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untanglingwebs
El Supremo
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Mortgage Fraud and Foreclosure Rescue Scams
Michigan ranks in the top 5 states in the country for mortgage fraud and foreclosure rescue scams. To combat these crimes, the Michigan Foreclosure Task Force secured funding to launch Scam Alert awareness campaigns. The campaigns consist of spreading a wide range of public education materials produced by NeighborWorks® as part of a national Scam Alert Campaign. If your community is interested in purchasing material, you can view the price list here (pdf).
Basic Scams
A “Foreclosure Prevention Specialist” Scam: Involves someone taking the homeowners money up front to work with the lender and “save” their home. They will look professional but take the homeowners money and do nothing to save the home.
The Lease/Buy Back Scam: In this scam, homeowners are tricked into signing over the deed to their home based on promises that they can stay in the home as a renter and buy it back later. Generally, the terms of the lease are so difficult that homeowners are rarely, if ever, able to repurchase their homes.
Bait-and-Switch Scam: In this scam, a homeowner unwittingly signs over the deed to the home thinking s/he is merely refinancing it to provide income. A typical target for this scam is elderly widowed women many of whom end up being evicted from a home they have owned outright and lived in for years.
Scam Prevention
In order to prevent being victimized by a foreclosure or mortgage scam:
Never pay anyone up front to help you work with your lender;
Never trust anyone who guarantees they can save your home;
Neversign anything you haven’t read or don’t fully understand;
Always seek the help of a FREE HUD or MSHDA-certified foreclosure counselor.
Scam Reporting
If you think you’ve been the victim of a foreclosure scam, report it by contacting the Michigan State Attorney General’s Office or calling 877.765.8388. If you would like to register a complaint about a licensed mortgage broker or lender contact the Office of Financial and Insurance Services or call 877.999.6442
Ingham County Residents Only – Ingham County Foreclosure Fraud Hotline ( 517) 676-7210
Scam Prosecution
Michigan State’s Attorney General’s office has made the prosecution of mortgage fraud and foreclosure rescue scams a high priority. However, in order to prosecute scam artists, it is important to know the law.
In the state of Michigan, laws are in place that make it illegal to require payment for a service before the service is rendered. As almost all scams will ask for money up front, they are able to be prosecuted.
Michigan Foreclosure Task Force
The Michigan Community Foreclosure Response Toolkit is an initiative of The Michigan Foreclosure Task Force, a program of CEDAM.
Copyright © 2012-13.
Michigan Foreclosure
Last edited by untanglingwebs on Wed Feb 06, 2019 6:42 am; edited 1 time in total |
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Tue Feb 05, 2019 4:49 pm |
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untanglingwebs
El Supremo
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| There are many individuals going door to door or sending mailers to residents in Genesee County asking home owners if they want to sell their property. The ones that cause the most concern in Flint are the one that offer prices far above the value of the home. While some of these investors may be anticipating the use of Section 8 vouchers being issued for the public housing tenants they may be legitimate as they appear to have done extensive remodeling to meet Section 8 criteria. But there is the possibility of mortgage fraud involved in some of these houses. |
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Tue Feb 05, 2019 4:58 pm |
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untanglingwebs
El Supremo
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Michigan Settlement Spotlights Lending Fraud Risks
Matt Hudgins | Jan 26, 2006
A $41 million settlement with federal regulators in early January highlighted a rising tide of residential mortgage fraud in the United States, but federal regulators say the commercial real estate industry is in a better position to thwart scams than its residential cousin.
ABN AMRO Mortgage Group Inc. agreed to pay the U.S. government $16.85 million and to absorb an estimated $24.35 million in losses on 783 defaulted loans rather than submit those loans for reimbursement by the Federal Housing Authority. The settlement is the largest from an enforcement action in FHA history, and stemmed from falsified underwriting signatures on more than 28,000 federally insured loans issued by a mortgage subsidiary of Troy, Mich.-based LaSalle Bank Midwest, which is in turn a subsidiary of Netherlands-based ABN AMRO Bank N.V.
Specifically, staff members at ABN AMRO Mortgage Group fraudulently signed the names of two underwriters to thousands of mortgage loans between 2000 and 2003. In announcing the settlement agreement, HUD Inspector General Kenneth Donahue Sr. described the incidents as “lax procedures during the heyday of the housing boom.”
In its own announcement of the settlement, ABN AMRO stated the company self-reported the wrongdoing to investigators, and had sufficient reserves to cover the settlement amount without harm or loss to borrowers or business partners. Further, the company stated the loans in question were underwritten by HUD-authorized underwriters, though the final certification process wasn’t completed properly.
Mortgage fraud, mostly perpetrated by borrowers, is a huge problem in Eastern Michigan, according to U.S. Attorney Stephen J. Murphy. “The lenders almost always find themselves in the capacity of victim,” Murphy says. “The ABN AMRO case was unusual in that the lender had not complied with various requirements.”
Mortgage fraud is one of the fastest growing crimes in the nation, according to the Federal Bureau of Investigation. The agency received 21,994 Suspicious Activity Reports from the banking industry in Fiscal 2005, an increase of more than 28% from the 17,127 filed in Fiscal 2004. Reported losses in the recent fiscal year more than doubled to $1.01 billion from $429 million a year before.
The FBI has even launched an ongoing initiative to combat what it terms the growing epidemic of mortgage fraud. Working with HUD, the Internal Revenue Service, U.S. Postal Inspection Service and the Justice Department, the investigators brought back indictments against 156 mortgage fraud suspects, made 81 arrests, and obtained 89 convictions between July 5 and Oct. 27, 2005.
What are the risks for commercial lenders and borrower? That’s hard to say, because few commercial deals involve the sort of federal mortgage protection regulators use to monitor residential lending. “We don’t have a way of really tracking (commercial mortgages),” says Special Agent William Carter, an FBI spokesman. “We’re unaware of problems in the industry, because there are strict underwriting procedures and because attorneys are mandatorily involved throughout the closing process.”
But Carter, the U.S Attorney on the ABN AMRO case, says the greater dollar volumes involved in commercial real estate lending are an enticement to the unscrupulous.
“I would advise both lenders and borrowers in the commercial real estate world that whenever there is financing and huge dollar amounts at issue, as there is in that industry, unsavory individuals can try to devise ways to get their hands on those funds,” Carter says. |
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Tue Feb 05, 2019 5:32 pm |
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untanglingwebs
El Supremo
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April 6, 2017 Compliance Building
The most recent highly publicized case is that of Larry Holley, Pastor of Abundant Life Ministry. "He thought he could cloak his securities in God's will and pass them off to parishioners" Holley and his associate, Patrice Enright Gay, according to to the Securities Exchange Commission (SEC) complaint sought to exploit church members, retirees, laid off auto worker and make them believe they were investing in a successful real estate business.
The SEC described how the pair used "faith based rhetoric paired with references to scripture and Biblical figures to pitch fraudulent promises and promissory notes from a real estate company " beginning in February of 2015. |
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Tue Feb 05, 2019 5:59 pm |
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untanglingwebs
El Supremo
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Labeling his church the "place of provision" and the duo were the "distributors of Knowledge, wisdom, wealth and substance". Thus they encouraged about 83 individuals to be investors
One of the lines Holley used was because he was a person "who prayed for your children that he was more trustworthy than a banker". In the churches that allowed him to present his financial presentations under the guise of "Blessed Life conferences", Holley would present cards for the congregants to fill out so that he could "pray over the cards". In reality, the cards were to allow Gray to ask for one-on-one meetings to "make them millionaires" |
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Tue Feb 05, 2019 6:14 pm |
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untanglingwebs
El Supremo
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In the SEC press release (2017-74 Washington D.C,)the charges filed March 30,2017 the SEC announced they also filed an emergency asset freeze . The SEC charges against a Flint, Michigan based Pastor who was accused of exploiting church members, retirees and laid of auto workers who were mislead to believe they were investing in a successful real estate business.
The charges included that Gray advertised on a religious radio show based in Flint and singled out recently laid off auto workers to consult with her and promising to roll over their Investor Retirement fund into tax advantaged Individual Retirement Accounts (IRA) and invest them into Treasure Enterprises Inc.. However, no money was ever invested in IRA fund depositories.
The SEC told how Treasure Enterprises struggled to generate enough money from real estate investments to support their promised payments to investors and owed $1.9 million in past due payments as of February 2017. |
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Wed Feb 06, 2019 5:32 am |
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untanglingwebs
El Supremo
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It was the State of Michigan that caught the fraud before the SEC. The Michigan Department of Licensing and Regulatory Affairs (LARA) issued a "cease and desist order
on August 16, 2016, against selling unregistered securities and from acting as unregistered agents and from making false or misleading statements in the offering and sale of securities. Unlike the SEC Michigan has imposed laws that can put individuals in jail.
CBS NEWS with Kathy Kristoff (Money Watch) carried the story "Pastor bilks flock of $6,7 million" on 3-31-2017, |
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Wed Feb 06, 2019 5:54 am |
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untanglingwebs
El Supremo
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Kristoff quoted th LARA order:
"In order to protect consumers, particularly vulnerable senior citizens, requires that those who sell to be registered or exempt from registration. Information provided must information. accurately disclose risks and other material associated with the investments sold to them"
The Pastor misrepresented the investment as "risk free" and failed to disclose the company may not have enough liquid assets to pay the obligations. Gray signed promissory notes and assisted the investors in liquidating securities so the investor could purchase the note.
Both Holley and Treasure Enterprises were required to pay $80,000 fines and Gray was to pay a $20,000 fine, they had the option to request a hearing. Failure to comply with the order , an additional civil fine up to $500.000 could be imposed for each violation . |
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Wed Feb 06, 2019 6:23 am |
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untanglingwebs
El Supremo
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This offense is a felony punishable by imprisonment or a fine of not more than $500,000 for each violation or both.
Before Entering into an investment contract, contact Corporation, Securities, Licensing Bureau (CSCL) to run a registration check on any investment adviser, broker, dealer, professional or product.
Investors must perform their own due diligence. Investor information is at the link
LARA - Corporations, Securities & Commercial Licensing
https://www.michigan.gov/lara/0,4601,7-154-89334_61343---,00.html
Corporations, Securities & Commercial Licensing Bureau (CSCL) supports business growth and job creation while protecting the health, safety, and welfare of ... |
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Wed Feb 06, 2019 6:34 am |
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untanglingwebs
El Supremo
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About the same time Holley was running his scams, A ponzi scheme from California targeting the foreclosure crisis in Flint and other cities.
Gary Ridley of the Flint Journal wrote "How a Ponzi scheme used Flint homes to fleece $15 million from realty investors" It was initially posted on April 15, 2016 and updated on July 1, 2017.
A 70 year old california man William Yotty was the mastermind behind the creation of business "Fortuno Inc that created a "Millionaire Club"that preyed on the belief that one could make fortunes in real estate in distressed cities.
Ridley described how Yotty purchased foreclosed homes in bulk for pennies on the dollar in locations like Flint and then sold hese properties at a small markup to investors that he convinced they could sell these homes on a rent to own basis for a profit. |
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Wed Feb 06, 2019 7:34 am |
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untanglingwebs
El Supremo
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Yotty then promised the investors would have both a guaranteed instant equity as well as a positive cash flow. Ridley noted how the investors were promised the homes would be appraised at $50,000 to $120,000 on houses that were livable and available at half the price. However photos of the houses filed to reveal significant flaws and were often in areas with low home values anled some investors to abandon the homes.
Yotty used home and market survey magazines that also features rentals and land contracts to seal the deal. Ridley explained how Yotty promised his company would promise to maintain the property and perform all the tasks of a land contract such as taking the down payment and collecting the monthly payments from the new owners.
Realty Trac.com showed that both 2008 and 2009 showed that there were 6,000 foreclosures in Genesee county. Flint was the 9th highest foreclosure rate in the country which made this area attractive for investors wanting to cash in on this area.
When Ridley interviewed the Genesee County Register of Deeds Fortuno purchased at least 164 homes in Flint between 2005 and 2009. |
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Wed Feb 06, 2019 8:01 am |
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untanglingwebs
El Supremo
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The 2010 Heintz mortgage fraud case was splashed in all of the media because of the sensational story of a swindled Mott College professor and psychologist, William Hirshmon, who stabbed the wife of Hurt Heintz in 2007 after Heintz got access to his $70,000 line-of-credit. Hirshman got a 1 to 3 year prison term.
Laura Misak wrote the story for the Flint Journal in 2010 about how Heintz Mortgage Company was involved in inflating property values in Grand blanc and Davison. Heintz swindle more than $14 million from banks in a mortgage scheme that involved 3 Genesee County subdivisions. He was ordered to repay $1,467,546.50 .
Both Heintz and his Royal Oak Associate James Fish were sentenced to prison for one count each of financial institution fraud.
Misjak explained how Fish was paid to inflate appraisal values in approximately 70 properties in 3 neighborhoods for Great lakes Brokerage Funding owned by Heintz. |
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Wed Feb 06, 2019 8:25 am |
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untanglingwebs
El Supremo
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Court records show a straw buyer scheme that Heintz employed during 2005 to 2007 to use the credit of the straw buyer for a mortgage or construction loans from banks. The scheme involved promising that Heint would not only use the funds for development and make the payments, he told the straw buyer they would receive $5,000 to $23,000 when he sold the property.
Heintz also used the scamin Macomb County The scheme is predicated on building the development, selling the property and paying the bank back before the bank catches on
Once again the scheme targeted retirees looking for extra cash. Heintz prepared all of he documents and the investors didn't read the documents thoroughly.
Fish was ordered to pay $5million and Holly Heintz received immunity for testifying. |
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Wed Feb 06, 2019 8:59 am |
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untanglingwebs
El Supremo
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08-20419 - United States of America v. Dover et al - GPO.gov
https://www.gpo.gov/fdsys/pkg/USCOURTS-mied-4_08-cr.../content-detail.html
ORDER finding as moot 71 Motion to Dismiss as to Donald Dover (1); withdrawing 72 Motion for Disclosure of Informants' Identity as to Donald Dover and ...08-20419 - United States of America v. Dover et al
Summary
Document in Context
Category
Judicial Publications
Collection
United States Courts Opinions
SuDoc Class Number
JU 4.15
Court Type
District
Court Name
United States District Court Eastern District of Michigan
Circuit
6th
Office Location
Flint
Case Type
criminal
Party Names
Linda Banks, Defendant
Anthony Cabrera, Defendant
Basil Dennis, Defendant
Donald Dover, Defendant
William Jackson Jr, Defendant
Ruby Owens, Defendant
Richard Townsend, Defendant
Gregory Wilson, Defendant
United States of America, Plaintiff |
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Wed Feb 06, 2019 2:28 pm |
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untanglingwebs
El Supremo
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Wed Feb 06, 2019 2:32 pm |
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