Economic conditions, mortgage fraud, real estate scams and increased foreclosures are some of the reasons for the dramatic decrease in new mortgages and other forms of credit. Are things beginning to look up? What is in store for the New Year?
Fifth Third extended less credit in October
Business Courier of Cincinnati
Fifth Third Bancorp extended $5.4 billion in credit in October, down nearly $600 million from September.
Commercial and industrial loan commitments decreased to $830 million, down from $846 million in September. Small business commitments dropped to $247 million, down from $393 million in September.
Renewal levels for existing commercial and industrial loans also fell to $1.8 billion in October, compared to $2.2 billion in September.
Mortgage and loan originations, however, increased in the month of October, to $1.7 billion from September’s $1.4 billion.
New credit card extensions also increased slightly, to $125 million over $124 million in September.
Fifth Third (NASDAQ: FITB), headquartered in Cincinnati, is the Tri-State’s largest bank, and has 16 affiliates with about 1,300 banking centers and more than 2,300 ATMs in Ohio, Kentucky, Indiana, Georgia, North Carolina, Michigan, Illinois, Florida, Tennessee, West Virginia, Pennsylvania, and Missouri.
Saturday, December 19, 2009
Robert Shumake Fraud Report - Tax Preparer Commits Bank Fraud
Here is an article that was recently posted by The Associated Press:
Wis. woman accused of $3.3 million bank fraud
MADISON, Wis. — A 44-year-old tax preparer from Sun Prairie, Wis., faces federal charges for allegedly defrauding a bank of $3.3 million.
Gail L. Mendez was arrested Thursday in Laredo, Texas but indicted Sept. 30.
Mendez, who worked as Mendez Connections, and others not named in the indictment allegedly took part in mortgage fraud in 2006 and 2007. They are accused of submitting false income tax returns to Park Bank in Madison while applying for 19 loans for more than $3.3 million.
The indictment also said Mendez applied for a $349,000 loan from AmTrust Bank, a Cleveland-based online bank. She allegedly submitted 2005 and 2006 income tax returns showing an income $169,237 and $170,825, respectively, but only earned $29,402 and $40,868.
No attorney was listed in online court records. A message left at her office wasn't immediately returned Friday.
Wis. woman accused of $3.3 million bank fraud
MADISON, Wis. — A 44-year-old tax preparer from Sun Prairie, Wis., faces federal charges for allegedly defrauding a bank of $3.3 million.
Gail L. Mendez was arrested Thursday in Laredo, Texas but indicted Sept. 30.
Mendez, who worked as Mendez Connections, and others not named in the indictment allegedly took part in mortgage fraud in 2006 and 2007. They are accused of submitting false income tax returns to Park Bank in Madison while applying for 19 loans for more than $3.3 million.
The indictment also said Mendez applied for a $349,000 loan from AmTrust Bank, a Cleveland-based online bank. She allegedly submitted 2005 and 2006 income tax returns showing an income $169,237 and $170,825, respectively, but only earned $29,402 and $40,868.
No attorney was listed in online court records. A message left at her office wasn't immediately returned Friday.
Robert Shumake Fraud Reports - Identity Theft and Bank Fraud
Here is an article I would like to share with my readers:
Clarksville man charged with bank fraud, ID theft
BY CHRIS SMITH • THE LEAF-CHRONICLE • DECEMBER 19, 2009
•
A Clarksville man was indicted by a federal grand jury this week on charges of bank fraud, aggravated identity theft and Social Security number misuse.
Jerome Henderson Jr., 37, was indicted Wednesday, according to a news release from the U.S. Attorney's Office in Nashville.
The seven-count indictment alleges that from March 2005 to May 2007, Henderson engaged in a scheme to defraud mortgage lenders and financial institutions by submitting multiple fraudulent mortgage loan applications to lenders and financial institutions for the purchase of properties in and around Nashville and Clarksville.
"Given the current strain on the housing and mortgage industries, our office takes very seriously, the prosecution of individuals and entities that defraud financial institutions," U.S. Attorney Ed Yarbrough said in the release.
"Anyone submitting false or misleading information in loan applications or engaging in any other kind of mortgage fraud is on notice that the United States Attorney's Office and other state and federal law enforcement agencies are focused on rooting out such illegal conduct."
The indictment further alleges that in multiple mortgage loan applications, Henderson lied about his income, assets and his financial suitability to qualify for a loan.
Henderson created fictitious and forged documents, including false Social Security numbers, a forged Army Contractor Badge, and forged W-2 forms, according to the indictment. In addition, Henderson created false bank statements that showed fictitious direct deposits into accounts bearing his name, and containing a bogus physical address.
If convicted, Henderson faces up to 32 years in prison and a $1 million fine, the release said.
This case is being investigated by the Secret Service, the Veteran's Administration Office of the Inspector General, and the Memphis Field Office of the Federal Bureau of Investigation.
Chris Smith is Senior Editor/Local News for The Leaf-Chronicle and can be reached at 245-0282 or by e-mail at chrissmith@theleafchronicle.com.
Clarksville man charged with bank fraud, ID theft
BY CHRIS SMITH • THE LEAF-CHRONICLE • DECEMBER 19, 2009
•
A Clarksville man was indicted by a federal grand jury this week on charges of bank fraud, aggravated identity theft and Social Security number misuse.
Jerome Henderson Jr., 37, was indicted Wednesday, according to a news release from the U.S. Attorney's Office in Nashville.
The seven-count indictment alleges that from March 2005 to May 2007, Henderson engaged in a scheme to defraud mortgage lenders and financial institutions by submitting multiple fraudulent mortgage loan applications to lenders and financial institutions for the purchase of properties in and around Nashville and Clarksville.
"Given the current strain on the housing and mortgage industries, our office takes very seriously, the prosecution of individuals and entities that defraud financial institutions," U.S. Attorney Ed Yarbrough said in the release.
"Anyone submitting false or misleading information in loan applications or engaging in any other kind of mortgage fraud is on notice that the United States Attorney's Office and other state and federal law enforcement agencies are focused on rooting out such illegal conduct."
The indictment further alleges that in multiple mortgage loan applications, Henderson lied about his income, assets and his financial suitability to qualify for a loan.
Henderson created fictitious and forged documents, including false Social Security numbers, a forged Army Contractor Badge, and forged W-2 forms, according to the indictment. In addition, Henderson created false bank statements that showed fictitious direct deposits into accounts bearing his name, and containing a bogus physical address.
If convicted, Henderson faces up to 32 years in prison and a $1 million fine, the release said.
This case is being investigated by the Secret Service, the Veteran's Administration Office of the Inspector General, and the Memphis Field Office of the Federal Bureau of Investigation.
Chris Smith is Senior Editor/Local News for The Leaf-Chronicle and can be reached at 245-0282 or by e-mail at chrissmith@theleafchronicle.com.
Sunday, March 8, 2009
Mortgage and Real Estate Scams in Michigan
The downward trend in the real estate market has encouraged mortgage fraud perpetrators to develop and utilize many schemes. The recent rise in foreclosures along with a depressed market, declining values and decreased demand has placed pressure on lenders, builders and home sellers. Fewer loans will be originated as lending practices tighten in response to the subprime lending crisis. Identity theft is a popular tool for use in mortgage fraud. With higher lending standards being enforced, individuals with good credit are valuable to perpetrators; therefore, at risk for identity theft and mortgage fraud schemes.
Illegal Property Flipping
Illegal flipping is a popular scam; here’s an example: An investor purchases a property for $20,000 and has the property fraudulently appraised for $80,000. The flipper then sells the house for $80,000 to a straw buyer who is able to get an 80% loan of $64,000. The flipper makes a $44,000 profit, while the home goes into foreclosure. The bank is left with a $64,000 mortgage owed on a home that is worth only $20,000. If the mortgage is FHA insured, the government absorbs the loss.
Builder-Bailout Schemes
Builder-bailout schemes occur when a builder or developer has difficulty selling their inventory, so they use fraudulent methods to sell the homes. This is most common in a depressed market and typically involves builders offering incentives to buyers which are not disclosed on the mortgage loan documents. For example, a builder wants to sell a house for $200,000. He begins by getting an inflated appraisal for $240,000 and finds a buyer. The lender funds the mortgage, believing that the buyer already paid the builder a 20% down payment of $40,000. The builder gets his $200,000 at closing and forgives the down payment; the lender has funded 100% of the home’s value. If the home should foreclose, the lender has no equity.
Seller Assistance Scams
Mortgage fraud perpetrators exploit the depreciating real estate market by assisting sellers when they provide buyers to conduct sales that are based on inflated appraisals. In a typical scam, the perpetrator determines the amount the seller is willing to accept and then hires an appraiser to inflate the value. He then finds a buyer who will obtain a mortgage for the inflated amount so the seller gets his asking price and the perpetrator gets the difference between the market value and the inflated value. If the mortgage should default, the lender forecloses, but is not able to sell the house for what is owed on loan because of the inflated appraised value.
Short Sale Scams
With the increase in foreclosures, short sales are a way out for many distressed homeowners. Lenders cut their losses by agreeing to accept less than what is owed to them on the mortgage rather than waiting out the foreclosure process while property values continue to decline. Here is an example of a pre-meditated short sale scam:
The perpetrator finds a straw buyer to purchase a property, providing fraudulent information about the buyer and the value of the house. He may even get the straw buyer to refinance the home to borrow money for repairs; he pockets the money and repairs are not made. He defaults on the payments and the home goes into foreclosure. When the straw buyer shows hardship and informs the lender that he cannot make the payments, he recommends the perpetrator as a buyer who will purchase the home on a short sale. The perpetrator gets the lender to accept less that he would receive in a foreclosure sale, and then sells the property for its actual value, or gets an inflated appraisal to conduct an illegal flip.
Foreclosure Rescue Scams
Escalating foreclosures have provided the opportunity for scammers who claim to be foreclosure help consultants who convince homeowners that they can help them save their homes from foreclosure. Some will agree to take over the mortgage payments while the homeowner rents their own home. Of course, they keep the rent payments but do not pay the mortgage payments. If the home has a lot of equity, the scammer may forge a deed, or trick the homeowner into signing a deed so they can secure a second loan without the homeowner’s knowledge, thus stripping the property’s equity. Many of these types of scams also involve an upfront consulting fee which adds to the scammer’s profit.
Read 10 Tips for Protecting Yourself from Real Estate Scams and Mortgage Fraud
Illegal Property Flipping
Illegal flipping is a popular scam; here’s an example: An investor purchases a property for $20,000 and has the property fraudulently appraised for $80,000. The flipper then sells the house for $80,000 to a straw buyer who is able to get an 80% loan of $64,000. The flipper makes a $44,000 profit, while the home goes into foreclosure. The bank is left with a $64,000 mortgage owed on a home that is worth only $20,000. If the mortgage is FHA insured, the government absorbs the loss.
Builder-Bailout Schemes
Builder-bailout schemes occur when a builder or developer has difficulty selling their inventory, so they use fraudulent methods to sell the homes. This is most common in a depressed market and typically involves builders offering incentives to buyers which are not disclosed on the mortgage loan documents. For example, a builder wants to sell a house for $200,000. He begins by getting an inflated appraisal for $240,000 and finds a buyer. The lender funds the mortgage, believing that the buyer already paid the builder a 20% down payment of $40,000. The builder gets his $200,000 at closing and forgives the down payment; the lender has funded 100% of the home’s value. If the home should foreclose, the lender has no equity.
Seller Assistance Scams
Mortgage fraud perpetrators exploit the depreciating real estate market by assisting sellers when they provide buyers to conduct sales that are based on inflated appraisals. In a typical scam, the perpetrator determines the amount the seller is willing to accept and then hires an appraiser to inflate the value. He then finds a buyer who will obtain a mortgage for the inflated amount so the seller gets his asking price and the perpetrator gets the difference between the market value and the inflated value. If the mortgage should default, the lender forecloses, but is not able to sell the house for what is owed on loan because of the inflated appraised value.
Short Sale Scams
With the increase in foreclosures, short sales are a way out for many distressed homeowners. Lenders cut their losses by agreeing to accept less than what is owed to them on the mortgage rather than waiting out the foreclosure process while property values continue to decline. Here is an example of a pre-meditated short sale scam:
The perpetrator finds a straw buyer to purchase a property, providing fraudulent information about the buyer and the value of the house. He may even get the straw buyer to refinance the home to borrow money for repairs; he pockets the money and repairs are not made. He defaults on the payments and the home goes into foreclosure. When the straw buyer shows hardship and informs the lender that he cannot make the payments, he recommends the perpetrator as a buyer who will purchase the home on a short sale. The perpetrator gets the lender to accept less that he would receive in a foreclosure sale, and then sells the property for its actual value, or gets an inflated appraisal to conduct an illegal flip.
Foreclosure Rescue Scams
Escalating foreclosures have provided the opportunity for scammers who claim to be foreclosure help consultants who convince homeowners that they can help them save their homes from foreclosure. Some will agree to take over the mortgage payments while the homeowner rents their own home. Of course, they keep the rent payments but do not pay the mortgage payments. If the home has a lot of equity, the scammer may forge a deed, or trick the homeowner into signing a deed so they can secure a second loan without the homeowner’s knowledge, thus stripping the property’s equity. Many of these types of scams also involve an upfront consulting fee which adds to the scammer’s profit.
Read 10 Tips for Protecting Yourself from Real Estate Scams and Mortgage Fraud
Robert Shumake’s 10 Tips to Protect yourself from Mortgage Fraud
Mortgage fraud is one of the fastest growing white-collar crimes in the country with Michigan being one of the top 10 locations for real estate scams. The downward trend in the real estate market has encouraged mortgage fraud perpetrators to develop and utilize many schemes. The recent rise in foreclosures along with a depressed market, declining values and decreased demand has placed pressure on lenders, builders and home sellers. Fewer loans will be originated as lending practices tighten in response to the subprime lending crisis. Identity theft is a popular tool for use in mortgage fraud. With higher lending standards being enforced, individuals with good credit are valuable to perpetrators; therefore, at risk for identity theft and mortgage fraud schemes.
How it Works
Mortgage fraud is divided into two major categories; fraud for profit and fraud for housing. Fraud for housing involves misrepresenting income/expense and assets/liabilities information on an application in order to obtain funding to buy a home. Fraud for profit involves industry professionals including mortgage brokers, property appraisers and real estate agents who over state a buyer’s income, assets, property value and other information to trick lenders into approving mortgages.
Sometimes people commit identity theft to obtain housing loans, sell someone else’s home or take over other’s property. Here are some tips to protect yourself from becoming the victim of mortgage fraud:
• Never sign blank or incomplete documents
• Never purchase property that you have not seen and personally inspected
• Use only licensed mortgage bankers or lenders; find a broker through the National Association of Mortgage Brokers (http://www.namb.org)
• Have a local, licensed real estate agent do a BPO (Broker’s Price Opinion) to determine value
• Don’t be pressured into using a particular lender, real estate agent or appraiser
• Know your rights as a mortgage borrower
• Don’t buy into get-rich-quick schemes of instant equity or investment property using your own name – investment property should be owned by an LLC to protect you from liability exposure
• Do not work with someone who suggest that you lie on your mortgage application
• Beware of lenders who charge excessive fees and prepayment penalties
• Most importantly, be sure to look over and understand your truth in lending disclosure documents which spell out the terms of your mortgage, before signing a contract with a mortgage company
If you are in doubt, have an attorney look over your documents and advise you. The fee for this service is little compared to the tens of thousands you can be charged for dealing with problems caused by mortgage fraud later.
How it Works
Mortgage fraud is divided into two major categories; fraud for profit and fraud for housing. Fraud for housing involves misrepresenting income/expense and assets/liabilities information on an application in order to obtain funding to buy a home. Fraud for profit involves industry professionals including mortgage brokers, property appraisers and real estate agents who over state a buyer’s income, assets, property value and other information to trick lenders into approving mortgages.
Sometimes people commit identity theft to obtain housing loans, sell someone else’s home or take over other’s property. Here are some tips to protect yourself from becoming the victim of mortgage fraud:
• Never sign blank or incomplete documents
• Never purchase property that you have not seen and personally inspected
• Use only licensed mortgage bankers or lenders; find a broker through the National Association of Mortgage Brokers (http://www.namb.org)
• Have a local, licensed real estate agent do a BPO (Broker’s Price Opinion) to determine value
• Don’t be pressured into using a particular lender, real estate agent or appraiser
• Know your rights as a mortgage borrower
• Don’t buy into get-rich-quick schemes of instant equity or investment property using your own name – investment property should be owned by an LLC to protect you from liability exposure
• Do not work with someone who suggest that you lie on your mortgage application
• Beware of lenders who charge excessive fees and prepayment penalties
• Most importantly, be sure to look over and understand your truth in lending disclosure documents which spell out the terms of your mortgage, before signing a contract with a mortgage company
If you are in doubt, have an attorney look over your documents and advise you. The fee for this service is little compared to the tens of thousands you can be charged for dealing with problems caused by mortgage fraud later.
Robert Shumake addresses Mortgage Fraud and Real Estate Scams in Michigan
Realtors and mortgage loan officers depend on closings and loan originations to earn commissions to make a living; the depressed market has encouraged many to commit fraud
Detroit, MI -- Mortgage fraud is on the rise due to a declining real estate market and an increase in foreclosures. The number of real estate sales is down; therefore, realtors and mortgage lenders, who are paid on commissions, are not making money. These circumstances have encouraged real estate agents and mortgage lenders to commit fraud to close deals and make commissions.
Robert Shumake is the CEO of Inheritance Investment Group in Detroit, a company who manages and develops real estate. He is a real estate expert; not one who would be expected to be a victim of fraud. “Anyone can be a victim of real estate fraud,” says Shumake. “Sometimes people will commit identity theft to obtain a housing loan, sell someone else’s house or take over someone else’s property.”
When Robert Shumake tried to sell some investment property, he found out that he was a victim of fraud. Someone has fraudulently executed a quit claim deed to transfer title of ownership, move into the property and take out building permits to make improvements. It took 2-1/2 years and over $60,000 in legal fees resolve the matter. “You can spend tens of thousands of dollars and still not be guaranteed your property,” said Shumake.
Robert Shumake’s experience led him to join with Michigan state officials to launch a mortgage fraud task force to aid victims and promote consumer awareness and prevention. Robert has made it his mission to help prevent this from happening to others.
There are steps people can take to protect themselves from mortgage fraud and real estate scams. Robert has written and published articles about the many ways predators commit fraud. According to Shumake, understanding how the scams are pulled off is the first step to preventing them. Robert is working on compiling his articles into blogs on the internet for consumers to read. Learn about the fraudulent activity in today’s market at http://robertshumakemortgagefraud.wordpress.com/
Contact:
Robert Shumake
Inheritance Capital Group, LLC
25900 West 11 Mile Road
Southfield, MI 48034
Phone: 248-443-0939
Email: nmccalister@icgreit.com
Detroit, MI -- Mortgage fraud is on the rise due to a declining real estate market and an increase in foreclosures. The number of real estate sales is down; therefore, realtors and mortgage lenders, who are paid on commissions, are not making money. These circumstances have encouraged real estate agents and mortgage lenders to commit fraud to close deals and make commissions.
Robert Shumake is the CEO of Inheritance Investment Group in Detroit, a company who manages and develops real estate. He is a real estate expert; not one who would be expected to be a victim of fraud. “Anyone can be a victim of real estate fraud,” says Shumake. “Sometimes people will commit identity theft to obtain a housing loan, sell someone else’s house or take over someone else’s property.”
When Robert Shumake tried to sell some investment property, he found out that he was a victim of fraud. Someone has fraudulently executed a quit claim deed to transfer title of ownership, move into the property and take out building permits to make improvements. It took 2-1/2 years and over $60,000 in legal fees resolve the matter. “You can spend tens of thousands of dollars and still not be guaranteed your property,” said Shumake.
Robert Shumake’s experience led him to join with Michigan state officials to launch a mortgage fraud task force to aid victims and promote consumer awareness and prevention. Robert has made it his mission to help prevent this from happening to others.
There are steps people can take to protect themselves from mortgage fraud and real estate scams. Robert has written and published articles about the many ways predators commit fraud. According to Shumake, understanding how the scams are pulled off is the first step to preventing them. Robert is working on compiling his articles into blogs on the internet for consumers to read. Learn about the fraudulent activity in today’s market at http://robertshumakemortgagefraud.wordpress.com/
Contact:
Robert Shumake
Inheritance Capital Group, LLC
25900 West 11 Mile Road
Southfield, MI 48034
Phone: 248-443-0939
Email: nmccalister@icgreit.com
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