Fraud Files III

"Howard Brown and his family felt panicked and desperate. They were behind on their mortgage payments, and they had just learned that their three-bedroom house in Wilmington was being foreclosed on. They did not know where to turn. Then, a nice young man appeared in the driveway. Well-dressed and pleasant, he told Brown he was a Christian. He said he could help save Brown's home."

"All Brown had to do was sign documents that would allow Brown to arrange for someone to temporarily "share" title to his property. With someone else's name on the title along with his, Brown could refinance and also improve his credit. Then, once his credit was repaired, he would get sole title back. Brown signed. "He seemed like he was honest," the legally blind Korean War veteran said. And that's when his real troubles began."

"With mounting horror, he and his family came to realize that they had signed over title to their home to a man they had never heard of. It also became clear that they were now on the hook not only for their original loan of about $160,000 but also for about $150,000 in new debt borrowed against the house without their knowledge. Then the family began getting notices that the property was going to be put up for auction."

"Foreclosure fraud is a relatively simple crime. Once a property owner misses two or three monthly payments, a lender routinely files a notice of default with the county recorder's office. That public document is a precursor to formal foreclosure, and all a scam artist has to do to find victims is read the notices, descend on the homeowners and trick them into signing over title to their homes."

"It is a crime that consumer advocates fear could become increasingly common — especially in Southern California, where many homeowners have stretched themselves to their financial limits to afford the region's record high housing prices."

"While still considered low, indications are that the nation's foreclosure rate is on the rise, meaning the pool of potential victims is growing. At the same time, the steep rise in housing prices over the last few years has created a massive amount of equity in many properties — a tempting target for swindlers."

"There's so much equity in houses, if you're going to do white-collar crime, you only have to rip off 10 people to become a millionaire," said Debra Zimmerman, an attorney at Los Angeles' Bet Tzedek legal services who specializes in real estate fraud and elder abuse. She said she has seen a "dramatic" rise in victims of foreclosure fraud in Los Angeles County in the last few months. "I am getting three cases a week," she said. "I used to get none."

"Across the country, law enforcement officials also are grappling with the crime. Colorado's attorney general, John Suthers, is pushing a law that would tighten rules for brokers after a rash of scams in that state."

"Minnesota passed new rules in 2004, Maryland in 2005. California actually has some of the nation's strictest regulations, but advocates say that does not stop all scam artists. And homeowners in the state could be particularly vulnerable because so many have nontraditional loans such as adjustable rate mortgages that send payments spiraling upward with rising interest rates after a fixed period. Real estate experts said many of those payments are set to begin rising this year."

"Already, advocates say they are seeing a corresponding rise in fraud victims. "We are just seeing more and more of it," said Dan Grunfeld, president and chief executive of Public Counsel, a Los Angeles pro bono law office that tries to help victims —reclaim title to their houses or at least escape the crushing debt that many are left with after scam artists have drained the properties' equity."


Avoiding scams
"Here are some things consumers can do to prevent foreclosure fraud:
• Never sign a contract under pressure.
• Never sign away ownership of your property to anyone without advice from your lawyer.
• Don't make mortgage payments to someone other than your lender.
• Beware of any home sale contract in which you aren't formally released from liability for your mortgage.
• Never make an oral agreement; get all promises in writing.
• If you're not English-speaking, use your own translator; do not depend on translation offered by others."

There's a great mortgage fraud blog in the sphere... check it out.

Here's a snippet from their headlines today:

"In the following press release the Santa Clara County (CA) District Attorney announced that on February 21, 2006, San Jose Police Officers arrested Scott Andrew James Balestreri, 48, and Ruth Helen Welz, 61, for first-degree burglary and elder theft for conning an 84-year-old San Jose man out of over $6,000 after posing as potential buyers at an open house the victim was hosting in Sunnyvale. The defendants convinced the victim that they would buy the $879,000 home for cash once they sold their $3 million home in Los Altos. According to their story, Balestreri was going through a nasty divorce and his wife was holding everything up. Over a period of 5 months beginning in August 2005 the victim gave the defendants over $6,500 in cash, payments for hotel rooms, rental cars, and eventually an apartment – all in an effort to keep the deal alive."

(thank you MoonValley for sending this in)


"RIVERSIDE Six people accused of operating a $24 million scheme to steal Riverside County property owners' land will appear in Superior Court April 14 on felony fraud charges, officials said Wednesday."

"The six defendants are accused of hatching a scheme in October 2003 to cheat owners of 25 undeveloped properties in Perris, Murrieta and Menifee of their land."

"Galvez and his associates allegedly perpetrated the scheme by offering forged grant deeds on the 25 properties to the Riverside County Recorder's Office. The grant deeds fraudulently conveyed ownership of the victims' property to various straw buyers. Those straw buyers were allegedly promised large sums of money by Galvez to use their names on the grant deeds."


"State and local authorities have charged a 35-year-old metro Atlanta man with Dawson County's first case of residential mortgage fraud, Dawson County Detention Center records show."

'"Basically, the suspect was using a stolen identity to purchase a residence here in Dawson County," he said.Siddiqui has been charged with residential mortgage fraud, Dawson County Detention Center records show.Authorities declined to release the name of the mortgage lender assisting in the sting operation."


"SACRAMENTO, Calif.--(BUSINESS WIRE)--March 27, 2006--ForeclosureS.com, a California based investment advisory firm and publisher of foreclosure property information, reported today that pending legislation cited as the Mortgage Rescue Fraud Act will seriously impact the rights of homeowners in financial distress as they attempt to sell their way out of foreclosure."