Mortgage Fraud - Chuck Gallagher Ethics Speaker Discusses FBI Report

In an effort to deter mortgage fraud the FBI has listed (from their investigations) typical fraud schemes. Some are listed below:

Backward Applications: After identifying a property to purchase, a borrower customizes his/her income to meet the loan criteria.

In effect the borrowers determine from the lender what the criteria should be to qualify for the mortgage loan. Then income is “customized” or fabricated to meet the criteria. This sort of fraud is usually a single loan fraud. The fraud can involve others - as mortgage professionals may coach the borrower thus participating in the fraud.

In many cases, as I’ve addressed mortgage industry professionals, we find that such frauds involve the mortgage broker knowing that they are paid based on production and production can’t take place without sufficient income.

Air Loans: These are non-existent property loans where there is usually no collateral. An example would be where a broker invents borrowers and properties, establishes accounts for payments and maintains custodial accounts for escrows. They may set up an office with a bank of telephones, each one used as the employer, appraiser, credit agency, etc. for verification purposes.

These loans represent a clear intent to commit fraud. Many convictions this past year have involved the complete creation of fabricated documentation. Other than “money for nothing” these frauds when caught will result in prison time.

While presentations to industry professionals focus on various types of frauds and the consequences that follow…rarely have I seen this other than from experienced criminals.

The last fraud scheme identified by the FBI that will be reviewed in this blog is:

Silent Seconds: The buyer of a property borrows the down payment from the seller through the issuance of a non-disclosed second mortgage. The primary lender believes the borrower has invested his own money in the down payment, when in fact, it is borrowed. The second mortgage may not be recorded to further conceal its status from the primary lender.

This fraud is common especially with first time home buyers, low income buyers or those who are new at investing in real estate for profit. In some cases, borrowers don’t see the fraud involved in this scheme. Based on experience there are two types of people involved: (1) folks who, as first time buyers, borrow the money from relatives and knowingly don’t disclose to the lender (otherwise they wouldn’t qualify) or (2) folks who clearly don’t have the fund to purchase the real estate and use funds (401(k) loans, personal loans from relatives or friends. or personal loans from undisclosed lenders.

For information about presentations related to ethics choices and mortgage fraud contact Chuck Gallagher at http://www.chuckgallagher.com

Mortgage Fraud - FBI Comments Says Business Ethics Speaker Chuck Gallagher

Over the past several years the incidence of mortgage fraud has increased. More and more headlines are filled with examples of mortgage fraud and more and more I’m asked to speak to banking, savings and loan and mortgage companies on ethics, fraud and how to avoid it.

The FBI has posted some helpful information on the FBI web site. A link is listed as follows for the entire copy: http://www.fbi.gov/page2/dec05/mortgagefraud121405.htm

Some examples of how mortgage fraud might take place are quoted below:

For example (and we’ve seen all this and more in recent cases):

You could be offered what seems like an attractive deal—buy a rental property with no money down and get cash kickbacks after the loan closes—but later learn the properties are worthless and get stuck with loans you can’t afford to pay.

You could get an e-mail promising to eliminate your mortgage loans or credit card debt for an up-front fee, only to pay the money and get nothing in return.
If you’re having trouble paying your mortgage, you could be approached by scam artists who promise to save your home if you transfer the deed to them and/or pay thousands for a new loan, but they either pocket the fees or remortgage the property and keep the proceeds.
You could unknowingly buy a home that’s been flipped several times recently, artificially inflating its value.
You could provide personal information in response to a “Help Wanted” ad, only to have your identity stolen and used to apply for mortgage loans in your name.

The FBI goes further to state:

To help educate you on these scams and to outline the steps we’re taking to address what has become one of the fastest growing white collar crimes in the nation, the FBI on 12/14 joined with the Department of Housing and Urban Development, the U.S. Postal Inspection Service, the Internal Revenue Service, and the Department of Justice in announcing “Operation Quick Flip.”

Together, as part of this effort,we’re providing the following resources:

A list of mortgage fraud prevention tips, including specifics on mortgage debt elimination schemes, foreclosure fraud, and predatory lending scams.
A complete description of the many kinds of mortgage fraud, from backward applications to silent seconds, as well as a rundown on what we’re doing to combat the problem with statistics and major case summaries.
Additional information, including flow charts on how scams like property flipping, air loans, and double sold loans can work and maps showing the top ten “Hot Spots” for mortgage fraud in 2003 and 2004.

Tips and other materials that support the reduction in mortgage fraud will be included in blogs moving forward. Meanwhile, it is important to do what must be done to protect yourself and others from becoming the victim of fraudulent transactions.

If you have been the victim of mortgage fraud…feel free to comment here and share your experiences for the benefit of others.

Mortgage Fraud - Prison and 1.2 Million in Restitution - Ethics Speaker Chuck Gallagher Comments

 

Manager of Nations Title Agency of Florida, Robert W. Hulbert, Jr., age 46, was sentenced to three years in prison, 4 years supervised release upon release from prison, restitution of $1.2 million and forfeiture of more than $4 million of assets.

Not only was Hulbert manager of Nations Title where several mortgage frauds were obtained, but he was personally involved in obtaining fraudulent loans on two properties he acquired in his name.

According to the Mortgage Fraud Blog (an excellent source for up to date material on mortgage frauds):

 According to court documents, the scheme operated this way: Conspirators negotiated to buy residential real estate at a given price. A conspirator who was a licensed real estate appraiser then fraudulently appraised the property for a substantially higher amount than the actual negotiated price. Documents reflecting the inflated appraisal price were submitted to a lender, along with other fraudulent documents, to obtain first and second mortgage loans on the property. The total amount of the loans was at or near the inflated price.

At the closing on the property, the difference between the actual sales price and the inflated appraisal price—the proceeds of the fraud—was disbursed to one or more of the conspirators as an “assignment fee” or “payoff of third mortgage” that did not exist. During the course of the scheme, the conspirators obtained a total of about $17.7 million in mortgage loans, which would not have been approved but for the fraudulent documents. The conspirators received approximately $4.024 million in proceeds from the fraudulent transactions.

As a business ethics speaker, I am finding that mortgage fraud (of one sort or another) is capturing the attention of law enforcement as the housing market declines.  More and more institutions are finding it necessary to reinforce their ethical rules as it relates to this kind of business.

Every choice has a consequence.  Having spent time in federal prison for unethical conduct, I understand how easy it is to become embroiled in unethical activity.   Today I speak to groups about the Truth About Consequences. 

As a result of unethical behavior Hulbert will find his life will dramatically change.  He will get up early - go to work (in prison) - be back at 3:30 and be standing for one of the six or so times a day he will be counted.  He will walk into prison a nobody and will be treated as such till he leaves.  Once out, he will be branded a “convicted felon” and find it hard to regain a normal life.  There will be times (many times in fact) while in prison he will wonder if the temporary enjoyment he received from his ill gotten gains was worth it.  And, he will emerge a changed man.

Feel free to comment.

If you’ve been the victim of  a mortgage fraud - fell free to share your experience.

If you’ve perpetrated a mortgage fraud, feel free to share your experience on the price you’ve had to pay.

Business Ethics Speaker - Chuck Gallagher signing off.

Stephen Stills - Prostate Cancer - Motivational Speaker Chuck Gallagher Says You Can Win This Battle!

Within the scope of seven days, two well known music icons have been either diagnosed or died from prostate cancer. Stephen Stills has been diagnosed with prostate cancer and Dan Fogelberg died from this disease.

As reported on MSNBC from a Reuters news story:

Singer/songwriter Stephen Stills, best known for his work with folk-rock trio Crosby, Stills and Nash, has been diagnosed with prostate cancer, according to bandmate Graham Nash.

Nash told TV talk show host Larry King in a telephone interview late on Monday that Stills is set to undergo an operation on January 3, which happens to be his 63rd birthday.

The news came a day after Dan Fogelberg died at the age of 56, three years after the ’70s folk singer was diagnosed with advanced prostate cancer. Upon learning that he had the disease, Fogelberg urged men over age 50 to get tested.

Nash said an early diagnosis of the disease had potentially saved Stills’ life.

“Unlike Danny (Fogelberg), who left it too long to be seriously checked, Stephen found his at an early stage,” he told CNN’s “Larry King Live” show.

No one was immediately available from Stills’ management team to comment.

The third member of the band, David Crosby, has also been ill, forcing the postponement of a U.S. tour earlier this year. Details of Crosby’s illness were not disclosed, but he was back on stage by mid-year.

Crosby, Stills and Nash comprised one of rock’s biggest acts and embodied Woodstock-era folk-rock sensibilities of peace, love and music. They were known for hits including “Teach Your Children,” “Woodstock,” and “Marrakesh Express.”

Stills rose to fame in the mid-1960s alongside Neil Young in Buffalo Springfield, before teaming up with Crosby and Nash (and sometimes Young). The eclectic guitarist maintained a parallel solo career, which yielded such notable tunes as “Love the One You’re With” and “We Are Not Helpless.”

As a survivor of prostate cancer I agree fully that early detection is critical. However, while Fogelberg had said that men over 50 should be checked - I will respectfully disagree. Men over 40 should be checked!

I was diagnosed with prostate cancer by accident at age 47. I had no symptoms - none what so ever. The PSA test was something that my doctor did when I had routine blood work done - something that I avoided as I have a fear of needles.

I received a call saying that all the blood work was fine - except that my PSA was a little high - 4.58. Now, frankly that meant nothing to me, but I followed orders and visited a urologist. After a routine DRE (digital rectal exam) I was told that there was probably nothing to worry about, but that a biopsy would be in order just to make sure.

The results from the biopsy proved that I had early stages of prostate cancer.

After considering several treatments: Traditional Surgery, Radiation, Proton Radiation, HIFU (High Intensity Focused Ultrasound) - I elected to have robotic surgery using the DaVinci system.

Outcome: The cancer was contained in the prostate (a benefit of early detection); the prostate was removed; in four weeks I had transferred from NC to Texas for a new job; there have been no side effects - urinary function is controllable and normal as is erectile function.

While for some this might be too personal…I find that living is personal and something that can be cured with early detection is worth personal comments.

For those with prostate cancer (know that I am not a doctor), I am willing to talk in person, via e-mail or use this blog to help others. Feel free to share your comments as the more young men (and I consider 40’s to be young) know about the benefits of early detection the more lives will be saved.

My best to Stephen Stills!

Prostate Cancer - Stephen Stills, Dan Fogelberg and Treatment Options

As a motivational speaker, I often have the opportunity to speaker to groups and share insights that can be life changing. Most presentations originate from personal experience. The one experience I didn’t expect to have at the “young” age of 47 was the experience of being told I had prostate cancer.

“How could that be? I had no symptoms. This is an older man’s disease,” I thought.

Wrong!

Dan Fogelberg was diagnosed in his early 50’s and is dead at 56. Stephen Stills is facing surgery on his 63rd birthday for prostate cancer (and because it was detected early has a good chance of survival).

I am fortunate. I was diagnosed early - opted for robotic surgery (the DaVinci Method) and am cancer free at age 50 with no side effects!

I have had the privilege of talking with many people about prostate cancer and various treatments (NOTE: I am not a Doctor - therefore what is written here is for general benefit. Do not rely on the content of this blog as medical advice. It is not!) Just the other day I received an e-mail that I have asked permission to share with those who read. The content is shared below:

Name: brenda gerhard
Media Outlet: The Morning Call, retired
Specific Details: Greetings. Maybe we can get the word out to YOUNG MEN with Dan Fogelberg’s illness and untimely death. My husband was diagnosed 2 years ago at age 52 with aggressive prostate cancer which TWO urologists ignored for three years. They dismissed a common symptom, blood in semen, and did everything but give him a simple test. A company doctor noticed a PSA rise during a routine physical and insisted my husband get a biopsy. He had to bully the urologist into doing it. And then the quack urologist told him he was SHOCKED that the biopsy came out positive.

He had the surgery 2 years ago with negative margins and a very good outcome.

But 2 years later, the cancer returned in the prostate bed. He had a Gleason 8 (aggressive) score.

Two years ago we heard about Loma Linda University Medical Center, which uses proton beam therapy with NO SURGERY AND NO SIDE EFFECTS to effectively cure prostate cancer. We had no first-hand info. and didn’t pay enough attention to this wonderful alternative to surgery. This time around we found out that Loma Linda also does salvage proton treatment (as opposed to regular photon radiation, proton beams are targeted precisely to the cancer cells, sparing the radiation of healthy tissue).
We moved to Loma Linda for two months. Treatments take about an hour Mon.-Fri. My husband JOGGED every day during his treatments.

We met plenty of men, mostly older, who have opted for this treatment. Many were too old for safe surgery.
Get the book by prostate cancer survivor Robert J. Marckini, “You Can Beat Prostate Cancer and You Don’t Need Surgery to Do It,” which chronicles the 15-year history and success rate of proton treatment. There are more centers opening up around the country and it is my and my husband’s mission to make sure that prostate cancer patients at least know of this wonderful alternative to surgery.

I would love to tell you (or anyone else) more about this treatment and its phenomenal success rate. Feel free to e-mail or call me anytime.

Yours in health,
Brenda Gerhard, Coopersburg, Pa.

Brenda…thank you for sharing and for your willingness to help others explore the options available. A good friend of mine used this same treatment and raved on his success. For purposes of clarification, I chose surgery knowing that should the cancer reappear I could use radiation as a backup treatment. Sounds like what your husband did.

I have been told that if radiation is the primary course of treatment at the beginning and then the cancer reappeared, surgery is then not an option. (Again…don’t rely on the content here to be medical advice - consult a medical professional).

Hopefully, the content of these blogs will spur discussion and most importantly motivate men in their early 40’s to get a PSA test. Having a PSA test early does two very important things: (1) gives you a bench mark to gage if there is any reason for concern; and (2) gives a clear early warning sign so that, if you find yourself like me, with prostate cancer, you can seek early treatment and LIVE!

Remember: Every Choice Has A Consequence. Choose to have the test…It Might Just Save Your Life!