ARIZONA MORTGAGE LOAN ORIGINATORS MUST BE LICENSED AND LOAN MODIFICATION ORIGINATORS MUST BE LICENSED-LIMITED EXCEPTIONS FOR ARIZONA ATTORNEYS
FACTS
Recent revisions to Arizona re-define "loan originator." This term will now include any person who "on behalf of a borrower, negotiates with a lender or note holder to obtain a temporary or permanent modification in an existing residential mortgage loan agreement. Beginning on July 1, 2010, loan originators must be licensed.
Under Arizona law, a loan originator shall not originate a mortgage loan unless employed by a mortgage broker, mortgage banker, or consumer lender. The effect of these provisions is that all companies whose owners or employees offer mortgage loan modification services to customers should immediately take steps to become licensed as mortgage brokers or mortgage bankers under Arizona law.
The revised law provides an exemption from loan originator licensing for "A licensed attorney who negotiates the terms of a residential mortgage loan on behalf of a client as an ancillary matter to the attorney's representation of the client unless the attorney is compensated by a lender, a mortgage broker or any other loan originator or by an agent of the lender, mortgage broker or other loan originator."
The Department interprets this "ancillary matter" exemption language to mean that a lawyer who negotiates a new loan or a modification of an existing loan as a transaction that is supplemental or subordinate to other representation or counseling of a client is exempt from licensure as a loan originator unless he is paid as described in the statute. On the other hand, a lawyer who is engaged solely in negotiating loan originations, including loan modifications, is not exempt from licensure as a loan originator. (azregalert92109)
MORAL
Freely translated: Have a "heyday" until July 1, 2010 but be sure to set up licensing by then or look out for trouble.
FLORIDA WOMAN DRAWS 15 MONTHS IN FEDERAL PRISON FOR MORTGAGE FRAUD
FACTS
Adriana Cruz of Miami was sentenced by United States District Judge Alan S. Gold on Sept. 18, 2009, for her role in a mortgage fraud scheme that resulted in the granting of two fraudulent home equity loans totaling approximately $1 million.
Cruz received a sentence of 15 months' imprisonment and, following her prison term, 36 months of supervised release. Judge Gold also ordered Cruz to pay $796,701.65 in restitution. Cruz had entered a guilty plea to an indictment that charged her with conspiracy to commit bank fraud.
According to the indictment, Cruz's co-conspirators simultaneously submitted two fraudulent loan applications, each at $500,000, to Bank of America and Wachovia Bank. The applications and supporting documents contained stolen identification information belonging to a co-conspirator's mother-in-law. In each application, the co-conspirators represented the mother-in-law as the purported borrower and pledged the mother-in-law's house as collateral.
The fraudulent applications were submitted to co-conspirators who worked as loan officers at the banks. When each loan application was submitted, neither bank was made aware of the other pending loan. The purported borrower's signatures were forged and Cruz obtained fake notarizations. Cruz, in turn, was given money. After the banks approved the loans and received back the closing documents, the proceeds were made available to the co-conspirators. These co-conspirators disbursed and shared the fraudulently obtained funds, which totaled approximately $800,000. Cruz's co-conspirators previously pleaded and have been sentenced. (usattysdfl92409)
MORAL
Someone really hated their mother-in-law.
INDIANA MAN SENTENCED TO 30 MONTHS IN FEDERAL PRISON FOR MORTGAGE FRAUD
FACTS
Jerry J. Jaquess of Indianapolis was sentenced to 30 months in prison on Sept. 29, 2009 for his participation in a large mortgage fraud scheme in the Indianapolis area. Jaquess plead guilty to one count of wire fraud and one count of money laundering. Eight other individuals have been charged in the schemes and those cases are currently pending. The investigation is continuing as to other individuals who were involved in the mortgage fraud schemes.
Jaquess owned and operated Homevestors LLC, a company involved in the development and construction of new real estate properties, as well as the purchase and sale of existing residential real estate properties. As part of the mortgage fraud schemes, Jaquess and other individuals entered into contracts to purchase 186 duplexes. These properties were all owned by one person, thru various land trusts. Jaquess and others negotiated with this individual to purchase all of the duplexes at a price of $50,000 each (the last group of these properties actually sold for $60,000).
Jaquess used his company Homevestors to negotiate the purchase and sale of the first 11 properties. On each of the properties, Jaquess entered into a land contract (and other documents) immediately preceding the closing, showing that Homevestors LLC was purchasing the property from the owner for $50,000. He also entered into agreements to sell the properties to investors for $120,000 each. In early February 2005, prior to the first purchase agreements ever being finalized, Jaquess, or individuals associated with him, caused three of the Windsor Village properties to be listed on the Metropolitan Indianapolis Board of Realtors Multiple Listing Service showing a list price of $120,000. Jaquess did not own the properties at the time they were listed and did not even enter into land contracts to purchase these properties (for $50,000 each) until mid-March 2005. These properties were the first three Windsor Village properties closed (on March 17, 2005). A few days after these properties closed, Jaquess and his associates caused these three sales (at $120,000 apiece) to be placed on the MLS. This allowed Jaquess and other individuals involved in the scheme to show these three properties as comparables on appraisals to be prepared for all of the remaining Windsor Village properties, thus making it appear that each of those properties were worth $120,000. Jaquess attended the closings as the seller of the properties, and generally also took the buyer (investor) down payment check to the closings. Jaquess signed the loan closing documents on behalf of Homevestors LLC, including the false HUD-1 Settlement Statements, showing that the investors were providing the down payments, which he knew to be untrue. After the closing, Jaquess received checks to Homevestors LLC for the amount of the fraudulent loan proceeds (generally more than $70,000per property). Jaquess then caused Homevestors LLC to issue checks disbursing the fraudulent loan proceeds. Included in these checks were payments totaling approximately $42,000 payable to Jaquess personally, or a family member of his, as well as checks to repay the individuals "fronting" the down payment (plus $1,000 to $3,000 fee) and checks to pay the investors $4,000 for each property purchased.
The judge ordered Jaquess to serve three years on supervised release following his 30 months of incarceration and also ordered him to pay $824,614.33 in restitution to Homecomings Financial and Argent Mortgage Co. (usattysdin93009)
MORAL
Busy little beaver, wasn't he?
FORMER MASSACHUSETTS LAWYER PLEADS GUILTY TO MORTGAGE FRAUD
FACTS
Kevin Carey, a former Somerville real estate attorney from Middleboro, Mass., pleaded guilty in Middlesex Superior Court to charges related to making false statements on mortgage applications and using the funds secured from the loans for his own purposes, rather than paying off existing loans. According to Massachusetts attorney general Martha Coakley, while practicing as a real estate lawyer in Somerville and Medford, Carey engaged in a scheme called "mortgage stacking" on four residential properties he or his family members owned. The scheme involved serially refinancing the loans on these properties, without paying off the existing loans. Carey was also the agent for a New England title insurance company, which allowed him to issue title insurance policies on mortgage transactions he processed. Sentencing is scheduled for November. (NMN93009)
MORAL
Now he had to know he would get caught stacking one mortgage on the other without paying the lower one off and acting as the closing attorney. Watch the people that handle your money. It could disappear.
NEW YORK POLICE OFFICER AND TWO OTHERS ARRESTED FOR MORTGAGE FRAUD
FACTS
Three individuals, including a New York City police officer, have been arrested in connection with a mortgage fraud scheme. Oneika Carthon of Brooklyn; Joe D. Green of Jamaica, Queens; and Samantha Girard of Roosevelt, N.Y., have each been charged with bank fraud. Ms. Girard has been an NYPD officer since March 2000. She has been on modified duty since February 2007 and was recently suspended. According to Rose Gill Hearn, commissioner of the New York City Department of Investigation, a police probe uncovered a fraudulent deed for a house in Brooklyn, which, together with other false documents, was allegedly used to obtain funds that were distributed to the three defendants, who were unavailable for comment. This supposed deed claimed to have transferred ownership from the original homeowner, who was deceased, to a man unknown to the former homeowner's family. There were irregularities in the deed, including the incorrect spelling of the deceased man's name and a signature that did not match his known signature. The defendants then allegedly obtained two mortgages using false income information totaling $600,000 to supposedly finance the purchase of the Brooklyn home. At closing, Mr. Green allegedly presented a phony stipulation indicating that a civil action contesting the property transfer had been discontinued. At the closing, $511,500 from the two mortgages was allegedly distributed to the three defendants. The complaint alleges that only three payments were ever made on the mortgages. The loans are now in default. (NMN93009)
MORAL
A police officer with 10 years into his pension and she puts it at risk. Makes you wonder? I have seen several of these and have two in house we are chasing now. It is so easy to find I wonder why people do it.
FOURTEEN INDICTED IN VIRGINIA FOR $24 MILLION MORTGAGE FRAUD
FACTS
On Sept. 24, 2009 a federal grand jury indicted 14 individuals on mortgage-fraud charges involving approximately 35 homes in Fairfax County and causing more than $9 million in losses.
The 14 individuals are charged in engaging in a conspiracy to defraud financial institutions into making fraudulent mortgage loans and profiting from the fees and proceeds. The conspiracy involved real estate agents, a loan officer, and individuals who fraudulently purchased properties. The total amount of mortgage loans approved through the alleged conspiracy exceeds $24 million.
The indictment alleges that the conspirators would identify straw buyers and pay them to use their good credit to purchase homes in Fairfax County. Conspirators would also refer unqualified buyers to a loan officer to qualify them for the mortgage. They would help prepare loan applications that contained false information that included the applicant's employment, income, assets, immigration status and intent to live in the property as a primary residence. The fraudulent mortgage loan applications also failed to list other properties purchased by the straw buyers or unqualified buyers.
According to the indictment, the conspirators would also transfer money into the bank accounts of straw buyers and unqualified buyers to inflate their assets and then transfer the money back out shortly after settlement on the properties. The scheme also involved corroborating false employment and income information included on the loan applications.
The individuals charged in the indictment include: Ruben Rojas of Vienna, Va., a real estate agent; Lourdes Rojas Almanza of Falls Church, Va., a loan officer, the agent for Almanza Corp., and sister to Ruben Rojas; Litcia Linares of Falls Church, a real estate agent and sister-in-law to Ruben Rojas; Jaime Nino Rojas of Falls Church, the brother of Ruben Rojas: Juan de la Cruz Aguayo of Springfield, Va., who is accused of buying at least three properties, which resulted in mortgage loans of more than $1.6 million: Yesenia Banegas of Springfield, who is accused of buying at least three properties, which resulted in mortgage loans of more than $2.3 million; Oscar Barahona of Springfield, who is accused of buying at least four properties, which resulted in mortgage loans of more than $3 million; Fidelino Ferrufino of Miami, who is accused of buying at least three properties, which resulted in mortgage loans of approximately $2.3 million: Santos Euceda Manzanares of Springfield, who is accused of buying at least five properties, which resulted in mortgage loans of approximately $2.5 million: Delmy Mendieta of Springfield, who is accused of buying at least three properties, which resulted in mortgage loans of approximately $1.7 million; Wilmer Mendieta of Springfield, who is accused of buying at least three properties, which resulted in mortgage loans of approximately $1.8 million; Maria del Carmen Rapalo of Springfield, who is accused of buying at least three properties, which resulted in mortgage loans of approximately $2.1 million; Jose A. Rodriguez of Springfield, who is accused of buying at least three properties, which resulted in mortgage loans of approximately $1.8 million; and Jose Villatoros of Springfield, who is accused of buying at least three properties, which resulted in mortgage loans of more than $1.9 million.
The charges in the indictment include conspiracy to commit wire and mail fraud, wire fraud, and mail fraud. Each of these charges carries a maximum penalty of 20 years in prison. (usattyedva92409)
MORAL
This is going to be one very busy trial with 14 lawyers on the one side and the United States Attorney on the other. Did you notice how the first four are related? Well like I have always been saying the family that commits fraud together, gets to go to prison together but in separate cells if they are proven guilty.
MERS CANNOT SUE FOR OR FORECLOSE ON REAL PROPERTY MORTGAGES IN KANSAS AND QUITE LIKELY CALIFORNIA AND OTHER STATES
FACTS
As a nominee company MERS has no right or standing to bring an action for foreclosure. MERS is an acronym for Mortgage Electronic Registration Systems, a private company that registers mortgages electronically and tracks changes in ownership. MERS purportedly holds 60 million mortgages. Holdings of the Kansas Supreme Court are not binding on the rest of the country, but they are dicta of which other courts take note; and the reasoning behind the decision is sound.
MERS would register and record mortgage loans in its name, and it would bring foreclosure actions in its name. MERS not only facilitated the rapid turnover of mortgages and mortgage-backed securities, but it has served as a sort of "corporate shield" that protects investors from claims by borrowers concerning predatory lending practices.
With MERS recorded as the beneficiary of the mortgage or deed of trust consumers and their counsel can no longer turn to the public recording systems to learn the identity of the holder of their note. Today, county recording systems are increasingly full of one meaningless name, MERS, repeated over and over again. But more importantly, all across the country, MERS now brings foreclosure proceedings in its own name - even though it is not the financial party in interest. This is problematic because MERS is not prepared for or equipped to provide responses to consumers' discovery requests with respect to predatory lending claims and defenses. In a large number of foreclosures, MERS actually succeeds in foreclosing without producing the original note - the legal requirement in many states for foreclosure. However, that is not necessarily true in California.
The Kansas Supreme Court stated that MERS' relationship "is more akin to that of a straw man than to a party possessing all the rights given a buyer." The court opined:
"By statute, assignment of the mortgage carries with it the assignment of the debt . . . Indeed, in the event that a mortgage loan somehow separates interests of the note and the deed of trust, with the deed of trust lying with some independent entity, the mortgage may become unenforceable. The practical effect of splitting the deed of trust from the promissory note is to make it impossible for the holder of the note to foreclose, unless the holder of the deed of trust is the agent of the holder of the note. Without the agency relationship, the person holding only the note lacks the power to foreclose in the event of default. The person holding only the deed of trust will never experience default because only the holder of the note is entitled to payment of the underlying obligation. The mortgage loan becomes ineffectual when the note holder did not also hold the deed of trust."
MERS as straw man lacks standing to foreclose, but so does original lender, although it was a signatory to the deal. The lender lacks standing because title had to pass to the secured parties for the arrangement to legally qualify as a "security"" The lender has been paid in full and has no further legal interest in the claim.
The banks arranging these mortgage-backed securities have typically served as trustees for the investors. When the trustees could not present timely written proof of ownership entitling them to foreclose, they would in the past file "lost-note affidavits" with the court; and judges usually let these foreclosures proceed without objection. (See LANDMARK NATIONAL BANK vs. BOYD A. KESLER, etc., et al KANSAS SUPREME COURT, No. 98,489, decided August 29, 2009.)
MORAL
In October 2007, I published the federal judge in Cleveland U.S. District Court, Christopher Boyko who ruled that Deutsche Bank had not filed the proper paperwork to establish its right to foreclose on 14 homes it was suing to repossess as trustee. The court refused to allow the foreclosure.
LOS ANGELES BANKRUPTCY COURT REFUSED TO ALLOW MERS TO FORECLOSE ON MORTGAGE
FACTS
MERS filed a motion for relief from the automatic stay in bankruptcy to allow foreclosure to continue on a debtor's real property. The court denied the motion for the following reasons:
1. MERS cannot join as moving parties for relief from stay to continue the foreclosure "its assignees and/or successors in interest." See FRCP Rule 10(a), Federal Rules of Bankruptcy Procedure, Local Rule 1002-1(a)(8). 1002-1 requires the actual movants be named to compare against Schedule A list of reel property and Schedule D list of creditors holding secured claims and to permit the judge to determine if he should recuse (remove) himself from the case.
2. Since notes are sold on the market and securitized, MERS has not proven it has the authority to act as the agent of the current holder of the promissory note. To seek relief from stay MERS must show proof it has authority to act for the current holder of the note.
3. The mortgage always follows the promissory note. Cal. Civ.C. §2936. Transfer of the note carries with it transfer of the security for the promissory note without and formal assignment or delivery or mention of the same. Carpenter v. Longan, 83 U.S. 271, 275 (1872). Thus mortgage cannot have a separate existence from the note and an assignment of the mortgage alone is a nullity. Carpenter at 274. The note is essential and the mortgage is only an incident to the note. Id.
4. Presuming the original holder of the note and transferred it, MERS is no longer the authorized agent of the holder unless it has a separate agency agreement with the new undisclosed principal.
5. Using computer records to show the balance owed must comply with an 11-step foundation not done here. In re Vinhnee, 336 B.R. 437, 444(BAP 9thCir. 2005)
6. First prove the authenticity of the promissory note and then MERS must prove it has the authority to enforce it. Use Fed. Rules of Evid. 901.
7. Only the holder of the note may enforce it. Cal. Com. Code §3301. The note is enforced by making a demand for payment by the holder or its authorized agent. Cal. Com. Code §3501(b)(2).
MERS is not in the business of holding promissory notes. Its sole purpose is to act as mortgagee of record for mortgage loans that are registered on the MERS System, a national electronic registry of mortgage loans.
Motion denied. (In re Raymond Vargas, U.S. Bankruptcy Court, Central District Cal., LA08-17036SB, Samuel L. Bufford Judge.)
MORAL
What does this mean to the consumer? It means there is a way to stop foreclosures in most instances where the note is sold.
CALIFORNIA MAN PLEADS GUILTY IN THE CRISP AND COLE SCANDAL
FACTS
Jerald Allen Teixeira of Bakersfield, pleaded guilty on Sept. 29, 2009 before United States District Judge Oliver W. Wanger to one count of wire fraud in connection with a scheme to defraud mortgage lending institutions. Teixeira was formerly a loan officer at Tower Lending, a mortgage brokerage company that was affiliated with Crisp & Cole Real Estate and was owned by Crisp & Cole's owners. Both businesses were in Bakersfield. As part of his plea agreement, he has agreed to cooperate in the government's ongoing investigation.
Teixeira admitted in his plea that between October 2004 and January 2007, he along with certain individuals at Crisp & Cole and Tower Lending, and other individuals, executed a scheme to defraud mortgage lending institutions, by submitting materially false and fraudulent statements in mortgage loan applications and related documents to obtain loans from the lenders for borrowers' purchases of real property.
Teixeira admitted that he and other individuals involved in this scheme caused false and fraudulent statements to be made in loan applications and other documents, including material misstatements of borrowers' income, employment status or occupation, and false statements concerning the borrowers' intent to reside in the properties as owner-occupiers. For example, Teixeira stated that a borrower's income would at times be falsely inflated on the loan application and related documents, if it appeared that the borrower would not qualify for a particular loan based on the borrower's actual income.
Teixeira also admitted that during the period from October 2004 to December 2006, he obtained loans to finance the purchase of approximately 11 real properties with a total purchase value at the time of approximately $4.4 million, and refinanced the mortgage on one of the properties. In order to qualify for these loans, in almost all of the loan applications, Teixeira knowingly made material misstatements or omitted relevant and material information, including misstatements concerning his income and his outstanding liabilities (including his liabilities with respect to other real properties), and misstatements that he would use certain properties as owner-occupied residences when in fact he had no intent to reside in the properties.
A number of the properties purchased with the loan proceeds were subsequently foreclosed upon after loan payments were not made when due.
Teixeira is scheduled to be sentenced on March 22, 2010. The maximum statutory penalty on the wire fraud charge is 20 years in prison, and a criminal fine of $250,000. (usattyedca92909)
MORAL
1. The federal prosecutors went back five years to get to the defendant. 2- They appear to be stated income loans in some cases due to the timetable. 3-The loans said owner occupied meaning the primary residence box was checked.
SAN DIEGO PROSECUTORS WANT MATTHEW LA MADRID HELD WITHOUT BAIL FOR MORTGAGE FRAUD
FACTS
A federal prosecutor urged a judge on Sept. 29, 2009 to keep Matthew La Madrid in jail without bail on fraud charges despite an earlier ruling by a judge that granted him release.
La Madrid is accused of piloting a $30 million Ponzi scheme that prosecutors say bilked more than 300 investors, most of them local people. He is also charged with a mortgage fraud scheme that netted $34 million. His brother Lance and a third man, Eric Montiel, were also indicted.
Since his arrest July 8, Matthew La Madrid has remained in jail. But on Sept. 9, 2009 Magistrate Judge William McCurine granted a request from La Madrid and, over the objections of the prosecutors, set bail at $300,000.
Assistant U.S. Attorney Steven Stone urged Judge William Hayes to revoke that order. He said La Madrid poses a high risk of fleeing if he is let out, because he faces hundreds of years in prison if convicted. Stone said La Madrid also poses an economic danger to the community because of his fraud activities. Hayes said he would issue a ruling later. (sduniontrib93009)
TWO MEN PLEAD GUILTY TO $1.2 MILLION MORTGAGE FRAUD
FACTS
On Oct. 1, 2009 a Wichita, Kan., man and a Carl Junction, Mo., man pleaded guilty in federal court to their roles in a $1.2 million mortgage fraud scheme. The mortgage fraud schemes involved a total of 20 houses with home mortgage loans ranging from approximately $200,000 to $500,000. The amount of loan proceeds returned to the borrowers ranged from less than $30,000 to more than $100,000. Some of the home purchasers subsequently defaulted on the loans, and the homes have been foreclosed or are in the process of being foreclosed.
Ricky Dean Unruh of Wichita pleaded guilty before U.S. District Judge Richard E. Dorr on Sept. 30, 2009, to a three-count information that charges him with mortgage fraud. Steven Ray Spencer of Carl Junction, also pleaded guilty on Sept. 30, 2009 to the charges contained in a Nov. 20, 2008, federal indictment.
Unruh was involved in the purchase of three homes in Ozark, for a total mortgage amount of $1,149,158. Unruh admitted that he participated in a conspiracy to obtain mortgage loans for the purchase of homes based on false loan applications, and to return approximately $238,500 of the total loan proceeds to the purchasers of the homes without the lender's knowledge and outside the closing of the home purchase.
The members of the conspiracy included Charles M. Davis of Rogersville, Mo., and Scott Allen Kassebaum and his wife Cheryl Joan Kassebaum, both of Ozark, Mo., who have each pleaded guilty in a separate but related case. Davis is a former mortgage broker who was the owner of Master Marketing Consultants. The Kassebaums are former mortgage brokers and co-owners of Metro Consulting Group.
Spencer admitted that he was involved in two separate conspiracies to obtain mortgage loans for the purchase of homes based on false loan applications, and to return a significant portion of the loan proceeds to the purchasers of the homes without the lender's knowledge and outside the closing of the home purchase. Spencer's role in each conspiracy was to be a purchaser/borrower, to execute loan applications that he knew were false, to solicit other purchasers/borrowers for the scheme, and to receive and, on occasion, to facilitate the return to other purchasers/borrowers of a significant portion of the loan proceeds without the lender's knowledge and outside the closing of the home purchase. Spencer knew that the loan applications were false in that the loan applications included overstatements of income and understatements or omissions of liabilities, falsely represented that the purchaser/borrower intended to reside in the home to be purchased, and, in some cases, stated a false place of employment for the purchaser/borrower.
One conspiracy that involved Spencer also included co-defendants Davis and Shanda Lynn Moore of Springfield, Mo., who has pleaded guilty to her role in the mortgage fraud conspiracy. The second conspiracy also included co-defendant Randall Lee Hall of Springfield, who has pleaded guilty to his role in the mortgage fraud conspiracy and to wire fraud. Hall admitted that the economic loss attributable to his criminal conduct is at least $217,556.
Spencer admitted that the aggregate amount of the loan proceeds attributable to his criminal conduct is at least $375,556. The government believes that aggregate amount is $436,556.
Unruh pleaded guilty to one count of conspiracy to commit wire fraud and money laundering, one count of wire fraud and one count of money laundering related to a mortgage fraud scheme. In a separate but related case, Spencer pleaded guilty to two counts of conspiracy to commit wire fraud, one count of wire fraud and one count of money laundering.
Under federal statutes, Unruh is subject to a sentence of up to 45 years in federal prison without parole, plus a fine up to $1.5 million and an order of restitution. Spencer is subject to a sentence of up to 50 years in federal prison without parole, plus a fine up to $1.5 million and an order of restitution. (usattywdmo10109)
ST. LOUIS, HOMEOWNER SENTENCED TO 30 MONTHS IN FEDERAL PRISON FOR MORTGAGE FRAUD ON HIS OWN HOME
FACTS
Milton H. Ohlsen III was sentenced to 30 months in prison on bank fraud charges after overstating his income on his home mortgage application, and in a separate case, sentenced to 30 months in prison on a firearms charge. The sentences are to run concurrently. In addition to the prison sentence, Ohlsen was ordered to pay restitution of $99,871.
In 2000, Milton Ohlsen originally financed his North Ballas Road residence with two loans totaling $302,000. In 2002, Olsen refinanced with Merrill Lynch for $307,000, and in 2006 obtained another loan from Merrill Lynch for $150,000 for the same home. In 2007, Olsen again refinanced the home with two loans, one for $470,000 from Countrywide, and $175,000 from Guaranty Bank, which paid off the previous Merrill Lynch loans.
On both of the June 2007 loans Ohlsen falsified the loan applications to Countrywide and Guaranty Bank, stating that his monthly income was $15,000, when in fact it was substantially less. In August 2007, Countrywide assumed the total line of credit from Guaranty Bank. Shortly after, Ohlsen became delinquent in his monthly payments on the original Countrywide and Guaranty loans. In May 2008 Ohlsen was in default on these loans, and in June 2008, he filed bankruptcy. (usattyedmo10209)
RHODE ISLAND WOMAN PLEADS GUILTY TO $1.7 MILLION
MORTGAGE FRAUD
FACTS
Lisa Torres formerly of Johnston, R.I., pleaded guilty on Oct. 2, 2009 to a $1.7 million mortgage fraud scheme in which she purchased properties that had recently been foreclosed upon, and then used the names of straw purchasers in sham sales to finagle mortgage financing.
The government could prove that, between October 2007 and June 2008, Torres purchased nine residential properties in Providence. She then enlisted the aid of others, some willing participants, others unwitting dupes, to arrange sham sales of the properties at inflated prices in order to obtain mortgage financing. The loan proceeds went to Torres, the purported seller of the properties, so she profited the difference between what she had paid for the properties, about $1.1 million, and what she purportedly sold them for, about $1.7 million.
Torres used a variety of ruses to enlist the aid of the sham purchasers, suggesting to them that they were not really buying the properties and that Torres would actually service the mortgages. However, Torres failed to service the mortgages and in the process defrauded the lending institutions out of approximately $675,000.
To secure the financing, Torres engaged the services of coconspirators, who fabricated W-2 forms, pay stubs, and bank account balances to misrepresent the employment status and credit worthiness of the sham buyers.
Torres is currently serving a federal prison sentence for obstruction of justice, conspiracy and making false statements, a case that was prosecuted in U.S. District Court, Massachusetts. She is due to be released on Jan. 26, 2010. (usattyri10209)
MORAL
With this plea she may be riding a merry-go-round and head right back in depending on the sentencing judge. Mortgage Fraud under various code sections has a potential sentence up to 20 or 30 years in federal prison.
THE INFORMATION CONTAINED HEREIN IS NOT LEGAL ADVICE.
AN ATTORNEY SHOULD BE CONSULTED IF YOU DESIRE LEGAL ADVICE
