California Real Estate Fraud Report

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Archive for the 'Predatory Lending' Category

Nationstar, Celink Sued for Fraud in Reverse Mortgage Inspections

June 2nd, 2016 at 12:26pm

Champion Mortgage Co., also known as Nationstar Mortgage, LLC, is the target of a class-action lawsuit accusing it of ordering excessive home inspections for elderly homeowners.

While home inspections are allowed as much as every 30 days, the plaintiffs’ attorneys allege that Champion Mortgage used automated software (blame the computer) to order its subcontractor, Celink, to perform home inspections several times a week and even more than once in the same day. The homeowner is charged for these inspections. Celink, also known as Compu-Link Corp., is based in Michigan and is also named as a defendant.

The lawsuit was filed in the U.S. District Court for the District of Columbia by Tycko & Zavareei, the National Consumer Law Center and AARP‘s Legal Counsel for the Elderly.

Read the original article in the Chicago Tribune.


AG Eric Holder considers bankers may have responsibility in mortgage crisis

February 18th, 2015 at 8:21am

Outgoing U.S. Attorney General Eric Holder – known for his opposition to prosecuting bankers for their prominent roles in the mortgage crisis – is finally giving lip service to the notion of personal responsibility. He’s given his AGs only 90 days to determine whether to charge individuals whose firms sold toxic mortgage-backed securities to investors.

Holder has been resistant to the point of indifferent to protecting consumers, who have suffered deeply from predatory banking practices. I’m not holding my breath. My bet is that as soon as he leaves office, he goes to work either for a mega-bank or a law firm that represents banks.

California has yet to indict any bankers, whether it is from the U.S. Attorneys’ offices or the office of California Attorney General Kamala Harris.

Read the full article in DSNews.

CFPB files enforcement actions against three lenders for misleading the public

February 12th, 2015 at 2:17pm

The Consumer Financial Protection Bureau (CFPB) has filed enforcement actions against Flagship Financial Group, American Preferred Lending and All Financial Services, alleging they mislead consumers by implying their products were government approved.

The first two companies have settled but All Financial Services is fighting the charges.

Read the full article in Reuters.


Ocwen business partner HLSS subject of class action

February 12th, 2015 at 8:37am

The Los Angeles law firm of Glancy Binkow & Goldberg LLP notified HLSS shareholders  that it has a filed a class action lawsuit against Home Loan Servicing Solutions (HLSS), a firm with strong business ties to Ocwen. The lawsuit alleges that HLSS failed to disclose to is its investors the extent that its business depended on Ocwen, as well as the now well-publicized extent of Ocwen‘s problems.

In late 2014, Ocwen paid $150 million to settle allegations by the office of Benjamin Lawsky, New York’s Superintendent of Financial Services. Ocwen‘s CEO, William Erbey, resigned – not only from Ocwen but also as the non-executive chairman on the HLSS board.

Read the original article in DSNews.

CFPB fines NewDay Financial for kickbacks, deceptive mortgage advertising

February 11th, 2015 at 8:43am

The following is a press release by the Consumer Financial Protection Bureau (CFPB):

Today, the Consumer Financial Protection Bureau (CFPB) took action against NewDay Financial, LLC for deceptive mortgage advertising and kickbacks. NewDay deceived consumers about a veterans’ organization’s endorsement of NewDay products and participated in a scheme to pay kickbacks for customer referrals. NewDay will pay a $2 million civil money penalty for its actions.

NewDay profited from the trust that veterans place in their veteran service organization,” said CFPB Director Richard Cordray. “Veterans, and any consumers getting a mortgage, deserve honest information about lender endorsements.”

NewDay is a Maryland-based, nonbank mortgage lender owned by Chrysalis Holdings, a private company. Its primary business is originating refinance mortgage loans guaranteed by the Veterans Benefits Administration. These loans are available exclusively to servicemembers, veterans, and their surviving spouses. NewDay mainly advertises its mortgage products to consumers through direct mail campaigns. Between July 2011 and July 2014, NewDay sent consumers over 50 million mortgage solicitations by postal and electronic mail.

Beginning in 2010, NewDay entered into a marketing arrangement with a veterans’ organization. The arrangement was facilitated by a broker company. As part of that agreement, NewDay paid “lead generation fees” to the veterans’ organization and the broker company. NewDay also paid a $15,000 monthly licensing fee to the broker company. As part of this arrangement, NewDay was named the “exclusive lender” of the veterans’ organization.

In targeted marketing to members of this veterans’ organization, NewDay stated that this title was based on its high standards for service and excellent value. At no point did NewDay disclose to consumers that the veterans’ organization had a financial relationship with NewDay. Under the circumstances, this failure to disclose the relationship constituted a deceptive act or practice, which violates the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act).

The direct mail that NewDay sent contained a recommendation from the veterans’ organization to its members. The recommendation urged members to use NewDay’s products, which, together with other telephone and web-based referral activities, constituted a referral of settlement service business. NewDay’s payments to the veterans’ organization and the coordinating company for these referral activities constituted illegal kickbacks in violation of the Real Estate Settlement Procedures Act (RESPA).

Enforcement Action

Under the Dodd-Frank Act, the CFPB has the authority to take action against institutions violating federal consumer financial laws, including by engaging in unfair, deceptive, or abusive acts or practices. NewDay is ending its relationship with the veterans’ organization and the broker company. The CFPB’s order requires that NewDay:

  • End deceptive marketing: NewDay may not engage in deceptive marketing related to mortgage credit products and may not assist others in making misrepresentations.
  • Cease deceptive endorsement relationships: NewDay may not enter into any business relationship that would involve third-party endorsements inconsistent with the Federal Trade Commission’s (FTC) guidance on endorsements and any subsequent guidance issued by the FTC or the Bureau concerning endorsements.
  • End kickbacks: The consent order requires that NewDay fully comply with the law and make no payments for referrals.
  • Pay $2 million in civil penalties: For its conduct, NewDay will make a $2 million penalty payment to the CFPB’s Civil Penalty Fund.

Click to read the Consent Order.

I’m wondering why the “Broker” was not named in the press release or Consent Order and there is no mention as to whether the Broker was also punished or penalized for its participation in this business arrangement.

Is Eric Holder a Traitor to the People and a Shill to the Banks?

November 18th, 2014 at 9:49am

If you have time – maybe a long coffee break – you may want to read this fascinating article in Rolling Stone about the settlement between Attorney General Eric Holder, “his” Department of Justice and how time-after-time he has allowed banks that mislabeled and sold mortgage-backed securities to get off-the-hook by paying monetary fines.

This article shows that the upstart Occupy Movement has had some effect on President Obama, but still not enough to get meaningful justice for homeowners and institutional investors, both of which were financially beat-up by the banks. It reveals that the primary banker who is the focus of the article, Jamie Dimon of Chase Bank and much of upper-management, allegedly knew Chase was packaging subprime securities as “Alt-A” (a higher-quality category) and getting rid of them before the borrowers defaulted, saving Chase billions but again causing significant losses to the credit unions and small financial institutions that purchased them, not knowing these shoddy mortgages would blow-up in their faces.

Besides the research performed by Rolling Stone writer Matt Taibbi, much of the information comes from his interview with former Chase transaction manager Alayne Fleischman, an attorney by profession. Ms. Fleischman tells the actual story of how Jamie Dimon and Chase Bank wiggled out what she termed “criminal fraud” and how almost every government agency that should have investigated this and other mega-bank misdeeds (think: SEC) either dropped the ball, aided in the cover-up or dragged their feet to allow the statute of limitations to expire on prosecutions.  A reluctant whistleblower, Ms. Fleischman is the model for the ethical behavior so devoid in most of the banks and the government agencies charged with protecting Americans.

How much do you want to bet that Eric Holder is going to end up working for his banking friends?

Santa Paula Man Indicted in Mortgage Fraud That Allegedly Targeted Latino Community

September 27th, 2013 at 3:54am

An investigation into a mortgage fraud conspiracy that is alleged to have targeted both Spanish-speaking persons (affinity fraud, ethnic fraud) and lenders has resulted in the arrest of eight people by the FBI, seven of whom are Ventura County residents.

Just arrested is Cesar Rodriguez Azamar, 36, of Santa Paula. The scheme was led allegedly by Jose “Joe” Garcia, 36, of Camarillo via Oxnard-based New Concepts Home Loans. Jose Garcia is a broker who also owned Century 21 Premier Realty, which still has a license to operate by the Bureau of Real Estate.

Besides Cesar Azamar and Joe Garcia, the others indicted are Lucy Ann Garcia, 46, (wife of Joe Garcia), Fernando Murguia, 47, of Oxnard; Jose Garcia’s sister, Sesilia Garcia, 30, of Oxnard; Lili Ayala Hernandez, 41, of Oxnard; Gregg Scott Quinn, 40, of Camarillo; and Lidubina “Lido” Mendoza Perez, 41, of Moreno Valley, who worked at New Concepts Home Loans office in  Bakersfield.

According to the indictment, New Concepts employees allegedly prepared mortgage applications that contained false information about borrowers’ income, employment and assets.

Ventura County Chief Deputy District Attorney Miles Weiss said fraudulent loans were written “for more than 100 homes, a conservative safe number,” and losses to the lender exceeded $11 million.

FBI Assistant Director in Charge Bill L. Lewis said that Joe Garcia “allegedly directed his workforce, including unlicensed individuals acting as Realtors, to peddle the dream of home ownership in the poorest neighborhoods of Oxnard, where they easily found people eager to buy.” If this is true, it could be concluded that the defendants used non-licensees because they knew that their victims would be unaware that a license is required to sell real estate in California.

The victim-banks were Washington Mutual, Wells Fargo, Countrywide, IndyMac, SunTrust, World Savings Bank and JPMorgan Chase.

Read the original article in the Santa Paula Times.

Lawsuit Filed against Lenders for Fraud in Land Purchase

April 26th, 2012 at 4:58pm

A man has filed a civil lawsuit against three lenders and an individual alleging fraud regarding the prepayment penalty clause in the real estate contract used to purchase a tract of land. The land is located in Pacific Beach in San Diego and was purchased for $1.6 million in 2007.

The lawsuit was filed by the San Diego law firm of Morris and Associates and is entitled Barton v. Michael Pohl (an individual), Rancho Santa Fe Mortgage, First California Bank and JP Morgan Chase Bank.

Specifically, the plaintiff Barton is alleging that when he inquired as to the prepayment penalty for the loan, he was told it was “about” 1% but that the contract also contained a complex calculation with respect to the prepayment penalty.  When Barton was forced to sell the property to pay a death tax liability when his mother passed away in 2011, he was presented a notice that the prepayment penalty was $449,607.85.

The case number for this lawsuit is 37-2012-00094774-CU-MC-CTL, and is being assigned to Judge Judith F. Hayes in the Superior Court of California, County of San Diego, Central Division.

Read the original article in SF

Thousand Oaks couple get prison for mortgage fraud

December 18th, 2009 at 10:20am

Sonya Tucker, aka Cheri Tucker, and Terrance Tucker, aka Terry Tucker, are each going to federal prison for approximately 10 years.

The husband and wife team of mortgage brokers and real estate agents pleaded guilty to bank fraud after being prosecuted for processing fraudulent loan applications. They were originally charged with scamming real estate investors, many elderly, after promising them 12 percent rates of returns.

The Tuckers were prosecuted by Assistant U.S. District Attorney Mark Aveis, who said “There are plenty of federal prison beds for criminals like the Tuckers”.

Read the Full Article in the Thousand Oaks Acorn.

Panel Discusses Trends in Real Estate Fraud

June 28th, 2009 at 10:22pm

Many of the issues that are reported in the California Real Estate Fraud report – elder financial fraud, rental fraud, and the now tradition (sic) mortgage fraud, loan fraud and real estate fraud that became so common they qualified as business-as-usual during the subprime mania – were topics of discussion at a panel of real estate experts held in downtown Antioch last week.

Billed as the Contra Costa County Real Estate Fraud Summit, the summit included Terrence Christopher Patterson, of the state Department of Real Estate, an agent from the U.S. Secret Service who discussed identity theft resulting from loan applications being mined for personal data, and other local professionals.

Read the Full Article in the San Jose Mercury News.

© Copyright 2007-2018 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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