As a member of the Fulton County tax assessors board, it's Rick Kenny's job to decide the worth of houses for tax purposes, assigning values that determine how much homeowners get billed.
But his ability to gauge properties in a tumultuous market was called into question last year by the state agency that regulates professional appraisers. In an unpublicized rebuke, the Georgia Real Estate Commission and Appraisers Board disciplined Kenny for being "negligent" in over-valuing a duplex in Atlanta's Capitol View neighborhood at $210,000, failing to disclose that it sold for $88,000 only a month earlier.
The appraisal was done in 2005, a year before former Commissioner Lynne Riley made him the north Fulton appointee to the Board of Assessors and during the peak of the real estate bubble. Capitol View is in the 30310 zip code, among the worst in the nation for mortgage fraud at the time.
Though not a criminal offense, inflated appraisals opened the door to housing scams, left homeowners stuck with massive loans based on bogus home values and allowed sales that jacked up thousands of property assessments. Intown residents now pay higher taxes to live near abandoned houses that attract crime and litter, said Derrick Duckworth, a realtor, Adair Park resident and member of the 30310 Mortgage Fraud Task Force.
After the Capitol View duplex went into foreclosure, Fannie Mae ordered a review appraisal that found the value should have been $76,000, according to state and county records. The agency sold it in 2007 for $59,100.
Part of the problem, state documents contend, was that Kenny cited comparable properties with sale prices that had nearly tripled in just over a year, which should have raised flags. Kenny had to pay $5,000 in administrative and legal costs and take six hours of classes on mortgage fraud, according to the citation issued in August.
Kenny said he stands by his work. Though he wouldn't provide a copy of the appraisal, he allowed a reporter to view a section where he noted the property was "currently under contract for $88,000," which he said disclosed the prior sale.
The comparable properties he used had also been rehabbed, Kenny said.
"Everything that's in there's been rebutted," he said of appraisers board documents, which The Atlanta Journal-Constitution obtained through an open records act request. "They were head-hunting and we just sort of fell into the trap, is what happened."
Fulton taxpayer advocates say he was treated too lightly and question whether he belongs on the assessors board.
"It's unbelievable," said Fulton County Taxpayers Foundation Executive Director Barbara Payne, "that we have somebody with this background serving on the board of assessors, which is not setting fair and reasonable values for property owners."
Real estate investor and Georgia Property Taxpayers Committee president R.J. Morris took a look at the duplex and surrounding neighborhood.
"You couldn't put gold faucets in that house and have it be worth $210,000," he said. "It's a dump."
Kenny's appraisal allowed Devan and Nicole Plummer to take out a $168,000 loan on the one-story, 55-year-old duplex at 1275 Hartford Ave., which they bought out of foreclosure. Devan Plummer said he read the book "Nothing Down for the 90s" and thought rental properties could be family nest eggs. They made a similar purchase, with a similar loan, of a house near Atlanta University Center.
Within a few years, they were financially ruined. Even with new floors, fixtures and heating and air systems, they couldn't find tenants to pay more than $400 per month for the duplex units and loan payments and taxes shot up to about $1,600 per month, Devan Plummer said.
The Plummers filed for bankruptcy and walked away from the properties. Their credit vanished, they live in an apartment in Marietta with their two small children.
"We had dreams, you know, and it just put such a damper on our dreams moving forward," Nicole Plummer said. "Here it is, six years later, and here we are. We haven't done anything else."
Kenny said he wishes he'd fought the state charges, but he had already spent $2,000 in legal fees. Rather than face a hearing and risk having his license pulled, he agreed to the citation and the board agreed not to publicize it, keeping his name off its web list of sanctioned appraisers.
Deputy Real Estate Commissioner Craig Coffee said that's standard for any appraiser who receives a citation, as opposed to having a license suspended or revoked. Though it ordered mortgage fraud education, the board would have meted out harsher punishment if it thought he was guilty of it, he said.
"I think it was bad incompetence and incompetence is probably what could have been proved," Coffee said.
Kenny was far from alone in being called to account for an appraisal done in the lead-up to the real estate meltdown. As foreclosures continue, complaints are still being lodged with the state, Coffee said.
The appraisers board revoked 90 licenses last year, compared to 56 in 2006, and issued 67 citations last year, up from 24 in 2006. Coffee attributed the spike both to ongoing fallout and better efficiency in his office. Meanwhile, as home sales decrease, the number of working licensed appraisers fell by more than 2,000 during that period, down to 5,494.
Riley's successor in the north Fulton seat, Liz Hausmann, said she's heard only good things about Kenny's performance on the board and she's still deciding how to handle the citation.
"Of course I take this matter very seriously," she said, "and we are looking into the circumstances of what happened and I will be discussing that with Rick."
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