California Real Estate Fraud Report

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Archive for July, 2008

It’s about Time: Federal Grand Jury Probing Countrywide, IndyMac, New Century

July 24th, 2008 at 9:56pm

The three largest subprime mortgage lenders are finally under the microscope of a federal grand jury in Los Angeles, which is investigating whether fraud and other white-collar crimes were a part of the mortgage meltdown.  
Countrywide Financial Corp., IndyMac Federal Bank and New Century Financial Corp. have all received subpoenas from the grand jury requesting emails, phone and bank records.

Countrywide’s Angeles Mozilo is under scrutiny for giving mortgage breaks and favors to members of Congress and other influential friends, such as Richard Aldrich, an associate justice of the California Court of Appeal.

Read the Full Article in the Los Angeles Times.

State Suspends Hurst Financial’s Securities Permit

July 22nd, 2008 at 6:42pm

The California Department of Corporations has suspended the permit for Atascadero-based Hurst Financial’s to collect and sell securities to California investors following concerns that Hurst’s business practices were “tending to work a fraud upon the purchaser.”

Hard money lenders are experiencing an increase in having their permits revoked: Hurst is the third hard money lender in its county to have received a suspension notice in the past 3 months.

Read all the accusations by the Department of Corporations against Hurst in the Full Article on the San Luis Obispo Tribune. 

Is the FDIC a Predatory Lender Too?

July 21st, 2008 at 9:20am

The Wall Street Journal is reporting that the Federal Insurance Deposit Corporation (FDIC), rather than being a white knight chartered to protect the assets of depositers, may have engaged in the same risky subprime lending practices that have led to the real estate economic crisis in the U.S.

In the early 2000s, the FDIC was supervising (= running) the operations of Illinois-based Superior Bank, FSB. During its oversight period, about $550 million worth of subprime loans were written, many of which have subsequently defaulted. Beal Bank, SSB bought a portfolio of those loans and has since then filed suit, claiming that many of the loans were improperly funded.

The FDIC’s most recent take over is Pasadena-based IndyMac.

Read the Full Article in the Mortgage News Daily.

High Bail for Fraud Prompts Murder-for-Higher

July 19th, 2008 at 12:00pm

Prosecuting can be hazardous to one’s health.

So found out Ventura County Senior Deputy District Attorney Marc Leventhal when he argued successfully to raise the bail of white-collar criminal Anthony Navarro Spencer to $1 million after Spencer’s arrest for a real-estate scam. Spencer was convicted of defrauding people out of $2 million through his Santa Paula-based business and was sentenced sentenced to state prison for 14 years and eight months in 2005.

Spencer’s wife Sandra was arrested and is now headed for trial after several gang members testified that she hired them to rob Ventura-area banks to raise money for her husband’s bail and to murder Leventhal.

For more on this made-for-television story, read the Full Article in the Ventura County Star by Raul Hernandez.

Good News for Homeowners in Southern California

July 17th, 2008 at 4:58pm

The FBI has announced that a new, multi-agency task force has been formed in Los Angeles to deal with the growing problem of mortgage fraud. The name of the task force is SCAM (Southern CAlifornia Mortgage)  and it will focus on both fraud-for-profit and fraud-for-housing.

Participating agencies include the United States Attorney’s Office- Central District of California; IRS- Criminal Investigation; the U.S. Postal Inspection Service; the Small Business Administration- Office of Inspector General; the Social Security Administration- Office of Inspector General; the United States Attorney’s Office; the U.S. Trustee Program; the U.S. Department of Housing and Urban Development- Office of General Inspector; the Department of Veterans Affairs; and the Federal Deposit Insurance Corporation- Office of Inspector General.

If you have information you would like to report regarding illegal mortgage or loan schemes, contact the SCAM Task Force at their tollfree tip line at (866) 959-SCAM (7226). Online complaints may be sent to

Read the Full Article from The Thousand Oaks Acorn.

IndyMac Under the FBI’s Microscope

July 17th, 2008 at 4:48pm

In response to reports from company insiders (see article below) and borrowers who lost their homes, the FBI has opened in investigation into IndyMac, the California mortgage lender that was put under government control last week.

Presumably because IndyMac is headquartered in Pasadena, it is the FBI’s Los Angeles office that is spearheading the investigation. The Bureau is looking into allegations that the bank made loans to borrowers who were unqualified by altering the loan documents.

Read the Full Article on Bloomberg.

IndyMac Created Its Own Demise

July 17th, 2008 at 4:42pm

A new report from the Center for Responsible Lending, published June 30, reveals that lender IndyMac brought on its own collapse by throwing historical underwriting standards out in favor of increasing the volume of closed loans.

Interviews with former employees and reviews of current lawsuits point to a company that, rather than being a victim of dishonest borrowers and mortgage brokers, numbers meant everthing. And when the numbers didn’t work, there was always someone higher up the food chain ready to overrule the underwriters’ declining of a loan.

Mike Hudson, a CRL senior investigator and the study’s primary author states that

“IndyMac’s current problems appear to be largely the legacy of top-down pressures that valued short-term growth over making responsible lending decisions. These are the kinds of actions that have produced record-breaking foreclosures and weakened our entire economy.  Lenders engaged in reckless lending and, unfortunately, the entire country is paying for their actions now.”

Read the Full Article on the Center for Responsible Lending website.

Ca. State Assembly Increases Fines for Unlicensed R.E. Agents

July 15th, 2008 at 5:50pm

By a 67-1 vote, the California State Assembly passed a bill by State Senator Jack Scott that would double the penalty for unlicensed “real estate agents” from $10,000 to $20,000.  

According to Scott,

“Hundreds of California individuals and corporations have been caught illegally engaging in unlicensed real estate activities within the past 10 years. This is indicative of thousands who have yet to be discovered and reported. . . . The problem has been fostered by ineffective penalties.”

Read the Full Article in the Glendale News Press.

Fed Wakes Up about Subprime Loans . . . Finally

July 15th, 2008 at 5:42pm

Like the last horse out of the gate at the race track or Rip van Winkle waking up after 100 years, the Fed finally shook off its slumber and announced new rules to curb the nonsensical lending practices that have cost thousands their homes and shaken the U.S. economy to its core.

According to Fed Chairman Ben Bernanke,

“The proposed final rules are intended to protect consumers from unfair or deceptive acts and practices in mortgage lending, while keeping credit available to qualified borrowers and supporting sustainable homeownership. Besides offering broader protection for consumers, a uniform set of rules will level the playing field for lenders and increase competition in the mortgage market, to the ultimate benefit of borrowers.”

While approving of the Fed’s better-late-than-never action, consumer advocates stressed that much more needs to be done to protect consumers and that significant loopholes for lender abuse still exist.

Read the Full Article in

Gov. Schwarzenegger Signs Anti-Real Estate Fraud Bill

July 14th, 2008 at 9:26am

In the past 3 years alone, there have been over 300 cases of real estate fraud in Riverside County alone. Last week, Governor Schwarzenegger signed SB 1287, a bill by State Senator Dennis Hollingsworth (R-Murrieta) that allos Riverside County to send notices to property owners of any changes to their deeds within 30 days.  

Hollingsworth wrote the bill at the request of the Riverside County district attorney’s office.

Read the Full Article in The Press Enterprise.

© 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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