California Real Estate Fraud Report

You have just entered the #1 private-sector resource on the Internet for real estate fraud. In doing so, you have voluntarily left the dimension of the conventional real estate world and crossed over to the Dark Side, the realm where greed, dishonesty and evil are the order of the day. Sign up for a free subscription to this comprehensive news resource and receive weekly, timely news reports about real estate fraud, mortgage fraud, short sale fraud, REO fraud, title fraud, loan fraud, appraisal fraud, affinity fraud, loan modification scams, securities fraud and elder financial fraud.

Archive for the 'Loan Fraud' Category

Industry Expert Says Mortgage Fraud Characterized by Delayed Discovery

October 6th, 2017 at 8:10am

Bridget Berg, a principal in Industry Solutions and Property Intelligence for CoreLogic, says that mortgage fraud is different than other forms of fraud and is more prevalent than most lender think.

In a 3-part interview in Mortgage News Daily, Ms. Berg outlines five reasons lenders should be wary.

 

 

Navy FCU Hit by Home Equity Loan Fraud (HELOC Fraud)

October 5th, 2017 at 8:16am

Atlanta business owner Thomas Scott Brown, 47 was sentenced to three years in prison last week for operating a home equity loan fraud (HELOC fraud) scheme that cost losses of almost $3 million for the $82 billion Navy Federal Credit Union.

In addition to his prison sentence, U. S. District Judge Claude M. Hilton also ordered Brown to pay $2.7 million in restitution and to serve five years of supervised released. Brown pleaded guilty in May to one felony count of bank fraud and one felony count to making a false statement to a financial institution.

Brown’s scheme – which involved over 50 properties – centered on him purchasing properties with his own money and putting them in the name of straw buyers. Ownership was transferred to the straw buyers, who were then directed to apply for HELOC loans and to pay those proceeds to him. For his efforts, he earned profits of $1.4 million.

Read the original article in Credit Union Times.

 

San Diego Mansions Used in $50 Million Mortgage Fraud Scheme

September 21st, 2017 at 10:05am

A real estate broker and a senior executive at a real estate investment company have been indicted wire and mail fraud conspiracy, wire fraud, mail fraud, aggravated identity theft and criminal forfeiture in connection with a multi-million dollar mortgage fraud scheme.

According to a press release by the U.S. Attorney’s Office for the Southern District of California, Peter Cash Doye, a senior executive at the real estate investment firm known both as Conix and Variant Commercial Real Estate, and Raquel Reid, a licensed real estate broker and notary public, allegedly conned lenders into providing loans for four multi-million dollar mansions in La Jolla and Del Mar.

Court documents indicated that Doye and Reid used numerous forged documents to trick the lenders into believing the loans had been paid off in order to obtain new loans against the properties.

Co-defendants Courtland Gettel, and an Arizona attorney, Jeffrey Greenberg, previously pleaded guilty to their roles in the scheme.

The mansions had been represented to the lenders as rental and investment properties but were lived in by Doye and Gettel and their families.

Read the original article in HousingWire.

Nevada Men Indicted in Fraudulent Short Sale

August 18th, 2017 at 9:55am

Acting U.S. Attorney Steve Myhre for the District of Nevada announced that two men have been indicted in connection with the sale of one man’s property to a family member of his friend (short sale fraud).

The indictment alleges that Dustin Lewis (Henderson, NV) and Brian Sorensen (Las Vegas, NV) conspired to defraud OneWest Bank when Lewis submitted a fraudulent short sale application to the bank to sell the home to a relative of Sorensen. The plan was to prevent a foreclosure so that Lewis could keep possession of the 5,331-square foot, five-bedroom home in Henderson. It is further alleged that Lewis did not disclose to the bank that he and Sorensen had an agreement that Lewis would remain on the property and that later it would be sold back to him.

The case was investigated by the Federal Bureau of Investigation (FBI), the Internal Revenue Service-Criminal Investigation (IRS-CID) and the U.S. Department of Interior-Office of the Inspector General. Assistant U.S. Attorney Patrick Burns is the prosecutor.

Read the original article in Mortgage Professional America.

Wells Fargo Pays Out Again, This Time For Fraudulent Anti-Veteran Lending Practices

August 18th, 2017 at 9:08am

Banking giant Wells Fargo must pay over $100 million to settle allegations of fraud that included overcharging military veterans using the VA Home Loan to refinance their mortgages. The victims were not only veterans but U.S. taxpayers.

Brokers Victor Bibby and Brian Donnelly were the two whistleblowers in the lawsuit who sought to recover the losses that the federal government suffered when the loans it guaranteed loans defaulted. The two men sued Wells Fargo and seven other lenders to recoup losses; notably the federal government declined to join the qui tam lawsuit, which was filed under the federal False Claims Act, aka Lincoln’s Law (31 USC §§ 3729-3733.

The other banks are Bank of America Corp (BAC.N), Citigroup Inc (C.N), First Tennessee, JPMorgan Chase & Co (JPM.N), PNC Financial Services Group Inc (PNC.N) and SunTrust Banks Inc (STI.N). The total pay-out is $161.7 million.

Depending on whether the federal government offers to assist, the private person can receive a portion of the recovered damages, from 10% to 30%. If the government intervenes, the person bringing the lawsuit, the “relator”, receives between 15%-25%. If the government does not, the relator receives between 25%-30%. If the government intervenes and most of the information is already public, the relator is only entitled to 10%.

Read the full article, including Wells Fargo’s boilerplate “apology,” in DisabledVeterans.org

The Consumer Financial Protection Bureau (CFPB) Must Be Saved

July 11th, 2017 at 8:37am

The Consumer Financial Protection Bureau (CFPB), created as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act, is one of the few federal agencies that exists to protect We ThePeople against predatory, misleading and fraudulent practices financial institutions have used to steal from us.

One of the CFPB‘s most recent accomplishments was to fine Wells Fargo $185 million and force it to return fees it had unlawfully charged its customers. This was in conjunction with a lawsuit filed against Wells Fargo by the Los Angeles City Attorney.

The current Administration and Republicans in Congress are openly trying to shut down the CFPB and go back to the “good old days” of no regulation of the financial sector.

Read this interesting article called “Why We Need to Save the Consumer Financial Protection Bureau.”

Sacramento Loan Processor Sentenced for Participation in Widespread Mortgage Fraud

July 7th, 2017 at 11:08am

Loan processor Sergey Shchirskiy, 41, has been sentenced to seven years and 10 months in prison for his role in a mortgage fraud conspiracy that caused losses of $2.7 million to lenders.

Shchirskiy was the target of a joint investigation by the FBI and IRS for white-collar crimes that began as early as 2007. According to U.S. Deputy District Attorney Phillip A. Talbert, Shchirskiy’s role was to recruit straw buyers and to prepare fraudulent loan applications for the straw buyers. He and his 15 co-conspirators took out equity lines of credit and all the properties were foreclosed.

U.S. District Judge Troy Nunley imposed sentence.

Read the press release from the U.S. Attorney for the Eastern District of California.

 

Prospect Mortgage to Pay $4.157 million in Penalties to Resolve Fraud Allegations

July 7th, 2017 at 10:55am

Prospect Mortgage Company is set to pay a penalty of $4.157 million to resolve claims by several attorneys general that it committed mortgage fraud while participating in the government’s Direct Lender Endorsement Program.

According to federal prosecutors, Prospect Mortgage defrauded the government during and after the run-up to the housing crisis through its participation in the Direct Endorsement program, which the feds claim cost taxpayers millions.

The program is administered by the Federal Housing Administration and the Department of Housing and Urban Development. As a DE lender, Prospect was able to originate, underwrite and endorse mortgages for FHA insurance. But the U.S. Justice Department alleged that Prospect falsely certified that the FHA-insured loans it had originated complied with critical quality-control requirements, when they did not.

Prospect Mortgage sold its operating assets to HomeBridge Financial in February 2017.

Read the original article in Mortgage Professional America.

Sacramento Man Sentenced in Mortgage Fraud Csae

June 16th, 2017 at 8:43am

Sergey Shchirskiy, 41, a loan processor in Sacramento, has been sentenced to seven years and 10 months in prison for his role in two mortgage fraud schemes and one tax fraud scheme, according to the U.S. Attorney for the Eastern District of California.

Between April and November 2007, Shchirskiy and his co-conspirators purchased properties with straw buyers and took out home equity lines of credit using fraudulent documents and statements that Shchirskiy created. He also recruited the straw buyers and the loan applications he submitted contained untrue information about the buyers’ income, assets and intent to occupy the houses.

Read the original article in the Central Valley Business Times.

Former Employees Sue American Financial Corp., Claim Retaliatory Firing for Exposing Fraud

June 16th, 2017 at 8:08am

Four former employees of American Financial Corp. have filed a whistleblower lawsuit, accusing the company of firing them after they attempted to expose AFC’s alleged mortgage fraud.

The plaintiffs are Chris Springer, Steffen Mehnert and Sandra Reynolds, who were mortgage consultants, and Stacia Springer, a pre-qualification specialist. They say they were fired after they reported their concerns to management in March 2017.

The lawsuit alleges that the company intentionally falsified loan information, faked signatures, withheld negative financial information about an applicant and faked compliance with key deadlines.

American Financing issued a statement to The Denver Post, saying it will defend itself “vigorously against this meritless lawsuit and the false allegations …”

JP Morgan Chase, Wells Fargo, US Bank, Flagstar Bank and PennyMac, were the banks allegedly defraud according to the lawsuit, as well as the Colorado Housing and Finance Authority.

Read the original article in The Denver Post.

 

© Copyright 2007-2017 Monique Bryher

Legal Disclaimer.

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.

ALL RIGHTS RESERVED. No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopying, recording or by any information storage and retrieval system, without written permission from the author, except for the inclusion of BRIEF QUOTATIONS in a review.

BLOG POWERED BY SHARP BIZ IMAGE

Copy Protected by Chetan's WP-Copyprotect.