This is a snippet from page 348 of the Special Topics sub-section in the 2011 Congressional Budget. It recaps the new FHA mortgage insurance guidelines for case numbers assigned after April 5, 2010. It also shows the FHA’s request to have authority over its mortgage insurance premiums from Congress. According to the highlighted text, the FHA wants make two changes, pending congressional approval.

Kevin Lafavers, 46, formerly of Indianapolis, Indiana, was sentenced to 33 months in federal prison, and Donald T. Brown, 67, Lebanon, Indiana, was sentenced to 27 months in prison. Both were sentenced following Lafavers’ guilty pleas to conspiracy to commit wire fraud and wire fraud and Brown’s guilty pleas to conspiracy to commit wire fraud and money laundering. These proceedings concerned the defendants’ participation in a multi-million dollar mortgage fraud scheme operated by Robert Penn in the Indianapolis, Indiana area.

As previously reported on Mortgage Fraud Blog, between November 2003 and August 2005, at least 136 fraudulent loans, totaling $16,613,850.00, were obtained by Robert Penn and his numerous business entities, assisted by Lafavers and Brown and others. The loans were obtained from Argent Mortgage Company, The MoneyStation, and People’s Choice Mortgage/Countrywide Home Loans.

The mortgage fraud schemes carried out by the defendants were accomplished as follows. Participants in the schemes, including Lafavers, located properties and arranged to purchase them at a fair market value generally by means of an option agreement or unrecorded land contract. Other participants in the scheme located straw purchasers who invested their good credit, but no money, to be the purchasers of these properties at a much higher price than that negotiated with the seller. Co-conspirators, including Brown, funded the down payments.

Lafavers was employed by Penn to locate properties for sale, negotiate the purchases of those properties, and enter into option agreements and land contracts with the sellers on behalf of Penn and his businesses. Lafavers generally received $1,000.00 per property located. Lafavers also attended some property closings on behalf of Penn’s companies and received checks that represented illegal proceeds. Lafavers’ sentence reflected his involvement in approximately 19 fraudulent loans. The total amount of those loans was $3,771,000.00.

Brown was primarily involved in funding down payments for investors on the fraudulent real estate transactions. Brown used a bank account, which was maintained by him and his son in the name of Brown Funding Inc. to fund the down payments. Brown obtained down payment checks and provided those checks to the title company, or to another co-conspirator, to be used for the closing. After the property closing, Brown received repayment of the checks from the fraudulent loan proceeds. In addition, Brown Funding Inc. received a fee of $1,000.00 – $3,000.00 for each down payment provided. The sole purpose of Brown Funding Inc. was to fund down payments for investors.

Brown borrowed some of the money for these down payments from individuals who he knew, but did not tell these people that they were in fact funding a fraudulent real estate scheme. Brown also added investors’ names to the Brown Funding Inc. bank account in order to convince the lenders that the investors had access to money which they did not have. Brown’s sentence reflected his involvement in approximately 113 fraudulent loans, including 86 Windsor Village loans. The total amount of those loans was $12,541,000.00.

According to Assistant U. S. Attorney Susan Heckard Dowd, who prosecuted the cases for the government, Circuit Judge David F. Hamilton also ordered Lafavers to serve three years on supervised release, and Brown to serve two years on supervised release following their incarceration. Judge Hamilton also ordered the defendants to pay restitution as follows: Lafavers – $ 1,475,851.63, Brown – $ 9,985,004.15.

The sentencing follows a lengthy investigation conducted by Special Agents of the Internal Revenue Service – Criminal Investigation Division, with the assistance of the Federal Bureau of Investigation. Judge Hamilton previously imposed sentence on six other individuals charged in the scheme as follows: Robert Penn, 84 months’ imprisonment; Mark Roth, 43 months’ imprisonment; Timothy Brown, 37 months’ imprisonment; Stephen Scott Brown, 37 months’ imprisonment; Jerry Jaquess, 30 months’ imprisonment; Tamara Scott, 24 months’ imprisonment.

PriceMyLoan (PML) has announced that they have completed their interface with the Federal Housing Administration’s (FHA) TOTAL Mortgage Scorecard loan approval platform. Lenders using PriceMyLoan’s automated underwriting and pricing engine now have direct access to FHA eligibility and credit scoring, providing a more efficient and cost-effective method for approving FHA loans.Read more

Loan-Score Decisioning Systems, an enterprise-class pricing and automated underwriting solutions provider, announced that Bay Equity, a growing wholesale and retail mortgage banker, has gone live with its integrated decsioning solution and customer-facing Web portals to ensure pricing and underwriting accuracy, quality control and superior customer service. The solution integrates seamlessly with Bay Equity’s back office LOS.Read more

Mortgage Contracting Services (MCS), a nationwide property preservation and inspection services provider to the financial services industry, announced that 2009 was a pivotal year in continuing operations to further assist its clients in rebuilding communities across America. These efforts varied from prominent executive changes to improvements in operations and vendor management procedures, as well as expanding its technology’s functionality and enhancing quality assurance and business security performance.Read more

Never has it been more important for underwriters and brokers to assess and understand the reliability of the loan data they rely upon. Such a large portion of underwriting is essentially about turning provided data into decisionable loan information. “Bad” or more likely “fuzzy” data going into underwriting increases the risk of generating poor loan information and funding riskier loans.Read more

► On Feb. 3rd the Mortgage News Daily posted a blog by "The Voice of Housing: Reverse Mortgages: Friend or Foe? Definitely Friend" … to get those of you who dismiss the reverse mortgage program as too risky for the FHA and taking advantage of the elderly, to get a grip and look at this wonderful program as a means to provide our growing (aging) population a better quality of life while maintaining our independence and self respect.Read more

Charlotte’s new-home industry continues to struggle because of several factors, including a weak economy, a poor job market, foreclosures, fears of declining home values and tight credit conditions, said Bill Miley, Metrostudy’s Charlotte market manager. “While it is likely that the market hit a bottom in terms of annualized starts and closings in the fourth quarter of 2009, and that single-family detached homes are in short supply in some Charlotte counties, demand for homes in 2010 will depend on job growth,” he said.Read more

Freddie Mac has released the results of its Primary Mortgage Market Survey (PMMS) in which the 30-year fixed-rate mortgage (FRM) averaged 5.01 percent with an average 0.7 point for the week ending Feb. 4, 2010, up from last week when it averaged 4.98 percent. Last year at this time, the 30-year FRM averaged 5.25 percent. The 15-year FRM this week averaged 4.40 percent with an average 0.7 point, up slightly from last week when it averaged 4.39 percent. A year ago at this time, the 15-year FRM averaged 4.92 percent.Read more

Allonhill, an independent third-party review firm specializing in mortgage due diligence and credit risk management, have announced the formal release of a complete securitization solution for issuers and underwriters of residential mortgage-backed securities (RMBS). The new approach to securitizations offers issuers a turn-key solution by meeting the requirements of all four major credit rating agencies for third party review firms.Read more