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MORTGAGE e-ALERT© (10-07-03a)
EXEMPT PROPERTY IS PROPERTY OF THE BANKRUPTCY ESTATE OR WHY YOU MAY NOT WANT TO KEEP YOUR MONEY IN WELLS FARGO BANK IF YOU CONTEMPLATE BANKRUPTCY FACTS Debtors filed a Chapter 7 bankruptcy. At the time they held four bank accounts with Wells Fargo Bank with a total balance of $17,075. Wells Fargo HAS A STANDARD PROCEDURE WHERE IT RUNS A COMPUTERIZED COMPARISON OF NEWLY FILED CHAPTER 7 BANKRUPTCIES AGAINST ITS LIST OF CURRENT ACCOUNT HOLDERS. When it learns the account holder(s) has filed Chapter 7 bankruptcy as it did here, Wells Fargo “freezes” the accounts and sends a letter to the Chapter 7 trustee seeking direction as to whom to distribute the funds. Here the debtors claimed 75% of the money as exempt and demanded that Wells Fargo distribute the funds to them. Wells Fargo refused. The debtors then brought an action in bankruptcy court seeking sanctions and attorney fees for violating the automatic stay. The bankruptcy court denied the motion finding the exempt funds were not part of the bankruptcy estate. The debtors appealed. THE 9TH CIRCUIT U.S. BANKRUPTCY APPELLATE PANEL said . . . Reversed. When the Chapter 7 bankruptcy is filed the estate is created consisting of all the property the debtors own including the bank deposits. The debtors may exempt property and once the claim of exemption is made interested parties have only 30 days to object to the claimed exemptions. If no objections are made timely title to the property goes to the debtors and the debtors are guaranteed payment. The Appellate Panel held the bankruptcy court was wrong and reversed. (Mwangi v. Wells Fargo Bank, N.A., in re Mwangi, U.S. Bankruptcy Appellate Panel, 9TH Cir. 09-1408, 6-30-10) MORAL In the meantime Wells Fargo keeps the money and gets the use of it until this is all ironed out. Consider how many people have accounts at Wells Fargo and how much money it freezes and gets the use of until a decision is made? FORECLOSURES EXPECTED TO REACH MORE THAN ONE MILLION HOMES BY THE END OF 2010 FACTS U. S. Banks for the three month period ending June 30, 2010 repossessed through foreclosure 269, 952 homes per RealtyuTrac. In the same time period 895,521 foreclosure notices were served. California alone there were 192,422 foreclosure notices filed in the second quarter of this year. Nevada has one in every 17 homes in foreclosure on average. (lat71510) MORAL What does this mean to you? Try short sales if you are a broker. Remember if you hold a real estate license you can sell homes and list them as well. BUT remember lenders try to get paid by having the borrower sign a document allowing the lender to sue them if the lender chooses for the difference. If you are protecting the seller, then have them delete the clause. Homeowners in foreclosure need to know the risks of a foreclosure, whether the lender can sue them after foreclosure and the income tax ramifications of a foreclosure. If you like we can conduct a seminar on this subject at no charge. BUT there have to be enough people interested and that preregister before we set up the class; IF YOU WOULD LIKE TO ATTEND A FREE CLASS ON THE SELLER RISKS OF FORECLOSURE AND SHORT SALES THEN YOU NEED TO CALL LORETTA AT 714-662-4990 TO REGISTER. IF THERE ARE ENOUGH I WILL SET THE SEMINAR. I DID ONE IN EAST BAY LAST MONTH AND WE HAD 60 PEOPLE IN ATTENDANCE. IF YOU ARE A TRADE GROUP WE CAN DO IT FOR YOU AT NO COST UNLESS I HAVE TO FLY IN AND RENT A CAR. THEN THE COST IS THE EXACT COST OF THE AIRFARE AND THE CAR. MORE INFORMATION ON THE BILL AFFECTING MORTGAGE BROKERS AND CONSUMERS FACTS The FINANCIAL REFORM BILL protects consumers from the home-lending abuses that led to thousands of foreclosures in Silicon Valley by establishing the BUREAU OF CONSUMER FINANCIAL PROTECTION. The provisions establishing the Bureau grant the Bureau rule making authority and provide the Bureau with supervisory authority over nondepository covered persons. This includes any person that engages in offering or providing a consumer financial product or service and any affiliate of such person if the affiliate acts as a service provider to such person. Lenders are required to ensure borrowers have the ability to repay a home loan and restricts costly features of many mortgages, such as prepayment penalties and fees to brokers for steering borrowers to higher-priced loans. Mortgage applications are modified to make them easier to understand and allow a better ability to comparison shop for loans. Stricter requirements apply to some types of mortgages including negative amortization loans, interest-only loans, and balloon payments. Banks will be required to retain 5 percent of these types of loans on their books. The new law places limitations on loan originator compensation to a total of 3 percent for points and fees based on the total loan amount. Lenders are required to consider a consumer’s ability to repay a mortgage loan and the bill expands the coverage of HOEPA. The new rules will not apply to temporary, or bridge, loans or to reverse mortgages. MORAL Read the bill very carefully and read the new regulations even more carefully. We will set a seminar as soon as the President signs the bill. BUYING CONDOMINIUMS, COMMERCIAL OR BUSINESS TO BE CONSTRUCTED MAY REQUIRE COMPLIANCE WITH THE INTERSTATE LAND SALES FULL DISCLOSURE ACT (“ILSFDA”) (PRONOUNCED, “ILLS-FI-DA”), 15 U.S.C. § 1701 ET SEQ. FACTS There are two exemptions that can apply to avoid the developer from complying with the INTERSTATE LAND SALES FULL DISCLOSURE ACT (ILSFDA). One is where there are less than 100 units to be developed and the other is where the lots are already improved called the Improved Lot Exemption. Barring these exemptions the seller must comply. To qualify for the Improved Lot Exemption under § 1702(a)(2), which provides that a sales contract must “obligate the seller ․ to erect a [residential, commercial, condominium, or industrial] building thereon within a period of two years,” the sales contract must obligate the seller to build and deliver the required structure within two years of the date that the purchaser signs the contract and incurs obligations, rather than within two years of the date that the seller signs the contract. The Improved Lot Exemption of § 1702(a)(2) recognizes a limit to the statute's protections in circumstances where a purchaser receives assurances that the lot he is purchasing either already contains a building or structure or will contain one within 24 months of the purchase date. ILSFDA is a remedial statute enacted to prevent interstate land fraud and to protect unsuspecting and ill-informed investors from buying undesirable land. The Act is designed to prevent fraud and deception in the sale of undeveloped land. The statute requires that specified disclosures be made prior to a purchaser's execution of a sales contract. These disclosure requirements are designed to protect purchasers by ensuring that prior to purchasing certain types of real estate, a buyer [is] apprised of the information needed to insure an informed decision. The Improved Lot Exemption of 15 U.S.C. § 1702(a)(2) requires that a sales contract, to be exempt, must oblige the seller to build and deliver the promised building within two years after the purchaser signs the contract and incurs obligations. Where a 24-month sales contract does not require construction and delivery of the condominiums within two years of when the purchasers signed the contracts and incurred obligations, but rather obligated it to complete the construction within two years of when it, in its discretion, chose to ratify the contracts, the contracts are not exempt under § 1702(a)(2). With this conclusion, the 100 Lot Exemption also could not have applied to the plaintiffs' contracts because there were more than 100 non-exempt units. See 15 U .S.C. § 1702(b)(1).. (Long, et al vs. Merrifield Town Center, etc. July 13, 2010, U.S.C.A. 4th Cir. 7-13-10) MORAL Now you may ask why did I put this in? Because when the market picks up again and it always does, those developers building condominiums and selling them before completion have to comply and the failure to comply gives the buyer a way to recover his money from the developer with the possibility of suing the developer individually and not just suing the corporation. ALASKA MODIFIES CONTENTS OF FORECLOSURE DOCUMENTS FACTS Alaska has modified its foreclosure requirements. These modifications include; changes to the content of the notice of default and delivery requirements, trustee requirements, and a surety bond requirement for trustees. (alrgs7810) MORAL If you are going to foreclose be sure to use the new documents or the foreclosure may get set aside or stopped in its tracks. IF YOU ARE A CALIFORNIA REAL ESTATE BROKER WITH AN IN HOUSE ESCROW BE SURE YOU HAVE THE RIGHT LEGEND IN YOUR ADVERTISING IF YOU DO NOT WANT TO HAVE AN ACCUSATION FILED AGAINST YOUR LICENSE FACTS When a broker has an in-house escrow division and has been issued a license with a fictitious business name containing the term “escrow”, or any term which implies that escrow services are provided, the broker is required to include the term “A NON-INDEPENDENT BROKER ESCROW” in any advertising, signs, or electronic material. This term provides full disclosure to the public that they are not dealing with an independent escrow company, and that available services are limited. A real estate broker license with a fictitious business name containing the term “escrow”, or any term which implies that escrow services are provided will not be issued or renewed by the Department unless the fictitious business name itself includes the term, “A NON-INDEPENDENT BROKER ESCROW.” Renewing real estate brokers will need to file a new fictitious business name statement (FBN’s), containing the now required language, with the county in which their main office is located and submit the FBN’s along with the renewal application. (rebsum2010martrso) MORAL There are many many changes in the law, including but not limited to Federal, State, RESPA and FHA. Read them and learn or contact your attorney before you act. Things are not as they were before and to continue as before is guaranteed to get you in trouble. A REMINDER ABOUT THE 86 PEOPLE BUSTED IN FLORIDA FOR A $76 MILLION MORTGAGE FRAUD UNDER “OPERATION STOLEN DREAMS” FACTS In South Florida, from March 1, 2010 to date, the combined interagency effort in Operation Stolen Dreams has resulted in a record number of prosecutions, among them: U.S. V. YOLETTE ANTOINE & CONSTANCE POWELL Two individuals were charged in a mortgage fraud scheme that resulted in the approval and disbursement of approximately $4.4 million in fraudulent mortgage loans, and causing losses of approximately $1.5 million to various lenders. YOLETTE ANTOINE allegedly advertised herself in the Haitian-American community as someone who could provide assistance with immigration and housing matters. In this way, Antoine obtained the personal identifying information of clients, including their names, Social Security numbers and copies of their driver’s licenses. The defendants then stole the identities of these clients and used the stolen personal information to fraudulently purchase various properties. After the closings for the properties, the defendants would prepare and execute false quit-claim deeds transferring title in the properties to THE ANTOINE INVESTMENT GROUP, which defendant Antoine controlled. U.S. V. RAMOS, ET AL. Eleven defendants, including a mortgage broker, a real estate broker, a loan processor, and eight straw buyers, were charged in a scheme that defrauded nine financial institutions of approximately $11.25 million in fraudulent loans on 15 residential properties. The defendants perpetuated their scheme by flipping properties at inflated prices to complicit straw purchasers. The properties ultimately went into foreclosure. U.S. V. MEDINA, ET AL. Thirteen defendants, including a loan officer, a title agent, recruiter, and straw buyers, were charged in a mortgage fraud scheme that resulted in the approval and disbursement of approximately $16.9 million in fraudulent mortgage loans, causing losses of $9.7 million to the lender. The properties charged include multiple units at a luxury condominium building on Brickell Bay Drive in Miami and single family homes in Coral Gables, Florida. U.S. V. ANSON JOACHIN, ET AL. Four defendants, including a mortgage broker, a loan processor, and a straw buyer, engaged in a $2.5 million mortgage fraud scheme to purchase properties in Broward, Palm Beach and Lee Counties. To execute the scheme, the defendants submitted false loan applications and supporting documents to various mortgage lenders across the United States. Based on these false documents, the mortgage lenders issued approximately $2,500,000 in loans. U.S. V. PETER N. PRICE Peter N. Price, a title attorney, pled guilty to one count of making a false statement on a HUD-1 form. Price, acting as a title closing attorney, embezzled more than $1,000,000 in lenders’ funds from his escrow account on a real estate closing in 2007. Sentencing is scheduled for August 27, 2010. U.S. V. SAMUDA Three defendants, including a title attorney, a title company employee, and a mortgage broker, are charged in a mortgage fraud and closing scheme regarding the sale of a home in Ft. Lauderdale for $1,250,000. Two defendants have pled guilty to making false statements on the HUD 1 forms at closing and defrauding the lender. The title attorney, Michael Samuda, is scheduled for trial on July 2010. U.S. V. YVETTE GONZALEZ VALDES, ET AL. A family of four, as well as the title company owner, were charged in this $600,000 mortgage fraud. The defendants prepared and submitted fraudulent mortgage loan applications to the lenders, which included materially false information regarding the buyer’s employment, income, assets, intent to live in the property, and other information necessary to induce the lenders to approve the loans. After the defendants received the loan proceeds, they defaulted on their payments, causing the properties to go into foreclosure. U.S. V. MARCOS SALAZAR, ET AL. The defendants identified a property to be used for the fraud, and caused the sellers of the property to execute a sales contract that inflated the price of the property. After the lender approved the loans on the inflated price, the co-conspirators kept the difference between the actual and the inflated sales prices. The defendants then defaulted on the loans. U.S. V. JEFFREY PHILLIPS, ET AL. Fourteen defendants are charged in a mortgage fraud scheme that resulted in the approval and disbursement of approximately $7.5 million in fraudulent mortgage loans, and several million in losses to the lenders. To execute the scheme, the developer artificially inflated the price of vacant land in North Florida, and resold it to complicit straw buyers. The defendants prepared fraudulent mortgage loan applications and other related documents on behalf of the straw buyers. U.S. V. BASILIO, ET. AL. Two defendants created a company called Principal Investment Management. They then recruited straw buyers to pose as purchasers of properties in Miami-Dade and Broward Counties. The defendants were involved in the fraudulent financing of mortgages for at least six residential properties in Miami-Dade and Broward Counties. The defendants took the money from the mortgage proceeds, including second loans on the homes, and used those proceeds to make the mortgage payments or divert the proceeds into their own accounts. The defendants were involved in the fraudulent financing of mortgages for at least eight residential properties in Miami-Dade County. The defendants would identify properties that could be used to defraud lenders and then recruit individuals to pose as purchasers of the properties. The defendants also signed-off on mortgage loans without performing the necessary verifications. U.S. V. JASON VITULANO, ET AL. Jason Vitulano was a branch manager at TopDot Mortgage, in Boca Raton, where Vitulano and others, including co-branch MANAGER PETER HARTOFILIS, devised a scheme to submit fraudulent loan applications to numerous lenders. The false loan applications grossly inflated the loan applicants’ earnings and assets on deposit in a local bank. In reliance on these and other false statements in the loan applications, the lenders approved and funded more than $5 million in mortgage loans to purchase residences in Palm Beach and Broward Counties. U.S. V. GALLEGO Defendant Gallego was charged in a $2 million mortgage fraud scheme to purchase a property in the Versailles subdivision of Wellington, Florida. U.S. V. LOZADA Four defendants were charged in a mortgage fraud scheme that defrauded lenders of more than $ 6 million in loans in connection with the purchase of five properties in Miami-Dade County. The straw buyers in this case were paid $5,000 for the use of their name and credit. Defendant Maria Lozada, a former loan processor at a title attorney's office, pled guilty to one count of conspiracy to commit bank fraud, based on a fraud loss of more than $2.5 million. U.S. V. GONZALEZ Eleven defendants, including a mortgage broker, a real estate broker, a loan processor, and eight straw buyers, were charged in a scheme that defrauded nine financial institutions of approximately $11.25 million in fraudulent loans on 15 residential properties. The defendants perpetuated their scheme by flipping properties at inflated prices to complicit straw purchasers. The properties ultimately went into foreclosure. U.S. V. QUIROZ The defendant is alleged to have created fraudulent loan applications, verifications of employment, IRS Forms W-2, payroll stubs, and bank statements in order to obtain mortgages for the refinance and purchase of real property in Port St. Lucie. In total, the defendant received more than $400,000 in fraudulent loans. U.S. v. Cazas, et al. Four defendants, including a developer and three loan officers, were charged in an $8 million dollar condominium conversion scheme involving a 53-unit condominium building. The developer converted an apartment building into condominiums and, with the loan officers’ assistance, sold the condominium units to unqualified buyers. To qualify the prospective buyers for loans, the loan officers paid down outstanding debt of the unqualified buyers and purchased false employment documents. The condominium units went into foreclosure and the building was ultimately condemned because the unqualified buyers could pay neither their mortgage payments nor their monthly condominium assessments. An indictment is merely a charge and defendants are presumed innocent until proven (usattysdfl61710) For a more detailed list of the names, charges, case numbers and amount of loss go to http://www.justice.gov/usao/fls/PressReleases/Attachments/100617-01.OperationStolenDreams.pdf MORAL As I said, the federal prosecutors are very intent on arresting everyone they can and the FDIC, and the trustees in bankruptcy for lenders such as New Century are just as intent in suing the brokers, borrowers, loan officers and anyone else they find involved in any bad loans they are managing. Unfortunately, some of you are all too well aware of this and some of you have retained us to mitigate the issues. SHARON MICHELLE THOMAS OF MINNESOTA PLEADS GUILTY TO MORTGAGE FRAUD FACTS On July 8, 2010 Sharon Michelle Thomas, 39 of Otsego, Minnesota pleaded guilty in federal court to participating in a mortgage fraud scheme that resulted in a $400,000 loss to several mortgage loan lenders. Appearing in St. Paul before United States District Court Judge Richard H. Kyle, Sharon Michelle Thomas pleaded guilty to one count of aiding and abetting mail fraud. Thomas was charged on June 7, 2010. Thomas admitted that from 2005 through 2006 she assisted others in obtaining money through fraudulent pretenses by depositing 10 “closing packages” in the U.S. mail or with private commercial carriers. During this time, Thomas was a closing agent for a licensed title company, which was affiliated with a local builder and closed residential real estate transactions for the builder. Thomas provided documents to mortgage loan companies that were funding the mortgage loans for each residential transaction, after which the lenders would approve loans and provide loan proceeds to the title company. Thomas admitted concealing from the lenders payments she made to “investors” associated with SUPERIOR INVESTMENT GROUP (“SIG”) on 10 Minnesota properties. Thomas admitted receiving only her customary salary and small bonuses for closing the transactions. SIG was owned and operated by TROY DAVID CHAIKA, age 43, of Burnsville, and DUSTIN LEE LAFAVRE, age 27, of Webster, Minnesota. The two men conspired to obtain money fraudulently through approximately 183 residential property transactions that defrauded real estate mortgage lenders out of more than $7 million. LaFavre pleaded guilty to one count of conspiracy to commit mail and wire fraud and awaits sentencing. Chaika has been indicted on seven counts of wire fraud, three counts of mail fraud, and one count of conspiracy to commit wire fraud and mail fraud. For her crime, Thomas faces a potential maximum penalty of 20 years in prison. Judge Kyle will determine her sentence at a future date, yet to be scheduled. This case is the result of an investigation by the Federal Bureau of Investigation and the U.S. Postal Inspection Service. It is being prosecuted by Assistant U.S. Attorney Tracy L. Perzel. (usattymn7810) MORAL She just dropped the stuff in the mail and is indicted and pleads guilty to a felony for her regular salary and small bonuses. Somehow you have to feel sorry for her. NEVADA MORTGAGE LENDING DIVISION PROPOSES STIPULATED SETTLEMENT WITH DONALD GOLD FOR UNLICENSED ACTIVITY AS MORTGAGE BROKER FACT Direct Property Group, LLC (“Direct Property”) was a limited liability company organized and existing under the laws of the State of Nevada since on or about March 5, 2009. The current status of Direct Property with the Nevada Secretary of State is “dissolved.” The MLD alleges at all relevant times herein mentioned, Direct Property held itself out as engaging in or carrying on the business 0f a mortgage broker and conducted mortgage broker activity in the State of Nevada. At all relevant times herein Donald Gold was the president and manager of Direct Property. At no time did Desert Property have a mortgage broker license issued by the Division of Mortgage Lending when the acts alleged herein occurred. On or about June 21, 2009 and June 29, 2009 the Division received written complaints from DJF and GW, respectively, and conducted an investigation (“Investigation”) of same. The investigation revealed, among other things, that under the direction and leadership of Donald Gold, Direct Property issued loan prequalification letters to borrowers PCS and MDS, VC, and GL; compiled information for, prepared, and executed 1003 Uniform Residential Loan applications for VC and JLG, GL, and AA, respectively; and also compiled information for, prepared, and executed two 1003 Uniform Residential Loan applications for LLC and JLC. During this entire time period Desert Property was not licensed as a Mortgage Broker in Nevada Direct Property broadcast approximately 178 television advertisements on KTNV Channel 13 in Las Vegas from March 2009 through May 2009 wherein Direct Property represented that “We can help AND WE OFFER 100% FINANCING.” Donald Gold admitted that he requested and approved the above-described advertising with KTNV Channel 13. Donald Gold admitted that he and/or Direct Property held themselves out as engaging in or carrying on the business of a mortgage broker and/or mortgage agent and conducted mortgage broker and/or mortgage agent activity in the State of Nevada. NRS 645B.0127, defines a “mortgage broker” as “a person who, directly or indirectly: (a) Holds himself or herself out for hire to serve as an agent for any person in an attempt to obtain a loan which will be secured by a lien on real property; (b) Holds himself or herself out for hire to serve as an agent for any person who has money to lend, if the loan is or will be secured by a lien on real property; (c) Holds himself or herself out as being able to make loans secured by liens on real property; (d) Holds himself or herself out as being able to buy or sell notes secured by liens on real property; or (e) Offers for sale in this State any security which is exempt from registration under state or federal law and purports to make investments in promissory notes secured by liens on real property.” NRS 645B.0125, defines a “mortgage agent” as “[a] natural person who: (1) Is an employee of a mortgage broker or mortgage banker who is required to be licensed pursuant to this chapter or chapter 645E of NRS; and (2) Is authorized by the mortgage broker or mortgage banker to engage in, on behalf of the mortgage broker or mortgage banker, any activity that would require the person, if the person were not an employee of the mortgage broker or mortgage banker, to be licensed as a mortgage broker or mortgage banker pursuant to this chapter or chapter 645E of NRS…” NRS 645B.900 provides “[i]t is unlawful for any person to offer or provide any of the services of a mortgage broker or mortgage agent or otherwise to engage in, carry on or hold himself or herself out as engaging in or carrying on the business of a mortgage broker or mortgage agent without first obtaining the applicable license issued pursuant to this chapter, unless the person: 1. Is exempt from the provisions of this chapter; and 2. Complies with the requirements for that exemption.” Pursuant to NRS 645B.690, as it existed at the time of the violations in question, “[i]f a person offers or provides any of the services of a mortgage broker or mortgage agent or otherwise engages in, carries on or holds himself out as engaging in or carrying on the business of a mortgage broker or mortgage agent and, at the time…[t]he person was required to have a license pursuant to this chapter and the person did not have such a license…The Commissioner shall impose upon the person an administrative fine of not more than $10,000 for each violation and if the person has a license, the Commissioner shall revoke it…” See NRS 645B.690(1)(a). After settlement negotiations, the Division and DONALD GOLD wish to resolve this matter without the necessity of a formal hearing. IT IS HEREBY STIPULATED AND AGREED by the Parties that the purported violations of NRS shall be settled on the following terms and conditions: 1. DONALD GOLD admits that he engaged in unlicensed mortgage broker and/or mortgage agent activity, or otherwise engaged in, carried on or held himself out as engaging in or carrying on the business of a mortgage broker and/or mortgage agent in violation of NRS645B.900. 2. DONALD GOLD shall, pursuant to NRS 645B.670 and/or NRS 622.400, pay to the Division an administrative penalty in the amount of Twelve Thousand Eight Hundred Seventy Five Dollars and No Cents ($12,875.00) plus the sum of $1,800.00 for its costs of investigation and $2,825.00 for attorney fees incurred herein. DONALD GOLD shall make such payments, in full, to the Division upon its execution of this Agreement. DONALD GOLD acknowledges that he has retained an attorney to represent him in this matter at his sole cost and expense. (nvmldprop7-18-10) MORAL If you would like to do unlicensed broker activities in the state of Nevada be aware it can cost you a lot more than the license. In this case about $18000.00 more presuming Mr. Gold agrees and signs the stipulation. What is beyond me is the advertising he did on television. He had to know the Commissioner was bound to find out about it and proceed against him. I wonder what he was thinking would happen when he advertised? Or was he? FORMER LAS VEGAS RESIDENT PLEADS GUILTY TO COMMITTING MORTGAGE FRAUD IN NEVADA On July 9, 2010 BRIAN K. JACKSON, 38 a former Las Vegas resident and currently of Anaheim, California has pleaded guilty in the United States District Court at Las Vegas, Nevada to conspiracy for his involvement in a Nevada mortgage fraud scheme involving straw buyers and falsified mortgage loan documents. He pleaded to conspiracy to commit mail fraud, wire fraud, and bank fraud and is scheduled for sentencing on October 8, 2010, at 10:00 a.m. Jackson was indicted by the Federal Grand Jury in Las Vegas on October 21, 2009. He faces up to 30 years in prison and a $1,000,000 fine. From about 2002 to May 14, 2008, Jackson, owner of UNLIMITED PROPERTIES, a now-revoked Nevada limited liability corporation, participated in a conspiracy to submit mortgage loan applications to financial institutions to finance straw buyer real estate purchases in Nevada. Jackson recruited and caused to be recruited straw buyers to purchase properties on behalf of the members of the conspiracy. The loans were PROCESSED THROUGH SAPPHIRE MORTGAGE, located in Henderson, Nevada. Jackson caused false and fraudulent information to be placed in the straw buyers’ mortgage loan applications concerning their employment, income, assets, intent to occupy property, etc. Jackson caused the same home to be purchased multiple times by different straw buyers at ever increasing prices, and caused the “equity” to be diverted to himself or his company. Jackson also placed renters in the properties and caused the mortgages to default. The plea agreement states that Jackson caused fraudulent loan applications to be sent to financial institutions to fund mortgage loans for the purchase of a home at 2061 Scenic Sunrise Drive in Las Vegas. Between March 2002 and late 2004, Jackson twice orchestrated the sale of the property using two straw buyers and the placement of false information in their loan applications. In June 2004, Jackson also orchestrated the sale of the Scenic Sunrise property to himself, and falsely stated in his loan application that he intended to reside in the property when he knew he did not. During this period, Jackson also leased the Scenic Sunrise property to another individual and accepted money from the individual as guarantee that he would purchase it in the future, even though Jackson knew that the property at the time was owned by the first straw buyer and was in the process of being sold to the second straw buyer. As a result of the fraud, the financial institutions suffered a loss of approximately $111,103. In May 2008, the owner of SAPPHIRE MORTGAGE, CINDY BIRKLAND, was arrested and charged in state court in Las Vegas with mortgage fraud related offenses. Trial appears to be set for November 15, 2010 (usattynv71210+ctcalstate) MORAL Remember everyone is innocent until proven guilty. Mr. Jackson appears to be guilty since he pleaded guilty. SUMMARY OF NEW OREGON LAWS FACTS Payday and title loans - SB 993. This bill separated laws regulating payday lenders and title lenders from those regulating traditional consumer finance lenders. It didn't make any policy changes to the licenses for any such lenders. The law took effect on passage - 03/04/2010. (2010 Or Laws ch. 23) Rights of tenants in foreclosed property - SB 1013. This bill clarifies that the existing requirement that the trustee of a property in foreclosure must provide the notice of sale to residential tenants of the foreclosed property and also prescribes the language of the required notice. It exempts a purchaser of a foreclosed residential property at a trustee's sale from the obligation to return a security deposit or prepaid rent to any tenant that has chosen to apply prepaid rent or a security deposit to their rent obligation,. The law took effect on passage - 03/04/2010 (2010 Or Laws ch. 28) Use of credit history for employment purposes – SB 1045. The “Job Applicant Fairness Act” limits use of credit history for employment purposes. With specific exemptions, the bill makes it illegal for an employer to use information in the credit history of an applicant for employment or for an employee, or to refuse to hire, discharge, demote, suspend, retaliate or otherwise discriminate against an applicant or employee for a promotion, or related to the compensation for or conditions of employment. Credit history is defined as any communication of information by a consumer reporting agency that bears on a consumer’s creditworthiness, credit standing, or credit capacity. The Bureau of Labor and Industries can take actions for violations of this law and individuals can pursue a civil action in circuit court. The specific exceptions from the bill are for financial institutions, public safety offices, and other employment if credit history is job-related and use of the credit history is disclosed to the job applicant or employee. The law will took effect on July 1, 2010. (2010 Or Laws ch. 102) Affidavits for loan modification - HB 3610. This bill revises the requirements of SB 628 (2009) that required notices to be sent to a borrower upon notice of default on a residential trust deed with information about loan modifications. That law also required a trustee to record an affidavit that they had complied with these requirements. This bill specifies that the TRUSTEE MUST FILE THE AFFIDAVIT AT LEAST FIVE DAYS BEFORE THE DATE OF A RESIDENTIAL FORECLOSURE SALE. If a lender determines that a borrower is not eligible for a loan modification, the bill requires that the lender give the borrower an explanation of how the lender calculated that borrower was not eligible. The bill also makes other technical changes. The law took effect on 05/27/2010. (2010 Or Laws ch. 40) Registration of appraisal management companies - HB 3624. The bill requires appraisal management companies to register with the Department of Consumer and Business Services and file a $15,000 surety bond or irrevocable letter of credit and the department may require applicants to provide fingerprints. The bill prohibits appraisal management companies from attempting to influence appraisals or substantively alter completed appraisal reports. The law took effect on 03/23/2010. (2010 Or Laws ch. 87) Sales of foreclosed property - HB 3656. When a homebuyer does not qualify for a single loan to cover the purchase price of a home, the buyer may qualify for an "80/20" loan -- essentially two different loans secured by one property. Recent court cases have allowed the junior creditor to sue for remaining deficiencies after the property has been sold at foreclosure. This bill clarifies HB 3400 (2009) by preventing the holder of the second loan from suing for restitution when: a second loan was part of the purchase or repurchase transaction as the loan which is being foreclosed, and when the second loan was owed to or originated by holder of the mortgage being foreclosed or its affiliate. It also clarifies language relating to a deficiency action. Effective 03/10/2010. (2010 Or Laws ch. 48) Unlawful Trade Practices Act extended to loans and extensions of credit - HB 3706. This bill includes loans and extensions of credit in definition of what constitutes "real estate, goods or services" for purposes of Unlawful Trade Practices Act (with the exception of pawnbroker pledge loans which are still excluded). The Unlawful Trade Practices Act (ORS 646.605 to 646.656) is Oregon's primary consumer protection law. It helps protect consumers from businesses that fail to deliver all or a portion of goods or serves as promised, cause a likelihood of confusion or misunderstanding about products or services, use deceptive representations or designations, represent goods as meeting standards they do not, and making false or misleading representations about products or services. The bill adds mortgage bankers, mortgage brokers, mortgage loan originators, and consumer finance lenders. (2010 Or Laws ch. 94) MORAL These are not all the new laws that were enacted but I would recommend you become thoroughly familiar with these if you want to stay out of trouble with Oregon authorities. THE INFORMATION CONTAINED HEREIN IS NOT LEGAL ADVICE. AN ATTORNEY SHOULD BE CONSULTED IF YOU DESIRE LEGAL ADVICE
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We do have attorneys available for those that need advice in the following areas:
1. Personal injury 2. Bankruptcy 3. Probate 4. Wills and Trusts 5. Criminal defense. 6. Employment law including unpaid wages.
REMEMBER IF YOU ARE SUED OR THE DEBT IS TOO HIGH WITH CREDITORS BANKRUPTCY CAN BE AN OPTION and IS A LOT LESS EXPENSIVE THAN DEFENDING A LAWSUIT:
Bankruptcy can potentially avoid a fraud judgment against the defendant thus reducing the risk of losing a professional license. If a foreclosure has occurred the lenders on the junior mortgages have the right to sue when it is a non purchase money mortgage. The lenders can sue on the junior mortgages as unsecured promissory notes and they are doing just that. The bankruptcy can remove this lawsuit. Bankruptcy is a form of asset protection believe it or not. It can in certain circumstances protect up to $175,000 in California and more. A Chapter 13 bankruptcy may be able to remove that second and even third mortgage by stripping it down as an unsecured lien and paying a percentage of the amount potentially allowing you to save the home. Past due Income Taxes under certain circumstances can be discharged in bankruptcy. Under certain circumstances you may be able to legally keep one or more of your credit cards after the bankruptcy so you have something to use when traveling. DISCLOSURE The services or benefits are with respect to bankruptcy relief under Title 11 of the United States Code. In doing this: “We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code” within the meaning of Title 11 United States Code Section 528. ALL US IF YOU HAVE QUESTIONS. THE TELEPHONE CONSULTATION IS FREE NON PAYMENT OF OVERTIME WAGES? If anyone you know has not been paid proper wages or overtime or needs to consider bankruptcy we have capable attorneys available that can assist them. Call 888-667-8529 for a free consultation. We are a full service law firm practicing law for over 37 years, the last 20 of which are at the exact same location at 6 Hutton Centre, Suite 1040, Santa Ana California where the 405 and 55 freeways meet. The firm attorneys represent numerous clients in many areas of law such as bankruptcy, personal injury, defending those sued on mortgage loans, mortgage fraud defense. Among others we are counsel to mortgage brokers and lenders, in California and nationally. We are counsel to several trade associations including the Arizona Association of Mortgage Broker (AAMB), Central Coast Chapter-(California Association of Mortgage Professionals (CAMP)), Central Valley Chapter-(CAMP), East Bay Chapter-(CAMP), Inland Empire Chapter-(CAMP), Monterey Bay Chapter-(CAMP), North Bay Chapter-(CAMP), North San Diego Chapter-(CAMP), Orange County Chapter (CAMP), San Diego Chapter-(CAMP), San Francisco Peninsula Chapter-(CAMP). SiliconValley Chapter-(CAMP), South Los Angeles Chapter-(CAMP), the San Fernando-Santa Clarita Chapter of NAHREP and the Nevada Association of Mortgage Professional. Mr. Thordsen has been a member of the Advisory Board of the Mortgage Banking and Real Estate Appraisal Programs at California State University, Fullerton as well as the California Department of Real Estate Solicitation Task Force Committee and the California Department of Motor Vehicles Anti-Fraud Task Force.
Herman Thordsen is a syndicated columnist for Broker Universe, a division of Thomson Media as well as publishing monthly columns for the San Diego Chapter-CAMB. He is also a responding attorney for RESPANEWS.com as well as being a member of its’ editorial board. Mr. Thordsen conducts seminars on Federal and State mortgage loan audit compliance issues that cover the new “RED FLAG”-IDENTITY THEFT MANUAL required by the FTC as well as manuals on HUD, RESPA, TILA, PREDATORY LENDING, CALIFORNIA and NEVADA compliance. He authors numerous manuals and articles on California Department of Real Estate Audits, Nevada Mortgage Lending Division Audits, HUD Audits, Truth in Lending, RESPA, Mortgage Fraud and Predatory Lending. Mr. Thordsen is an invited guest speaker before trade groups, and is a guest speaker on Mortgage Radio: “Legal Sand Traps” to discuss RESPA, minimum wage and overtime issues as well as legal requirements for protecting the consumer/borrower financial information. He has been a speaker on HUD audits before the Clark County Bar Association, Las Vegas Nevada and the Nevada Association of Mortgage Brokers Education Committee as well as a guest speaker on mortgage fraud. He has been a guest speaker at the National Compliance Summit held in Las Vegas, Nevada updating the attendees on “Third Party Mark-ups” and the status of employment laws and regulations against brokers, lenders and title companies that misclassify loan officers and others as independent contractors to avoid paying minimum wage and overtime. He has also been a guest speaker on the RESPA issues at the National RESPA Compliance Summit in Las Vegas, Nevada. The Firm regularly represents brokers, licensees and lenders before licensing agencies such as the California Department of Real Estate, California Finance Lender section of the Department of Corporations, HUD-FHA Mortgagee Review Board (MRB), HUD Home Ownership Centers and the California Office of Administrative Hearings. This representation includes those charged with violation of federal and state mortgage laws or the withdrawal of FHA/HUD approval and the threat of paying civil penalties or loan indemnification agreements to HUD. Mr. Thordsen acts as an advisor on other state licensing audit violations. Mr. Magyar is the bankruptcy attorney in our firm and we are able to represent you state wide with the modern electronic filings we have with the Bankruptcy Courts throughout the state of California. The attorneys in our firm are able to represent you in bankruptcy, personal injury, as well as lawsuits brought against you by lenders, civil and/or criminal Mortgage Fraud and other white-collar crimes in both State and Federal Courts. We have been successful in representing clients in wage and overtime violation cases and personal injury cases on a contingency fee basis and wage disputes including minimum wage, overtime and unemployment compensation issues. If we may be of service please contact us, and one of our attorneys will discuss the matter with you. Sincerely, Herman Thordsen, Esq. Jozef G. Magyar, Esq. Adam
Roehrick, Esq.
IF YOU WILL USE A CREDIT CARD, CONTACT LORETTA TOLL FREE AT 888-667-8529
UPON PROOF OF MEMBERSHIP IN THE CALIFORNIA ASSOCIATION OF MORTGAGE PROFESSIONALS, THE SUBSCRIPTION IS FREE. JUST CALL LORETTA.
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