California Real Estate Fraud Report

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Archive for September, 2009

California State Bar Association investigates attorneys for loan modification scams

September 30th, 2009 at 2:17pm

Attorneys who fell prey to the siren call of easy money doing loan modifications for homeowners in distress are now finding out that if they didn’t provide the promised services, their law licenses could be at risk.

Not only is the California State Attorney General’s Office investigating attorneys for loan modification fraud, but the California State Bar is now taking unprecedented action to rein in “lawyers preying on vulnerable homeowners”, says a press release on the Bar’s website. What is even more astounding is that Interim Chief Trial Counsel Russell Weiner is waiving the normal confidentiality that occurs during investigations in favor of protecting consumers by naming names.

Read more about this investigation – including the names – on Examiner.com by the L.A. Fraud Examiner.

Safe Haven in Pico Rivera accused of loan modification fraud

September 29th, 2009 at 11:40pm

In a story oft-repeated in the California Real Estate Fraud Report, a Pico Rivera-area firm is being investigated for loan modification fraud after targeting distressed homeowners for home modification loans and requiring upfront consulting fees.

Your Dreams Come True Inc., also known as Safe Haven and Proteccion Familiar, is being investigated for both rental fraud and home modification fraud. One of its employees, Frank Candelaria, 47, was arrested for theft when he allegedly took an advance fee. His boss, executive Director Alex Jurado, claims that Safe Haven is understaffed, which was why it was behind working on customers’ loan modifications.

To show how much of a problem home loan modification is, in 2007, the California State Attorney General’s Office took 27 complaints against real estate agents and brokers, loan modifications firms, foreclosure consultants and attorneys who had jumped into the easy-money loan modification business. So far in 2009, there are over 2,000 complaints.

To put a stop to loan modification fraud, the Attorney General’s office has required all foreclosure consultants to register with its office and post a $100,000 bond since last July 1. According to a spokesman for the Attorney General’s Office, few of the loan modification firms have posted the bond. And attorneys, who have either started doing loan modifications themselves or renting out their names to foreclosure consultants, are now the target of complaints – up to 250 of them currently. At least four of them have resigned from the Bar after facing disciplinary hearings: Mitchell Roth, Christian Dillon, Nabile Anz and Cameron Edwards.

Read the Full Article in the Whittier Daily News. This article has also been posted to Examiner.com by the L.A. Fraud Examiner.

United Commercial Bank accused of hiding real estate losses

September 27th, 2009 at 3:33pm

United Commercial Bank, a lending institution based in San Francisco and with branches in Sacramento and Citrus Heights, is the focus of an examination by the Securities and Exchange Commission (SEC) after an internal investigation found that losses in its real estate loans were hidden from both outside auditors and United’s own finance Department. The bank, which received almost $300 million in TARP (Troubled Asset Relief Program ) from the federal government, is under a cease-and-desist order which forbids it from opening any new branches or extending more credit to its high-end customers without board approval.

The commotion has resulted in the resignations of Chairman and CEO Thomas S. Wu, David S. Ng (chairman of the board’s audit and finance committees) and Ebrahim Shabudin, (loan officer). Doreen Woo Ho is now the acting president and CEO and said the bank is reviewing options to rebuild its capital, including either a partial or total sale of the bank.

United Commercial Bank is the largest of the 65 California-based banks to receive TARP funds. If it is unable to repay the U.S. Treasury at the promised 5% dividend for 5 years, the loan (that’s what TARP is) by U.S. taxpayers could be in jeopardy.

Read the Full Article in the Sacramento Bee. This article is also reprinted in Examiner.com by the L.A. Fraud Examiner.

Mother-daughter real estate agents in Tracy arraigned for real estate fraud

September 27th, 2009 at 2:51pm

A mother-daughter team of real estate agents were arraigned September 23 on charges that they defrauded both lenders and home buyers to the tune of $5 million.

The two agents, Helen Sotiriadis, 49, and Irene Sotiriadis, 23, appeared in federal court after an informant told investigators that they planned to leave the country.

Both the Federal Bureau of Investigation (FBI) and the San Joaquin County District Attorney’s Office began investigating the pair for real estate fraud in January 2008. The alleged scam is one that has been reported over and over in the news: the agents submitted fraudulent documents in order to boost the income of Cambodian buyers and placed them into variable-rate loans which the buyers could not afford. A one-time $4,000 payment was required, after which the buyers were told they’d be refinanced into low monthly mortgages. Almost all of the properties became foreclosures.

If the charges are proven to be true, Sotiriadises could each get to enjoy the other’s company for the next 20 years in prison, in addition to a paltry (who came up with this number) fine of $250,000.

For the record, the California Department of Real Estate (DRE) website does not show that Irene Sotiriadis is a licensed real estate agent in California.

Read the Full Article in the Tracy Press. This article is also reprinted in Examiner.com by the L.A. Fraud Examiner.

Good new for the fight against real estate crime in Ventura County

September 27th, 2009 at 2:26pm

Bad news for those who commit real estate fraud and mortgage fraud in Ventura County: the Ventura County District Attorney’s Office has just received almost $1.7 million in federal stimulus money to fight real estate crimes.

As a result of this good use of taxpayers’ dollars, the D.A.’s office will add one prosecutor, two investigators and an assistant to its team assigned to fighting real estate fraud according to Ventura County District Attorney Greg Totten.

If you live in Ventura County and believe you are the victim of a real estate fraud, click here for the Ventura County District Attorney’s Office to find complaint forms.

Read the Full Article in the Ventura County Star. This article is also reprinted in Examiner.com by the L.A. Fraud Examiner.

Home loan modification firm target of the FTC

September 24th, 2009 at 11:58pm

Two men  who were prosecuted the U.S. Attorney’s Office in 2003 are now the subject of a new investigation by the Federal Trade Commission (FTC). Glen Rosofsky and Bryan Rosenberg were prosecuted in 2003 in a mortgage fraud case that prosecutors said involved up to $2.5 million in losses.

Now Rosofsky and Rosenberg have been indicted, along with Michael A. Trap, of fraud for illegally charging distressed homeowners up to $3,000 for loan modifcation services. The legal action includes the three men, as well as Nations Housing Modificatin Center and Infinity Group Services. has filed fraud charges against a San Marcos company for allegedly offering to help modify homeowners’ loans if they pay up to $3,000 for a service that is usually free.

Read the Full Article in the San Diego Tribune.

Real estate agent jailed by L.A. County D.A.’s office

September 24th, 2009 at 11:44pm

Mario Raul Guevara, 30, is a  real estate agent who has been charged with four counts of grand theft of personal property and two counts of forgery and failure to file tax returns. For his alleged crimes, Guevara has been jailed on a $2 million bail.

Guevara is accused of forging a client’s signature and sold a North Hollywood property to his alleged accomplices Marcelino Hernandez, 47, and Hernandez’s wife, Maria Guadalupe Banales, 38. According to the L.A. County District Attorney’s Office, Guevara and Hernandez defrauded a financial institution of $1.1 million. Guevara is additionally accused of fleecing investors for his real estate firm.

Read the Full Article in the Los Angeles Daily News. *

* For the record, Guevara is not a licensed real estate broker. He did hold a salesperson’s license, which is expired. There are no complaints showing on the California Department of Real Estate’s web site regarding Guevara’s license. There is also no information on the DRE’s web site indicating the existence of Guevara’s real estate firm (per the Daily News) called Nationwide Capital Investments.

Indictments in $100 Million Hard Money Loan Fraud

September 18th, 2009 at 12:26am

A pair of Monterey businessmen have been indicted by a federal grand jury on charges of conspiracy to commit mail and wire fraud, mail fraud, wire fraud and securities fraud.

David Arthur Nilsen, 58, surrendered to authorities in San Jose, but Manoel Antonio Errico, 55,  is currently a fugitive. They are accused of defrauding up to 1,000 investors in loans secured by deeds of trust, as well as a fund that invested in those same loans.

The indictment further alleges that the men defrauded investors in fractional interests in loans secured by deeds of trusts, and in Cedar Funding Mortgage Fund, LLC, by making materially false statements, failing to disclose material facts, and creating a materially deceptive and misleading scheme, plan and artifice to defraud.

The scheme consisted of two parts: in part one, Nilsen and Errico created a false impression that Cedar Funding was safely placing investors’ funds secured real estate loans, which they claimed offered high returns and safety of principal.

In part two, as the borrowers began defaulting on their loans, Nilsen and Errico extended the maturity dates of the loans and continued to lend more of the investors’ funds. And like a Ponzi scheme, some of the interest used to pay existing investors came not from profits but from the funds of newer investors.

Read the Full Article in the Californian. This article is also reprinted in Examiner.com by the L.A. Fraud Examiner.

Wells Fargo Does the Right Thing – Fires Callous VP

September 14th, 2009 at 9:00pm

Talk about dancing on somebody’s grave or fiddling while Rome burns.

Americans are sick to death of reading news articles about banking executives who are still receiving huge bonuses after running their businesses into the ground and being bailed-out by taxpayers. That’s why it was nice to finally read an article about boorish, callous behavior by a highly-paid banker that was dealt with swiftly, correctly and without excuse by one of the largest banks in the U.S.

The story was about how now-former Wells Fargo Senior Vice-President Cheronda Guyton drank her own poison, embarrassed her employer and outraged a neighborhood. Ms. Guyton’s profile on LinkedIn as of September 14 self-describes her as being the “Head of Commercial ORE” – commercial foreclosed properties at Wells Fargo. This is how she apparently gained access to the property, which the former owners lost as a result of having invested heavily with Ponzi-king and master swindler Bernard Madoff.

According to a story published in the Los Angeles Times‘ Business Section on September 12, Guyton used her position at Wells Fargo to help herself to the spoils of war – a $12 million Malibu Colony beachfront home. She apparently spent time there with her family this summer, perhaps even lived there, and threw lavish parties, by accounts given by the neighbors.

Before going further, this author acknowledges that she has a business relationship with Wells Fargo’s residential REO division, Premiere Asset Services (PAS) and that she is one of their active REO agents. That said, this author is also aware that Wells Fargo is quick to fire any REO agent they feel has engaged in unethical or questionable conduct in the selling of its properties.

It’s refreshing to read that one of the largest banking institutions in this country has the same rules for its executives as for its line-level employees, vendors and Realtors. Although at least one Realtor interviewed for the L.A. Times article thought it was fine for Wells Fargo to use the foreclosed property as it wanted, he misses the point, which is that perception is important too. The perception in this case is that Wells Fargo, in the guise of its employee Cheronda Guyton, couldn’t care less about people who have lost their homes – let’s dance on their graves, as it were.

For once, this author is happy to report in the California Real Estate Fraud Report that a big bank did the right thing without hesitation: it didn’t make excuses, didn’t cover-up the story and didn’t give Ms. Guyton a promotion and a bonus. She got exactly what she earned for her behavior – a well-deserved termination. Perhaps with some of her free time, she can review her MBA courses at USC for a lesson in ethics.

This editorial is also published in Examiner.com under the L.A. Fraud Examiner.

How to Stop Loan Modification Fraud – NOW

September 11th, 2009 at 11:09am

On September 10, 2009, California Attorney General Edmund G. Brown met local residents and community activists at a town hall meeting organized by Los Angeles City Councilman Alarcon at Mission College in Sylmar. The purpose of the meeting was to discuss loan modification fraud by con artists – including some attorneys – as well as the general unwillingness of banks that have received bail-out money from the federal government to modify the terms of distressed borrowers’ loans.

There has been no shortage of news regarding Attorney General Brown’s efforts to stamp out loan modification fraud by prosecuting those who prey on homeowners in default. This author has published a number of articles in both Examiner.com and the North Valley Community News advising borrowers to use extreme caution when dealing with loan modification consultants, and if they do, the questions that should be asked of these persons. Number One, though, is not to pay these individuals and firms any upfront money unless the firm is run by a licensed real estate broker or an attorney who has filed a plan of their business practices with the state of California Department of Real Estate (DRE).

Despite this, I get several emails and phone calls each week from homeowners who, through a combination of ignorance and desperation, caved in to the siren calls of loan modification firms.

Because the public still has not gotten the message about loan modification fraud, during the town hall meeting with Attorney General Brown, I got up and asked him to do the following to stop the fraud NOW:

When the County Recorder sends out a Notice of Default (NOD) to a homeowner who has defaulted on his or her mortgage, attached or enclosed with the NOD should be a letter with official letterhead from the Office of the California State Attorney General warning homeowners about loan modification scams. The cost to the state is minimal in terms of outlay, but over time, it will reduce the number of cases the Attorney General has to file against loan modification firms and attorneys which may be breaking the law with respect to modifying the loans of homeowners who cannot pay their mortgages.

If YOU want to stop loan modification fraud, please call or write your state senators and assembly members and ask them to lobby the Attorney General’s office to place educational information in the Notice of Default mailings from the County Recorder. You will be helping your neighbors, your community and perhaps even yourself.

This article is also published on Examiner.com by the L.A. Fraud Examiner.

© Copyright 2007-2017 Monique Bryher

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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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