10:34AM

Daily Updates - Monday December 11, 2006

The following older entries were updated today. Click the blue link to read them.

Bloomington Man sentenced in foreclosure related bankruptcy fraud

11:49AM

Mortgage broker/loan officer license revoked

In the following press release the Georgia Department of Banking and Finance (“Department’s”) announced that on December 5th, 2006 the Notice of Intent to Revoke Annual License became final against 1st Midtown Mortgage, Inc. (“1st Midtown”), license number 19735, located at 2775 Cruse Road, Suite 1901, Lawrenceville, Georgia 30044.

The Notice of Intent to Revoke Annual License provided that 1st Midtown made false statements or misrepresented material facts to lenders and transacted business with a person who is not licensed or registered, not exempt from licensing and registration requirements and is not an employee of a mortgage broker or lender.

In conjunction with these violations, the Department issued a Cease and Desist Order to Bosedo Ero of Lawrenceville, Georgia, who is the president of 1st Midtown. This agency also issued a Cease and Desist Order to Christina Obayemi of Sugar Hill, Georgia, who, in her capacity as a 1st Midtown loan officer, made false statements or misrepresentations to lenders.

Both of these Cease and Desist Orders became final on December 5, 2006. Pursuant to state law, it is prohibited for any person knowingly to purchase, sell, or transfer a mortgage loan or loan application from or to a mortgage broker or mortgage lender who is not licensed or exempt from licensing or registration provisions.

The Department may revoke a mortgage broker or lender’s license if that entity employs an individual against whom a final Cease and Desist Order has been issued within the preceding three years if the order resulted from the commission of a prohibited act identified in the Georgia Residential Mortgage Act.

Click here to view the press release

3:32PM

Newport Beach man pleads guilty to mortgage and bankruptcy fraud

dojseal.gifIn the following press release Debra Wong the United States Attorney for the Central District of California  announced on December 4, 2006 that a Newport Coast man pleaded guilty (click here for the plea agreement) this morning to fraudulently obtaining mortgage loans that went into default and caused more than $2.7 million in losses to the federal government and commercial lenders.

Lorenzo Espinoza, 39, pleaded guilty before United States District Judge Stephen V. Wilson in Los Angeles. Espinoza pleaded guilty to conspiracy to defraud the Department of Housing and Urban Development, two counts of bankruptcy fraud, one count of money laundering relating to his bankruptcy fraud,and one count of willful failure to pay tax to the Internal Revenue Service.

In a plea agreement filed last month, Espinoza admitted that, from April 1995 until May 2001, he engaged in a scheme to defraud HUD and several commercial lenders. To facilitate the scheme, Espinoza and his associates purchased residential properties. They then sold the properties to “straw buyers” who purported to be the actual purchasers of the properties, but in fact did not provide the down payments or did not have the means to legitimately obtain a mortgage. Espinoza and his associates supplied the down payments for straw buyers and obtained bogus tax forms and paycheck stubs that were submitted with the loan applications. After the straw buyers purchased the homes, they defaulted on the mortgages, leaving the lenders, including the Federal Housing Administration, with properties worth much less than the amount funded in the mortgages.

In addition to defrauding lenders, Espinoza also admitted that he engaged in bankruptcy fraud. In February, 1999, Espinoza filed for bankruptcy and failed to tell the United States Trustee that he owned a Rolex Daytona watch, a 1990 Ferrari, a 1995 Ferrari and a 1989 Lamborghini. In late 2002, Espinoza laundered the proceeds of his bankruptcy fraud when he sold the Ferrari automobiles for $127,500.

Espinoza also pleaded guilty to willfully failing to pay income tax, admitting that he did not pay $199,053 due for the 1996 tax year.

As a result of today’s guilty pleas, Espinoza faces a statutory maximum penalty of 26 years in federal prison. Judge Wilson is scheduled to sentence Espinoza on March 12.

The investigation of Espinoza was conducted by IRS Criminal Investigation, the United States Department of Housing and Urban Development and the Federal Bureau of Investigation. Assistant United States Attorney Christine Adams prosecuted the case.

4:27PM

Montana DFI issues "phony lender" advance fee alert

On December 1, 2006 the Montana Division of Banking and Financial Institutions issued the following consumer alert to the Montana press corps and consumers warning them about an entity identifying itself as Northbay Alliance Group or Northbay Alliance (“Northbay Alliance”).

The Division of Banking and Financial Institutions has received information that an entity or person representing itself as Northbay Alliance has been targeting consumers in an “advance fee” scam. Northbay Alliance has stated to consumers that it does business at 300 Central Avenue in Great Falls, Montana. This location is a US Bank building, which has no association or knowledge of thefraudulent entity doing business as Northbay Alliance.

“Advance fee” scams entice consumers with the promise that they will be approved for a loan if they pay the lender an up-front fee. The loan never materializes and it is then that the consumer learns that the loan was just a bogus offer.

“This is apparently an attempt by a person or entity to otherwise illegally part Montanans from their money,” said Annie M. Goodwin, Commissioner of the Montana Division of Banking and Financial Institutions. “Consumers should be suspicious of any lender requesting advance fees with the promise of making a loan.”

Consumers have reported that Northbay Alliance operated a website at www.northbayalliancegroup.com in order for consumers to provide contact information if they were interested in obtaining a loan. After providing contact information on this website, the consumers were later called by a representative from Northbay Alliance. This representative would request that an advance fee be paid in order to obtain a loan.

Northbay Alliance does not hold any license issued by the City of Great Falls or the State of Montana. Anyone who questions the authenticity of an entity or person who represents itself as a financial institution doing business in Montana should contact the Division of Banking and Financial Institutions at (406) 841-2920.

2:07PM

Daily Updates - Wednesday December 6, 2006

The following older entries were updated today. Please click on the blue link to read the full entry.

 

4:52PM

CT Dept of Banking issues order to loan officer - alleges fraud

On November 8, 2006 The Connecticut Dept of Banking issued a Notice to Issue a cease and Desist Order against Raymond L. Patrice who was registered as a loan originator with VIP Mortgage Corporation (“VIP”).

The Dept allege that on February 9, 2006, Respondent took two loan applications from a borrower for the purchase of two different properties, each of which indicated that the property was going to be the borrower’s primary residence. Based on one of the applications, Credit Suisse Financial Corporation, a first and secondary mortgage lender/broker licensee, made a first mortgage loan and a secondary mortgage loan, both of which closed February 23, 2006. Based on the other application, IndyMac Bank, F.S.B. made a first mortgage loan and a secondary mortgage loan, both of which closed on February 27, 2006

Click here to view the complete Notice.

4:33PM

CT Dept of Banking issues cease and desist order, alleges misrepresentation

On November 16, 2006 The Connecticut Dept of Banking issued a Notice to Issue a cease and Desist Order against Yvette Allen who was formerly a loan officer employed with Stanley Capital Mortgage Company, Inc. whose principal office is at 270 Sylvan Avenue, Suite 260, Englewood Cliffs, New Jersey.

The Dept of Banking allege that on October 11, 2004, Allen took a loan application from a borrower for the purchase of a Connecticut property, which indicated that the property was going to be the borrower’s primary residence. Based on the application, First Franklin Financial Corporation, a division of National City Bank of Indiana, made a first mortgage loan that closed on November 12, 2004. On November 22, 2004, Allen took another loan application from the same borrower for the purchase of another Connecticut property, which also indicated that the property was going to be the borrower’s primary residence. The address stated in the application as the borrower’s residence was the same as that stated in the October 11, 2004 loan application, and the application did not reflect the borrower’s mortgage obligation for the loan that closed on November 12, 2004. Based on the application, IndyMac Bank, F.S.B. (“IndyMac”) made a first mortgage loan that closed on December 30, 2004.

On October 29, 2004, Allen took a loan application from another borrower for the refinance of his primary residence in Connecticut. According to the application, the borrower’s monthly base income from his employment was $5,000 and the borrower owned one other property. Based on the application, IndyMac made a first mortgage loan which closed on December 31, 2004. On December 28, 2004, Allen took another loan application from the same borrower for the purchase of an investment property. The application stated that his monthly base income was $5,500 when it was actually $4,604. Based on the application, Greenpoint Mortgage Funding, Inc., a first and secondary mortgage lender/broker licensee under Part I of Chapter 668, Sections 36a-485 to 36a-534a, inclusive, of the Connecticut General Statutes, “Mortgage Lenders, Brokers and Originators”, made a first mortgage loan and a secondary mortgage loan, both of which closed on January 27, 2005.

Click here to view the complete Notice.

4:13PM

Two appraisers charged by Colorado Division of Real Estate

On October 31, 2006 The Colorado Division of Real Estate  announced a decision by the Colorado Board of Real Estate Appraisers to file charges against two real estate appraisers for violating Colorado law. The Board filed charges against:

James Esters (Parker) seeking revocation of his license and a $24,000 fine for 48 violations of the real estate appraiser standards. Division of Real Estate investigators allege that Esters overvalued 7 properties in the Pueblo area an average of 70% over their real value. One property was allegedly overvalued by 100%. All 7 properties went into foreclosure.

Albert Jajt (Pueblo West)  In a separate action the Board filed charges against alleging 113 violations and is seeking revocation of his license and a fine of $56,500. Fajt is alleged to have overvalued at least 12 properties in the Colorado Springs area, increasing the sales price of one home by 46%. Many of the properties were listed for sale at reduced prices for months, but Fajt adjusted his appraisals to reflect the increased sales prices.

Allegations against both appraisers include charges of using improper comparables and other practices to artificially inflate the value of properties. Such practices are harmful to consumers and lenders and are believed to contribute to the increase in real estate foreclosures in Colorado.

Click here for the DORA Press Release