December 13th, 2011 at 7:18am
A man who promised investors he would use their money to buy corporate bonds backed by TARP (Troubled Asset Relief Program) could get life in prison for defrauding them out of $20 million.
John Farahi, 54, a fund manager has been charged with 41 felony counts, among them loan fraud and obstruction of justice.
Attorney David Tamman has also been charged in what prosecutors allege is a Ponzi scheme.
Read the original article in SFGate.
December 6th, 2011 at 3:12pm
The Attorneys General for California and Nevada announced at a press conference today that they have joined forces and formed a Mortgage Investigation Alliance.
California AG Kamala D. Harris and Nevada AG Catherine Cortez Masto are pooling investigative sources, data and evidence and will share litigation strategies in order to battle foreclosure fraud and mortgage fraud. Not only will “mortgage rescue” firms be targeted but apparently also those in the mortgage industry who may have engaged in misconduct.
Nevada has filed suit against Bank of America and Countrywide Lending for violating a Consent Judgment, for irregularities in both mortgage origination and servicing.
According to the press release by the California Office of the Attorney General, one out of every 180 Nevada properties received a Notice of Default (NOD) in October 2011; one in every 243 California homes received an NOD in October. Both states have the dubious distinction of being leaders in the number of foreclosures that property owners have suffered.
December 6th, 2011 at 9:33am
An unnamed employee in the Stanislaus County Recorder’s Office is the hero in discovering an alleged foreclosure rescue fraud perpetrated on up to 1,000 victims.
Suspicious fillings to a company called Pacifica Group 49-II caused the Recorder’s Office to contact the Stanislaus County District Attorney’s Office. Investigator Glenn Gulley says that possibly 30 victims have been found in Stanislaus County but further digging found victims outside of the area.
The indictees include Brent Medearis, 45, the CEO of Modesto-based VIP Financial Services; Jewell L. Hinkles, 61, aka Cydney Sanchez; Bernadette Guidry, 43; Jesse Wheeler, 34; and Cynthia Corn, 58. All five defendants have been charged with multiple counts of bankruptcy fraud; two are also facing mail fraud charges.
The 2 1/2 year investigation was undertaken cooperatively by the FBI, the U.S. Postal Service and other federal agencies, in addition to the Stanislaus County District Attorney’s Office.
Read the original article in the Modesto Bee.
December 6th, 2011 at 9:21am
A recent posting on Dr. Housing Bubble underscore on of the premises of my e-book “How to Commit Short Sale Fraud . . . and Get Away with It” – that short sale fraud is occurring in many urban markets.
The Dr. Housing Bubble post talks about flopping, which occurs when the listing agent for a short sale property conspires with the buyer (and sometimes the seller) to accept a lowball offer on the property. The listing agent submits the low offer to the lender, intentionally not informing the lender that there are one or more higher offers. If the sale goes through, the listing agent, who usually has a financial interest in the lowball purchase, contacts one of the higher offers and resells the property to that buyer, pocketing another commission.
Short sale fraud, a subset of real estate fraud, can only happen through “asymmetrical information” – the listing agent controls exact what information is passed on to the lender. The lending institution, at least with current standards of practice, is forced to trust that the seller and his listing agent have submitted the highest and best offer. Since many home buyers speak openly about short sales being rigged and a number of honest real estate agents and brokers have written the same, this is ample evidence that housing prices are being artificially distorted, which not only harms neighboring properties where the owner wants to sell or refinance, but also the property tax base.
Flopping is just one of many forms of short sale fraud. My e-book discusses in depth a number of these schemes and why it is so easy to commit them. My e-book also explains how short sale fraud can be stopped dead in its tracks by taking simple, common-sense steps to eliminate the loopholes in the current system.
You can get the scoop of how crooked consumers, their real estate agents and some of their bank-insider friends profit from short sale fraud by reading “How to Commit Short Sale Fraud . . . and Get Away with It.”
December 1st, 2011 at 6:28pm
You are thinking of selling your home next year and using the equity to fund part of your retirement or a move to a smaller property. You have spent years building that equity, including keeping your home in impeccable condition in a neighborhood known for pride of ownership.
Your neighbor has just listed his home with a real estate agent on the Multiple Listing Service as a “short sale.” A short sale occurs when a property is sold for less than the value of the loan owed against it.
Despite a tough real estate market, your neighbor’s home sells in one day for cash. Oh, and did I mention the seller and his/her bank agreed to take 10 percent or more off the listed price without the benefit of having the property on the market even one week so that local real estate agents could preview it with their buyers and bid competitively? A listed price that the presumably competent agent determined by analyzing local neighborhood values?
In this example, the borrower sold his home to a relative, one with a different name. He did this so that the lender, which requires the sale to be “arms-length,” was unaware that the new buyer would not be moving into the property, thereby allowing his relative to remain on the premises, which is forbidden under the terms of the short sale. In the long term, the original borrower will most likely “buy” the property back at some point from his relative, achieving a huge write-down in his principal, something I refer to as “mortgage laundering.”
Welcome to the world of short sale fraud, one in which the normal rules of a real estate transaction often fly out the window in favor of unenlightened self-interest, conflict-of-interest, bribes, kick-backs and lack of proper due diligence by lenders. And it often occurs fairly openly because the chances of getting caught and punished are between slim and none.
This article was taken from one I wrote for The Patch.
To learn more about short sale fraud and how it is distorting the housing market and economic recovery, read my book “How to Commit Short Sale Fraud . . . and Get Away with It.” A free sample download is available on this blog.
December 1st, 2011 at 6:21pm
Twin sisters and one of their associates have been arrested on multiple counts of operating a loan modification scam in Stockton.
Magdalena Salas, 42, the owner of Legacy Home Loans, her twin sister Angelina Mireles, 42, and Julissa Garcia, 36, were charged with 13 felonies and two misdemeanor, including conspiracy, grand theft and false advertising. The three are accused of circulating flyers in English and Spanish that guarantee to save the homes of distressed borrowers and promising a refund if the homeowner did not receive a loan modification. Homeowners were charged $5,000 upfront for these services, which is illegal in California.
The case was a cooperative investigation between the California Office of the Attorney General, the San Joaquin District Attorney’s Office, the Office of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP), the California Department of Real Estate (DRE) and the Stockton Police Department. According to California AG Kamala Harris,
“These scam artists preyed on innocent homeowners who were simply trying to protect their homes and families from foreclosure. The mortgage crisis has caused tremendous damage to our state and to California families. There is nothing worse than those who seek to capitalize on this devastation by defrauding Californians who have already been victimized in this crisis.”
Salas operated not only Legacy Home Loans but also Salas Properties, Salas Estates, Peace and Freedom Legal Services and Divinity Legal Services. Magadalena Salas’ license to practice real estate was revoked in 2008, according to DRE records. Mireles and Garcia have real estate licenses but no broker affiliations, meaning they may not engage in services which require a license from the DRE.
Read the original press release by the California Office of the Attorney General.
December 1st, 2011 at 1:55pm
Firing a shot across the bow of efforts by large banking institutions to settle complaints of robosigning and forcing homeowners into foreclosure when the foreclosing bank did not hold the actual mortgage, Massachusetts Attorney General Martha Coakley filed suit against five of the largest banking institutions.
The five banks are Bank of America, Wells Fargo, JP Morgan Chase, Citigroup and GMAC. AG Coakley’s move is another dagger into the efforts of the banks to craft a settlement with the attorneys general of all 50 states. California’s Attorney General Kamala Harris left the table several months ago after concluding that the settlement offer by the banks was insufficient to provide relief to homeowners who were harmed. The attorneys general for New York, Delaware and Nevada have also indicated that they want more time to investigate the actions of the banks before committing to any settlement numbers.
In April, the Office of the Comptroller of the Currency, an agency that operates under the US Treasury and that regulates national banks, reviewed the foreclosure politices of the country’s largest mortgage servicers. The OCC then wrote a report that concluded the servicers employed ”inadequate policies, procedures, and independent control infrastructure covering all aspects of the foreclosure process.”
Read the original article by MSNBC.com.
