Posts Tagged ‘real estate fraud’

More Homeowners Paying Credit Card Bills Over Mortgage

Wednesday, April 6th, 2011

According to a new report by the credit management company TransUnion, more U.S. borrowers are choosing to pay their credit card bills over making a mortgage payment; no doubt due in part to the recession.

Prior to the economic downturn, Americans worked hard to stay current on their mortgages before they paid their other large bills like credit cards and student loans. But now that pattern seems to be changing.

In the last quarter of 2010, 7.24% of U.S. homeowners were delinquent on their mortgages, but current on their credit cards. While Sean Reardon, the author of the study and a consultant for TransUnion, notes there was a decrease of 7.40% since the third quarter, the number of homeowners behind on their mortgage payments remains “72% higher than it was at the beginning of the Great Recession.”

The TransUnion report compared three groups: homeowners 30-plus days delinquent on their mortgage but current on credit cards; those current on their mortgage but 30-plus days behind on credit cards; and those who are 30-plus days delinquent on both their credit cards and their mortgage.

While conducting the report Sean Reardon found there were two primary drivers in making the U.S. “less cash dependent and more credit dependent.” He found Americans first adjusted their “payment hierarchy” from mortgages to credit cards just months after the financial collapse in 2007, and that high unemployment and a suffering housing market left many owing more on their homes than they were worth.

By the final quarter of 2010, 23% of all U.S. homeowners owed more than their homes were worth, according to business information provider CoreLogic.

The inability for struggling Americans to make large mortgage payments, combined with the credit card industry’s decision to tighten lines of credit, has put pressure on consumers to stay current with their credit. It didn’t take long for people to realize missed mortgage payments may have dire consequences down the road, but good credit now is the road to keeping food on the table.

In the chart below, the red curve denotes delinquent mortgages, current credit cards. The green curve denotes current mortgages, delinquent credit cards. The purple curve denotes delinquency on both:

graph mortgage vs credit

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IRS Agent One Of Fourteen People Arrested For Tax Fraud

Tuesday, March 29th, 2011

Yet another lesson in not messing with the Tax Man…..

According to US Attorney Carmen M. Ortiz, fourteen people – including an employee of the Internal Revenue Service – have been charged with using the first-time homebuyers government credit to commit tax fraud.

Mostly from Massachusetts, the defendants were charged in multiple indictments all related to filing false tax returns linked to the federal tax credit for first-time homebuyers.

The IRS agent charged in the case, 44-year-old Michael Doyle, is from New Hampshire and is accused of falsely claiming that he purchased a home in 2008 so that he would qualify for the credit, when in reality he actually bought the property in 2007.

An official with the IRS could not say whether or not Michael Doyle still has his job, and Doyle could not be reached for comment.

The other defendants include Junior Lopez of Southbridge, and Christopher Proe of Michigan, who allegedly filed more than 50 fraudulent tax returns. According to prosecutors, they received about $500,000 in refunds.

Like Michael Doyle, neither Lopez nor Proe could be reached for comment.

In a prepared statement, Ortiz said, “It is critically important that taxpayers who play by the rules do not end up paying for refunds to people who commit fraud and blatantly lie on the forms submitted to the IRS.”

J. Russell George, the Treasury’s inspector general for tax administration, added in his own statement that it is “especially troubling” when an IRS agent is implicated in a fraud case. “Congress created and modified the home buyer credit to stimulate and help taxpayers achieve the America Dream, not to line the pockets of wrongdoers,” he said.

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Houston Homeowner Says CitiMortgage Tricked Him Into Foreclosure

Wednesday, October 20th, 2010

Last March Ray Coleman, Jr. of Missouri City, TX lost his IT management job with BMC Software. He and his wife decided they would be able to still afford their mortgage payments with his unemployment and the income from her job as a counselor, if they could get a reduction in their monthly mortgage payment amount.

Ray Coleman, Jr. called his lender, CitiMortgage, and asked about how he could apply for the Federal Making Home Affordable program. Coleman says the bank told him he had to be at least 30 to 90 days behind in his payments.

Coleman and his wife fell behind on their payments and then applied for help. And that’s when, according to Coleman, things got shady. He said CitiMortgage repeatedly asked him for the same paperwork again and again.

“But then, just out of the clear-blue sky, I get a letter from them telling me they’re foreclosing on me Sept. 7,” said Coleman.

He said he was shocked because he believed he qualified for a loan modification and wonders if CitiMortgage ever really reviewed the documents he said he sent them.

Coleman decided to fight back and first contacted Mediation Centers of America in the Galleria area.

“Banks string them along so they won’t go to an attorney,“ said the Terry Parks, with Mediation Centers of America. His advice to Coleman was, in fact, to get a lawyer.

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U.S. Foreclosure Filings Down Slightly In First Half Of 2010

Monday, July 19th, 2010

According to a new report by RealtyTrac, property foreclosures filings in the United States dropped 5% during the first half of 2010; this is due to lenders continuing to delay foreclosure proceedings so they can focus on short sales and load modification efforts.

The same report states that over the past six months, more than 1.6 million homes have received at least one filing, such as default notices, auction sale notices, and bank repossessions. So while foreclosures filings were down slightly during the first half of the year, there is still an abundant amount.

There is growing concern that a backlog of homes in line for foreclosure could build up, which may result in a double dip in the market when said homes are dumped at some future date.

The chief executive of RealtyTrac, James Saccacio, contends that at the current pace, more than 3 million properties will receive foreclosure filings by the end of this year; leaving lenders to repossess more than 1 million of them.

“The roller coaster pattern of foreclosure activity over the past 12 months demonstrates that while the foreclosure problem is being managed on the surface, a massive number of distressed properties and underwater loans continues to sit just below the surface, threatening the fragile stability of the housing market,” Saccacio said.

Saccacio continued, “The second quarter was a tale of two trends. The pace of properties entering foreclosure slowed as lenders pre-empted or delayed foreclosure proceedings on delinquent properties with more aggressive short sale and loan modification initiatives. Meanwhile the pace of properties completing the foreclosure process through bank repossession quickened as lenders cleared out a backlog of distressed inventory delayed by foreclosure prevention efforts in 2009.”

For all the numbers and figures of the RealtyTrac report, visit PropertyWire.com: Property foreclosure filings in US down slightly in the first half of 2010.

U.S. Foreclosure Filings Down Slightly In First Half Of 2010
Image Source

Convictions Upheld For East Bay Mortgage Scam Artists

Tuesday, July 6th, 2010

In 2007 Dale Scott Heineman of Union City and Kurt Johnson of Sunnyvale were convicted on one count each of conspiracy and 34 counts each of mail fraud stemming from their fraudulent business practices while operating the Dorean Group in Union City and Newark from 2003 to 2005. The pair pocketed millions of dollars by claiming they could help people eliminate mortgage debts.

In early 2008 Kurt Johnson was sentenced to 25 years in federal prison, while his partner Dale Scott Heineman got 21 years and 8 months.

Prosecutors said Johnson and Heineman victimized at least 20 lenders and as many as 3,500 homeowners across 35 states with their idea that borrowers could ditch their mortgage debts through a legal and bureaucratic process. Homeowners first transferred their interest in their properties to a trust, naming Johnson and Heineman as trustees. The pair would then send demand notices to the lenders questioning the validity of their lending practices.

When banks failed to respond or “prove” their lending practices were valid, the pair recorded bogus documents with county clerks’ offices supposedly establishing that the homes were no longer under a mortgage. The homeowners then refinanced with different banks using their supposedly unencumbered homes as collateral.

Heineman and Johnson took upfront fees as well as a cut of the homeowners’ new equity loans; they admitted making more than $3 million, and were later ordered to pay almost $513,000 in restitution.

FULL ARTICLE

On Tuesday July 6th 2010 a federal appeals court issued the decision to uphold the convictions.

In the ruling, Judge Barry Silverman of the 9th U.S. Circuit Court of Appeals wrote:

“[Heineman and Johnson] were adamant in their desire to represent themselves and assert an absurd legal theory wrapped up in Uniform Commercial Code gibberish…Both defendants were examined by a psychiatrist and found to have no diagnosable mental disorder.”

…“The record clearly shows that the defendants are fools, but that is not the same as being incompetent,” Silverman wrote for himself and two other circuit judges. “(T)hey had the right to represent themselves and go down in flames if they wished, a right the district court was required to respect. There was no legal or medical basis to foist a lawyer on them against their will.”

So basically these two scam artists are idiots and deserve to be right where they are – behind bars.

convictions upheld for east bay mortgage scam artists

Traps To Watch Out For When You Sell A Home

Wednesday, June 30th, 2010

Putting a home up for sale can turn out to be a wrenching experience. Although it matter how ready you might be to move on, it still means giving up a part of your history. Selling is even harder if it is prompted by difficult or even tragic circumstances, such as the death of a spouse, the loss of a job, or any kind of shift in financial circumstances.

This article covers common mistakes that that are made by people who want to sell and, more importantly, how to avoid being trapped by them.

Asking Too High a Price

Often it seems that sellers think that they should start out asking for the highest price in the realm of possibility. If it doesn’t sell right away, after all, they can always lower the price by a little, right? Not right. Although it’s true that opening prices can always be lowered, by the time that happens, the house has gotten “old.” People who dismissed your home as being too expensive or above their range as they studied the new listings won’t easily find out so they can come back and give your property a second look now that the listed price has been reduced. Start off by asking a fair price, and you’re likely to sell much faster and without a lot of bother. Considering the value of your time and the monetary and personal expense of holding the home on the market, most likely the right price differential could make months of difference in the time on the market before the transaction is successfully concluded.

Not Being Thorough With Disclosures

Laws in every state require you to disclose any material facts and flaws that pertain to your home. Most Realtors agree that it is safer to disclose too much about flaws and material facts than too little. It can be a problem if the buyer becomes aware of flaws or facts that you knew about, they could cancel the transaction or even take you to court.

Not Keeping the Home “Visitor Ready”

It is essential when you want to sell a home that it has to always look clean, comfortable, and welcoming. You can never tell when a Realtor will call and say they’re around the corner with a client who is ready to view the home. The home has to highlight the prospective buyers’ highest self-image, the way they like to think of themselves living a simple, carefree life. It could ruin your chances if a prospective buyer should walk in on two weeks’ worth of dirty laundry, a dirty bathroom sink, or a messy, cluttered house that looks more appropriate for a garage sale than for the relaxed, uncomplicated everyday life that needs to be the ideal.

Not Completing Your Agreements

When you enter into the contract, you may agree as part of the contract to do a few things, such as do something to fix up the outside of the home or make needed repairs. Be sure to complete whatever you agreed to do before the closing date, or the buyer could walk away from the deal.

Having Restricted Hours

When it finally happens that a prospective buyer wants to view the home, they want to be there now, or very quickly. Making a buyer wait even 24 hours may well keep them from wanting to see your place at all, or lead to them finding another one that they like better. Since the real estate agent will not want you present while the home is being shown, it’s a good idea to have your own list of places you can go or things you can do on short notice. This could be a neighbor’s home, the library, a movie theater, grocery store, etc.

Avoiding these home seller mistakes will increase the chances that your home will sell successfully and easily.

This information was provided by Automated Homefinder, Colorado’s Longmont real estate specialists.

traps when selling

Adam Hochfelder Pleads Guilty To Swindling Millions

Friday, May 21st, 2010

Once considered a Manhattan real estate whiz, 39-year-old Adam Hochfelder admitted on Friday that he scammed banks and private investors – including his own uncle – out of millions and millions of dollars.

Adam Hochfelder, a former part-owner of the Helmsley Building, pleaded guilty to stealing $18 million from 15 victims. Hochfelder began duping innocent people out of their money in 2002 as a way to pay for his extravagant Manhattan lifestyle; originally Hochfelder blamed his excessive greed on a cocaine habit.

Hochfelder pled guilty to 18 separate counts, including grand larceny and scheme to defraud.

When sentenced on September 7th, Adam Hochfelder will face 4 to 12 years in prison, as well as a $9.5 million bill for restitution.

According to Hochfelder’s lawyer, Marc Agnifilo, Hochfelder has returned $15 million to his victims. Agnifilo adds that the restitution his client will pay includes interest on loans he took out fraudulently, including $5 million loans from both North Fork Bank and Bank of America.

Adam Hochfelder admitted the loans were taken out against a property located on Park Avenue, and that he failed to tell the banks the home was already heavily leveraged. He also stole millions from private investors – including $700,000 from his father’s brother – telling them their money would be invested in real estate deals.

Sadly, this sort of thing is going on all across the country – it’s nice to see swindlers get their comeuppance.

adam hochfelder guilty grand larceny

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Four Family Members Charged In $16 Million Real Estate Fraud Conspiracy

Wednesday, March 10th, 2010

The Orange County, CA District Attorney’s office has announced they have charged four family members –
including a mother and her two daughters – in a conspiracy to commit more than 16 million dollars worth of
real estate fraud by forging documents and buying homes using straw buyers*.

If convicted, each of the four defendants could be facing as much as 19 to 40 years in prison.

Here’s what we know about each defendant, and the charges being brought against them:

Sushama Devi Lohia, 71, Newport Beach
Felony charges include 13 counts of conspiracy to commit a crime, 19 counts of forgery, 6 counts of identity theft and 4 counts of recording false and forged instrument and other charges. She is the mother of defendants Supriti Soni and Suniti Shah.

Supriti Soni, 49, Corona del Mar
Felony charges include eight counts of conspiracy to commit a crime, 10 counts of forgery and other charges. In addition, prosecutors are seeking a stiffer sentence for her, if she’s convicted, because she was imprisoned in 2003 for perjury.

Suniti Shah, 48, Newport Beach
Felony charges include five counts of conspiracy to commit a crime, nine counts of forgery, six felony counts of identity theft, four counts of recording a false and forged instrument and other charges.

Dinesh Valjeebhai Shah, 60, Newport Beach
Felony charges include two counts of conspiracy to commit a crime, four counts of forgery, four counts of
identity theft, four counts of recording a false and forged instrument and other charges. He is Suniti Shah’s
husband.

According to prosecutors, the alleged scheme happened like this:

-Between June 2006 and October 2009, Lohia, Soni, Suniti Shah and Dinesh Shah obtained 54 fraudulent loans on 29 properties in Orange County through the use of straw buyers’ credit.

-The four defendants then fabricated loan applications to reflect significantly higher incomes for the straw
buyers, supplying altered bank statements to reflect the higher incomes, falsifying employer information on
loan documents and forging the names and signatures of straw buyers on various deeds and loan documents.

-They used the personal and credit information of the straw buyers to complete the fraudulent documents used in obtaining loans, as well as took fraudulent loans under their own names.

-The 54 loans were all approved by then-Washington Mutual Bank.

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It’s scary out there – and in desperate times, people make desperate decisions.

Always play it safe by being cautious when meeting with a new Realtor or Lender, and ask all the questions you can think of – even if you think they’re silly or will make you look stupid.

Scammers feed off ignorance and fear, so be sure to gather all the information you can before making any
choice of this magnitude.

Remember to go with your gut. If what your hearing sounds too good to be true, it probably is.

*A straw buyer is a person who uses or allows their credit to be used for the purchase of a property they never intend to use or control. Straw buyers can also be used to purchase non-owner occupied properties by being paid simply for the use of their credit. [source]


Clipart from Clipartheaven.com