Friday, June 19, 2009

Something local

Mary Pat Harper, formerly Mary Pat Lord was indicted in the U.S. District Court for seven counts of wire fraud. Look through my previous posts and see if I do not deserve an award for not saying, "I told you so."

Ms. Harper was a real estate agent in the Quad City area. Her license is "expired" according to Ms. Harper represented two individuals, Robert Herdrich and Darryl Hanneken, who purchased numerous properties in the Americana Park subdivision in northwest Davenport. Here is how the scheme worked: The two purchasers would agree to buy a house for a certain price, say for example, $140,000. Ms. Harper, who apparently prepared the purchase agreements, would attach an addendum which stated that the buyers would receive $40,000 back from the seller at closing. Essentially, the seller would be receiving $100,000 for the property ($140,000 minus the $40,000 the seller would give to the buyer at closing). Ms. Harper would fax the purchase agreement to the mortgage broker, but somehow the addendum would not be attached by the time it got to the actual lender. Because of this omission, the lender would be under the impression that the purchase price was $140,000 with no credit back to the buyer. The $40,000 would not appear on the settlement statement, so the lender would have no way of knowing that the buyers were not actually paying the full $140,000 for the property.

She did this at least seven times according to the indictment. Then the buyers stopped making their payments. Then the properties were foreclosed. Then likely you and I bailed someone out, the properties sat empty and deteriorated, and property values went down.

So, buyers, sellers, real estate agents, real estate brokers, closing agents, appraisers, and especially attorneys take note: If it is not on the settlement statement, it does not happen. If you do prepare or sign a settlement statement that does not accurately reflect all receipts and disbursements, look for nice folks in dark suits and black SUVs to stop by your office. Soon.

See, I never once said, "I told you so" in this whole, entire blog.

Thank you FBI and U.S. Attorneys! Keep up the good work.