Why would a big bank like Wells Fargo

[no_hypocrisy]

give a home equity loan to a widow in the amount of $484,000 for a property valued at $235,000?

(I got the numbers from a filed mortgage and a call to the tax assessor.)

[lapfog_1]

1. when was the loan originated?

[no_hypocrisy]

5. 2008 just before "The Crash"

[PoindexterOglethorpe]

8. That says it all .

Before the crash lots of banks were routinely giving loans well in excess of the property value. They were also giving loans to people who had no demonstrable ability to repay them.

While I think the banks and mortgage companies should bear the lion's share of the blame, the borrowers also should have been paying attention to what was being loaned and so on.

[lapfog_1]

9. yup... hence the question... and that's the explanation.

[dameatball]

2. Did she once pee on a bed in Moscow? Only explanation I can think of.

[unblock]

3. Appraised value and assessed value can be very different

In some places assessed value is a fraction of market value, where I live i think it's 70% but it could be lower in other places.

Then there are timing differences, the assessed value could be based on when the market in the area was terrible compared to when the appraised value was.

Then, a loan could be based in part on intended improvements that wouldn't go into an assessment yet.

[PoliticAverse]

4. Did someone involved get a commission based on the amount of the loan? n/t

[no_hypocrisy]

6. Don't know. Only have the actual document.

Probably.

[Socal31]

7. The assessed value has nothing to do with current market.

The maximum CLTV for HELOCS is generally 80%.

Commission on HELOCs for the LO is almost nothing.

[no_hypocrisy]

10. OK, for those of you who make a good argument about assessed and market values

here are some current market values for the property:

$320,000 Zillow
$345,000 Redfin
$341,000 ReMax


Still $140,000 or so more on the mortgage than the market value. It's a dinky house built in 1940 in a dinky little town.