MORTGAGE REFINANCING UP IF YOU KNOW WHERE TO LOOK FOR LOANS ELIGIBLE FOR REFINANCING
FACTS
Reduction in the mortgage interest rates has caused an increase in mortgage applications as borrowers refinance home loans. A lot of this stems from those that purchased FHA houses in the past year with Federal Housing Administration loans at 6% interest and above. With rates now in the 5% range a borrower can save a significant amount of money by refinancing.
The Mortgage Bankers Association announced a 21% increase in U.S. mortgage applications in its newest survey for the week ending March 13. The refinance share was 72.9%, up from 67.9% the previous week. Activity is up statewide in California. (sacrob31909)
MORAL
Kind of tells you to do some mining or prospecting in the title company records or recorders' office for loans that funded in the 6% era. Look up the old rates when they were 6% FHA and start talking to borrowers about numbers reducing rates monthly for a shorter term at less monthly.
FANNIE MAE REJECTS CONDO FINANCING IF MORE THAN 15% OF HOMEOWNERS ARE DELINQUENT ON HOMEOWNER ASSOCIATION FEES
FACTS
Fannie Mae has implemented new regulations that will cause the rejection of any mortgage for a condo buyer if more than 15% of the other owners are delinquent on their homeowner association fees.
Fannie Mae will not guarantee mortgages in new or newly converted condo developments if less than 70% of the units are sold or under contract, (lat32109b5)
MORAL
Well, that will kill almost every single condo financing.
BANKRUPTCY MAY GIVE YOU A BREATHER TO STAY IN YOUR HOME LONGER
FACTS
In California and possibly other states there is a Civil Code section that provides:
2932.5. Where a power to sell real property is given to a mortgagee, or other encumbrancer, in an instrument intended to secure the payment of money, the power is part of the security and vests in any person who by assignment becomes entitled to payment of the money secured by the instrument. The power of sale may be exercised by the assignee if the assignment is duly acknowledged and recorded.
MORAL
In plain English: You cannot foreclose unless you prove you own the deed of trust. If you are not the original beneficiary (lender) then there must be an assignment from the lender to the new owner of the security recorded with the count recorder. You can protect against the foreclosure by lawsuit or if eligible by bankruptcy. In other words, if you cannot prove you own the deed of trust you cannot foreclose on my property.
MORE ABOUT BANKRUPTCY
FACTS
Unemployment in California is now at 10.5%. To me that means one in ten on average is unemployed! There are 45,557 people in California who became unemployed in February 2009 alone. The total summary is California lost 116,000 jobs in February aside from the layoffs and over the last 12 months the total is 600,900 jobs.
The Central Valley, which includes Merced, is the second highest in bankruptcies in the nation, second only to Los Angeles County.
MORAL
Now you know why our firm's bankruptcy attorney is so busy. Thus far we have assisted people in being able to stay in their homes a little longer, keeping some credit legally and removing obligations to pay certain debts so they can get a "second chance" to recover.
CALIFORNIA DEPARTMENT OF REAL ESTATE FILES ACCUSATION AGAINST ORANGE COUNTY BROKER
FACTS
Paul Henry Reed, owner-broker of Seaview Financial, is alleged to have negligently thrown away 350 files full of his clients' sensitive personal information and should have his real estate license suspended or revoked, California investigators say. An accusation appears to have been filed by the California Department of Real Estate under case number H-35763 LA. (You may review a previous column by Mr. Thordsen which discussed that Seaview a fictitious business name of Paul Henry Reed is alleged to have taken customer financial data and dumped or had been responsible for its dumping at a recycling center the same day the broker moved out of its East Coast Highway offices.)
The dumpster allegedly had discarded loan applications, refinancing information, bank account statements, credit reports, tax returns and social security numbers among other things. This consisted of about 350 files dumped in bins at Mariners Elementary School. You can review the exact details in the accusation by contacting the Department of Real Estate and asking for a copy of the accusation by number as listed above.
Although Mr. Reed has denied liability state investigators allegedly say he absolutely is liable. "Reed's inappropriate means of disposal via trash bin dumping of 24 Bekins boxes of approximately 350 client files, without notice to his clients, constitutes a breach of fiduciary duty with respect to their private, personal and family data," the complaint says. The "negligence" is grounds for "suspension or revocation of (Reed's) real estate license," the complaint says.
The complaint also says Reed broke laws by failing to notify the department he was moving from his offices, and by not retaining certain records during the past three years.
An accusation is just that and subject to all defenses available to Mr. Reed but records that can cause identity theft is a serious accusation considering the federal laws on privacy and the new "Red Flags" law that becomes effective on May 1, 2009. (ocreg32009)
MORAL
Whatever else may happen, Mr. Reed now has a potential problem with other brokers that may do business with him.
SAN BERNARDINO COUNTY REAL ESTATE AGENT AND WIFE ARRESTED FOR IDENTITY THEFT, GRAND THEFT AND FORGERY
FACTS
On March 17, 2009, investigators with San Bernardino County District Attorney's Real Estate Fraud Unit arrested Michael Moon Park and his wife, Bu Yun Park, of Helendale, on felony charges of identity theft, grand theft, forgery, money laundering and conspiracy. Three additional suspects remain outstanding and are currently being sought. They are: Kenneth Sung Park, Jason S. Kim, and Duk Sung Jin.
The investigation revealed that the suspects opened a bank account in the name of the victim and purchased two vehicles, one of which has since been shipped to South Korea. Jason Kim obtained a fictitious driver's license in the name of the victim in order to steal the victim's identity and purchase two homes in Silver Lakes, Calif.
Michael Park, a licensed real estate agent, represented himself as the broker and his wife as the seller during the fraudulent transactions. After the homes were sold, proceeds were wired into the Parks' bank account and then some of the proceeds were electronically transferred to another account in Vancouver, British Columbia. The homes subsequently went into foreclosure with the estimated loss of over $1.2 million. Bail was set at $2,180,000. (sbdistatty32009)
MORAL
Note three things: 1-They are innocent until proven guilty. 2-Since Mr. Moon has a broker at all times there is a probability the broker will be sued civilly and so I trust he has E&O insurance. 3-At least do a perfunctory background on whom you hire since I doubt the broker has a "Red Flags" manual which is mandatory as of May 1, 2009 and probably lacks a privacy manual which has been required for sometime under the Gramm-Leach-Bliley Act. If the victim's information was part of the broker file to start with, there is even a greater likelihood he will be sued. That is, if he has assets. At least that is one lawyer's opinion (mine).
FLORIDA ATTORNEY TITLE AGENT SENTENCED TO
EIGHT YEARS IN FEDERAL PRISON
FACTS
Howard Gaines was sentenced to eight years in federal prison, to be followed by three years of supervised release for his role in a complex mortgage fraud scheme. U.S. District Judge William Dimitrouleas sentenced Gaines, an attorney and a licensed title agent with Your Title Choice, Inc., in Deerfield Beach, Fla. In addition, Gaines was ordered to pay restitution in the amount of $422,465 to three lenders.
This is the sixth conviction in this case, following five earlier guilty pleas by other conspirators. According to the evidence presented at trial, Gaines, as a title agent, aided co-conspirator Anthony Dehaney and others to close on fraudulent loans. Among the fraudulent documents presented at closings were HUD-1 settlement forms, which falsely represented that buyers were using their own money to close on the purchases. The evidence showed that Gaines helped Dehaney close more than $10,000,000 in loans during 2004, 2005 and 2006, including $5,000,000 in fraudulent mortgages. (usattysdfl32009)
MORAL
Notice again the federal prosecutors went back five years and anyone want to bet it is on stated income loans.
MARYLAND MAN INDICTED FOR MORTGAGE FRAUD
FACTS
Robert Dewain Venson of Fort Washington, Md. was arrested March 11, 2009 for mail and wire fraud, money laundering and failing to file tax returns in connection with a three-year mortgage fraud scheme involving 13 residential properties.
The 26-count indictment alleges from 2004 to 2007 Venson negotiated the purchase of 13 residential properties in Maryland and the District of Columbia. Venson allegedly paid straw buyers to appear at the settlement posing as the buyer. Venson typically would represent to the straw buyer that he would pay the loan obligation. Venson allegedly inflated the price listed on the sales documents to an amount substantially larger than the actual price, causing the mortgage lender to provide funds for the purchase substantially in excess of the actual price. Venson allegedly misrepresented and concealed the true purchase price, his arrangement with the straw buyer and other material information from the mortgage lender. Under this scheme, Venson allegedly reaped hundreds of thousands of dollars.
The indictment also alleges that Venson failed to file individual federal income tax returns for 2004, 2005 and 2006. Based on the mortgage fraud scheme, the indictment seeks forfeiture of property, including a money judgment of $892,371, and Venson faces a maximum sentence of 20 years in prison for each of the eight counts of mail fraud, each of the eight counts of wire fraud and each of the seven counts of money laundering; and one year in prison for each of the three counts of failure to file tax returns.
The Maryland and Washington, D.C. Mortgage Fraud Task Forces are bringing this prosecution jointly. (usattymd31109)
MORAL
Here the government went back to loans that occurred five years ago and wants to forfeit his property. Do you have any questionable loans that occurred in the last five years? Remember you are innocent until proven guilty but if convicted the numbers theoretically indicate over 160 years in federal prison. This sentence is unlikely if convicted but it sure is scary.
MICHIGAN APPRAISER WITH INFLATED APPRAISAL PUTS HIM IN FEDERAL PRISON FOR ONE YEAR
FACTS
Ali Haidous, a Dearborn real estate appraiser, was sentenced to one year imprisonment in connection with a multi-million dollar mortgage fraud scheme,
Haidous admitted to inflating appraisals in a scheme involving sixteen total properties. Countrywide Financial, Washington Mutual, Fifth Third Bank, IndyMac and other financial institutions between April 2005 and April 2008 issued mortgages totaling $1.9 million on the 16 properties. Haidous admitted to being paid $1,000 -- rather than his usual fee of $300-$500 -- for each fraudulent appraisal.
Haidous prepared the fraudulent appraisals for co-defendant Hassan Nagi, a mortgage broker from Dearborn Heights, who used the fraudulent appraisals to submit false applications to obtain the mortgages for straw buyers. Nagi pled guilty on Dec. 15, 2008. His sentencing is set for April 16, 2009. (usattyedmi31709)
MORAL
Think about it! An extra $500 per appraisal above his usual fee. That amounts to $8,000 on 16 properties. So for $8,000 he goes to prison for one year convicted of a felony. No holding public office, no licensed vocations and disclose conviction on every job application and no voting. Hardly seems worth it. Note how the government went back four years in this case. Did you do or pay for any creative appraisals in the last four years? If so, you may want to see your attorney now before federal agents see you later.
LAS VEGAS TALK SHOW HOST ARRESTED FOR FRAUDULENT MORTGAGE RESCUE SCAM
FACTS
On March 11, 2009, Nevada Attorney General Catherine Cortez Masto announced that Jack Ferm, a former talk show host in Las Vegas, has been arrested on two counts of felony theft and related charges in connection with the operation of U.S. Justice Foundation, a mortgage rescue scam.
Ferm is the president and owner of U.S. Justice Foundation, a document preparation business which misled customers into believing his service would stop ongoing foreclosures on their homes without the need to retain an attorney. His company web site indicated he has participated in successful litigation against numerous large corporations.
The Attorney General's office has received numerous complaints about misrepresentations made by Ferm, including several clients who paid thousands of dollars to the U.S. Justice Foundation with no legal documents having been prepared or filed on their behalf. In many cases, Ferm required the victims to pay a monthly charge in addition to the original retainer for the duration of the litigation.
During a hearing in Federal Court Ferm stated that the U.S. Justice Foundation has closed its doors and will not be accepting new clients. Ferm was moderator of the show "Straight Talk" broadcast on the radio station KKVV 1060 from 1994 through 2003. (nvag31109)
MORAL
That is the primary weakness with greed. A complaint is received. No money (usually $5,000 or less) is given back, a complaint is then filed and bingo, you get arrested over $5,000 and charged with ripping off hundreds of thousands of dollars. Does that kind of tell you something? Remember, Mr. Ferm is innocent until proven guilty but it is going to be expensive.
NEW JERSEY MAN PLEADS GUILTY TO HUD/FHA MORTGAGE FRAUD INVOLVING MULTIPLE DEFENDANTS FACES 30 YEARS IN PRISON
FACTS
Renford Davis of Paterson, N.J., pleaded guilty on March 17, 2009 to wire fraud conspiracy and money laundering conspiracy in connection with a mortgage fraud and property-flipping scheme involving rental properties. Davis' trial on a 25-count indictment against him and two codefendants was to begin on May 4, 2009; instead he admitted conspiring with his co-defendants and several others to originate mortgage loans fraudulently and to engage in money laundering with proceeds of the loans during 2002 through 2005.
Davis pleaded guilty before U.S. District Judge Jose L. Linares to one count of wire fraud conspiracy, which carries a maximum statutory penalty of 30 years in prison and a fine of $1 million, and one count of money laundering conspiracy, with a maximum statutory penalty of 10 years in prison and a fine of $250,000. Davis faces an actual sentencing range of between 30 and 37 months in prison.
Davis admitted that he conspired with Michael Eliasof, a former Paramus real estate agent; W.C., a Garfield attorney; Melanie Gebbia, W.C's legal assistant; Gerald Carti, a former US Mortgage Corp. loan officer; Frank Corallo, a former US Mortgage loan processor; Amer Mir, a former loan officer at United Home Mortgage Co. in Jersey City; Claribel Morrobel, who recruited borrowers for Eliasof; and Hopeton Bradley, who jointly managed with Davis of the Paterson properties involved in the scheme; and others. Eliasof, Gebbia, Carti, Morrobel, Corallo, Bradley (who has since died) and one other conspirator have each pleaded guilty in connection with this scheme; W.C. is also deceased; and Mir's trial has a start date of May 4, 2009 along with that of co-defendant Frederick Ugwu, of Saddle River.
Davis admitted recruiting borrowers to purchase two- and three-family homes in Paterson through Eliasof knowing that the borrowers would be putting no money down to purchase these properties. Davis further admitted providing false verifications of rent to Corallo and others to help these borrowers qualify for mortgage loans. Davis also admitted that the closings of these loans take place at the law office of W.C., then a Garfield municipal judge.
Davis's guilty plea is the result of an investigation by the U.S. Department of Housing and Urban Development Office of Inspector General, the FBI, the U.S. Postal Inspection Service and the Internal Revenue Service Criminal Investigations Division into fraudulent Federal Housing Administration-insured and conventional mortgage loans originated by various New Jersey mortgage companies, including US Mortgage and United Home Mortgage. The investigation has resulted in a dozen guilty pleas from New Jersey residents. (usattynj31709)
MORAL
Notice several things in this summary. First the government went back seven years to get mortgage fraud loans. Second that HUD/FHA was in on the investigation. Do you have questionable loans going back seven years?
MORTGAGE EXECUTIVE DRAWS 97 MONTHS IN FEDERAL PRISON FOR FRAUD INVOLVING $44 MILLION
FACTS
Leib Pinter, a former executive of Olympia Mortgage Corp., was sentenced today to 97 months in prison for orchestrating a scheme to defraud Fannie Mae in connection with mortgage loans which Fannie Mae owned but were refinanced through Olympia. Pinter was also ordered to pay more than $43 million in restitution to the victims of his fraud scheme.
Olympia, formerly in Brooklyn, N.Y., originated and serviced mortgage loans owned by Fannie Mae. When Olympia refinanced a Fannie Mae mortgage loan, Fannie Mae typically wire transferred the money to an Olympia bank account. Olympia was then required to pay off the underlying mortgage loan by remitting the outstanding balance to Fannie Mae. Instead, Pinter misappropriated these proceeds for the benefit of Olympia. When the fraudulent scheme was revealed, Fannie Mae held nearly $44 million in unpaid principal in refinanced mortgage loans. (usattyedny31909)
MORAL
As a friend of mine likes to say: "felony stupid." How did he not think that Fannie Mae would not find the $44 million shortfall when it did not receive the money?
TWO NEW YORKERS CHARGED WITH MORTGAGE FRAUD
FACTS
On March 19, 2009 LAVETTE M. BILLS and KIRK LACEY surrendered on a criminal complaint charging them with perpetrating a mortgage fraud scheme involving loans totaling over $800,000. According to the complaint, from at least 2007 to 2009 BILLS and LACEY engaged in a scheme to defraud homeowners and a number of financial lenders by submitting applications and supporting documentation for mortgages that contained false and misleading information to induce lenders to make loans.
BILLS is a licensed real estate broker and the chief executive of MTC Real Estate Inc. in the Bronx. BILLS -- whose business card describes her as a "foreclosure specialist" -- advertised on the radio that MTC could help homeowners avoid foreclosure and invited listeners to call her directly at MTC for a free consultation. BILLS also hosted a radio program that aired three times per week on WBLS and WLIB in which she discussed issues related to foreclosure and invited listeners to contact her for assistance.
LACEY, is a representative of NNI LLC, a limited liability corporation involved in real estate transactions with which BILLS is also associated. In one scheme, BILLS fraudulently induced a homeowner and her grandson to add BILLS to the deed of their home based on BILLS' promise that she would then be able to obtain a loan for the homeowner that would allow the homeowner to pay off an existing mortgage and make repairs.
In fact, BILLS, after obtaining a loan to purchase this home, re-sold the home to a straw buyer who had obtained a loan based on a loan application containing false information. LACEY assisted the straw buyer in submitting this false loan application. Through this scheme, BILLS and LACEY obtained approximately $150,000, both directly and through entities they controlled, and the victims of this scheme lost the equity in their home, which is now the subject of foreclosure proceedings.
In a second fraudulent transaction, BILLS and LACEY used a straw buyer to obtain a loan in the amount of $495,000 to buy a property in the Bronx that they had purchased for $300,000 through an entity they controlled. The loan application submitted on behalf of this straw buyer contained numerous false statements, including false employment, income, and residency information.
BILLS, of Briarcliff Manor, N.Y., and LACEY, of Pembroke Pines, Fla., are each charged with one count of conspiracy to commit bank fraud, which carries a maximum sentence of 30 years in prison and a fine of the greater of $1,000,000 or twice the gross gain or loss resulting from the crime. (usatty31909edny)
MORAL
Remember, you are innocent until proven guilty. BUT, do you really want to spend that much money to prove you are innocent.
THE INFORMATION CONTAINED HEREIN IS NOT LEGAL ADVICE.
AN ATTORNEY SHOULD BE CONSULTED IF YOU DESIRE LEGAL ADVICE.
