Tuesday, June 02, 2015

Upstate NY Appraiser Cops Plea For Role In Mortgage Fraud Scheme/Rent-To-Own Racket That Unloaded Dilapidated HUD Homes Onto Unwitting First-Time Homebuyers With Crappy Credit, Then Pocketed Refinancing Proceeds Without Paying Off Existing Liens

From the Office of the New York Attorney General:
  • Attorney General Eric T. Schneiderman announced [] the conviction of Steven Essig, a licensed appraiser and the owner of an appraisal company in Syracuse, on a felony charge stemming from making false entries in an appraisal report. The falsified report was used to obtain a mortgage as part of a million dollar mortgage fraud scheme.

    “It is simply appalling that any individual would seek to take advantage of new homeowners in this manner,” said Attorney General Eric Schneiderman. “[This] conviction sends a message that my office is committed to protecting New York families from predatory fraudsters.”

    Essig, of Syracuse, today entered a guilty plea before the Honorable Anthony F. Aloi, Onondaga County Court Judge, to the charge of Falsifying Business Records in the First Degree, a Class E felony. As part of his plea, Essig is expected to be sentenced to five years’ probation and must surrender his appraisal license, preventing him from conducting any further appraisals in New York State.

    Essig was charged as part of a Syracuse-based mortgage fraud ring that operated for several years and netted more than $1 million by preying upon first-time home buyers and institutional lenders. The ring purchased dozens of dilapidated homes in and around the City of Syracuse from the United States Department of Housing and Urban Development, and then had them appraised, sometimes for more than what they had just paid for them.

    After paying for the properties, the ring took mortgages out on each of the homes, usually in the names of family members. The homes were advertised as rent-to-own opportunities to entice first-time home buyers with low credit by offering the chance to own their own homes with no down payments and no closing costs. Members of the ring then applied for what they told lenders were refinance loans in the names of these first-time home buyers, despite the fact that the first-time home buyers had never before owned the homes they were refinancing. Lenders, believing they were paying off underlying mortgages, wired closing funds to accounts controlled by the ring, who then pocketed the money.

    Essig is the owner and operator of Essig Appraisals, an appraisal company that specialized in residential appraisals.
Source: A.G. Schneiderman Announces Conviction Of Syracuse Appraiser Involved In Mortgage Fraud Scheme (Defendant Steven Essig Pleads Guilty To Felony Charge For Falsifying Appraisal Records; Schneiderman: We Are Committed To Protecting New York Families From Predatory Fraudsters).

In a related story in this case, see A.G. Schneiderman Announces Prison Sentence For Attorney Who Ran Million-Dollar Mortgage Fraud Scheme (Defendant Theresa Sanders Sentenced To Up To 7 Years in Prison, Ordered to Pay Over $500,000 in Restitution, And Must Surrender Law License).