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Category Archive: ‘Fraud’

Corruption, Lies, and Deceit

Chase Witness

Every American should read this article that exposes the cozy relationship between big banks and government – thanks daytrip for sending!

http://www.rollingstone.com/politics/news/the-9-billion-witness-20141106

An excerpt:

One mortgage in particular that sticks out in Fleischmann’s mind involved a manicurist who claimed to have an annual income of $117,000.  Fleischmann figured that even working seven days a week, this woman would have needed to work 488 days a year to make that much. “And that’s with no overhead,” Fleischmann says.  “It wasn’t possible.”

Posted by on Nov 9, 2014 in Fraud, Mortgage Lawsuits | 3 comments

‘Control Fraud’

Finally, Wall Street gets put on trial: We can still hold the 0.1 percent responsible for tanking the economy

Here’s a fascinating story about the prosecution of people who defaulted on liar loans they obtained in 2006.

The U.S. Attorney accused of them of mortgage fraud, and the defense attorneys – some appointed by the state – made the case that banking executives intended to make fraudulent loans.

The defendants were acquitted.

Click on the link below for the full story:

http://tinyurl.com/kot6d4a

Hat tip to daytrip!

Posted by on Sep 9, 2014 in Fraud, Mortgage Lawsuits | 8 comments

Cole Gets 17.5 Years

crispy

Hat tip to W.C. Varones for sending in this article on Crisp and Cole, the two real estate agents in Bakersfield who were found guilty of defrauding banks out of nearly $30 million:

http://www.bakersfieldcalifornian.com/local/breaking-news/x2027872331/David-Crisp-sentenced-to-17-1-2-years-wife-to-probation

FRESNO — For their roles in a mortgage fraud case that rocked Bakersfield, David Crisp was sentenced Monday to 17 1/2 years in prison while his wife, Jennifer, received what the federal judge in the case called “the break of a lifetime”: five years probation.

David, 34, was immediately remanded to custody to begin serving what amounts to the same sentence given in February to his former business partner, Carl Cole, who like Crisp had pleaded guilty to conspiracy to commit mail, wire and bank fraud. Both former principals of Crisp & Cole Real Estate and Tower Lending were ordered to pay restitution of more than $28 million.

In a news release, federal prosecutors said David had finally “crashed hard” after flaunting his “ill-gotten wealth” and going around in exotic cars, Armani suits and a private jet.

“David Crisp lived in the fast lane, steering a real estate company that was all image and no substance,” U.S. Attorney Benjamin B. Wagner wrote.

As the housing bubble burst, Crisp & Cole’s projects fell through, home defaults mounted and lawsuits were filed. By September 2007 the IRS had slapped David and Jennifer Crisp with a $111,170 lien in back taxes and the FBI began investigating.  Within days, more than 75 federal agents swarmed over 13 properties related to the former Crisp & Cole company.

In his plea agreement, David Crisp admitted that he and his co-conspirators caused losses of at least $29.8 million to defrauded lenders.

The Crisps’ guilty pleas brought to 14 the number of defendants who have done so in the case.

As for the success he appeared to achieve as a young real estate mogul, Crisp told the judge, “It got to my head, your honor.”

His Fresno lawyer, Eric Kersten, portrayed Crisp as an inexperienced “kid” caught up in a booming market. Kersten tried to shift some of the blame to Cole and the bankers anxious to give out loans during the real estate boom.

“Everybody was making money. It was like the wild West,” Kersten said.

Posted by on Jul 16, 2014 in Fraud, Scams | 6 comments

Short-Sale Flipping

Here is investigative reporting for you.

Jason Hidalgo from the Reno Gazette-Journal found that dual-agency short sales with a prearranged cash buyer accounted for more than 10 percent of Northern Nevada’s 2,096 single-family home short sales last year.  He looked me up in February to get my thoughts on short-sale flipping, and then in his story he lays out two offenders:

http://pages.rgj.com/specialreports/soldshort/index.html

Here is an excerpt:

Krch Realty, which triple dipped commissions on more than half of its dual-agency short sales with cash buyers last year, did not respond to a request for comment for this article.

ssmarshallMarshall Realty accounted for nearly a third of such short sales in 2013. Broker-owner Marshall Carrasco defended his company’s transactions and referred further questions to his lawyer, who wrote to the Reno Gazette-Journal to “proceed with caution” on any article about Carrasco.

“Mr. Carrasco and Marshall Realty have represented many sellers in short sale transactions,” attorney James M. Walsh wrote. “As noted, full disclosure is made to the short sale sellers of the nature of the transaction. Mr. Carrasco, on occasion, presents these listings to individuals or entities that he knows are interested in purchasing short sale properties.”

Investor Jeremy Page of Harcourts NV1 Realty, a key player in the area’s real estate investment scene, stressed that all his short sale deals were done within the scope of the law. Page says his short sale purchases not only took distressed houses out of the market, they pumped more than $20 million back into the Northern Nevada economy in 2013 in the form of payments to suppliers and contractors who worked on his properties, as well as real estate agent commissions.

Real estate experts say such short sales come at the expense of the average homeowners, who do not fully understand how real estate transactions work, making them easy targets. It’s a problem that’s not limited to Nevada but is seen in other states as well where agents bend the rules for profit, said Jim Klinge, broker for California-based Klinge Realty.

“Typically, the homeowners don’t even know what they signed when these sharks get into their living rooms,” Klinge said. “I have had people call me asking if they have been taken advantage of, and in every case the answer is yes, but they never asked questions.”

The practice is especially a concern in Nevada, which saw the steepest decline in home values at the peak of the U.S. housing crisis. In recent years, the FBI identified the Silver State as a prime target for short sale fraud due to its high percentage of distressed properties.

Klinge called the lax environment surrounding short sales laughable.

“Nothing is done by anybody to stop this outright defrauding of banks, servicers and investors,” Klinge said. “There is no law enforcement or industry watchdogs, so it runs unabated. When other agents see people get away with it and make 5 percent or 6 percent commissions, then the amateurs give themselves permission to do it, too. It is going to take a district attorney vigorously pursuing this until we see perp walks nightly” for it to stop.

http://pages.rgj.com/specialreports/soldshort/index.html

This stuff happened in every major city in America over the last 2-4 years, and thankfully it’s mostly over.  Thank you Jason for a great investigative report!

Jason answers reader questions here:

http://www.rgj.com/story/news/2014/04/21/short-sale-flipping-reporter-answers-reader-questions/7983239/

Their Facebook entry here with 25+ comments and 57 likes:

Posted by on Apr 22, 2014 in Fraud, Scams, Short Sales, Short Selling | 2 comments

Mortgage Fraud

FBI-logoLast summer I met with an FBI agent to discuss a local realtor. I submitted 32 pages of conclusive evidence that implicated the realtor in committing 19 cases of short-sale fraud.

Though the agent said he would pursue it, I never heard from the FBI again.

Hat tip to daytrip for sending in this article from the nytimes.com:

http://www.nytimes.com/2014/03/16/business/a-loan-fraud-war-thats-short-on-combat.html?ref=business&_r=0

Two excerpts:

“The I.G. report confirmed what’s been clear for quite a while — that the D.O.J. has never taken mortgage fraud seriously,” Professor Levitin said. “There is going to be no comeuppance for crimes committed during the financial crisis. This sets a really bad precedent for future crises because we’re seeing that there is going to be no deterrent effect of criminal law.”

“The report fits a pattern that is scary for a democracy, that there really are two levels of justice in this country, one for the people with power and money and one for everyone else. And that eats at the heart of what I think makes this country great.”

Posted by on Mar 17, 2014 in Fraud, Market Conditions, Mortgage News, Scams | 7 comments

Short Sale Fraud is Illegal

Hat tip to Booty Juice!  From calcoastnews.com:

timbTimothy William Barnes, 37, pleaded guilty Monday to committing bank fraud. Barnes, a San Francisco resident, owned and operated Apex Properties Real Estate Brokerage in San Luis Obispo. Barnes is accused of orchestrating a property-flipping scheme in San Luis Obispo, Paso Robles, Pismo Beach and other Central Coast cities that netted him more than $500,000 in profits between January 2010 and September 2012.

Barnes understated the value of homes in documents he submitted to banks that he was asking to approve short sales. He then sold the houses at higher prices. Often Barnes concealed higher offers he had already received and simultaneously negotiated the short sale and resale of the houses.

Short sales can occur when the value of a property drops below the amount of money owed on the mortgage. In that instance, a bank can agree to a short sale, in which it accepts less than the total owed on the loan.

The FBI and the Federal Housing Finance Agency’s Office of Inspector General investigated the Barnes’s property-flipping scheme. FBI agents raided his downtown San Luis Obispo office in September 2012.

Barnes is scheduled for sentencing on June 16. He faces a maximum of 30 years in federal prison.

http://calcoastnews.com/2014/03/former-slo-broker-charged-federal-bank-fraud/

Posted by on Mar 5, 2014 in Fraud, Jim's Take on the Market, Scams, Short Sales, Short Selling | 6 comments

$15 Million in Kickbacks

The Wolf of Ramona! From Channel 6:

thatsallSAN DIEGO – A Ramona real estate agent who admitted taking part in an investment and mortgage fraud scheme that generated tens of millions of dollars in phony loans and illegal kickbacks was sentenced Friday to serve 15 months in federal custody.

During a hearing in downtown San Diego, U.S. District Judge John Houston also ordered Teresa Rose, 58, to pay more than half a million dollars in restitution to victims of the offenses.

Read More

Posted by on Jan 4, 2014 in Fraud, Mortgage Lawsuits, Scams | 3 comments

More Pocket Scum

Realtors will put a twisted spin on any new gadget in order to justify hoarding commissions.  In this article, one manager convinces himself that because he gets ’300 emails a day and four actually apply’, it’s good to use a separate system that enables pocket listings:

http://www.latimes.com/business/realestate/la-fi-lew-20131020,0,7268732.story

An excerpt:

That means agents no longer have to fool with emails selling Viagra, unwanted notices about office pools, and other non-work-related messages. That frees them up to spend more time listing houses, showing and selling properties, and attending closings. Agents found that the software allowed them to “preview” possible listings with their fellow agents and market them internally before they hit the open market.

That’s a form of so-called pocket listings, which are somewhat controversial in and of themselves.

With a pocket listing, a property for sale is held out of the local Multiple Listing Service while the seller’s agent shops it among his list of clients and friends. If the agent finds a buyer, he gets to keep the entire commission rather than share it with a buyer’s agent.

But while a house is in the agent’s pocket, so to speak, it is not exposed to the entire market, as it would be if it was on the MLS. And in theory at least, if the house was listed, the seller might have been able to secure a higher price.

Under the rules of most MLS systems, a property must be listed within 48 hours of receiving a signed listing agreement. So a true pocket listing is only a short-term ploy at best.

But the Yapmo software makes the process more efficient. Agents are able to automatically shop the property in-house directly to buyers and other agents who have expressed an interest in that kind of house, that price range or perhaps that area.

It isn’t intended to limit exposure to keep the deal in-house, Van Eck said. Rather, it is intended to maximize exposure during the “downtime” between when a listing is taken and the house is ready to show.

“Nothing in the MLS defines what people are looking for,” says Boehmig, the Atlanta broker. “But with this tool, a conversation can ensue while a house is getting ready to come on the market. Our agents can say, ‘I want to hear about that kind of stuff but not that kind of stuff.’”

Yapmo also works well for sellers who don’t know what their homes are worth, or for those who value their privacy and don’t want to tell the world that they are getting ready to put their properties on the market or what price they are asking.

“One of our agents just took a listing but was concerned about the price,” Boehmig says. “He was able to email other agents in the company saying, ‘Here’s what the seller is thinking. What do you think?’ And when the house actually came on the market, it was positioned properly to sell.”

They can dress it up all they want, but when they prominently mention that they have closed 275 pocket sales, you know their objective.  Realtors won’t police themselves – sellers need to insist on their home being placed on the open market!

Posted by on Oct 21, 2013 in Fraud | 5 comments