Appraiser Sentenced for Mortgage Fraud Scheme

Allison Tussey —  May 10, 2009 — 4 Comments

Lavon Ivy, 38, Orange Village, Ohio, an appraiser, was sentenced to three years in prison, according to media reports, after being found guilty after an eight-day trail on charges of mortgage fraud. John Ivy, 70, Orange Village, Ohio, Lavon‘s father, who did rehab work on the house, their rehab company, PTOT Enterprises, along with a mortgage broker, Phillip Stevens, and his company, M & S Investments, were collectively found guilty of all 23 of the mortgage fraud offenses pertaining to a house at 25349 Tyron Road, Oakwood Village, near Bedford, Ohio.

As previously reported by Mortgage Fraud Blog, Lavon Ivy was found guilty of Theft by Deception, Securing a Writing by Deception, Forgery,Communications Fraud, Receiving Stolen Property, and Falsification. She faces a maximum prison sentence of 26 1/2 years. John Ivy was found guilty of Forgery and Receiving Stolen Property, and he faces a maximum prison sentence of 4 1/2 years. Mortgage broker, Phillip Stevens, was found guilty of Theft by Deception, Securing a Writing by Deception, and Falsification, and he faces a maximum prison sentence of 10 1/2 years. Sentencing is scheduled for March 26, 2009, at 1pm in Judge Hollie Gallagher’s courtroom.

Appraiser Ivy was the key defendant in this mortgage fraud scam that started with 7 other defendants. She acted as an appraiser and deal maker, and she fraudulently submitted an inflated appraisal of the property. An expert testified for the prosecutor’s office that Ivy‘s appraisal of $165,000 was inflated by at least $30,000, that she failed to disclose known violations, and that she failed to disclose that she and her father and their rehab company got money at closing to repair the house. In her deal making role, Ivy was also found guilty of deceiving the lender to make a $132,000 loan by submitting false documents, including a bogus $165,000 purchase agreement, which was needed in order to match the bogus appraisal to obtain a larger loan for the buyer. The actual purchase price was $90,000 with the buyer to fix all of the
housing violations.

Also, Lavon Ivy and her father, John Ivy, deceived Kenneth O’Neal, 51, Warrensville Heights. At the loan closing, they diverted money that was to be used to rehab the Oakwood, Ohio house from O’Neal to themselves. Although a victim of this deception, O’Neal falsified his loan application when he relied on Lavon Ivy to take care of the financing documents. As a result, he accepted a plea because he signed a false application that contained an inflated income amount and an inflated bank balance of $42,000 to cover fake document of a $42,000 down payment. The mortgage broker, Phillip Stevens, 52, Akron, Ohio, and his company, M & S Investment, is fraudulently processed the loan.

After O’Neal signed the purchase agreement, he contacted Lavon Ivy, a licensed mortgage broker as well as a licensed appraiser, to close the deal. Lavon fraudulently substituted O’Neal‘s $90,000 purchase agreement for one with a purchase price of $165,000 to enable her to get a larger loan, a $132,000 loan from New Century Mortgage Company, Columbus, Ohio, which is now out of business. In addition, she acted as the appraiser and submitted a false property appraisal, as well as assisted in submitting a false loan application and a fraudulent down payment scheme.

O’Neal and the seller, Eugene Jones, 42, Highland Hills, signed a closing document stating that he paid $42,000 to cover the difference between the false $165,000 purchase agreement and the $132,000 loan. But, this payment was never made because Lavon Ivy and Stevens, the mortgage broker, deceived the lender into believing the fake $42,000 down payment was made, when it was not. Like O’Neal, Jones accepted a plea because of this falsification. Both O’Neal and Jones testified against the defendants.

Finally, Lavon arranged for her father’s repair contracting company, PTOT Enterprise, Pepper Pike, Ohio, to receive $25,581.48 for rehab work on O’Neal‘s house that was never completed. O’Neal has not been able to move into his house because existing code violations, which were supposed to be fixed by PTOT, were never rectified. O’Neal contacted Beachwood Police Department, and a detective uncovered this series of scams during his investigation. The house fell into in foreclosure and O’Neal lost the house.

Cuyahoga County Prosecutor Bill Mason made the announcement. 

Prosecutor Mason said, “Successfully prosecuting an appraiser for fraudulently inflating the value of a home is an important step in our fight against mortgage fraud. The jury rejected this appraiser’s bogus defense-that appraisals of homes are primarily based on opinion. This sends a strong message that all parties in these mortgage fraud scams will be prosecuted for their crimes.”

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Allison Tussey

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4 responses to Appraiser Sentenced for Mortgage Fraud Scheme

  1. Four years ago I borrowed $69,000 +fee’s against my house that was paid for! And bought a fixer upper to buy and sell! After only three months of late or non-payment Countrywide filled papers for repo on my existing home, so I immediately reduced the price of the fixer upper to sell fast The day of closing we called countrywide for the actual pay off balance on that day, we sent them the check right after we closed for the amount in question. One month latter there calling to ask where our house payment was..And then said they were not paid off because of there foreclosure attorney fees were not added to the balance and gave us no price ,in which I would have paid immediately had I known the cost.

    A couple more months go by with weekly calls from us complaining wanting the pay off, somebody told us, it was between $4,000 and 5,000 but that we could not do anything about it yet! Just keep making those same high payments even after sending them pay off check for $74,120 ,They lead us down a four to six month time frame of diversion and storytelling and us calling weekly , just getting different stories from someone different every dam time. Finally they gave us an unbelievable cost of $16,000 and they forced us into a loan modification deal .A 30 year mortgage with an ARM that goes up every year!It devastated us . $16,000 more than the actual pay off they quoted us, this is madness. I recently even went to get cheaper financing to pay this off And they want to add an additional $2,700 for prepayment fee’s please dear GOD somebody help..

    I believe Countrywide while being overly expedient in trying to steal my house (30 days) used stalling tactics (6 months) to over inflate the foreclosure costs and enhance there portfolio of what is obviously Predatory lending practices at its’ best, and I am begging for legal assistance and will be searching every angle possible. I will be following all lawsuits against Countrywide and joining them or going on my own to file suite unless all debt if forgiven Please help !!!
    Tom Ferge 602 S Beech st Savannah ,Mo 64485 .

  2. Antoinette Iannacco May 11, 2009 at 10:25 pm

    The amount was $2,000.00 that the appraiser paid in fines. The decimal point & one zero did not show up on my last post. Sorry but I must give the right info.

  3. cyanoacrylate adhesives May 11, 2009 at 9:22 pm

    I especially like the final statement which I think is a great point. People who commit fraud at any point in the process should be aware that they are not untouchable. Even appraisers, who arguably act based on opinion can still be held responsible for their appraisals and actions.

  4. Antoinette Iannacco May 11, 2009 at 3:54 pm

    These people don’t know how much damage they have caused. We had a problem with Hawthorne Abstract Corp that is costing us. Their appraiser, Mr. Albert Perez was fined $2,0000 for his part in an illegal mortgage that Hawthorne got for my in-laws,for 5805 18th Ave,
    Brooklyn,Ny. 11204 We had to get a court order to sell this house because of this mortgage. As my husband was one of the owners,but had no knowledge of this mortgage. Mr. Perez brought the value of the house down $75,000 just so my in-laws could get more money.They were to get a loan to buy out my husband,instead they refinanced.We never saw a dime. Hawthorne seems to be untouchable,so no controls their actions. But they are brokers for The Old Republic National Tiltle Co. I’m on a mission to get answers.No one should suffer until these crooks.I hope Mr. Perez has learned something from what he did wrong.

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