chow
Joined: 22 Jan 2005
Posts: 2350
Location: Cornfield County, Indiana
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| Posted: Sun Dec 25, 2005 7:59 pm Post subject: Federal E-Alert HUD update from Herman Thordsen |
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FEDERAL MORTGAGE e-ALERT©
(December 27, 2005)
HUD FINES NINE TENNESSEE BUILDERS FOR RESPA VIOLATIONS
FACTS
The Department of Housing and Urban Development announced a $226,000 settlement with nine Tennessee builders who allegedly took kickbacks from a Tennessee title company in violation of the Real Estate Settlement Procedures Act. The companies, known as Title Group Builders, have agreed to pay $226,000 to the U.S. Treasury and to cease "any further business operations involving the sham business affiliations." The companies allegedly received payments for settlement services that were never performed, violating RESPA's anti-kickback and unearned-fee provisions. The Title Group Builders consist of: Oaktree Homes LLC, Vintage Homes LLC, Bronze-Christian LLC, P & G. Capital Partners LLC, Summit Homes LLC, Lenox Homes LLC, Riverbirch Homes LLC, Richard and Milton Grant Co., and Downing Homes Inc. (bkruniv122305)
MORAL
Nine companies pay collectively $226,000 or about $25,111 per company. That should really teach them a lesson. Especially if they maid $50,000 each. Let me see the math! I agree to pay a fine of $25,111 as my share, I made $50,000, that leaves a profit of $24,889 for breaking the law. That will really teach me not to do it again.
IDENTITY THEFT MAKES EQUIFAX PAY OREGON CONSUMER OVER $300,000
FACTS
Kirkpatrick, 30, learned his identity had been stolen and that multiple lines of credit had been fraudulently established in his name, wrecking his credit history and preventing him from acquiring credit for projects such as home renovation to accommodate his third child. He contacted Equifax, sending a police report and an affidavit outlining the identity theft and asking the company to clear his credit history. Nothing was done. He contacted Equifax and they said the documents Kirkpatrick sent had been inadvertently destroyed. He sent them several more times and still nothing was done.
Kirkpatrick sued Equifax for violation of the Fair Credit Reporting Act alleging emotional distress as well as repeated denials of credit. Equifax defended stating it had made a reasonable mistake.
The jury said . . .
Pay Kirkpatrick $210,000 as well as $295,000 in attorney fees. (Kirkpatrick vs. Equifax Info. Servs. LLC, U.S. District Ct., D. Oregon, No. 3:03-CV-00199-MO, Jan. 25, 2005)
MORAL
I guess Equifax never read the TransUnion case where they were hit for $5.3 million for failing to correct credit. Oh well, Equifax will just raise its’ fees to the retailer to cover the cost and keep right on doing it?
THE FAIR DEBT COLLECTION PRACTICES ACT ALLOWS COLLECTION AGENCIES AND DEBT COLLECTORS TO BE SUED WHEN THEY INSIST OBJECTIONS TO THE DEBT BE IN WRITING
FACTS
Rita Camacho, a debtor sued Bridgeport Financial Inc., a debt collector, for violation of the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. §§1692g and 1692e. Camacho alleges that Bridgeport Financial’s initial collection notice which stated that Camacho could only dispute the validity of the debt in writing, misrepresented Camacho’s rights. She could dispute them orally or by any other means.
Camacho’s debt for $42.57 was assigned to Bridgeport by Into Video. In its’ initial collection letter, Bridgeport included the statement: “Unless you notify this office in writing within 30 days after receiving this notice that you dispute the validity of this debt or any portion thereof, this office will assume this debt is valid.” Camacho then filed this lawsuit alleging the violations stated above. Bridgeport made a motion to dismiss which was denied. Bridgeport appealed.
The 9th Circuit Court of Appeals said . . .
Affirmed. Under the FDCPA (15 U.S.C. §1692g(a), a debt collector must send a consumer debtor, within five days of its initial attempt to collect any debt, a written notice containing: (1) the amount of the debt; (2) the name of the creditor to whom the debt is owed; (3) a statement that unless the consumer, within thirty days after receipt of the notice, disputes the validity of the debt, or any portion thereof, the debt will be assumed to be valid by the debt collector; (4) a statement that if the consumer notifies the debt collector in writing within the thirty day period that the debt, or any portion thereof, is disputed the debt collector will obtain verification of the debt or a copy of a judgment against the consumer and a copy of such verification or judgment will be mailed to the consumer by the debt collector; and (5) a statement that upon the consumer’s written request within the thirty day period the debt collector will provide the consumer with the name and address of the original creditor, if different from the current creditor.
Section 1692g(a)(1)(5) further provides that if the consumer notifies the collector of a dispute in writing within the 30-day period, the collector shall cease collection activities until he obtains the verification or information required. While a written notice requires the debt collector to comply with certain requirements, an oral dispute of the debt is still sufficient and gives the debtor certain protections. Oral disputes preclude the debt collector from communicating the debtor’s credit information to others without including the fact that the debt is in dispute (15 U.S.C. §1692E(8). Additionally, if the consumer if a consumer owes multiple debts and makes a payment, the debt collector is prohibited from applying such payment to a debt in dispute (15 U.S.C. §1692h.) Oral dispute also prohibits the debt collector from contacting the consumer at a time or place known or which should be known to be inconvenient to the consumer. Particularly Fox vs. Citicorp Credit Servs. Inc., 15 F.3rd 1507,
1516, found the debt collector liable for contacting a debtor at work after the consumer orally informed the collector not to do so. (Camacho et al (class action) vs. Bridgeport Financial, Inc., et al (2005 DJDAR 14242, 12-12-05).
MORAL
Now you ask yourself why do I put in all the legalese citations? Because, the market is slowing down and many loan officers may find themselves in a financial bind. By having the legal citations and threatening to see a lawyer about filing a lawsuit may make the debt collector think twice about the validity of the claim. Especially when the company and the individual collector(s) can be sued personally?
CALIFORNIA NEW “DO NOT FAX LAW” EFFECTIVE JANUARY 1, 2006 PROVIDES NO EXCEPTIONS TO EXPRESS PERMISSION TO FAX
FACTS
Senate Bill 833 enacts California Business and Professions Code Section 17538.43 effective January 1, 2006. This prevents everyone from faxing an unsolicited advertisement to anyone WITHOUT EXPRESS PERMISSION. The penalty is $500 per fax and tripled to $1,500 if the court determines the sending is a willful violation of this law. Specifically the code defines the term unsolicited advertisement as:
"Unsolicited advertisement" means any material advertising the commercial
availability or quality of any property, goods, or services that is transmitted
to any person or entity without that person's or entity's prior express invitation or permission. Prior express invitation or permission may be obtained for a specific or unlimited number of advertisements and may be obtained for a specific or unlimited period of time.
This does not apply to a professional or trade association that is a tax exempt non profit organization PROVIDED the member gives the fax number and states the terms and conditions of the fax.
There are additional requirements at what must appear at the top of the fax line. (B&PC §17538.43)
MORAL
This new law is even more restrictive than the federal law. You will be getting sued by more and more people suing you for this violation. This is because a prior business relationship does not count. You must have express permission to send the fax. This law affects anyone sending from or receiving the fax in California. Welcome to the world of Small Claims court.
CALIFORNIA ADMINISTRATIVE HEARINGS REQUIRE GOVERNMENT AGENCIES TO COMPLY WITH THE 100-DAY RULE
FACTS
St. Francis Medical Center was audited by the Department of Health Services and deemed to have been overpaid by some $2 million. St. Francis appealed and requested an administrative hearing under the California Administrative Procedures Act (APA). The Administrative Law Judge issued a ruling of no overpayments and St. Francis owed no money on October 23, 2001. The same day the Department of Health Services rejected the decision. On February 13, 2002 (113 days later) the Department rejected the judge’s decision and issued a new and different decision that St. Francis owed a little over $1.7 million. St Francis stated the Department decision was invalid because the APA (Gov’t C. §11517) requires a decision by the Department within 100 days of the decision or rejection of the decision and this was issued 113 days after rejection. St. Francis filed its’ writ in the Superior Court to set the decision aside and the Superior Court rejected the petition and let the Department decision stand. St. Francis then appealed.
The 3rd Appellate District said . . .
Reversed. When an agency fails to issue a final decision within 100 days of rejecting the proposed decision the judges’ decision becomes final and is deemed adopted by the agency. (St. Francis Med. Cntr. vs Shewry, CA 3rd, No. Co47027, 122005)
MORAL
Now you say, why put a medical decision here when this is mortgage or real estate law? The answer is the Department of Real Estate (DRE) is subject to the same rule. If the DRE fails to accept or reject the judge’s decision on within 100 days of receipt of the judges’ decision the judge’s decision is deemed adopted. SO, count the days. .
VENTURA COUNTY, CALIFORNIA DISTRICT ATTORNEY HITS PREDATORY LENDER WITH 3-YEAR PRISON TERM AND FREEZES ASSETS
FACTS
The District Attorney's Office's Consumer and Environmental Protection Unit of Ventura County California will distribute $100,000 in restitution to victims of a predatory lending scam.
Edgar Mauricio Berrazueta, 44, fleeced 14 victims in his predatory lending and theft scheme, which was operated while Berrazueta was employed as an assistant loan agent at Pacific First Bancorp in Oxnard, according to Mitchell Disney, senior deputy district attorney. Berrazueta was sentenced to three years and eight months in prison for the crime in August 2005.
Berrazueta, an Ecuadorian national, promised homeowners lower monthly payments on their home loans if they refinanced through his own company. The homeowners received worse loans than they already had. The homeowners were not aware of the terms of their new loans because all the documents were in English, and they were Spanish speakers, according to Disney. The district attorney was able to secure a “freeze and seize” order from the court on Berrazueta’s assets after his arrest. (venturacountystar121705)
MORAL
If you are going to prey, then be prepared to pay. In this case, $100,000 and three years in state prison.
WATCH THE CALIFORNIA INDEMNIFICATION AGREEMENTS YOU SIGN AS A BROKER-YOU MAY FIND YOUR PERSONAL ASSETS AT RISK
FACTS
Invest America Mortgage Corporation, a Georgia corporation, signed a broker agreement with Trust One Mortgage Corporation. Invest would broker loans to be funded by Trust One and Invest indemnified Trust if there were any problems with the loan files including false documents regardless of whether Invest knew or should have known any of the loan documents were false or incorrect in any form. Invest also would buy back the loans if there were any defaults in the first six payments. Linda Sens, the president of Invest guaranteed the performance of Invest by a separate guaranty. Two loans were funded in Georgia on two different properties owned by one borrower and Trust one sold them to IMPAC Funding Corporation. The borrower defaulted on one loan after only three payments and on the other loan after one payment. IMPAC foreclosed leaving a substantial deficiency and Trust One pursuant to its’ purchase agreement with IMPAC paid the loss to IMPAC.
Trust One then sued Invest America and its’ owner Lynda Sens under the broker agreement’s indemnification clause and the personal guaranty of Sens which required Invest America to indemnify losses or repurchase loans in the event of a borrower’s early default or fraud in the loan application. Invest America argued Georgia law applied and therefore it had no liability and Trust One stated California law applied pursuant to the signed agreement. California law applied and the indemnification is not a guaranty and therefore Invest and Sens were liable for the loss. Invest America on the indemnification and Sens under the guaranty if Invest America did not pay. The court awarded Trust one $173,704.01 in damages against both Trust One and Sens. Invest and Sens appealed.
The 4th Appellate District said . . .
Affirmed on various grounds. (Trust One Mortgage Corporation vs. Invest America, etc., et al. (12-15-05), 2005 DJDAR 14480)
MORAL
If you are a lender get the guaranty from the owners, shareholders and officers as well as the indemnity from the corporation. If you are the broker, do not sign the guaranty. You can always walk away from a corporation, but you cannot walk away from your personal assets.
NEW YORK DOES IT AGAIN WITH A GREAT MORTGAGE FRAUD SCAM THAT INCLUDES ONE PERSON MISUSING A RELATIVE
FACTS
Lawsuit No. 1- May 10, 2005, Conestoga Title Insurance Company filed a civil lawsuit against GMC Land Services, Inc., James LaForte, Jr., Richmond Abstract Corp., Joseph LaForte, LaMattina & Associates, Inc. and Joseph LaMattina. Conestoga alleged: it entered into agency agreements with Richmond Abstract Corp and with GMC Land Services, Inc. appointing these parties its non-exclusive agent in connection with issuance of Conestoga title insurance policies for property located in the State of New York. Further, that he agreement with Richmond Abstract Corp. was later canceled and the agreement with GMC was terminated. After termination of the contracts, Conestoga was not provided with title insurance files or trust account reconciliation reports and that GMC diverted trust account funds. The complaint further alleges breach of contract, breach of fiduciary duty, conversion, tortuous interference with contract and fraudulent conveyance and seeks damages in an amount to be not less than $5,000,000.
Lawsuit No. 2-August 15, 2005, First Continental Mortgage and Investment Corp. filed a civil lawsuit against LaMattina & Associates, Inc. and Joseph LaMattina alleging that funds wired to LaMattina & Associates as closing agent in three mortgage transactions were not properly disbursed. The complaint alleges conversion, unjust enrichment, money had and received, negligence and breach of fiduciary duty and seeks not less than $1,545,080.78.
Lawsuit No. 3-September 14, 2005, Credit Suisse First Boston Financial Corporation filed a lawsuit against LaMattina & Associates, Inc., Joseph LaMattina and Victory State Bank alleging a fraud scheme by the LaMattina defendants to convert to their own use approximately $795,000 of plaintiff’s funds. The complaint alleges Credit Suisse wired approximately $795,000 to an account maintained by LaMattina & Associates, Inc. for funding a residential real estate transaction. Further, LaMattina & Associates, Inc. claimed the funds had not been received despite confirmation by Victory State Bank that the wire had been received. The claims against Victory State Bank seek attachment of any remaining account funds. The complaint includes conversion, fraud, unjust enrichment, money had and received.
Lawsuit No. 4-October 12, 2005, Accredited Home Lenders, Inc. filed a civil suit against LaMattina & Associates, Inc. and Joseph LaMattina alleging they acted as closing agent for five transactions on behalf of Accredited and used the closing funds for their own benefit instead of apply them to the transactions. The complaint alleges conversion, unjust enrichment, breach of fiduciary duty and negligence and seeks damages of no less than $861,414.10.
Criminal charges are filed in Nassau County, New York against:
Joseph W. LaForte, 34, Staten Island, New York and Miami Beach, Florida;
James LaForte, Jr., 28, Staten Island, New York (brother of Joseph W. LaForte)
Tina LaForte, 56, Staten Island, New York (mother of Joseph W. LaForte and James LaForte, Jr.)
James LaForte, 59, Staten Island; New York (father of Joseph W. LaForte and James LaForte, Jr.)
Tara Gibson, 33, Staten Island, New York and McKinney, Texas (sister of Joseph W. LaForte and James LaForte, Jr.)
Jaime Lynn Guli, 27, Staten Island, New York
Francis Alfieri, 27, of 18 Hillis Street, Staten Island, New York
Michael O’Leary, 29, Staten Island, New York was also charged in a separate felony complaint with money laundering and conspiracy)
District Attorney Denis Dillon is purported to have stated, “The charges are based on allegations that the defendants conspired to steal over $12 million from various lending institutions by forming a corporation, which appeared to be a law firm. They used that corporation to act as attorneys for banks at mortgage closings and then would launder the proceeds through related entities and back to themselves. The corporation they formed, LaMattina & Associates, Inc. opened a bank account to handle the banks’ funds, which was entitled the LaMattina & Associates, Inc., Joseph LaMattina Settlement Trust Account.”
“None of the eight individuals charged are attorneys,” said Dillon. “Instead, James LaForte contacted Joseph LaMattina, a Staten Island attorney and relative and arranged to make him Secretary of the corporation and use his name. No charges have been brought against Mr. LaMattina at this time. The other corporate officers were, Joseph W. LaForte, its first President, followed by Tina LaForte and Tara Caminiti (now Gibson), Vice President.”
“Once the corporation was formed, it made arrangements to represent the banks at mortgage closings,” said Dillon. “They opened an office at 220 Old Country Rd., Mineola, New York where most of the closings took place. The banks would wire the funds into the Joseph LaMattina Settlement Trust Account and LaMattina & Associates, Inc. was then supposed to write checks to either the borrower or on the borrower’s behalf. They then began moving millions back and forth between related entities. Instead they used these fund for their own benefit.” (rdol12/05)
MORAL
The fraud is epidemic. To be somewhat humorous, it also means we receive a lot of calls to protect people that get into trouble. I wish to express my deep appreciation for the business, but I do recommend not doing it in the first instance. Especially to family.
SEMINARS
JANUARY 18, 2006-NEW LAWS LEGISLATION AND CASES AFFECTING THE ABILITY OF THE MORTGAGE BROKER TO MAKE A LIVING, NEW DISCLOSURE FORM IN PURCHASE OF PROPERTY-NEW CALIFORNIA ANTI-FAX LAW THAT GUARANTEES YOU WILL BE SUED-6 HUTTON CENTRE DRIVE, SUITE 100, SANTA ANA, CALIF.
REGISTER BEFORE JANURAY 11, 20076 COST IS $95. REGISTER AFTER JANUARY 11, 2006 COST IS $175. SEMINAR WILL HAVE A SYLLABUS FOR ALL ATTENDEES.
JANUARY 25, 2006-LAS VEGAS, NEVADA
NEW LAWS LEGISLATION AND CASES AFFECTING THE ABILITY OF THE MORTGAGE BROKER TO MAKE A LIVING, NEW DISCLOSURE FORM IN PURCHASE OF PROPERTY-NEW CALIFORNIA ANTI-FAX LAW THAT GUARANTEES YOU WILL BE SUED - SOUTHWEST TITLE, 8215 South Eastern Suite 100 Henderson, NV 89123
REGISTER BEFORE JANUAY 18,COST IS $95. REGISTER AFTER JANUARY 19 COST IS $175.
FEBRUARY 3, 2005-
Equity Title 7360 W. Flamingo Road. @W. Flamingo and Tenaya, Las Vegas, NV
9:00 a.m.-noon: How to Handle a Nevada Mortgage Lending Division Audit and stay out of trouble with the Commissioner
1:00p.m.-5:00 p.m. TILA-RESPA updates for the coming year including ways to pay referral fees legally
The above two seminars are accredit in Nevada for renewing your license. They may or may not be accredit for other state licensing renewals. Please check with the agency that issues your license.
THE INFORMATION HEREIN IS NOT LEGAL ADVICE.
AN ATTORNEY SHOULD BE CONSULTED IF YOU DESIRE LEGAL ADVICE.
If you want to make certain you receive our e-mails you must put our e mail address in your address book. Otherwise, AOL among other servers may reject the message and you will not receive the information.
Herman Thordsen
IF YOU HAVE TROUBLE WITH:
• MORTGAGE FRAUD
• NEVADA MORTGAGE LENDING DIVISION AUDITS
• HUD AUDITS AND THE MORTGAGEE REVIEW BOARD;
• LICENSING IN THE VARIOUS STATES
• DEPARTMENT OF REAL ESTATE AUDITS OR LICENSE DISCIPLINARY MATTERS
• DEPARTMENT OF CORPORATIONS AUDITS OVER CFL OR RMLA LICENSES;
• MINIMUM WAGE OR OVERTIME LAWS
Please contact Herman Thordsen toll free (888) 667- 8529.
Go to www.lendinglaw.com and upcoming events for further details.
Herman Thordsen and his firm are the attorneys for numerous mortgage brokers and lenders, both in California and nationally as well as the attorneys for trade associations including Central Coast Chapter-- (CAMB), Central Valley Chapter-- (CAMB), Inland Empire Chapter-- (CAMB), North Bay Chapter-- (CAMB), North San Diego Chapter—(CAMB), San Diego Chapter --(CAMB), Silicon Valley Chapter-- (CAMB). In the past, the firm has represented the Nevada Association of Mortgage Brokers. Mr. Thordsen has been a member of the California Department of Real Estate Solicitation Task Force Committee, the California Department of Motor Vehicles Anti-Fraud Task Force and the Banking and Real Estate Appraisal Programs at California State University, Fullerton.
Mr. Thordsen publishes weekly articles for the Broker Universe , a division of Thomson Media, monthly columns for the San Diego Chapter-CAMB and is a responding attorney for RESPANEWS.com. He conducts seminars on Federal and State mortgage loan compliance issues that cover HUD, RESPA, TILA, PREDATOREY LENDING, NEVADA and CALIFORNIA.. He authors numerous manuals and articles on HUD Audits, California Department of Real Estate Audits, Nevada Mortgage Lending Division Audits, Truth in Lending, RESPA, Mortgage Fraud and Predatory Lending. His most recent publication is on loan officer minimum wage and overtime laws.
Mr. Thordsen is an invited guest speaker before trade groups, and has been a guest speaker on HUD audits before the Clark County Bar Association, Las Vegas Nevada and the Nevada Association of Mortgage Brokers Education Committee. He has been a guest speaker along with the FBI as invited guests on mortgage fraud issues as well as California Department of Real Estate and Nevada Mortgage Lending Division audits.
The firm regularly represents brokers and lenders before licensing agencies including the HUD-FHA Mortgagee Review Board (MRB), HUD Home Ownership Centers, California Office of Administrative Hearings, and the Nevada Mortgage Lending Division. 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 to HUD.
The firm represents those accused of civil and criminal Mortgage Fraud and other white-collar crimes such as wire fraud and mail fraud in federal court actions filed by the Office of the United States Attorney and others.
We represent our clients in employee labor disputes before various labor boards including minimum wage, overtime and unemployment compensation issues.
The firm’s attorneys are successful in recovering damages for clients in personal injury lawsuits.
If we may be of service in these areas of personal injury, probate, or estate planning and asset protection, please contact us, and an attorney will discuss the matter with you.
IF YOU WOULD LIKE TO SUBSCRIBE TO THE FEDERAL MORTGAGE E-ALERT AND ARE NOT A RESIDENT OF CALIFORNIA PLEASE SUBMIT THE FOLLOWING INFORMATION TO “LAW OFFICES OF HERMAN THORDSEN.” MAIL TO LAW OFFICES OF HERMAN THORDSEN, 6 HUTTON CENTRE DRIVE, SUITE 1040, SANTA ANA, CA 92707. ATTN: LORETTA
NAME: __________________________________________
COMPANY: ______________________________________
ADDRESS: _______________________________________
CITY, STATE, ZIP CODE: ___________________________
TELEPHONE: _____________________________________
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