Wednesday, September 30, 2009

Are you kidding me?

An attorney in Somerville, Massechu, Masatchus, Massechuset, Massachusetts came up with a new one. He kept getting new mortgages without paying off his old ones. It appears he had four mortgages on one property, three on another, two on another. These were not second or home equity mortgages. He was directed by the lenders to pay off the previous mortgages. He just didn't. Apparently he kept the money for his own purposes. It took some time for the lenders to catch on, since it was making his payments on time. It took a Fannie Mae database search to uncover the frauds. He failed to disclose some of these additional loans on his loan applications. They even got the Postal Inspector in on this one. He plead guilty to eight counts of Larceny and seven counts of Willfully Making a False Statement Regarding Financial Condition or Assets.

Doesn't it seem to be pretty simple math that making QUADRUPLE house payments eventually is going to catch up to you?

Georgia Attorney Disbarred for Mortgage Fraud

The Georgia Supreme Court has disbarred a Georgia attorney for mortgage fraud. According to the opinion:

"The complaint in S09Y0485 is based upon Moore’s service in June 2006 as the closing attorney for a real estate transaction. At closing, the HUD-1 settlement statement listed a sales price $9,000 higher than the price listed on the sales contract. The settlement statement also listed “cash to seller” of $16,329.84. Of this amount, the seller received $8,079.84 through a wire transfer and Moore wrote a check to the seller for the balance, but gave the check to the buyer’s loan officer. The check has two endorsements, the first from the seller, which the seller’s wife contends is a forgery, and the second from a third person who purportedly loaned money to the buyer to cover the buyer’s down payment."

Sound familiar? You might think, well heck, maybe this poor guy had no idea that the money wasn't going to the seller, but there are enough red flags here to start a Chinese marching band. Why didn't the purchase price match the purchase agreement? He wired part of the money directly to the seller. Shouldn't he question why he wasn't wiring the full amount to the seller? Why did he give the check to the buyer's loan officer. Wouldn't it be more appropriate to give it to a representative of the seller, if not the seller himself? When these kind of things come up at closing, the closing agent and the attorneys have a duty to ask questions.