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Denver Mortgage Fraud Seminars
Due to requests after the November Pueblo conference to
hold a program in Northern Colorado, on May 4th and 5th I.J. Hill
Appraisal Services again presented a Mortgage Fraud Seminar, this time
at Denver’s Merchandise Mart.
Attendees included bankers, Realtors, appraisers, mortgage brokers,
assessors, title companies and law enforcement agencies from across the
state. Also in attendance were representatives from Fannie Mae
from Texas, Freddie Mac from California, and individuals from
Washington D.C.
In addition to Dan Bradley, of the FBI, Jan Zavislan from the Colorado
Attorney General’s Office, David Berenbaum of NCRC, B. Glenn
Bartholomew, Past President of CAMB, and Lou Garone of Aurora Loan
Services and Past Chair of the Colorado Board of Real Estate
Appraisers, who all spoke in Pueblo, six new speakers joined us in
Denver.
Jonathan A. Goodman, Frascona, Joiner, Goodman and Greenstein,
expressed amazement at the openness of valuation scams and questioned
how we got a market that has allowed this to happen. He then
discussed how the momentum of the deal often blinds honest
professionals to loan fraud and reiterated the importance that
those making a commission must not be allowed to choose an appraiser.
Robert Brown of the Colorado Bureau of Investigation shocked the
audience with his discussion of an article published by a syndicated
writer in which an unidentified investigator with the Department of
Homeland Security estimates that illegal immigrants have purchased 20
to 40 thousand homes in the Denver metro area alone. Brown stated
that the CBI is actively investigating cases involving illegals, those
obtaining loans with bad credit, and loans acquired using wholly
fraudulent documents.
Jeff Bernard, President of the Denver Board of Realtors talked about
the responsibilities of the Realtor regarding the accuracy of reporting
data and to their respective State and MLS boards while also addressing
the ever expanding role of technology and the effect it has on the
loosening of control over ethical realty practices.
The highly experienced John Gray III of Aurora Loan Services gave case
histories of the many ways of how fraud is accomplished and expounded
on the fact that investors don’t talk to each other enabling scam
artists to run the same fraud over and over.
Scott Storey, District Attorney for Jefferson County, talked about the
successful mortgage fraud prosecutions within the county and discussed
the decreasing benefit of the financial gain to criminals versus the
consequence of their illegal actions as racketeering originally did not
include the instance of mortgage fraud.
And the dynamic Oliver E. Frascona of Frascona, Joiner, Goodman and
Greenstein, P.C. discussed down payment schemes, cash incentives to
buyers, and entrapment of loan fraud. Frascona gave a no-nonsense
talk that hinged on personal ethics and stated that we all have the
ability to stop fraud, just get off your butt and say “no,” turn
in the cheaters, and don’t work for a lender who is fraudulent.
If we do not do something about the breach in honesty, he stated, we
will find ourselves in a much worse situation than the savings and loan
scandal.
Many other issues were addressed. Several speakers brought up the
increasing role that underwriters play in the fraud game and the
importance of education for both consumers and professionals.
Dan Bradley, FBI, discussed the significance that caution is used in
with whom you are dealing, as the truly frightening fact is—if you are
found guilty in even one fraudulent circumstance, you will be charged
as a co-conspirator in the over-all scheme. As an example:
If you are found in fault in just one transaction with a mortgage
broker or a loan officer who is guilty of mortgage fraud in, say, 40
occurrences, you are considered connected to all 40 cases.
If you are found guilty on one particular issue...you will be charged
with complicity for the full conspiracy. As Bradley put it, “if
you are in for an ounce, you are in for a pound.”
Jeff Zavislan, The Deputy Attorney General For Consumer Protection at
the Colorado Attorney General’s Office, highlighted the increasing
incidences of foreclosure scams as the number of foreclosures quickly
escalates in the state of Colorado. Zavislan discussed the
various types of scams currently being seen by his office and
emphasized the need for education of consumers to prevent continuing
injury.
Many concerns were also voiced by the audience as several participants
expressed frustration that both enforcement and regulatory agencies
were not responsive enough in addressing obvious occurrences of fraud,
a circumstance that I hope these seminars will help to address.
There is no way to adequately cover or convey the energy of this
conference in an article. If you were not in attendance, you
missed a rare opportunity to hear some of the most dynamic speakers in
our profession. A very limited number of coursebooks
containing statistics and the presentations of the speakers are
available for the publishing price of $25. Please contact us if
you are interested.
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