Mortgage Fraud Blog is the premier website for news and information on mortgage fraud and real estate fraud throughout the United States.
Rachel Dollar, the editor of Mortgage Fraud Blog, is an attorney and Certified Mortgage Banker who handles litigation for lending institutions and secondary market investors. She is an author and a nationally recognized speaker on the topic of mortgage fraud. Ms. Dollar is a shareholder with the law firm of Smith Dollar, PC, is licensed to practice law in California and maintains offices in Santa Rosa, California. Email Ms. Dollar
Mortgage Fraud Blog is co-sponsored by Interthinx the leading provider of fraud services and solutions for the mortgage industry.
$1.37M Recovered for Consumers in 2 Mortgage Fraud Cases
More than $1,370,000 in civil penalties and restitution has been gained for consumers as a result of two mortgage fraud lawsuits filed earlier this year by the Arizona Attorney General Terry Goddard.
Taken Care of Investments, LLC
In March 2009, Goddard filed a lawsuit on behalf of his office and the Arizona Department of Financial Institutions against an alleged foreclosure rescue operation believed to have defrauded some 270 Arizonans of their homes.
According to the lawsuit, between 2003 and 2007, Richard Winer, 33, Tempe, Arizona, through his limited liability companies - Taken Care of Investments, LLC; Homeowner Solutions, LLC; Bourbon Street Property Management, LLC; and Filibuster, LLC - victimized homeowners facing imminent foreclosure with fraudulent offers to help them stay in their homes.
Winer identified potential targets through public records of delinquent borrowers whose properties were facing trustee sales. Winer or his salespeople approached those homeowners claiming to be experienced "distressed property consultants" who could, in many cases, "stop foreclosure within 24 hours."
According to court documents, Winer and his salespeople persuaded struggling homeowners to deed him their homes in return for assuming their monthly mortgage payments and paying off the full value of their delinquent payments. Winer charged homeowners a monthly fee equivalent to the mortgage payment to remain in the home as a renter. Neither the owner's mortgage lender nor servicer was notified of the transfer of title.
These owners-turned-renters had the option to repurchase the house from Winer within one year for a fee of approximately $15,000, if they met all of the conditions of the sale-leaseback agreement. If the owner-turned-renter violated any of the conditions, such as by making even one late rental payment, the option to repurchase the home became void and the individual was subject to immediate eviction.
The State's lawsuit claimed that homes obtained under this scheme were resold within two weeks to investors who paid a commission to Winer. Almost all of the owners-turned-renters proved unable to repurchase their properties, at which time the investor sold or refinanced the home at full market value, earning profits in the tens or, in some cases, hundreds of thousands of dollars.
The lawsuit claimed that these actions violated numerous state laws, including the Arizona Consumer Fraud Act and the Arizona Debt Management Companies Act, by:
● Falsely and deceptively representing to homeowners that they would save their homes when, in fact, the defendants structured the transactions to take ownership and equity away from homeowners for the benefit and profit of defendants. ● Misleading homeowners and circumventing and concealing from them the defendants' obligations and homeowners' rights and remedies under a mortgage loan agreement. ● Evading the protections of the Federal Truth in Lending Act (TILA) which required defendants to disclose the annual percentage rate of the mortgage and the homeowner's right to rescind the transaction within three days of receiving notification of the right. ● Evading of the protections provided by Arizona's licensing requirements for mortgage bankers and mortgage brokers. ● Acting as a debt management company but failing to obtain a license, post the bond required, pay the required fees or maintain the required liquid assets. ● Making or negotiating mortgage loans, acting as a mortgage broker and receiving compensation in connection with arranging or negotiating mortgage loans without posting the required bond, passing the mortgage broker's test, conducting the required investigations into employees or making the disclosures to consumers required of mortgage brokers by Arizona law.
According to the terms of the settlement, Winer must:
● Pay $391,500 in restitution to homeowners victimized by their alleged scheme. ● Pay $150,000 in civil penalties to the Attorney General's Office and $150,000 in civil penalties to the Arizona Department of Financial Institutions. ● Refrain from participating in any manner in any financial institution or enterprise licensed by the Arizona Department of Financial Institutions.
Hope for Homeowners Now, LLC.
In July 2009, Goddard filed a lawsuit alleging that Hope for Homeowners Now, LLC, a Glendale, Arizona-based company, misled homeowners looking for help in modifying their mortgage.
In the suit, Goddard alleged that between December 2008 and July 2009, Matthew Castaneda, Glendale, Arizona and Michael Winding, Phoenix, Arizona through their limited liability company Hope for Homeowners Now, LLC, victimized homeowners facing imminent foreclosure with fraudulent claims of high success rates modifying mortgage loans.
Hope for Homeowners Now advertised loan modification services for an upfront fee of $3,195. According to court documents, the company solicited their modification services with claims including: "Over 80% of our customers have tried to deal with their lending institutions on their own and failed," and "Loan modifications have a very small success rate if you try to do it with a non-profit organization or yourself."
Based on the Attorney General's investigation, Goddard alleged that Hope for violated numerous state laws by:
● Deceptively implying it was more successful at obtaining mortgage loan modifications than consumers who try to obtain modifications on their own or with the assistance of non-profit organizations. In fact, the company's success rate was no better than that of it clients who tried to obtain loan modifications on their own.
● Misrepresenting that the company was comprised of real estate and financial professionals, as well as "professional mitigation attorneys," and that attorneys negotiate on behalf of Hope for Homeowners' clients. ● Charging consumers an upfront fee prior to the full performance of services and without first having obtained a surety bond. ● Failing to provide its loan modification clients with the necessary substantive disclosures required by the Arizona Credit Services Act.
Despite being served with the lawsuit and notice of a court hearing regarding the State's claims, the defendants did not appear in court or otherwise respond to the allegations against them. As a result of their failure to respond, Maricopa County Superior Court Commissioner Jay Davis issued a default judgment in favor of the State.
According to the court judgment, the defendants must: ● Pay $424,935 in restitution to consumers. ● Pay $155,000 in civil penalties to the State of Arizona. ● Permanently refrain from providing loan modification or origination services in Arizona or on behalf of an Arizona consumer.
This case was handled by Assistant Attorney General Cherie Howe.
These enforcement actions come as part of Goddard's crackdown on businesses that prey upon homeowners struggling to avoid foreclosure.
"The Attorney General's Office will continue to aggressively fight mortgage fraud with all available tools," Goddard said. "These operations misled vulnerable homeowners for profit, with no apparent concern for the damage their actions caused. I will continue to work with local, state and federal partners to root out mortgage fraud and protect consumers."
Failed Mortgage Firm Trustee Allowed $50,000 in Fees Union Leader
U.S. Bankruptcy Court Judge J. Michael Deasy will approve $50,000 in legal fees for the trustee of failed mortgage brokerage businesses Financial Resources Mortgage Inc. and CL&M Inc.
Bend Oregon Event to Help Homeowners Prevent Foreclosures Oregon.Gov
As part of an ongoing effort to help homeowners avoid foreclosure, state agencies are organizing a foreclosure-prevention event in Bend on Saturday, March 27, 2010.
Shelbyville Man Gets 2-Year Sentence For Loan Fraud Chattanoogan.Com
Prosecutor Gary Humble said the lost was approximately $2.3 million in the mortgage fraud involving hundreds of homes in the Shelbyville area.
Lend America, VP Ashley Banned from FHA Housing Wire
Michael Ashley, the embattled former vice president of Federal Housing Administration (FHA)-backed mortgage originator Lend America, and the company he worked for, were permanently banned from doing business in the industry last week.
Countrywide Tries to Pin Blame on Insurer Court House News
Countrywide Home Loans demands $111 million from Triad Guaranty Insurance, claiming Triad is trying to blame mortgage lenders for the insurer's role in the housing bubble and collapse.
Investors Say They Were Swindled in Property Scheme Fox 13 Now
Utah Division of Consumer Protection is joining forces with a few investors who claim they have been cheated by an agency called "Utah Mini Ranches.
Greenfield Man Accused of Housing Scam The Republic
A former real estate agent conned at least eight people by renting them properties actually owned by a federal agency and then running off with their deposits, prosecutors said.
Appraisal Institute Opposes Obama Administration's Plan for Homeowner 'Short Sales' PR News Wire
Citing concerns about increased mortgage fraud, four organizations representing more than 35,000 real estate appraisers today voiced their opposition to changes to an Obama administration program that will encourage "short sales" of homes.
Ownership Rights to Get Another Look TBO.Com
State lawmakers may beef up protections of property owners' rights by rewriting a law this spring that is at the center of a case of alleged fraud in Pasco County.
Thursday, February 18, 2010 F. Jeffrey Miller Trial Continued Testimony
As reported by Anne Mitchell, who viewed the trial:
Angela Parenza worked for Jeff Miller as the office manager for 7 or 8 years beginning in 1998. Parenza was indicted along with Miller and pled guilty to conspiracy to commit bank fraud and money laundering. Parenza testified that Miller or his contractors allegedly preferred to build all the...
Wednesday, February 10, 2010 F. Jeffrey Miller Trial Coverage Continued - Witness Testimony
Steve Middleton Testimony - Coverage Provided by Anne Mitchell
The Government continued in its cross examination of Steve Middleton. He was shown several HUD-1 statements involving sales of homes located in Overland Park, KS, and Olathe, KS. The HUD statements each allegedly showed line items of payments to (James) Moser & Associates, LLC's...
Monday, February 01, 2010 F. Jeffrey Miller Trial Coverage - Continued Witness Examination
According to Anne Mitchell, who is present in court for the trial:
Next Witness: Kelly Sanford
Kelly Sanford of the Federal Reserve was a short witness for the Government. Sanford manages electronic payments between banks and member financial institutions. He was shown copies of wire transfers and asked whether they coincided with the counts in...
Wednesday, January 27, 2010 F. Jeffrey Miller Trial - Prosecution Witnesses Continued
According to Anne Mitchell, who is viewing the trial:
January 13, 2010
Witness: Rick Hayes
Rick Hayes testified that on the day that he closed on his Miller Enterprise home, he received a phone call from the Kansas Banking Commission informing him that his loan was fraudulent. After the Hayes responded to a classified ad, they met with John...
Legal Disclaimer.
The information and notices contained on Mortgage Fraud Blog are intended to summarize recent developments in mortgage fraud cases and mortgage banking matters nationwide. The posts on this site are presented as general research and information and are expressly not intended, and should not be regarded, as legal advice. Much of the information on this site concerns allegations made in civil lawsuits and in criminal indictments. All persons are presumed innocent until convicted of a crime. Readers who have particular questions about mortgage banking, mortgage fraud matters or who believe they require legal counsel should seek the advice of an attorney. The creators, editors and sponsors of Mortgage Fraud Blog do not intend to create a confidential relationship or an attorney-client relationship by communication via or arising from this site.
Rachel Dollar, the editor of Mortgage Fraud Blog, is an attorney and Certified Mortgage Banker who handles litigation for lending institutions and secondary market investors. She is an author and a nationally recognized speaker on the topic of mortgage fraud. Ms. Dollar is a shareholder with the law firm of 
mortgage fraud
