Welcome to The Home Equity Theft Reporter, a blog dedicated to informing the consumer public and the legal profession about Home Equity Theft issues. This blog will consist of information describing the various forms of Home Equity Theft and links to news reports & other informational sources from throughout the country about the victims of Home Equity Theft and what government authorities and others are doing about it.
Monday, November 16, 2015
Final Defendant In Syracuse-Area Rent-To-Own Racket Sentenced; Gets 6 Months For Role In Scam That Bought Dilapidated Foreclosed HUD Homes, Peddled Them To Aspiring 1st Time Homebuyers w/ Crappy Credit, Then Used Inflated Appraisals To Fraudulently Refinance Properties & Pocket The Cash Out From Under Victims As They Were Ready To Claim Deeds
From the Office of the New York Attorney General:
Attorney General Eric T. Schneiderman [] announced the sentencing of Tracie Clark, 44, of Wimauma, Florida, for her role in a million-dollar residential mortgage fraud ring that operated in the Syracuse area. [...] Clark was sentenced [] to 6 months in jail and five years of probation [...] in Onondaga County Court.
“The state prison sentence announced [] brings to justice a defendant who defrauded numerous first-time homeowners,” said Attorney General Schneiderman. “The shameful actions of the defendants in this case harmed many vulnerable New Yorkers who wanted nothing more than a chance at homeownership.”
Clark played a vital role in a mortgage fraud ring led by former attorney Theresa Sanders, which operated for years and netted more than $1 million by preying upon first-time home buyers and institutional mortgage lenders.
Sanders purchased dozens of dilapidated homes in and around the City of Syracuse from the United States Department of Housing and Urban Development, using powers of attorney in the names of family members.
Sanders then advertised the homes as rent-to-own opportunities, seeking out first-time home buyers with low credit, who were now offered the chance to own their own homes with no down payments and no closing costs. Sanders promised to work to improve their credit and that after one year of renting the property, they could obtain first-purchase mortgages to buy the homes they inhabited.
In anticipation of the sale of each property to a tenant, Sanders obtained a second appraisal, typically from [appraiser Steven] Essig, which was higher than the previous appraisal she had ordered. The inflated appraised values enabled Sanders to apply for refinance amounts to financial lenders that were significantly higher than the actual values of the properties.
After tenants had paid rent for approximately one year to AFA America, a shell company owned by Sanders, Clark prepared forged mortgage loan applications for the properties. Rather than submitting the tenants’ mortgage applications as first-time homeowners, Sanders and Clark submitted applications for refinances of the properties. Sanders and Clark fraudulently listed AFA America as holding a first mortgage on the property, although AFA America had made no such mortgage loan to the tenants. Institutional lenders, believing they were paying off underlying mortgages held by AFA America, wired closing funds to accounts controlled by Theresa Sanders, who then pocketed the money.
To prevent discovery of their crimes, the defendants used a variety of excuses to withhold from the buyers the deeds to the properties, which caused the buyers to suffer numerous additional hardships stemming from their difficulties in demonstrating that they were the rightful owners of the properties.
Clark is the fifth and final participant of the mortgage fraud ring to be sentenced. Previously, Sanders was sentenced to 2 1/3 to 7 years in state prison for her role in the mortgage fraud scheme. Michelle Powers, a licensed attorney who conducted the closings for the refinanced loans, was sentenced to 6 months in jail and 5 years probation. Appraiser Steven Essig and property manager Paul Sakowski were also convicted of felonies and were each sentenced to 5 years probation.
CBC News: Betrayal of Trust (A CBC investigation reveals how lawyers across Canada have misappropriated and mishandled clients money, to the tune of tens of millions of dollars, or sometimes even charging vulnerable people top dollar for shoddy services)
Land Contract/Contract For Deed/Rent-To-Own Rackets
The New York Times: The Housing Trap (In the wake of the housing crisis, low-income families have turned to seller financing to buy homes but these deals can be a money trap)
Beware The Fine Print: Consumers Forced To Sign Away Their Rights To Use Court System
The NY Times: Arbitration Everywhere, Stacking the Deck of Justice(Part 1 in series examining how clauses buried in tens of millions of contracts have deprived Americans of one of their most fundamental constitutional rights: their day in court)
Foreclosure Mills' Abysmal Record In Complying With New NYS Foreclosure Requirements
Justice Deceived: How Large Foreclosure Firms Subvert State Regulations Protecting Homeowners
MFY Legal Services Report On Questionable Practices By Process Servers In Debt Collection Cases
Justice Disserved: A Preliminary Analysis of the Exceptionally
Low Appearance Rate by Defendants in Lawsuits Filed in the Civil Court of the City of New York
Mortgage Mess Redux: Robo-Signers Return (A Reuters investigation finds that many banks are still employing the controversial foreclosure practices that sparked a major outcry last year)
CNN Video: As Foreclosures Mount, Florida Court Turns To 'Rocket Docket'
The Wall Street Journal: A Florida Court's 'Rocket Docket' Blasts Through Foreclosure Cases (2 Questions, 15 Seconds, 45 Days to Get Out; 'What's to Talk About?' Says a Judge)
"Produce The Note" Strategy When Dealing With Missing Promissory Notes In Foreclosure Actions
ABC Video: Fighting Against Foreclosure (Some homeowners have found a new tactic to keep the banks at bay)
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