FACTS
FHA has waived its regulation that prohibits the use of FHA financing to purchase properties that are being resold within 90 days of the previous acquisition. During this period of high foreclosures, FHA seeks to encourage investors that specialize in acquiring and renovating properties to renovate foreclosed and abandoned homes with the objective of increasing the availability of affordable homes for first- time and other purchasers and helping to stabilize real estate prices as well as neighborhoods and communities where foreclosure activity has been high. While the waiver is granted for the purpose of stimulating rehabilitation of foreclosed and abandoned homes, the waiver is applicable to all properties being resold within the 90-day period after prior acquisition, and is not limited to foreclosed properties.
The waiver, however, has conditions, and eligible mortgages must meet the conditions specified in this notice. Additionally, the waiver is not applicable to mortgages insured under HUD's Home Equity Conversion Mortgage program. (75fr28632)
MORAL
Sounds like an investor's right to work law to me. But read the regulation in full first so you are not sorry afterward.
ALABAMA WOMAN INDICTED OVER $69,000 LOAN
FACTS
On May 25, 2010 a federal grand jury indicted Charlene Andrews, a Birmingham woman, for one count of mail fraud in connection to her application for a mortgage loan to buy a house.
According to the indictment Andrews applied for a mortgage loan in March 2007, causing the application and supporting documents to be mailed to NorthStar Mortgage Co. In each of those documents, Andrews falsely claimed that she received monthly Social Security disability benefits. Had Andrews accurately reported her income, she would not have been eligible to receive the mortgage loan.
The indictment also seeks forfeiture of $69,500, the amount of the fraudulently obtained loan. The maximum sentence for mail fraud is 20 years in prison and a $1 million fine.
Special agents of the FBI, the Department of Housing and Urban Development, Office of the Inspector General, and the Social Security Administration, Office of the Inspector General, worked this case. Assistant U.S. Attorney Patrick Carney is prosecuting it. (usattyndal52510)
MORAL
I would ask you to note that the federal people are now chasing loans in the low area and $69,500 is pretty low and they are chasing the ones submitted to mortgage companies as opposed to just banks, savings & loans and credit unions. The woman must also pay restitution. This tells you at least one thing. The Nationwide Mortgage Fraud Task Force is now large enough to chase the smaller loans and that means more people are going to be looking at the "slammer" unless they have a good attorney.
CALIFORNIA SON AND MOTHER INDICTED FOR HARD MONEY INVESTMENT LOAN FRAUD
FACTS
On May 27, 2010, a federal grand jury returned a six-count indictment charging Robert E. Rosenau and his mother, Donna M. Rosenau, of Redding, Calif., with mail fraud and a conspiracy to commit mail fraud in a fraudulent investment scheme.
The indictment alleges the pair, through their family business, Rosenau Investments Inc., took in more than $700,000 in investment funds between December 2007 and February 2008 with promises that they would be used to fund "hard money" real estate loans. The indictment alleges that those funds instead were used to pay monthly returns to investors in January and February 2008 (approximately $163,000 in each of those months), and used to issue checks totaling more than $180,000 for the benefit of Robert E. Rosenau or his associates.
The maximum statutory penalty for the conspiracy charge is five years in prison, and the maximum statutory penalty for the mail fraud charge is 20 years in prison. Each charge carries a maximum fine of $250,000. (usattyedca52710)
MORAL
When you give money to a hard money investor to loan it should be for a specific loan and spelled out on the disclosure statement the broker is required to give you at the time of requesting the money. Then check the endorsement on the back of the check when it is returned to you from the bank to be certain it shows that it was deposited into the broker trust account. Failing these to be true you should consult your attorney.
COLORADO NEW LAW ON THIRD-PARTY FEE DISCLOSURES
FACTS
The Colorado Division of Real Estate has adopted a new rule that requires a separate disclosure to each borrower that itemizes all third-party fees and costs to comply with the provisions of Colo. Rev. Stat. Ann. § 12-61-914(2)(b). According to Section 12-61-914(2)(b), a mortgage loan originator must provide the borrower a written disclosure that contains the following information: The itemized costs of any credit report, appraisal, title report, title insurance policy, mortgage insurance, escrow fee, property tax, insurance, structural or pest inspection, and any other third-party provider's costs associated with the residential mortgage loan. (docmgic52410)
MORAL
If you do loans in Colorado be certain to use the new disclosure or be certain to be disciplined if you do not in addition to increasing the risk of being sued.
COLORADO MAN GETS OVER TWO YEARS IN FEDERAL PRISON FOR MORTGAGE FRAUD
FACTS
On April 16, 2010, Stafford A. Hilaire of Aurora, Col., was sentenced to 32 months in prison on charges of conspiracy to defraud the United States and conspiracy to commit money laundering. In addition to the prison term, Hilaire was ordered to spend two years on supervised release and to pay more than $397,000 in restitution.
