OCT 11, 2012
Compliance Matters

Consumer Financial Protection Board Examiners Picky

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CFPB AUDITORS FIND THE GFE IS NOT COMPLETED PROPERLY

FACTS

Recently in audits conducted by the Consumer Financial Protection Bureau it has been alleged that its auditors found the Good Faith Estimate was not being completed properly. One of the violations was failure to complete the email address of the loan originator!

MORAL

Now that is what I call picky. However, if you have a story about your audit let me know. We will not reveal your name or the name of your company. Your information will help other professionals as well as yourself by allowing them and you to make corrections to quality control plans and keep out of trouble.  As here many of you now will make certain the LO email address is put on the GFE form. Please remember what the CFPB finds, in my opinion the licensing agencies in California, Colorado, Nevada, Alabama and elsewhere will also look for in their audits.

LOS ANGELES MAN GETS 37 MONTHS IN FEDERAL PRISON FOR HELOC SCAM

FACTS

On Oct. 2, federal Judge Manuel L. Real sentenced David Han to 37 months in federal prison for his participation in a home equity line of credit scheme that resulted in losses of more than $1 million. Judge Real also ordered the defendant to pay $1,065,000 in restitution.

Han pleaded guilty to four counts of bank fraud based on his submission of home equity loan applications to four different banks. The HELOC applications were all submitted under the alias “Young He Kim” and were all to be secured by the same property. Han submitted the HELOC applications in a “shotgun” approach in order to obtain approval and funding before any of the banks recorded liens on the property. In addition to concealing his true identity, Han made false representations on his loan applications about his employer, his employment status, and his income.

Once the loans funded, Han directed the proceeds to be deposited into bank accounts that he had opened under the alias, and then he wrote checks to cash or purchased cashier checks to withdraw the funds. After accessing more than $700,000 in loan proceeds, Han sent checks that prosecutors allege were counterfeit—purportedly to be partial loan re-payments—to the banks, which then made additional funds available to Han. Han accessed over $300,000 of these funds before the banks realized that the checks were counterfeit.  (usattycacd10212)

MORAL

He now has three years room and board at a federal hotel. Of course, his freedom of movement is restricted.

CALIFORNIA ATTORNEY INDICTED FOR MORTGAGE LOAN MODIFICATION SCAM

FACTS

On Oct. 2, United States Attorney Laura E. Duffy announced that Dean G. Chandler, an attorney from Oceanside, and telemarketing salesman Shelveen Singh were arraigned in Federal Court in San Diego. They were charged in a 50-count indictment of defrauding thousands of homeowners in an $11 million loan modification scheme. According to the indictment, these defendants (and two others previously arraigned) used Chandler’s Oceanside-based law firm, 1st American Law Center to persuade victims to pay thousands of dollars each by deceptively touting 1ALC’s purported success and legal resources and falsely promising that 1ALC would successfully modify their residential mortgage loans.

As alleged in the indictment, the defendants and their co-conspirators used high-pressure sales tactics and outright lies to prey on homeowners located across the country who were struggling to make their monthly mortgage payments and were at risk of losing their homes to foreclosure. Among other alleged lies, the conspirators falsely promised to have a team of attorneys pre-screen client applications—claiming that these attorneys only approved 30% of those seeking to use 1ALC’s services—and boasted of having a 98% success rate in obtaining loan modifications. 1st American Law Center’s telemarketers were encouraged (using call “scripts” and other training) to say virtually anything to customers in order to close the deal. The indictment alleges that among other ruses, employees pretended that that they had helped “thousands” of happy homeowners save their homes, that 1ALC had been in business for 20 years, that clients’ fees would be deposited into a client-trust account and remain untouched until the client was satisfied, and that there was a money-back guarantee. Conspirators even persuaded financially strapped homeowners to pay 1ALC’s fees instead of the clients’ monthly mortgage payment.

Chandler appeared in television commercials and on the company’s websites as the attorney in charge of the company, soliciting customers throughout the United States. He, Singh, Anthony Calandriello and Michael Eccles are charged with conspiring to commit the offenses of mail fraud and wire fraud through the operation of 1st American Law Center. Chandler is also charged with money laundering because he conducted financial transactions with the proceeds of the fraudulent conspiracy.

Nine other participants in 1ALC’s telemarketing scheme have already entered guilty pleas in federal court for their roles in the criminal enterprise and the subsequent cover-up. (usattycasd10212)

MORAL

Remember they are all innocent until proven guilty in a court of law. But, you would think they would have an attorney in waiting like a lady in waiting? Except for the one that is an attorney that is.

DENVER WOMAN GETS FIVE YEARS IN FEDERAL PRISON FOR MORTGAGE FRAUD

FACTS

On Sept. 27, U.S. District Court Judge Marcia S. Krieger sentenced Vicki Dillard Crowe, also known as Vicki R. Dillard, for mail and wire fraud in connection with a mortgage fraud scheme. Following her prison sentence, Judge Krieger ordered Crowe to spend three years on supervised release. She was also ordered to pay $2,408,142.37 in restitution to the victims of her crime. Crowe pocketed close to $1,000,000 during the course of her fraudulent scheme. Crowe was immediately remanded into custody at the conclusion of the sentencing.

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