bubbleinfo.com

From HW:

Who said housing scams can’t read like a zombie movie? In this scam, a man came back from the dead to trick people in to investing in bad houses. I foresee a blockbuster hit.

Cleveland’s News Net 5 uncovered the scheme, perpetrated by a man now named John Alexander — who used to be Michael Pedwell — who once faked his own death for insurance money. The scam was easily uncovered, he pleaded guilty to insurance fraud and then he disappeared.

He reappeared years later in California under the name Michael Alexander before partnering with Mark Tow — who was banned from selling securities in 2003 — to scam the good people of Cleveland with a company named EZ Access.

The two bought up foreclosed properties, promising investors they would clean them up, but they never did. One home was bought for $900, then sold to investors for $32,000 only weeks later with no improvements made.

The two roped the investors in with presentations, in which Alexander said they had “some exciting and very interesting, but more importantly, some very lucrative information” to share with them, and that they “have put together a complete turnkey system whereby you’ll be able to take advantage of what we can show you and offer you.”

No good zombie movie would be complete without explosions.

Two years ago, a home owned by EZ Access exploded. Destroying almost an entire neighborhood.

The pair have piled up $335,000 in potential housing court fines, more than $500,000 in unpaid taxes and $32 million in contempt sanctions for failure to appear in housing court for the last three years.

Alas, the man now known as Alexander seems to have disappeared again.

In all seriousness, such scams are no laughing matter. Though this one seems to contain all the mystery and intrigue of a mystery novel.

http://www.newsnet5.com/dpp/news/local_news/investigations/Mystery-and-fraud-behind-major-housing-scam-revealed-in-exclusive-investigation

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.

Read the rest of this entry »

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 »