California Real Estate Fraud Report

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Blaming the Computer Excuse May Cost Ocwen $100 million

October 30th, 2014 at 1:23pm

In the latest news to surface about Ocwen Financial committing servicing violations by backdating loan modification denial letters, Ocwen’s executive chairman said the company is setting aside $100 million to settle with Benjamin Lawsky, the superintendent of New York’s Department of Financial Services.

Executive Chairman Bill Erbey told analysts on an October 30 conference call that the $100 million was Ocwen’s “best estimate of the exposure,” after Lawsky identified 6,100 borrowers who received the backdated letters. Ocwen, which weakly tried to blame the letters on “the computer,” has known about the problem for over a year, when one of its own employees informed executives and an internal monitor about them.

The settlement, according to Michael Bourque, Ocwen’s executive vice president and CFO, could be even higher.

Ocwen is in a hurry to put the matter in its rearview mirror because it’s preventing the company from completing its purchase of $39 billion in mortgage servicing rights from Wells Fargo.

Read the original article in National Mortgage News.

Mark Nagy Atalla Ordered to Pay Judgment of $515,000 by Federal Judge

October 29th, 2014 at 8:37am

Mark Nagy Atalla, a defendant in an a 2013 action by the Federal Trade Commission, has been ordered by a federal district court in Southern California to pay almost $515,000. The FTC brought its complaint against Atalla, alleging that he and his two companies violated the FTC Act and the Mortgage Assistance Relief Services Rule (also known as the MARS Rule or Regulation O) by promising to lower homeowners’ mortgage payments in exchange for change and advance fee that reached as high as $4,495.

“The court’s order in this case makes a very clear point,” said Jessica Rich, Director of the FTC’s Bureau of Consumer Protection. “When you sign a settlement order with the Federal Trade Commission, you’d better be up-front about your assets. If you’re not, we won’t hesitate to collect suspended monetary judgments.”

Attala is also banned from future work in the debt relief and mortgage relief businesses.

Read the original article on the Federal Trade Commission website.

 

Ocwen the Target Again of New York Banking Supervisor

October 28th, 2014 at 11:02am

New York’s top banking supervisor once again set his sights on Ocwen Financial Corp. this week, saying the servicer sent thousands of foreclosure warnings to borrowers months after it was too late to save their homes.

Benjamin Lawsky, New York’s superintendent for financial services, said an investigation of Ocwen’s mortgage servicing practices turned up more than 7,000 letters sent to borrowers that had been backdated and sent only after their payment deadlines had passed.

“In many cases, borrowers received a letter denying a mortgage loan modification, and the letter that was dated more than 30 days prior to the date that Ocwen mailed the letter. These borrowers were given 30 days from the date of the denial letter to appeal that denial, but those 30 days had already elapsed by the time they received the backdated letter,” Lawsky said in a letter, which was addressed to executives and board directors at Ocwen.

Note: it is my observation and opinion as a Realtor® that Ocwen is at the top of the list of servicers that are inept and fail in their fiduciary obligations to homeowners, such as paying impounds and insurance declarations as they are legally required. God help anyone who is forced to have Ocwen servicing their loan.

Read the original article in DSNews.

An update on the same topic:

According to an article in National Mortgage News, Ocwen’s problems may prevent it from completing its purchase of $39 billion in mortgage-servicing rights from Wells Fargo. Analysts and servicing experts say Benjamin Lawsky’s investigation of Ocwen may have delivered the “death blow” to the deal.

“This increases the chances the Wells Fargo servicing deal is canceled,” Compass Point Research & Trading analyst Kevin Barker wrote in a research note.

Lawsky’s crackdown on Ocwen sent the mortgage servicer’s shares down 18.2% last Tuesday and another 7% in Wednesday afternoon trading.

 

Newport Beach Man Gets Seven Years for Mortgage Fraud

October 23rd, 2014 at 10:24pm

65-year-old Dinesh Valjeebhai Shah of Newport Beach pleaded guilty Friday to five felony counts of conspiracy to commit a crime, 13 felony counts of forgery, and other charges including identify theft and grand theft, said spokespersons with the Orange County District Attorney’s Office. He has now been sentenced to seven years in what prosecutors said was a conspiracy with his family member to commit real estate fraud by buying homes using straw buyers and submitting forged loan documents.

This all occurred between June 2006 and October 2009. Washington Mutual Bank approved all the loans and the total amount of the fraud was over $16 million.

The Shah family owned and operated New Age Realty, First Property Escrow, City First Realty, and Associates Investments Group, which were all at 13821 Newport Ave. in Tustin. One member owned and operated Vason Development, located at 1520 Warner Ave. in Santa Ana, which processed home loan applications.

Read the original article in the OC Register.

Judge Charles Breyer Says San Francisco’s Fees to Displaced Tenants Violates Property Rights

October 23rd, 2014 at 9:23am

U.S. District Judge Charles Breyer has ruled unconstitutional a new law by the City of San Francisco that required property owners to pay huge fees to displaced tenants.

In his ruling, Breyer said, “A property owner did not cause the high market rent to which a tenant who chooses to stay in San Francisco might be exposed, nor cause the lower rent-controlled rate the tenant previously enjoyed.”

Read the original article in SFGate.

Victims in Witch Creek Fire Arraigned on Fraud Charges

October 17th, 2014 at 5:48am

Douglas Tumlinson and Deborah Tumlinson, a couple whose home was destroyed by fire in October 2007, have been arraigned on a 10-count indictment, including conspiracy, money laundering, and providing a false statement on a loan application, said United States Attorney Laura E. Duffy.

The indictment against the Tumlinsons  alleges they took out loans with U.S. Claims and Seaside Funding, Inc. following the wildfire but failed to repay the lenders. They are also accused of failing to list the loan debt they owed to U.S. Claims on their bankruptcy petitions.

Read the original article in Fox5SanDiego.com.

 

Florida Man Gets Prison for Short Sale Fraud

October 16th, 2014 at 1:37pm

Douglas Edward Henderson, 52, of Fort Walton Beach, Florida, was sentenced to 15 months in prison by Chief U.S. District Court Judge M. Casey Rodgers.

Henderson, who was ordered by the court to pay over $1.2 million in restitution, pleaded guilty to five counts of submitting a false tax return, two counts of aiding in the preparation of a false tax return, one count of mail fraud, and one count of conspiracy to commit mail and wire fraud.

The sentence was announced by Pamela C. Marsh, United States Attorney for the Northern District of Florida.

Henderson admitted to many of the charges. But while being the subject of a federal grand jury investigation, he engaged in a fraudulent short sale of his condominium using a family trust and the cooperation of Henderson Electric’s then chief financial officer.

The charges were the result of an investigation by the Internal Revenue Service – Criminal Investigation and was prosecuted by Assistant U.S. Attorney Tiffany Eggers.

Read the original article in WTYV.

Associates of Donald Totten Plead Guilty to Mortgage Fraud

October 16th, 2014 at 8:37am

Real estate investor Grant McCollough, 38, and his 36-year-old wife, Marisa, pleaded guilty to conspiracy to commit wire fraud and defrauding the United States.

The McColloughs recruited investors to act as straw buyers and, according to the U.S. Attorney’s Office, arranged for erroneous information to be submitted to lenders to approve their loan applications. They also inflated the value of the homes (appraisal fraud) and disguised the source of the down payments in order to skim funds from the fraudulent transfer of property among their co-conspirators. And they hid their skimmed profits from the IRS.

Their associate, Donald Totten,  was a mortgage loan officer and broker operating out of Rancho Santa Fe who specialized in negative amortization loans. Totten pleaded guilty in February to mortgage fraud, bankruptcy fraud and filing a false tax return that failed to report more than $3 million in taxable income.

Grant McCollough and Marisa McCollough will be sentenced in January 2015 by U.S. District Judge Michael Anello.

Read the original article in Fox 5 San Diego.

 

Northern California Real Estate Broker Charged in Short Sale Fraud Case

October 9th, 2014 at 3:21pm

This press release was copied from the website of U.S. Attorney Melinda Haag.

Anthony Keslinke was charged today by superseding indictment in a scheme involving short sale mortgage fraud (“short sale fraud“), announced U.S. Attorney Melinda Haag, Drug Enforcement Administration Special Agent in Charge Jay Fitzpatrick, and Internal Revenue Service, Criminal Investigation, Special Agent in Charge José M. Martinez.

According to the superseding indictment, Keslinke used straw buyers to purchase real estate throughout Northern California. Keslinke identified properties, including his own properties, that were potential candidates for a “short sale.” A “short sale” is a sale of real estate in which the sale proceeds are less than the balance owed on the mortgage loan pertaining to the property and often occurs when a borrower cannot pay the mortgage loan. In furtherance of the scheme, Keslinke allegedly submitted offers to the financial institutions on behalf of straw buyers. In order to induce a bank to accept a short sale offer, Keslinke would draft fraudulent financial hardship letters and submit them on behalf of the seller of a property. In addition, Keslinke often altered engineering and pest reports associated with the properties in order to give the appearance to the financial institutions that the properties were worth significantly less than true fair market value. Additionally, according to the superseding indictment, Keslinke often altered bank account documents to create the appearance that the straw buyers had sufficient funds to purchase the properties in cash. Once a financial institution accepted a particular property for a short sale, Keslinke used his own funds to purchase the property in the name of the straw buyer. After a short sale was completed on a particular property, Keslinke maintained control of the property and often sold the property for a significant financial gain. Keslinke is charged in the superseding indictment with using this mortgage fraud scheme to orchestrate the short sale of properties in Danville, California; Walnut Creek, California; and Kings Beach, California.

The indictment also alleges that between August of 2013 and February of 2014, Keslinke met with an undercover agent purporting to be a drug dealer on multiple occasions. On five separate occasions, Keslinke accepted a total of $550,000 from the undercover agent. In an attempt to conceal the true source of the funds, Keslinke repeatedly deposited the money received from the undercover agent into business bank accounts under Keslinke’s control. Keslinke then attempted to launder the money by wiring it from his business bank accounts to an account controlled by the undercover agent. During the investigation, Keslinke routinely kept 8-10% of the money provided to him from the undercover agent as a fee for his services.

Upon a conviction on any of the bank fraud or wire fraud charges, alleged in counts one through six, Keslinke shall forfeit any property, real or personal, which constitutes or is derived from proceeds traceable to the offense.

Upon a conviction of any of the money laundering charges, alleged in counts seven through twelve, Keslinke shall forfeit $320,000 cash seized from Keslinke’s residence, approximately $1.4 million from bank accounts, 500 American Silver Eagle coin, and a Tiffany diamond solitaire ring, all of which allegedly constitutes or is derived from the proceeds traceable to the offenses.

The maximum statutory penalty for each count of Conspiracy to Commit Bank Fraud and Bank Fraud, in violation of 18 U.S.C. § 1349 and 18 U.S.C. §§ 1344, is 30 years in prison and a $1,000,000 fine. The maximum statutory penalty for each count of Wire Fraud, in violation of 18 U.S.C. §§ 1343, is 20 years in prison and a $250,000 fine. The maximum statutory penalty for each count of Conspiracy to Commit Money Laundering and Money Laundering, in violation of 18 U.S.C. § 1956(h) and 18 U.S.C. § 1956(a)(3)(B), is 20 years in prison and a $250,000 fine.

Assistant U.S. Attorney Aaron Wegner is prosecuting the case with the assistance of Vanessa Vargas. The prosecution is the result of an investigation by the Drug Enforcement Administration and Internal Revenue Service. The Contra Costa Sheriff’s Office and Livermore Police Department have also provided assistance during the investigation. The investigation was conducted and funded by the Organized Crime Drug Enforcement Task Force, a multi-agency task force that coordinates long-term narcotics trafficking investigations.

Please note, an indictment contains only allegations. Therefore, as with all defendants, Anthony Keslinke must be presumed innocent unless and until proven guilty.

(Keslinke superseding indictment )

Do Past Crimes Predict the Future for “America’s Leading House-Flipping Expert?”

October 8th, 2014 at 9:58am

David Lazarus of the Los Angeles Times has written a thought-provoking essay: do consumers have the right to know that the person with whom they are about to invest their money has previous convictions for white-collar crimes?

Lazarus’ article is about Lloyd Segal, 66, a former Los Angeles lawyer, who was convicted in state and federal courts of real estate-related fraud. Segal used the social security numbers of two strangers to lease properties in Bel-Air and Marina del Rey, but, according to prosecutors, never paid the rent. When the landlords began eviction proceedings, prosecutors said he filed for bankruptcy using the same stolen identities. For this, he was sentenced in L.A. Superior Court to over two years, which he served concurrently with a federal sentence of 18 months for filing false bankruptcy petitions.

At least one unhappy consumer has registered his/her thoughts about Lloyd Segal on RipoffReport.com.

Lloyd Segal resigned his attorney’s license with the California State Bar in 2003.

Read the original, illuminating article in the Los Angeles Times.

© Copyright 2007-2014 Monique Bryher

Legal Disclaimer.

The information and notices contained on The California Real Estate Fraud Report are intended to summarize recent developments in real estate fraud, mortgage fraud, short sale fraud, REO fraud, appraisal fraud, loan modification scams, loan modification fraud and other real estate related crimes occurring in Los Angeles and California. The posts on this site are presented as general research and information and are expressly not intended, and should not be regarded, as legal advice. Much of the information on this site concerns allegations made in civil lawsuits and in criminal indictments. All persons are presumed innocent until convicted of a crime. Readers who have particular questions about real estate fraud, mortgage fraud and appraisal fraud matters or who believe they require legal counsel should seek the advice of an attorney.

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