12 Aug 2008

Estate agents accused of inflating house values

5:29 pm on 12 August 2008

Three real estate agents have been accused of overvaluing the houses they bought and using false documentation to obtain mortgages.

The Real Estate Licensing Board was told that three property deals alone netted almost a $1 million in extra finance.

The board reserved its decision on the case on Tuesday.

The Real Estate Institute brought the case against Raghu Aryasomayajula, Philip Cavanagh and Phillip Niall, who worked for the Mount Albert branch of Barfoot & Thompson, in Auckland.

The institute says they bought and sold properties between themselves, and paid others to help in what was described as a mortgage-ramping ruse.

The institute's lawyer told the hearing the men had contacts within Bank of New Zealand, Westpac and the valuation industry.

The only one of the three suspended members to appear before the board, Phillip Niall, said the institute made it clear that heads had to roll over the affair after pressure from the Government.

The agents could be barred from operating if found guilty by the board, which reserved its decision on Tuesday.