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Mortgage Industry Fraud
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January 26, 2007,
A former Kansas elected official who is in trouble along with her attorney husband for alleged mortgage fraud highlights the latest edition of Lawyers Gone Wild.
Katheryn Shields, 60, the former Jackson County executive and her husband, attorney Philip Cardarella, 59, have been indicted along with nine other people on federal charges of "conspiracy and wire fraud for their role in a scheme to engage in mortgage fraud," according to a statement from U.S. Attorney Bradley Schlozman.
"This case represents another tragic example of intelligent individuals -- including lawyers and prominent elected officials -- thumbing their noses at the law in the pursuit of quick and easy cash," said Schlozman, the U.S. Attorney for the Western District if Missouri in Kansas City.
The couple could not be reached to comment, but they have maintained their innocence in published reports.
subscribers read Patrick's full story
Accused of Foreclosure Fraud
The Maryland Attorney General is looking into claims
that a state legislator duped a woman into selling
her home to him.
In a lawsuit filed in Anne Arundel County Circuit
Court, Teresa Milligan accuses Maryland State Delegate
William "Tony" McConkey, a Republican and a real
estate broker, of foreclosure rescue fraud.
McConkey has denied Milligan's claims that he somehow
tricked Milligan into singing over her house to
Kevin Enright, a spokesman for Maryland Attorney
General J. Joseph Curran, confirmed to MortgageDaily.com
that the attorney general's office is "looking into
subscribers read Patrick's full story
Fraud Index Worsens
Overall mortgage risk was low in 2006, compared
to previous years -- although fraud risk is
on the rise.
subscribers read full story..
Tells How to Avoid Fraud
Among the tips Brent Barber, who was sentenced
to 12 years for running the largest mortgage
fraud scheme prosecuted in Missouri, gave for
consumers to avoid being duped in mortgage and
home deals was to verify everything of the person
offering the services.
story from USA Today.
Spark Rescue Scams
Real Estate Depot and one of its business partners,
David Lievano, are being accused of stealing
the home and equity of a man through a foreclosure
rescue scam, a problem that an attorney says
is already severe and can worsen as the number
of foreclosures increases.
story from the South Florida Sun-Sentinel.
Banned for ID, Mortgage Fraud
Banking officials permanently revoked the loan
originating license of Kimberly C. Taylor, citing
that she falsified documents and stealing customers'
financial identities to get loans in their names
for her personal benefit.
story from the Triangle Business Journal.
Mobile home seller Donald W. Gupton was sentenced
to more than six years for submitting fraudulent
loan applications on 150 manufactured homes
that resulted in $11 million in federally-insured
story from the News and Observer.
Fraud Won't Stop Foreclosures
Foreclosures in Colorado will not stop with
stricter enforcement of existing state laws
or the elimination of fraud, according to Attorney
General John Suthers who instead suggested,
among other things, that legislators implement
"suitability" rules for mortgage originators
to offer borrowers loans that are appropriate
to their situation.
story from the Denver Post.
Accused of HUD Scam
Mark Wilkins allegedly pocketed nearly $128,000
through a "double HUD" mortgage scam,
in which the title company would prepare two
HUD settlement statements, one with the home's
actual price that went to the seller and one
with the inflated price that went to the home
story from the Chattanoogan.
Agent Stole IDs for Loans
Charges against Ida Mae James say the real estate
agent stole a few identities, including those
of some people she met at church, to buy homes
under their names and in the process collect
broker's fees, sales commission, and even rent.
story from the Star Tribune.
Charged With Mortgage Fraud
Eight people, including loan officers, have
been charged with being involved in a scheme
that had one common escrow agent and used stolen
identities and fake documents for loans on homes
with inflated values.
story from the Houston Chronicle.
Detects Loan Pool Fraud
New analytics help investment banks fight mortgage
Testify Against RE Investor
A couple of former professional athletes have
testified that they lost a combined 350,000
through fraudulent deals orchestrated by Phillip
E. Hill Sr., a real estate investor whom the
government claims has caused at least $80 million
in foreclosures through a massive mortgage scheme.
story from the Daily Report.
Brainstorms Foreclosure, Fraud Solutions
In a hearing on foreclosure in Colorado, mortgage
banker Jim Spray suggested that laws to tackle
the growing number of foreclosures and mortgage
fraud should bar prepayment penalties and eliminate
the exemption of FHA-approved brokers from the
mortgage registration act.
story from the Rocky Mountain News.
Bill to Fight Fraud
An Arizona bill aims to make it easier for prosecutors
to go after mortgage fraud, including the most
prominent type, cash-back deals, in which a
mortgage is obtained for a home with an inflated
value and the extra proceeds are pocketed by
the fraud perpetrators.
story from the Arizona Republic.
Co. Owners Accused of Fraud
Sotirios "Steve" Gertzas and Radomir
"Erik" Ivanovich, owners of Trinity
Century 21 Realty, as well as appraisers and
title company employees, are being accused of
collaborating in mortgage fraud involving inflated
appraisals for mortgages that generated extra
proceeds pocketed by the company owners.
story from the South Bend Tribune.
Combats Cash-Back Scams
A task force in the Arizona Department of Financial
Institutions will investigate and be on the
lookout for ‘‘cash-back'' schemes
in which inflated appraisals are used to secure
higher-than-sales-price home loans and the extra
proceeds are split amongst the buyer, appraiser,
mortgage broker and real estate agent.
story from the Mohave Daily News.
Range of Fraud Unknown
While recent research showed a 1,400 percent
rise in mortgage fraud-related suspicious activity
reports between 1997 and 2005, no clear mechanism
exists to fully track and assess the impact
of the "growing epidemic" of fraud,
and therefore prevent it.
story from the San Francisco Examiner.
Jailed for Flipping Scam
Israel Pena, a former church youth pastor, received
a 46-month prison sentence for submitting loan
applications with fraudulent or false information
to get loans on properties that were sometimes
flipped on the same day at a substantial profit.
story from the Mid-Hudson News.
Industry Insiders Perpetrate Fraud
Weak housing markets appear to prompt mortgage
fraud, which involves a ringleader, sometimes
a lender, and always an appraiser, home seller
and buyer, perhaps innocently or on purpose.
story from Inman News.
read archived blog entries
Crowley is fraud journalist for MortgageDaily.com
and a reporter and columnist
for The Cincinnati Enquirer.
Email Patrick at: PatCrowley@FraudBlogger.com