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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 the nypost.com:

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.

Read the rest of this entry »

From the Carlsbad Patch:

Four men pleaded guilty in federal court in San Diego to stealing more than $11 million in a loan modification scam that preyed on desperate homeowners trying to save their homes from foreclosure.

Gary Michael Bobel, 59 of Carlsbad, Scott Thomas Spencer, 35, Mark Andrew Spencer, 32, and Travis Corey Iverson, 35, pleaded guilty to conspiracy charges. Bobel, also admitted that he failed to report approximately $489,308 in taxable income received in 2009 from 1st American Law Center. An employee of 1st American Law Center, Roger Trent Jones, pleaded guilty a year ago and was sentenced in March to 21 months in custody for his involvement in the conspiracy.

According to court documents, Bobel opened up the loan modification business in North County in 2008. The defendants used high-pressure sales tactics and outright lies to induce customers of 1st American to purchase loan modification services — for payments of $1,995 to $4,495 — such as falsely claiming to have a team of attorneys who pre-screened clients and having a 98 percent success rate in obtaining loan modifications.

Among other ruses, telemarketers pretended that their grandmothers got a loan modification through the company, that they had a special relationship with a particular client’s bank, or that the company had helped thousands of happy homeowners with loan modifications, prosecutors said. The telemarketers even persuaded homeowners to pay the company’s fees instead of using their limited funds to stay current on their mortgage payments, according to prosecutors.

Through the use of false representations and promises, 1st American Law Center fraudulently obtained more than $11 million in client payments between 2008 and 2010 from more than 4,000 homeowners across the country, prosecutors said.

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From his classified ad two years ago – sound familiar?  bobel ad

It is our mission and highest priority to provide Americans in every city with an ethical, affordable, and effective program in obtaining multiple solutions to financial freedom. Our vision is to create the largest and most reputable law firm in the country by providing education, customized client resolutions, and 100% customer service/satisfaction. It is evident, through the financial crisis that is taking place in all aspects of lending, that consumers need a personal advocate to help intervene. 1st American Law Center and Gary Bobel are committed to protecting all Americans from predatory lending and financial distress. It is our confident belief that success ultimately depends on establishing a customer service and relationship oriented environment, that instills the integrity in each team member in the crusade of “Protecting The American Dream.”
Gary Bobel

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.

Read the rest of this entry »

Excerpted from bloombergbusinessweek.com:

As Las Vegas’s housing supply exploded, so did the competition among lawyers and contractors to represent new homeowner associations in so-called construction-defect lawsuits. It was in this environment, according to plea agreements recently unsealed in an ongoing FBI investigation, that a shadowy outfit cooked up a brazen scheme.

When a new development was nearing completion, the group would buy a couple of units in the community and then transfer partial ownership of the condos to individuals secretly on its payroll, according to court documents.

While pretending to be residents of the communities, these “straw buyers” would run for leadership positions on boards of the new homeowner associations. By paying off community managers, hiring private investigators to find dirt on legitimate candidates, and rigging elections, the documents allege, the straw buyers were able to infiltrate boards at several new developments in Las Vegas from 2003 to 2008. Once in control of the boards, the straw buyers would then use their governing positions to steer millions of dollars in construction and legal fees back to their co-conspirators.  Targets included the condo complex called the Vistana.

In the fall of 2007 the Vistana board announced it had reached a $19.1 million settlement with Rhodes Homes. Of that—according to a recent accounting by current Vistana board members—about $11 million in legal fees and reimbursement expenses went to two firms: Spilotro & Kulla and Quon Bruce Christensen. That left $8.1 million for repairs.

One night that September, Amesbury, a lawyer for Silver Lining Construction, stood up at a meeting in the clubhouse. Amesbury, who owned a small firm in Las Vegas, specialized in criminal law. He was also a co-owner, along with Benzer and Kim, of the Courthouse Cafe. That night, Amesbury told the Vistana residents that in 2005 the board had signed a “right-of-first-refusal” contract with Silver Lining Construction. The contract essentially guaranteed Benzer’s company 100 percent of the construction remediation money from the settlement. Moving forward, he said, there would be no competitive bids with other contractors. Amesbury did not respond to a request for an interview sent to his attorney.

Over a roughly six-month period, from the fall of 2007 through the spring of 2008, various teams of subcontractors working for Silver Lining Construction came and went from the Vistana—painting buildings, replacing windows, and patching roofs. By May 2008, all but $450,000 of the $8.1 million was gone.

Shortly after, as the money ran out, the board members connected to Silver Lining Construction stopped showing up at meetings. “They just disappeared,” says current board member Wallace.

In the meantime, thousands of people who bought condos during the boom are still coping with their own financial hardship. Two-bedroom, two-bath condos at the Vistana were going for $200,000 in 2007. In November a 929-square-foot two-bedroom, two-bath unit sold for $59,000.

Full article here:

http://www.businessweek.com/magazine/the-king-of-all-vegas-real-estate-scams-12082011.html

From the Patch:

Two Oceanside men who pocketed more than $500,000 by filing grant deeds on vacant, foreclosed homes and sold the stolen homes to investors for cash were each sentenced Friday to three years and four months in state prison. Wesley Anderson Cristman, 28, and Michael Felix Mayfield, 30, pleaded guilty to conspiracy, grand theft and filing false documents.

“There are several victims, including the title insurance companies, the banks, but mostly the victim investors,” Deputy District Attorney Jennifer Kaplan said outside court.

Judge Robert F. O’Neill ordered the defendants to pay restitution of more than $600,000 to three victims. Mayfield unsuccessfully asked the judge to sentence him to credit for jail time served so he could go back to work and repay the victims.

“I don’t have a dollar left to my name,” Mayfield said. “All I have is my work. These people will never get paid.”

Authorities said the defendants scammed a Carlsbad investor out of $250,000 by selling him a fake deed to a bank-owned property in Vista.

Mayfield sold another man a fake deed to a home in Oceanside for more than $283,000, according to court documents. The defendants’ company, Cristman Title and Loan Investments, also held fraudulent grant deeds on homes in San Diego and Escondido, according to court documents.

For the full details of the con, click here:

http://www.nctimes.com/news/local/sdcounty/region-cops-serve-alleged-scammers-a-bitter-cup/article_339a9b7a-f57e-5789-a4bd-d28f3d3bdd5a.html?mode=story