California Real Estate Fraud Report

Beginning January 1, 2011, brokers and mortgage bankers will now have to be licensed and listed in a federal database that can be searched by consumers. The law applies to those who take residential mortgage applications or negotiate loan terms but exempts them if they work for banks that take customer deposits.

This all takes place under the Secure and Fair Enforcement for Mortgage Licensing Act, which Congress passed in 2008.

Since July 31, 2010, persons in California operating under the Department of Corporations must be licensed. I am dumbfounded that the only requirements are passing a state and national test, 20 hours of education, a criminal background check and a credit check and that this is considered an improvement. A hair dresser is required to have more education than the person who takes your loan application! Somehow, these new requirements are supposed to put a damper on mortgage fraud.

Read the full article about licensing requirements in the Fresno Bee.

A Salinas-area woman has been arrested by police and is charged with suspicion of mortgage fraud, embezzlement, forgery and grand theft.

Blanca Maciel Sanchez is accused of fradulently posing as a real estate agent and mortgage broker. She operated her businesses under the names of Maciel Financial Services and First Continental Mortgage. Sanchez took upfront money from at least two victims for assistance with loan modifications but their homes were foreclosed and Sanchez is thought to have spent at least some of the funds on her own bills.

Read the full article in the Salinas Californian.

Life under the microscope is getting tough for Bob Livingston.

In 2009, Livingston pleaded guilty to a felony charge related to mortgage fraud in which he an others netted $250,000.

Corona City Councilman Steve Nolan, appointed Livingston to the Corona City Planning Commission knowing of his friend’s guilty plea. But Nolan’s differences with the Corona Police Officers Association resulted in one of their detectives publicly outing Livingston, who resigned his Commission position.

Now, the California Department of Real Estate (DRE) has indicated that an administrative law judge will conduct a hearing against Bob Livingston to determine if it wants to revoke or restrict his real estate agent’s license based on Livingston’s guilty plea for a crime related to the duties of a licensee.

Read the full article in the Press-Enterprise.

A loophole that allows convicted felons to sit on city boards and commissions could be closed in Corona if the City Council decides to ban such individuals from serving. Felons may not be elected to official offices.

Bob Livingston, the chairman of the Planning Commission, pleaded guilty in 2009 to a federal charge of bank fraud after admitting he helped hid a mortgage fraud that netted him and other persons $250,000. What is shocking is that Councilman Steve Nolan, who had appointed Livingston to the position in 2006, knew about his conviction but did not inform Corona officials. The truth only came out when Detective Steve Sears of the Corona Police Officers Association told the Corona City Council of the guilty plea on November 17.

Read the full article in the Press-Enterprise.

Robert Elmer Livingston’s real estate license in California is in good standing as of this date. His conviction for bank fraud occurred in Nevada. There is another article in the Press-Enterprise having to do with the DRE’s positions on agent licensure.

An article in the Los Angeles Times states that Jesse Alvin Cripps, 57, has been arrested in a real estate scam. According to the FBI, Cripps is thought to have stolen $2 million from persons he met through his church and other avenues by telling them they would earn 10% each month by investing in his real estate investment trust when he used the money for personal use instead.

The State of California Department of Corporations has also issued a cease-and-desist order against Jesse Alvin Cripps and his business Horizon Financial Services, Inc. because he “misrepresented to investors during the offer or sale of securities that investors would receive a profitable return on their investments.”

Read the cease-and-desist order here.

In a provocative article in the Modesto Bee, Garth Stapley writes that the California Department of Real Estate (DRE) is doing a disservice to Californians by not posting information on its Licensing Check web page about real estate agents who have been charged with crimes.

Stapley cites two instances in which this has occurred:

James Lee Lankford, the owner of Century 21 Apollo in Modesto, is charged with 49 counts in which it is alleged he fleeced lenders and elderly persons out of $10 million by forging documents. He was indicted by a federal grand jury but a diligent consumer looking up the status of his license would not know this.

The same goes for Darrell Anthony Souza, managing director of Sperry Van Ness/Souza & Associates in Modesto. He has been charged by local authorities in connection with grand theft and forgeries that caused a developer to lose $3.2 million. No indication that he has been criminally on the DRE’s License Check web page.

Lankford has been the subject of several postings in the California Real Estate Fraud Report.

The DRE’s regional manager, Bill Koenig, defends the DRE’s non-posting of criminal charges against licensees by stating “In this country, I believe, we are innocent until proven guilty.  Just because he’s indicted doesn’t mean he’s guilty.”

There are multiple articles on the internet about James Lee Lankford and Darrell Anthony Souza. Personally, I don’t see how either man’s rights are being violated if the DRE, which is supposed to protect consumers, indicates they have been indicted and provides links to the criminal complaints.

Read the full article in the Modesto Bee.

Wyvonnia Nixon of Modesto said her 79-year-old ailing mother was the target of elder financial fraud by a family member and a friend.

Nixon’s mother, Virginia Pollock, had allowed the friend to move into her Ceres-area home. The friend was calling her “Mom”, telling her how much she loved her and that Nixon was going to put her mother into a nursing home. The so-called friend and Nixon’s relative also managed to get access to Pollock’s $849 Social Security check by telling Pollock that the relative was sick, usually at the beginning of the month when the check would arrive.

When Nixon contacted Ceres police, they told her they could not investigate unless her mother filed a complaint.

There are a number of stories of elder financial fraud in this article in the Sacramento Bee.

Wells Fargo Bank and its loan servicer America’s Servicing Company (ASC) are the defendants in a class action lawsuit in U.S. District Court in Northern California filed by Harwood Feffer, LLP.

Attorneys for Harwood Feffer allege that in their complaint that “ASC induced borrowers to default on their mortgages by telling them they would not be eligible for a loan modification if they were current on payments.” And “As a loan servicer, ASC generates a significant portion of its revenue from fees, penalties, and interest collected on the non-performing loans it services.”

Wells Fargo, instead of assisting distressed homeowners with loan modifications, as a signatory to the Home Affordable Modification Program (HAMP), is alleged to have required borrowers to default before evaluating them for loan modifications.

Read the full article in DSNews (Default Servicing News).