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HUD Audits of Direct Endorsement Lenders Increasing

NOV 8, 2012 4:46pm ET
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Los Angeles County Superior Court Judge Lawrence H. Cho said judgment for the defendant tenant. New owners of foreclosed properties are required to give tenants 90 days’ notice before eviction under the three-year-old Protecting Tenants at Foreclosure Act. The tenant’s motion to quash the eviction complaint was granted. The judge also ruled that any back rent would accrue from the filing of the 90-day notice and not before. (Private National Mortgage Acceptance Company LLC v. Kamie Stanko / 11U04495-2-27-12 Santa Monica Court)

MORAL

What was the attorney reading when the notice was given knowing it was foreclosure property?

SOUTHERN CALIFORNIA WOMAN PLEADS GUILTY IN OREGON FEDERAL COURT TO $20 MILLION MORTGAGE FRAUD

FACTS

On Oct. 31, Wanda Coleman pleaded guilty in federal court in Portland, Ore., to mail fraud charges for orchestrating a mortgage fraud scheme that used fraudulent loan applications and supporting documents to convince lenders to fund more than $20 million in loans on approximately three-dozen properties in Orange, Riverside and San Bernardino Counties in California.

She pleaded guilty to one count of mail fraud pursuant to a plea agreement filed under seal in United States District Court in Portland. As a result of the guilty plea, Coleman faces a statutory maximum sentence of 30 years in federal prison when U.S. District Judge Michael H. Simon sentences her on Jan. 25, 2013.

The case against Coleman was brought by the United States Attorney’s Office in the Central District of California following an investigation by the Federal Bureau of Investigation. The case was transferred to the District of Oregon, which is near Coleman’s new residence, for the entry of the guilty plea and sentencing.

Coleman and several co-conspirators fraudulently obtained funds from financial institutions by making false statements on, and omitting material information from, loan applications submitted to purchase houses in the names of straw buyers. Coleman identified properties for sale across Southern California and offered to pay the sellers substantially more than their asking price, in return for the sellers’ agreement to refund the excess amount to Coleman or companies that she controlled. Coleman recruited straw buyers to submit fraudulent applications for loans to buy the houses. Various participants in the scheme prepared fraudulent mortgage applications that contained false information regarding the buyers’ employment, income and assets, and then submitted the bogus applications to lenders. To corroborate the false claims, co-conspirators forged bank statements and prepared other fraudulent documents, which were submitted to lenders.

As a result of the scheme, financial institutions funded loans totaling more than $20 million in relation to approximately 30 properties across Southern California. The straw buyers ultimately defaulted on the loans, resulting in foreclosure of the properties and losses of more than $11 million to the lenders.  Usattycdca103112)

MORAL

Note that the criminal complaint was filed “under seal.” What that generally means is the defendant is cooperating with authorities, agreeing to be “wired” and cooperate in catching others who do not know or whom it is reasonably believed do not know the person has been arrested and indicted. Look to seeing quite a few more arrests and indictments in the near future in Southern California. If anyone did any creative loans with Coleman, I suggest you see an attorney now as opposed to later. That is presuming the prosecutor’s office or special agents have not already contacted you by now.

FLORIDA FORECLOSURE SOLUTION SPECIALISTS DRAW FIVE-YEAR PRISON TERMS AFTER PLEADING GUILTY

FACTS

On Nov. 2, Lisa Wright and Cathy Saffer were sentenced to serve 66 and 60 months, respectively, for defrauding homeowners and mortgage lenders as part of a foreclosure rescue scheme. U.S. District Judge Kenneth A. Marra in the Southern District of Florida sentenced the two women.

Wright pleaded guilty on March 27, to one count of conspiracy to commit mail and wire fraud, one count of mail fraud, and one count of wire fraud. Saffer was convicted of one count of conspiracy to commit mail and wire fraud, three counts of mail fraud, and two counts of wire fraud, following a two-week jury trial in July.

Wright and Saffer operated Foreclosure Solution Specialists from 2006 to 2009. Through FSS, Wright and Saffer targeted homeowners facing foreclosure, advertising that FSS could assist those homeowners in remaining in their homes. When contacted by distressed homeowners seeking assistance, Wright and Saffer misrepresented to those homeowners that their homes would be sold to investors. They also claimed that customers could remain in their homes after the sales and promised them an opportunity to repurchase the homes at a later date. Rather than selling the homes to legitimate investors, Wright and Saffer designed sham sales to straw purchasers whom they paid to participate in the scheme.

Wright and Saffer paid certified public accountant Barrington Coombs to write a fraudulent letter that falsely vouched for the fraudulent information on various loan applications. Coombs, who was also convicted by the jury, is scheduled to be sentenced on Dec. 7.

Mortgage transactions completed by FSS drew equity out of the homes, which Wright and Saffer pocketed for their own purposes. After doing so, Wright and Saffer allowed the loans to go into foreclosure. Homeowners ultimately lost all of the equity in their homes, and most of the victims were forced to move out of their homes.  (usattyfl11212)

MORAL

Consult your attorney before you play games. This way you know the risks and can avoid the problems. 

ELEVEN CONVICTED FOR MORTGAGE FRAUD IN FLORIDA AND ONE GETS 15 YEARS IN FEDERAL PRISON

FACTS

On Nov. 2, a federal judge in Tampa sentenced 11 individuals for their participation in a mortgage fraud scheme that spanned a decade and involved tens of millions of dollars in bogus loans.

The individuals had previously pled guilty to conspiring to commit fraud and/or to making false statements on bank loan applications so they could get the maximum mortgage possible on properties without risk or any of their own money. The scheme fell apart when the real estate market collapsed in 2008.

Richard Bobka of Sarasota, described in the statement as one of the main perpetrators, was sentenced to 15 years in federal prison and ordered to pay $22.8 million in restitution for his role in the scheme.

R. Craig Adams of Tampa was sentenced to three years in federal prison and ordered to pay $25 million in restitution. Adams had cooperated with the government in efforts to target the most culpable individuals who caused the largest losses to the banks, prosecutors said.

Nine others received sentences ranging from time served to 24 months in prison and were ordered to pay various amounts of restitution.  (tampbusjl usattytampfl103112)

MORAL

Adams is alleged to have ripped off more and gets a sentence one-fifth of the Bobka gentleman. See what cooperation can do?

 

THE INFORMATION CONTAINED HEREIN IS NOT LEGAL ADVICE.

AN ATTORNEY SHOULD BE CONSULTED IF YOU DESIRE LEGAL ADVICE.

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