Legal News

At the beginning of 2011, the first of our nation’s baby boomers reached the age of 65. Since then, thousands a day are also reaching that milestone. They have many reasons to celebrate. Senior citizens are most likely to have a “nest egg,” to own their home, and to have excellent credit. Unfortunately, these are also many of the same qualities which make them so attractive to con artists. In a statement before the House Committee on Energy and Commerce, Subcommittee on Commerce, Manufacturing and Trade,...

A residential mortgage loan borrower alleged that his mortgage broker joined with an appraisal company in an illegal scheme to inflate appraisals in order to induce borrowers to enter into high-cost, adjustable-rate mortgages that they were unable to afford. The borrower also alleged that the broker received a yield spread premium from the mortgage lender as a kickback for securing a loan with a higher interest rate. The lower court dismissed the claims, but a federal appeals court disagreed. 

A real estate appraiser was sentenced to to 15 months in prison, followed by three years of supervised release, for conspiracy to commit wire fraud.  According to his guilty plea, the appraiser appraised a number of properties on behalf of purchasers who were seeking financing through a mortgage brokerage company in Baltimore. The appraiser admitted that from April 2004 to April 2008, he prepared at least 16 fraudulent appraisals for $4 million in loans originated at the mortgage company. He&nb...

The Consumer Financial Protection Bureau (CFPB) released small entity compliance guides for three more of its January rulemakings. The guides cover the bureau’s Home Ownership and Equity Protection Act (HOEPA) rule, and rules pertaining to lender-furnished appraisals and appraisals for higher-priced mortgages.

A 34-count indictment was unsealed charging five people with various crimes stemming from their participation in a mortgage fraud scheme between May 2004 and February 2009 that involved fraudulent documents, inflated purchase prices on loan documents for more than 100 Philadelphia properties and resulted in more than $20 million in fraudulent loan proceeds. 

Four individuals have pled guilty to offenses relating to mortgage fraud schemes. One of which pled guilty to conspiracy to commit bank fraud used her position as an apprentice appraiser to prepare appraisals with inflated values to help herself and others qualify for mortgage loans. She also failed to disclose material conflicts of interest to the mortgage lender when she performed appraisals on her own home and homes where she was the real estate agent.

You may remember reading about a a Philadelphia mortgage scheme that was fueled by fraudulent appraisers earlier this week. That lawsuit has yet another addition. The fifth defendant is charged with participating in a massive mortgage fraud conspiracy that operated between May 2004 and February 2009, primarily in the West Philadelphia section of the city of Philadelphia, involving KREW Settlement Services. KREW is a Philadelphia real estate settlement company that is alleged to have been at the center of...

 A woman was charged with participating in a mortgage fraud conspiracy involving more than 100 Philadelphia properties and more than $20 million in fraudulent loan proceeds. She is charged with conspiracy to commit loan and wire fraud, making false statements in connection with a Federal Housing Administration loan, and loan fraud. The information also seeks the criminal forfeiture of more than $467,000.The conspiracy also included grossly inflated appraisals, false title insurance policies, fa...

The Consumer Financial Protection Bureau (CFPB) released several important rules in January, including a pair of appraisal-related rules setting forth some new obligations for lenders. John Redding, a partner with Buckley Sandler LLP, discussed key aspects of the new rules during the recent Independent Community Bankers of America Convention and Techworld in Las Vegas. The CFPB released issued two final appraisal rules on Jan. 18, 2013. One of the rules implements Dodd-Frank amendments to the Equal Credi...

It was part of the scheme for the co-defendants to cause to be submitted false appraisals for some of the properties. One defendant usually recommended an appraiser to the mortgage broker for the loan approval. He supplied the appraiser with inflated values of comparable homes or omitted information concerning the home sales so the appraiser would overvalue the current home. At closing, through a grant program, the defendants funneled money back to the home buyer who was one of the defendants. They conce...