FACTS
MORAL
Consult your attorney if you are in arrears and learn the foreclosure process, the tax consequences if any and the possibility of the mortgage holders suing you for the deficiencies after foreclosure. This can assist you in making well-reasoned decisions and should not take more than one hour. It can relieve your anxiety as well.
UPDATE ON FEDERAL REGISTERING UNDER THE SAFE ACT FOR FEDERALLY REGULATED AGENCIES
FACTS
The OCC, Federal Reserve Board, FDIC, OTS, FCA and NCUA (collectively, the agencies) are adopting final rules to implement the Secure and Fair Enforcement for Mortgage Licensing Act (the SAFE Act). The SAFE Act requires an employee of a bank, savings association, credit union or Farm Credit System institution and certain of their subsidiaries that are regulated by a federal banking agency or the FCA (collectively, agency-regulated institutions) who acts as a residential mortgage loan originator to register with the Nationwide Mortgage Licensing System and Registry, obtain a unique identifier, and maintain this registration. The final rule further provides that agency-regulated institutions must require their employees who act as residential mortgage loan originators to comply with the SAFE Act's requirements to register and obtain a unique identifier, and adopt and follow written policies and procedures designed to assure compliance with these requirements.
MORAL
Meaning if you are funding loans to those regulated by these agencies then you as loan originators should know the rules and you as a matter of self protection should have the unique identifier of who you are brokering or funding the loan to at the OCC, FRB, FDIC, OTS, FCA and NCUA regulated financial institutions.
FAIR CREDIT REPORTING ACT TO REQUIRE CREDIT SCORES WHEN ADVERSE ACTION IS TAKEN AGAINST A CONSUMER
FACTS
The Fair Credit Reporting Act has been amended to require that the consumer receive the credit score that assisted the creditor in deciding to take the adverse action.
MORAL
This is one bill you must be well aware of as a lender or a broker. The bill is over 1,200 pages and the regulations to enforce it will be coming out over the next six to 18 months.
THIS IS WHAT HAPPENS WHEN YOU ARE NOT CANDID WITH YOUR BANKRUPTCY ATTORNEY
FACTS
Keith Gary and his ex-wife Stacie Gary divorced in 2002, but both remained in the same house taking care of their two children. In March 2007, they filed a joint Chapter 13 bankruptcy petition. Stacie had received a substantial monetary settlement for a workers’ compensation claim just days before filing for bankruptcy. The Garys failed to disclose the award in their bankruptcy petition and lied about it while testifying under oath at a later creditors’ meeting. After the fraud came to light, both of the Garys were indicted on multiple counts of bankruptcy fraud. Keith pled guilty to three counts for making false statements and taking a false oath. See 18 U.S.C. § 152(2) & (3). Stacie pled guilty to five counts.
In a joint sentencing hearing, the district court sentenced Keith at the bottom of his guideline range to a total of 12 months and one day in prison. Stacie had a significant criminal history, and the court sentenced her at the top of her higher guideline range to 21 months in prison. Out of concern for the Garys’ two children, who faced separation from both parents, the district court tried to ensure that the two defendants would serve their prison terms in sequence. The sentencing was upheld on appeal.
MORAL
A competent attorney can protect you many ways but not against a lie. There are ways the money may have been kept legally by putting it into exempt property such as a home and homestead among others if they were eligible. Now they have felony convictions, lose the right to vote, hold public office, government jobs. Remember, what you tell your attorney is privileged. However, he cannot participate in a fraud. Therefore, be truthful and he may be able to find a legal way for you to keep the proceeds including the avoidance of filing bankruptcy which we have done on several occasions.
PHOENIX MAN CONVICTED ON TEN COUNTS FOR MORTGAGE FORECLOSURE RESCUE SCAM
FACTS
On Aug. 26, attorney general Terry Goddard announced that EDWARD L. CARPENTER, 52, OF PHOENIX, A MINISTER AND FORMER MORTGAGE BROKER, has been found guilty by a Maricopa County Superior Court jury of 10 charges related to his operation of a fraudulent mortgage "rescue" business. Carpenter was convicted on five counts of fraudulent schemes and artifices, all Class 2 Felonies, and five counts of fraudulent schemes and practices, all Class 5 Felonies.
The defendant contacted local homeowners, falsely stating he ran a "mortgage elimination" business that could legally remove the homeowners' names from their mortgages, giving them ownership of the properties free and clear. He charged upfront fees of $1,000 or more.
