On Thursday, Lehman Bros. Holdings announced that it was eliminating 1,300 jobs from its Aurora Loan Services unit and close three of Aurora's offices in Orange County, Florida and New Jersey. This is the fourth round of cuts by Lehman Bros., which has made newslines in the past few months for its eyes-wide-shut response to loans reported as suspicious and possibly fraudulent by vigilant real estate agents. In fact, one wonders how many of the job cuts can be traced to the massive losses incurred by Lehman Bros. courtesy the Bevery Hills real estate fraud gang that has been profiled in this blog, the Los Angeles Times and Forbes Magazine.
Indicted members of the Beverly Hills gang include developers Mark Alan Abrams and Charles Elliot Fitzgerald, real estate agents Joseph Babajian and Kyle Grasso, appraisers Lila Rizk and Scott Robinson, loan processor Nicole LaViolette, real estate worker Jamieson Matykowski, escrow officer Timothy Holland, and mortgage banker Richard Maize.
Read the Full Story
Friday, January 18, 2008
Wednesday, January 16, 2008
Forbes Magazine Provides Juicy Details to Beverly Hills Real Estate Fraud
Following up on the Los Angeles Times' story of unbridled greed on the part of a pack of real estate professionals operating out of Beverly Hills, Forbes Magazine has written about some of the details that made stealing so easy: lender Lehman Brothers - too busy writing loans without showing the slightest due diligence to its investors by failing to verify loan documents; chronic crooked developers Mark Alan Abrams and his bigamist partner Charles Elliot Fitzgerald; celebrity still-not-rich-enough Realtor Joseph Aram Babajian and his crew of crooked appraisers and mortgage brokers.
In a plug for my home team, Christian Stevens, a broker in the Beverly Hills office of Keller Williams Realty, was the good guy that Lehman Brothers wished would go away. Calls by Stevens to Lehman Brothers to report what Stevens thought was fraudulent lending, were brushed off. When the lender finally contacted Abrams about his scam, Abrams' reply was "What's the worst that can happen to us?"
Another good guy was appraiser Gary Crabtree, working out of Bakersfield, California. Crabtree called lenders WaMu, SunTrust Bank, Countrywide and others to report up to 207 residential sales he believed were fraudulent. According to Crabtree:
"GreenPoint Mortgage told me it was none of my business," he recalls. "SunTrust was another I reported numerous frauds to. They just want to write them down and get out of town." The banks declined comment.
Read the full story
In a plug for my home team, Christian Stevens, a broker in the Beverly Hills office of Keller Williams Realty, was the good guy that Lehman Brothers wished would go away. Calls by Stevens to Lehman Brothers to report what Stevens thought was fraudulent lending, were brushed off. When the lender finally contacted Abrams about his scam, Abrams' reply was "What's the worst that can happen to us?"
Another good guy was appraiser Gary Crabtree, working out of Bakersfield, California. Crabtree called lenders WaMu, SunTrust Bank, Countrywide and others to report up to 207 residential sales he believed were fraudulent. According to Crabtree:
"GreenPoint Mortgage told me it was none of my business," he recalls. "SunTrust was another I reported numerous frauds to. They just want to write them down and get out of town." The banks declined comment.
Read the full story
California Appraiser Sues WAMU, First American, eAppraiseIT, and LSI
WaMu's (Washington Mutual) problems with fraudulent appraisals has moved rapidly from New York State, where it is being sued by New York Attorney General Cuomo, to California.
According to Appraisal Scoop, WaMu is being sued by Jennifer Wertz, a California Office of Real Estate Appraisers (OREA) licensed appraiser for fraud, breach of both oral and written contracts and other tortious acts. The 12 count lawsuit also names First American Corp., eAppraiseIT, Lenders Services (LSI), FNIS, Inc, and Susan Richter, a WaMu sales manager.
Wertz' attorneys wrote the complete article on Appraisal Scoop describing the history of appraiser Wertz' business relationship with the defendants and the events that transpired, culminating in her legal claims against them. This is a fascinating read, a prelude of the problems washing up at WaMu's front door.
Here is just a taste of the article:
Jennifer Wertz was considered a preferred real estate vendor which means that Wertz's worked had previously been used and WAMU was familiar with and considered Plaintiff's work to be proven.
On or about May 21, 2007, Susan Richter (a Sales Manager employed by WAMU) informed Jennifer Wertz that a loan for which Wertz had prepared an appraisal report had been declined because Wertz had indicated in her report "declining" market conditions. Richter insisted that Wertz change her appraisal report to indicate "stable" market conditions so that the loan could be approved.
According to Appraisal Scoop, WaMu is being sued by Jennifer Wertz, a California Office of Real Estate Appraisers (OREA) licensed appraiser for fraud, breach of both oral and written contracts and other tortious acts. The 12 count lawsuit also names First American Corp., eAppraiseIT, Lenders Services (LSI), FNIS, Inc, and Susan Richter, a WaMu sales manager.
Wertz' attorneys wrote the complete article on Appraisal Scoop describing the history of appraiser Wertz' business relationship with the defendants and the events that transpired, culminating in her legal claims against them. This is a fascinating read, a prelude of the problems washing up at WaMu's front door.
Here is just a taste of the article:
Jennifer Wertz was considered a preferred real estate vendor which means that Wertz's worked had previously been used and WAMU was familiar with and considered Plaintiff's work to be proven.
On or about May 21, 2007, Susan Richter (a Sales Manager employed by WAMU) informed Jennifer Wertz that a loan for which Wertz had prepared an appraisal report had been declined because Wertz had indicated in her report "declining" market conditions. Richter insisted that Wertz change her appraisal report to indicate "stable" market conditions so that the loan could be approved.
Again, click on the above link for the full article.
Click here to read about NY AG Cuomo's lawsuit against WaMu.
Tuesday, January 15, 2008
Former Placer Planning Commissioner Sues County
Michelle Ollar-Burris, former Planning Commissioner of Placer County, has countersued the County this week, stating that the County's lawsuit, which claims fraud and misrepresentation by Ollar-Burris in several land deals, has hurt her business. in a counter lawsuit this week saying that false allegations have hurt her real estate business. The County also removed her as Planning Commissioner in conjunction with its complaint.
According to Steve Belzer, Ms. Ollar-Burris' attorney,
"All the allegations in their complaint and the fact that she was removed from the planning commission based on these unsupported allegations has damaged her business."
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According to Steve Belzer, Ms. Ollar-Burris' attorney,
"All the allegations in their complaint and the fact that she was removed from the planning commission based on these unsupported allegations has damaged her business."
Read the Full Story
Monday, January 14, 2008
FBI: Housing Scams More Than Double
In an article published today, USA Today reports that Federal mortgage fraud convictions have more than doubled in the past year, and the Bureau expects further growth in foreclosure scams as the crisis over lenders granting subprime loans continues to escalate. Defaults on subprime mortgages are at record highs, with no end in site.
In 2007, the FBI opened 1,210 mortgage fraud cases, 300 percent more than the number of new cases they opened in 2003. Convictions more than doubled from 123 in the 2006 fiscal year to 260 in 2007. Financial Crimes Section Chief Sharon Ormsby states that they expect convictions to increase . . .
"We expect that number to increase again in 2008," says FBI financial crimes section chief Sharon Ormsby.
Although the FBI is busy, according to consumer advocates, they have not done enough.
Read the Full Story
In 2007, the FBI opened 1,210 mortgage fraud cases, 300 percent more than the number of new cases they opened in 2003. Convictions more than doubled from 123 in the 2006 fiscal year to 260 in 2007. Financial Crimes Section Chief Sharon Ormsby states that they expect convictions to increase . . .
"We expect that number to increase again in 2008," says FBI financial crimes section chief Sharon Ormsby.
Although the FBI is busy, according to consumer advocates, they have not done enough.
Read the Full Story
Friday, January 11, 2008
Trio Convicted of Fraud against Seniors
A Corona, California jury returned hundreds of guilty verdicts today against three men for running a $190-million investment scheme that defrauded the elderly of their life's savings. According to prosecutors, the men ran their investment scam from offices located in Los Angeles, Orange and Riverside Counties. The victims numbered approximately 1,600 over the 10-year period the fraudsters were in operation.
Daniel W. Heath, 51, President of Daniel W. Heath & Associates, his 81-year-old father and a former business associate were convicted on all but one of the 400 charges of fraud, money laundering and other crimes. Heath Jr. could face up to 100 years in prison at his upcoming sentencing hearing in March. Papa John Heath and friend Denis T. O'Brien, 53, could face up to 30 years in prison each when they are sentenced next month.
Read the Full Article.
Daniel W. Heath, 51, President of Daniel W. Heath & Associates, his 81-year-old father and a former business associate were convicted on all but one of the 400 charges of fraud, money laundering and other crimes. Heath Jr. could face up to 100 years in prison at his upcoming sentencing hearing in March. Papa John Heath and friend Denis T. O'Brien, 53, could face up to 30 years in prison each when they are sentenced next month.
Read the Full Article.
Bank of America to Buy Countrywide for $4 Billion
In a move that surprised no one and to protect its own investment, Bank of America agreed today to purchase subprime lender Countrywide Financial Corporation for $4 billion. Before making risky loans, experiencing record borrower defaults, investigations by the SEC and other regulatory agencies, Countrywide was the darling of the lending industry. Less than a year ago, its market value was pegged at $26 billion.
Reuters indicates that Countrywide shareholders would receive 0.1822 of a Bank of America share in exchange for each of their shares.
Comment: sympathizers to the uber-wealthy should not fret over the fortunes of CEO Angelo Mozilo, who not only built Countrywide from the ground up, but tore it down with his reckless lending policies and greed: Mozilo stands to make $115 million on the deal, in addition to the tens of millions he has already sucked out of Countrywide.
Read the Full Story.
Prior the takeover announcement, in a quote that is nothing less than a stunning understatement, Mozilo reportedly told a group of Los Angeles real estate professionals that the industry is "roiling" and that panic is generating fear among lenders “who are increasingly less likely to lend to risky borrowers.” (Reuters)
The above quote was taken from an article published by the San Francisco Bay Independent Media Center.
Comment: how is Anthony Mozilo different from Kenneth Lay of Enron? Both stole money from the backs of working people.
Reuters indicates that Countrywide shareholders would receive 0.1822 of a Bank of America share in exchange for each of their shares.
Comment: sympathizers to the uber-wealthy should not fret over the fortunes of CEO Angelo Mozilo, who not only built Countrywide from the ground up, but tore it down with his reckless lending policies and greed: Mozilo stands to make $115 million on the deal, in addition to the tens of millions he has already sucked out of Countrywide.
Read the Full Story.
Prior the takeover announcement, in a quote that is nothing less than a stunning understatement, Mozilo reportedly told a group of Los Angeles real estate professionals that the industry is "roiling" and that panic is generating fear among lenders “who are increasingly less likely to lend to risky borrowers.” (Reuters)
The above quote was taken from an article published by the San Francisco Bay Independent Media Center.
Comment: how is Anthony Mozilo different from Kenneth Lay of Enron? Both stole money from the backs of working people.
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