bubbleinfo.com

These houses sold for $1,200,000+, and those listed there now are trying to get mid-$700,000s:

(Source: FBI) - United States Attorney Laura E. Duffy announced that Simon Saed Alizadeh was arraigned in federal court in San Diego today on an indictment charging Alizadeh and Kian Ashkanizadeh with conspiracy, wire fraud, mail fraud, and money laundering in connection with a mortgage fraud scheme involving four expensive homes on Triton Street in Carlsbad, California. The charges were returned by a federal grand jury on February 2, 2012. Co-defendant Ashkanizadeh was arraigned on the charges last week.

According to the indictment, the defendants, who worked at a mortgage company called Southern California Finance, recruited family members and friends to supply their names and signatures on mortgage loan applications as the purported buyers for these million-dollar homes.

The defendants then fabricated the job titles, income, and assets of the purported buyers, so they could qualify for approximately $1 million in mortgage funding on each of the properties. The defendants arranged for $200,000 in sham “consulting fees” to come out of each transaction, and another $45,000 in fees for “construction fees”—but no consulting or construction was ever performed, according to the charges.

Instead, the defendants took for themselves most of the extra $245,000 in fees paid out from each of the four transactions. According to the indictment, the defendants disguised the funds by first funneling the payments through bank accounts owned by friends and relatives, and then causing the funds to be withdrawn or transferred to their own bank accounts.

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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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