Posts Tagged fraud
It seems attorney David J. Stern made over $105,000,000 foreclosing on people’s homes, many times with “manufactured” documents that could not be located that were key in the foreclosure process. He bought homes, cars (including a million dollar Bugatti) and even a yacht and moved-in next door to Jay Leno.
New York’s chief judge imposed a rule Wednesday requiring lawyers handling foreclosures to verify that all paperwork is accurate as attorney generals in all 50 states are jointly investigating whether or not mortgage companies have violated state laws in the foreclosure process. The Obama administrations top housing official said that lenders are within their right to continue with foreclosures but that they could face federal fines if found to have broken the law.
Utah ranked 6th in foreclosures nationwide
According to RealtyTrac Inc., Utah ranked sixth nationally in foreclosures during the third quarter of 2010. According to their figures 1 in every 88 homes in Utah were in some state of the foreclosure process during this time compared to the national average of 1 in every 129 homes.
But it’s not all that bleak. Utah traditionally lags behind the rest of the nation economically so we’re now at the same point everywhere else was over a year ago, and nationally the foreclosure rate was down 21% from the third quarter of 2009. So it’s getting better all the way around.
Bought a foreclosure? Title insurance could save you
With the current allegations of foreclosure fraud on the bank and loan servicer levels can you be really sure you own that sweet deal of a foreclosure you just bought?
The issue at hand here is “who really owns the home you just bought?” It turns-out that in some cases banks have committed fraud in the foreclosure process by manufacturing missing documents needed to foreclose on a home. Documents like the original Note and other missing loan documents, forging peoples signatures in the process.
Loan servicing rights can change companies several times throughout a loan’s life. Every time it does a hard copy of the original Note (you have a copy in your closing documents the title company gave you) is supposed to go to the new servicer.
It rarely did.
Now, banks are unsure who really owns the loan and thus who has the right to foreclose on the property.
Although I’m very outspoken about the reasons behind the current economic crises and foreclosures, I do believe that if someone is in violation of their contract with the bank to repay the loan that the bank has the right to foreclose on them. But, this has to be done with due process of law. The XIV Amendment insures us of this right. This is a whole other topic, though.
The point here is, remember that title insurance policy that was part of your closing costs? That $600 to $1,500 charge? Well that policy is what will protect your right to the house you just bought. Title insurance insures past events on the property. So even if the title wasn’t clear with a previous lender at the time you bought the house, you’re not going to lose your home.
All lenders require a title insurance policy be purchased when you buy or refinance a home for that reason. It protects their interest just as it protects yours. But if you bought the property with cash and didn’t opt to pay for title insurance, than you may have reason to be concerned because you may not own the property because the bank you bought it from may not have owned it and thus had the right to sell it to you, and there is no insurance to pay-out damages to the rightful holder of the Note.
The moral of the story? Title insurance is cheap protection on your property. Always get it.
This article was in Monday’s Salt Lake Tribune regarding Rick Koerber, who defrauded entry-level real estate investors out of $100 million plus using the Ponzi scheme referenced in this post. Here is the contents of the article since the Tribune will soon archive it:
Koerber seeks to keep key documents out of trial
Court » Accused swindler contends information was confidential and given to the government by mistake.Updated: 05/03/2010 07:23:51 PM MDT
Rick Koerber took the witnesses stand Monday in an effort to prevent the government from using documents against him in connection with federal charges that he operated a Ponzi scheme out of Utah County that took in at least $100 million.
Koerber’s testimony at a court hearing was part of a legal confrontation over a document that is the basis for one of 22 charges against him that include fraud, money laundering and tax evasion. It also pitted Koerber against a former personal assistant described as a key witness who provided FBI agents with information from Koerber’s FranklinSquires Cos. based in Utah County.
Koerber was indicted in May 2009 by a federal grand jury. Under the guise of a real estate investment company, Koerber’s Ponzi scheme, the charges say, promised returns of around 5 percent a month.
But, according to the indictment, the companies never made a profit and instead he used more than half of the $100 million to pay initial investors with money from new investors. In addition, Koerber allegedly diverted monies for personal use, including more than $1 million to purchase autos such as a 2001 Ferrai 550 and a 2004 Ferrari 360 for more than $200,000 apiece.
No trial date has been set, but Koerber and attorney Marcus Mumford are contesting the government’s right to hold and use 222 pages that they say were provided by mistake out of the 200,000 pages of documents given the government in response to subpoenas. Those include correspondence with attorneys over various matters
But the one document that took up the most time Monday during a four-hour hearing was one meant for people who had invested in or loaned money to FranklinSquires. The 2005 letter addressed “To our Lenders” is the basis for a mail fraud charge that alleges the document contained “false” information.
The question concerning it and the other documents Koerber wants returned is whether they are confidential because they were part of an attorney-client relationship.
Koerber testified that a draft of the letter was among his correspondence with attorney Ross Moore and was not actually sent to the company’s lenders. Attorney-client documents that are disclosed to outside parties generally are not protected.
Koerber’s testimony was at odds with that of FBI agent Cameron Saxey, who said the agency obtained the letter through two sources — the documents provided by Koerber and from a former assistant to Koerber, Rachelle Taylor.
Saxey said that the letter was on a CD of documents that Taylor provided to the FBI from her employment with Koerber that included work in the company’s financial department. Saxey said she told him she mailed the letters to people who had invested or loaned money to the companies.
“She said she sent it out,” said Saxey, although the agent said the FBI had not uncovered any other evidence to corroborate whether the letter was actually mailed.
The issue could be important because Mumford said that Taylor, “one of the government’s key witnesses in this case,” is disgruntled because she sued Koerber for employment discrimination after being dismissed.
FranklinSquires’ former attorney, Russell Skousen, testified that the documents in question were inadvertently given to the government. Skousen went to work for Koerber after he resigned as head of the state Department of Commerce, which had begun making inquiries about Koerber’s operations.
Veteran criminal defense attorney Max Wheeler also said such documents were supposed to be retained by FranklinSquires under a subpoena from the Internal Revenue Service to which he had been hired to respond.
Read the original article here.
U.S. Magistrate Sam Alba took the issues under advisement and said he would rule soon.
Related articles by Zemanta
- Men indicted in alleged local Ponzi schemes (seattlepi.com)
- Feds: SoCal Ponzi scheme claimed US stimulus ties (sfgate.com)