California Real Estate Fraud Report

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Zillow Sued by Top Agent Network for Theft of Its Trade Secrets

November 7th, 2014 at 8:10am

Top Agent Network, Inc. (TAN) has filed a lawsuit against giant  online real estate company Zillow, accusing Zillow of theft of its proprietary trade secrets in the creation of the highly-promoted  “Coming Soon” feature. The Top Agent Network lawsuit alleges that Zillow was able to learn exactly how TAN’s confidential program worked by pretending to have interest in investing in it and that this was simply a ploy to gain access and launch a competing product.

TAN CEO David Faudman said, “TAN is based on the principle that collaboration among trusted participants is the key to success and we approached this transaction in that spirit. We believe that Zillow broke this trust by misusing trade secrets that we spent years developing and perfecting.” Faudman further said “We are filing this lawsuit to hold Zillow accountable for its actions.”

According to an article in BusinessWireTop Agent Network “is a private, member-only online community where the verified top 10% of real estate agents in local markets collaborate and exchange information. TAN agents exchange information relating to a broad range of real estate issues, including upcoming listings (commonly referred to as “pre-MLS” or “Coming Soon” listings), buyer needs, service provider recommendations, agent referrals and other industry matters. TAN has a wide reach within the industry, as their agents typically sell between 75% and 90% of the homes in their areas. TAN’s collaborative model increases the flow of information, benefiting informed sellers by ensuring that their properties get broad pre-MLS exposure and leading to smoother transactions and better prices for clients. TAN is a national leader in this type of exchange.”


Huntington Beach Man Gets 10 Year Prison Sentence for Foreclosure Rescue Scam

November 7th, 2014 at 7:57am

United States Attorney Benjamin Wagner announced that Jeremy Michael “Mike” Head, 34, of Huntington Beach, has been sentenced to 10 years in prison for operating a national foreclosure rescue scam.

Head was found found guilty in May 2013 by a federal jury that was tried in front of United States District Judge Kimberly J. Mueller. In September, Judge Mueller sentenced Mike Head’s brother and co-defendant Charles Head, 40, to 35 years in prison.

According to prosecutors, Charles and Mike Head, without the knowledge of homeowners in distress, used straw buyers as substitutes on title for properties that had equity. The defendants then applied for mortgages to take whatever equity was available for the properties and shared it among themselves, netting in total over $15 million. The homeowners lost their equity and homes and their credit was severely damaged.

Here is what law enforcement and prosecutors had to say about Mike Head:

U.S. Attorney Wagner said: “Mike Head made a small fortune taking advantage of victims who looked to him for help. Instead of helping, he stole the last remaining equity in their homes, and many victims were evicted and left destitute. He will now go to prison and pay for his crimes. This office continues to vigorously prosecute multiple variations of mortgage fraud throughout our district.”

“The scheme Head and his co-conspirators devised preyed upon individuals when they were most vulnerable and lived in fear of imminent foreclosure. Despite promises to help their victims avoid foreclosure, many were financially devastated by the scheme,” said Special Agent in Charge Monica M. Miller of the Sacramento FBI. “The FBI is committed to thoroughly investigating complex mortgage fraud schemes, identifying all participants, and ensuring that those who have violated the trust of the American public face justice in federal court.”

“Today’s sentencing sends a clear message to those who commit mortgage fraud, the consequences can be severe,” said Acting Special Agent in Charge Thomas McMahon, IRS-Criminal Investigation. “The defendants in this case have hurt so many people and so many of our communities. This sentencing highlights IRS-CI’s commitment to hold accountable those involved in these types of crimes.”

Read the original article in the Imperial Valley News.

Orange County Man Sentenced to Seven Years for Real Estate Fraud

November 7th, 2014 at 7:45am

The Orange County Register reported that  65-year-old Dinesh Valjeebhai Shah has been sentenced to seven years in prison. He pleaded guilty in October to five felony counts including conspiracy, forgery, identify theft and grand theft.

Prosecutors say Shah for conspired with family members in an complex real estate fraud scheme in which he and his defendants forged loan documents using straw buyers. Losses to Washington Mutual, aka WaMu, were over $16 million for the 15 properties purchased using fraudulent loan applications between 2006 and 2009.


Donald Totten Sentenced to Prison for Mortgage Fraud

November 7th, 2014 at 7:37am

Donald Totten, a one-time real estate agent, has been sentenced to 30 months in prison by U.S. District Judge Michael M. Anello.  He had pleaded guilty last February to four felony counts relating to his mortgage fraud, tax, and bankruptcy frauds.

Totten ran his businesses, under the names of AS Money World, Island Financial, and Integrated Home Loans, and according to court documents, made millions of dollars recruiting people to refinance their mortgages with him by running  television commercials. His loan programs were called “adjustable rate negative-amortization loan.” Negative amortization loans allow the borrower to make less than the minimum monthly payment but this results in the principle balance increasing.

“Prosecuting people who have contributed to the mortgage meltdown is one of my top priorities because they have played such a significant role in our nation’s financial turmoil,” said U.S. Attorney Laura Duffy. “My office will not allow individuals to make themselves rich at the expense of the American people and the taxpayers. I am pleased to report that this defendant’s decade-long crime spree is finally over.”

There’s much more to the story of Donald Totten. You can read previous postings about him in the California Real Estate Fraud Report.

Read the original article in the Rancho Santa Fe Review.

Target of Mortgage Scam Probe Caught Trying to Board Fly to Afghanistan

October 31st, 2014 at 6:58am

Knowing that the U.S. Attorney’s Office in Santa Ana was considering filing criminal charges against her for falsely claiming to be an attorney and operating a mortgage prevention scam, 30-year-old Najia Jalan decided to buy a one-way ticket from LAX through Dubai to Afghanistan. But as she boarded, she found two special agents with the U.S. Department of Treasury’s Special Inspector General for the Troubled Asset Relief Program (TARP) waiting to arrest her on charges of mail fraud, wire fraud and aggravated identity theft.

Najia Jalan, who has previously been convicted of burglary, theft, possession of narcotics, obtaining money under false pretenses, also has used the aliases of Poh Yee Neo, Sarah Adams and Korina Taylor.

According to a complaint dated October 20 by the Treasury Department, Jalan allegedly used various consumer firms to fool distressed homeowners into paying her substantial fees.

Note: The real Poh Yee Neo is a licensed lawyer who works in Hong Kong and has no connection to Jalan.

Read the original article in OC Weekly.

Blaming the Computer Excuse May Cost Ocwen $100 million

October 30th, 2014 at 1:23pm

In the latest news to surface about Ocwen Financial committing servicing violations by backdating loan modification denial letters, Ocwen’s executive chairman said the company is setting aside $100 million to settle with Benjamin Lawsky, the superintendent of New York’s Department of Financial Services.

Executive Chairman Bill Erbey told analysts on an October 30 conference call that the $100 million was Ocwen’s “best estimate of the exposure,” after Lawsky identified 6,100 borrowers who received the backdated letters. Ocwen, which weakly tried to blame the letters on “the computer,” has known about the problem for over a year, when one of its own employees informed executives and an internal monitor about them.

The settlement, according to Michael Bourque, Ocwen’s executive vice president and CFO, could be even higher.

Ocwen is in a hurry to put the matter in its rearview mirror because it’s preventing the company from completing its purchase of $39 billion in mortgage servicing rights from Wells Fargo.

Read the original article in National Mortgage News.

Mark Nagy Atalla Ordered to Pay Judgment of $515,000 by Federal Judge

October 29th, 2014 at 8:37am

Mark Nagy Atalla, a defendant in an a 2013 action by the Federal Trade Commission, has been ordered by a federal district court in Southern California to pay almost $515,000. The FTC brought its complaint against Atalla, alleging that he and his two companies violated the FTC Act and the Mortgage Assistance Relief Services Rule (also known as the MARS Rule or Regulation O) by promising to lower homeowners’ mortgage payments in exchange for change and advance fee that reached as high as $4,495.

“The court’s order in this case makes a very clear point,” said Jessica Rich, Director of the FTC’s Bureau of Consumer Protection. “When you sign a settlement order with the Federal Trade Commission, you’d better be up-front about your assets. If you’re not, we won’t hesitate to collect suspended monetary judgments.”

Attala is also banned from future work in the debt relief and mortgage relief businesses.

Read the original article on the Federal Trade Commission website.


Ocwen the Target Again of New York Banking Supervisor

October 28th, 2014 at 11:02am

New York’s top banking supervisor once again set his sights on Ocwen Financial Corp. this week, saying the servicer sent thousands of foreclosure warnings to borrowers months after it was too late to save their homes.

Benjamin Lawsky, New York’s superintendent for financial services, said an investigation of Ocwen’s mortgage servicing practices turned up more than 7,000 letters sent to borrowers that had been backdated and sent only after their payment deadlines had passed.

“In many cases, borrowers received a letter denying a mortgage loan modification, and the letter that was dated more than 30 days prior to the date that Ocwen mailed the letter. These borrowers were given 30 days from the date of the denial letter to appeal that denial, but those 30 days had already elapsed by the time they received the backdated letter,” Lawsky said in a letter, which was addressed to executives and board directors at Ocwen.

Note: it is my observation and opinion as a Realtor® that Ocwen is at the top of the list of servicers that are inept and fail in their fiduciary obligations to homeowners, such as paying impounds and insurance declarations as they are legally required. God help anyone who is forced to have Ocwen servicing their loan.

Read the original article in DSNews.

An update on the same topic:

According to an article in National Mortgage News, Ocwen’s problems may prevent it from completing its purchase of $39 billion in mortgage-servicing rights from Wells Fargo. Analysts and servicing experts say Benjamin Lawsky’s investigation of Ocwen may have delivered the “death blow” to the deal.

“This increases the chances the Wells Fargo servicing deal is canceled,” Compass Point Research & Trading analyst Kevin Barker wrote in a research note.

Lawsky’s crackdown on Ocwen sent the mortgage servicer’s shares down 18.2% last Tuesday and another 7% in Wednesday afternoon trading.


Newport Beach Man Gets Seven Years for Mortgage Fraud

October 23rd, 2014 at 10:24pm

65-year-old Dinesh Valjeebhai Shah of Newport Beach pleaded guilty Friday to five felony counts of conspiracy to commit a crime, 13 felony counts of forgery, and other charges including identify theft and grand theft, said spokespersons with the Orange County District Attorney’s Office. He has now been sentenced to seven years in what prosecutors said was a conspiracy with his family member to commit real estate fraud by buying homes using straw buyers and submitting forged loan documents.

This all occurred between June 2006 and October 2009. Washington Mutual Bank approved all the loans and the total amount of the fraud was over $16 million.

The Shah family owned and operated New Age Realty, First Property Escrow, City First Realty, and Associates Investments Group, which were all at 13821 Newport Ave. in Tustin. One member owned and operated Vason Development, located at 1520 Warner Ave. in Santa Ana, which processed home loan applications.

Read the original article in the OC Register.

Judge Charles Breyer Says San Francisco’s Fees to Displaced Tenants Violates Property Rights

October 23rd, 2014 at 9:23am

U.S. District Judge Charles Breyer has ruled unconstitutional a new law by the City of San Francisco that required property owners to pay huge fees to displaced tenants.

In his ruling, Breyer said, “A property owner did not cause the high market rent to which a tenant who chooses to stay in San Francisco might be exposed, nor cause the lower rent-controlled rate the tenant previously enjoyed.”

Read the original article in SFGate.

© Copyright 2007-2016 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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