How to Get Out of Debt With the Get Out of Debt Guy » mortgage loan

Holy Fraud, Batman! Literally…

Amanda Miller — Fri, 06 Jan 2012 18:15:13 +0000

Yesterday, an Ohio resident was indicted for allegedly engaging in a fraud scheme that promised to fund more than $500 million in mortgage loans to around 20 churches and a dozen small businesses across the country. The man, Jamal Lawson, fraudulently obtained more than $300,000 in advance fees that he used for personal expenses instead of securing loans as he had promised. Three of the churches were located in Chicago, Illinois and others located in Georgia, New Jersey, North Carolina, Ohio, Oregon, and Virginia.

Lawson was charged with three counts of wire fraud in an indictment and will be ordered to appear for an arraignment in U.S. District Court. The indictment seeks forfeiture of at least $308,000, which represents the amount that Lawson allegedly fraudulently obtained and used for such personal expenses as travel, clothing, food and cars.

According to the indictment, between June 2009 and December 2010, Lawson offered to provide loans to pastors of churches and owners of small businesses through one of his companies: Evangel Capital Group LLC and Evangel Capital Partners Ltd., Ascendant Capital Partners LLC and Ascendant Commercial Mortgage, and Destiny Capital Group LLC and Destiny Capital Partners Ltd. Lawson advertised low-interest loans to churches and small businesses and, after receiving a loan application, advised the borrowers that his companies had approved loans in amounts ranging from approximately $300,000 to $206 million and that firm closing dates had been set. Lawson allegedly knew that he lacked the ability to fund the loans through his companies and he had not secured funding or closing dates from other outside lenders.

As part of the scheme, Lawson allegedly told the borrowers that, before any loans would be disbursed, they were required to pay certain advance fees, in amounts ranging from approximately $1,250 to $35,000, that would be used to obtain appraisals, loan documents, title reports, and audited financial statements. The indictment alleges that Lawson directed the borrowers to pay the advance fees by mailing checks or transferring funds to accounts that he controlled.

Lawson told borrowers that he would refund their application fees if they did not receive the loans, knowing that he never intended to provide the actual loans, the charges allege. Altogether, Lawson allegedly promised to fund loans totaling at least $537.4 million to some 20 churches and 13 small businesses. In Chicago, he alleged defrauded one unnamed church of $3,950 in fees for a purported $742,000 mortgage loan; a second church of $4,000 in fees to provide a mortgage loan of $1,546,000; and a third church of $3,950 in fees for a $3,045,000 mortgage loan.

Lawson could face up to 20 years in prison with a $250,000 fine, and mandatory restitution – Source.

If you have been scammed and would like to file a scam report, please click here.

Mother Daughter Fraud Team Pleads Guilty After Five Days Of Trial

Amanda Miller — Tue, 08 Nov 2011 02:58:18 +0000

From How to Get Out of Debt

Mid-trial a mother and daughter fraudster team, along with an accomplice from Las Vegas, pleaded guilty to participating in a mortgage fraud scheme that lead to more than $1.9 million in mortgage loan losses to lenders.

Mother, Patricia Smith, pleaded guilty to Counts Four and Five of the Superseding Indictment, which charged her with wire fraud. Daughter, Jamilah Smith, pleaded guilty to Counts Two and Three of the Superseding Indictment, which charged her with wire fraud. Pleading along with them was Carol Ashley to Counts Four and Five of the Superseding Indictment which charged her with wire fraud.

What’s strange about this trial is that all three defendants entered their guilty pleas after five days of trial.

Apparently, Patricia and Jamilah Smith served as “straw buyers” to purchase two condominiums each in North Wildwood, New Jersy. The straw buyers had good credit scores, but lacked the financial resources to qualify for mortgage loans. The Smiths’ accomplices created false documents, such as fake bank statements, W-2 Forms, and pay stubs to make the straw buyers appear more creditworthy than they actually were in order to induce the lenders to make the loans. Ashley falsely verified to the lenders that Patricia Smith worked for Ashley’s company, Exclusive Entertainment Production, based in the Los Angeles area.

Once the loans were approved and the mortgage lenders sent the loan proceeds in connection with real estate closings on the properties, the defendants’ accomplices took a portion of the proceeds from the fraudulent mortgage loans and ultimately paid the Smiths for their roles.

Each charge to which the defendants pleaded guilty carry a maximum potential penalty of 30 years in prison and a $1 million fine. Patricia Smith agreed to forfeit $82,716.80, and Jamilah Smith agreed to forfeit $65,047.70, representing the amount of proceeds obtained as a result of the offenses.

Sentencing for all three defendants is scheduled March 2012. A fourth defendant named in the Superseding Indictment Ollie Rudolph Thaxton, pleaded guilty to Count One, which charged him with wire fraud on Sept. 20, 2011, and is scheduled to be sentenced Jan. 12, 2012 – Source.

If you have been scammed and would like to file a scam report, please click here.

Homeowners In Financial Distress Lose Over $1.2 Million To Mortgage “Rescue” Fraud

Amanda Miller — Tue, 11 Oct 2011 16:06:28 +0000

From How to Get Out of Debt

To the tune of a MasterCard commercial:

$4.7 million in fradulent mortgage loans…
$944,224 lost by lenders….
$1.2 million lost in equity to homeowners….

Shameful.

Mary Ann Dean and Charles Donaldson pleaded guilty to the charge of conspiracy to commit wire fraud in connection with a mortgage fraud scheme of Sunset Mortgage Company.

Dean was a loan originator and operator of the Maryland-licensed mortgage brokerage franchise while Donaldson acted as a loan originator during part of the conspiracy. Donaldson would steer clients to Dean’s brokerage franchise and facilitated communication between Dean and buyers and sellers.

Beginning in 2005, Donaldson identified homeowners who were in financial distress because they were unable to make the mortgage loan payments on their homes and enticed the homeowners to participate in a foreclosure “rescue” plan. Donaldson told the homeowners that he would locate “investors” to purchase the homeowners’ properties; that the homeowners would rent their properties after selling them to the “investors,” who would receive a small percentage of the homeowners’ equity; that the remainder of the homeowners’ equity would be transferred to Donaldson, who would hold it in escrow; and that the homeowners would buy back their properties after twelve to eighteen months, during which they could rehabilitate their finances and “repair” their credit while they continued to live in their homes.

Donaldson then recruited associates and family members as “investors” to purchase the properties. He then paid them all a small percentage of the seller’s equity at settlement. Homeowners were then expected to pay monthly rent to the “investor” to remain in their home and in return the “investor” was expected to make and keep up with the mortgage payments.

Prior to the sales of the properties, Donaldson created and recorded Second Deeds of Trust or promissory notes that purported to show debts owed by the homeowners to Donaldson, and which were secured by the existing equity in their home. At the closing of the sale of the property to the “investors,” the title companies disbursed funds to Donaldson’s bank account in order to payoff the liens he had established. Donaldson assured the homeowners and “investors” that he would assist them, if need be, with their rent and mortgage payments respectively, using that equity, which he claimed he was holding in his “escrow account.”

In reality all Donaldson simply put the funds into his own personal checking account, using the for business and personal purposes. Dean knew of this practice the whole time.

Donaldson and Dean obtained the new mortgage loans on the properties in the names of the “investors” with higher monthly mortgage payments, and, most times, higher interest rates, than that which the homeowners were currently paying. To obtain the new loans, Dean made false representations in the loan applications, including, that the “investors” intended to live in the properties as primary residents and inflating the incomes of the “investors.” Donaldson also assisted Dean by procuring false verification of employment letters. Dean, who acted as the mortgage broker, submitted the false loan applications to lenders to obtain financing for the purchases of the properties in the names of the “investors.” In some instances, Dean submitted fraudulent loan applications for the same “investor” to purchase multiple properties as their ‘primary residence’ in a short period of time.

Given the fraudulent loans at a high interest rate and large transaction fees and premiums Donaldson and Dean knew the clients that had trusted them to help them keep their homes had lost control and could not afford the new loan payments since they were now higher than what they were higher than what they were originally paying. They also did not quality for a refinance.

Due to the nature of the high payments “investors” and homeowners were forced to use personal savings and credit cards to keep up with mortgage and rent payments, respectively, until their funds had run dry. The loans went into default and as of right now thirteen of the homes have been foreclosed upon and proceedings for foreclosure have started for three of the other homes.

Lenders made over $4.7 million in mortgage loans based on the fraudulent loan applications, and have so far lost at least $944,223.91. Dean and Donaldson’s scheme also caused the homeowners to lose between $1.2 million and $1.4 million. More than 20 victims were defrauded by Donaldson and Dean.

Inspector General Jon T. Rymer of the Federal Deposit Insurance Corporation (FDIC) said, “I am once again pleased to join our law enforcement colleagues in defending the integrity of the financial services industry by combating mortgage fraud. We are particularly concerned in cases like this one where professionals have misused their positions of trust and whose fraudulent activities in committing mortgage fraud have harmed numerous innocent homeowners. We are committed to continuing our investigations of such criminal misconduct to help maintain the safety and soundness of the nation’s financial and lending markets” – Source.

If you have been scammed and would like to file a scam report, please click here.

Deceitful Debt Relief And Mortgage Operation Shut Down

Amanda Miller — Fri, 07 Oct 2011 18:44:14 +0000

From How to Get Out of Debt

A United State district court has shut down two related operations who apparently failed to provide promised debt relief services and jeopardized clients’ privacy by at the Federal Trade Commission (FTC)’s request. Apparently one firm charged consumers a $1,495 up front fee for a mortgage relief assistance program that was never given as well as tossing personal information into unsecured dumpsters putting clients’ personal information in serious jeopardy.

The FTC has been cracking down on scams lately that target consumers in financial distress. Goodness knows there’s enough of them out there! The settlements with Relief Foundation, Silver Lining Services, Mitigation America, and their principal owners are a result of the recent crackdowns. The defendants, James Holderness, Bryan Melanson, Michael Valenti, and Jillian Melanson, are banned from working in the mortgage assistance and debt relief business from the settlements. Also, a judgement of more than $10.5 million has been issued. This amount is the total the defendants made through their deceptive conduct. Mitigation America’s Dennis Strzegowski has also been banned for working in just the debt relief industry.

According to the FTC, the Residential Relief defendants used a logo similar to the Great Seal of the United States to market their products. Claiming quick results and a high success rate, the defendants charged a $1,495 up-front fee, advised consumers to stop making mortgage payments, and falsely claimed that reports they created would enable homeowners get the promised results.

The FTC alleged the defendants behind Residential Relief Foundation violated federal law by falsely claiming their loan modification program could lead to the waiver of late mortgage payments, late fees, and legal fees; the conversion of adjustable mortgage rates to fixed rates as low as one percent; the reduction of consumers’ principal balance; and up to 40 percent lower mortgage payments.

The defendants engaged in their conduct amid the publicity surrounding the availability of free mortgage loan assistance and modification programs, including the Home Affordable Modification Program (HAMP) implemented by the federal government under the Troubled Asset Relief Program (TARP).

Finally, the FTC charged that in marketing credit card debt relief services, the defendants falsely told people they could become debt-free in 12 to 36 months, could eliminate late fees and penalties, and could reduce their debts by up to 50 percent.

Defendants cannot make misrepresentation about any product or service under these settlements, including claims about financial products and/or services, their affiliation with the government and implementation of their data security measures. The defendants are also required to have competent and reliable evidence to back up key claims about their financial products or services and prohibit them from violating the FTC’s Telemarketing Sales Rule. Also, in settlements, the total judgment amounts will become due if the defendants are found to have misrepresented their financial condition – Source.

$11 Millon Loan Scheme Lands Former CEO In Prison

Amanda Miller — Mon, 03 Oct 2011 00:28:32 +0000

From How to Get Out of Debt

David Findel, former CEO of Worldwide Financial Resources, a mortgage origination firm in New Jersey, was sentenced to 63 months in prison on September 27, 2011 for a connection with an $11 million fraudulent loan scheme.

Previously, Findel pleaded guilty to an Information charging him with wire fraud.

According to the Information to which Findel pleaded guilty and statements made in Trenton federal court:

Findel is the former CEO of Worldwide Financial Resources (“Worldwide”), which was in the business of originating residential home loans. Worldwide worked with borrowers to prepare mortgage applications and qualify the borrowers for home mortgages. Although Worldwide would originate the mortgage loans, after origination, Worldwide would re-sell the loans to another financial institution in the secondary mortgage marketplace.

Findel admitted he prepared and sold fake mortgage loans from 2008 through September 2009. Specifically, after Worldwide had originated a mortgage loan and sold that loan to a third-party lender, Findel would create a second set of fraudulent loan documents for the same property. He would then sell the second set of fraudulent loan documents to another third-party lender, even though the actual mortgage loan for that property already had been sold. As a result of these fake mortgage loans, Findel received over $11 million in illicit proceeds, which he used, in part, to maintain his lavish lifestyle – including his multimillion-dollar, exotic travel, and exclusive seating at a major New Jersey professional sports arena.

After Findel completes his 63 months (5.25 years) of prison he will then face three years of supervised release and have to pay $11,994,000 in restitution.

Findel also pleaded guilty to a separate Information on September 19, 2011 charging him with bankruptcy fraud after concealing assets from his trustee, U.S. Trustee and creditors in his bankruptcy are. He will be sentenced on that count on November 14, 2011.

This case was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.

Press Release

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Slowdown nails contractors: Dozens of Idaho small business owners

Steve Rhode — Mon, 27 Oct 2008 05:41:17 +0000

From How to Get Out of Debt

Here is a great news story that gives you a real look at some of the recent small business failures and what the court documents tell us. It helps to put a real face on what would otherwise be just another tick in a column.

Court documents offer a window into some of the struggles of these entrepreneurs. The following vignettes were gathered from paperwork filed in bankruptcy court this summer and fall. Owners of these businesses either declined to comment or could not be reached:

Brad Echeverria started his Boise home-building company, Echeverria Construction Inc., in 1998. The company shut down in January 2008, and Echeverria has been working as a subcontractor for Steed Construction in Eagle since then. He and his wife filed for Chapter 7 bankruptcy protection on Aug. 28. They plan to surrender a $300,000 home on Diamond Ridge Way in Nampa to pay off Washington Mutual, which is owed $220,000 from a mortgage loan issued in 1997, and Wells Fargo, which is owed $66,000 from a second mortgage issued in 2004. Liabilities total $673,000, while the Echeverrias have assets of $313,000. Liabilities include a $28,000 business debt to Arenas Plaster of Eagle for masonry and stucco provided in 2006, $23,000 to Eagle Custom Wood Products of Emmett for cabinets and more than $100,000 owed on business credit cards.

David Cullison operated his Boise construction and remodeling company, Cullison Construction, from June 1994 until July 2008. He and his wife owe $290,000 and have $111,000 in assets. Their real property assets include a 50 percent interest in a home in the Country Club Manor development near Hillcrest Country Club, though they owe $205,000 to Countrywide Home Loans for the property. Other debts include $25,000 in wages they owe themselves and $55,000 related to a breach of contract lawsuit.
Kirk Carpenter of Boise has operated his own business for most of the time that he’s also served as a Nampa firefighter over the past 10 years. His company, Open Door Home Building, also known as Concore LLC or E4 Developments, has built homes since October 2000. For the past two years, Carpenter has also worked as a realtor for Idaho Properties GMAC. On Oct. 6, he and his wife filed for Chapter 7 bankruptcy protection with $149,400 in assets and $1.4 million in liabilities. Their $278,000 home on Riva Ridge in Boise was returned to the lender, HSBC Mortgage Services, on Sept. 3. They also lost possession of a home on Ardyce Street in Boise in January, when it was returned to Wells Fargo. Debts include $322,000 owed to Syringa Bank for construction loans issued in 2006; $150,000 to Darrell Wiseman, a private investor in Meridian; $225,000 to Kenny Lee, a private investor in Nampa; and $60,000 for a business loan from Wayne and Dru Carpenter of Baker City, Ore.
Chambers Construction of Meridian reported gross income of $42.3 million in 2006, which plummeted to $2.4 million in 2007 and $283,000 this year. The company, led by president Gary Chambers, filed for Chapter 7 bankruptcy protection on Oct. 7 with $1.1 million in assets and $1.8 million in liabilities. The assets consist of four properties, including a $424,000 home on Commander Street in Meridian, plus two additional properties of unknown value. Liabilities include four construction loans totaling $680,000 from Banner Bank issued in May and June 2008, a $464,000 construction loan issued by Provident Financial in May 2008 and a $218,000 construction loan from Action Mortgage issued in May 2008. Other unsecured debts include $8,600 owed to subcontractor Metric Industries Inc. of Boise, $28,000 to supplier Evans Building Center of Eagle, $30,275 to subcontractor Prestige Fence and Lands of Star and $18,300 to supplier Dale’s Floor and Granite Inc. of Nampa.
Scott Carroll closed his Post Falls painting company, Scotts Painting, in September after more than five years in business. He and his wife filed for bankruptcy on Oct. 17. The only major asset they possess is a $168,000 home, though they have $229,000 in liabilities. They plan to retain their home and pay CitiMortgage Inc. the $147,000 that’s still owed after the conclusion of the bankruptcy process. Most of the rest of their liabilities consist of medical bills, a car loan and credit card debt.
Boise home builder and contractor Russ Iverson filed for Chapter 7 bankruptcy protection on Aug. 29. Iverson and his company, Outlook Homes, will surrender five properties in the liquidation process after being in business from May 2003 to August 2008. Iverson and his wife have $1.2 million in assets and about the same in liabilities. The assets mostly consist of the five homes that will be returned to lenders, including their own $285,000 residence on Outlook Avenue in Boise, two duplexes in Nampa and two other mid-range homes. The liabilities largely entail the mortgages on the homes, taxes and credit card bills.

Slowdown nails contractors: Dozens of Idaho small business owners … Idaho Business Review, United States - 2 hours ago Most of the rest of their liabilities consist of medical bills, a car loan and credit card debt . · Boise home builder and contractor Russ Iverson filed for …

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Source: Slowdown nails contractors: Dozens of Idaho small business owners

Guest Post – Mortgage Tips and Money Saving Advice

Guest Post — Mon, 18 Aug 2008 23:46:22 +0000

From How to Get Out of Debt

Tom McConnon contacted me recently and wanted me to share this post with you. If you would like to contribute a guest post, you can contact me here.

If you are a first-time home buyer, a mortgage may seem like an overwhelming and intimidating thing if you do not fully understand what it is. Here we break down confusing mortgage terminology, choosing the right mortgage for your financial situation, and how to pay it off early.

Mortgage Terminology

Adjustable Rate Mortgage – Commonly referred to as an ARM in the industry, an adjustable rate mortgage is one in which the interest rate is intermittently adjusted according to a set industry index.

Annual Percentage Rate (APR) – In regards to a mortgage loan, the APR is simply the measurement of the full cost of the loan (including fees and interest) given in a yearly rate.

Mortgage Broker – A broker is an industry expert who arranges funding and negotiates mortgage contracts for clients. They are not the lender themselves but often require a fee or receive a commission.

Term – A mortgage term refers to the amount of time you have to pay off the loan, typically anywhere from 10 to 30 years. The longer you have to pay off the loan, the lower your payments will be; however, your interest rate may be higher.

Interest Rate – How much you will be paying the bank just to borrow the money. The rate is different than the actual principal (or amount) of the loan.

Closing Costs – These are fees associated with the finalizing of a mortgage. They typically include things such as an appraisal, attorney/notary fees, registry fees, etc. Closing costs are part of every mortgage.

Choosing the Right Mortgage for You

Choosing a mortgage term that is right for you depends largely on your financial situation and how you view your home. Some people opt for a longer mortgage term (such as 30 years) since it affords them lower payments. Other homeowners prefer shorter mortgage terms with larger payments so they can pay it off sooner. Traditionally, the more money you put into your home, the better off you’ll be since your home is (typically) an appreciating asset.

Early Mortgage Payoff Tips

Many homeowners choose to pay off their mortgage in less time than the term of the mortgage. This is especially ideal for homeowners who plan to stay in the current home indefinitely.

Pay more than the required monthly payment. Adding a specific dollar amount that goes towards your principal can really add up, even if it is only $30 a month – that’s an extra $360 a year that goes toward the loan principle. Supplement only what you can afford.

Add to your home’s value by updating or improving the rooms that will net you the most profit: the kitchen and bathrooms. This will enable you to make money if you ever sell the house.

Shave years off your mortgage term by paying 13 monthly payments each year, instead of the standard 12.

See if your lender offers biweekly payments, instead of monthly ones – make sure the fee for such a service is worth the fee it costs.

If you want to increase your financial responsibility and accountability while paying off your mortgage early, try an accelerated mortgage program, such as the Money Merge Account.

If interest rates drop, consider refinancing if you can lock in a rate that is a full 1 percent lower than your current one.

How to Get Out of Debt With the Get Out of Debt Guy » mortgage loan

Holy Fraud, Batman! Literally…

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