Tuesday, May 31, 2011

Mortgage Fraud Blog - 10 new articles - In This Issue...

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Mortgage Fraud Blog - 10 new articles

In This Issue...

Sisters Sentenced for Straw Buyer Scam
Woman Sentenced for Diverting Escrow Funds
Foreclosure Rescuer Sentenced for Fraud
Man Sentenced for Flipping Scheme
Mortgage Broker Sentenced For Fraud
Final Defendant Sentenced for Large-Scale Mortgage Fraud
3 Indicted for Straw Buyer Scams Involving 13 Properties
Federal Jury Convicts Man of Bilking Lenders
Loan Officer Sentenced for Improper Conduct
California Man Admits HELOC Scam
Search Mortgage Fraud Blog

Sisters Sentenced for Straw Buyer Scam

Ralondria Stafford, 37, San Francisco, California, and Necole Ward, 32, Las Vegas, Nevada, (both formerly of Vallejo, Calif.) were sentenced by United States District Judge Morrison C. England, Jr....

Read the whole entry »


Woman Sentenced for Diverting Escrow Funds

Shawn Chambers-Galis, 48, Mt. Joy, Pennsylvania, following a three-day jury trial before U.S. District Court Judge William W. Caldwell, was sentenced to 57 months' incarceration on charges she...

Read the whole entry »


Foreclosure Rescuer Sentenced for Fraud

Vu Thuy Chau a.k.a. Steve Chau, has been sentenced in a foreclosure rescue scam case.

Chau pled guilty to one count of Petty Theft, a misdemeanor, in connection with his role in operating a...

Read the whole entry »


Man Sentenced for Flipping Scheme

Sang Min Kim, a/k/a Sonny Kim, 37, Tampa, Florida, was sentenced by U.S. District Judge Susan C. Bucklew to 41 months in federal prison for conspiracy to commit wire, mail, and bank fraud and money...

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Mortgage Broker Sentenced For Fraud

Daniel Sporrer, 47, Gibsonia, Pennsylvania, has been sentenced in federal court to 27 months in prison and two years of supervised release on his conviction of wire fraud conspiracy. Sporrer

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Final Defendant Sentenced for Large-Scale Mortgage Fraud

Ralph Appolon, 30, formerly of Watertown, Massachusetts, a loan originator, the 12th and final defendant in a large-scale mortgage fraud ring, was sentenced in federal court for his role in...

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3 Indicted for Straw Buyer Scams Involving 13 Properties

A federal grand jury returned a 13 count indictment against a loan officer and a loan processor, as well as a former Rhode Island attorney currently involved in the real estate industry. The...

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Federal Jury Convicts Man of Bilking Lenders

Troy David Chaika, 44, Burnsville, Minnesota, was convicted of conspiring with others to bilk mortgage lenders out of more than $43 million following a six-day jury trial.

Chaika pled guilty on seven...

Read the whole entry »


Loan Officer Sentenced for Improper Conduct

Melvin Rohs, 65, Nevada City, California, was sentenced by United States District Judge Lawrence K. Karlton to 33 months in prison to be followed by five years of supervised release and ordered him...

Read the whole entry »


California Man Admits HELOC Scam

Larry P. Corbi Jr., 36, Buellton, California, was sentenced to 21 months in federal prison for defrauding banks by nearly simultaneously seeking home equity lines of credit from four different...

Read the whole entry »


Rachel Dollar represents lenders in mortgage related litigation. She is a shareholder at Smith Dollar PC. Ms. Dollar is a nationally recognized speaker on the topic of mortgage fraud, is licensed to practice law in California and maintains offices in Santa Rosa, California.

Mortgage Fraud Blog is co-sponsored by Smith Dollar PC and Interthinx, the leading provider of fraud services and solutions for the mortgage industry.

Copyright 2004-2009 Rachel M. Dollar

Legal Disclaimer. The information and notices contained on Mortgage Fraud Blog are intended to summarize recent developments in mortgage fraud cases and mortgage banking matters nationwide. The posts on this site are presented as general research and information and are expressly not intended, and should not be regarded, as legal advice. Much of the information on this site concerns allegations made in civil lawsuits and in criminal indictments. All persons are presumed innocent until convicted of a crime. Readers who have particular questions about mortgage banking, mortgage fraud matters or who believe they require legal counsel should seek the advice of an attorney. The creators, editors and sponsors of Mortgage Fraud Blog do not intend to create a confidential relationship or an attorney-client relationship by communication via or arising from this site.

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This Photographer's Life

This Photographer's Life

Beacham Series Party Video!

Posted: 31 May 2011 08:12 AM PDT

Check out the video of our Beacham Series party! Beacham Series Party Video   Party Location, The Pink Castle.  3418 Pinestream Road.

This Photographers Life (Architecture + Interior Design)

Top Box Design

Top Box Design

Medina House in Hove, United Kingdom

Posted: 30 May 2011 01:57 PM PDT

Designed by Camillin Denny Architects, Medina House is located in Hove, United Kingdom. The design for client Globe Homes is a direct and positive response to the context of the seafront location, the varied and interesting range of building ages, heights and materials, and also the coloured beach huts on Hove Lawns – the varied [...]

Four Seasons in St Petersburg, Russia

Posted: 30 May 2011 01:48 PM PDT

The Four Seasons designed by Cheryl Rowley Design is located in St Petersburg, Russia. With its elegant neo-classical architectural detailing, the magnificent edifice harkens back to the time when the Russian aristocracy lived on a grand scale. Now, the new Four Seasons will contemporize that vivid history. Two of the three existing open-air courtyards will [...]

RocPopShop, Fine design in mobile retail venue in United States

Posted: 30 May 2011 01:24 PM PDT

RocPopShop, Fine design in mobile retail venue that located in United States, was designed by D-ASH Design of New York have created an upmarket pop-up mobile shop which will go on tour with hip hop star Jay Z to sell his clothing line, Rocawear's new line of apparel while he is on tour. RocPopShop, has [...]

Student accommodation in Woolverhampton, United Kingdom

Posted: 30 May 2011 12:59 PM PDT

Located in Woolverhampton, United Kingdom, Student accommodation was designed by O’Connell East Architects of Manchester, Woolverhampton’s new student halls are comprised of 805 modules. Featuring a 24 storey block it will be Europe's tallest modular building and will provide 657 student bedrooms plus 142 post-graduate student apartments. The full build will take just 27 weeks to [...]

Central Village Hotels in Liverpool, United Kingdom

Posted: 30 May 2011 12:53 PM PDT

Designed by Woods Bagot, Central Village Hotels is located in Liverpool, United Kingdom. Liverpool's new Central Village development is to include two Woods Bagot designed hotels it has been revealed. The hotels, owned by Millennium & Copthorne, will be at the heart of the £160million Central Village joint venture between Merepark and Ballymore. The hotels will [...]

Crandall Public Library in New York, United States

Posted: 30 May 2011 12:36 PM PDT

The Crandall Public Library designed by Ann Beha Architects is located in New York, United States. ABA restored the original 12,600 sf building on City Park and provided a new 39,400 sq ft expansion fronting the City's main commercial street, creating an inviting, open and accessible entrance with browsing area on the street and ample [...]

Irvine Housing Blog

Irvine Housing Blog

Link to Irvine Housing Blog

Republicans propose tighter lending standards to limit taxpayer liabilities and losses

Posted: 31 May 2011 03:30 AM PDT

Republicans in the House of Representatives are introducing legislation to tighten lending standards on government-backed loans to limit the exposure of taxpayers to ongoing price declines.

Irvine Home Address ... 2418 SCHOLARSHIP Irvine, CA 92612
Resale Home Price ......  $325,000


Hey yo I once was a kid all I had was a dream
mo money mo problems when I get it I'm a pile it up
Now I'm dope, wonderbread we can toast

Chiddy Bang -- Opposite of Adults

In our two-party political system, the function of the minority party is to oppose policies of the party in power, particularly when the party in power is overreaching or enacting legislation that is not in the best interest of the country. Sometimes, members of Congress act the opposite of adults, and the rhetoric gets heated and sometimes pretty ridiculous. But for the most part, the two-party system is successful in debating ideas and allowing only the most supported to become law.

One of the advantages of the minority party is that they can force uncomfortable public votes on major issues. When the majority party begins pandering to its constituencies with handouts and political seniorage, the minority party can garner attention by introducing good competing legislation and force the majority party to cast an unpopular vote.

The Republicans in the House of Representatives in Washington now hold a majority, and thereby they control the introduction of most new legislation into our grand political theater. They are taking advantage of their majority in the House to force the Democrats which control the Senate and the Presidency to vote down common-sense legislation designed to protect the interests of US taxpayers.

Republicans Aim to Raise FHA Down Payment Requirement

 by Adam Quinones -- May 25, 2011

The Republican led House Financial Services Committee has drafted legislation that would, among other things, (1) raise the FHA down-payment requirement to 5 percent and (2) prohibit borrowers from financing their closing costs.

The draft legislation, ‘‘FHA-Rural Regulatory Improvement Act of 2011’’, was discussed today in a House Subcommittee hearing entitled "Legislative Proposals to Determine the Future Role of FHA, RHS and GNMA in the Single-and Multi-Family Mortgage Markets".

If both provisions above were enacted, the already depleted buyer pool would be made much smaller because it would require much more savings for buyers to close the deal. Raising the down payment requirement from 3.5% to 5% will get the most attention, but the other provision prohibiting buyers from financing their closing costs that will really add to the savings requirement and decimate the buyer pool.

I have sold several houses in Las Vegas to FHA borrowers. On properties selling for less than the $118,000 median, FHA dominates the market. In a typical FHA deal, the buyer submits a full asking price offer but asks for the seller to pay all buyer closing costs which generally run between 3% and 5% of the purchase price. If borrowers are prohibited from financing these costs into the loan, the effective down payment doubles to 7% or more.

By far the most damaging provision to the quantity of buyers in the buyer pool is the prohibition against financing their closing costs.

However, the long-term effect of this will be to have buyers with more of their own money into the deal which makes most borrowers much less likely to strategically default, partly because they are less likely to fall underwater, and partly because they don't want to lose their money in a sale. Despite the horrendous impact this policy would have the in the short term -- and it would inflict a great deal of pain in the most beaten down markets -- the long term impact is nothing but positive.

In a formal release, the House Financial Services Committee's Republican Chairman Spencer Bachus touted the bill as a coming at an important time in history, “This hearing and legislative proposal come at a pivotal moment, as the Committee debates the future of the mortgage finance system, and in particular, government guarantee programs that could expose taxpayers to significant losses.”

Senator Bachus is right. The various government guarantees have been used to shift much of the private sector garbage onto the balance sheets of Uncle Sam and the federal reserve. It was a short-term policy designed to keep our banks solvent, but since the various players in the real estate industry gain advantage from the government assignment of risk, they are lobbying to keep their advantage in place.

Industry advocates were quick to respond to the proposal as a move in the wrong direction.  Michael Berman, Chairman of the Mortgage Bankers Association, explained that down-payments are not the best indicator of payment default. Berman said,  "Recently, policymakers have focused on required minimum down-payments as a measure of what factors are necessary to create sound lending practices. While down-payment certainly impacts default risk, other compensating factors, particularly full documentation of conservative loan products, are more influential mitigating factors."

This is a straw-man argument. This legislation does not argue that down payments are the best indicator of default. It isn't. However, based on the government database of loans in both the GSEs and FHA, the data shows that default rates are inversely related to down payment. As down payments go down, default rates go up. Some of this may be due to the borrower being underwater and hopeless, but much of this documented behavior is because borrowers aren't losing their money.

Berman went on to share the MBA's opinion on the matter, saying, "The current minimum down-payment of 3.5 percent for borrowers with credit scores of 580 or above and 10 percent for borrowers with credit scores of 579 and below permits borrowers to have appropriate “skin in the game” while providing credit-worthy homebuyers with an option for entering the purchase market. Maintaining the existing minimum down-payment requirements, while requiring strong underwriting standards, such as full documentation and income verification, allows borrowers to responsibly become, and stay, homeowners."

The MBA isn't the only industry group to oppose the down-payment hike. Ron Phillips, President of the National Association of Realtors, shared similar sentiments in his prepared remarks. "NAR strongly opposes increasing the down-payment for FHA. The correlation between down-payment and loan performance is significantly less important than the linkage to strong underwriting, which FHA continues to have. FHA’s foreclosure rate remains less than conventional mortgages, so we don’t believe changes to the down-payment would do anything but disenfranchise many creditworthy homebuyers".

Does the government really want to disenfranchise creditworthy borrowers? Increased home ownership has been the goal of Congressional public policy and every presidential administration since the 1920s. A declining home ownership rate is not politically popular. The only way a policy that negatively impacts the home ownership rate would be proposed is because the alternative is even less appealing -- endless government bailouts. 

Not all feelings were mutual though. The Cato Institute, a D.C. think tank devoted to limiting government participation in free markets, believes a combination of poor credit history and low down-payment requirements  have resulted in "tremendous losses" for private mortgage investors and the FHA. In its prepared testimony Cato said, "Given the relatively “safe” features of an FHA loan, we do not have to guess about loan characteristics driving the borrower into default. We know it is equity and credit history that drives losses."

To complete their list of causes, they should add unemployment due to the economic collapse that was a direct result of the anti-regulation policies endorsed by groups like the Cato Institute, but I don't want to quibble with their well-reasoned argument....

Cato outlined a variety of FHA program reforms it believes must be implemented immediately to ensure taxpayers are exposed to minimal risk.  These reforms include:

  • Immediately require a 5 percent cash down-payment on the part of the borrower.
  • Require FHA to allow only reasonable debt-to-income ratios.
  • Restrict borrower eligibility to a credit history that is equivalent to no worse than a 600 FICO score.
  • Require pre-purchase counseling for borrowers with a credit history that is equivalent to a FICO score between 600 and 680.
  • Require a 10 percent down-payment, immediately, for borrowers with a credit history equivalent to below a 680 FICO score.
  • Borrower eligibility should also be limited to borrowers whose incomes do not exceed 115 percent of median area income, so as to mirror the requirements of section 502(h)(2), as amended, of the Housing Act of 1949.

That's the best policy proposal I have seen come out of Washington. Each one of those provisions would serve to limit the borrower pool to those most likely to repay the debt which in turn limits the exposure of taxpayers to further Ponzi scheme losses.

Besides raising the down-payment requirement, the proposed legislation would also cement  the reduction of current "high-cost" loan limits. The maximum loan limits for Fannie Mae, Freddie Mac, and FHA are currently $417,000 with a temporary limit of up to $729,750 for one-unit properties in high-cost areas. The temporary high-cost area limit was first set in the Economic Stimulus Act of 2008, and was extended in subsequent legislation. It expires on September 30, 2011. Without the extension, the high-cost loan limit ceiling would revert back to the limits established under the Housing and Economic Reform Act (HERA), a maximum of $625,500 in high-cost areas.

The change from $729,750 to $625,000 will be effective October 1, 2011. There is no political will to save markets like Irvine where GSE financing between $625,000 and $729,750 is common.

The Obama administration already stated in its white paper that it will not support another extension of the higher loan limits, but the MBA believes the higher limits should be maintained until the housing market stabilizes and the private market shows more signs that demand has returned.

Why should government policy be used to prop up house prices for the upper-middle class? What societal benefit is obtained? Money is fungible, and any assistance the government is providing to upper income households is merely supporting their entitlements.

MBA  urged such legislation to be enacted well before October 1, 2011, in order to avoid certain market disruptions that will, because of rate locks, occur within 90 days of the current limits expiring. The National Association of Home Builders echoed that perspective. 

NAHB First Vice Chairman Barry Rutenberg, a home builder from Gainesville, Fla.,  told the House Financial Services Subcommittee, "Counties across the country would see their loan limit reduced by tens of thousands of dollars, placing further downward pressure on home prices and impairing the ability of borrowers to use FHA-insured mortgages to purchase new homes,"

To keep FHA, Fannie Mae and Freddie Mac loan limits at their current levels, NAHB called on Congress to support H.R. 1754, the Preserving Equal Access to Mortgage Finance Programs Act, a bipartisan measure sponsored by Reps. Gary Miller (R-Calif.) and Brad Sherman (D-Calif.).

The draft legislative proposal will require a full Committee vote before it is formally introduced to be voted on by the entire house.  Such measures would not be expected to pass the Senate.

Is anyone surprised that two California legislators signed on to a bill designed to support the California real estate Ponzi scheme? I'm not.

A stable home ownership rate requires the limiting of access to home loans to those who cannot make the payments. It doesn't serve anyone for lenders to let borrowers move into properties they cannot afford, develop a sense of entitlement to property they cannot afford, and then foreclose on them because the borrower cannot afford it. The cycle merely upsets everyone involved and makes the taxpayer lose money through losses on the insured loan.

It has been a long and painful process as the bubble deflates back to levels of affordability. Housing deflation is not over yet, particularly in markets like ours where price deflation has been slowed by the government meddling. Kool aid intoxication must die, and buyers must give up on the idea of their California house being a substitute wage earner. Until that happens, a few people will overpay, the the slow grind of lower prices will go on.

Welcome to our new normal.

A 50% loss in an Irvine high rise 

One of the most obvious signs of the housing bubble was the rise of buildings on the Jamboree corridor about 25 years ahead of when the economics may support it. These properties should never have been built. The units within them are worth less than half of what they were at the peak, and if today's pricing would have been the order of the day back when these were proposed, they wouldn't have been financed.

The owner of today's featured property paid $635,000 back on 1/27/2006. He used a $507,650 first mortgage and a $127,350 down payment. However, on 10/6/2006 he obtained a $150,000 HELOC from Wells Fargo which gave him access to his down payment plus $22,650 in HELOC booty.

Do you think he took the HELOC money, or did he lose his down payment?

And, if he didn't take the HELOC money, do you imagine he wishes he did?

Irvine House Address ...  2418 SCHOLARSHIP Irvine, CA 92612   

Resale House Price ...... $325,000

House Purchase Price … $635,000
House Purchase Date .... 1/27/2006

Net Gain (Loss) .......... ($329,500)
Percent Change .......... -51.9%
Annual Appreciation … -12.0%

Cost of House Ownership
$325,000 .......... Asking Price
$11,375 .......... 3.5% Down FHA Financing
4.54% ............... Mortgage Interest Rate
$313,625 .......... 30-Year Mortgage
$68,424 .......... Income Requirement 

$1,597 .......... Monthly Mortgage Payment 
$282 .......... Property Tax (@1.04%)
$0 .......... Special Taxes and Levies (Mello Roos)
$68 .......... Homeowners Insurance (@ 0.25%)
$361 .......... Private Mortgage Insurance
$460 .......... Homeowners Association Fees
$2,767 .......... Monthly Cash Outlays

-$257 .......... Tax Savings (% of Interest and Property Tax)
-$410 .......... Equity Hidden in Payment (Amortization)
$19 .......... Lost Income to Down Payment (net of taxes)
$61 .......... Maintenance and Replacement Reserves
$2,179 .......... Monthly Cost of Ownership 

Cash Acquisition Demands
$3,250 .......... Furnishing and Move In @1%
$3,250 .......... Closing Costs @1%
$3,136 ............ Interest Points @1% of Loan
$11,375 .......... Down Payment
$21,011 .......... Total Cash Costs
$33,400 ............ Emergency Cash Reserves
$54,411 .......... Total Savings Needed

Property Details for 2418 SCHOLARSHIP Irvine, CA 92612
Beds:  2
Baths:  2
Sq. Ft.:  1260
Property Type: Residential, Condominium
Style: Two Level, French
Year Built:  2007
Community:  0
County:  Orange
MLS#:  P782365
Source:  SoCalMLS
Status:  Active

real estate home sales

Monday, May 30, 2011

Great Home Design, Architecture and Interior

Great Home Design, Architecture and Interior

Riga : Modern Modular Reception Office Furniture Design by Babini

Posted: 30 May 2011 09:25 AM PDT

contemporary reception office furniture photos

Providing the modern and good looking reception desk furniture is one of the most importance piece and inseparable of a whole modern office management since the reception area is the first places of the clients, guests or potensial costumers see us. Choosing the best design and good looking of reception furniture is must to give best impression for the company. Riga : Modern Modular Reception Office Furniture Design designed by Ivan Palmini for Babini is the sample. Riga welcomes the guests with its minimal and sinuous lines, composing a refined space where elegance and spontaneity live in perfect harmony. Riba completed by the cable management, CPU holder box, drawer and bearing drawer unit make the riba good looking, naet and elegant. Made with highly innovative materials like Okite, Steel and Staron. If You are looking for the modern and elegant reception desk furniture design, this collection could be your reference.

cool and compact=
modern L shaped reception furniture design
modern reception furniture design
modern reception furniture desk photos
simple and compact=
simple and minimalist reception furniture

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