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Fraud
Stories
From
Patrick
Crowley

Fraud News Wire

Last Updated Friday, February 9, 2007, 04:49 PM Texas Time


Crooked Lawyers

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.

MortgageDaily.com subscribers read Patrick's full story




Legislator 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 him.

Kevin Enright, a spokesman for Maryland Attorney General J. Joseph Curran, confirmed to MortgageDaily.com that the attorney general's office is "looking into the matter."

MortgageDaily.com subscribers read Patrick's full story

February 9, 2007

Merger Deepens Fraud Risk Management
New, combined company to deliver comprehensive line of risk management analytics to the mortgage industry




Flipping Ringleader Admits Fraud
Up to 40 years in prison are a possibility for Randall Aaron Davidson, who pleaded guilty to charges relating to a flipping scheme he allegedly masterminded that involved 350 fraudulent loans worth about $22 million.

read story from the Dayton Daily News.




Man Faces 39 Years
Among several other charges he pleaded guilty to, Larry D. Wills admitted that he used false documents to obtain a loan of nearly $0.5 million from New Century Mortgage and now faces up to 39 years in prison without parole.

read story from the Kansas City Business Journal.




February 8, 2007

ID Fraud Rises
More borrowers are using someone else's identity to obtain real estate loans.

MortgageDaily.com subscribers read full story.




Expert Elaborates on "Liar" Loans
More borrowers are using someone else's identity to obtain real estate loans.




Mortgages through Forged Deeds
A prosecutor made new arrests related to a silent scam where forged documents are recorded within a county and are later used to fraudulently obtain mortgage loans for the false sales transactions.

read story from Yahoo News.




No Trial Before Elections
A judge denied a request by Katheryn Shields, a mayor candidate for Kansas City, Mo., to speed up her trial on federal mortgage fraud charges before the city’s Feb. 27 primary.

read story from the Kansas City Star.




February 7, 2007

Borrower Risk Assessment Tool Launched
Kroll Factual Data releases FactualID.




Scam Used Mortgage Borrower Info
Charles Griffin and Bianca Bowl were arrested for allegedly masterminding a scam in which an employee of a mortgage company and another at an escrow firm were recruited to provide victims' personal financial information and two others were recruited to obtain phony documents, all to set up and charge accounts in the victims' names.

read story from King 5.




Co. Loses Appeal to Arbitration Clause
Beneficial Mortgage appealed a jury verdict that awarded a Spanish-speaking couple damages for a refinance loan executed in a language they couldn't read, arguing that the case should have gone to arbitration before being decided by a jury, but an appeals court upheld the decision because the arbitration clause in Beneficial's loan agreement violated Oregon law.

read story from The Oregonian.




Broker Charged with Mortgage Fraud
Charges of engaging in mortgage fraud, involving the use of straw buyers and sellers and inflated appraisals for loans, were made against Bennie Clark, a mortgage broker and owner of World Wide Financial LLC, his associate Michael Jackson, his employee Donna Brown and Robert Casey, who allegedly was a straw buyer.

read story from the St. Louis Post-Dispatch.




Ex-Mortgage CEO Receives 20
The former chief of HomeGold, Ronald Sheppard, was sentenced to 20 years in prison for his role in multimillion-dollar securities scheme that defrauded thousands of investors.

read story from the Charlotte Observer.




Restaurateurs Investigated for Mortgage Fraud
Investigators seized computers, mortgage files, counterfeit cash, and phony immigration documents, among other things, from a restaurant owned by a couple they think ran a multi-million dollar mortgage fraud scam.

read story from the Columbus Dispatch.




4 Expected to Admit Guilt
While a mortgage fraud trial was postponed for Randall Aaron Davidson, the alleged ringleader of a flipping scam that involved 350 fraudulent loans, Michael McWhirter, Mary J. Donaldson and Jocelyn L. Hammond, each of the individuals is expected to plead guilty to some of the related charges.

read story from the Dayton Daily News .




Ex-mortgage CEO Faces 25 Years
After a three-week trial, Ronald Shepperd, the former chief of now-defunct HomeGold, was found guilty of defrauding 8,000 investors out of $275 million and now faces 25 years in prison.

read story from the Charlotte-Observer.




Mayor Candidate Requests Speedier Trial
Katheryn Shields, accused of mortgage fraud, has asked a judge to move the date of her trial to before Feb. 27 from June to try and clear her name before the primary elections for mayor of Kansas City, Mo.

read story from KSHB-TV .




February 6, 2007

Course Trains on Mortgage Fraud
Fraud Awareness Training Offered.




Fraud Emerging in Home Equity Portfolios
Web-facilitated expansion of fraud footprints threaten ongoing portfolio performance.




Appraisers Increasingly Pressured into Overvaluing
Study finds pressure on residential appraisers to increase property values on the rise.




Online Glossary Combats Mortgage Fraud
Words of the Week glossary tool at LoanPage.com offers list of mortgage terms to help consumers understand the loan process and avoid fraud
.



Suit Alleges Repair, Mortgage Scam
Illinois authorities have filed a lawsuit against Candice Co., Cadillac Properties and Payment Center, alleging that the companies made over $10 million in illegal loans and hid their relationship to shoddy home-repair firms.

read story from the Chicago Tribune.




Ex-mortgage Execs Settle Fraud Accusations
Robert Nass and Thomas Masters, the former controller and vice president of Metropolitan Mortgage & Securities Co., respectively, and businessman Dan W. Sandy settled lawsuits by the Securities and Exchange Commission alleging that the men were involved in a series of real estate deals that inflated the company's profitability and hid its deteriorating financial condition.

read story from the Spokesman Review.




Appraisers Consistently Pressured to Inflate
A survey found that nine out of 10 appraisers said they were pressured by real estate agents, loan prospects and mortgage brokers and lenders into inflating property values, compared to nearly 6 in 10 appraisers in 2003.

read story from Mercury News.




Avoid Fraud Pitfalls
Using trusted friends' referrals for mortgage professionals and researching prices of homes sold in area of interest are some ways loan prospects can avoid a victim of mortgage fraud, which has become increasingly popular, despite authorities' efforts to fight it.

read story from Quicken Loans.




Mortgage Broker Charged with Fraud
Michael Danish, a mortgage broker who had been accused of duping several mostly-poor people by pocketing money he had promised would be used to pay off their debts and make investments, was arrested late last week on charges of defrauding a financial institution and fraudulent notarizing.

read story from the St. Petersburg Times .




How to Avoid Misleading Lenders
Because lenders are sometimes knowingly the perpetrators of mortgage fraud, consumers should watch for red flags such as being encouraged to include false information on a loan application and leaving signature lines blank.

read story from the Meridian Star.




Scheme Targets Distressed Homes
Randall Aaron Davidson and three accomplices are accused of orchestrating a scheme of 350 fraudulent mortgages worth about $22 million for run-down homes worth much less but sold at inflated prices to borrowers who were promised repairs that never came.

read story from the Dayton Daily News.




Avoiding Foreclosure "Rescue"
The Colorado attorney general's tips to avoid falling prey to foreclosure "rescue" scams included reviewing documents carefully and being aware that signing any kind of deed translates to a home sale.

read story from the Miami Herald.




Businessman Accused of Remodeling Scam
Over the past two years, more than 36 people have filed complaints against Frank Edmund Donofrio, a businessman accused of helping arranging high interest loans for remodeling projects of which some were never completed.

read story from the St. Petersburg Times.




Fraud Suspect Couple Arrested
Mark Bonds, who was due in court for allegedly being involved in a drug ring, and his wife, Anna Bonds were recently arrested for allegedly falsifying documentation, including tax forms and pay stubs, in a mortgage fraud scheme.

read story from the St. Louis Post-Dispatch.




Appraiser Gets 42 Months
Edward Young received 3 years and five months in prison for his alleged involvement as an appraiser in a mulitmillion-dollar flipping scheme in which properties were purchased and resold the same day with inflated appraisals and fraudulent documentation.

read story from Clarion-Ledger.




Foreclosure Rescue Scam Services
A television reporter investigated a mortgage fraud foreclosure "rescue" program that stole money and the home of a victim.

read story from NBC 4.




RBC Encourages Fraud Awareness
RBC Centura Bank will join a campaign led by federal, state and local governments and national consumer advocacy organizations to support the ninth annual National Consumer Protection Week, which encourages consumers to educate themselves to avoid being a victim of identity theft and fraud.

read story from the Rocky Mountain Telegram.




February 5, 2007

Mortgage Fraud Involves Insiders
Through the many shapes and sizes of mortgage fraud, a lender is always a victim and one major element is the concealment of the true property price, but sometimes another lender and other industry insiders, such as appraisers, are knowingly the perpetrators.

read story from the Seattle Times.




February 1, 2007

Flipping Scam Lands 5 Sentences
A fraudulent flipping scheme involving distressed property landed Kristy N. Packer, Marcy Irby and Jafus Jones II probation terms ranging from five to three years and restitution to Countrywide Mortgage, and Phillip N. Weary and William Vaston Fairley prison sentences ranging from 7 to 19 months.

read story from the Hattiesburg American.




Lawyer Suspended for Inflated Property
Attorney Morris I. Olmer has been suspended from practicing law for his involvement in a real estate transaction in which the sales price of a property was inflated and proceeds generated were pocketed, and may be a case of mortgage fraud.

read story from the Connecticut Law Tribune .




Realtor's Fraud Conviction Appeal Unsuccessful
A federal appeals court upheld the conviction and sentence of Sally L. Gibson, a Realtor who led a $1.4 million mortgage fraud scam in which borrowers were promised $100 if Century Mortgage couldn't find and qualify them for a home purchase, but ultimately borrowers ended up in loans for properties with inflated values and with balloon payments and high interest rates.

read story from the Spokesman Review.




21 Accused of Mortgage Fraud
A grand jury charged 21 people connected to two cases of alleged mortgage fraud that included illegally acting as a real estate broker and appraiser, a false down payment, and inflating property value.

read story from the Plain Dealer .




Fraud Lands Woman Prison Sentence
Christa M. Eker was sentenced to five months in prison after admitting to cooperating in a scheme that 6 others have been sentenced for and in which false deeds and other documents were used to get title to properties and then use these as collateral to obtain more than $2.5 million in loans.

read story from the South Florida Sun-Sentinel.














 


read archived blog entries

  Patrick Crowley is fraud journalist for MortgageDaily.com and a reporter and columnist for The Cincinnati Enquirer.

Email Patrick at: PatCrowley@FraudBlogger.com
 
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