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From 10News:

SAN DIEGO — A woman was arrested in connection with an alleged housing scam centered in the South Bay, the San Diego County District Attorney’s Office announced Monday. 

The district attorney’s office said Dianne “Harmony” Brown illegally took over dozens of homes in Chula Vista, rented them out and turned a huge profit.

10News learned Brown was charged with 61 felony counts, which included burglary and drug charges as well as charges of filing false instruments.

Last month, Brown told 10News the company she and her husband operated, Prudent Constituents Association (PCA), was legitimate and above board.  However, investigators said Brown illegally rented out homes she did not own. Some realtors told 10News she was pocketing up to $60,000 a month as part of the alleged scam.

Some realtors said Brown used a loophole to fraudulently file quit claim deeds with the county that allowed PCA to gain the rights to various properties.

Brown insisted she was helping previous homeowners by using the rent money to fund lawsuits against banking institutions on their behalf.  “When the case gets settled that’s when PCA will split the award with the owners. If we can’t find the former owners, then the money will go into a trust with the state,” she told 10News in an interview in early January.

Brown’s husband, Dexter, was not arrested for his involvement with the company.

The Chula Vista Police Department and Chula Vista City Councilman Rudy Ramirez held a public meeting at Thurgood Marshall Elementary School and listened to concerned parents and realtors, who said squatters are terrorizing neighborhoods.

“They have showed me video of parties going on, urinating on their lawns, running across and peeking in the windows,” said realtor Terri Dillion. “These people… are invading areas of Chula Vista.”

Some at the meeting said police need to step up, while others blamed the banks. All said the system is flawed.  “I’m going to file a lawsuit against [Bank of America] if they don’t get off their fat corporate ass and go and stand up as property owners and get those people out,” said homeowner Bill Gersten.

Steve Lemack lives by the Browns. He said at the meeting that they are still operating and believes he and his family members are not safe.

“The rest of the group is still in the house,” he said. “I’ve been threatened. My family’s been threatened… verbally and in writing. They’ve come to my house and threatened my grandkids and they’re still out there… the rest of the group is still there. They told my grandkids, ‘Get out of the house for a couple of days.”

10News has a video here: http://www.10news.com/news/30393744/detail.html

From Kelly Bennett at the voiceofsandiego.org:

This time three years ago, we were working on an investigation into why more than 80 condos in North San Diego County fit an odd pattern of extravagantly high purchase prices and near-immediate foreclosure.

Today, the man at the center of what Will Carless and I uncovered in our “A Staggering Swindle” investigation pleaded guilty to federal charges of money laundering and conspiracy to commit fraud.

Jim McConville went up and down the state for a few years last decade, convincing dozens of people to rent him their identities. He used their credit scores to dupe banks into granting mortgages to those individuals, often buying a handful of condos (whose prices had been artificially inflated) at once in one person’s name. The purchase prices we found in North County at apartment-turned-condo complexes in Escondido and San Marcos were way higher than what the market should’ve warranted in the middle of 2008.

McConville then kept the difference between what he’d agreed to buy the condo for and the loan the bank approved. His company captured more than $120,000 out of each of the transactions he did here. In just three complexes in San Diego County, McConville pulled out more than $12.5 million, according to developer records we analyzed.

Because now-government-controlled mortgage banks Freddie Mac and Fannie Mae bought the loans after lenders made them, taxpayers are on the hook for a big chunk of the losses accrued when the condos went into foreclosure.

Several other defendants have already pleaded guilty to lesser charges. McConville is scheduled to be sentenced on April 18 in the Bay Area.

If you’re just catching up on the story, here’s a link to our initial investigation and the pieces we’ve reported since then.

From cnnmoney.com (seen at CR):

NEW YORK (CNNMoney) — Delinquent borrowers facing foreclosure are learning that they can stay in their homes for years, as long as they’re willing to put up a fight.

Among the tactics: Challenging the bank’s actions, waiting to file paperwork right up until the deadline, requesting the lender dig up original paperwork or, in some extreme cases, declaring bankruptcy.

Nationwide, the average time it takes to process a foreclosure — from the first missed payment to the final foreclosure auction — has climbed to 674 days from 253 days just four years ago, according to LPS Applied Analytics.

It takes much longer than that in Florida, where the process averages 1,027 days, nearly 3 years. In D.C., foreclosure averages 1,053 days and delinquent borrowers in New York often stay in their homes for an average of 906 days.

Because California is a trustee-sale state, the delays are shorter – only 11 months on average:

And while some borrowers are looking for ways to make good with lenders and get their homes back, many aren’t paying a dime. Nearly 40% of homeowners in default have not made a payment in at least two years, according to LPS.

Many of these homeowners are staying in their homes based on a technicality. There is rarely any dispute over whether or not they have stopped paying their mortgage, said David Dunn, a partner at law firm Hogan Lovells in New York, who represents banks and other financial institutions in foreclosure cases.

“In my experience, they never say, ‘I’m not delinquent’ or ‘I want to pay my bill but I’m confused over who to send it to,’ or ‘Oh my God, you mean I didn’t pay my mortgage?’ They’re not in technical default. They’re in default because they’re not paying,” he said.

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There will be realtors who see this video and think, “Jim, you have it all wrong.”

“The listing agent’s duty is to the seller only, not the bank.”

But that is the short-sighted, greedy viewpoint.  For agents to hide behind that simple thought, and ignore the big picture so they can pad their wallets is how we got here in the first place.

The big-picture viewpoint:

1. It’s wrong because it’s wrong.

2. To purposely cause banks to accept less than full value increases the eventual taxpayer bailout, which our children and grandchildren will inherit.  If you are OK with that, you are a dirtbag.

3.  To perpetuate the fraudulent activity increases the chances that banks will shut down the realtor program, and find a way to liquidate these properties without us.

4.  I encourage you to sell my listings, you should allow me to sell yours.  It is how the co-op realtor business was designed in the early 1960s, and should be respected – or disbanded once and for all for the kill-or-be-killed program.

If you are a realtor and still have a problem with this, then submit your name and license number with your comment so I can turn you in too:

From usatoday.com:

Three conspirators in a Valley mortgage-fraud ring say a Mesa minister with a worldwide following masterminded the scheme.

A former loan officer, escrow agent and straw buyer who have pleaded guilty as part of a deal with federal authorities say they helped Clint Rogers launder millions of dollars through his ministry.

In a plea agreement made public this week, former Scottsdale loan officer Ernest Babbini told prosecutors that he submitted $5.5 million in phony mortgage-loan documents on 15 homes purchased by Rogers and his wife, Angela Faith Rogers.

The plea agreements provide insight into a form of mortgage fraud commonly referred to by authorities as a cash-back operation, in which participants lie on applications about home values, transfer title from one buyer to another while obtaining loans on the bloated price and then pocket the difference.

Babbini, along with former Scottsdale escrow agent Drew Hull and Tempe homebuyer Shannon Kato, admitted in court documents that they used “double escrow” transactions and sales to bogus family trusts in order to artificially inflate the values of the properties and hide the identity of the purchaser from banks.

Clint Rogers is the head of Mesa-based Clint Rogers Ministries and conducts faith-healing events at churches throughout the United States, Africa, Asia, Europe and elsewhere. He and his wife are scheduled for trial on Valentine’s Day 2012.

“My client has always maintained his innocence and does so to this day,” Rogers’ lawyer, Eric Kessler, said this week.

Rogers and his wife were indicted by a federal grand jury in March, accused of fraudulently obtaining $5.5million in financing for 15 homes bought in 2006 and 2007. Authorities say they got about $2.5million in cash, which they concealed in ministry accounts.

Federal authorities said the case against the Rogerses is significant because of the number of homes involved and the amount of cash they generated. They said the defendants obtained anywhere from $113,000 to $530,000 in cash back from each home sale.

The couple’s home purchases were detailed in a 2009 investigation by The Arizona Republic, which found that they bought 26 homes in less than two years and that nearly all of them went into foreclosure.

Property records show that Rogers and his wife bought homes that other sellers had purchased for thousands of dollars less just hours, days or weeks earlier.  Records show that 15 of the homes were sold to Rogers by Tempe resident Shannon Kato.

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It must have been a slow week for real estate news – from the latimes.com:

Could today’s seductive conditions in the housing market — severely marked-down prices, record low interest rates and hundreds of thousands of foreclosures waiting to be resold — be breeding new generations of the very practices that led to the crash?

In an ironic twist, there are signs that the wreckage left over from the housing bust may be reigniting dubious real estate schemes and fraud. According to researchers:

• Property flippers are back in action in places like south Florida and Las Vegas, where condominium prices crashed but are now appreciating again in some areas.

• So-called floppers are defrauding banks by hijacking short sales at prices below what legitimate buyers are willing to pay. In these schemes, realty agents obtain fraudulent appraisals to persuade banks to sell houses at below-market prices to investor groups. The investors then flip the houses at fair market prices to ordinary home buyers and split the quick profits.

• Creative “credit enhancement” companies are “renting” investors the bank account balances they need to demonstrate to lenders that they have the financial wherewithal to qualify for a mortgage. The accounts are real, but they don’t belong to the loan applicants who claim them. Account names are assigned to applicants — who pay for the service — but they are never allowed access to the money. When mortgage underwriters check to verify the deposits, which are in reality fraudulent sub-accounts, they are told the money is in the name of the loan applicant.

• Investors are hoodwinking lenders into giving them low down payments and rock-bottom interest rates by lying about their intentions to occupy the property they plan to buy as a principal residence. Some investors consider such dissembling nothing more than a fib, but in reality it’s bank fraud. Researchers at the Federal Reserve Bank of New York have documented that widespread falsehoods by investors about occupancy played a major but previously unrecognized role in the real estate bust.

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From the Real Estalker.com:

YOUR MAMAS NOTES: Yesterday, while mindin’ the necessary ps and qs for our discussion about the Thousand Oaks, CA mansion recently leased by phoenix-like pop phenom Britney Spears, we rather randomly ran across another, smaller mansion located behind the guarded gates of the well-heeled Sherwood County Club owned as per property records–and much to our pearl clutching flabbergast–by the vastly-loathed and utterly disgraced former Countrywide Financial CEO and COB Angelo Mozilo who has the architecturally conventional (mc)mansion listed on the open market with an asking price of $3,400,000.

Mister Mozilo, a mortgage industry maverick who co-founded Countrywide in 1969 and nearly 30 years later co-founded the dramatically collapsed IndyMac Bank (now OneWest Bank), is widely regarded as one of the more Machiavellian sub-mortgage-men who helped march the U.S. (and global) economy straight off the cliff in the mid-Noughts.

While Mister Mozilo and his mortgage-making army pushed and pedaled sub-prime home loans he talked up the then-flourishing company’s stock price, earned hundreds of millions in compensation, and cashed out more than $400,000,000 worth of Countrywide stock, a large portion of it during the last couple of years of his tattered tenure as the king of Countrywide.

Alas, the sub-primed fueled real estate bubble burst sometime around 2007 and Mister Mozilo left Countrywide in 2008 after the crippled company was sold for $4.1 billion to Bank of America. In June 2009 the Securities and Exchange Commission (SEC) charged Mister Mozilo with insider trading and securities fraud. 

In September 2010 Mister Mozilo settled with the SEC and agreed to pay $67,500,000 in fines, $45,000,000 of which was paid by Bank of America. Despite the sizable payout, settlement terms allow Mister Mozilo to circumvent acknowledgement of any misconduct. We can’t vouch for or confirm it but online idle chatter says he has a net worth well in excess of half a billion dollars.

To be honest, puppies, Your Mama isn’t sure where exactly Mister Mozilo and his wife Phyllis currently (or previously) consider(ed) their primary residence. After all, In addition to the house in Thousand Oaks they now have on the market, they own a variety of luxury residences in Hawaii, Santa Barbara, and the affluent Coachella Valley desert community of La Quinta (CA).

Listing information shows the stately two-story house was built in 1999 and sits on a half acre lot that backs up to the 2nd fairway of the Jack Nicklaus-designed par-72 championship course at the Sherwood Country Club, The meticulously maintained mansion measures 6,238 square feet with a total of 5 bedrooms, 5.5 bathrooms and a finished 4 car garage.

As it turns out, listing their Thousand Oaks mansion isn’t the only recent adjustment Mister and Missus Mozilo have made to their rather extensive portfolio of residential real estate. Property records reveal in March 2011 Mister and Missus Mozilo splashed out $1,800,000 on a .78 acre vacant parcel of land at The Madison Club, an upscale, guard-gated golf community in La Quinta (CA) that weaves and winds its way through and around an undeniably scenic Tom Fazio-designed course.

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Thanks to the reader who sent this in, from the tampabay.com:

Tampa condo owner Alejandro Salazar was surprised to learn that Clearwater lawyer Bruce Harlan was representing him in a foreclosure case.

Surprised because Salazar never met Harlan, didn’t hire him and didn’t even want the condo. But someone else did — Lori Polin, a real estate agent with a checkered past who paid Harlan $1,500 to delay the foreclosure because she hoped to buy Salazar’s condo in a short sale.

Because of Harlan’s actions in the case, the Florida Supreme Court this month suspended him from practicing law for 90 days starting in mid December.

“Even if Mr. Harlan had good intentions, his clients, Mr. Salazar and Ms. Polin, had adverse interests and Mr. Harlan was representing both of them at the same time,” the Florida Bar said in finding Harlan guilty of a conflict of interest.

The bizarre chain of events started in 2007 when Salazar’s architectural design business foundered and he and his wife moved to her native Spain, defaulting on their mortgage and condo maintenance fees. The Westchase Community Association took title to the condo and deeded the unit to Polin after she paid the back fees.

At the time, Polin was about to go into foreclosure on her own Westchase condo. She moved into the Salazars’ unit and rented out hers, collecting more than $14,000 in rent, but not making payments on either property. Instead, Polin hired Harlan to delay the foreclosure on the Salazars’ condo while she negotiated with the bank to buy it for far less than the $137,000 the couple then owed.

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From HW:

Freddie Mac will force parties involved in a short sale to sign affidavits making them liable for their negligent or intentional misrepresentations in the deal, an effort to be sure it’s an arms-length transaction, according to guidance released Friday.

The new affidavit will go into effect Jan. 1, but Freddie is asking servicers to implement the change immediately to fight fraud. However this, and other changes, are meant to expedite the process of getting borrowers in default relocated.

In August, the government-sponsored enterprise alerted real estate agents to the rise in shady short sale deals. The main concern is flopping. There is a growing trend of real estate agents on the buy-side of the deal failing to disclose other bids on the property, rigging the sale at a lower price.

The fraudsters can then flip it, sometimes the same day, and pocket the difference.

In the third quarter, Freddie completed 11,744 short sales and deeds-in-lieu of foreclosure, according to its financial statement. It completed nearly 33,500 of these two foreclosure alternatives in all of 2011.

CoreLogic noted an increase in property fraud in 2011 tied specifically to flopping.

“With this change, you will have more information to identify potential mortgage fraud and a clearer understanding of the intent of all parties involved in the real estate transaction,” Freddie said in the guidance to mortgage servicers.

The guidance put out Friday also trimmed other rules to help servicers speed up the loss-mitigation process.

The GSE also required all amounts paid in the transaction, including anything going to the borrower, be documented fully in the HUD-1 Settlement Statement.

Freddie eliminated the requirement that borrowers more than 120 days delinquent have to list their home for sale before becoming eligible for a deed-in-lieu.

From the York-Dispatch:

A former East Berlin real-estate agent defrauded mortgage lenders of more than $6.2 million by filing false loan applications, then pocketed about $2.3 million of that money, a federal jury in Harrisburg determined this week.

Joanne M. Seeley, 41, now of Tolar, Texas, remains free pending her sentencing hearing, which has not yet been scheduled, according to Heidi Havens, spokeswoman for the U.S. Attorney’s Office in Harrisburg.

On Monday, jurors found Seeley guilty of four counts each of wire fraud and money laundering. Each count carries a maximum penalty of 20 years in prison and a $500,000 fine, Havens said.

Between 2006 and 2008, Seeley owned and operated the East Berlin-based business S&D Property Solutions. She was a licensed real-estate agent until November 2006, when she surrendered her license in lieu of disciplinary action, according to the U.S. Attorney’s Office.

The scheme:  Seeley used false real-estate contracts, inflated property appraisals, bogus employment verifications and fictional leases to defraud people and companies out of money. The crimes happened in York, Adams, Cumberland and Dauphin counties, officials said.

Seeley would find homes listed for sheriff’s sale and tell the homeowners they could avoid foreclosure by selling their homes to her or her buyers, who would then lease the properties back to the homeowners after the sale, according to court documents.

She assured homeowners this would allow them to pay off debts, rebuild their credit ratings and allow them to qualify for new mortgages when they bought back their homes a year or so later, officials said.

Incentives:  Seeley told buyers of the properties they would be reimbursed for all out-of-pocket expenses, including down payments, plus receive an $8,000 “fee” for engaging in the transaction, authorities said; she also promised buyers they would receive monthly rent that would cover most or all of their mortgage payments.

“Seeley submitted a plethora of false documents to the mortgage lenders in order to induce them into approving unqualified buyers’ loan applications,” according to a news release from the U.S. Attorney’s Office.

False leases:  She concealed the fact that the buyer and seller had entered into buy-back agreements, and submitted false leases to the lenders with fake tenant names and rents, officials said.

She also charged inflated commissions of up to 47 percent, officials said.

The defrauded homeowners were never able to buy back their homes, the U.S. Attorney’s Office said.  Seeley’s attorney, assistant federal public defender Lori Ulrich, could not immediately be reached for comment.