12:02PM

Georgia broker banned for 18 months - must undertake fraud education

On April 14, 2009, the Georgia Department of Banking and Finance announced that it has entered into a Consent Order with Oluwole “Joseph” Ojeikere of Lawrenceville, Georgia, to resolve allegations pertaining to a violation of the Georgia Residential Mortgage Act.

The terms of the Consent Order include the following:

  • Mr. Ojeikere is prohibited from directing the affairs of a Georgia mortgage broker or Georgia mortgage lender or from acting as a director, officer, partner, branch manager, agent, employee, equitable owner or any other equivalent role for a Georgia mortgage broker or Georgia mortgage lender for eighteen (18) months from the date of entry of the Consent Order
  • Mr. Ojeikere is prohibited from applying for a Georgia mortgage broker’s or Georgia mortgage lender’s license, either in her individual capacity or as the owner or officer of a corporation, partnership, or limited liability company for eighteen (18) months from the date of entry of the Consent Order
  • Mr. Ojeikere shall attend in-person and complete at least four (4) hours of continuing mortgage education on the subject matter of fraud.
9:21AM

5 straw buyers arrested in Miami-Dade mortgage fraud allegations

Attorney General Bill McCollum today joined members of Miami-Dade County Mayor Carlos Alvarez’s Mortgage Fraud Task Force in announcing the arrests of five individuals involved in a criminal mortgage fraud operation that defrauded several financial institutions collectively out of more than $4.5 million. The individuals are facing charges of organized fraud, mortgage fraud and grand theft and will be prosecuted by the Attorney General’s Office of Statewide Prosecution.

The arrest warrants were issued following a 16-month investigation conducted by the Task Force, of which the Office of Statewide Prosecution is a member. Arrested were the following individuals (photos in same order as list:

  • Emerio Lima, DOB 3/25/1941, of Miami
  • Inocencia Soto, DOB 12/28/1963, of Miami
  • Pedro Fornos, DOB 12/14/1942, of Miami
  • Josefa Herrera, DOB 3/19/1948, of Miami
  • Stephen Zalka, DOB 2/14/1958, of Parkland


Those arrested are believed to be recruited straw buyers who, for a fee, would lend their names and credit to purchase numerous properties. These straw buyers were told they would not have to make any mortgage payments and that the properties would be flipped in a few months. Once the property was sold, the straw buyers would be paid once again. The scheme also included a certified public accountant who provided falsified employment verification letters on behalf of the straw buyers, at the request of co-conspirators. According to authorities, this individual never represented or met with these straw buyers.

With the straw buyers lined up, title agents prepared fraudulent HUD-1 statements on behalf of other co-conspirators, then provided the statements to the lenders. A HUD-1 settlement statement is a document which informs the lenders how disbursements will be made after a loan is funded. Some of the HUD-1 statements involved in this case contained inflated sales contract prices; others included fraudulently created liens.

Upon receiving the fraudulent HUD-1 statement, a lender would fund the loan based on the inflated sales price. The title agent, acting on behalf of the other co-conspirators, would then transfer the profits into a bank account of either a third party or a shell company controlled by one of the co-conspirators.
The arrest affidavit identifies nine properties which were used by the defendants to facilitate their scheme. These properties are located in Miami-Dade, Broward, Lee and Charlotte counties, and the majority of these properties are currently in foreclosure because of the nonpayment of the loans. The criminal investigation is ongoing and additional arrests are expected.

2:43PM

Todays existing case updates

We always publish these updates on the front page with a link to the original article and the new information. However it occured to me that some of you may well rely on the daily email and don’t visit the front page and therefore will miss these as they don’t appear in the email. So…now you do

MTSU Nursing Professor found guilty in straw borrower scheme

Ringleader Earnest Lewis is the fourth and final person to plead guilty in MD foreclosure scam

2:41PM

Yesterdays case updates

2:39PM

Wells Fargo and RELS subject of law suit alleging blacklisting of appraisers who refused to inflate values

In a press release it was announced that today two real-estate appraisers filed a proposed class-action lawsuit against Wells Fargo (NYSE: WFC) and Rels Valuation, an appraisal management service, claiming the two organizations pressured and intimidated appraisers to deliver artificially inflated home appraisal values to help close loans and increase profits.

The suit, filed in U.S. District Court in San Francisco under the Racketeering Influenced and Corrupt Practices Act (RICO), claims that beginning in 2004 Wells Fargo and Rels colluded to punish appraisers who refused to inflate appraisals by denying them future appraisal work.

Rels is one of the largest appraisal management companies in the country, acting as an intermediary between banks and appraisers. Appraisers, by law, are intended to be independent and autonomous from the influences of others, but according to the complaint are compelled to do the bidding of Rels, and through them Wells Fargo.

“We plan to show Rels effectively tells the appraisers what they want to see in the valuation, and if they don’t deliver, they are locked out of future work,” said Steve Berman, the attorney representing the plaintiffs and managing partner of Hagens Berman Sobol Shapiro.

According to Berman, Rels provides the appraiser with a predetermined figure called the ‘Borrower Estimated Value’ and expects the appraisers to deliver reports with values exceeding the Rels-supplied figures.

“We heard from appraisers who say that after providing bona-fide appraisals that come in below what Rels wants, the company contacts them and strongly suggests they reevaluate the property,” Berman noted. “If an appraiser refuses, we contend Rels simply refuses to use them again.”

Don Pearsall and Timothy Savage both claim Wells Fargo tried to strong-arm each of them into inflating appraisal values, violating the laws and regulations of the Uniform Standards of Professional Appraisal Practice (USPAP). The USPAP rules clearly state an appraiser must not accept an assignment that includes the reporting of predetermined opinions and conclusions - something the lawsuit claims Rels does on a regular basis.

According to the compliant, Rels and Wells Fargo have given appraisers predetermined comparable properties to base appraisals, further compromising the appraisers’ independence.

Plaintiff Pearsall, a long-time appraiser, completed an appraisal for Wells Fargo and Rels in 2007. After submitting his report, Rels asked that he alter the report to reflect the company’s desired views on the property.

After refusing, the suit claims Rels blacklisted Pearsall, stripping him of a large portion of his income.

Timothy Savage, an appraiser in Vail, Colorado, also submitted two appraisals to Rels in 2009, which the company rejected, asking him to increase the appraisal values. After refusing, Savage received a letter from Rels informing him that he is no longer included on the approved panel of appraisers, the suit claims.

“We’ve heard from appraisers across the country sharing similar stories - bullied into inflating prices and blacklisted when refusing,” Berman added. “Apparently the treatment that both Tim and Don experienced is the same for hundreds, if not thousands of appraisers.”

The lawsuit seeks to represent all state-licensed or state-approved appraisers nationwide who’ve been removed as an approved appraiser by Wells Fargo or Rels Valuation. The suit asks for treble damages and is the first lawsuit filed on behalf of appraisers against Wells Fargo and Rels.

You can learn more about this case by visiting www.hbsslaw.com/appraisers. If you’ve performed appraisals for Wells Fargo or Rels Valuation and been blacklisted, you can also contact attorneys at wfc@hbsslaw.com.

2:30PM

Florida AG sets up mortgage fraud website to help consumers

Attorney General Bill McCollum today unveiled [Press Release] a new website designed to help homeowners avoid mortgage fraud-related scams. The website, at http://myfloridalegal.com/mortgagefraud, provides consumers with easy access to current investigations, complaint forms, and tips to identify and avoid foreclosure rescue fraud. Foreclosure rescue fraud, or fraud involving loan modifications related to foreclosures, is the complaint topic most commonly reported to the Attorney General’s Office and involves the charging of an up-front fee for foreclosure rescue services before any services are provided, if they are provided at all.

“Companies and individuals are taking advantage of our homeowners in these tough economic times by preying on their financial situations,” said Attorney General McCollum. “If we can increase consumer education and empower people to spot scams and avoid them in advance, we can help decrease the number of victims targeted by this fraud.”

Consumers can obtain information about active litigation involving companies the Attorney General has taken action against and can download affidavit forms to fill out if they have been victimized by one of the companies on the list. Consumers can also access a list of investigations being conducted by the Attorney General’s Mortgage Fraud Task Force to see if a particular company is currently being scrutinized.

The website also features answers to frequently asked questions, consumer tips, and a list of warning signs that a company or an individual might be engaging in foreclosure rescue fraud. Additional resources are also available, including a link to a new Florida Bar website containing information for attorneys and consumers on legal training, housing help workshops and clinics being held in Florida, and information concerning the Florida Bar Lawyer Referral Service and qualified legal aid agencies throughout Florida.

In 2007, Attorney General McCollum initiated an agency-wide Mortgage Fraud Task Force to address the issues of mortgage and foreclosure rescue fraud. Since then, the Task Force has filed six lawsuits, has settled with seven companies, and is actively investigating more than 50 additional companies under the Foreclosure Rescue Fraud Prevention Act, which took effect October 1, 2008. The Task Force has also reviewed information pertaining to the business practices of more than 200 foreclosure rescue businesses.

Earlier this month, Attorney General McCollum called together representatives from state agencies, law enforcement groups, prosecutorial entities and the Florida Bar to address the state’s mortgage fraud issues and to develop a cooperative approach on behalf of Florida’s homeowners. The group will focus on a systematic method of triaging complaints and a cooperative interagency consumer education initiative. By establishing a team approach, Florida will receive an “all hands on deck” approach to ensure no case goes unaddressed.

10:51AM

Pennsylvania AG issues warning about American Escrow which closed without notice in March

In a press release Attorney General Tom Corbett today announced that the Attorney General’s Bureau of Consumer Protection has launched an investigation into the business practices of American Escrow LLC, an Illinois-based escrow company that suddenly halted operations in March 2009.

Corbett said that homeowners across Pennsylvania, along with consumers from several other states, used American Escrow to handle the payment of their property taxes and/or homeowners insurance.

“Based on our preliminary investigation, it is possible that property tax and insurance bills for more than 100 Pennsylvania consumers were not paid by American Escrow,” Corbett said. “It is essential that consumers who used American Escrow contact their local taxing authorities and homeowner’s insurance companies as soon as possible to notify them of the problem, verify what payments have been made and make arrangements to directly pay any balances that are due.”

Corbett said that consumers who suffered losses because of the sudden closing of American Escrow should file formal complaints with the Attorney General’s Bureau of Consumer Protection. Consumers are also encouraged to contact their insurance companies to determine if they can file claims for losses under their homeowner’s policies.

“It is vital that consumers take immediate steps to identify any losses and ensure that all current and future property taxes and insurance bills are being paid,” Corbett said. “Homeowners who were using American Escrow should also notify their taxing authorities and insurance companies that all future bills and statements should be sent directly to their home addresses.”

Corbett said the Attorney General’s Bureau of Consumer Protection is actively working with authorities from several other states to investigate the activities of American Escrow and determine how best to assist consumers. A letter explaining the investigation along with a complaint form has been sent to all Pennsylvania consumers who have been identified as customers of American Escrow.

“We are asking consumers to assist this investigation by providing our office with as much information as possible about their dealings with American Escrow,” Corbett said. “Details about how consumers entered into their contracts with this company and who suggested their services, along with copies of any advertising materials, brochures, correspondence and account statements will all be extremely helpful as this probe proceeds.”

American Escrow customers in Pennsylvania who do not receive a letter, or those who misplace the complaint form,can download a copy of the form.

Complaint forms and other correspondence related to the American Escrow case should be sent to the following address:

PA Office of Attorney General, Bureau of Consumer Protection
564 Forbes Ave.
6th Floor, Manor Complex
Pittsburgh, PA 15219

Consumers with specific questions about the American Escrow investigation should contact the Pittsburgh Regional Office of the Attorney General’s Bureau of Consumer Protection, at 412-565-5134.

3:03PM

Pompano Beach man arrested over forged deeds to elderly mothers condo

The Broward County Sherrifs office has announced [Press Release] the arrest of Marco Secolo (pictured below), male, 39, 12-3-69, 3200 block of Northeast 11th Street, Pompano Beach, who is accused of forging a deed to his mothers property.

When Marco Secolo’s mother’s mind began to succumb to the effects of Alzheimer’s disease, she became disoriented, confused and her memory was spotty. She needed an advocate, someone to protect her and look out for her best interests.

Instead, her son tried to steal about $158,000 from her in cash, property and possessions.

He moved into and fraudulently signed a deed claiming half ownership of her Pompano Beach condominium. He transferred more than $50,000 from her bank account to his. He stole her social security check and transferred the title of her 2002 Mercedes-Benz into his name.

A warrant was issued for Marco Secolo’s arrest earlier this month, and he turned himself in Monday on a charge of exploitation of the elderly, a first-degree felony.

Rose Secolo is now in an assisted living facility, and her other children have assumed responsibility for her welfare.