Trump inflating and devaluing properties... didn't anyone ever verify his claims?

Not sure where to ask this… it’s a factual question, involving a big-name politician, requiring legal/financial opinion. My question is:

How can someone or some business have lied about the value of properties to both lenders and the government for apparently years if not decades without anyone cluing in?

When I applied for a loan to buy my house, I needed to show my income and what the property was worth, and it had to be using official documents like my T4 (US equivalent W2 form I think), and some sort of actual appraisal done by a professional. Nobody just asked for my personal word of what I had and wanted to borrow against.

What Trump allegedly did seems equivalent to me just claiming to the Bank that I made $87 million last year, my house is worth $20 million, so how about a little $2 million dollar loan at a great interest rate? And then when I file my tax return to claim I made $2K, and incurred a $800K loss on my hotdog stand business.

Both the bank and the government would know that I’m full of it because of the various documents/assessments put together by other people. Are bigshots who claim huge numbers simply assumed to be telling the truth and not checked into like us mere minions? Or, is the allegation that the supporting “proof” of all this simultaneous high & low valuation was expertly faked and the banks and govt bought it?

Basically. Unless it’s sold there is no way to determine exactly what trump tower is worth. It depends on what you think the comparisons are. You can pretty easily generate a high or low value just based on what you pick. We just refinanced our house and when the bank sent over someone to appraise the house they asked me what I wanted the appraisal to be. It would be even easier for trump and his minions to convince a appraiser to do what they want.

Best as I can tell, no one just blindly relied on his word for anything. But property owners have input and can make an argument that may or not be accepted by the county tax people. Ditto for borrowers making a case to the banks lending money.

As I understand it, the issue is that Trump’s people argued to the county tax people and tried to convince them that the properties were worth very little and then turned around and made a case to the lenders that the properties were worth a lot. To what extent the tax people or lenders bought these arguments is another question. But they might have been influenced to one extent or another, which was the point of making the arguments to begin with.

Apparently this is pretty common, and the main question is whether Trump took it a lot further than most people in the field, in particular whether his low/high assessments that he presented were to the point of being fraudulent. It’s a complicated matter. Here’s an article about the issue: N.Y. prosecutors set sights on new Trump target: Widely different valuations on the same properties (msn.com)

The article makes more sense of how this situation developed. I was thinking real estate was valued more like something at antique shop where you can figure the true value out fairly well, but it seems more like the situation at a used car sales lot where one side wants to inflate the value and the other side wants to deflate it for their advantage, and there’s some legitimate back and forth in opinion.

Also, I guess residential houses and common occupations are common enough that lenders and the govt can get an idea what they are worth or pay (a janitor doesn’t earn 6 figures, and houses aren’t worth a hundred dollars). But huge hotels and golf courses… maybe there aren’t enough comparables sold to be very sure of the value. And it looks like there were appraisers involved, but they can be influenced to adjust their numbers.

I guess they’ll have to decide if these valuations were too extreme to consider “normal”, and how easily they can prove the reason for them.

Also, the value of land can vary greatly based on things like permits and approvals for subdivisions or waivers of environmental restrictions and the like, which are highly speculative. So you can have one value based on the notion that you’re going to get approved and another radically different value based on the notion that you won’t. Though again, either you will or you won’t, so in theory you should consistently argue based on the likelihood of success.

I’ve challenged my assessment at the county commission, and while I myself have pretty much relied excusively on my comps and why I think they’re the most valid points of comparison, it’s been amusing to see fellow citizens talking down the value of their properties, pointing out how flawed and decrepit they are, in such a terrible location etc. And I’ve imagined to myself these same people describing the properties to a prospective buyer. :slight_smile: