Real Estate Agent Admits Scheme
Michael John Sorensen, Jr., 40, Anchorage, Alaska, pleaded guilty to wire fraud associated with kickbacks he received from home sales in Anchorage, Alaska. In connection with the guilty plea, Assistant United States Attorney Retta Randall advised the court that Sorensen was a real estate agent licensed by the State of Alaska and an associate broker with ReMax Properties, Inc. Sorensen also owned a remodeling and construction company called Right Way Construction. Using Right Way Construction, Sorensen devised a scheme to obtain money by means of material false representations. The purpose of his scheme was to financially assist buyers and defraud various mortgage lenders by submitting false invoices from Right Way Construction to title companies, who then prepared false settlement statements which reflected payments for repairs and remodeling work which were never done to the properties. The false settlement statements were relied upon by the mortgage companies when they wired funds for the mortgage loans from outside the State of Alaska to title companies in Alaska who conducted the closing on each transaction. The amounts paid by the title companies to Right Way Construction pursuant to the false invoices were then given to the buyers by Sorensen after closing as a cash-back scheme without the knowledge of the mortgage lenders. Cash backs operate by falsely inflating the sales price of a property. Read more at the Mortgage Fraud Blog.
California Mortgage Fraud Task Force Established
In recent months, an Eastern District of California Mortgage Fraud Task Force has been established. This action was taken as a result of the significant increase in reported mortgage fraud as economic conditions and the housing market have worsened. Members of the task force include representatives from the U.S. Attorney’s Office, FBI, IRS-CI, the Department of Housing and Urban Development, the United States Bankruptcy Trustee’s Office, and the California Department of Real Estate. ”Mortgage fraud is a very real problem, both legally and economically. Federal law enforcement here in the Eastern District is fully committed to holding responsible those who in their greed have stolen from their fellow citizens. It is our duty to do all we can to restore faith and confidence in the marketplace by placing these thieves where they belong: in prison.” stated U.S. Attorney Scott. Read more at the Mortgage Fraud Blog.
Operation Homewrecker Nets 19 Indictments
19 individuals were indicted for mortgage fraud-related offenses under Operation Homewrecker. The leader of this nationwide scam is Charles Head, 33, Los Angeles, California, who targeted homeowners in dire financial straits, fraudulently obtaining title to over 100 homes and stole millions of dollars through fraudulently obtained loans and mortgages. Operation Homewrecker is the product of an extensive investigation by the FBI and IRS Criminal Investigation. The charges are broken out into two separate indictments, “Head One” and “Head Two”. Head One involved a foreclosure rescue scam, netting approximately $6.7 million in fraudulently obtained funds taken from 47 homeowners, nearly all of whom were located in California. Head Two involved an equity stripping scheme, netting approximately $5.9 million in stolen equity from 68 homeowners in states across the nation. While still targeting distressed homeowners and defrauding mortgage lenders through the use of straw buyers, this time Charles Head altered the scheme so that he would receive approximately 97 percent of the stolen equity, while his sales agents and employees, and the other defendants, would receive either the remaining 3 percent of equity or a salary from the fraudulently-obtained funding. Read more at the Mortgage Fraud Blog.
Wave of Foreclosures Drives
Oversupply Triggers Lenders' Fast Sales; Mr. English BidsBy JAMES R. HAGERTY and KRIS HUDSON March 25, 2008 A glut of foreclosed homes of historic proportions is starting to drive down U.S. home prices faster as lenders put more properties on the market and buyers show signs of interest. The ability of America's lenders to manage this fire sale will be crucial to determining how long the housing market stays in the dumps -- and how quickly blighted neighborhoods can heal. The oversupply is severe: In some major markets, including Las Vegas and San Diego, foreclosure-related sales have accounted for more than 40% of all sales in recent months. Read more at the Wall Street Journal.
Colorado Brokers Recieve Cease And Desist Orders
Mortgage Fraud BlogCade Emerson Lee, was issued a cease and desist order by the Colorado Department of Real Estate. This is the first formal action against mortgage brokers accused of violating Colorado’s new lending laws. The Division of Real Estate is also seeking a $20,000 fine against Lee. In addition, Adriana Arzate‘s license was summarily suspended and the Division is seeking $10,000 in fines asserting that Arzate falsified borrowers’ financial information so they could obtain loans for which they were not qualified. Cease and desist and summary suspensions are emergency measures used when the public’s safety or welfare is in danger, and immediately prohibit the individuals from acting as mortgage brokers. Read more at the Mortgage Fraud Blog.
Kentucky Man Sentenced For Identity Theft
Mortgage Fraud BlogWillie Collins, 76, Chicago, Illinois, was sentenced to 2 years and 1 day imprisonment in United States District Court, Louisville, Kentucky, for aggravated identity theft and conspiracy to commit bank and wire fraud; all in connection with the fraudulent obtaining of mortgage loans on two Kentucky residences, one in Indian Hills and the other in Cherokee Triangle. Thomas B. Russell, Judge, United States District Court, also sentenced Collins to 3 years supervised release following incarceration. There is no parole in the federal judicial system. Read more at the Mortgage Fraud Blog.
Fed cuts key rates three-quarters of a point
Scale of central bank’s move shows the size of economic riskAssociated Press WASHINGTON - The Federal Reserve on Tuesday slashed a key interest rate by three-fourths of a percentage point, moving aggressively to contain a credit crisis threatening to push the country into a severe recession. The latest action brought the federal funds rate — the interest that banks charge each other — down to 2.25 percent, the lowest point since late 2004. It marked the second cut of three-fourths of a percentage point this year. The first occurred at an emergency meeting on Jan. 22 and was followed by a half-point cut at a regular meeting on Jan. 30. Read more at MSNBC.com.
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