How to Commit Loan Fraud By Jonathan A. Goodman, Esq. Frascona, Joiner, Goodman & Greenstein, P.C....

How to Commit Loan Fraud

By Jonathan A. Goodman, Esq.Frascona, Joiner, Goodman & Greenstein, P.C.

4750 Table Mesa Dr.Boulder, CO 80305

(303) 494-3000 (voice) (303) 494-6309 (fax)www.frascona.com [email protected]

861 Silver Circle, Breckenridge

Date Status Amount

Apr 4, 2003 On Market $625k

Oct 9 , 2003 Active $599k

Feb 14, 2005Sold $763k

Feb 22, 2005Sold $599k

Listing History

MLS Listing History

1st Deed of Trust

• $614,000 AMT

• 80% ALTV

• 102% PLTV

2nd Deed of Trust

• $152,600 AMT

• -$157,000 EQUITY CUSHION

Loan Fraud?

or

Stupid Loan?

or

Neither?

15402 E. Arizona - Contract

15402 E. Arizona – Purchase price and terms

15402 E. Arizona – Additional Provisions

15402 E. Arizona - HUD-1 Settlement Sheet

Legitimate Downpayment Assistance HUD-1

4973 Malibu

Marked Plat Map of Subdivision

Rainbow Lakes Estates Subdivision

AddressDate of

SaleRelevant

Listing PriceNominal

Sales Price% of Puff

1st D.T. Amt.

ALTV PLTV2nd D.T. Amount

2nd D.T. Type

Equity Cushion

Days on

Market

1164 Shelby 4/20/2005 $675k $750k 18% $600k 80% 94% $75k Purchase $ ($40k) 91

4525 Malibu 2/25/2005 $599k $700k 17% $560k 80% 93% $140k Purchase $ ($101k) 174

4818 Malibu 4/22/2005 $775k $850k 10% $637.5k 75% 82% $167.5kPurchase $/

HELOC($30k) 226


4973 Malibu 4/29/2005 $499k $646,725 30% $517,380 80% 104% $60kPurchase $/

HELOC($78,380) 454

Foreclosures

AddressDate of

SaleRelevant

Listing PriceNominal

Sales Price% of Puff

1st D.T. Amt.

ALTV PLTV2nd D.T. Amount

2nd D.T. Type

Equity Cushion

Days on

Market

1164 Shelby 4/20/2005 $675k $750k 18% $600k 80% 94% $75k Purchase $ ($40k) 91



NED: July 9, 2007Bid: $590k

Deficiency: $ 0

NED: March 21, 2007Bid: $495k

Deficiency: $98k

NED: October 10, 2007Bid: $590k

Deficiency: $ 0

4335 Zenobia St.

Listing History – 4335 Zenobia St.

Settlement Statement – 4335 Zenobia St

4718 W. 34th Ave.

4718 W. 34th Ave. – MLS Listing

4718 W. 34th Ave. - MLS Listing Cont’d

Settlement Statement – 4718 W. 34th Ave.

4718 W. 34th Ave. - Torrence James

773 Josephine St.

Listing History – 773 Josephine St.

733 Josephine St. – MLS Listing

733 Josephine – MLS Listing Cont’d

1st Deed of Trust – 733 Josephine St.

• $559.2k AMT

• 80% ALTV

• 117% PLTV

2nd Deed of Trust – 773 Josephine St.

• $139.8k AMT

• 20% ALTE

• Negative PLTE

• -$224k EQUITY CUSHION

Bid Letter– 773 Josephine St.

• Total Indebtedness: $604,839.05

• Bid: $380,700.00

• Deficiency: $224,139.85

Contract – Maplewood Dr.

Closing Instructions and Earnest Money Receipt - Maplewood Drive

801 Race Street, Denver

Listing History

Date Status Amount

Apr 18, 2006Active $2,250k

June 2, 2006 Reduction $2,150k

Aug 28, 2006 Increase $3,100k

Aug 29, 2006 Under Contract $3,100k

Sept 20, 2006 Withdrawn $3,100k

Warranty Deed – 801 Race St.

1st Deed of Trust – 801 Race St.

• $1,950,000 AMT

• 65% ALTV

• 90% PLTV

2nd Deed of Trust – 801 Race St.

• $450,000 AMT

• $250,000 EQUITY CUSHION

Foreclosure

• Loan Foreclosed: 1st

• Notice of Election & Demand: Sept. 24, ’07

• Bid: $ 2,100k

• Deficiency: $ 0

Bond Holder

Packager

Mort. Investor

MB

Information $$$$$$$

A B ®

Flow of information and money

S

Bond Holder

Packager

Mort. Investor

MB

Information $$$$$$$

A B ®

Who is being misled?

S

Bond Holder

Packager

Mort. Investor

MB

A B ®

Who is actually defrauding?

S

Tracking Fraud

Property Address AppraiserMortgage

BrokerListing Broker

Selling Broker

123 Main Street

456 Broadway

789 Spruce

*

*

*

Fraud by Mortgage Banker



Selling Broker

123 Main Street

456 Broadway

789 Spruce

*

*

*

Sleepless Nights by Association



Selling Broker

123 Main Street

456 Broadway

789 Spruce

*

*

*

• IF IT’S NOT FRAUD,

• AND YOU DON’T HOLD DEBT,

• WHY SHOULD YOU CARE?

• Inflated Purchase Prices

• Stalemate Buyers v. Sellers

• Inflated Real Property Taxes

• More Fragile Real Estate Market

• More Fragile Financial Markets

Closing the Barn Door

Fixes

• Education?

• New Laws?

• Systemic Changes.

Systemic Changes

• Chooser of Appraiser

• Testers

How to Commit Loan Fraud By Jonathan A. Goodman, Esq. Frascona, Joiner, Goodman & Greenstein, P.C....

Documents

Transcript of How to Commit Loan Fraud By Jonathan A. Goodman, Esq. Frascona, Joiner, Goodman & Greenstein, P.C....