Archives For Oregon

On May 18, 2018,  Attorney General Bob Ferguson filed a lawsuit against Kirkland and Portland, Oregon based Real Estate Investment Network, LLC (REIN), a company accused of scamming foreclosed homeowners out of equity in the form of surplus funds from the foreclosure sale to halt its deceptive practices while the state’s lawsuit progresses. REIN had been charging up to 67 percent of surplus funds it recovers for homeowners following a foreclosure sale. These fees amounted to tens of thousands of dollars for each homeowner.

With the real estate market booming, foreclosure sales can bring in more money than is owed on the mortgage. Homeowners can often recover these “surplus funds” through a relatively simple process with the court.

REIN approached foreclosed homeowners soon after the foreclosure sale, before they receive notice that surplus funds are available.

REIN’ misrepresented  the process for recovering surplus funds, telling consumers the process could take up to a year and will be near impossible without their help. REIN then offered to help the consumer recover the funds in exchange for a fee, but presented documentation giving REIN all the rights to the surplus funds. Although REIN returned a percentage of the recovered surplus funds to the consumer, REIN’s cut often exceeded 50 percent of the total recovery and was sometimes as high as 67 percent.

REIN omitted any information about the amount of surplus funds available, which can exceed $100,000. In one instance, the foreclosure sale led to $134,000 in surplus funds, and under the terms of its contract, REIN would recover around $90,000 for its services. In another case, REIN’s contract allowed it to recover about $88,000 of more than $141,000 in surplus funds.

My office is a watchdog for homeowners facing foreclosure,” Ferguson said. “I will hold companies that prey on homeowners facing foreclosure accountable.”

Judge Catherine Moore, a King County Superior Court judge granted an agreed order for a preliminary injunction, which, among other restrictions, prevents REIN from collecting more than the 5 percent allowed by law.

The order prevents REIN from:

  • Making misrepresentations or material omissions to consumers about surplus funds;
  • Charging homeowners more than 5 percent of recovered surplus funds plus reasonable costs not to exceed $225; and
  • Failing to disclose all the information REIN knows about a consumer’s foreclosed property, including the foreclosure sale price, liens on the property and the amount of recoverable surplus funds.

One victim told KING 5 news that when he learned the true amount of the surplus funds available, he thought, “We were getting scammed. Totally.”

Former real estate developer Roger Pollock pleads guilty to bank fraud

Real estate developer and Lake Oswego resident Roger Pollock agreed to a plea deal last week in connection with federal bank fraud charges relating to a loan he obtained for the construction of an office building on A Avenue.

Pollock, 54, is best known as the owner of the now-defunct Buena Vista Homes, whose projects included 141 houses built in Happy Valley. The fraud charges relate to a loan Pollock obtained for construction of an office building at 412 A Ave that was never built.

Shannon Egeland, a former Bend, Oregon, real estate developer who pled guilty to mortgage fraud, was sentenced on January 29, 2014, to 120 months in prison.  Egeland was to begin serving his sentence on August 1, 2014, by 2 pm.  However, just prior to surrendering, Egeland was shot.

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Five defendants, including a real estate developer, a loan officer, a mortgage broker, and an escrow officer, have been sentenced by Chief U.S. District Judge Ann Aiken for a variety of mortgage and loan fraud charges arising out of the collapse of Desert Sun Development (DSD), a company previously headquartered in Bend, Oregon.

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Six borrowers were sentenced in Oregon by U.S. District Court Judge Ann Aiken for their roles in a large-scale mortgage fraud scheme.

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Peter Wilkinson, Eugene, Oregon, was sentenced on September 3, 2013, for his role in a mortgage fraud scheme involving the submission of false and misleading loan packages to lenders.

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Jeffrey Sprague, 50, Bend, Oregon, appeared before Chief U.S. District Court Judge Ann Aiken and pleaded guilty to conspiracy to make false statements to a financial institution, to commit wire fraud, and to commit bank fraud. The charge arose out of the collapse of Desert Sun Development (DSD), a development and construction company in Bend, Oregon.

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Geoffrey Montani, 36, and Kenneth Jones, 50, both of Portland, Oregon, were sentenced to 15 months in prison in separate hearings following their convictions for wire fraud in connection with a mortgage fraud scheme.

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David Ovist, 45, Lake Oswego, Oregon, was convicted February 8, 2013, of bank and wire fraud following a 10-day jury trial.

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Tu Ngoc Tran, 38, Portland, Oregon, was found guilty by a federal jury of conspiracy to manufacture or distribute marijuana, two counts of manufacture of marijuana, making a false statement on a loan application and wire fraud.

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