Archive for the ‘Mortgage Bloggers’ Category

Mary J. Fox Ianniello, 46, now of Los Angeles, California, pled guilty to her role in the bank fraud scheme involving Michael Cassadei and others where they used fraudulent loan applications, appraisals, settlement statements, and other false statements and documents to induce the former First Union National Bank of Delaware to finance the sale of Capital Region, New York residential properties to third parties in amounts well in excess of their actual value, with the participants in the scheme using the proceeds from the loans to purchase the properties in much lower amounts and retaining the bulk of the funds for themselves. Ianniello admitted in Court hat she engaged in various acts in furtherance of the scheme, including submitting false loan applications, executing false settlement statements and other documents, and assisting in the distribution of the loan proceeds.

As previously reported on Mortgage Fraud Blog, on February 17, 2010, Cassadei and appraiser Elmer J. “Joe” McIndoo pled guilty to involvement in the same scheme. All three defendants face sentences of up to thirty (30) years imprisonment, a fine of up to $1 million, or both, a period of up to five years supervised release to follow any term of imprisonment, and mandatory restitution and forfeiture of assets totaling approximately $135,148.45, subject to any apportionment by the Court. Based upon the estimates presented by the government in Court, Cassadei’s advisory sentencing guidelines range was approximately 41 to 51 months imprisonment, and the range for both Ianniello and McIndoo is up to approximately 27 to 33 months. Ianniello’ssentencing was set for July 13, 2010, at 1:00 p.m., before United States District Judge Thomas J. McAvoy in Albany, New York.

The announcement was made by Richard S. Hartunian, United States Attorney for the Northern District of New York, Rene Febles, Special Agent in Charge of the Office of Inspector General, U.S. Department of Housing and Urban Development in New York, John F. Pikus, Special Agent in Charge of the Albany Division of the Federal Bureau of Investigation, and Lt. John D. Durling of the New York State Police Special Investigations Unit.

The ongoing investigation in this matter is being conducted by the Office of the Inspector General of the United States Department of Housing and Urban Development, the Albany Division of the Federal Bureau of Investigation and the New York State Police Special Investigations Unit, with the assistance of the Internal Revenue Service, Criminal Investigation Division, the United States Postal Inspection Service, and the New York State Banking Commission. It is being prosecuted by the United States Attorney’s Office for the Northern District of New York.

An excellent path to a super deal on a home in Portland is the FHA Good Neighbor Next Door (GNND) purchase program for law enforcement, teachers and emergency personnel. The GNND program allows these buyers to get a home at half price if they live in it for at least three years as their principal residence. Right now there are four such properties on the website in Portland, including this one:

Our periodic recap of who got nabbed breaking mortgages laws!

• Disgraced realtor charged in murder plot (Toronto Sun)
• Massive Florida Mortgage Fraud Case Unfolding (UPI.com)
• Ala. woman pleads guilty in $580K bank and mortgage fraud (WHNT)
• Merced County law enforcement targets real estate fraud Merced Sun-Star
• Va. Businessman Pleads Guilty in $2.3 Million Mortgage Scheme (RealEstateRama)

Mortgage schemer nabbed in murder plot is a post from: Mortgage Insider

Michael Hicks, 41, Quincy, Massachusetts, was sentenced in federal court for a mortgage fraud scheme in which he recruited straw buyers to purchase two properties in Dorchester, Massachusetts which ultimately went into foreclosure, causing a loss to the lenders of more than $1 million.

Hicks was sentenced to 42 months’ imprisonment to be followed by 3 years of supervised release. An order of restitution was deferred for up to 90 days because one unit of the foreclosed properties is scheduled to be sold at auction in March. Hicks pled guilty to one count of wire fraud and one count of money laundering on November 24, 2009.

At the earlier change of plea hearing and according to court documents, the prosecutor told the Court that had the case proceeded to trial, the evidence would have established that in August 2007, Michael Lee purchased a three-family dwelling at 162 Quincy Street, Dorchester, Massachusetts, for $400,000. He immediately converted the dwelling to three condominiums, which allowed Lee to sell the units individually. At Lee’s request, Hicks, through a Pennsylvania associate, recruited a “straw buyer” to purchase all three units. The straw buyer provided his identifying information to the Pennsylvania associate who forwarded it to Hicks. Hicks used this information, such as his name, address, date of birth and Social Security number, to apply for mortgages for the purchase of the three units at 162 Quincy Street. In the loan applications, Hicks falsely represented that the straw buyer intended to make each unit his primary residence, that he was self-employed as a contractor, and that he had an annual income ranging, in the various applications, from $156,241 to more than $379,152, all in an effort to secure mortgages for $370,000 for each of the three units. Hicks also created a fictitious business for the straw buyer, falsely verified the straw buyer’s employment status for the mortgage applications and arranged for false income tax returns to be submitted with the applications.

Hicks also arranged for a straw buyer for another multi-family dwelling at 3-5 Sexton Court in Dorchester, Massachusetts which was owned by Lee’s in-laws. For recruiting both buyers, Lee paid Hicks a total of $180,500 a sum which Hicks turned over to the United States prior to sentencing and which the Court ordered Hicks to forfeit.

Michael Lee also is under Indictment, charged with five counts of wire fraud, in connection with the scheme. His case is pending.

United States Attorney Carmen M. Ortiz, Steven Ricciardi, Special Agent in Charge of the U.S. Secret Service and Susan Dukes, Special Agent in Charge of the Internal Revenue Service – Criminal Investigations, Boston Field Office made the announcement.

The case was investigated by the United States Secret Service and the Internal Revenue Service. It was prosecuted by Assistant U.S. Attorney Sandra S. Bower of Ortiz’s Economic Crimes Unit.

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.

Citigroup Inc., which is 27 percent owned by the Treasury Department, ended a three-quarter profit streak with a $7.6 billion loss on costs to begin exiting the government’s bailout program, reports Bloomberg.

Chief Executive Officer Vikram Pandit had to book an $8 billion pretax charge when he repaid $20 billion of bailout funds in December to avoid being left behind by rival banks that exited the Troubled Asset Relief Program. Taxpayers still own 7.7 billion Citigroup shares, and Pandit failed to restore the bank to profitability in his second full year in the top job.

“It’s been a tumultuous two years,” said William Fitzpatrick, a financial-industry analyst with Optique Capital Management in Racine, Wisconsin, which oversees about $850 million. “They’re probably done capital-raising, and investors now want some visibility on what the earnings power is.”

Citigroup may spend most of 2010 recovering from the bailout, grappling with more loan losses and pushing to sell or wind down unwanted businesses with more than $600 billion of assets, or a third of the bank’s total.

Read the story HERE.

MORE HEADLINES…

• $1 million-plus homes in Coto’s repo pipeline
• Homeowner wants to convert equity to emergency cash
• These homes just got foreclosure dates
• Economists react to Obama’s bank tax plan
• Obama wants tax on 50 big banks. Agree?
• Holiday foreclosure dip bigger this time
• Judge permits closure of mortgage-aid firms
• Refinancings “choked off” amid higher rates
• State bar closes mortgage-aid firms

Post from: Mortgage Insider

Jeffrey L. Levine, 68, Atlanta, Georgia, pleaded guilty in federal district court to causing materially false entries that overvalued bank assets to be made in the books, reports and statements of Omni National Bank. Such practices contributed to the over 500 foreclosures and an additional 500 non-performing loans, which resulted in at least $7 million in losses to the FDIC.

Levine was Executive Vice President, the second largest bank shareholder, and head of the Community Redevelopment Lending Department at Omni National Bank from 2000 through October 12, 2007. To keep non-performing loans current on paper, Levine and others at Omni failed to disclose many exceptions to their policies and procedures which resulted in Omni being exposed to a greater risk of loss. Practices that went unreported included: diversion of loan proceeds escrowed for rehab; excessive credit concentrations to a single borrower; funding additional loans for Omni foreclosures at ever-increasing amounts; and failing to create sufficient reserves for those questionable loans or to properly record them on Omni’s books and records.

Before takeover by the FDIC on March 27, 2009, Omni was headquartered in Atlanta, Georgia with branch offices in Birmingham, Alabama; Tampa, Florida; Chicago, Illinois; Fayetteville, North Carolina; Houston,Texas; Dallas,Texas and Philadelphia, Pennsylvania. Omni borrowed Fed Funds at low rates to make high-interest, short-term loans through Levine’s Community Redevelopment Department to borrowers with less than stellar credit and often no steady employment or formal education. Such Omni borrowers were supposed to purchase and rehab distressed properties for prompt resale or Section 8 rental in run-down, inner-city neighborhoods. Borrowers were expected to do most of the rehab themselves within a few months of the loan, and qualify for a loan to purchase a second property only when the first property was sold, or ready for sale. Omni, its regulators and investors relied on the expected increased value of the property after rehab to be we! ll in excess of the loan amount. The Redevelopment Department generated a significant portion of the Omni profits reported on its books and reports, although the facts now show that those profits were materially overstated.

Levine and others were well aware that none of the foreclosed properties could be sold on the open market for the amount of the outstanding Omni loans. A number of foreclosures were never disclosed on the Omni books as required, and some properties were resold up to five times at ever-increasing amounts. The actions of Levine and others at Omni resulted in an overvaluation of bank assets, which in turn misled Omni’s outside auditors, its Office of the Comptroller of the Currency regulator, its FDIC insurer, the Securities and Exchange Commission, and Omni shareholders. Such practices contributed to the over 500 foreclosures and an additional 500 non-performing loans, which resulted in at least $7 million in losses to the FDIC.

The evidence showed that the HUD Section 8 Program and its tenants also suffered, because many of the Omni funded distressed properties were not rehabbed, but rather, stood vacant or were inhabited by squatters for years, corrupting other Section 8 properties and the community. Even if rented, the frequent Omni foreclosures resulted in unstable housing for Section 8 tenants, as well as increased crimes resulting from the vacant properties and transient tenants. 

Levine was charged in a Criminal Information on December 22, 2009, with making, and causing others to make, materially false entries that overvalued bank assets, in the books, reports and statements of Omni National Bank, and pleaded guilty to this charge. He could receive a maximum sentence of 30 years in prison and a fine of up to $1,000,000. In determining the actual sentence, the Court will consider the United States Sentencing Guidelines, which are not binding but provide appropriate sentencing ranges for most offenders. Sentencing is scheduled for March 23, 2010, at 2 p.m., before United States District Judge Jack T. Camp.

Additional Omni-related prosecutions to date include:

●Mark Anthony McBride, 43, East Point, Georgia, as previously reported in Mortgage Fraud Blog, pleaded guilty on April 4, 2009, to fraudulently obtaining millions of dollars in mortgage loans from Omni and other lenders.  McBride is scheduled to be sentenced on March 2, 2010 at 2 p.m., before United States District Judge Jack T. Camp. McBride remains in jail while awaiting sentencing.

●Brent Merriell, 37, Atlanta, Georgia, as previously reported on Mortgage Fraud Blog, was indicted on December 15, 2009, with six counts of aggravated identity theft and false statements in connection with his request to the FDIC for permission to “short sale” 14 properties for $2.2 million less than the Omni funded outstanding loans. Merriell was facing foreclosure on each of the properties when the charges allege that he submitted “short sale” requests supported by forged and counterfeited sales contracts and loan commitments in the names of four people whose identities had been stolen. Merriell has pleaded not guilty to the charges and remains in jail awaiting trial. No trial date has been set.

●Delroy Oliver Davy, 37, Lithonia, Georgia, as previously reported on Mortgage Fraud Blog, was charged in a Criminal Information on December 18, 2009, with bank fraud and conspiracy to commit bank, mail, and wire fraud in connection with a scheme to fraudulently obtain millions of dollars of mortgage loans from Omni and other lenders. At his initial appearance Davy waived indictment and announced his intention to plead guilty to those charges in January 2010. The plea hearing will be before United States District Judge Jack T. Camp. The hearing date has not yet been set.

These cases are being investigated by Special Agents of a Mortgage Fraud Task Force for Omni-related cases, which includes FDIC-OIG, HUD-OIG, the Postal Inspection Service, the SIGTARP, and the FBI. The Task Force is continuing a number of Omni-related investigations, including inquiries related to Omni’s application for Troubled Asset Relief Program (TARP) funds.

Acting United States Attorney Sally Quillian Yates said, “This case demonstrates the damage that can result when senior bank officials ignore rules and regulations designed to protect a bank by identifying problem loans. Bank executives and those in critical and knowledgeable positions will be held accountable when they deliberately circumvent the systems designed to reveal the true condition of their bank to its regulators, insurers and investors.”

Federal Deposit Insurance Corporation (FDIC) Inspector General Jon T. Rymer said, “The FDIC is tasked with liquidating the assets of failed banks such as Omni. Therefore, the FDIC OIG aggressively investigates and prosecutes fraudulent activities that undermine the integrity of the financial services system and impede the FDIC’s efforts to maximize recoveries. We are pleased to have partnered with our law enforcement colleagues in bringing about this successful action.”

Martin D. Phanco, Postal Inspector in Charge of the Atlanta Division said, “This investigation uncovered a fraudulent scheme which benefited the defendant and other individuals. The U.S. Postal Inspection Service mission is to protect the U.S. mail system from criminal misuse like that demonstrated in this case.”

Special Inspector General for the Troubled Asset Relief Program (SIGTARP) Neil Barofsky said, “There were many reasons for our financial crisis, including fraudulent schemes like the egregious conduct admitted today. SIGTARP is committed to working with its law enforcement partners to root out these crimes whenever they can be discovered.“

Department of Housing and Urban Development (HUD) Inspector General Kenneth M. Donohue said, “Families receiving Section 8 rental subsidies should expect safe, decent and sanitary housing. In this case, poor stewardship and management of the properties has negatively affected the neighborhoods and the entire community.”

Assistant United States Attorneys Gale McKenzie and Christopher Bly are prosecuting the case.

What is a Section 184 HUD loan?

The Section 184 Indian Home Loan Guarantee Program is a mortgage product for American Indian and Alaska Native families, tribes Alaska Villages or tribally designated housing entities. Congress established this program in 1992 to facilitate homeownership in Native American communities.

Benefits to Homebuyer

2.25% down payment requirement for loans over $50,000;
1.25% downpayment requirement for loan under $50,000;
No monthly mortgage insurance
A one-time, 1% loan guarantee fee that can be added to your financed loan

Who is Eligible for a Section 184 Loan?

American Indians or Alaska Natives who are enrolled members of a federally recognized tribe
A member of an Alaska Village and Regional Corporation established pursuant to the Alaska Native Claims Settlement Act
An Indian tribe
A Tribally Designated Housing Entity (TDHE)
An Indian Housing Authority (IHA)

How can I find out if I am eligible?

Simply complete the “Am I Eligible Form“,  and we will let you know!!

Jackie Toppin Mortgage Banker Mortgage License #100110 Preferred Mortgage Branch of Residential Mortgage Mortgage License #100083 3111 “C” Street, Suite 325 Anchorage, AK, 99503	Work: 907-261-7655 Fax: 907-261-7543 jackie@jackietoppin.com http://www.jackietoppin.com
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The California State Bar said today it shut down the loan modification businesses of two men for allegedly lying to consumers about being supervised by attorneys. The bar, which acted with the Orange County Superior Court in this case, has worked with other state and local officials to crack down on companies promising homeowner aid but not delivering it.

The bar alleges Curtis Melone of Huntington Beach and Christopher Fox of Redondo Beach promised to help homeowners facing foreclosure keep their properties but did nothing.

An attorney for the men was not immediately available for comment.

They can argue their case at a hearing tomorrow at 1:30 p.m. in Department 31 of the Orange County Superior Court. Their operations were halted on Dec. 21.

The duo operated under the names Guardian Credit Services, Green Credit Solutions, Green Credit Services, Erickson Law Group, Green Credit Law and PacWest Funding. A Web search indicates the companies were based primarily in Foothill Ranch and Irvine.

Here’s more from the bar:

After working with the California Department of Justice, the California Department of Real Estate and the Orange County District Attorney’s Office, State Bar investigators and prosecutors seized client files, terminated phone and computer services and posted notices to clients and the public about the shutdown. All officers, principals and employees of the businesses were ordered to cease and desist from holding themselves out as attorneys.
Since last March, the State Bar has aggressively sought to stop loan modification fraud by lawyers and to shut down the offices of people offering foreclosure services who represent themselves as lawyers. Thirteen attorneys have resigned in the wake of investigations by the State Bar Task Force on Loan Modification and six businesses have been closed.
Section 6126.3 of the Business and Professions Code gives authority to a superior court, on its own motion or upon application of the State Bar, to assume jurisdiction of the business of a person who is not a lawyer. Assumption of a law practice by a Superior Court is based upon the court finding that a person has engaged in the practice of law without being an active member of the State Bar or otherwise authorized to practice in California and that the interest of a client or interested person or entity will be prejudiced if the court does not assume jurisdiction.

MORE LOAN MOD STORIES…

Post from: Mortgage Insider