Friday, June 09, 2006

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.

1324 Ryland Avenue, Cincinnati, Ohio

726 Whittier Street, Cincinnati, Ohio

1216 Blanchard Avenue, Cincinnati, Ohio

316 Mohawk Place, Cincinnati, Ohio

5211 Lillian Drive, Cincinnati, Ohio

138 Kinsey Street, Cincinnati, Ohio

1610 Neilson Place, Cincinnati, Ohio

1526 Lincoln Avenue, Cincinnati, Ohio

1992 Harrison Avenue, Cincinnati, Ohio

6833 Greismer Avenue, Cincinnati, Ohio

3515 Wabash Avenue, Cincinnati, Ohio

1137 Grand Avenue, Cincinnati, Ohio

2540 Queen City Avenue, Cincinnati, Ohio

4143 Langland Street, Cincinnati, Ohio

2810 Preston Avenue, Cincinnati, Ohio

1241 Lincoln Avenue, Cincinnati, Ohio

1721 Grand Avenue, Cincinnati, Ohio

1225 Quebec Road, Cincinnati, Ohio

2270 Loth Street, Cincinnati, Ohio

5726 Argus Road, Cincinnati, Ohio

3058 Kerper Avenue, Cincinnati, Ohio

1726 Denham Street, Cincinnati, Ohio

3331 Hewitt Crescent, Cincinnati, Ohio

1647 Iliff Road, Cincinnati, Ohio

4255 Kirby Avenue, Cincinnati, Ohio

2159 Oesper Avenue, Cincinnati, Ohio

511-513 Forest Avenue, Cincinnati, Ohio

515 Hickory, Cincinnati, Ohio

3022 Gilbert Avenue, Cincinnati, Ohio

1928 Bigelow Street, Cincinnati, Ohio

3020 Gilbert Avenue, Cincinnati, Ohio

2026 Burnet Avenue, Cincinnati, Ohio

1416 Joseph Avenue, Cincinnati, Ohio

533 Rockdale Avenue, Cincinnati, Ohio

1226 Dewey Avenue, Cincinnati, Ohio

1913 Losantiville Avenue, Cincinnati, Ohio

1628 Blair Avenue, Cincinnati, Ohio

869 Hutchins Avenue, Cincinnati, Ohio

1851 Clarion Avenue, Cincinnati, Ohio

3628 Idlewild Avenue, Cincinnati, Ohio

5911 Erie Avenue, Cincinnati, Ohio

3573 Bogart Avenue, Cincinnati, Ohio

mortgage fraud

1. 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

2. 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

3. Rachel,

   If the loan was 100% LTV why would a down payment be required?  This doesn’t make sense to me.  Please clarify.

   Posted by John Wyatt, CMB  on  06/12  at  07:18 AM

4. 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

5. Getting a loan in Pennsylvania these days is much harder than it was in 2006.  Back then they were giving money away. 
   

   Posted by  on  08/11  at  07:09 AM