First came the subprime mortgage crisis; now comes the cases of alleged fraud.
An amazing story Tuesday out of Southern California where the state attorney general has busted an alleged mortgage scam that may have bilked thousands of SOCAL homeowners out of millions of dollars.
And, California Attorney General Jerry Brown told me, in some cases, signatures of homeowners were actually forged on the mortgage documents!
How it worked
According to the attorney general’s office, at least six companies operated by one family enagaged in “predatory lending” by pushing the alleged victims into “illegal and unconscionable loans.”
Brown blames this scheme on the worsening mortgage crisis, which, he says, is creating a number of “fly-by-night” operations.
Brown told me he has never seen anything like this–and the man was even once governor of California, so he’s been around a bit.
The alleged victims were often targeted because they lacked command of English. They were promised one fixed rate on a mortagage but, later in the day, they would be visited by a representative of one of the companies who often had forms with incomplete information.
They would promise that, once signed, the proper numbers would be inserted back at the office, Brown says. If the homeowner declined, says Brown, in some cases their signatures were forged, often with improper spellings of their names.
Many lost homes
Brown says the scheme robbed many homeowners of their homes because they could not afford the paymens.
Arrests have been made and more may be still to come.
Growing California Mortgage Scandal?
Brown thinks so. His office says that in the coming weeks, “Brown intends to bring additional legal actions, both civil and criminal, against other mortgage lenders and foreclosure consultants who are taking advantage of homeowners across California.”
Doubt this is the only state this is happening in!
Let us know if you have heard of such practices in YOUR state or community.
Article Author:
Charles FeldmanCharles has written 147 articles for us.
Visit Charles's Website: http://www.thefeldmanblog.com
Charles is currently reporting for KNX Radio in Los Angeles, is the co-author of the book No Time To Think, and can be found commenting about the news on his blog, The Feldman Blog.
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thanks
What is really scary is that there are probably many, many more lenders that engaged in this type of activity. And not just in California. I would venture to say that over the next year or so there will be many developments and indictments for this practice.
And this is somehow a surprise? As far as I can tell, this has been normal practice for some time. And it’s certainly not limited to California.
I was ripped off in three different real estate deals in Chicago. These people prey on poor people to rip off. It is so blatant that they just rape the contracts. ALL people involved know eachother and have worked in this business for a long time. HUD, the FBI, the police,,, none of them will help in this scam. HUD always tries to act interested but it has come to my attention that they provided section 8 contracts and housing to con artist and swinders in Chicago. Most of the lending companies are based in California, they would give a loan without proper respas, 1003’s, etc… they gave a loan for $500K to a welfare mother with three kids. The broker would have a convicted felon find “targets” to dupe into false schemes and sell the section 8 properties he owned several times to un-suspecting people with low incomes and little experience in real estate. According to the HUD official, “they have alot of money now and will be difficult to prosecute.” Their scheme is SO illegal that it is easy to believe that even this HUD official is involved. A Chicago newspaper reportter named David Jackson was doing a story on this, a very good one and was ordered to “cease.” Why? Because this scam goes all the way to the top of government and all the way to the bottom of the barrel of scumbags and con artists. I am unfortunate to be ripped offf by these people but I wonder how many lives and families and children have been directly harmed by the greed of this corrupt industry???
How impressive that Jerry Brown feigns concern. I have spent the past several years reporting a MASSIVE real estate fraud/theft operation in Fresno, CA – he has not once acknowledged me. Forged (verified by handwriting expert) documents, altered records, ID theft, illegal conversion of assets, even suspected homicide.
Fresno’s District Attorney has prohibited reports of the operation – they went as far as to BLOCK my email address so I could not provide additional information.
Senators, Attorney General – no response.
Discrediting me seems to be one of the methods used to avoid looking into this. I believe I am being used as a scape goat for what this appears to be linked to – a 45+ yr citywide cover-up involving the city’s water system. Aside from empty speeches and promises, are there any agencies that actually DO investigate real estate theft/real estate fraud?
Won case at LA Superior Court, but now I’m being victimized by
Countrywide…need help
he could swing a cat by it’s tail in the middle of orange county, california and hit hundreds of criminals.