Federal Mortgage E-alert

chow · Posted: Sun Apr 02, 2006 11:24 am Post subject: Federal Mortgage E-alert

FEDERAL MORTGAGE e-ALERT©
(March 31, 2006)

ERISA PENSIONS ARE NOT EXEMPT FROM EXECUTION UNDER THE FEDERAL MANDATORY VICTIMS RESTITUTION ACT

FACTS

Defendant pleaded guilty. The court in addition to sentencing the defendant to 24 months’ imprisonment ordered him to pay restitution in the amount of $3,360,051.67.. The United States Attorney sought a writ of garnishment of defendants’ pension plan that he had vested in him for over $142,000 while he was employed at Robinson-May. The defendant objected and the district court quashed the writ.

The 9th Circuit Court of Appeal said . . .

Reversed. The Mandatory Victims Restitution Act, in conjunction with 18 U.S.C. section 3613, constitutes a statutory exception to ERISA's anti-alienation provision. An order quashing a writ of garnishment of defendant's benefits under a pension plan subject to ERISA is reversed. (U. S. vs. Novak (3-23-06) No.04-5583)

MORAL

And you thought your pension was sacrosanct. Have you committed mortgage fraud? Do you have an IRA or Pension from prior employment? May be you should really see your lawyer nor or lose your pension later.

A REMINDER THAT IF OVER 50% OF INCOME IS IN COMMISSIONS , THEN OVERTIME NEED NOT BE PAID AT LEAST IN CALIFORNIA

FACTS

The California law mandates that all employees who work in excess of eight hours in one workday or in excess of 40 hours in one workweek receive overtime pay. (Lab. Code, § 510, subd. (a).) This provision does not apply to any employee “whose earnings exceed one and one-half . . . the minimum wage if more than half of that employee’s compensation represents commissions.” (Cal. Code Regs, tit. 8, § 11040, subd. 3(D),italics added.) A commission is compensation paid for services rendered in the sale of property and services, and “based proportionately upon the amount or value thereof.” (Lab. Code, § 204.1.)

MORAL

So if you pay hourly and commissions or salary and commissions, if over one-half is commissions there is no overtime due.

MELISSA RENEE DURAN-CASAUS OF SAN JOSE, CALIFORNIA ARRESTED MARCH 21, 2006 FOR MORTGAGE FRAUD

FACTS

Melissa Renee Duran-Casaus, 32 was charged with conspiring to defraud mortgage lenders by falsifying borrowers’ financial backgrounds. She was also is charged with three counts of grand theft from some of the lenders for the amounts of the real estate loans that were paid out based on the false information she submitted to them.

Duran-Casaus was arrested at her job as a temporary office assistant in Sunnyvale and was booked into Santa Clara County jail in lieu of $20,000 bail. According to court documents, she allegedly worked for a local insurance broker when she was asked by a real estate agent to handle employment verification inquiries from lenders in return for payment. Prosecutors say she falsely stated that the loan applicants had worked at the insurance brokerage for a number of years and were earning relatively high wages.

If convicted of all the charges and enhancements, Duran-Casaus faces up to seven years and four months in prison. And she may not be alone. Reader said more charges and arrests are to come, possibly including the real estate agent who allegedly orchestrated the scheme. (sjmercnews32206)

MORAL

I would say the real estate agent needs a very good lawyer presuming he is involved and you can bet your last dollar that if Duran-Casaus is guilty she will cooperate for a reduced sentence. I have represented enough people to know what will happen. Good Luck Real Estate Salesperson.

BARRY HOWARD LANDRETH, 36, A UNIVERSITY OF SOUTHERN CALIFORNIA (USC) INSTRUCTOR ARRESTED FOR WIRE FRAUD

FACTS

Barry Howard Landreth, 36 residing at Cota de Caza in Orange County, California was arrested by the FBI on charges of wire fraud on March 24, 2006. The arrest was for allegedly bilking investors, many of them students out of more than $1.5 million. The investments he is alleged to have touted were in real estate promising huge returns. He had been a part time instructor in real estate finance and development at USC’s School of Policy, Planning and Development and the college’s Marshall School of Business. He had graduated from USC in 2001 with a Master’s Degree in real estate development.

The FBI is alleged to have stated Landreth told investors that their investments in Nevada and Northern Illinois commercial properties and land would yield a 190% return. Landreth is then alleged to have deposited $718,000 of the investor money into his personal bank account using much of the remainder for his personal expenses including buying a $500,000 show jumping horse, a $73,000 Cadillac Escalade and $52,000 for brokerage accounts in his and his wife’s name. Bail was set at $500,000. He is the founder and president of Webster Realty Investors, Inc., started in 1995. He is alleged to have hired students to work as project managers and paying them $100,000 per year to raise money to fund the “projects.” The students are alleged to have persuaded their parents and others to invest in the projects such as Las Vegas and Chicago.

Later investors were not paid and the student workers were not paid including two students who invested $215,000 and found the properties they purportedly invested in were owned by someone else. (latimes32506,ocsection .B3)

MORAL

Seems like he put his education to good use. He did get $15 million. However, with bail at $500,000 and a good trial lawyer to defend him at $100,000+ the profit seems negligible considering the risk of federal prison for a number of years. Remember everyone is innocent until proven guilty. But I sure would hate to spend that much money to prove I am innocent.

10 PEOPLE INDICTED FOR MORTGAGE FRAUD IN LEE COUNTY, FLORIDA

FACTS
The State Attorney’s Office of the 20th Circuit announced that it has filed formal charges against multiple individuals for fraudulent money practices and racketeering stretching over a two-year span. Ten people involved with the company Alternative Home Financing, Inc (AHFI) are facing more than sixty felony counts in relation to this allegedly deceptive scheme.

The allegations in the charging documents filed in the Circuit Court in Lee County cover a period from 2002 through 2004, Alternative Home Financing, Inc (AHFI) approached individuals and enticed them into allowing AHFI to apply for mortgages in the name of the nominee in order to buy houses. AHFI paid the nominee a small amount for allowing AHFI to use their names to apply for these mortgages. AHFI would complete the mortgage application paperwork, falsifying application information in order for the nominee to qualify for the mortgage. AHFI then received an inflated property appraisal and received two mortgages on each home, one for the purchase price and another for the balance of the appraisal value. AHFI informed the nominees that they would “manage” the property, finding a tenant and collecting monthly payments and paying the mortgages. The nominee would have no involvement beyond the mortgage application.

AHFI would place a tenant with insufficient credit into a nominee’s home under a proposed lease/option-to-buy contract. After a specified period, the tenant would have the option to buy the house. The tenant would pay a deposit as consideration for this option, usually in the amount of $5,000.00, and a monthly payment, which was to be applied directly to the mortgage. AHFI failed to make a majority of the nominee’s mortgage payments, causing many of the mortgages to default. In some instances, AHFI took the tenant’s deposit money and did not place the tenant in a home. Ultimately the mortgage would foreclose, leaving the tenant without a home they believed they were purchasing, and a defaulted mortgage debt associated with the nominee.

Individuals charged include:

1). CHRISTOPHER KIM JACK (D.O.B.: 1/16/1971)
2). ERICH MICHAEL HECKLER (D.O.B.: 07/22/1971)
3). ERLING DAVID HALL (D.O.B; 12/03/1969)
4). RAND H. HALL (D.O.B.: 07/17/1945)
5). GAIL POLLARD DOVER (D.O.B.: 08/22/1954)
6). CARLON DOVER (D.O.B.: 01/22/1953)
7). ROBERT E. SECORD (D.O.B.: 10/04/1963)
8). CHARITY J. SECORD (D.O.B.: 11/14/1972)
9). LINDA J. BEAVERS (D.O.B.: 08/28/1947)
10). LUIS ANTONIO BUSH (D.O.B.: 12/22/1968)

(news-press.com. 32706)

MORAL

Now you know one of the reasons I am kept so busy along with the other attorneys in my firm. It is difficult to keep them out of prison although we are usually pretty successful.

GEORGIA DEPARTMENT OF BANKING AND FINANCE REVOKES RCI MORTGAGE, INC. LICENSE AND ISSUES CEASE AND DESIST TO
FEMI AKINSUNMI

FACTS

On March 21, 2006, the Georgia Department of Banking and Finance (“Department”) revoked the Mortgage Broker’s License issued to RCI Mortgage, Inc., 5161 Brook Hollow Parkway, Suite 210, Norcross, Georgia (“RCI”), license number 17429, after finding that RCI had violated provisions of the Georgia Residential Mortgage Act. In addition, a Cease and Desist Order issued to Femi Akinsunmi (Owner) became final that same day. Specifically, RCI and Mr.. Akinsunmi were cited by the Department for making misrepresentations in loan files submitted to mortgage lenders, working with an unlicensed individual and improperly keeping a mortgage loan journal. (Dept.Bkg & Fin, 3-30-06)

MORAL

Did you fund any of RCI loans? Did you do business with Mr. Akinsunmi? Maybe you want to review the loan files?

CLEVELAND, OHIO STILL INTO FRAUD FLIPPING

FACTS

Gil Gotlieb, age 38, pled guilty to conspiracy before U.S. District Judge Solomon Oliver, Jr., in Cleveland, Ohio, in connection with fraudulent real estate transactions. He is alleged to have conspired with Raymond A. Delacruz and others to engage in fraudulent real estate transactions from March 2001, through May 2002. Raymond A. Delacruz, age 32, and Laura E. Atkinson, age 56, were charged in a 70-count indictment filed in the Northern District of Ohio in February 2005. Delacruz and Atkinson were arrested then at their current residence in Anaheim, California, and on August 30, 2005, Delacruz appeared before Judge Patricia A. Gaughan and pled guilty to a total of 12 counts, including 3 bank fraud offenses, 7 mail fraud charges, and 2 money laundering offenses. On that same date, Laura Atkinson also pled guilty to a total of 10 counts of the indictment, including 3 bank fraud offenses and 7 mail fraud charges. On January 20, 2006, Judge Gaughan sentenced Delacruz to 27 months in custody followed by 3 years of supervised release. Atkinson was sentenced to 5 months in custody, 5 months of home confinement with electronic monitoring, and 3 years of supervised release.

The indictment alleged that they and others engaged in numerous fraudulent real estate transactions, commonly known as property "flipping." Delacruz and others are alleged to have created false purchase agreements, false rental agreements, and obtaining false appraisals which artificially and fraudulently inflated the true values of those properties. (OT32706)

MORAL

Note that Gotlieb who just pled guilty did so to property loans that took place in 2001 to 2002 over 4 to 5 years ago. The statute of limitations to prosecute someone for mortgage fraud runs from acts that were committed from 5-10 years previously. Have you done any fraud loans since 1995? If so, see your lawyer now or you may see federal prison later. BUT be sure he is knowledgeable in mortgage fraud and how it works.

SEMINARS

APRIL 21, 2006 – 9-12

How to Survive an MLD Audit without losing your license.

Location: Old Republic Title, 140 N. Stephanie, Henderson, Nevada

Registration:Dennis Wentworth- (702) 283-3717; Dennis@DennisWentworthTrainingSeminars.com

1-4:30 - TILA-RESPA Updates. Updated laws, regulations and cases from 2005 to February 2006 including how to do high-rate high fee loan without violating Section 32 of Reg;, what is and is not a kickback; how to legally give someone a fee in a cooperative brokerage without violating RESPA and cases where brokers, loan officers and real estate salespeople have been disciplined and fined by RESPA Police for accepting kickbacks.

Location: Old Republic Title, 140 N. Stephanie, Henderson, Nevada

Registration:Dennis Wentworth-(702)283-3717; Dennis@DennisWentworthTrainingSeminars.com

The two seminars are accredited in Nevada for renewing your MLD license. They may or may not be accredited for other state licensing renewals. Please check with the agency that issues your license.

MAY 16, 2006 - 5:30 p.m.- 8:30 p.m.

Employee Labor Laws and Regulations affecting mortgage Brokers and Bankers. The necessity to pay overtime to employees, underwriters, loan officers, processors and others. A syllabus will be given to all attendees.

Tony's Seal Landing, 13612 Newport Ave., Tustin CA –Dinner Meeting

TOPIC

Labor laws and regulations affecting mortgage brokers and bankers and the necessity to pay overtime to employee underwriters, loan officers, processors and others. A syllabus will be given to each of the attendees.

Call Loretta Lee to Register at 714-662-4990. Checks payable to Association of Professional Mortgage Women. Registration cost is $45 including manual.

THE INFORMATION HEREIN IS NOT LEGAL ADVICE.
AN ATTORNEY SHOULD BE CONSULTED IF YOU DESIRE LEGAL ADVICE.