California Real Estate Fraud Report

Any Californian who does not want to see more mortgage fraud in the state of California needs to write, email or call their state legislators to vote against two bills our legislature is considering. Click here to find out who your representatives are.

Senate Bill 461 (introduced by Senator Lou Correa / Santa Ana ) and Assembly Bill 442 (introduced by Assembly Member Juan Arambula / Fresno County) both seek to amend the California Civil Code Section 1185 by requiring Notaries Public to accept the Matricula Concular card of Mexico as legal proof of a signer’s identity.

Never mind that the FBI has referred to the Matricula Consular card as “unreliable due to the non-existence of any means of verifying the true identity of the card holder” – our two legislators are more interested in establishing new “rights” for foreign nationals than they are in protecting the rights of California citizens and legal residents against mortgage fraud.

According to the California-based National Notary Association, which vigorously opposes the proposed legislation because it mandates that Notaries accept a document that both the U.S. Department of Justice and the FBI consider untrustworthy:

“Allowing acceptance of the Matricula Consular will compromise the safety and security of California consumers and undermine the credibility of the state’s Notaries Public.”

Timothy S. Reiniger, Executive Director of the National Notary Association further adds:

“In this era of rampant document fraud and identity theft, requirements for establishing proof of identification should be tightened rather than compromised. Senate Bill 461 and Assembly Bill 442 will not accomplish this, and more importantly, will undermine our state’s efforts and recent successes in fighting mortgage fraud.”

and

“The enactment of the legislation requires Notaries to recognize a card of proven unreliability, weakening the California notarial system that protects the public from forged real property deeds and other important documentary transactions and identity crimes. Notaries in this state must not be forced to accept a card that the U.S. Department of Justice and the Federal Bureau of Investigation declare is not a trustworthy identifier.”

Here is what the U.S. Department of Justice and the FBI say about the Matricular Consular card issued by the government of Mexico:

1. The government of Mexico does not have a centralized database to coordinate the issuance of consular ID cards. So multiple cards can be issued under the same name, the same address, or with the same photograph.

2. The government of Mexico issues the card to anyone who can produce a Mexican birth certificate and one other form of identity. Mexican birth certificates have been listed as a large part of the fraudulent foreign document trade and they are easy to forge.

3. If an individual applying for a Matricula Consular cannot produce the above documents, he or she can still be issued a Matricula Consular card by the Mexican consular official if a questionnaire is completed and the individual satisfies the official that the person of his/her identity. [Note: I feel safe already]

4. 90 percent of the estimated 2 million Mexican Matricular Consular cards in circulation are merely laminated cards with no security features.

This legislation could result in more: identity theft, escrow fraud, title fraud, mortgage fraud, loan fraud, real estate fraud – all because real estate transactions rely upon the authenticity of documents attesting to the identity of the individuals who are signing those documents.

Read the Original Article on Virtualization

Now that the ferocious and inevitable finger-pointing has begun as to who is to blame for the $700 billion corporate welfare bail-out, it’s time for those with cool heads and common sense to review the simple laws of nature in business – who controls the purse strings – to see how predictable the mortgage crisis was.

Fact: as home prices kept rising and banks and other lenders had lent to everyone who was credit-worthy, the quest began to write loans to anybody with a verifiable pulse. Centuries of underwriting standards were thrown out in the race to write loans. Hence the birth of the NINJA loan: No Income No Jobs or Assets.

Fact: borrower stupidity (and investor greed) aside, it was and still is the lending institution that decides whether the loan should be written or not. These decisions directly led to, and are therefore responsible for, the massive real estate fraud, mortgage fraud, appraisal fraud and other real estate crime such as foreclosure fraud that occurred and are which now occurring in new forms to take advantage of both real estate market chaos and the lack of sufficient law enforcement capabilities to respond.

Fact: Former Fed Chairman Alan Greenspan lied when he stated that he had no idea that large-scale defaults and price re-setting to numbers roughly equivalent to the days leading up to the lending splurge. So did Secretary of the Treasury Henry Paulson of Goldman Sachs. They both knew this was a great opportunity to make a lot of money for their industry, they knew the inevitable fall-out, and they knew that Congress – which had eagerly accepted industry largess for their own campaign coffers – would ride to the rescue with the taxpayer skewered at the end of its lance.

Fact: Congress willingly put no conditions on the bail-out: not on golden parachutes, not on year-end bonuses – some amounting to $600,000 EACH to managers and executives in “failed” lending institutions receiving bail-out money, not on corporate pork. Both political parties are as guilty as Greenspan and the Fed, Paulson and his Treasury (it’s apparently not yours and mine) and the lenders, who have not let up a bit on rewarding themselves for a combination of incompetence and fraud. See the many articles below on WaMu / Washington Mutual in the California Real Estate Fraud Report.

Fact: did you – or Congress – ever ask how Henry Paulson came up with the $700 billion figure for the bail-out? As opposed to $600 billion or $800 billion? This is just the start – there will be more bail-out money demanded by continuing to manipulate public fear and the markets.

Fact: this further leap into enormous deficit spending by the federal government is inevitably leading to the bankruptcy and selling off of the United States. Treasury bills and bonds are being sold to foreign interests because America has not lived within its means and there are few American takers for those financial instruments. Bulk sales of banks’ REOs are also finding primarily foreign purchasers as investors’ confidence in the dollar’s value continues to erode. Don’t be surprised if the next “tsunami” is uncontrolled inflation.

This is the biggest con of the 21st century.

For an excellent write-up on the man-made mortgage crisis, read this article by real estate broker Madeline Zook.

Finally, somebody with common sense is speaking and acting.

Rewarding executives for exceptional performance has been replaced with shoveling obscene amounts of cash into their bank accounts no matter how poorly their companies performed under their leadership. Angelo Mozilo of Countrywide Home Loans is a perfect example of someone who has been overly rewarded for greedy and inept management at the costs of thousands of homes and jobs.

News that former CEOs Daniel Mudd (Fannie Mae) and Richard Syron (Freddie Mac) would be receiving multi-millions of dollars for guiding the financial giants has been greeted with outrage by taxpayers.

On September 14, the conservator appointed to administer the affairs of Freddie and Fannie Mae press release summarizing the FHFA’s (Federal Housing and Finance Authority) decision that “‘golden parachute‘ payments contemplated under (the executive’s) contracts would not be paid. The Agency, serving as conservator, determined that under applicable statute and regulation, the Enterprises should not make such payments to these individuals and directed the Enterprises accordingly.”

Read the Full Article in Mortgage News Daily.

Note: the letter is in response to the December 31, 2007 article in the Los Angeles Times regarding the Beverly Hills real estate fraud ring. See the abstract of that article in my blog below.

Victims or accomplices? Re: “How a bank fell victim to loan fraud,” Dec. 31.

This fraud would not have been possible had Lehman Bros. Bank observed proper checks and balances and hired its own appraisers before funding loans for the properties. According to the article, Lehman Bros. also was contacted by two local real estate agents reporting questionable valuations of area homes, yet it chose to ignore the concerns raised.

Ditto for the straw buyer, Kathy Moore of Utah. She sold the use of her identity and credit to help make one of the deals happen; she was no more a victim than Lehman Bros. and was just as greedy as the other players.

Letters to the Editor