A Texas financing company is suing two local appraisers for purposely overvaluing a Gary house, an allegation similar to several recent mortgage fraud cases.
Llano Financing Group LLC., based out of Austin, Texas, says in its lawsuit, filed Thursday in the U.S. District Court in Hammond, that Richard Bannec, of Angola, and Randall Price, of Hobart, were hired in 2006 to appraise the house at 4360 Connecticut St.
The two men could not be reached for comment.
The appraisal was part of an refinance application by the owner, who wanted $64,000.
The lawsuit claims that Bannec and Price appraised the house at $80,000, and the loan was approved.
The owner later defaulted, however, and Llano discovered the home was worth “far less than $64,000,” the lawsuit says. It argues the loan would never have been approved if not for the trumped-up appraisal.
Llano is asking for unspecified damages.
This is not the first claim of mortgage fraud in Gary in recent years. Federal attorneys have convicted about a dozen people in the past few years with running schemes to sell homes in the city for more than they were worth, sometimes for tens of thousands of dollars, although neither Bannec nor Price have been charged, according to court records.
In those cases, most of the buyers were not aware of the scheme, and the defendants recouped the extra mortgage money by filing liens on the homes for work they never did, court records showed.