California Real Estate Fraud Report

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Archive for June, 2013

Latino Real Estate Agent Pleads Guilty to Scamming Latino Homeowners

June 24th, 2013 at 8:00pm

A San Jose man who targeted the Spanish-speaking homeowners with a refinancing scam (affinity fraud) has pleaded guilty to accepting advance fees for loan modifications and performing unlicensed real estate activity, according to the Santa Clara County District Attorney’s Office.

Michael Mendoza, 56, was collecting upfront fees of $3,000 from his victims in exchange for promising them he would negotiate lower mortgage payments.

His employee Maria “Marilou” Jackson, 59, also pleaded guilty.

Both Mendoza and Jackson received three years of probation (what, no prison?), unknown fines and Mendoza was ordered to reimburse the victims.

Mendoza’s employee Maria “Marilou” Jackson, 59, also pleaded guilty. They were sentenced to three years of probation and fined. Mendoza also had to reimburse the victims for their losses.

Read the original article in the Silcon Valley Mercury News.

Investor Agrees to Plead Guilty

June 24th, 2013 at 7:48pm

Robert Williams, an Atherton, California investor, is the 31st person to plead guilty or agree to plead guilty to felony charges of bid rigging and mail fraud at public real estate foreclosure auctions in San Mateo County. Prosecutors in the U.S. District Court for the Northern District of California in San Francisco have been aggressive in pursuing individuals who conspire at these auctions in order to gain title and possession at more favorable prices than if the bidding were open and competitive.

“Collusion at these foreclosure auctions enabled the conspirators to present the illusion of competition, when they were actually thwarting the competitive process and profiting at the expense of lenders and distressed homeowners,” said Bill Baer, Assistant Attorney General in charge of the Department of Justice’s Antitrust Division. “The division remains committed to holding accountable those who illegally subvert competition at real estate foreclosure auctions across the country.”

“The legitimacy of an open, public real estate foreclosure auction is compromised when an individual or group conspires to commit criminal activity which impacts genuine intentions of good citizens,” said David J. Johnson, FBI Special Agent in Charge of the San Francisco Field Office. “We are steadfast in our continued partnership with the Antitrust Division in bringing those criminally responsible to justice.”

These crimes are being prosecuted under the Sherman Act. A violation carries a maximum penalty of 10 years in prison and a $1 million fine for individuals.

Read the original article in the Imperial Valley News.

Bank of America Employees Say They Were Told to Lie about Loan Modifications

June 20th, 2013 at 10:41am

The following story, as reported by NBC News, is no surprise to the thousands of distressed homeowners who have tried and failed to get home loan modifications under the government’s HAMP program (Home Affordable Modification Program). Realtors® who try to help homeowners with loan modificationsAlthough the bad guy in this story is Bank of America, I can safely say that homeowners whose loans are with all of the major big-name banks have experienced the same frustrations.

In sworn testimony in response to a Massachusetts lawsuit filed on behalf of dozens of Bank of America borrowers in 26 states, former employees of the bank have acknowledged that they routinely denied qualified borrowers a chance to modify their loans to more affordable terms.

That’s not the shocking part: Bank of America actually paid cash bonuses to its employees for pushing homeowners into foreclosure, this, according to affidavits filed as part of the lawsuits.

Simone Gordon, who worked in the bank’s loss mitigation department until February 2012, said “We were told to lie to customers. Site leaders regularly told us that the more we delayed the HAMP [loan] modification process, the more fees Bank of America would collect.” Gordon is one of six former employees who recounted stories where the bank deliberately thwarted the efforts of the homeowners, their housing counselors and attorneys.

Read the Affidavit of Simone Gordon.

William Wilson Jr., a manager in the company’s Charlotte, N.C., headquarters, said that the point of delaying or denying the HAMP loans to which many borrowers were qualified was so Bank of America representatives could upsell them to a more costly “in-house” loan modification. Rates for these bait-and-switch in-house loans were 3 points higher than the 2 percent rate available under HAMP guidelines, he said.

“The unfortunate truth is that many and possibly most of these people were entitled to a HAMP loan modification, but had little choice but to accept a more expensive and less favorable in-house modification,” he said.

Read the William Wilson Declaration.

The testimony of these employees makes clear why the government’s Home Affordable Modification Program, initiated in 2008, has been a dismal failure.

Bank of America has denied the allegations and issued the following statement: “We continue to demonstrate our commitment to assisting customers who are at risk of foreclosure and, at best, these attorneys are painting a false picture of the bank’s practices and the dedication of our employees,” a spokesman said in a statement. “While we will address the declarations in more depth when we file our opposition to plaintiffs’ motion next month, suffice it is to say that each of the declarations is rife with factual inaccuracies.”

Good Job! Vallejo Broker Gets Three Year Sentence for Mortgage Fraud

June 20th, 2013 at 9:13am

A Vallejo mortgage broker who pleaded guilty in August 2012 to conspiracy to commit wire fraud has been sentenced to three years in federal prison for defrauding lenders (loan fraud, mortgage fraud).

Amy Schloemann, 36 is the former president of Hiddenbrooke Mortgage. Prosecutors accused her of plotting with her husband and business partner, Karim Akil, and others to fraudulently obtain loans to purchase over 18 properties between 2006 and 2007, using straw buyers and inflated sales prices. As a result of the fraud, most of the properties were lost to foreclosure.

The case was prosecuted by the office of U.S. Attorney Melinda Haag.

U.S. District Judge Phyllis Hamilton of Oakland sentenced Amy Schloemann to prison and ordered her and several of the defendants to provide $5.8 million in restitution. Schloemann’s real estate license expired in September 2012.

Karim Akil, who also goes by the name of Scott Kinney (??), has already pleaded guilty to conspiracy and money laundering in the same case and awaits his sentence.

Read the original article in SFGate and KTVU.com.

Nevada Realtors Charged in Short Sale Fraud

June 20th, 2013 at 8:47am

A Henderson couple who sold real estate is facing federal charges for committing bank fraud and conspiracy to commit bank fraud against Wells Fargo Bank.

According to the U.S. Attorney’s Office for the District of Nevada, Cynthia Hosbrook, 41, a currently licensed real estate agent, and her husband Robert Hosbrook, 51, a formerly licensed real estate agent, committed a fairly uncreative form of short sale fraud.

First, the Hosbrooks submitted documents to Wells Fargo that the sale of their house was arm’s-length (not to relatives, friends or known associates), when instead they are alleged to have used a relative to purchase their home as a straw buyer in March 2010. Second, they are alleged to have signed a title company form in July 2010 falsely stating that the straw buyer relative would be occupying the house and that they agreed not to live in the home as renters after the sale.

The case is being prosecuted by Assistant U.S. Attorney J. Gregory Damm. It was investigated by the Federal Housing Finance Agency Office of the Inspector General.

Click on the link Hosbrook Indictment to read the details.

If convicted, Cynthia and Robert Hosbrook face up to 30 years in prison and fines of up to $1 million on each count.

** For the record, nobody has ever served more than one year in prison for committing short sale fraud and the fines never reach beyond simple restitution, much less penalties. **

See my book “How to Commit Short Sale Fraud . . . and Get Away with It” for the very short list of prosecutions and why law enforcement at local, state and federal levels has made short sale fraud a virtually risk-free, highly profitable crime for the 99.9% of those who commit it.

Read the original article in the Las Vegas Review Journal.

Interthinx Releases Q1 2013 Mortgage Fraud Risk Report

June 14th, 2013 at 10:54am

Mortgage fraud risk increased slightly in the first quarter of 2013, according to the latest quarterly Mortgage Fraud Risk Report published by Interthinx.

Interthinx prepares its reports using an internal team of fraud experts who analyze more than 12 million loan applications.

California was the riskiest state in the nation, but essentially tied with Nevada and Florida. Its mortgage fraud risk index is 125. Additionally, California has four of the top 10 riskiest ZIP codes and five of the top 10 riskiest metropolitan statistical areas (MSAs)—including Santa Barbara-Santa Maria-Goleta.

Read the original article in DSNews.

Daly City Real Estate Broker Pleads Not Guilty in Real Estate Fraud Case

June 11th, 2013 at 3:06pm

Andrew Abed Khoury, 42, San Mateo County real estate broker, pleaded not guilty Friday in San Mateo County Superior Court to 36 counts of real estate fraud. According to San Mateo County District Attorney Steve Wagstaffe , Khoury scammed three people out of over $800,000 between May 2006 and May 2012. 

A co-defendant, Cindy Teahan, worked at several escrow companies and said she knew Khoury on a business level. Teahan has been charged with six felonies, including three counts of falsifying documents.

Teahan said one of the victims was her 83 year-old mother-in-law, who Khoury allegedly convinced to turn over $202,000 she netted from selling her home and moving into senior housing.

Another man, 74 years old, gave Khoury $100,000 to invest after being told money was secured by a deed of trust, but according to DDA Wagstaffe, it wasn’t and Khoury allegedly used it to pay his credit card bills.

Andrew Khoury is being held at San Mateo County Jail in lieu of $1 million bail; Cindy Teahan is out on bail.

Read the original article in the San Jose Mercury News.

Bakersfield Married Couple Plead Guilty in Mortgage Fraud Case

June 11th, 2013 at 2:44pm

United States Attorney Benjamin B. Wagner announced that Eric Ray Hernandez, 37, and his wife Monica Marie Hernandez, 32, have pleaded guilty to conspiracy to commit mail fraud, wire fraud, and bank fraud.

According to court documents, between October 2005 and May 2007, the Bakersfield couple conspired with three other defendants to defraud lenders by submitting false and fraudulent loan applications  to the lenders in order to obtain mortgages, ultimately causing losses of approximately $6,037,541. Eric Hernandez was employed at a mortgage brokerage during the period when the crimes occurred.

Both defendants face length prison terms when they are sentenced this fall – up to 30 years in prison, a $1 million fine, and five years of supervised release.

One of their co-defendants, Patricia King, has already pleaded guilty to three counts of mail fraud and been sentenced to three years and one month in prison. The remaining co-defendants Evelyn Sanchez and Darling Montalvo have pleaded not guilty and are awaiting their trials on August 13, 2013.

Read the original article in KERO-TV 23 and the Central Valley Business Times.

Man Dies in Court after Suing Wells Fargo for Negligence, Wrongful Foreclosure

June 7th, 2013 at 10:45am

This is one of the most egregious cases of corporate ineptitude and callousness I’ve heard of to date. And after wrongfully costing a man his property, it then may have cost him his life.

Larry Delassus was a disabled retiree, living on $1,600 a month in the Hermosa Beach condo he had owned for 16 years.

One of Delassus’ neighbors neighbors fell behind in his property tax payments. The neighbor, like Delassus, had his mortgage with Wells Fargo. Wells Fargo, in order to preserve its interest in the property, paid the property taxes. But instead of pursuing the neighbor for the shortfall, these idiots went after Delassus because they mistyped the parcel number on documents to show the person in default was Delassus.

Larry Delassus had actually paid his property taxes six months in advance.

In a scenario familiar to thousands of homeowners who have tried to communicate with this lender, Wells Fargo heaped on penalties, interest, fines and attorney fees in its relentless pursuit of Larry Delassus, forcing him into default by doubling his mortgage. He and his attorney tried and tried to call the bank, but got the runaround typical of Wells Fargo and other mega-lenders: put the borrower on hold forever, disconnect the call, transfer the call to the wrong department, transfer the call to employees unauthorized to make decisions, lose paperwork, etc.

According to an article in the LA Weekly, even after it admitted its error, Wells Fargo foreclosed on him anyway.

The next two paragraphs are quoted directly from the LA Weekly:

Robert Baily of Anglin Flewelling Rasmussen Campbell & Trytten LLP admitted the bank’s mistake: “Wells Fargo paid the amount it determined was owed to the County Assessor: approximately $10,500. This was a mistake. The $10,500 was the tax amount owed on a neighboring property, not Plaintiff’s.” (Bailey did not address the discrepancy between $13,361 and $10,500.)

Bailey added: “In September, 2010 Wells Fargo acknowledged its error in paying the taxes on Plaintiff’s neighbor’s property and corrected it.” By then, however, Delassus was so far behind on his mortgage payments wrongly doubled by Wells Fargo that the bank refused to let him resume his $1,237.69 installments, Trujillo says. He faced a sizable “reinstatement” cost — which is often the past due amount plus fees.

Delassus’ neighbor and friend, attorney Anthony Trujillo, sued Wells Fargo on his behalf for negligence and discrimination (based on his disability).

Wells Fargo litigation support manager Michael Dolan, in a videotaped deposition, was asked the following:  “So Plaintiff was never provided with the reinstatement amount after the bank discovered its error, correct?” Dolan replies, “That is correct.”

Larry Delassus was in Torrance Superior Court last December listening to Trujillo argue his case when he slumped over and died.

Watch this YouTube video that discusses this story further. Read another article in Slate about Larry Delassus versus Wells Fargo.

Sentencing Delayed in Hendrix Montecastro, Helen Pedrino Real Estate Investment Fraud

June 6th, 2013 at 10:14am

Hendrix Montecastro and his mother, Helen Pedrino, have caught a lucky break: their new attorney managed to get their sentencing reset for August 8.

Montecastro and Pedrino had represented themselves at the 86-day trial, in which prosecutors had accused him and the other defendants of fleecing victims out of a staggering $142 million. Similar to a Ponzi scheme, money was brought in by the defendants by holding seminars and setting up shell companies to take in money from the victims, who were located primarily in Riverside County and Palm Springs.

Mastermind James Duncan and Charles McLeod, pleaded guilty, and are already serving time in jail as they await their sentences, after agreeing to cooperate and testify against Montecastro and Pedrino, both of whom are sitting in jail.

 
Read the original article in the Press Enterprise. There are also numerous articles about this case on the California Real Estate Fraud Report.

© 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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