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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Loan Originator Pleads Guilty In Cincinnati Mortgage Fraud
Clarence Harris was charged by information and agreed to plead guilty to Conspiracy to Commit Bank Fraud, Wire Fraud and Mail Fraud and Filing a False Income Tax Return in connection with his role in a Cincinnati, Ohio flipping scheme that has thus far resulted in over two dozen guilty pleas. According to court documents, as a result of his fraud, engaged in between June 1, 2002 and January 19, 2006, Harris caused actual and/or intended losses to financial and lending institutions of $872,910. The conspiracy charge carries a maximum penalty of 30 years in prison and a $1,000,000 fine while the tax related charged carries a maximum penalty of three years in prison and a $100,000 fine.
According to the plea agreement, the scheme operated as follows:
• A person would purchase a piece of real estate at a low value, e.g., $20,000
• A buyer would be recruited – usually someone that could not otherwise afford to purchase real estate or an individual interested in properties as an investor
• After finding the buyer, one of the co-conspirators would create false documents, including pay stubs, W-2 forms, bank statements and employment verifications.
• The co-conspirators would obtain a falsely inflated appraisal for the property
• The co-conspirators would submit the false loan package to the lender in order to obtain a highly inflated loan (e.g. $85,000 for the property that was originally purchased months before for $20,000).
Harris acted as a loan originator and a recruiter for many of the flipped properties. He recruited buyers to purchase properties from others at artificially inflated values and was aware that one of his co-conspirators, rather than the buyer, brought the down payment to the closing. He was also aware that buyers often received undisclosed kickbacks outside of the closing. As owner of Check First Mortgage, Harris prepared loan applications that he knew were false, overstating borrower’s income and assets, and which were supported by inflated appraisals.
The plea agreement details two transactions, one a June 19, 2003 transaction whereby Eddie Cooper purchased property at 316 Mohawk Place, Cincinnati, Ohio for $58,000 and the other wherein Rhonda Ballew purchased property at 5211 Lillian Drive, Cincinnati, Ohio for $118,000. The loan documents in both cases falsely reflected that the borrowers contributed the down payments when it was, in fact, they were made by Harris. Both loans were supported by inflated appraisals. Harris received payoffs from fraudulent loan proceeds payable to his mortgage company, Check First Mortgage, and to his shell company, Inman Realty, and failed to report substantial income.
A hearing on the plea agreement is scheduled for February 28, 2006.
Somehow this doesn’t makes me feel better, I can’t stop thinking how many like him will come, how many frauds do we still have to face. We already in a crisis, let’s hope things won’t get worse than that. We have to learn who to trust in handling mortgage.
Posted by on 06/23 at 02:48 PM
Seriously, tough times for all of us right now, I am struggling to eat but I am making $5k/month. Things are expensive especially when you have debt and collectors.
Posted by on 12/10 at 11:52 PM
The most effective way to avoid prosecution for mortgage fraud is to identify mortgage fraud schemes prior to any actual involvement. Most mortgage fraud offenses fall into one of two general categories: “fraud for housing” and “fraud for profit”. Fraud for housing often involves fraudulent acts committed by a borrower, often coached by his or her mortgage broker or real estate agent, to obtain a loan for the ultimate goal of acquiring a home. These fraudulent facts generally pertain to the falsification of facts and documents during the loan application process to enable the borrower to obtain financing that he or she would otherwise not be qualified to receive. Conversely, fraud for profit typically involves a more concerted plan to abuse the entire real estate transactional process for pecuniary gain.
Posted by on 05/01 at 01:21 AM
Mortgage fraud for profit is typically a more complex scheme involving an inflated appraisal, falsified loan applications, equity skimming, property flipping, and sometimes identity theft. The borrower is typically a straw buyer, who never intends to occupy the house. The mortgage payment is paid by the investor, or a company controlled by the investor. Eventually, the investor stops making mortgage payments, forcing the lender to foreclose, or sells (“flips”) the house for additional profit.
Posted by on 05/04 at 03:47 AM
The crime of mortgage fraud has developed quite a bit in this country over the past few years. Sometimes called real estate fraud, this type of crime is wreaking havoc across the country as perpetrators get better and better at it and their methods develop and have become quite complex. Two distinct types of mortgage fraud have arisen to take the forefront of this disgusting practice. Let’s have a closer look at the two major types of mortgage fraud and how they operate, perhaps in knowing about them you will be better able to arm and protect yourself against their occurrence.
Posted by on 05/05 at 04:20 AM
A rental property is negatively geared when it is purchased with the assistance of borrowed funds and its expenses exceed the rental income and a loss is incurred.Conversely positive gearing is where the income received is greater than the total amount of the expenses and therefore creates a situation where tax must be paid on the net income. Generally you will find a newly purchased negatively geared property will have better capital growth than that of a positively geared property.
Posted by on 05/14 at 06:53 AM
Mortgages issued in the first half of 2007 are going bad at a pace that far outstrips the 2006 vintage, suggesting that the blow to the financial system from U.S. housing woes will be deeper than many people earlier estimated.
Posted by on 06/01 at 12:43 AM
Receiving mortgage advice early on is invaluable for any home owner. When problems do occur, mortgage advice and debt counseling can often be combined. Ways of saving money can be discussed, methods to make extra money identified and a complete solution brought into action to Stop Repossession.An extension of the mortgage term does result in more interest being paid, but also brings the monthly repayments down. Being able to stop repossession is all about making life more affordable and spreading the cost over longer helps to achieve this objective.
Posted by on 06/01 at 02:06 AM
Do you know about reverse mortgage?
Posted by on 06/03 at 01:46 AM
Understanding real estate investment is crucial because it usually involves a substantial investment and a long-term one. Moreover , the real estate market can be unpredictable. This is particularly important when one goes beyond buying a home to actually “investing” in real estate.
Posted by on 06/08 at 12:25 AM
In today’s modern society there are so many different kinds of fraud taking place right under your own nose it really beggars belief.As well as income tax fraud mortgage fraud is right up there with the rest of them.And if where not keeping a vigil on things then you could be the victim of a fraud your self.
Posted by on 07/27 at 11:22 PM
Great stuff loved the post.
Posted by on 08/26 at 04:25 AM
What maximum loan can be given to employee for training by the employer according to indian law ?
Mortgage fraud is a term used to describe a broad variety of criminal actions where the intent is to materially misrepresent or omit information on a mortgage loan application to obtain a loan or to obtain a larger loan than would have been obtained had the lender known the truth.
Posted by on 09/03 at 10:33 PM
Hi,
Very nice article, thanks a lot for sharing ....cheers keep going
Posted by on 10/13 at 02:51 AM
Hi,
I am planning to start a small web-designing business. Do I require a license for that?
Posted by on 11/02 at 10:50 PM
Hi,
Do I need to register as a business if I want to work in India as a consultant?
Posted by on 12/01 at 01:35 AM
Hi,
I want to start up some small business with very less investment. Plz suggest what can I do?
Posted by on 12/01 at 01:38 AM
Hi,
How much is a home plate signed by Pete Rose worth or going to be worth?
Posted by on 12/01 at 08:01 PM
interesting read, thanks for helping keep me busy at work
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 
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