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Ocwen Financial Corporation is a national provider of loan servicing for lenders. It is headquartered in Florida and has offices in several states. In its Consent Agreement with Maine’s Bureau of Consumer Credit Protection and Attorney General, Ocwen admitted that after July 2014 it pursued foreclosures against Maine homeowners based on paperwork which the State found to be legally defective.

Specifically, Ocwen used “powers of attorney” granted by corporate originators of the mortgages, but those corporate originators of the mortgages had been legally dissolved – had ceased to exist – no later than March 2012. The State alleges that the powers of attorney terminated when the granting corporations dissolved.

Under the Consent Agreement, the State found that Ocwen’s use of the powers of attorneys from legally nonexistent entities violated a statute prohibiting “false, deceptive or misleading representation or means in the collection of any debt.”

Ocwen’s illegal filings continued into January of 2019, even after Ocwen’s lawyers had assured State regulators in November 2018 that the practice would stop. The company termed the additional filings as “inadvertent.”

Ocwen Financial Corporation will refund or credit 24 Maine residents more than $50,000 in attorney’s fees they were assessed when their homes were foreclosed upon, and the company will pay $24,000 in civil penalties and $10,000 in investigative costs to the State of Maine, as part of a Consent Agreement signed last week.

Maine’s Supreme Court has made clear that lenders must establish that they have the legal right to pursue foreclosures,” said Will Lund, Superintendent of the Maine Bureau of Consumer Credit Protection. “Those requirements were not followed in these cases.”

Attorney General Aaron M. Frey, whose office assisted state mortgage regulators in negotiating and resolving the matter, stated, “The Consent Agreement puts Ocwen – and other national mortgage lenders and servicers – on notice that they must follow the legal standards here in Maine if they pursue actions on defaulted mortgages.”

The Consent Agreement may have ramifications beyond Ocwen, noted Superintendent Lund, since other lenders may be filing foreclosures based on similar powers of attorney issued by the same nonexistent corporate loan originators used by Ocwen.

 

Vision Property Management, LLC; the company’s CEO, Alex Szkaradek; and a number of other companies affiliated with Vision have been charged today for operating an illegal, deceptive, and unlicensed mortgage lending business in New York since at least 2011. By offering disguised, predatory subprime home loans and illegal finance-lease hybrid agreements, Vision and the other defendants took part in fraudulent activities that repeatedly targeted and took advantage of financially vulnerable New Yorkers.

The complaint alleges that Vision specializes in buying severely distressed properties and then markets those properties — at a substantial markup to consumers — without making any necessary repairs or renovations, and without fully disclosing to consumers the many conditions that exist and repairs that must be made for safe habitation. Vision targets low-income consumers eager to share in the “American dream” of homeownership, claiming that its “unique” business model provides this path to homeownership. But, in reality, Vision’s illegal business model has generated significant profits by skirting consumer protections and financial regulations and trapping vulnerable consumers with high cost mortgages for uninhabitable homes.

Vision’s deceptive tactics have left many of its consumers in dilapidated homes with unhealthy and hazardous conditions, while simultaneously requiring them to pay subprime, or high-cost, interest rates — in the range of 10% to 25% — on top of paying for extensive repairs and renovations just to make their homes habitable.

Vision has engaged in approximately 150 such transactions in New York since 2011 without possessing the legally required licenses to engage in mortgage lending. Furthermore, Vision entered into contracts with financially strained consumers that illegally required them to shoulder the burden of ensuring their properties were habitable. Often, consumers were deceived and trapped into paying for the treatment and repair of dangerous and unhealthy conditions in their new homes, including infestations, faulty electrical wiring, missing heaters and septic systems, mold, and asbestos, as well as severely damaged and rotted out, floors, walls, and roofs.

Vision has violated laws applicable to both mortgage lending and the leasing of residential properties, as well as numerous state and federal consumer protection laws.

Attorney General Letitia James and New York Superintendent of Financial Services Linda A. Lacewell made the announcement.

For nearly a decade, Vision put profits above people — fraudulently targeting, preying upon, and exploiting aspiring homeowners, including people with disabilities, the elderly, and those living on fixed income,” said Attorney General Letitia James. “These deceptive and abusive practices have trapped New Yorkers in mold-infested, dilapidated homes, and wrongfully placed the onus on consumers to pay the price. This behavior is unacceptable, which is why my office is aggressively prosecuting Vision and will do the same against any company or individual that tries to defraud New Yorkers.”

As alleged in the complaint, Vision swindled vulnerable New Yorkers who wanted nothing more than the American dream of homeownership but instead got distressed properties with unsafe, squalid conditions and high-interest, predatory loans,” said Superintendent Linda A. Lacewell. “We took this action to protect New York consumers by putting an end to these illegal, predatory and unconscionable business practices and holding Vision and its CEO accountable under New York State law and applicable federal laws. I am proud of the exemplary work of the DFS colleagues who investigated Vision’s activities for over two years, analyzed thousands of documents, and who worked to protect New Yorkers and bring this company to justice.”

In the suit — being filed in the Southern District of New York — Attorney General James and Superintendent Lacewell are seeking to end Vision’s ongoing illegal activity in New York, secure restitution and damages for all consumers injured by these practices, and obtain statutory penalties.

The matter is being handled by Assistant Attorney General Noah Popp of the Consumer Frauds and Protection Bureau, under the supervision of Jane M. Azia, Chief of the Consumer Frauds and Protection Bureau, and Chief Deputy Attorney General for Social Justice Meghan Faux. The Bureau of Consumer Frauds and Protection is overseen by Chief Deputy Attorney General for Economic Justice Christopher D’Angelo.

Additional attorneys at the Department of Financial Services involved with this litigation include Peter C. Dean of the Real Estate Finance Division and Cynthia M. Reed, Supervising Attorney in the Consumer Protection and Financial Enforcement Division.

Jason Schiff, 40, Lincolnwood, Illinois is charged with three counts of bank fraud, according to a superseding indictment returned July 24, 2019.  The superseding indictment also charges Jason Schiff’s brother, Yale Schiff, 44, Riverwoods, Illinois with 12 counts of bank fraud and two counts of aggravated identity theft.

According to the charges against the Schiffs, Yale Schiff made false statements in loan applications to obtain millions of dollars in mortgage loans secured by a variety of properties.  The charges allege that Yale Schiff filed with the Cook County Recorder of Deeds fraudulent letters from financial institutions claiming that loans on the properties were paid in full and that the mortgages were released, when, in fact, the loans were not paid in full and the mortgages had not been released.  Yale Schiff then kept the financing paid by the banks, as well as proceeds from the eventual sales of the properties, without paying the mortgages, the indictment states.  The fraud allegedly committed by Jason Schiff arose out of bank loans for vehicles and a loan secured by real estate purchased from Yale Schiff.

A separate indictment returned July 17, 2019, charges Yale Schiff’s business associate, David Izsak, 44, Chicago, Illinois with eleven counts of bank fraud and one count of aggravated identity theft.  During the investigation, federal authorities seized Izsak’s 57-foot Carver 570 Voyager yacht known as the “Flying Lady.”  The indictment seeks forfeiture of the yacht, as well as a personal money judgment against Izsak of approximately $4 million.  Izsak pleaded not guilty at his arraignment earlier this month.

The charges against Izsak accuse him of fraudulently obtaining loans secured by real estate and vehicles.  Izsak allegedly submitted or caused to be submitted to the Cook County Recorder of Deeds fake letters purporting to be from the lender, purporting to congratulate Izsak for paying his loan in full and releasing the lien.  In reality, the letters were not from the lender, the loans were not paid in full, and the liens were not released, the indictment states.

Izsak and Yale Schiff are each accused of fraudulently obtaining loans by using names, Social Security numbers and dates of birth that did not belong to them.  Izsak also used a stolen identity to obtain a credit card, while Yale Schiff used fake and stolen identities to fraudulently obtain a charge card at Nordstrom department store and loans for a Jeep Grand Cherokee and a Lexus RX350, the indictment states.

Yale Schiff was initially charged in the case last month.  The Schiffs pleaded not guilty today.

The indictments were announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; Jeffrey S. Sallet, Special Agent-in-Charge of the Chicago office of the FBI; and Craig Goldberg, Inspector-in-Charge of the U.S. Postal Inspection Service in Chicago.  The government is represented by Assistant U.S. Attorney Sheri H. Mecklenburg.

The public is reminded that an indictment is not evidence of guilt.  The defendants are presumed innocent and entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.  Each bank fraud count is punishable by a maximum sentence of 30 years in prison, while each count of aggravated identity theft carries a mandatory sentence of two years.  If convicted, the Court must impose reasonable sentences under federal statutes and the advisory U.S. Sentencing Guidelines.

 

Zalathiel Aguila, 46, Vallejo, California has been sentenced to four years in prison for conspiracy to commit wire fraud affecting a financial institution and bank fraud.

According to court documents, between September 2004 and February 2008, Aguila and co-conspirators Sergio Roman Barrientos and Omar Anabo operated Capital Access LLC, in Vallejo, a company that preyed on homeowners nearing foreclosure. The defendants convinced homeowners to sign over the title to their homes to Capital Access and then spent any equity those homeowners still had, which was then used for operational expenses of the scheme and personal expenses of Aguila and his co-conspirators.

The defendants also used straw buyers to obtain home loans under false pretenses and defraud federally insured financial institutions out of millions of dollars. Vulnerable homeowners across California lost their homes and savings as a result of the scheme, and lenders lost an estimated $10.47 million from the fraud.

Aguila remains out of custody pending his surrendering for service of his sentence on October 25, 2019. Barrientos was sentenced on November 2, 2018, to 14 years in prison for his role in the scheme, and Anabo (charged elsewhere) is scheduled to be sentenced on August 16, 2019.

U.S. Attorney McGregor W. Scott made the announcement.

This case was the product of an investigation by the Federal Bureau of Investigation and the United States Postal Inspection Service. Assistant U.S. Attorney Matthew M. Yelovich prosecuted the case.

An action has been taken against Ditech Holding Corporation (Ditech) in the United States Bankruptcy Court for the Southern District of New York, opposing the mortgage servicer’s attempted end-run around statutory protections for homeowners.

Ditech currently has more than 880 active foreclosure actions pending across New York State. Homeowners organized the Consumer Creditors Committee to ensure that the courts do not permit the company to sweep their rights under the rug. Homeowners are demanding that their claims and defenses, which include significant money damages, not be extinguished in Bankruptcy Court.

Attorney General Letitia James made the announcement.

In addition to filing this motion, the Office of the New York State Attorney General currently has an open investigation into Reverse Mortgage Solutions (RMS), a reverse mortgage servicer that is owned by Ditech.

Bankruptcy Court should never be used as a tool to unjustly oust New Yorkers from their homes,” said Attorney General Letitia James. Ditech’s action is an illegal attempt to strip hundreds of homeowners of their legitimate claims and eviscerate New York’s carefully-created foreclosure process. Housing is a right, and we will continue to use every legal tool at our disposal to stand up for homeowners and to protect their rights.”

In addition to filing this motion, the Office of the New York State Attorney General currently has an open investigation into Reverse Mortgage Solutions (RMS), a reverse mortgage servicer that is owned by Ditech.

This past March, Attorney General James took a similar action when a building owner in Manhattan attempted to flout rent regulation laws and displace tenants.

Attorney General James — in support of the Consumer Creditors’ Committee — is filing the objection to ensure that vulnerable homeowners, who were victims of predatory lending and mortgage servicing abuses, including seniors with reverse mortgages, can assert their rights under the protections of New York’s robust judicial foreclosure process.

The objection is being handled by Assistant Attorneys General Elena González, Elizabeth M. Lynch, and Sarah Trombley of the Bureau of Consumer Frauds and Protection, under the supervision of Bureau Chief Jane M. Azia, as well as Enid Nagler Stuart, Special Bankruptcy Counsel for the Litigation Bureau. The Bureau of Consumer Frauds and Protection is overseen by Chief Deputy Attorney General for Economic Justice Christopher D’Angelo, and the Litigation Bureau is overseen by Chief Deputy Attorney for State Counsel Orelia Merchant.

 

The Department of Justice’s Consumer Protection Unit (CPU) has reached a settlement on Tuesday with two California-based companies requiring them to stop advertising and selling mortgage loan modification and debt relief services in Delaware and to provide restitution to Delaware consumers.

In the cease and desist agreement, CPU alleges that Roosevelt Law Center, P.C. and Miracles for Homeowners Marketing, Inc., and their principals, Thomas Moore and Benjamin Borazghi, operated a foreclosure rescue scam targeting Delaware homeowners. According to CPU, Roosevelt and Miracles targeted Delaware homeowners struggling to make their mortgage payments with over 1,000 deceptive flyers, and collected thousands of dollars in upfront fees from Delawareans who responded. CPU alleges that the “services” purportedly provided by these companies had little or no value, and a number of homeowners ultimately lost their homes to foreclosure.

Under the cease and desist agreement, Roosevelt, Miracles, Moore, and Borazghi are required to pay restitution of $22,275 to nine Delaware homeowners, in addition to $70,000 in civil penalties. The agreement also prohibits the companies and their principals from directly or indirectly offering any mortgage loan modification or debt relief services in Delaware going forward.

Common tactics used by foreclosure rescue scammers include “guarantees” to save someone’s home or to secure a loan modification, requests for upfront fees, and misleading statements regarding affiliation with government agencies. Delaware’s Mortgage Loan Modification Services Act makes it unlawful for a mortgage loan modification service provider to collect fees from a homeowner prior to obtaining a modification from the homeowner’s loan servicer. Under the Act, all providers must register with the Delaware Department of Justice, and are required to disclose certain information in their advertising to homeowners.

Attorney General Kathy Jennings made the announcement.

People who are trying to save their homes are living through a nightmare, often amid other serious hardships,” said Attorney General Jennings. “There are real programs that can offer these homeowners hope, including programs within the Department of Justice, but the ugly truth is that many scammers see opportunity in others’ misfortune. My office is here to help homeowners facing foreclosure, and we will not tolerate the despicable scams that prey on our most vulnerable residents.

Homeowners who wish to report a foreclosure rescue scam should contact CPU at (800) 220-5424. Legitimate foreclosure prevention programs are also available through CPU’s Office of Foreclosure Prevention, including Delaware’s Residential Mortgage Foreclosure Mediation Program. More information is available at de.gov/consumer.

CPU’s work in this matter was handled by Deputy Attorney General David Weinstein and former Deputy Attorney General Gillian Andrews, with assistance from Special Investigator Joe Rago and Paralegals Ryan Martin, Kelly Drzymalski, and Shannon Faulk.

 

Mark Savransky, 59, Dix Hills, New York, was sentenced on Thursday to three to six years in prison for scamming 32 homeowners out of more than $600,000 in a mortgage modification scheme

According to documents, the defendant operated a mortgage modification business in Nassau County, New York, using the name Mark Savran. Between 2008 and 2014, he promised 32 homeowners in Nassau County and elsewhere that, after securing modifications, he would hold their mortgage payments in trust and forward them to the financial institutions servicing the homeowners’ mortgages.

Instead, the defendant converted the funds for personal use, stealing approximately $601,546.92 from these homeowners. Savransky used the funds for ATM cash withdrawals, credit card payments, child support, car payments, gasoline, travel expenses, restaurants, grocery stores, department stores and Netflix.

Savransky’s clients were typically residential homeowners who had purchased their homes using a subprime adjustable rate mortgage sometime between 2006 and 2009. When the payments became more than the homeowner could afford, homeowners hired the defendant to assist in obtaining a mortgage modification.

Savransky requested that all paperwork from the bank be given to him and if additional paperwork was sent by the bank to the victim, he demanded that it be given to him immediately, preferably unopened.

The defendant then counseled clients to give him the monthly mortgage payment that was due under the modified mortgage. Savransky informed his clients that he would make the payments on their behalf and, in doing so, create a record of payment that would prevent a lender from denying that payments were made or from reneging on any mortgage modification that was obtained. At the defendant’s request, these payments were mostly made in cash or by check that did not include the payee. Savransky later completed the payee portion of the check, thereby giving him the means to misappropriate the funds.

Because the mortgage payments weren’t made, lenders started to foreclose on the properties belonging to the defendant’s clients. When some of the homeowners complained to him, some of them received a limited amount of repayment.

Savransky pleaded guilty on October 9, 2018 before Supervising Judge Teresa Corrigan to two counts of Grand Larceny in the Second Degree (a C felony) and Scheme to Defraud in the Second Degree (an A misdemeanor).

The defendant must also pay $601,546.92 in restitution.

The defendant was arrested in August 2015 by NCDA detective investigators and arraigned on grand jury indictment charges in October 2017.

Nassau County District Attorney Madeline Singas made the announcement.

Today’s sentence sends a strong message to those who would prey on vulnerable homeowners during tough financial times in their lives,” DA Singas said. “Victims were close to losing their homes because of this defendant’s scheme and lies. I am grateful to our partners in Suffolk County District Attorney’s Office, the Suffolk County Police Department and the Bronx District Attorney’s Office for their assistance on this case.”

This case was initially referred to the Nassau County District Attorney’s Office by the Bronx County District Attorney’s Office. Additional cases were also referred by the Suffolk County District Attorney’s Office in conjunction with the Suffolk County Police Department.

Savransky’s victims include residents from Amityville, Baldwin, Bayside, Brentwood, the Bronx, Brooklyn, East Northport, Farmingdale, Hempstead, Hicksville, Huntington, Levittown, Lynbrook, Malverne, Merrick, Mount Vernon, New Hyde Park, Queens Village, Richmond Hill, Riverhead, Uniondale and Westbury, New York.

Deputy Bureau Chief Peter Mancuso of DA Singas’ Financial Crimes Bureau is prosecuting this case. Joseph Conway, Esq. represents the defendant.

Angela Fawn Wallace, aka Leah Denise Williams, West Hills, California 58, who has been already been accused of bilking millions of dollars from elderly property owners and two others have been charged today in a real estate fraud case.

In 2015 and 2016, the defendants are accused of creating fraudulent deeds in order to illegally take out a loan against a Los Angeles, California home and later sell it.

Wallace also allegedly created false deeds for two other Los Angeles residential properties in 2015 and then in 2018 illegally signed deeds of trust on the residences as collateral for her bail in another fraud case, the prosecutor said.

Wallace was charged in case BA479339 with 68 felony counts, including identity theft, forgery relating to identity theft, procuring and offering false or forged instrument, counterfeit seal, grand theft and money laundering.

Co-defendants Charlesetta Brown, aka Barbara Brown, 68, Los Angeles, California and David Jayson Greene, aka Damian Dave Brown, 45, Los Angeles, California face 54 felony counts.

The charges for all three defendants include allegations of taking more than $100,000 through fraud and embezzlement and having prior felony convictions. The case was filed for warrant on July 12, 2019.

Brown pleaded not guilty today at an arraignment hearing. Wallace and Greene pleaded not guilty earlier this week. Bail for Wallace was set at $1.61 million and for Brown and Greene at $1.27 million each.

A bail review hearing for the three defendants is scheduled for July 24, 2019 followed by a preliminary hearing on July 29, in Department 30 of the Foltz Criminal Justice Center.

The crimes allegedly resulted in a loss of more than $400,000.

Wallace faces a possible maximum sentence of 41 years in state prison if convicted as charged. Brown and Greene each face up to 35 years and eight months in prison.

The Los Angeles County District Attorney’s Office made the announcement today.

The case remains under investigation by the Los Angeles Police Department and the District Attorney’s Bureau of Investigation.

Wallace previously was charged in cases BA474533 and BA468922 with a total of 162 felony counts, including grand theft, identity theft, forgery and money laundering. Those charges include special allegations of taking of more than $200,000 and prior convictions.

If convicted as charged in those two cases, she faces a possible maximum sentence of 81 years and 10 months in state prison.

 

Daniel Badu, 56, New City, New York, was convicted today of conspiring to commit mail and wire fraud affecting a financial institution.

Between 2008 and 2009, the defendant conspired with others to defraud The Funding Source (“TFS”), a mortgage bank, and other financial institutions by submitting fraudulent applications for home loans.  After being originated by TFS, the loans were sold to other financial institutions, including M&T Bank and JPMorgan Chase. http://www.mortgagefraudblog.com/?s=Daniel+Badu

The co-conspirators in this case submitted fraudulent applications for loans on eight properties in Bronx, New York. They fraudulently obtained mortgages that were insured by FHA on behalf of unqualified borrowers, such as the defendant. Badu was the purchaser on two of the properties and he aided in the submission of false documentation as part of the loan application, including documents purporting to show income from a fake job. The defendant also backstopped false employment for another loan, pretending that the borrower worked for his ophthalmology company, Eagle Eyes, which in reality was a shell company that performed no business.
The total loan amount for these eight transactions was $4,800,007.

In total, six defendants have pleaded guilty for their roles in this fraud. Attorney Laurence Savedoff, Esq. pleaded guilty to a misprision of a felony and was sentenced to four months in prison. Realtor and appraiser Julio Rodriguez pleaded guilty to mail and wire fraud affecting a financial institution, and a conspiracy to do the same, and was sentenced to six months in prison. Sentencing hearings are pending for mortgage broker Gregory Gibbons, and realtors Tina Brown and Alagi Samba.

Badu was sentenced to time served and 10 months home detention.

Attorney James P. Kennedy, Jr. made the announcement.

The sentencing is the culmination of an investigation by the United States Postal Inspection Service under the direction of Joseph W. Cronin, Inspector-in-Charge, Boston Division; the United States Department of Housing and Urban Development, Office of the Inspector General, under the direction of Special Agent-in-Charge Brad Geary; and the Federal Bureau of Investigation, under the direction of Special Agent-in-Charge Gary Loeffert.  Additionally, the New York State Department of Financial Services assisted with the investigation.

Jared Castellaw, 34, Alpine, California, and Valerie Schones, 54, Tucson, Arizona, were sentenced on Wednesday, July 17, 2019 for their role in making false statements to a financial institution.

According to court documents, beginning in or around October 2008 and continuing to on or about May 2009, Castellaw and Schones, along with co-defendant Patrick Healey, made false statements to the Federal Housing Administration “FHA” in order to assist low-income borrowers in qualifying for FHA insured loans that they would not otherwise have qualified for. Healey and Castellaw are former employees of an undisclosed entity, ABC Homes, LLC, located in St. Bernard Parish, Louisiana.  Schones worked for XYZ Financial as a loan officer. In total, due to the acts of the defendants, the FHA suffered a loss in excess of $852,415.

Both Castellaw and Schones were sentenced to time served, supervised release of 5 years, a special assessment of $100, and ordered to pay restitution in the amount of $852,415.16.

U.S. Attorney Peter G. Strasser made the announcement.

U.S. Attorney Strasser praised the work of the Department of Housing and Urban Development, Office of Inspector General and the Federal Bureau of Investigation. The case is being prosecuted by Assistant U.S. Attorneys Sharan E. Lieberman and Edward J. Rivera.