November 24th, 2008 at 12:37pm
Five loan officers from Creative Financial Solutions, Inc. (CF) have pled guilty to wire fire and admitted that CFS, a mortgage brokering company, obtained mortgage loans for unqualified borrowers by submitting false loan applications, false bank statements, and false income documentation. In total, the lenders who funded their loans, may have lost up to $16 million on properties that have been foreclosed or are in the foreclosure process.
Read the Full Article in the Imperial Valley News.
November 20th, 2008 at 3:30pm
Kirk “Mark” Newton appraised more than 200 properties for the now-defunct Crisp and Cole real estate team in Bakerskfield. He is being accused by the state Office of Real Estate Appraisers of misstating measurements of the properties and over-appraised many properties that are now in foreclosure, essentially that he committed appraisal fraud. The hearing could strip him of his real estate appraiser’s license. Both David Crisp and Carl Cole have lost their California real estate licenses and the firm is being investigated by the FBI.
Read the Full Article in KGET 17.
Search the California Real Estate Fraud Report for more details on the Crisp and Cole firm and real estate fraud.
November 10th, 2008 at 9:08pm
James B. Duncan and Hendrix Montecastro were two of three principals of a number of companies, two of which, Pacific Wealth Managment and Stonewood Consulting, Inc., are accused by the Securities and Exchange Commission (SEC) of defraud almost 100 investors out of more than $11 million, forcing many of them into foreclosure. Now Dundan’s father and Montecastro’s mother-in-law have been arrested on charges of making false statements on loan applications - mortgage fraud and loan fraud.
Real estate lawsuits filed by the investors accused Pacific Wealth and its affiliates and companies of committing loan fraud by falsifying loan applications. Appraisal fraud was an integral part of the conspiracy by making the properties to be purchased look to be worth more than they were.
As with many other real estate fraud schemes reported in the California Real Estate Fraud Report, Washington Mutual, aka WaMu, was the willing lender. WaMu is itself under investigation by several attorneys general for pressuring appraisers at eAppraiseIT, to inflate appraisals of properties with subprime loans in order to increase profits.
Read the Full Article in the Press Enterprise.
November 7th, 2008 at 9:43am
Appraisal fraud is the rarely mentioned, but often essential, ingredient in real estate fraud or mortgage fraud and other real estate crimes. Without an appraisal justifying the listed price of a home, mortgage fraud cannot occur.
In California, one of the most well-publicized stories of real estate fraud and mortgage fraud is taking a turn, as the state regulatory agency responsible for overseeing appraisers wants to revoke or suspend the license of a Bakersfield real estate appraiser who appraised more than a hundred homes for the former Crisp and Cole company. The appraisal fraud part of this real estate fraud investigation is being managed by the FBI.
Read the Full Article on the 32-page accusation complaint filed against Kirk “Mark” Newton by the Office of Real Estate Appraisers (OREA).
November 6th, 2008 at 9:09am
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.
November 4th, 2008 at 8:59am
A federal judge has ordered Jose Serrano, 45, to pay more than $219,000 in restitution to Washington Mutual Bank (WaMu) and to serve 15 months in prison for his role in a subprime mortgage fraud scam in Stockton. The real estate fraud ring involved the purchase of 10 homes.
Washington Mutual loan officer John Ngo, ringleader Iftikhar Ahmad, mortgage broker William Bridge, Bridge’s brother Paul and Manpreet Singh have pleaded guilty and are awaiting sentencing. The sole hold-out in the mortgage fraud ring, Joel Blanford, did not cooperate with prosecutors and awaits trial.
Read the Full Article on ABC News10.
November 3rd, 2008 at 9:51am
Asian-American investors in Turlock were victimized by real estate broker Bounthavy “Tyler” Manivong, 31, of Livingston, according to investigator Glenn Gully of the Stanislaus County district attorney’s fraud unit. Manivong was arrested on suspicion of defrauding a half-dozen Modesto-area victims out of more than $500,000. Accusations include title fraud, that Manivong provided phony deeds of trusts of properties he did not own to the investors.
Manivong is licensed with Pacific A.R.C. Real Estate, based in Turlock.
Read the Full Article in the Modesto Bee.
November 3rd, 2008 at 9:41am
Sacramento finally has a position dedicated to real estate fraud, something most policing agencies could only dream of.
Police Detective Mike Wood’s position is funded partially by a county grant with the purpose of dealing with an influx of financial crimes that came with the boom and crash in the California real estate market. So far, Detective Wood, one of only a handful of real estate fraud detectives in Sacramento County, has caught up with an unlicensed contractor (Keith McGowan) who is now charged with elder fraud of a Del Paso Heights couple, identity theft of a Kentucky woman whose Social Security number had been fraudulently used to buy Sacramento real estate, and professional squatters, who collect rental deposits from properties they pretend to own.
Read the Full Article in the Sacramento Bee about real estate crimes in Sacramento County.
October 26th, 2008 at 9:51am
Although many jilted investors have cheered at the recent arrests of the mother-and-son leaders of the bankrupt Paso Robles-based Estate Financial, they are only one group of a growing number of investors in the Central Coast who have had troubles with mortgage and lending firms.
Besides Estate Financial, other hard money lenders who are biting the dust are:
- Atascadero-based Hurst Financial, which had at least $86 million in investments last year, has had its license revoked by the California Department of Corporations and has been accused of fraud in September in filings by the Department of Real Estate. Hurst Financial has been the subject of several posts in the California Real Estate Fraud Report.
- Real Property Lenders of Paso Robles had its license revoked by the Department of Corporations in May. It had about $55 million in loans as of 2007,
- 21st Century Mortgage, also of Paso Robles, closed down abruptly about a year ago with no notice to its investors. Other firms eventually bought most of the loans.
Estate Financial is still the king of fraud allegations at the time of this writing. Their $170-million in loans were frozen and put under court control after the state revoked its license to sell real estate investments. On October 16, Estate Financial’s President, Karen Guth, and her son Joshua Yaguda were arrested at their Paso Robles ranch by investigators from the SLO County District Attorney’s Office.
Read the Full Article in the San Luis Obispo New Times.
October 26th, 2008 at 9:34am
The Federal Bureau of Investigation (FBI) has published its latest statistics on mortgage fraud across the country.
Quick snapshots: California ranks 4th in the country (behind Florida, Nevada and Michigan) in “significant” reports of mortgage fraud in 2008; total estimated losses to mortgage fraud in 2008 - $4 - $5 billion; and in 2008: 523 indictments, 282 convictions.
Click here to read the full compilation of FBI statistics on mortgage fraud.
