The Resolution Law Group: Latest Mortgage Fraud Trend: Collusion on the Inside

victor wolf mortgage fraud case

When real estate agent John Lebron opened EZ Investments in Tampa, Fla., he may have already been planning fraud. His very first EZ Investments transaction involved selling a distressed property to his sister, then to his brother-in-law, the kind of “non-arms-length” flopping that tips authorities to collusion. Lebron lost his real estate license and his liberty in April, when he was sentenced to 26 years in prison for a string of foreclosure and short-sale frauds.

Mortgage fraud is rampant in the U.S., with distressed homeowners offering a whole new market to criminals. The recent trend in rising foreclosures led to soaring rates of foreclosure fraud. The Financial Crimes Enforcement Network, or FinCen, reports a 58 percent rise in 2012’s foreclosure-rescue fraud schemes, a rate possibly spurred by the “opportunity” created by government assistance programs.

Florida continues its run as the country’s top state for mortgage fraud investigations, coming in No. 1 on the Lexis-Nexis Mortgage Fraud Index for the fifth year. With a Mortgage Fraud Index of 805, Florida had eight times the expected number of fraud investigations in 2012. It’s closest second, Nevada, had only a little over 2½ times the expected rate. Plus, for the second year running, Florida came in first with the record number of defaults.

A newcomer to the Mortgage Fraud Top 10 also bears close watching: Ohio. Of mortgage frauds under investigation that originated only in 2012, Ohio ranks number one-indicating a recent fraud upswing in that state.

The last several years have also seen an uptick in collusion of industry professionals, resulting in an entire new index focused on collusion indicators alone. Collusion indicators, which are derived from public records, are based on factors like cohabitation, shared assets, family and business connections and other criteria, particularly relevant when a property has been transferred at a loss. Vermont ranks No. 1 in collusion indicators, with almost five times the expected number of incidents for 2012.

While FinCEN reports a 25 percent decline in Suspicious Activity Reports, or SARs, filed nationally in 2012, some analysts think the decline may be due, at least in part, to an overall decline in the housing market. According to National Association of Realtors spokesman Walter Molony, 2013 will see an estimated 11 percent increase in the housing market, creating all kinds of new opportunity for scammers.

Mortgage fraud is especially tricky, according the FBI, because scams morph with the market, always adapting to the latest trends. And although financial institutions file SARs by the thousands every month (there were 93,508 in FY 2011), it can take years after the fraud occurs before it is even discovered.
There are over a dozen common mortgage fraud schemes-application falsification, illegal flipping and flopping, short sales, equity skimming and more. The FBI and CoreLogic report that in 2010 more than $10 billion in loans originated with fraudulent application data, the most common kind of mortgage crime. Particularly brilliant hucksters manage to combine and pull off serial land and mortgage frauds that can bilk private investors and financial institutions alike out of millions. Two such alleged fraudsters were a couple living in Florida, Natalia and Victor Wolf. (CNBC’s “American Greed: The Fugitives” reports on the notorious “developers” who vanished after their investors lost millions. Victor Wolf is pictured above.)

At the end of the housing boom, the Wolfs allegedly were engaged in every known type of mortgage fraud, said Roman Groysman, an attorney representing lenders in a lawsuit against the couple. “If one could teach a course on complex mortgage fraud and match it up against the allegations against these two individuals, I think there’d be little left to cover,” he said.

“None of the lenders knew … there were other lenders,” FBI Special Agent Kurt McKenzie told CNBC. As authorities and investors began to close in on the Wolfs, the couple managed to quickly mortgage their opulent home-over and over again. There were private cash lenders, small business lenders and financial institution lenders. “By the time all was said and done,” said McKenzie, “there were at least four to five loans, mortgage loans, on [the Wolfs’] house.”

But when authorities went to the mansion looking for the couple, they found empty champagne bottles. The people who lost money by trusting the Wolfs have never been able to confront them. Unconfirmed reports place the couple at large in Moscow.

Upcoming changes to regulations may — or may not — affect rates of mortgage fraud. In January 2014, the Consumer Financial Protection Bureau will enforce new mortgage regulations that emphasize loan and borrower quality. “Under the new regulations for Qualified Mortgages,” said CFPB spokesman Samuel Gilford, “certain loan features are not allowed any more, for example, balloon payments or interest-only loans or mortgages that last for over 30 years.” The new Ability-to-Pay rule says borrowers must conform to a clear standard, and lenders will have to verify and document the lender’s ability to repay. The no-doc loans of the past, says Gilford, “were much more vulnerable to fraud.”

The latest fraud-detection tools are two new indexes in the Lexis-Nexis Annual Mortgage Fraud Report, which is available for public access: a foreclosure index, added this year, and an index of potential collusion activity, which makes its second appearance this year. The two new indexes join the on-going index of verified mortgage fraud and misrepresentation.

The potential for collusion is an important new index because in recent years, data analysis shows an increase in collusion involving multiple industry professionals. (The Collusion Indicator Index reports on the factors that make collusion possible or likely; not actual collusion.) “What the industry has found,” Jennifer Butts, one author of the Lexis-Nexis report, wrote in a recent email to CNBC, “is that these indicators-properties transferred at a loss between known relatives or associates-is often an indicator of suspicious activity.”

The more indexes a state appears on, according to the report’s authors, the more “challenging” are the state’s financial prospects for the coming years. New Jersey is the only state to appear on all three indexes. Five states — Florida, Nevada, Illinois, Georgia and Ohio-appear on both the Mortgage Fraud Index and the Volume of Foreclosures Index. And New York and Delaware appeared on both the Mortgage Fraud Index and the Collusion Indicator Index.

Drilling down into the data reveals even more geographic information: For loans originating only in 2012, five “metropolitan statistical areas” represent 35 percent of all 2012 SARs.

If you feel you are the victim of Mortgage Fraud, please do not hesitate to email or call the The Resolution Law Group (203) 542-7275 for a confidential, no obligation consultation.

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The Resolution Law Group: Darryl Woods, the Chairman of Mainstreet Bank in Ashland, Missouri, pleaded guilty to charges that he used the TARP bailout money given to his bank in 2008 to buy an oceanfront condo in Florida, rather than use the money for its intended purposes.

Darryl Woods, the Chairman of Mainstreet Bank in Ashland, Missouri, pleaded guilty to charges that he used the TARP bailout money given to his bank in 2008 to buy an oceanfront condo in Florida, rather than use the money for its intended purposes.

Mainstreet bank applied for and received just over One Million Dollars in TARP funds. Woods took over $380,000 and used that money to buy his luxury condo.

Geoffrey Broderick, the senior partner of the Resolution Law Group, says “At a time when many Americans were losing their homes, and the Government made money available for the specific purpose of assisting the homeowners, Mr. Woods’ actions are reprehensible. For a Bank Chairman to siphon off public funds to pay for an oceanfront condo is shameful“

Mr. Broderick adds that “The housing market will continue to suffer until it is fixed by the Courts or the Legislature. Somebody has to fix the problem. That is why The Resolution Law Group continues its fight for homeowners. Homeowners cannot expect the problem to fix itself.”

The Resolution Law Group continues to prosecute ground breaking litigation in Federal Court on behalf of homeowners suing lenders and servicers for, among other things, the illegal use of MERS, robo-signing, and intentionally ignoring underwriting standards and encouraging inflated appraisals.

The Resolution Law Group is currently enrolling clients into the pending lawsuit. For further information, visit its website at www.TheResolutionLawGroup.com

A Florida Court of Appeals has reversed a trial court’s ruling and undone a wrongful foreclosure.

A Florida Court of Appeals has reversed a trial court’s ruling and undone a wrongful foreclosure. The lender, JP Morgan Chase Bank, was found to have wrongfully foreclosed and the Court of Appeal has reversed the lower court’s decision and had thus ruled in favor of the homeowner.

Despite the fact that JP Morgan Chase Bank submitted a sworn affidavit that stated it was the proper and legal holder of the promissory note, the Court of Appeal found that JP Morgan Chase Bank had failed to establish that it had the right to enforce the note when the foreclosure action was filed. Additionally, the Court of Appeal even found that JP Morgan Chase Bank had failed to establish that it had legal standing to initiate the foreclosure action in the first place.

Geoffrey Broderick, the senior partner of the Resolution Law Group, says “There are so many instances where lenders and servicers simply assert that they are the lawful Holders in Due Course, when they cannot establish a proper chain of title. It is rare for a homeowner to have the means to be able to go to the Court of Appeal in order to void a wrongful foreclosure. In this instance, the homeowner lost at the trial court level; therefore, we actually had that a Judge that approved the foreclosure, despite the fact that the lender was unable to establish that it was entitled to foreclose.“

Mr. Broderick adds that “The housing market will continue to suffer until it is fixed by the Courts or the Legislature. Somebody has to fix the problem. That is why The Resolution Law Group continues its fight for homeowners. Homeowners cannot expect the problem to fix itself.”

The Resolution Law Group continues to prosecute ground breaking litigation in Federal Court on behalf of homeowners suing lenders and servicers for, among other things, the illegal use of MERS, robo-signing, and intentionally ignoring underwriting standards and encouraging inflated appraisals.

The Resolution Law Group is currently enrolling clients into the pending lawsuit. For further information, visit its website at www.TheResolutionLawGroup.com

EverBank, based in Jacksonville, Florida has agreed to pay over $43 Million for foreclosure fraud

EverBank, based in Jacksonville, Florida has agreed to pay over $43 Million for foreclosure wrongdoing, which occurred in 2009 and 2010. $37 Million will be paid to wronged borrowers and over $6 Million will be paid to organizations that assist low and moderate income individuals and families.

EverBank was subject to a cease and desist order for unsafe and unsound practices in mortgage servicing and foreclosure processing. More than 32,000 borrowers are eligible for a portion of the settlement proceeds, which will range from $1,050 to $125,000 per person.

Geoffrey Broderick, the senior partner of the Resolution Law Group, says “These settlements are long overdue and insufficient to solve the problems that exist. EverBank made unsafe and unsound loans. This settlement allows EverBank to retain most of the profits it made from the bad loans. Meanwhile, a settlement payment of $1,050 does nothing to compensate a victim of a wrongful foreclosure.“

Mr. Broderick adds that “The housing market will continue to suffer until it is fixed by the Courts or the Legislature. Somebody has to fix the problem. That is why The Resolution Law Group continues its fight for homeowners. Homeowners cannot expect the problem to fix itself.”

The Resolution Law Group continues to prosecute ground breaking litigation in Federal Court on behalf of homeowners suing lenders and servicers for, among other things, the illegal use of MERS, robo-signing, and intentionally ignoring underwriting standards and encouraging inflated appraisals.

The Resolution Law Group is currently enrolling clients into the pending lawsuit. For further information, visit its website at www.TheResolutionLawGroup.com

The Resolution Law Group: Mortgage Executive Charged with Defrauding Fannie & Freddie

Patrick J. Mansell, 68, Boca Raton, FL, Vice President of Coastal States Mortgage Corporation, has been charged with conspiracy to commit wire fraud to defraud government sponsored entities, Fannie Mae and Freddie Mac.

According to the Information, from April 2007 through February 2012, in the Southern District of Florida, Coastal was a licensed mortgage brokerage whose primary business activity was the selling and servicing of mortgage loans for Freddie Mac and Fannie Mae. As alleged in the Information, Coastal processed payments and payoffs received from borrowers on behalf of Freddie Mac and Fannie Mae, according to the contractual agreements entered into between them.

As further alleged in the Information, Coastal failed to remit some of the mortgage loan payoffs that it received from borrowers to Freddie Mac and Fannie Mae, resulting in a loss to Freddie Mac and Fannie Mae. This misappropriation was concealed by the regular submission of false financial reports by Coastal, via an internet portal, to Freddie Mac and Fannie Mae. If convicted, the defendant faces a statutory maximum penalty of five years’ incarceration, followed by a three year period of supervised release, a fine of up to $250,000 and restitution.

Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, and Steve Linick, Inspector General of the Federal Housing Finance Agency Office of Inspector General, announced the charges.

Mr. Ferrer commended the investigative efforts of the Federal Housing Finance Agency Office of the Inspector General.

If you feel you are the victim of Mortgage Fraud, please do not hesitate to email or call the The Resolution Law Group (203) 542-7275 for a confidential, no obligation consultation.

Lender Litigation, Unlawful Foreclosure, Tarp Money, Mortgage Backed Securities, Derivitives Lawsuits, Insider Trading Lawsuit, SEC Settlements, Ponzi Scheme Lawsuits, Intentional Misrepresentation, Securitized Mortgage, Class Action Securities Lawsuit, Robo-Signing Lawsuit, Lost Equity Litigation, Mortgage Lender Fraud, FINRA Fraud Lawsuit, Suing Banks, Fraudulent Misrepresentation, Short Sale Fraud, Fraudulent Business Practices, Mortgage Litigation, Complex Tort Litigation, Injunctive Relief, MERS Fraud

The Resolution Law Group: Wells Fargo Bank is foreclosing on a borrower because he overpaid his mortgage and he made his payment earlier than when they were due

Wells Fargo Bank is foreclosing on a borrower because he overpaid his mortgage and he made his payment earlier than when they were due. An Orlando, Florida television station reported that Etienne Syldor, received a loan modification from Wells Fargo Bank, and he showed undisputed proof that he made all of his payments early, and in an amount slightly higher than was due.

Wells Fargo Bank stopped accepting his payments because, as they explained, the loan was part of a mortgage-backed security and in a protected pool, with specific payment guidelines. The overpayments and early payments put Mr. Syldor in default, despite the fact that he pair early and more than was due. Wells Fargo Bank has offered to look into the matter, but the foreclosure process will continue unless the bank stops it.

Geoffrey Broderick, the senior partner of the Resolution Law Group, says “it is shameful that Wells Fargo Bank cannot or will not stop a foreclosure when it is obvious that the homeowner is not in default. “

Mr. Broderick adds that “The housing market will continue to suffer until it is fixed by the Courts or the Legislature. Somebody has to fix the problem. That is why The Resolution Law Group continues its fight for homeowners. Homeowners cannot expect the problem to fix itself.”

The Resolution Law Group continues to prosecute ground breaking litigation in Federal Court on behalf of homeowners suing lenders and servicers for, among other things, the illegal use of MERS, robo-signing, and intentionally ignoring underwriting standards and encouraging inflated appraisals.

The Resolution Law Group is currently enrolling clients into the pending lawsuit. For further information, visit its website at www.TheResolutionLawGroup.com

Lender Litigation, Unlawful Foreclosure, Tarp Money, Mortgage Backed Securities, Derivitives Lawsuits, Insider Trading Lawsuit, SEC Settlements, Ponzi Scheme Lawsuits, Intentional Misrepresentation, Securitized Mortgage, Class Action Securities Lawsuit, Robo-Signing Lawsuit, Lost Equity Litigation, Mortgage Lender Fraud, FINRA Fraud Lawsuit, Suing Banks, Fraudulent Misrepresentation, Short Sale Fraud, Fraudulent Business Practices, Mortgage Litigation, Complex Tort Litigation, Injunctive Relief, MERS Fraud