Monday, April 07, 2008

Settlements Reached In Foreclosure Rescue Case

Settlements totaling $89,000 have been reached with four defendants in a foreclosure rescue civil case in Maricopa County, Arizona Superior Court.

Lin Liou, 47, Chandler, XiaoFen Liu, 33, Laveen, Liang Zhao, 44, Chandler and Qiao Zhu, 37, Chandler, all of Arizona, were allegedly straw buyers who obtained mortgage loans worth millions of dollars that were used to remove equity from the homes of people facing foreclosure.  Straw buyers are loan applicants used by scam artists to obtain home loans. They usually do not intend to occupy the properties they are buying or pay off the mortgages they obtain.

According to court documents, the defendants participated in a foreclosure rescue scheme designed to skim equity from properties of distressed homeowners for the defendants’ benefit.  The State alleged that the scheme worked like this:

An operator would contact a homeowner at risk of going into foreclosure and convince the homeowner to use his refinancing assistance; trustees linked to the operator would take and convey legal title of the property to a straw buyer, who would use his/her good credit to secure mortgage loans far in excess of the underlying debts; a loan officer would prepare and present false information on behalf of the straw buyers to lenders, and a closing agent would conceal and distribute the scheme’s illegal proceeds to the defendants

The State alleged violations of the Arizona Consumer Fraud Act and the Arizona Racketeering Act, including the illegal conduct of an enterprise, a scheme or artifice to defraud, money laundering, forgery and theft in connection with the foreclosure rescue scheme. 

The settlements, in the form of Consent Judgments, do not constitute a finding or admission of wrongdoing. They prohibit the defendants from:

* Engaging in any misrepresentations or fraudulent activities in connection with obtaining financing for real estate purchases, or in purchasing or selling real property.

* Providing false or misleading information to mortgage lenders regarding income, assets, or debt, misrepresenting to lenders the purpose for obtaining a mortgage loan, or misrepresenting to lenders the relationship between the parties to a real estate transaction.

The settlement requires the four defendants to pay the Attorney General’s Office a total of $89,000.  The money will be used to pay for consumer fraud education, attorneys’ fees and investigation costs.
Maricopa County Superior Court Judge Pendleton Gaines approved the settlements.

The case, Arizona v. Peter Hou, Yanjun Hou, and Stress Free Equity Corp., et al., is pending against other defendants in Maricopa County Superior Court.  Assistant Attorney General Cherie Howe is handling this case.

mortgage fraud

1. You tell half the story. What happens to the one that got scamed? Did they lose there home or did they win there home back? What about the title agancy was there nelgance on there part? The mortgage company was there neglance in there part?

   Posted by  on  04/09  at  12:24 AM