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Attorney General Brown Shuts Down Mortgage Scam Artists

By
Real Estate Agent with 1st Action Real Estate

For a copy of the indictment and to read the lengthy release detailing the mechanics of this scam and interviews with victims, please follow the source link. This scam has been going on for some time now and involves THOUSANDS of victims in LA and San Bernardino county. The scam involved high pressure sales tactics, bait-and-switch loan documents and multiple other predatory practices.

Another one bites the dust - but too late to save thousands of people from being victimized and many lost homes.

Source: http://ag.ca.gov/newsalerts/release.php?id=1533&

08-019
FOR IMMEDIATE RELEASE
(916) 324-5500

LOS ANGELES-California Attorney General Edmund G. Brown Jr. today shut down Lifetime Financial, Nations Mortgage, Greenleaf Lending, Virtual Escrow, Olympic Escrow and Direct Credit Solutions, accusing the predatory lending companies of pushing homeowners into "illegal and unconscionable loans."

"As the mortgage crisis worsens, a growing number of fly-by-night companies are employing utterly brazen tactics to push homeowners into illegal and unconscionable loans," Attorney General Brown said. "The illegal sales practices of these companies, run by Eric Pony and his family, included psychological pressure, forgery, and outright lies," Brown added.

The companies ran a complex predatory lending scheme using bait and switch tactics to victimize thousands of consumers in California, many of whom have lost their homes.

Yesterday, the Los Angeles Superior Court, at the request of the attorney general, froze all the companies' real estate and bank accounts and enjoined them from engaging in further predatory practices. The freeze order also included expensive cars and millions of dollars in private real estate owned by Eric Pony. Brown also seeks an estimated $20 million in penalties and restitution.

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.

San Bernardino District Attorney Michael A. Ramos also announced that several individuals affiliated with Lifetime Financial were arrested this morning on charges including conspiracy, grand theft, forgery and elder abuse. "These predatory lenders have taken advantage of people who placed their trust, as well as their homes, in the hands of these unscrupulous business people," San Bernardino District Attorney Ramos said.

THE CHARGES

The attorney general is seeking civil penalties of $2,500 for each violation of law and full restitution as well as a permanent injunction against operation these businesses. Penalties and restitution are estimated to exceed $20 million. The following assets are subject of the seizure order:

· Bank accounts at Wells Fargo, Bank of America, Citibank, East West Bank, First Federal Bank and Washington Mutual

· 16 separate private and commercial properties, valued at more than $6 million, in Tarzana, Canoga Park, Studio City, Las Vegas, San Antonio, Sherman Oaks, North Hollywood and Los Angeles

· All personal property, especially luxury cars, including: 4 Mercedes Benzs, 2 Ferraris, 1 Land Rover, 1 BMW, 1 Audi and 1 Bentley


Other agencies which assisted with the investigation that led to today's lawsuit include: Los Angeles Department of Consumer of Affairs, California Department of Real Estate, the California Department of Motor Vehicles and the San Bernardino District Attorney.

Gene Wunderlich - Selling Southwest California Homes including Murrieta, Temecula & the Southern California Wine Country.

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Comments(3)

Richard Pollak
self - Alvin, TX

I need help in Texas, just posted my case that relates to international Banking, I evidenced false loan history and my attorneys were denied loan history, then stay of my home was released and I requested loan history from officer that wasn't loan manager in Florida, then my attorney claimed lender theft but missed hearing, I'm still a squatter at my home waiting.

Keep exposing them lenders. Mr. Gene

Mar 19, 2008 01:15 PM
Gene Wunderlich
1st Action Real Estate - Murrieta, CA
Realtor & Legislative Liaison

Hi Richard - I was trying to follow the thread in your post and couldn't exactly figure it out. It sounds like you need help and hopefully your attorney can get it for you. If you feel you have been a victim of fraud, you should also contact the District Attorney in your county, or whatever the Texas equivalent is, as well as your state Dept. of Real Estate, your local Association, the state Attorney General and your local FBI white collar crime guy. These things seem to take forever even when the problem is apparent to even a casual observer. Most law enforcement, especially local, are unable to deal with this type of crime as it's too sophisticated and time consuming for them.

Best of luck with your case.

Mar 19, 2008 02:22 PM
David Saks
Memphis, TN
Broker / Industry Analyst

Sounds like the usual stuff plaguing the industry, these days, Gene.

Bait and switch - rate, fees, terms all change from GFE to close
Non-disclosure - loan originators telling you what they are offering with out providing proper up-front GFEs and other disclosures
Property over-valuation - originators inflating your property value to push down the quoted rate.
Rate buy downs - excess fees charged as discount points paid to the lender to get you the lowest rate possible.
Short-locks - loan originators locking your loan for 15 days to improve their offered pricing; then reneging on the offer when the lock expires early.
Adjustable products pitched as fixed loans - ARMs and negative amortizing loans pitched as fixed rate products and many, many other types of fraud.
By choosing the right person in the first place the borrower, buyer or seller should be able to avoid many of these problems by focusing on the wrong aspects of the transaction in the beginning. I believe that the originators should compete based on their personal and professional merits and qualifications up-front and then bring the products in for a closer look. I'm tired of hearing the expression, "banks compete, you win", aren't you? It's garbage...just plain garbage.   

Thanks for sharing the story.

Mar 24, 2008 10:47 AM