Indianapolis Cop Gets 57 Months In Mortgage Scam

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An Indianapolis cop was sentenced in an Indiana Federal Court Wednesday to 57 months in prison for his role in a mortgage fraud scheme. This conviction, as well as 57 others, is a result of a probe by a little-known federal task force set up in 2002 to look into Indianapolis' long rash of real estate scams.

To read more, see Cop gets 57 months for fraud, as reported at IndyStar.com (The Indianapolis Star).

Former Indianapolis patrolman gets 57 months for fraud, report by WAVE Channel 3

Former Indianapolis patrolman gets 57 months for fraud, Associated Press wire report at The News-Sentinel at FortWayne.com.

revised 1-19-07 (4:11 p.m.)

"Shotgunning"

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"Shotgunning" is the term used to identify one of the latest real estate frauds that one industry insider refers to as "the fraud of the year." This scam comes in two forms. To read more, see How mortgage scams snare unsuspecting sellers, reported at marketwatch.com.
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Another Land Flipper Sentenced To Federal Prison

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A Massachusetts man was sentenced yesterday in federal court in Sprigfield, Massachusetts for his role in a land flipping and mortgage fraud scam. According to prosecutors, the scam involved drawing in unwitting buyers with realty investment opportunities without the need for any downpayments, promising them money back at the real estate closing, and generating false documentation to induce mortgage lenders to approve loans. Also involved in the conspiracy were real estate appraisers who provided false property appraisals to support the loan amounts for the artificially inflated property values, and attorneys who generated false and fraudulent real estate closing documentation to facilitate and conceal the fraud.

To read more, see Wilbraham Man Sentenced to Prison for Role in Multi-Million Dollar Mortgage Fraud Reports U.S. Attorney, as reported at prnewswire.com.

For a previous report on this story, click here for Real estate fraud case nets prison, confinement.
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Indiana Mortgage Fraud Prosecution Reaches Conclusion

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The last of ten criminal defendants in a local mortgage fraud case was sentenced in Indianapolis Federal Court Wednesday to 57 months in prison. The fraud was an illegal flipping scam involving over 40 properties.

To read more, see FRAUD: Final sentence delivered, as reported in the Marion Chronicle Tribune at Chronicle-Tribune.com (Grant County, Indiana).

To read other reports involving this prosecution, see:

• U.S. Justice Department Press Release
• 3 get prison time for mortgage fraud
• Three get prison time in mortgage scheme

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Two Equity Skimmers Sentenced To Federal Prison

Two Utah men accused of ripping off tenants, distressed homeowners, and lenders in an equity skimming operation have each received a one year sentence in federal prison Tuesday afternoon.

The operation was exposed by local Salt Lake City Channel 2 investigative reporter Bill Gephardt just over three years ago.

The reporter poses a question that all prospective tenants and financially strapped homeowners should ask themselves in order to avoid getting sucked into an equity skimming operation:

• "If you give your rent to a landlord, are you sure the landlord owns the property? Or, if you're a distressed homeowner, would you trust someone's promise that they'll take over all the payments, and allow you to walk away from your debt? It's the basis of equity skimming."

To read more, see Get Gephardt: Equity Skimming Crooks Sentenced, as reported at the KUTV Channel 2 website, kutv.com.

Click here to watch/listen to Bill Gephardt's Channel 2 report.

To read an earlier Channel 2 report, see Two Utah Men Accused Of Rental Fraud.

Almost 3500 Register Under Colorado's Morgtage Brokers Registration Act

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Colorado's Morgtage Brokers Registration Act, a new state law which took effect Jan. 1, has already had almost 3500 people register under its terms and has barred 10 people from registering as mortgage brokers.

At least 500 more applications were waiting for the completion of the statutorily mandated criminal background checks.

Legislators passed this new law with the view to prevent the frauds associated with real estate scams, predatory lending, and foreclosures.

To read more, see Mortgage broker law already bars 10 people, at RockyMountainNews.com.
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Atlanta Trial of 12 In Alleged Flipping Scheme Begins

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A trial of twelve defendants accused of engaging in a "straw buyer" mortgage fraud using a flipping scheme involving over 300 homes and condos in metro Atlanta began yesterday in Atlanta Federal Court. The trial, crowded with the twelve defendants and their attorneys, was described as resembling a "business seminar."

Click here to read the full story as reported by the Atlanta Journal Constitution at ajc.com.
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Baltimore Woman Unwittingly Signs Over Home Title, Gets It Back After Fraud Investigation

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In this 2006 story, a Baltimore area woman, struggling with cancer and mounting medical bills, was strapped for cash and facing foreclosure. In an attempt to save her Middle River, Maryland home and get some money to pay her medical bills, she entered into a transaction with a company (that turned out to be a local foreclosure rescue operator) whereby she thought she was signing for a home equity loan but, in fact, was signing away her home. Ultimately, the company gave the house back after a year long ordeal and following a state department of labor licensing and regulation investigation.

'There are so many people who are cash-poor but equity-rich in their homes,' said Phillip R. Robinson, a consumer protection attorney and executive director of Civil Justice Inc., a network of solo, small firm and community based lawyers in Baltimore that handles predatory real estate cases in Maryland & Washington, D.C. (as well as provide services for local attorneys).

Attorney Michael Morin, who represented the victim, reportedly stated that the mortgage fraud in the area has gotten to the point that he's seeing 'hobby con artists,' people doing it in their spare time.

Sources for this story:

Woman Unknowingly Sells Her House (5-24-06; Channel 11 / Baltimore)
Woman Gets Home Back After Fraud Investigation (9-25-06; Channel 11 / Baltimore - read story and watch/listen to video)
State warns of foreclosure 'consultants' (9-26-06; Baltimore Sun)
Foreclosure Rescue Fraud Prevention Slide Show

Additional Resources:

Click here for new Maryland law regulating foreclosure rescue purchasers & consultants ( see Subtitle 3 - Protection of Homeowners in Foreclosure)

Click here to find Maryland consumer protection attorneys who are members of the National Association of Consumer Advocates (NACA).

Click here to find Maryland Non-Profit Legal Services Providers.

Click here for Maryland's Peoples Law Library (legal & self help information).
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Mortgage Fraud Increasing, Reports FBI

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New FBI statistics indicate a continuing increasing trend in mortgage fraud cases. Reportedly, the FBI had 938 pending mortgage-fraud investigations as of early January, compared with 818 at the end of September and 721 in September 2005. The bureau also estimates that the actual number of cases was closer to 36,000 for the year ended Sept. 30, compared with 22,000 the previous year.

To read more, see this New York Times article, appearing in The Detroit News online presence, detnews.com.
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Theft Of Client Funds Concerns Connecticut Bar Association

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A report published yesterday in The Advocate (Stamford / Fairfield County, Connecticut) discusses what staff writer John Nickerson describes as a "[a] spate of attorney arrests and convictions for stealing client funds in the area and across [Connecticut]".

Two officials, working together "to determine why up to $20 million in client funds have been misappropriated statewide over the past three years" describe it as "the middle-aged white guy scenario" since many of the approximately 20 Connecticut attorneys alleged to have stolen money from their clients over the last couple of years fit that description.

Included in the list of specific incidents detailed by this article are:

• a case where attorneys reportedly collected the proceeds from the sale of a client's home but failed to pay off their client's mortgage and home equity loan (to read more, see this 2005 report at The Mortgage Fraud Blog/The Prieston group), and

• a case of an attorney, hired by a husband & wife to protect their interests while they refinanced their existing mortgage, who never paid off the original loan when the money came in (to read more, see 2003 Grievance Committee Decision).

Reportedly, the Connecticut state legislature will be considering a law this year requiring that attorneys who hold money for clients be bonded.

One official stated, "few clients have been taken to the cleaners by their lawyers in part because of the Connecticut Client Security fund set up in 1999. The account, which has paid out more than $7 million in claims since its inception, is funded by each lawyer practicing in the state."

As should be obvious (and as pointed out in this article), all attorneys should not be "painted with the same brush" (readers of this blog know that the property owners in the equitable mortgage cases reported on recently were only able to get their unfortunate transactions voided through the effective representation of competent legal counsel). Additionally, in many states, non-attorneys are allowed to conduct real estate closings and handle the exchange of money; a homeowner's home sale proceeds are no less at risk in these cases.

To read the entire article, see:

Thefts have bar seeking new reforms

Click here for other blog posts on theft of home sale proceeds.

theft of home sale proceeds

Predatory Mortgage Servicing Destroying The American Dream?

(revised 3-11-07)

Predatory Mortgage Servicing is one type of home equity theft that seems to be flying under the radar. A May, 2005 report titled Private Property Rights Deferred: Has Predatory Mortgage Servicing Destroyed the American Dream has found that mortgage servicing fraud and abuse by unscrupulous mortgage companies and their agents is stripping working families of home equity and, in certain instances, pushing homeowners into foreclosure because of the failure to properly account for monthly mortgage payments in favor of excessive fee income.

To read more on this report, by Rawle Andrews Jr., Esq., and Leroy Jones, Jr., JD of the law firm of Andrews & Bowe, PLLP:

1. Private Property Rights Deferred: Has Predatory Mortgage Servicing Destroyed the American Dream
2. The Seven (7) Deadly Signs of Predatory Servicing
3. Five Stages of Foreclosure Fraud
4. Stark v. EMC Mortgage (a case that details the egregious conduct committed by one mortgage servicing company against homeowners)
5. Congrtaualtory Letter from Congressman John Conyers (D-Mi.)

Go here , go here , and go here for posts on questionable mortgage servicing practices. questionable mortgage servicing practices tactics zebra

Atlanta Area Attorneys Comment On Predatory Lending

Howard Rothbloom, a Marietta, Georgia bankruptcy and consumer protection attorney (click here for website) and Atlanta area consumer protection attorney Bill Brennan, a predatory lending expert with the Atlanta Legal Aid Society comment about predatory lending in Georgia in an article appearing in Creative Loafing Atlanta.

To read the entire article, see:

Sharks patrol these waters
(Predatory lenders prey on the weak while Georgia consumer laws remain shallow)

Click here for a list of Georgia consumer protection attorneys who are mebers of the National Association of Consumer Advocates (NACA).

Click here for low cost Legal Aid Service Providers in Georgia.
http://HomeEquityTheft.blogspot.com

Tree Trimmer Caught Clipping Customers, Pleads No Contest

In this 2004-2005 story, an unlicensed Northern California landscaper pleaded guilty to embezzling 3.1 million from five mostly elderly customers, four of whom took out multiple mortgages on their homes to invest money with him and were ultimately left facing foreclosure.

According to authorities, they suspected this scam artist of using his landscaping business as a front to get acquainted with his victims, establish trust with them, and then seek out their money to invest in a side business he had, talking at least four of them into borrrowing money against their home equity and "invest" it with him in exchange for a promise that he would keep up the payments on the loans.

Reportedly, when the arrest was initially made, police alleged that there were at least ten victims who were scammed, but the media reports indicated that some of them were ashamed and embarrassed to talk about it with investigators.

To read the media reports on this story, see:

Businessman faces prison for embezzling $3.1M from elderly - Silicon Valley/San Jose Business Journal (5-27-05)

Sheriff's deputies arrest Saratoga man, charge him with elder fraud - Saratoga News (11-3-04)

Landscaper is accused of clipping seniors - San Francisco Chronicle at sfgate.com (10-29-04)

Go here , go here , and go here for other posts on elder financial abuse. zeta elder financial abuse

Moore v. Cycon Enterprises, Inc. & Flack v. McClure - Equitable Mortgage Cases

http://HomeEquityTheft.blogspot.com
Re: Moore v. Cycon Enterprises, Inc., (Case No. 1:04-CV-800), 2006 U.S. Dist. LEXIS 57452 (W.D. Mi. 2006) (unpublished)

For those readers recently attempting to find the name of legal counsel who successfully litigated the equitable mortgage issue for the property owner in this case, it was attorney Phillip C. Rogers, Grand Rapids, Michigan. Mr. Rogers is a member of the National Association of Consumer Advocates.

I referred to this case in two earlier posts, December 17, 2006 and January 2, 2007.

In addition, the Illinois equitable mortgage case Flack v. McClure, 206 Ill. App. 3d 976, 565 N.E.2d 131, 151 Ill. Dec. 860 (Ill. App. Ct. 1990) is now posted here, for those recent visitors looking for this case.

Click here for a list equitable mortgage posts on this blog.

Oregon Appellate Court Invokes Equitable Mortgage Doctrine In Sale-Leaseback Deal

http://HomeEquityTheft.blogspot.com-Foreclosure Rescue...
The Oregon Court of Appeals invoked the "equitable mortgage" doctrine in order to re-characterize a sale-leaseback deal between an investor and a property owner as a secured loan in a 2005 case.

Representing the property owner in this case was attorney Jim Petersen.

Click here to read a more extensive post on this Oregon court decision.

The Oregon Judicial Department website has made the full text of the case available online. Click the link below.

Case Law Citation:

Swenson v. Mills, 198 Ore. App. 236, 108 P.3d 77, (Or. Ct. of App. 2005)

Click here for a list of other equitable mortgage posts on this blog.
http://HomeEquityTheft.blogspot.com-Foreclosure Rescue...