FACTS
Effective Jan. 1, 2012 the California Real Estate Commissioner may issue citations to unlicensed persons the commissioner believes to be engaging in activities for which a real estate license is required or to licensees who are in violation of any provision of the Real Estate Law or any rule or order thereunder. The Commissioner is authorized to have the citations include an order to correct the violation or to include an administrative penalty of up to $2,500. The bill would make additional changes with regard to the commissioner's authority pertaining to discipline and, on and after July 1, 2012, licensure renewal.
The commissioner may apply to the superior court for an order requiring a licensee to appear before the commissioner or to produce evidence under specified circumstances. The court may punish as contempt the failure of a licensee to comply with such an order.
The Commissioner may make information public confirming an investigation or proceeding against an unlicensed person or licensee.
On and after July 1, 2012, a real estate broker who is exempt from the Escrow Law and who engages in escrow activities for five or more transactions in a calendar year or whose escrow activities equal or exceed $1,000,000 in a calendar year ($1 million could be the sale of one luxury home) to file a specified report with the department within 60 days following the completion of the calendar year. The commissioner can assess specified penalties upon a real estate broker who fails to provide the report to the department. (sb53, B&PC Sections 10079, 10176, 10237,10238 amend, repeal, and add Sections 10156.2 and 10177, add Sections 10080.9, 10088, 10141.6, and 10236.7, repeal Section 10239.4, repeal Article 6 (commencing with Section 10237) and Article 6.5 (commencing with Section 10239) of Chapter 3 of Part 1 of Division 4 of, the Business and Professions Code, and to add Section 1808.51 to the Vehicle Code, relating to real estate licensees.)
REAL ESTATE BROKER CAN APPOINT SOMEONE TO MANAGE BRANCH SUBJECT TO CONDITIONS
FACTS
Starting July 1, 2012, an employing broker or corporate designated broker officer may appoint a manager of a branch office or division of the employing broker's real estate business and delegate to that manager responsibility to oversee and supervise operations and activities, as specified. The appointment must be made by means of a written contract and that the employing broker or corporate designated broker officer send a notice to the department identifying the appointed manager and branch office or division, as specified.
The employing broker or corporate designated broker officer must notify the commissioner, immediately and in writing, whenever a branch manager is terminated or changed. An appointee shall not hold a restricted license, be subject to debarment, or have less than two years of full-time real estate experience within five years preceding the appointment. The commissioner to suspend or revoke the license of an appointed licensee for failure to properly oversee and supervise operations, as specified. (sb510,10164-65)
MORAL
What's the point? For all intents and purposes you can do that now by appointing a broker. This may just be simpler and no broker license is needed.
UNDER CERTAIN CONDITIONS PEOPLE CONVICTED OF FELONIES MORE THAN SEVEN YEARS FROM APPLICATION MAY OBTAIN A LICENSE AS MORTGAGE ORIGINATORS IN CA
FACTS
Existing law provides for the licensure and regulation of mortgage loan originators, as defined, by the Commissioner of Corporations under the California Finance Lenders Law and the California Residential Mortgage Lending Act. Existing law requires a real estate license endorsement by the Real Estate Commissioner under the Real Estate Law for a real estate licensee to engage in the business of a mortgage loan originator.
EXISTING LAW PROHIBITS THE ISSUANCE OF A MORTGAGE LOAN ORIGINATOR LICENSE OR A LICENSE ENDORSEMENT TO ACT AS A MORTGAGE LOAN ORIGINATOR IF THE APPLICANT FOR A LICENSE OR LICENSE ENDORSEMENT HAS BEEN CONVICTED OF, OR PLED GUILTY OR NOLO CONTENDERE TO, A FELONY DURING THE SEVEN YEAR PERIOD PRECEDING THE DATE OF THE APPLICATION FOR LICENSING OR AT ANY TIME PRECEDING THE DATE OF APPLICATION IF THE FELONY INVOLVED AN ACT OF FRAUD, DISHONESTY, A BREACH OF TRUST, OR MONEY LAUNDERING.
Effective Jan. 1, 2012 an expunged or pardoned felony conviction does not require denial of a license or license endorsement but would authorize the consideration of the underlying crime, facts, or circumstances of the expunged or pardoned felony conviction when determining whether to issue a license or license endorsement, as specified. (SB217, b&pc10166;05, fin.c.22109.1, 50141)
MORAL
Look to the date of the conviction and look to the type of conviction as to fraud, dishonesty, breach of trust or money laundering.
MAN CONVICTED OF FORECLOSURE SCAM IN ALAMEDA COUNTY TO BE SENTENCED TO STATE PRISON FOR 16 MONTHS
FACTS
ALAN DAVID TIKAL—previously arrested in Las Vegas on a fugitive warrant—was a man who peddled foreclosure rescues in Stanislaus County and elsewhere. He will be sentenced to 16 months in state prison for a conviction in Alameda County.
Tikal faced 29 felony charges in the East Bay before agreeing to a plea deal on Oct. 31 on two felony counts, said David Lim, an Alameda County deputy district attorney.
The KATN TRUST AND TIKAL allegedly convinced people facing foreclosure that they could obtain new loans at a 75% discount, for a fee, typically about $1,100. Homeowners desperate for relief were guided to file phony documents at county recorders' offices, authorities say, and many eventually lost their homes anyway.
Tikal relied on telling homeowners they could get out of traditional loans because government backs banks with "vague promises" and not gold. He told webinar customers he was a private banker with "access to enormous lines of credit in the banking industry."
ABC News reported that Tikal has prior convictions in five states for theft, disorderly conduct and other felonies, and aired interviews with people in San Francisco and Chicago who said they fell for his scheme.
A judge could impose a prison term of three years and eight months if Tikal fails to appear at a Dec. 1 sentencing, Lim said. Tikal also must return fees paid him by 11 families in Alameda County. (modbee11411)
MORAL
Although desperate times make people desperate, they should consult with someone they trust before allowing schemes to take their remaining money. Remember your stomach. If it feels funny when you hear it then maybe it is funny and you should not do it.
FEDERAL MORTGAGE FRAUD CHARGES BROUGHT AGAINST FOUR PEOPLE IN SACRAMENTO
FACTS
On Nov. 3, KRISTINE ATOYAN, MARTIN ATOYAN, MARAT GALOYAN AND ZHORA DARMOYAN were indicted by a federal grand jury as part of wide-ranging investigation into mortgage fraud involving members of the local Russian American community.
The four were charged with wire fraud and mail fraud charges for their alleged role in a scheme that defrauded banks of $1.5 million. According to the indictment, the FOUR SERVED AS STRAW BUYERS for four properties in Sacramento, Roseville and Rancho Cordova at inflated prices. The homes later went into foreclosure.
The indictment said the four were recruited by local tax preparer VERA KUZMENKE to make the home purchases. Kuzmenko was indicted in May by a federal grand jury on mail and wire fraud charges in an alleged mortgage fraud scheme that took nearly $10 million from banks. Kuzmenko has pleaded not guilty and denies all wrongdoing. (sacrobee11411)
MORAL
I would suggest since Kurzmenko was indicted in May 2011 and these four were indicted six months later that it may be someone is cooperating with the prosecutor.
LOAN OFFICER AND TITLE AGENT SENTENCED IN FLORIDA FOR REVERSE MORTGAGE AND LOAN MODIFICATION FRAUD
FACTS
On Nov. 4, 2011 defendants KIMBERLY MACKEY WAS SENTENCED TO 60 MONTHS IN PRISON, to be followed by five years of supervised release, AND MARCOS ECHEVARRIA WAS SENTENCED TO 24 MONTHS IN PRISON, to be followed by five years of supervised release by U.S. District Court Judge William P. Dimitrouleas. DEFENDANTS LOUIS GENDASON AND JOHN INCANDELA will be sentenced on Dec. 16. Restitution was ordered in the amount of $1,654,805.36.
All of the defendants previously pled guilty to a criminal information charging them with one count of conspiracy to commit wire fraud for their participation in a $2.5 million Home Equity Conversion Mortgage (a.k.a. reverse mortgage) fraud scheme.
According to the information and statements made in court, from May 2009 through November 2010, the defendants engaged in a reverse mortgage scheme that defrauded unwitting borrowers, Genworth Financial Home Equity Access, Inc., and the Federal Housing Administration. GENDASON AND INCANDELA WORKED AS LOAN OFFICERS AT 1ST CONTINENTAL MORTGAGE, with offices in Fort Lauderdale and Boca Raton, Fla. The defendants, as loan officers for 1st Continental, solicited individuals, ages 62 and older, from around the country to refinance their existing mortgages with a reverse mortgage loan financed by Genworth. To qualify the borrowers for the loans, Gendason altered real estate appraisals to fraudulently inflate the value of the borrowers properties. In fact, however, none of the borrowers had sufficient equity in their properties to qualify for a reverse mortgage.
The defendants then submitted the fraudulently inflated appraisals to Genworth. Based on the false documentation, Genworth approved and the FHA insured more than $2,572,813 in reverse mortgage loans.
As a further part of the conspiracy, MACKEY, A LICENSED TITLE AGENT AND PROPRIETOR OF REAL ESTATE ONE LAND SERVICES, INC., located in Pittsburgh, fraudulently closed the Genworth loans, failing to pay off the borrowers existing mortgage loans. Genworth wired the loan proceeds to Mackey as the designated closing agent for 1st Continental. Mackey attempted to conceal the fraudulent loan closings by preparing false HUD-1 settlement documents that showed that the existing mortgages had, in fact, been paid off. Between May 2009 and November 2010, Mackey received loan proceeds from Genworth totaling $2,572,813.19. Mackey fraudulently diverted at least $988,086.33 to a bank account controlled by Incandela and Gendason, who used this money for their personal benefit.
Thereafter, to perpetuate the fraud, the defendants engaged in a loan modification scheme to conceal the existence of the Genworth reverse mortgage transactions from the original mortgage lenders, whose loans remained unpaid. To this end, Gendason, Incandela, and Mackey conspired to create fictitious offers to buy some of the borrowers properties, in the form of short sales.. In other instances, to hide the existence of the Genworth reverse mortgage loan from the original lenders, the defendants made monthly mortgage payments to the borrowers original lenders. (usattysdfl11411)
MORAL
The federal prosecutors and federal agents are still at it. More down and more to follow. Notice the five year sentence?
OWNER OF AT HOME SETTLEMENTS PLEADS GUILTY TO STEALING ALMOST $5 MILLION IN MORTGAGE CLOSING PAYOFFS
FACTS
On Oct. 28, GARY PIERCE pleaded guilty to conspiracy to commit wire fraud in connection with a five year scheme to divert or hold mortgage payoff funds from clients' closings on 17 Maryland properties.
Pierce owns and manages AT HOME SETTLEMENTS LCC, a real estate title agency with an office in Gambrills, Md. In 2007, Pierce applied for and received a mortgage on a property in Edgewater that he did not own. Pierce used funds obtained from the lender to perpetuate the scheme and diverted $50,000 from the funds provided by the mortgage lender to himself. The true owner of the property had no knowledge that documents were created that purported to show that he had sold the property to Pierce.
Beginning in 2007, Pierce and his co-conspirator diverted or held mortgage payoff funds from clients' closings for a matter of days, weeks and sometimes years. Pierce falsely represented on HUD-1 forms sent to the borrower's lender that the payoff was made, when in fact Pierce intended to divert the funds. Pierce and his co-conspirator fabricated wire confirmation reports, which purported to be a bank record of the transfer, to include in loan files. These were created in advance of audits by the title insurers in order to deceive the title insurers. Additionally, to forestall discovery by the lenders, Pierce and his co-conspirator contacted the mortgage lender who should have been paid off and posed as the borrower/homeowner. Pierce's co-conspirator would either create an on-line profile for the borrower and stop any mail from being sent to the borrower, or he would tell the lender that his, the borrower's, address had changed and he would re-direct the lender to send all correspondence to a post office box owned by Pierce. The co-conspirator would then make monthly mortgage payments to the existing lender. With no delinquency in the account, the scheme went undetected.
Because the existing mortgages were not paid off, the liens against the property were not removed and clear title could not be passed to the new lender and borrower. The total amount of diverted or otherwise improperly obtained funds totals $4,971,380.
Pierce faces a maximum sentence of 20 years in prison and a fine of $250,000. U.S. District Judge Catherine C. Blake scheduled his sentencing for Feb. 10, 2012, at 10:00 a.m. (usattymd102811)
MORAL
This one was slicker than most. But like all Ponzi's at some time they run out of money and the crap hits the fan.
MISSOURI REAL ESTATE BROKER PLEADS GUILTY TO MORTGAGE FRAUD CAN BE SENTENCED UP TO 70 YEARS IN FEDERAL PRISON
FACTS
On Nov. 1, Beth Phillips, United States Attorney for the Western District of Missouri, announced that VICKIE KAY LIND, a Branson, Mo., real estate agent, has pleaded guilty in federal court to all four counts related to her role in a $391,519 mortgage fraud scheme.
By pleading guilty, Lind admitted that she participated in a wire fraud conspiracy and a money laundering conspiracy from Aug. 1 to Oct. 3, 2005. In addition to the conspiracies, Lind pleaded guilty to one count of wire fraud and one count of money laundering.
Lind, a Realtor who did business as MY REALTY COMPANY LLC, defrauded First Magnus Financial Corp., in Overland Park, Kan., by submitting fraudulent documentation in order to obtain $391,519 in mortgage loans for an Ozark, Mo., residence.
In order to obtain the loans, Lind provided false documentation that an individual was leasing the property for $3,500 per month. First Magnus approved the buyer's loan application on the strength of the $3,500 per month lease agreement. First Magnus would not have approved the loan application without this lease agreement, because the buyer's debt to income ratio was too high.
Without the lender's knowledge, Lind obtained $70,000 from the loan proceeds, while the seller of the property only received approximately $310,000. Lind submitted a fraudulent invoice in order to direct a $25,000 payment to ELITE HOME ALLIANCE, which was actually Lind's own company and which had not performed any work. In reality, Lind used the $25,000 for her own benefit. Lind also submitted a fraudulent invoice in order to direct a $45,000 payment to GOLD POINTE HOMES, which likewise had not performed any services. In reality, those funds were used to repay a loan from a friend in Arizona, who had loaned the money so Lind could live in the residence until it could be sold for a profit.
Lind declared bankruptcy in October 2005. The buyer could not make the monthly mortgage payments, nor could he sell the residence, and the property went into foreclosure. As a result, First Magnus lost $70,426. Under federal statutes, Lind is subject to a sentence of up to 70 years in federal prison without parole, plus a fine up to $750,000. (usattymo11111)
MORAL
I have issues here. One transaction and they charge four counts? There does not appear to be any deal cut with the prosecutor on the face of the press release so what does she have to lose by going to a jury trial. Lastly, First Magnus is a name I have not heard in a long time and here t he federal agents went back SIX YEARS to find this loan. This case makes an interesting case study if one has the time to find out why things went the way they did over one loan.
VIRGINIA LOAN OFFICER GUILTY OF MORTGAGE FRAUD
FACTS
On Nov. 4, Javier SIVERONI OF SPRINGFIELD, VA., WAS SENTENCED TO 24 MONTHS IN PRISON, followed by two years of supervised release, for using his position as a loan officer to help carry out a multi-million-dollar mortgage fraud scheme involving more than 15 homes in the Northern Virginia area.
Siveroni, a former loan officer at the Falls Church branch of SUNTRUST MORTGAGE, prepared and submitted false, fraudulent, and misleading mortgage loan applications for unqualified buyers. The fraudulent mortgage loan applications contained false information regarding applicants' employment, income, assets, immigration status, and intent to live in the property as a primary residence. As part of the fraud scheme, Siveroni created, and taught his co-conspirators how to create, fake documents in order to corroborate false information contained in the loan applications. The total amount of mortgage loans approved through the conspiracy exceeded $6.5 million. The total loss attributable directly to Siveroni is over $2.5 million.
THREE LOAN OFFICERS HAVE PLED GUILTY FOR THEIR ROLES IN THE ALLEGED CONSPIRACY: PRESTON CHEROUNY OF WASHINGTON; JOHN LEONE OF VIENNA, VA.; ALEJANDRO ALQUINTA OF SPRINGFIELD, MASS. MARIA TERESA SANCHEZ OF BURKE, VA., AND YOLANDA SALAZAR CAMACHO, OF ALEXANDRIA, VA., ALSO PLED GUILTY for their roles as loan officer assistants in the conspiracy. (usattyedfl11411)
MORAL
Notice the five others Notice the ongoing prosecutions just as I have said. We have new ones coming forth regularly. Anyone that thinks they were even peripherally involved in a questionable mortgage that foreclosed and had a loss should consult with their attorney. In all we are currently aware of four law firms chasing loans on behalf of four agencies including Chase, Flagstar, FDIC, Countrywide via Bank of America and others. FDIC in this one attorneys opinion is looking at the portfolio loans of at least 84 failed banks and those that are questionable are being chased by going after the brokers and wholesale lenders. If you have a different opinion let me hear it.
THE INFORMATION CONTAINED HEREIN IS NOT LEGAL ADVICE.
AN ATTORNEY SHOULD BE CONSULTED IF YOU DESIRE LEGAL ADVICE
