- 84 -
bargain price, or whether EPIC is overcharging the
investors."
In a later memorandum dated August 24, 1984, after
CMAC had written mortgage insurance on a small amount of
EPIC's business, Mr. Miller focused on the risk "that the
overall market for investment property could become
saturated, and/or the EPIC Management might overextend
themselves by paying too much for their properties."
Mr. Miller instructed his staff to order spot-check
appraisals of the EPIC property. The spot-check appraisals
did not support the values suggested by EPIC's appraisals,
and CMAC was not able to reconcile the differences.
Shortly thereafter, in a letter dated August 5, 1985, CMAC
ended its business relationship with EPIC.
EPIC's Financial Statements
The record contains EPIC's financial statements for
1981, 1982, and 1983. These statements show the following
revenue and expenses:
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