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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New York Attorney Indicted for Subprime Mortgage Fraud Scheme
Alexander Kaplan, Brooklyn, New York, was arrested on charges of participating in a multimillion-dollar sub-prime mortgage fraud scheme. The allegations against Kaplan relate to charges contained in a superseding Indictment, unsealed in Manhattan federal court, charging 26 other individuals with participating in a wide-ranging scheme to commit mortgage fraud by submitting to sub-prime lenders loan applications and supporting documents that contained false information and material omissions. The applications and documents included false information about the prospective borrower’s employment, income, and intent to reside in the property in question, as well as the fair market value of the property, and were intended to induce the sub-prime lenders to make loans that otherwise would not have been funded.
According to the Complaint against Kaplan:
Kaplan participated in a scheme to commit mortgage fraud in the purchase of a block of ten rent-regulated condominium apartments at 243 West 98 Street ("the Apartments") in the Upper West Side, Manhattan. On two separate days in January 2006, Kaplan served as the attorney for the buyers and the lenders in the closings of the Apartments. Kaplan conspired with others to obtain mortgages, based on false statements and material omissions, to finance the purchase of the Apartments.
Specifically, with respect to seven of the ten Apartments, certain sub-prime lenders were falsely told, in mortgage applications and supporting documents, that the buyers intended to live in the Apartments as a “primary residence.” With respect to the remaining three Apartments, certain sub-prime
lenders were falsely told that the Apartments were to be used as “investment properties” that earned approximately $6500 a month in rent from tenants. None of the documents submitted to the sub-prime lenders disclosed that: (1) certain buyers were seeking loans to purchase more than one Apartment as a “primary residence;” (2) each of the Apartments was already occupied by a tenant and, therefore, not suitable for a primary residence; or
(3) the Apartments were subject to rent regulation laws that precluded the buyer from charging $6500 in rent. In addition, the sellers and the buyers were all related in some respect -either by blood or by marriage—to each other. None of the sub-prime lenders were informed of the fact that the sale was not
an “arms-length” transaction.
As attorney for the buyers and the lenders, Kaplan attended the closings, and submitted to the lenders signed and completed documents, including loan application documents, on which the buyers indicated whether the property was to be a “primary residence” or an “investment property,” as well as other documents that reflected whether the buyer intended to occupy the property.
If convicted, Kaplan faces a maximum sentence of thirty years in jail and the greater of a $250,000 fine or twice the gross gain or loss resulting from the crime.
If you dig further in fraud cases, you’ll find out that there are more people involved but never indicted. Sometimes appraisers,agents and even bankers get involve in lending fraud.
Posted by on 08/01 at 09:29 PM
Behind most every mortgage fraud scam is an attorney and title company who turn a blind eye (at best) or who are active in aiding and abetting the crime. They should all be prosecuted.
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...
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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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