FORECLOSURES ARE STILL CLIMBING AND LAS VEGAS IS TOPS
FACTS
Las Vegas had the highest U.S. foreclosure rate ending Sept. 30, 2009 with cities in California and Florida following in second and third as per RealtyTrac Inc. The sharpest increases in foreclosure activity among the 50 metropolitan areas with the highest rates were in Boise City, Idaho, Salt Lake City and Provo-Orem, Utah. Foreclosure filings more than doubled in all three areas. Guess where the FBI will be looking for its next set of mortgage fraud defendants?
New foreclosure hot spots developed in Chico, Calif., where the foreclosure rate almost doubled, and Reno, Nev., where the rate rose 80% from 2008. Foreclosure rates increased 77% in Prescott, Ariz.; 64%in both Jacksonville, Fla., and Rockford, Ill.; and 41% in Lansing, Mich.
Las Vegas led the nation, with 5.13% of households receiving a foreclosure filing, almost seven times the national average. Merced, Calif., had the nation's second-highest rate, with 3.72% of households receiving a filing. Cape Coral-Fort Myers, Fla., ranked third with filings going to 3.67% of households. Stockton, Calif., was fourth with a rate of 3.53% of households receiving a filing. Modesto, Calif., recorded a rate of 3.39%.
At trio of California cities were sixth through eighth: Riverside-San Bernardino, Bakersfield and Vallejo-Fairfield. Reno was ninth and Port-St. Lucie, Fla., was 10th, with filings climbing 40%. Los Angeles ranked 23rd with 1.58% of households receiving a filing. (azcen.com102809)
MORAL
The more foreclosures in one area, the more law enforcement looks for mortgage fraud in this attorney's opinion. Therefore, it you had stated income loans in these areas or questionable documents to support income I suggest you see your attorney now.
FOUR MORE CALIFORNIA LAWYERS RESIGN OVER MORTGAGE LOAN MODIFICATION SCAM
FACTS
On Oct. 21, 2009 the State Bar of California announced that four Southern California Attorneys accused of cheating homeowners seeking mortgage modifications have given up their bar licenses, while three more lawyers are close to losing theirs. The Bar has a task force currently looking into 738 complaints involving about 200 lawyers according to the press release.
The lawyers that have resigned are Cameron Edwards of the Alliance Law Center in San Diego; Ronald Rodis of Rodis Law Group and American Law Group in Newport Beach and Jeffrey Nemerofsky of U.S. Advocacy Law Group and U.S. Financial Products in Laguna Niguel.
The fourth lawyer, James Parsa, "has advertised heavily throughout California for the past several months offering to help homeowners facing foreclosures," according to the State Bar. Parsa is alleged to have resigned from the Bar when the bar discovered he had not reported to the group his two misdemeanor convictions for sex with an underage girl in 2001.
Another lawyer identified in the Bar's latest news release is Christopher L. Diener of the Diener Law Group and Home Relief Services in Irvine. The State Bar allegedly put Diener on inactive status involuntarily on Oct. 9, 2009. He is also being sued by the State Attorney General Jerry Brown in Orange County Superior Court for allegedly bilking thousands of homeowners out of thousands of dollars each. See People v. Home Relief Services, 30-2009-00125949-CU-MC-CJC (Orange Super., filed July 13, 2009)
The Bar states it is also seeking to force two more lawyers into inactive status, Paul Lucas of Lucas Law Center in Aliso Viejo and Sean Rutledge of United Law Group in Irvine. (ladlyjl102209
MORAL
Pick your lawyers carefully.
IDENTITY THEFT OF HELOC LINES EARNS CALIFORNIA MAN 11 YEARS IN A FEDERAL PRISON
FACTS
Martin Quoc Pham of Garden Grove, Calif. has been sentenced on Oct. 29, 2009 to 132 months in federal prison for orchestrating two identity theft schemes in which he obtained personal information from hundreds of consumers and used the data in an attempt to fraudulently obtain approximately $1.5 million from home equity lines of credit and credit cards accounts. In addition to imposing the 11-year prison term, Judge Wu ordered Pham to pay $537,973. Pham pleaded guilty to a series of felony charges -- including aggravated identity theft -- related to two identity fraud schemes that prosecutors say he orchestrated and played an instrumental role in. In both schemes, Pham obtained personal identifying information and, with the help of co-conspirators, fraudulently accessed victims' accounts to obtain money and consumer goods.
In the first scheme, Pham and his associates used personal identifying information to take over HELOCs at JPMorgan Chase Bank. Once they had online access to the HELOCs, Pham and his co-conspirators transferred money into bank accounts they controlled. This scheme, which lasted only five months but netted well over $1 million, caused losses to the bank and to individual victims whose identities were taken over.
In the second scheme, Pham and his co-conspirators used personal identifying information to encode counterfeit credit cards that were used to obtain merchandise and gift cards at WalMart stores and Sam's Clubs across Southern California. Once they encoded the counterfeit credit cards, Pham and his associates tested the cards by seeking approvals for small purchases through a merchant account they had obtained for a bogus online company. If the cards were approved for $1 to $3 "purchases" at their bogus company, members of the conspiracy then used the cards at WalMart stores and Sam's Clubs, from which they obtained approximately $300,000 in merchandise. In relation to the HELOC scheme, Pham pleaded guilty to three counts of bank fraud, aggravated identity theft and money laundering. In the scheme targets WalMart and Sam's Club, Pham pleaded guilty to conspiracy and aggravated identity theft. Each count of aggravated identity theft carries a mandatory sentence of two years in federal prison which must run consecutive to the sentence imposed for any other offense.
Previously in this case, Viet Nguyen pleaded guilty in the Sam's Club/WalMart scheme to conspiracy and fraudulent activity in connection with access devices, and he is scheduled to be sentenced by Judge Wu on Dec. 10. Joe Inthisone pleaded guilty to bank fraud and aggravated identity theft in the HELOC scheme. Inthisone also pleaded guilty to conspiracy in the Sam's Club scheme. He is also scheduled to be sentenced on Nov. 19. Kyle Kongchan pleaded guilty to conspiracy and fraudulent activity in connection with access devices. He was sentenced in September 2009 to serve two years in federal prison.
The investigation into Pham and his cohorts was conducted by the Identity Theft and Economic Crime Task Force which is sponsored by the Los Angeles Division of the United States Postal Inspection Service. Members of ITEC include postal inspectors, along with agents and detectives from the United States Secret Service, Los Angeles Police Department and Los Angeles County Probation Department -- Special Enforcement Operations Unit. Significant assistance was provided by numerous financial institutions including JPMorgan Chase and Wells Fargo bank. ITEC was established in 2004 in response to increased complaints of identity theft in Southern California. Since its inception, the ITEC Task Force has arrested over 261 suspects, executed nearly 530 search warrants, and seized more than $2.4 million in assets. (usattycdca103009)
MORAL
Note the task force devoted to checking identity theft. Now if you do not have the manual in house and show how you check to protect data and to review data as you are processing the loans, think of the potential civil liability exposure to the people who had their identities stolen. Note they arrested over 261 suspects and seized over $2.4 million in assets. This is a small dent in the potential exposure that a civil lawyer can use by showing you did not comply with the law to protect people against identity theft as you were processing loans in their names. Especially when the identity is stolen.
MARYLAND MAN GOES TO FEDERAL PRISON FOR 42 MONTHS FOR $19 MILLION MORTGAGE FRAUD
FACTS
U.S. District Judge J. Frederick Motz sentenced Terrence White of Oxon Hill, Md. on Oct. 30, 2009 to 42 months in prison, followed by three years of supervised release for mail fraud arising from the fraudulent purchase of 25 properties in Maryland, the District of Columbia and Virginia using false mortgage and settlement documents. Judge Motz also entered a restitution order against White in the amount of $4,196,967.
White, Timothy Reed, Osman Al-Bari, and others paid over 15 straw purchasers $10,000 per property to purchase houses for White and others. White created false mortgage and settlement documents, many of which misrepresented the straw purchasers' income and assets. White, Reed, and Al-Bari also created false invoices to claim that their company, Brotherly Investment Group, performed "renovations" on some of the properties. Using these false invoices, White and his co-conspirators were "repaid" at closing for the purported renovations.
This scheme involved fraudulent loans worth over $19,021,366. The loss amount foreseeable to White is between $2.5 and $7 million.
Kara McIntosh and Sabrina Weinberg, both of Bethesda, Md., were sentenced to three years and two years in prison, respectively, for mail fraud.
Osman Sharrieff Al-Bari of Washington was sentenced to 78 months in prison. Jamilah Al-Bari of District Heights, Md., and Timothy Reed of Beltsville, Md., have pleaded guilty to mail fraud in connection with their participation in this scheme and are scheduled to be sentenced in the next two months. (usattymd103009)
MORAL
As you can see, the federal prosecutors are not slowing down so see your attorney today if you have questions about any loans you did in the last 10 years. This is the statute of limitations meaning the federal prosecutors have 10 years in which to file criminal charges against those involved in mortgage fraud.
OREGON ISSUES $11,000 FINE AGAINST AN INSURANCE BROKER FOR DUMPING CLIENT RECORDS IN A DUMPSTER
FACTS
The Oregon Department of Consumer and Business Services has issued a cease-and-desist order against insurance agent Robert Warren Spruill for violating the Oregon Consumer Identity Theft Protection Act and the Oregon Insurance Code. Spruill, owner of Brooke Auto Insurance and Brooke Agency Services Co. LLC, discarded more than 1,000 insurance business records and other insurance-transaction documents into an unlocked garbage dumpster behind the Portland office of Brooke Auto.
The documents contained clients' personal information, including client names, Social Security numbers, driver license numbers, bank account numbers, and credit card numbers with card expiration dates. The department cited Spruill for failing to protect the security, confidentiality, and integrity of the personal information he had in his possession and for not having a written information security plan with safeguards to protect customer information. DCBS fined Spruill $11,000 with $8,500 suspended as long as he complies with the order.
"Identify theft can wreak havoc on a person's credit history, which can take years to correct," said David Tatman, administrator of the department's Division of Finance and Corporate Securities. "Fortunately, in this case, alert citizens and media contacted DCBS when they noticed the documents, but unscrupulous persons might not have treated the information so carefully."
According to national surveys, identity thieves most commonly obtain personal data from lost or stolen wallets, dumpster diving, and mailbox theft.
To read the order against Spruill, go to:
MORAL
It does not matter what state you are in, there is a privacy law in place to protect consumers against identity theft and that means a law that businesses must comply with to protect the data via a written manual. By the way, since it is a consumer protection law it applies to mortgage brokers even more so. Are you an Oregon mortgage broker? Do you have your identity theft and privacy manual in place? Remember, in addition to the Oregon law, the Federal Trade Commission has one in place too.
OREGON HOMEOWNERS FACING FORECLOSURE HAVE NEW RIGHTS
FACTS
Lenders are now required to meet with borrowers about loan modifications. On Sept. 28, 2009 a new law took effect that strengthens the rights of Oregon homeowners who face foreclosure to help more families stay in their home during this difficult economic climate.
Senate Bill 628, passed by the 2009 Oregon Legislature, requires lenders to meet with borrowers facing foreclosure, either in person or by phone, and evaluate whether they qualify for a loan modification. By requiring lenders to meet with homeowners, this law provides Oregonians another avenue to avoid foreclosure and stay in the home. Starting Sept. 28, 2009, foreclosure notices that are sent to homeowners who are late on their mortgage payments must include new information about how to meet with their lender and how to request a loan modification. If the borrower requests it, lenders must meet with the borrower and evaluate the borrower for a loan modification before foreclosing on the home. The meeting can be by phone, and it must be with a person who has or can get authority to modify the loan. Many homeowners may qualify for a loan modification, but often have a difficult time getting in touch with the right person at their lending company,
Oregonians who are seriously behind on their mortgage payments should watch their mail for the new foreclosure notice. Once they receive the notice, they should immediately take the following steps:
1. Call their lender to set up a meeting to discuss a loan modification.
2. Fill out the loan modification request form provided in the notice.
3. Call 1-800-SAFENET and ask to be referred to a nonprofit foreclosure counselor. The counselor can help homeowners request a loan modification.
Homeowners should act fast as they have 30 days from the date of the foreclosure notice to request a loan modification. (ORDeptofB&CS92809)
MORAL
Help your borrower get a loan modification and you may be able to obtain a short sale if not.
THE INFORMATION CONTAINED HEREIN IS NOT LEGAL ADVICE.
AN ATTORNEY SHOULD BE CONSULTED IF YOU DESIRE LEGAL ADVICE
