Friday, April 25, 2008

JPMorgan Chase Involved in Illegal and Fraudulent Loan Advice to Lenders- Robert Paisola Reports

If you’ve been following the reports on the Cay Clubs con, you’ve probably met Carisa and Craig Urban — two investors who got burned by Cay Clubs and one of its property managers, Phil Graham.

On Thursday, March 27, The Oregonian ran an article entitled “Chase mortgage memo pushes ‘Cheats & Tricks’,” in which reporter Jeff Manning exposes an incriminating memo that was being circulated amongst loan officers at JPMorgan Chase. The memo, called “ZiPPY Cheats & Tricks,” encourages loan officers to fudge facts and figures on loan applications, if necessary, to gain approval for loan applications that otherwise would be rejected by the bank’s automated underwriting system, ZiPPY.


http://www.flippingfrenzy.com/wp-content/uploads/2008/04/zippycheatstricks2.jpg

(click above to see memo)

The main problem with this practice–in addition to being illegal–is that it deceived loan applicants into believing that they could easily afford payments on the loans for which they were applying. After all, most borrowers assume, “the bank certainly wouldn’t approve a loan if I couldn’t make the payments.” This is exactly what happened to Cay Clubs investors Carisa and Craig Urban, as they relate in their own words:

We are approaching the one year anniversary of our investment in a Las Vegas Cay Club condo, but there’s not much to celebrate. We have sunk into the real estate and mortgage fraud abyss like so many others. It has been a long and grueling process to find someone who will listen to our story, believe what we have said, and assist us in seeking justice.

We purchased our first investment property during the era of the “mortgage meltdown,” when mortgage fraud was on the rise. Recently, we came across a disturbing memo that has been linked to a former Chase Account Representative, Tammy Lish. According to JPMorgan Chase, this is not an official company memo, they do not condone the practices recommended in the memo, and they fired the Account Representative as soon as they discovered who was responsible for it. We don’t doubt any of these claims. From our experience with Chase, however, we do believe that the recommendation in this memo were common practice.

The memo provides detailed information on how to work around the company’s automated underwriting system – a system designed to function as a gatekeeper, rejecting loan applications when borrower do not meet the minimum requirements. Here are the recommendations that the memo contains:

Always select “ALTERNATE DOCS” in the documentation drop down.
Borrower(s) MUST have a mid credit score of 700.
First time homebuyers require a 720 credit score.
NO! BK’s OR Foreclosures, EVER!! Regardless of time!
Salaried borrowers must have 2 years time on job with current employer.
Self employed must be in existence for 2 years. (verified with biz license)
NO non-occupant co borrowers.
Max LTV/CLTV is 100%

The memo also provides step-by step instructions on how to gain favorable SISA (Stated Income, Stated Assets) findings; in other words, how to make an applicant’s income and assets look good on paper:

In the income section of your 1003, make sure you input all income in base income. DO NOT break it down by overtime, commissions or bonus.
NO GIFT FUNDS! If your borrower is getting a gift, add it to a bank account along with the rest of the assets. Be sure to remove any mention of gift funds on the rest of your 1003.
If you do not get Stated/Stated, try resubmitting with slightly higher income. Inch it up $500 to see if you can get the findings you want. Do the same for assets.
We find it interesting that there were so many similarities between what the memo stated and what our loan officer from Chase Bank, Ross Pickard, actually did to us and numerous other investors who purchased Cay Club properties. Ross Pickard simply followed the #3 recommendation and plugged in inflated numbers for our income and assets to get the loan approved. That’s mortgage fraud, plain and simple.

He also labeled our purchase as a second home instead of an investment property. When we questioned him about it he said, “We can label it as a second home because with the Cay Clubs lease back agreement you would have possession of the property 2 weeks out of the year.”

In talking with other professionals, we have since come to question many aspects of this transaction. At the time, however, we believed we were working with a legitimate developer and a legitimate loan originator and lender. After all, JPMorgan Chase is no mom-and-pop operation. We approached the transaction believing we could trust these professionals. Cay Club Resorts also offered to waive our first year of HOA fees if we used their preferred vendor, Ross Pickard. I guess this shows our naivety and inexperience as first time investors.

As a result of this fraud, many of us are left struggling to pay mortgages we cannot afford–mortgages that no lender would have approved if it had been given accurate facts and figures. Moreover, we now owe mortgages on properties that are worth less than we owe on them. We can’t even refinance or sell our way out of trouble.

We know that an employee in the loss mitigation department from Chase Bank has been assigned to deal with Las Vegas Cay Club loans, but many owners do not qualify for deed in lieu of foreclosure or a short sale, which would enable us to get out from under these properties without losing any more money.

So where does that leave us? Stuck in the mortgage fraud abyss! The ZiPPY Cheats & Tricks memo is blatant proof that shady transactions were going on behind the scenes.

There is a task force currently looking into Ross Pickard’s bad practices, and it is only a matter of time before the truth comes out. Chase played a major role in the acts committed. Now it is time for Chase Bank to right its wrongs and the deceptive practices of its loan officers.

~ Carisa & Craig Urban

Fortunately, when fraud can be proven to have been committed on a loan application, the borrowers can file a RESPA (Real Estate Settlement Procedures Act) complaint and actually force the lender to renegotiate the terms of the loan. Carisa and Craig Urban have an open and shut case, proving that fraud was committed in approving and processing their mortgage loan.

Our fraud busting team is currently working with the Urbans’. We have carefully audited their loan application and highlighted the specific incidents of fraud that were committed and are in the process of filing a RESPA complaint on behalf of the Carisa and Craig. We fully expect justice to be served and the Urbans’ to receive some long awaited relief.

Southern Florida Housing Crisis - Proof- Posted by Robert Paisola

Matt Sanchez reports live from Coral Gables Florida with video that shows that most every home on an upscale suburban street is either for sale or in Foreclosure, Video Courtesy of LiveLeak.com

Bank of America to ax Countrywide name, Posted by Robert Paisola

Thursday, April 24, 2008 - 11:47 AM HAST

Bank of America to ax Countrywide namePacific Business News (Honolulu)
Bank of America Corp. plans to drop the Countrywide Financial moniker after it closes on its purchase of the troubled mortgage lender later this year.

California's largest bank generally drops the name of an acquired institution. (Keeping the U.S. Trust brand last year was an exception.)

BofA may be eager to distance itself from the Countrywide brand, given the scrutiny its lending -- and collection -- practices are now receiving in the wake of the nation's housing bubble.

BofA (NYSE: BAC) CEO Ken Lewis told shareholders at that bank's annual meeting in Charlotte, N.C., of the plans to discontinue using the Countrywide (NYSE: CFC) name.

Earlier this week, the bank disclosed in testimony to the Federal Reserve that it plans to boost Countrywide's lending standards, eliminating altogether subprime loans and option adjustable-rate mortgages that include a feature in which the loan balance actually rises over time if borrowers routinely make the minimum payment permitted.

Lewis also reiterated his commitment to the Countrywide acquisition, which is expected to close in the third quarter.

BofA announced in January that it would buy Countrywide in an all-stock transaction worth about $4 billion. Later that month, Countrywide said 33.64 percent of its subprime mortgages were delinquent at the end of 2007. That was up from 29.08 percent in September and 21.22 percent in December 2006.

In August, BofA invested $2 billion in Countrywide, the country's largest mortgage lender. BofA's investment came in the form of a nonvoting convertible preferred security yielding 7.25 percent annually. The security can be converted into 16 percent of Countrywide's common stock.



San Francisco Business Times

Thursday, April 24, 2008

Utah Homes Sales Dropping , Robert Paisola Reports


Utah Homes Sales Dropping
Last Edited: Thursday, 24 Apr 2008, 8:07 AM MDT

SALT LAKE CITY -- Plummeting home sales along the Wasatch Front are finally starting to take their toll on selling prices.

The Salt Lake Board of Realtors says sales of existing single-family homes in Salt Lake County fell by 42.2 percent in the first quarter, compared with the same period last year. Median selling prices were virtually unchanged over that period, rising less than 1 percent, to $242,000. Just a year earlier, the increase was more than 20 percent from the previous year.

In Davis County, which had a 26.6 percent decline in home sales, median prices remained largely unchanged at $220,000.

Average prices fell in Tooele County by 6.3 percent, to $180,000, coinciding with a steep 45.5 percent drop in sales from last year.

Another Story

Foreclosure future grim for Utahns
By Jasen Lee
Deseret News
Published: April 17, 2008
Utah's housing bubble is forecast to burst in a big way, with one in 25 Utah homeowners projected to be in foreclosure in the next two years, according to a report released Wednesday by The Pew Charitable Trusts.
The report attributed the rise in foreclosures to subprime loans made in 2005 and 2006. In those years, 24 percent of home loans in Utah were subprime.

The outlook is grim in several other states, as well, including Nevada, where one in 11 homeowners are projected to be in foreclosure in the next two years, and Arizona, where one in 18 homeowners may face the same circumstance. Rounding out the five states with the highest projected foreclosure rates were California at one in 20, and Utah, which tied with Colorado at one in 25, or a 4 percent rate of foreclosure.

"Is the American dream slipping away?" asked Shelley Hearne, managing director of Pew's Health and Human Services program, in a letter introducing the report, titled "Defaulting on the Dream: States Respond to America's Foreclosure Crisis."

Because of foreclosures in their communities, 40 million homeowners could see their property values and their municipalities' tax bases drop by as much as $356 billion, largely over the next two years, said Hearne, a professor of health policy and management at Johns Hopkins University.

"The stakes are incredibly high. Homeownership is the primary vehicle through which American families build financial security," she said. "It also is an essential building block of state and local economies."

Jim Wood, director of the University of Utah's Bureau of Business and Economic Research, said that Utah's previous highest rate of foreclosures was about 2 percent in 2002, coinciding with the last recession. He noted that foreclosures are closely tied to unemployment rates and rapid home price appreciation, which Utah was able to avoid for the most part during the national housing boom, due to the state's strong, stable economy.

The Pew report's prediction of a 4 percent foreclosure rate "would be close to an all-time high," he said "It's quite pessimistic — double what we've been before."

He attributed the state's recent housing bubble to overly optimistic beliefs by those in the housing industry, combined with eager homebuyers and sellers, which prompted a home-building run-up during the past few years.

Hearne said that the Pew study is the first comprehensive look at what all 50 states and the District of Columbia are doing to try to address the subprime mortgage fallout. The study was a joint effort between the Pew Center on the States and Pew's Health and Human Services Program.

"Stronger standards from federal policymakers could have helped avert this crisis," Hearne said. "Future legislation must consider ways to strengthen standards to prevent more troubling loans from being made."

Fourteen states, including Utah, have created statewide foreclosure task forces to bring government, lenders, consumer advocates and experts together to address the crisis.

The Pew researchers analyzed two principal data sets: the Mortgage Bankers Association 4th Quarter National Delinquency Survey, and the Center for Responsible Lending's foreclosure projections and subprime spillover data.

The Mortgage Bankers Association quarterly data are based on survey sampling techniques and offer a point in time picture of loans in various stages of delinquency or in the foreclosure process, the report said. The MBA foreclosure estimates refer to all loans in the foreclosure process, as well as loans that are seriously delinquent, or more than 90 days past due.

The Center for Responsible Lending's estimates evaluate the total number of subprime loans disbursed during 2005 and 2006 and give the number of loans the analysts expect will be foreclosed upon. This estimate includes foreclosures that will occur in 2008, as well as subsequent years.

Wood said resets of variable-rate subprime loans have contributed to the increase in foreclosures, both nationally and in Utah.

"We will probably go well above the national average," he said, "but 4 percent seems high."

Tuesday, April 22, 2008

Money Laundering or Assistance with A Mortgage, Robert Paisola Reports

Below is an update on the Down Payment Assistance Front. Recently HUD stated that they were going to do away with the DPA. A DPA is where a seller contributes 3% of the purchase price plus an administration fee to the DPA and the DPA will gift the buyer the down payment.

This program works for FHA loans and that is why HUD is in the middle of it.

A buyer's down payment can be a gift, however the gift cannot be directly from the seller. So this clever little money laundering technique has benefited many of homeowners get a 100% loan but instead of it being a sub-prime adjustable type thing or an interest only for two years and kaboom. The buyer would have a nice 30 year fixed rate with low monthly mortgage insurance.

So here is the deal in action. Billy Buyer makes an offer on Sally Seller's home. The offer has an addendum that says that Sally will contribute 2.5% of the purchase price to pay for the buyer's closing cost. Then Billy Buyer will ask Sally Seller to contribute 3% of the purchase price + a $500 processing fee. So depending on the price of the home, the seller will contribute approximately 6% of the sales price on behalf of the buyer.

Usually the difference is split, meaning the sales price is increased by 3%. The seller agrees to the full 6% concession. SO the buyer gets 100% loan and finances the closing cost.

October 31, 2007

UPDATE

Gaithersburg, MD - United States Federal District Court Judge Paul L. Friedman today ruled in the case of AmeriDream v. Jackson that the Department of Housing and Urban Development cannot implement its regulation on downpayment assistance, which had been scheduled to go into effect today. AmeriDream, Incorporated, a 501(c)(3) charitable entity dedicated to helping low and moderate income families purchase their own homes through the provision of downpayment assistance and other services, had brought suit against HUD Secretary Alphonso Jackson challenging the regulation, which would have reversed prior HUD policies regarding downpayment assistance.

Judge Friedman agreed with AmeriDream's position that there was a "substantial likelihood" that the regulation violated applicable law. Judge Friedman further stated that the regulation lacked a "reasoned analysis" and was based on "flimsy" support. Judge Friedman also questioned whether HUD acted appropriately in issuing the regulation in view of a published report that Secretary Jackson was committed to that course of action regardless of whatever public comments HUD would later receive. In view of those shortcomings and other considerations, Judge Friedman issued an injunction, effective immediately, preventing the regulation from taking effect.

Engenuity...Wealth Strategist? Rick Koerber? Posted By Robert Paisola

WHERE TO BEGIN......I AM SO GLAD I STUMBLED ACROSS THIS SITE. I AM NOT AN INVESTOR OF ANY OF THE COMPANIES MENTIONED HERE (THANK GOODNESS) BUT, I HAVE SEVERAL FRIENDS WHO ARE. OF EVERYTHING I'VE READ, THERE IS SELDOM ANYTHING WRITTEN ABOUT ENGENUITY, VALUE CAPITAL, RAYHAR, AND MIWI. AS I UNDERSTAND IT, ST. GEORGE ENGENUITY IS SET UP LIKE THIS.....VALUE CAPITAL (KURT VANDERSLICE, MARTY WILKINSON) AND RAYHAR (MIKE ISOM) RAISED MILLIONS OF DOLLARS FROM ACCREDITED AND NON ACCREDITED INVESTORS. AN INTERESTING FACT IS THAT ALL THREE OF MY FRIENDS WERE SIGNED UP AS ACCREDITED INVESTORS. AN ACCREDITED INVESTOR HAS A NET WORTH OF $1,000,000 OR A PERSON WITH AN ANNUAL INCOME FOR THE TWO MOST RECENT YEARS OF $200,000. WELL, NONE OF THEM MEET THAT CRITERIA. IN FACT, IF THEY PUT ALL THEIR RESOURCES TOGETHER THEY STILL WOULD NOT MEET THE CRITERIA. SO VALUE CAPITAL AND RAYHAR GIVE THEIR MONEY TO MIWI (MIKE ISOM....AGAIN). MIWI THEN LOANED THE MONEY TO GUESS WHO........? FOUNDERS CAPITAL (RICK KOERBER). THIS DOESN'T LOOK LIKE A PYRAMID SCHEME WHEN DRAWN OUT ON A PAPER DOES IT? FROM REPORTS, FOUNDERS CAPITAL STOPPED PAYING MIWI SOMETIME IN JULY OF 2007. THIS IS WHAT'S INTERESTING. FOUNDERS CAPITAL APPARENTLY OFFERED TO PAY MIWI BACK ITS INVESTMENT SOMETIME IN 2007 OR CONVERT ITS INVESTMENT INTO EQUITY IN FOUNDERS CAPITAL. GUESS WHAT...THEY CONVERTED IT TO EQUITY. SO LETS POINT OUT SOME THINGS HERE. ENGENUITY, WHICH IS (VALUE CAPITAL, RAYHAR, MIWI) IS A FINANCIAL ADVISOR. OK, WHAT FINANCIAL ADVISOR IN THEIR RIGHT MIND WOULD BUY INTO A COMPANY (FOUNDERS CAPITAL) THAT COULDN'T PAY INTEREST PAYMENTS ANYMORE. ESPECIALLY WHEN THEY WERE OFFERED TO BE PAID BACK THE FULL INVESTMENT? THAT'S ONE OF THE HUNDREDS OF QUESTIONS INVESTORS WOULD LIKE TO KNOW BUT, THERE IS NO COMMUNICATION FROM ENGENUITY TO THEIR INVESTORS ON TOUCHY SUBJECTS LIKE THIS. THE COMMUNICATION LETTERS THAT I HAVE READ BASICALLY SAY, WE CANT PAY AT THIS TIME, SORRY. WHY IS ENGENUITY SO QUIET WHEN ASKED WHEN FOUNDERS CAPITAL IS GOING TO PAY THEM BACK? PROBABLY BECAUSE THEY DON'T WANT YOU TO KNOW THAT THEY USED YOUR INVESTMENT DOLLARS TO BUY A BIG CHUNK OF FOUNDERS CAPITAL. THE THREE FRIENDS OF MINE WERE TOLD THEY WERE INVESTING IN HOMES, NOT BUYING FOUNDERS CAPITAL. THEY WERE TOLD THAT SOMEWHERE OUT THERE, THERE WAS A HOME BACKING UP THE INVESTMENT THEY MADE WITH AT LEAST 20% EQUITY IN IT. THE OWNERS OF THESE COMPANIES STILL HAVE THE FANCY CARS, TOYS, AND THEIR HOMES WHILE THE INVESTORS LOSE EVERYTHING. I WILL SAY IT LIKE I SAID TO MY THREE BUDDIES. IF YOU INVESTED WITH THESE COMPANIES YOUR MONEY IS GONE. YOU MAY SEE TOKEN PAYMENTS FROM ENGENUITY TRYING TO MAKE GOOD EITHER ON THEIR OWN OR FORCED BY THE LAW BUT, IT IS HIGHLY UNLIKELY YOU WILL SEE THE TOTALITY OF YOUR INVESTMENT AGAIN FROM THIS HOUSE OF CARDS.

W.T. CRAIG
ST GEORGE UTAH

Best Cities For Bargain- With All the Real Estate Fraud- Utah is Number One, Posted by Robert Paisola

Best Cities For Bargain House-Hunters- Live from Forbes.com


Property sharks looking to take advantage of local housing slumps are doing their best to time the market, searching for the precise moment when prices bottom out before taking a bite.

They'd be smart to look for markets where job growth is strong, foreclosures are relatively low and inventory is high. With these factors in place, buyers can still dictate terms of sale and negotiate prices, but aren't as exposed to the economic and lending risk problems that have sunk many markets around the country.

Good places to look? Salt Lake City and Raleigh, N.C., where there are plenty of sellers slashing prices, but not because of a lending meltdown.
Complete List: 10 Best Cities For Bargain House-Hunters


Timing a market is tricky business, and prices alone may not be the best way to determine a bargain opportunity.

What you need is a buyers' market, where there is healthy job growth and more houses available than people to buy them. This is not due to foreclosures and economic downturn, but to overbuilding that should balance out in time.

Related Stories
America's Most Overpriced Suburbs

America's Hardest-Hit Foreclosure Spots

These markets "are where you have high inventories but pliable borrowers, with lenders willing to deal," says Anthony Sanders, a professor of finance at Arizona State University.

This is what's happening in Houston. Compared to housing prices in other cities, Houston real estate has always been a bargain, which is part of why the population has expanded so much since 2000. Jobs are being added to the books at the sixth fastest rate of cities measured, and while the city has had more than a few foreclosures, especially in Harris County, it hasn't taken a huge overall hit. Based on inventory levels and construction projects in the works, buyers still have good standing to negotiate price.

Behind The Numbers
Our list includes 2006-2007 data on job growth, from the Bureau of Labor statistics; foreclosure data from RealtyTrac, an online database of foreclosures gleaned from multiple listing services, bank-owned properties, bankruptcy records, loan histories, tax liens and lender information; and ZipRealty, an online firm that tracks vacancy rates through multiple listing services.

In addition to Houston, Salt Lake City and Raleigh, what we found were soft markets such as Orlando, Fla., Charlotte, N.C., and Jacksonville, Fla., where the damage from risky lending isn't as drastic as other parts of the country, and where employment growth suggests inventory can burn off at a healthy rate.

Who is to blame for the subprime crisis? Weigh in. Add your thoughts in the Reader Comments section below.

Job growth matters, as it's a sign that people are moving to a city and that they're building the roots and wealth to buy a home. On this measure, we used data from the Bureau of Labor Statistics from 2006 to 2007 to calculate which markets are adding people to payrolls. The timing of the data also weeds out any places that saw their job growth explode in past years due heavily to housing or jobs that are now gone, and we excluded any city losing jobs from our list. Excess housing inventory and job loss don't pair well.

But fast job growth coupled with a high foreclosure rate points to a more volatile market, one where economic activity might be slowing, or where prices were untenable from the very beginning.

Kermit Baker, an economist at the Harvard University Joint Center for Housing Studies, says that the equity problems that lead to foreclosures are more often than not "the result of economic conditions in the market as a whole," or "an overheated market."

Neither condition makes for a bargain because there's too much risk involved.

Sellers in subprime troubled markets, for example, might be anxious to sell to save whatever equity they have. Of course, this is more or less like being handed a grenade. If you bought a house in Stockton, right now, where there's one foreclosure for every 31 households, according to RealtyTrac, it's likely that prices will continue to plummet.

You won't be getting a bargain, you'll be buying cheap.

Instead, a bargain buy in an overbuilt market exposes you to less risk and comes with the satisfaction of not profiting at someone else's foreclosure misery.

Wednesday, April 16, 2008

Shammand "Sham" Maharj and The Buena Vista Corporation Threaten Investors, Robert Paisola Reports


Investors across the nation have been contacting our offices at Western Capital complaining of a man named Shammand "Sham" Maharj. We are told he has scammed millions of dollars from investors and this is a consumer and media site that is covering this story. He is the owner of the Buena Vista Corporation and The Orlando Sharks Soccer Team. Jail???

That was the headline that we brought to you last October when we first began to investigate Sham Maharaj and his "Buena Vista Corporation". Since then we have heard from jundreds of victims that have been silenced or threatened by Maharaj if they speak regarding any losses that they incurred as a result of their involvement with his companies.

We have spoken to large investment banks around the world, and have been told that the project that we were mainly interested in looking at called "Ruby Ridge: in Florida, was merely the tip of the iceberg for old Sham.

Well, we received a call today from a Real Estate Investor who has lost a substantial amount of money to Sham Maharaj and Buena Vista Corporation and he said that he received a letter from an attorney THREATENING him.

So, if you are a victim of Sham Maharaj and Buena Vista Corporation and have received a letter from their attorneys, or better yet, if you have been sued by their companies, we want to know immediately. Please send a copy of any demand letter that you receive to investigations@mycollector.com or fax our Los Angeles Office at 408-889-2415.

We will keep you advised on upcoming posts. If you are a member of the media, please feel free to contact mediarelations@cretv.com

Regards,

Robert Paisola
CEO
The Western Capital Foundation
www.RobertPaisola.com

The Mortgage Fraud Video Archives

Loading...