Man Uses Reverse Staging to Manipulate Short Sales

Allison Tussey —  October 31, 2012 — 2 Comments

Guerard Wallace Howard, 63, Melbourne, Florida, pleaded guilty to one count of wire fraud, he faces a maximum penalty of 20 years in federal prison. His sentencing hearing is scheduled for January 16, 2013, before Senior U.S. District Judge G. Kendall Sharp.  Howard was charged via criminal information on August 31, 2012.

According to the plea agreement, between November 2007 and August 2011, Howard operated an illegal real estate short sale flipping business, Provincial Real Estate Administrative Services, Inc. Using Provincial, Howard made properties appear to be in poor condition during appraisals, through a scheme known as reverse staging. Reverse staging is a process wherein someone manipulates the short sale price by intentionally downgrading a property’s appearance and falsely representing the condition of a property in advance of bank appraisals.

Reverse staging is done in an effort to acquire the property at below market price. In this case, it included Howard removing receptacle plates and pulling wires from the walls to falsely represent to an appraiser that the house required rewiring; falsely representing that the house needed electrical service upgrades, and repair work. In some instances it also involved spraying the house with a foul-smelling prank product, and falsely representing to an appraiser that the odor was due to mold or other potential biohazard issues that required expensive remediation costs. The reverse staging effectively caused the lender to agree to the below market offer made by Howard through Provincial. The property was then immediately resold at a profit.

According to the plea agreement, in addition to reverse staging, Howard also engaged in an illegal scheme known as commission shifting, whereby real estate agent commissions that should have been borne as an expense in the resale transaction were paid as part of the short sale transaction. The shifting of these costs, from the resale to the short sale, resulted in the short sale lender bearing realtor commission costs that should have been borne by Howard. This resulted in a higher profit to Howard, to the detriment of the short sale lender. Howard illegally obtained $219,414.52 during the short sale flipping of 13 properties in Brevard County.

This case was investigated by the Federal Bureau of Investigation. It is being prosecuted by Assistant United States Attorney David Haas.

Allison Tussey

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2 responses to Man Uses Reverse Staging to Manipulate Short Sales

  1. A homeless man was sentenced Wednesday to 180 days in the Marion County Jail for stealing Twix and Snickers candy bars worth about $2.

    This is what our government is busy with–(putting kids in jail) they won’t help put the scum of the earth in jail–but they will pick up kids and put them in jail

    —-I want my —-house back–I want my killer in jail–guess he will have to still a candy bar instead of my home and life . FHA–cfpb –and all the rest of our so called agencies, your worthless —-your all full of —-–quite warning us–just tell the whole ugly story about reverse mortgage–put the story on CNN all over the TV networks about this horrifying government scam—you aren’t making sure a person really needs this mortgage— so every one can come after us with lie after lie because you won’t do anything to the lending co. or agents. (they work for you and there safe as —-) Then they put you into these night mare of annuity’s. You’re the instigator FHA———–or you would get the truth out-you sorry —/ ——––I am living in my hell now till I die–I hope you all rot in —-—FHA—how about a class action suit to get our homes back———–you god ——– , we give you names address to go after the scum of the earth, but fraud is legal in reverse mortgage annuity fraud. Signature—-losing sorry —-

  2. why don’t you do a report of the killing of seniors by our government. they are behind the reverse mortgage scam. they make billions and the IRS gets your kids inheritance. once scammed there is not one thing you can do. the lending companies work with brokers and then put you into an annuity nightmare. everyone wants to pretend they care by giving out info on how not to get scammed–when they no it is all bullshit. I should of never of even been approached with the option(we could of been protected) but now, new money, from the old useless human beings still on the earth-get there money before they die–had my house paid for in full, retirement set up and they caught me at 62 and now 66 been dead 4 years now, wake up and there is the nightmare day after day. I wrote complaints to about 12 gov agencies furnished them with my killers info to go get him—fraud is as legal as hell-they will not do one thing. called 3 real estate litigation law firms- they will have nothing to do with reverse mortgage, seen a lawyer-was going to have to charge the whole fee–he said forget it, would take thousands to even get started. this is why my killer didn’t have to move, change address, stop his advertising on internet–consulting, planning for seniors. this is the big scam and it’s on grandma and grandpa. they have gotten the rights to start telemarketing now to, you think there not after us. they hire every tom and dick–and they go through there training class—which is how to lie your ass off, because there is nothing the gov will do to you. I want my house back–they say you still own your house—my house has 166,000.00 mortgage on it now-in my book I don’t own my house, I am on the 3rd mortgage co. caring this loan. I am imprisoned in my house and I am the care taker now. I started reading contract but had to stop when I came to the part where they can come into your house !!!!!!!! help us stop the bastards–I would kill them all if I could-they have ruined my life

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