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
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Wilbert Brodie, real estate developer, Mount Rainier, Maryland was sentenced to four years and nine months in prison and ordered to pay over $355,000 in restitution in connection with a mortgage loan fraud scheme in the Washington D.C. Area. Brodie was convicted of conspiracy and wire fraud in connection with allegations that he bought nine distressed properties using inflated appraisals to obtain overvalued loans in a scheme that resulted in losses of over $850,000 to lenders. Brodie spent the money and defaulted on the loans.
Brodie was initially indicted on April 23, 2002. On November 13, 2003, a superseding indictment was filed that also charged Olurotimi A. Padonu with two counts of conspiracy to defraud and Sarafa A. Kareem with three counts. On August 12, 2004, a Second Superseding Indictment was filed against Brodie.
Padonu plead guilty on August 3, 2004 to two counts of conspiracy to defraud and was later sentenced to eight months in prison followed by three years supervised release and ordered to pay restitution of $976,129.19. On August 9, 2004, Kareem plead guilty to one count of conspiracy and was later sentenced to four years probation.
Brodie’s trial began on January 10, 2005 and, on January 18, 2005, the jury returned a verdict of guilty on three counts of wire fraud and one count of conspiracy to commit making false statements and wire fraud.
According to court documents, the evidence at trial established that Brodie, over the course of approximately eighteen months: (1) used his small company to contract to buy shell or distressed properties; (2) contracted to buy from his company the same properties in the same condition at more than double the sales price; (3) used another company under his control, First Eagle Mortgage, to “guarantee” himself a loan, and thereby, entice the original seller into accepting the defendant’s offer to buy the property; (4) signed certain inflated sales contracts to buy properties from his company even before his company had contracted to buy the properties in the first place; (5) applied for the inflated loans to match the inflated sales contracts; (6) falsely represented in certain paperwork, including a handwritten letter, that he had made earnest money deposits; (7) insisted on his selection of a settlement agent to alleviate his cash-flow problems on a certain property whose settlement resulted in the unlawful diversion of funds to his benefit; (8) “flipped” the same properties in the same condition, almost always on the same day, for more than double the lower sales price; and (9) obtained an inflated loan which was at least double the lower sales price. As the evidence established at trial, the properties were never worth the amount of the “flipped” sale. Because the properties were not renovated, the lender was not able to recover top dollar for the properties.
The Sentencing Memorandum filed by the United States defines the harm caused by Brodie:
In addition to greed, however, the defendant’s recidivism, spanning over eighteen months, reflects a callous indifference to the social effects of his scheme. A potential supply of moderate income housing for the citizens of the District of Columbia degenerated into uninhabitable shells replete with ceilings and walls collapsing from water damage, bathrooms stained with pigeon defecation, and floor supports giving way to gravity. A potential supply of cash in the form of loans for individuals interested in home ownership was diverted to cover the lenders’ expensive foreclosure costs on the Brodie properties. Ultimately, then, it was the district’s housing market, including those interested in receiving loans to buy and those interested in moderate rentals, who bore the cost of the defendant’s crime.
I currently serve as the President of my Condomimium Association. Our Association has been fighting for over a year to recoup our Capital Contribuition funds of over $11,000.00 for our Reserve account from the developer. I have done research and I have each unit owners closing statement detailing the check # and the amount provided to the developer at closing as proof that the Title company provided him with these funds. I also have a statement from the management company stating that the funds were not deposited to the Association’s account.
The developer has been non responsive in communications, and it doesn’t seem like he will cooperate. This developer has left the Association with bills over $8,000 for repairs he was to pay for, but instead left them in the Association’s name. We desperately need help in this situation. Any guidance would be greatly appreciated.
At this point, I would like to know the following:
1. Due to the current state of debt the developer has left us in, what is the best way to report the developer taking over $11,000.00 in capital contributions and not providing this to the Association as stated in our Bylaws?
2. Is there any way the Association can recoup the funds for $8,000 in repairs the developer made and stuck the Association with paying the bill?
We are limited to the amount of money we have for legal, and I’m willing to save on cost by doing any necessary leg work to see that the Association is reimbursed.
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.
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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.
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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...
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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 
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