Home : Blogs : Michael La Fay & Sara Edwards : Sara Lee's Point of View

Mortgage Fraud Hits Alaska..... Again :-/

INAPPROPRIATE COMMENTS REGARDING THE NATURE OF THOSE ACCUSED WILL BE DELETED.

WHILE I DO NOT LIKE TO EDIT COMMENTS, I SEE NO PLACE FOR PLACING THEIR PERSONAL HISTORY OF PAST DRUG USE OR OTHER ACCUSATIONS HERE.

THIS BLOG IS INFORMATIVE AND MEANS TO SHED LIGHT ON THE MEANING OF "STRAW BUYER".

http://www.adn.com/news/alaska/story/9525985p-9436772c.html

OK so I posted this blog this morning before I had to run off to a very important meeting and left it very vague with a link to the article in the Anchorage Daily News :-)

But I wanted to actually take some time and revisit this post. For the 2nd time in about 1-1/2 years Alaska is seeing another federal case of Mortgage Fraud!

When reading these articles there are many terms such as "straw buyer" used, and maybe it's just me, but I had no idea what the smack a straw buyer was until about a month ago. Ken Cook posted What Is A "Straw" Buyer? here on AR, and it has some good detailed information as to how this scam works.

In my naivety I never could have imagined people really do this sort of thing and here is how it is said to work:

HOW ONE OF THE ALLEGED SCHEMES WORKED

The same house is sold three times

FIRST SALE

1. Innocent seller offers house for $240,000.

2. Ringleader buys the house for $240,000.

SECOND SALE

3. Immediately after buying the house, the ringleader sells it to a hand-picked straw buyer for $310,000.

4. Higher price is "justified" by crooked appraiser, who values house at $310,000.

5. Straw buyer obtains a $250,000 loan -- and should put up a $60,000 down payment -- for the $310,000 purchase.

6. Straw buyer actually makes no down payment, but the bank making the loan doesn't know that. A crooked title agent rigs paperwork to look as if the down payment was made.

7. Ringleader uses loan to pay off the first sale, then pockets $10,000 profit.

THIRD SALE

8. Ringleader puts the house up for sale again.

9. Appraiser produces second false appraisal for $390,000.

10. Ringleader entices the buyer by promising a $50,000 "cash back" after closing the sale for $390,000.

11. Ringleader pockets another $90,000 ($390,000 minus $50,000 cash back minus $250,000 loan). His total profit now is $100,000.

-- Compiled by Elizabeth Bluemink and Bill White from conversations with the U.S. Attorney's office.

http://www.adn.com/news/alaska/story/9525985p-9436772c.html

Sad Sad Sad !!!

Posted by Michael La Fay & Sara Edwards on 12/18/2007 11:21 AM

Comments (9)

mortgage fraud, alaska, lenders, phony loans

This post has been included in Alaska Information
Post is included in group: Realtors®
Post is included in group: RE/MAX Active Rain Bloggers
Post is included in group: What NOT to do in REAL ESTATE - BAD BUSINESS
Post is included in group: National Women's Council of Realtors - Not Just for Women!
Post is included in group: Family Ties

9 Comments on Mortgage Fraud Hits Alaska..... Again :-/

This is so sad, who would have thought ALASKA?? >>>>>>> not me!!

12/18/2007 11:31 AM

by Tampa Real Estate | Florida Relocation | Land | LakeFront Home | Katrina Madewell (Charles Rutenberg Rlty- More than 3,500 agents(813) 235-9889)

Sara, This is very sad and puts a bad mark on the whole industry! It makes it hard for those of us who are trying to do an honest job.

12/18/2007 11:33 AM

by Roberta LaRocca - REALTOR® Las Vegas (Keller Williams Realty The Marketplace)

Sara,

Don Murray are you kidding me!!! I've worked on and off with one of your agents up in Anchorage for over 6 years, and he's been on the other side of the transaction several times. He always seemed like a great guy, so it's shocking to hear what happened. Holli Stroud worked on several files several years ago, and it's surprising to hear about her as well.

I've always been at a disadvantage with Anchorage Mortgage lenders. They've accused me of everything in the book because I'm from out of state. The reality is that our laws where I'm from are much stricter then anything I've seen in Alaska. Hopefully you guys will adopt some strict licensing laws when it comes to mortgage loan officers.

This Lance Lockard character is a member of one of my clients church's. I was introduced to him about 6 years ago. I spoke to him one time and realized that he was a dirty player. This was before theses alleged incidents, so I think he's been pushing these schemes for a long time. I'll bet a nickel that this guy get's the biggest penalty, and probably will be the only one serving time in the pokey. But Don and Facer, and Holli are done when it comes to real estate. They'll never be able to get another job in this industry. Tough price to pay, and the unfortunate thing is they probably didn't make much at all compared to this Lance Lockard jerk!

Anyway, good luck to you guys up there!

Karl Christen

12/18/2007 05:33 PM

by Karl Christen Utah Mortgages~Mortgage Planning Expert (Envision Lending Group)

Listen, wrong is wrong but can we remember that not only are the victims affected but so are the families of the accused. I grew up with Lance and his family, I don't know the whole story but it is a shock to find out about all of this. Before we as the public become the judge, jury and executioner, we need to remember there are many people hurting and scared, don't judge people you don't know. It is the holidays and a time to have our hearts open, lets ry to do the same with our minds. Who truly knows the circumstances that leads one in any direction they may go, good or bad.

12/20/2007 02:35 PM

by Kari E

Please understand Kari that no where in this blog post am I pointing blame or passing judgement on any of the accused. This blog is intended to be informational and addresses the meaning of "straw buyer"with reference to the article in the Anchorage Daily news.

12/20/2007 03:30 PM

by Michael La Fay & Sara Edwards (Meadow Lakes Supply Co.)

Hi Sara,

After attending a couple of mortgage fraud classes this year, I say THANK YOU for addressing this topic. Unfortunately, it is much more prevalent than we care to admit. Education is one way to minimize it. (Note, I say this as a former CPA that specialized in investigating fraud.) Believe it or not, if someone is reading this that works in any sizable area, they have probably had someone that lives in their area try to pull of this scheme. It may have not been reported or caught.....but.......

Sondra

12/21/2007 01:00 AM

by Sondra Meyer (United Country Brazos Valley Realty)

Thank you for mentioning classes Sondra! I feel we truly need them here, and I hope to get in touch with the powers that be to see that we have them offered...

12/21/2007 01:03 AM

by Michael La Fay & Sara Edwards (Meadow Lakes Supply Co.)

Wow! What a scam, I can't believe people actually thought this out that far and even got that far before someone caught them.

12/22/2007 12:16 AM

by Todd Clark (Realtor), GRI (Washington Co, Beaverton, Oregon) (Kastings & Associates, Oregon)

That's some interesting information. Thanks for bringing it up.

01/03/2008 03:43 PM

by Yasha Lange (Olinger Insurance Group LLC)

Leave a response…

Name:

Notify me of new comments:

Comment:

What does the graphic say?