California Real Estate Fraud Report

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28
Aug

Danville executive pleads guilty in mortgage fraud, $75 million in losses

Ayman Shahid, the former president of Discovery Sales Inc. has pleaded guilty to a mortgage fraud scheme in which he and others convinced lenders to approve loans for unqualified buyers during the height of the mortgage crisis in 2006-2008. The fraudulent loans were issued on over 326 homes in Alameda and Contra Costa counties and totaled over $230 million in mortgage loans.

According to Shadid’s admission in his plea agreement, the value of the homes were inflated and the buyers, who made no down-payments, were offered cash and other incentives. The down-payments were instead made by Discover Sales and it and other builders made the mortgage payments for a brief period so that the straw buyers would not default immediately. None of the financial incentives were disclosed to the underwriters. Shahid also said that the incentive program was known by some of the employees and managers of its preferred/on-site lenders Wells Fargo and J.P. Morgan Chase and that these individuals knew the incentives were not being disclosed.

The case was prosecuted by the U.S. Attorney’s Office for the Northern District of California.

Read the original article in SFGate.

 

 

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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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