferring with top management officials, Martin Wilhelm, an Amerisave vice president, declined to answer questions about how it compiles its blacklist.

Unheard Warning Bells

Before real estate prices began to plummet in 2006, some sounded the alarm on fraudulent appraisals and lender pressure, but few listened to the warnings, least of all Congress, industry regulators, and the Justice Department.

David Callahan, a founder of the public policy think tank Demos, was one of the first people to study inflated appraisals and lender pressure. In 2005, Callahan wrote a paper describing the financial incentives for lenders and appraisers to pursue inflated appraisals. The goal of lenders, brokers, real estate agents and developers was to ensure that a home loan closed without a problem, Callahan said. All those people exert pressure on appraisers to inflate values.

In a 2007 study by October Research, a real estate news provider, 90 percent of more than 1,200 appraisers polled reported feeling pressure to change property values, usually from lenders, mortgage brokers or real estate agents.

“Congress didn’t really care about it,” Callahan said, noting the lack of reaction his report generated in Washington. “There was remarkably little legislative activity looking at the corruption in the real estate market.”

In fact, Congress had struggled with the issue of lender pressure on appraisers since the savings and loan crisis of the 1980s. In recent years, Congressman Paul Kanjorski, a Pennsylvania Democrat, has been the most vocal proponent for stronger regulation, proposing legislation in 2007 that would have set stiffer appraisal independence standards. The legislation, which would have prohibited lender coercion of appraisers and established penalties for it, was folded into the 2007 Mortgage Reform and Anti-Predatory Lending Act. The legislation faced stiff opposition and lobbying by the banking and mortgage industry, which argued it would adversely impact credit availability, and the bill was not taken up in the Senate after passing the House. In March, the legislation was reintroduced in the House as part of the Mortgage Reform and Anti-Predatory Lending Act.

Appraisal industry insiders say part of the difficulty in policing the process stems from regulatory fragmentation. Appraisers fall under the jurisdiction of state regulators, which enforce standards set up by the Appraisal Foundation, a nonprofit industry group authorized by Congress. State licensing is overseen by the Appraisal Subcommittee, an agency created by Congress in 1989.

Hyped appraisals did not escape the attention of federal banking and savings and loan regulators, but reports published since the mortgage industry collapse show that those officials did little to stop the practice. A February audit by the Treasury Inspector General on the implosion of IndyMac, a savings and loan, noted that the Office of Thrift Supervision, IndyMac’s primary regulator, identified problems with appraisals on the company’s loans in 2001, but took no formal action.

In one example from the audit report, an IndyMac file for a $1.5 million loan contained appraisals ranging from $639,000 to $1.5 million. “There was no support to show why the higher value appraisal was the appropriate one to use for approving the loan,” the report says.

In 2006, Ameriquest, then the largest subprime lender in the country, paid $325 million and agreed to reform its business practices to settle a 49-state investigation into its predatory lending practices. Among the allegations, the lawsuit claimed Ameriquest engaged in deceptive or misleading practices to obtain inflated appraisals substantially beyond the market values of homes. The company, which closed in 2007, denied the allegations.

Problems like these only seem to come to light during declining markets and concerns are put on a shelf when buyers return, says Dave Biggers, founder and CEO of the real estate technology company a la mode, inc. In an appreciating market, appraisals five to 10 percent beyond value are not an issue, he said, and home values climb beyond appraisal values soon after the sale.

But when the market peaked in 2005 and then began its sharp decline, inflated appraisals exacerbated the trouble faced by “underwater” homeowners. “We as the taxpayers are getting stuck with the bill,” Biggers said. “What has not been investigated is the systemic issues that take place on the basis of policy by many of these companies.”

“Who Has Juice with Whom”

Since the bubble burst, the FBI has focused most of its real estate efforts on appraisers and other fraudsters who developed intricate schemes to defraud banks. The Justice Department is not going through the wreckage looking at the institutionalized lender pressure on the appraisal process. An FBI official, asking not to be identified because the agency has no official position on the matter, said they view the matter as a regulatory issue to be addressed by Congress not a matter of law enforcement.

FBI Deputy Director John S. Pistole testified in March before the House Committee on Financial Services about the agency’s efforts to combat mortgage fraud, saying the bureau is focusing its limited white collar crime-fighting resources on real estate industry insiders engaged in fraud for profit. Those cases target real estate speculators and mortgage brokers who work with appraisers to sell a house for far more than its true value. So far, however, there have been no prosecutions of lenders who pressured appraisers to inflate values.
Instead, the highest-profile investigation of the appraisal industry has come from New York Attorney General Andrew Cuomo. In 2007, Cuomo filed a lawsuit against First American Corp. and its subsidiary First American eAppraiseIT, charging that eAppraiseIT allowed loan production staff at Washington Mutual to pressure appraisers to inflate home values. The suit is pending.

The suit claims the appraisal management company allowed Washington Mutual’s “loan production staff to hand-pick appraisers who bring in appraisal values high enough to permit WaMu’s loans to close, and improperly permits WaMu to pressure eAppraiseIT appraisers to change values that are too low to permit loans to close.”

In addition, the complaint alleges that executives at eAppraiseIt knew its appraisal arrangement with Washington Mutual broke the law. “I think WaMu’s new initiative is way over the line,” it quotes eAppraiseIT’s executive vice president as writing in spring of 2007 to the company’s president. “It is even possible that the current arrangement crosses the line.”

“Bingo!” replied the company president, according to the complaint. “It boils down to who has juice with whom at the regulatory level.”

In a 2007 press release, First American said the New York lawsuit “has no foundation in fact or law. The Attorney General’s allegations, largely based on a handful of e-mails that have been taken out of context, or mischaracterized, and an incomplete review of the facts, belie our record of compliance with applicable law.”

Cuomo also subpoenaed Fannie Mae and Freddie Mac. The investigation into whether the two largest loan purchasers bought loans that included inflated appraisals was dropped in March 2008 after Fannie and Freddie agreed to strict new rules — penned in part by Cuomo’s office — governing the appraisal practices for the loans they buy. They also agreed to pay $24 million to fund the Independent Valuation Protection Institute, a new organization to help implement and monitor the code.

What led Fannie and Freddie to the agreement was not made public, and Cuomo’s investigators aren’t talking, but his office did point the Center for Public Integrity to letters Cuomo sent in 2007 to the CEOs of both Fannie Mae and Freddie Mac, expanding his investigation to include a subpoena of their records.

In the letters, Cuomo wrote that his office had “uncovered a pattern of collusion between lenders and appraisers that has resulted in widespread inflation of the valuations of homes.” Further, Cuomo wrote that evidence shows mortgages Fannie and Freddie purchased from Washington Mutual “may be premised on fraudulently inflated appraisals” that do not meet regulatory standards. “We are, therefore, expanding our investigation to determine the extent of [Fannie Mae and Freddie Mac’s] knowledge of, and actions regarding, these problems as they relate to past mortgage purchases and securitizations.”

Cuomo’s office declined the Center’s request for details of its investigation’s findings.

The Home Valuation Code of Conduct, an industry standard which came about as a result of Cuomo’s investigation, is slated to go into effect on May 1, makes deep changes to the appraisal industry.

The code, which affects all loans eligible for purchase by Fannie and Freddie, bans lenders and brokers from pressuring appraisers to hype appraisals by threatening to withhold future business as punishment. Lenders must inform appraisers when they are removed from qualified use lists and allow them to appeal. It also bans loan origination staff from ordering appraisals directly — instead, the lender must use other in-house staff or go through a middleman appraisal management company. Even so, the incentive to pressure appraisers still exists, even for supposedly independent appraisal management companies.

Fox and the Hen House

Despite the changes, the new code has been panned by both the appraisal industry and some lenders. The National Association of Mortgage Brokers filed a lawsuit to try to block the rules, arguing that the code puts smaller mortgage brokerages at a disadvantage because they will be forced to rely on lenders to obtain appraisals for their customers, thereby limiting their ability to shop for loans. The association dropped the action earlier this month.

Appraisers who work for themselves or small businesses say the code will end their careers since mortgage brokers and other loan generation staff can no longer contact them directly. Instead, they say the code in effect directs all business to appraisal management companies, the unregulated middlemen that are often subsidiaries of lenders.

Appraisers say the management companies passed on pressure from lenders in the past, including in Cuomo’s case against eAppraiseIt, and see nothing in the new code to stop it from happening.

“It’s a bit of irony that the solution is the same thing that got us here,” said Bill Garber, director of government and external relations at the Appraisal Institute, a trade association representing appraisers.

The Home Valuation Code of Conduct, Garber added, is lip service to cleaning up the industry. Appraisal management companies “are just as capable of pressuring appraisers as anyone else.”

Appraisers also dislike the plan because some appraisal management companies take a hefty administrative fee and pay low rates to appraisers, which experienced appraisers say will force them out of the business and turn the industry over to less experienced appraisers who are more likely to make mistakes.

Pressure will still come from the management companies, said Dodd, the Virginia appraiser. “They could give a damn about the consumer. They don’t care if the consumer pays ten, twenty, or thirty thousand more than it’s worth.”
Cuomo hasn’t answered critics of the new code, and his office did not return calls from the Center for Public Integrity.

Lawyers, Banks, and Money

Since the real estate crash, the appraisal and lending industries have come under closer watch by regulators and Congress. But so far, no one has addressed the effect inflated appraisals have had on struggling homeowners. Buyers who moved in at the height of the boom are particularly vulnerable, and attorneys say their struggle provides fertile ground for civil litigation.

“I definitely believe that lenders have engaged in widespread illegal activities, and they will come under increased scrutiny in the next year or so as people who have been damaged by this realize there are some bad actors out there,” said Steve Berman, an attorney in Seattle.

In October, Berman’s firm, Hagens Berman Sobol Shapiro, filed a class action on behalf of blacklisted appraisers against Countrywide Financial and its subsidiary Landsafe, an appraisal management company. Like Cuomo’s suit, Berman’s case argues that Countrywide forced appraisers to hit the numbers and added them to a blacklist if they refused.

“Countrywide… has engaged in a practice of pressuring and intimidating appraisers into using appraisal techniques that meet Countrywide’s business objectives even if the use of such appraisal techniques is improper and in violation of industry standards,” the complaint alleges.

If the appraisers refused, the complaint says they were placed on a “field review list,” which disqualified them for further work for loans for Countrywide.

Because mortgage brokers shop for lenders, if an appraiser was blacklisted by Countrywide, the largest independent mortgage lender, they were in effect blacklisted by much of the industry, Berman’s complaint claims.

According to the complaint, Countrywide’s blacklist contains more than 2,000 appraisers. Berman said his firm is looking at other lenders and their blacklists as it considers further litigation.

The new appraisal code and increased scrutiny of the industry seems to have had some effect. Lender pressure is not as strong, appraisers say, but it still exists. Ray Miller, an appraiser outside Madison, Wisconsin, says the pressure is moving to FHA loans and refinancing as credit for other loans remains dried up.

In January, Miller said he did an appraisal for a lake home where the owner was looking to refinance. The original appraisal, done when the owner bought the home a few years back, listed the value at $554,000, but the comparables used to hit that number were from homes on a more upscale lake, Miller concluded.
Miller’s reappraisal came in at $400,000. “I’m just waiting for the phone call,” he said.

In February, Miller received a call from a different lender. This one wanted him to remove pictures of a cracked sidewalk he included in his appraisal. This would be prohibited under the Home Valuation Code of Conduct. But Miller expects lenders will figure out a way around the rules.

“They don’t want good appraisers,” he said. “They don’t want good numbers, even now.”

Why broker price opinions may cut home values

Kenneth Harney - San Francisco Chronicle - 03/29/2009

Are lowballed valuation estimates on short sales and bank-owned foreclosures artificially depressing property values in neighborhoods across the country?

Growing numbers of appraisers and consumer groups believe the answer is yes - and are demanding that either Congress or state regulators crack down. Their complaints focus on what are called "broker price opinions," also known as BPOs, that substitute for actual appraisals.

Unlike standard property valuations performed by licensed appraisers - which can run to hundreds of dollars - the opinions often cost $50 and are performed by real estate agents who may have minimal or no appraisal training and are subject to no regulatory oversight. Realty agents defend the opinions, arguing that their extensive knowledge of local market trends equips them to render accurate estimates.

The opinions have become a booming business as foreclosures and short sales have risen sharply. When banks that own foreclosed houses need to put values on them for resale, increasingly they order opinions that can be delivered quickly at rock-bottom fees.

Short sales - when a lender agrees to take less than the principal amount owed by a delinquent owner provided the property is sold to a new buyer - also frequently entail use of the opinions.

On the Internet, the opinions are hawked to realty agents as a route to quick profits in an economic downturn. "This is the easiest and fastest way to make big money in 2009," says one Web site that promises agents "six figures or more" per year. The same site suggests that "bad times put you in the ideal spot" to rack up income by churning out the opinions for lenders.

One problem is that selling opinions to value houses violates the law in 23 states, according to appraisal industry leaders. In other states, the opinions may not be prohibited, but critics say they may be far off the mark in accuracy - typically coming in below appraised values. That's partly because agents who perform the opinions may set the value extra low to ensure quicker sales.

When houses are listed at fire-sale prices, they exert a downward pull on the values of other houses in the neighborhood because, under current lending industry underwriting guidelines, appraisers must consider recent listing prices as well as closed sale prices.

In testimony March 11 before the House Subcommittee on Financial Institutions and Consumer Credit, David Berenbaum, executive vice president of the National Community Reinvestment Coalition, called on Congress to outlaw the opinions when used as appraisal substitutes in distressed property transactions. Berenbaum said that realty agents "develop hasty and inaccurate BPOs that underestimate" the value of bank-owned and other distressed real estate. That lowballing, in turn, "is often destructive to local markets and depresses the value and equity of (lender-owned) properties."

Gary Crabtree, CEO of Affiliated Appraisers in Bakersfield, says his company's research "shows very clearly" that the opinions frequently understate actual market values by as much as tens of thousands of dollars.

Why would agents lowball their valuations? Crabtree argues that there are inherent conflicts of interest: "They want to sell the property fast" to make bank asset managers "look like heroes" to their bosses. They may also want additional BPO and property listing assignments from those same bank managers, yielding them commission dollars. Many of the properties are snapped up by investors at the depressed prices driven by the low valuations. Those sales then become "comparables" for appraisers, "which simply intensifies the downward spiral" in property values, said Crabtree.

Regulators in many states recently have expressed concern about excessive use of the opinions. The Nevada Real Estate Division warned agents that when real estate agents prepare "a BPO for any reason other than listing and selling a property," and receive compensation, they have violated state law.

Nebraska regulators issued a similar warning last December, threatening to criminally prosecute realty agents who are not licensed to perform appraisals but who issue the opinions as appraisal substitutes.

The National Association of Realtors, whose 1.2 million members include many of the agents who prepare the opinions, says it has no policy guidance for Realtors on the issue, but expects to issue a statement in May. Asked whether the association would at the minimum urge members to adhere to state laws and regulations, a spokesman said "there is no policy" on the sensitive issue at present.

National appraisal groups, including the Appraisal Institute, whose members lose revenue when lenders or property owners order the opinions, are up in arms. Bill Garber, the institute's head of government relations, said the opinions are an attempt "to pay the least to obtain something" - appraised value - "that is extremely important to get right."

Borrowers get the gift of time

By Todd Ruger - Sarasota Herald Tribune, 04/15/2009

Heide and Ronald Felicita showed up in Circuit Court last week thinking this would be the hearing where they finally lose their home.

Their suitcases were packed and they removed all the pictures from the walls of their Venice home, which has been in foreclosure for nearly two years.

But like hundreds of foreclosed-upon residents in Manatee and Sarasota counties, the Felicitas got a reprieve -- weeks, possibly months, to stay in their home and try to clear their debt and work out a deal with their lender.
Since January, the rate of residents in Sarasota and Manatee counties who lost their homes to foreclosure has fallen 66 percent, going from more than 400 cases per month to just over 100.

The decline has nothing to do with the state of the real estate market or a sudden benevolence on the part of lenders.

Instead, it reflects a policy set down by 12th Circuit Court Judge Lee Haworth that has effectively stopped the fast track of summary judgments allowing lenders to quickly gain control of properties from distressed borrowers.

Last fall, as foreclosure cases overwhelmed the court system, Haworth ordered lenders' law firms to meet with homeowners starting in January and discuss alternatives to foreclosures. The judge's hope was that discussions could lead to resolutions that would prevent residents from losing their homes.

But lenders widely ignored the judge's request. So Haworth hit the law firms in the pocketbook, with a new rule requiring them to show up in person -- not just over the telephone -- for all hearings starting in March. They must also complete a checklist about the facts of the case.

Again, many lenders have failed to comply, leading Haworth and two other judges in the 12th Circuit to cancel cases, so many that their dockets are virtually bare. Last Wednesday, for example, Judge Donna Berlin canceled 20 of the 27 foreclosure cases on her docket, including the case against the Felicitas, whose attorney failed to show.

The reprieve is only temporary. Distressed homeowners still must find resolution with their lenders. Yet the extended time comes with opportunity because lenders have been more open in recent months to negotiate, and the Obama Administration is offering more help for homeowners.

"It gives us more time and, hopefully, the company will come up with something better," said Ronald Felicita, who lost his job as a home inspector in the real estate downturn. "Now, they could work with us."

Heide Felicita has found a job, but it is not enough to pay off what they owe on the house they bought 10 years ago. They are not sure where they might go if forced out of the home, but they might have to move in with relatives in Minnesota, Ron Felicita said.

The rules instituted by Haworth make the 12th Judicial District one of the toughest places to get a summary judgment, which gives the lender the property without lengthy litigation, attorneys said. Other circuits are starting to follow suit with similar rules.

"It's a new procedure, so people are not used to dealing with it," said Robert Schermer, who often makes the local appearance in court for the lenders' out-of-town attorneys. "And they don't really realize how serious the judges are, or how strictly they are enforcing it.

"They want every box checked and every spot filled in."

Other outside factors have worked to slow the pace of final judgments, including moratoriums on foreclosures from some of the country's largest lenders and new rules for refinancing loans.

But attorneys and judges say the new rules are the biggest cause. Attorneys for lenders, who mostly work at large, out-of-town "foreclosure mills" that handle cases across the state, are too overwhelmed to go through the careful review of cases and rules for each circuit.

"There have been days when the entire docket has been canceled from non-compliance," Circuit Judge Charles Williams said.

One day recently, Williams had four foreclosure hearings set. None of the hearings happened, though, because attorneys did not follow the rules.

Bradenton attorney John Fleck, who represents both homeowners and lenders in foreclosure cases, said the judges are doing the right thing if an attorney does not make sure his work is right.

"The judges think, 'If he didn't take the time to fill out the box, how can I be certain the rest of this was done correctly?'" Fleck said. "Until all these massive foreclosures, we didn't see this slipshod work."