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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Ohio Closing Agents Indicted for Assisting Down Payment Scheme
Stephanie Corsmeier and Stacey Lester were indicted in the Southern District of Ohio on 11 counts of bank, mail and wire fraud and conspiracy to launder money in connection with their participation in a down payment assistance scheme.
Corsmeier owned and operated a real estate title company, American Security Title, in Ohio, where she employed Lester as a disbursement clerk. From January 1, 2000 through December 31, 2004, according to the indictment, the defendants worked with co-conspirator loan officers, primarily Clarence Harris (who plead guilty to related charges in February 2006) and Ike Bronson (plead guilty to related charges in January 2006) and their shell companies LCI Financial and Inman Realty, to facilitate a “down payment assistance” scheme.
The coconspirators would recruit home buyers to purchase real estate, financing 100% of the sales price of the property with no money down. They would usually prepare a loan application stating that the buyer had funds available for the down payment and intended to use funds from his/her bank account to make the down payment. In fact the buyer didn’t have the funds or the intent to make the down payment.
After receiving the wired funds from the lender, Corsmeier or Lester would issue a check from the wired funds to one of the coconspirator companies, ostensibly for sums due in connection with the transaction. The conspirators would deposit these checks to their bank accounts and then immediately obtain a cashier’s check for the funds. This casher’s check would then be submitted to Corsmeier or another closing agent at American Security Title Company. The settlement statement would falsely reflect that the borrower provided the down payment when, in fact, the down payment had been provided by a coconspirator.
The scheme enabled buyers to qualify for loans they would not otherwise have been able to obtain and also enabled the buyers to obtain mortgages representing 100% of the purchase price as the property were appraised at inflated values and the loan amounts represented the actual purchase prices.
American Security Title Company received substantial fees for the services. Their profit in the scheme resulted from increased business volume.
The closing agents should not have disbursed loan proceeds prior to closing. That is what burns them here and proves they knew the money didn’t come from Buyer.
Most of these scams in Georgia are designed so the fraudster (i.e. Harris in this case) would front the money out of pocket to buy the Buyer’s cashier check, so the closing agent knows nothing. The fraudster hands the check to Buyer right outside the closing, so at the table it looks like Buyer’s money . However, Harris was either too cheap to front the money, or too worried the Buyer would bolt with the cashier’s check, so Fraudster wouldn’t buy the cashier’s check until he had his fraud profits in hand. Greedy
Posted by on 06/09 at 05:46 AM
WHAT KIND OF PUNISHMENT DID THE REAL ESTATE APPRAISER GET? I have been a licensed appraiser in Ohio for 15 years. Last year I took a continuing-ed class in Columbus. My instructor was one of the 5 board members that make-up the Ohio-State Appraisal Board. Members are appointed by Governor Taft. The instructor stated “Since licensing began in 1989, the State of Ohio has issued over 3400 appraisal licenses and to date [2005] only 10 appraisers have lost there license”. This is probably why we lead the nation in foreclosures. It is becoming almost impossible to operate an appraisal business above the board in Ohio. Real Estate fraud in Ohio is like a forest fire. The State is using a garden hose to try to extinguish it.
Posted by on 06/09 at 06:03 AM
Rachel,
If the loan was 100% LTV why would a down payment be required? This doesn’t make sense to me. Please clarify.
The loans were not INTENDED as 100 percent LTV. They were effectively 100 percent LTV because the borrower did not make the down payment. For example - the lender approved the loan at $80K on a purchase price disclosed as $100K. The borrower was slated to make a $20K down payment. In fact, the property was only worth $80K - although an inflated appraisal reflected it as worth $100K. The down payment was taken from and then recontributed to the closing funds. In effect, the borrower purchased the property for $80K and the lender has an $80K loan against a property worth $80K and the borrower contributed no funds to the transaction. The lender has a loan that is 100 percent LTV!
Posted by on 06/12 at 07:45 AM
Getting a loan in Pennsylvania these days is much harder than it was in 2006. Back then they were giving money away.
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.
Defaulted Loans May Haunt Seniors On Line WSJ.Com
A little-noticed law could soon result in smaller Social Security checks for hundreds of thousands of the elderly and disabled who owe the U.S. money from defaulted loans and other debts more than a decade old.
Oregon to Help Homeowners Prevent Foreclosures CBS State
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.
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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