“Flipping” Homes Nets Perp 24 Years in Prison

What makes this case so different (and explains the harsh penalties) is that the perpetrators created a self-contained mortgage fraud operation. It included a loan officer, who was the mastermind behind the scheme, bank underwriters who cooperated and approved the loans submitted by the loan officer, and an unlicensed appraiser who supplied the fraudulent appraisals:

A federal judge has sentenced a former mortgage loan officer convicted of organizing a Washington, D.C., house-flipping scheme involving mortgage fraud to more than 24 years in prison.

In sentencing Charles E. Hall Sr. to serve 293 months in prison and to pay restitution of $5.04 million, Judge Sterling Johnson called the former loan officer “a predator” whom the community must be protected from.

A jury convicted Hall, 37, in August of conspiracy, bank fraud, wire fraud and money laundering. Prosecutors said the former Guaranty Residential Lending loan officer organized a conspiracy to flip more than 30 homes, netting more than $5.2 million.

Hall recruited straw buyers and submitted loan applications listing false assets, income and other information to apply for $14 million in loans, according a statement released by U.S. Attorney Jeffrey A. Taylor. To read the full article…

Do Banks Charge Minority Borrowers Higher Interest Rates?

Why would a bank slap minorities with higher rates? sometimes the guilty party is the loan consultant or the mortgage broker, who receive bonuses from lenders when they steer their customers toward high-priced loans.

Los Angeles: African Americans and Latinos in California were more than three times as likely to take out higher-cost home loans as whites in 2005, according to an analysis of data lenders provide to federal banking regulators. To read the full article…

Can a City Legislate Selling or Renting to Illegal Aliens?

Are property managers or sellers the agents of the INS? Should they be required to ascertain that real estate is not rented or sold to undocumented aliens? One Texas city thinks so:

DALLAS – A real estate broker filed a lawsuit Monday alleging members of the Farmers Branch City Council and the city’s mayor repeatedly violated the state’s open meetings laws to deliberate a series of anti-illegal immigration ordinances.

Guillermo Ramos, of Farmers Branch, was among opponents who protested at city hall before council members in this Dallas suburb unanimously approved having property managers or owners verify the immigration or citizenship status of apartment renters.

The ordinance was part of a series of anti-illegal immigration rules passed in November that intend to keep illegal immigrants out of Farmers Branch. Council members also approved resolutions making English the city’s official language and allowing local authorities to become part of a federal program so they can enforce immigration laws. To read the full article…

“Zero Down” Fraud Stopped in Brooklyn

There is very little mortgage lenders can do to prevent “Zero Down” scams during times of easy money and rising property values:

NEW YORK – A Brooklyn mortgage fraud ring duped homebuyers and lenders by falsifying documents and overstating property values, ruining the credit of many people who bought homes in minority neighborhoods, New York Attorney General Eliot Spitzer said Wednesday.Spitzer sued 11 people over the scheme, which he said lasted from 2002 until early this year and hurt dozens of borrowers and lenders, in a lawsuit filed with the state supreme court in Manhattan. To read the full article…