Thursday, November 12, 2009

A template for mortgage fraud.

Remember that masterfully prepared flowchart outlining a "typical mortgage fraud" that we looked at yesterday? Take another peek at it if you will. Now, let's go through each step and see what we learn.

Step #1

Ok, so far I follow, in the case of the Bernardo Barrera fraud this would be the purchase of the home on Oak Avenue by John Romney for $185,000. Let's now move on...

Step #2

Subject has the property fraudulently appraised. SAY WHAT?! This is the first time we're hearing ANYTHING ABOUT A FRAUDULENT APPRAISAL! WTF?! According to what we read in the media and in statements made in both the criminal court case and the civil foreclosure case, it was the states assertion that the attorney that handled the closing
"fraudulently inflated the value of the home three fold"
I don't know Mr. Baluja, Mr. Kostrzewski, was the attorney also a licensed appraiser whose appraisal was submitted to the bank that financed the fraudulent purchase?! INTERESTING TO SAY THE LEAST! Moving right along...

Step #3

Ok, in the case of the Oak Avenue home the straw buyer would be Bernardo Barrera and or the impostor who the state claims came to the closing, we've shown that there is a cloud of suspicion over this claim several times over the last few months (here and here) but the state attorneys office refuses to do anything about it. That's fine though. There is a step missing here though, the involvement with the mortgage broker. I'm not suggesting that there's any wrong doing on the brokers part, but at the very least somewhere along the line there was documentation that was submitted to the bank along with the application for the mortgage that had to be fabricated, not to mention that someone had to take the application from the real/fake Bernardo Barrera. Regardless, let's move on...

Step #4

PAID!!!! HELL YES! According to what we know from the Miami Herald article, John Romney pockets $369,896.88 and his accomplice (the man who lent the straw buyer the down payment for the home purchase) collected $135,000. According to the states paperwork, the attorney who closed the transaction made off with a whopping, ground breaking ONE THOUSAND TWO HUNDRED AND SEVENTY DOLLARS. OK, perhaps times are tough, you got to take whatever you can get right? Let's keep going...

Step #5

Right on, there wasn't a single payment made on the Oak Avenue home, after all, Mr. Barrera claimed ID theft a month after the closing, theoretically never giving the people behind the fraud a chance to make a payment. Last but not least that brings us to...

Step #6

Yep, in our case the bank is left with a $450,000+ mortgage on a house that will more than likely sell at the foreclosure auction for less than $20,000. As we mentioned before though, the bank isn't the only victim, it's the neighborhood that suffers a worse fate. Now the neighbors have to deal with a nasty dilapidated home that becomes a haven for undesirables, if that wasn't bad enough they also have to suffer the financial consequences of this bust out, HIGHER PROPERTY TAXES!

So what happened Detective Baluja? Where's the other people that should have been part of your "ORGANIZED SCHEME TO DEFRAUD"? Where are the other people that benefited from this fraudulent transaction? You basically had a fill in the blank pictoral guide to work with and you couldn't pull it off? Fantastic. I know this isn't the way the rest of the Mortgage Fraud Task Force works, especially after reading about the kind of work people like Sgt Davis did in the David Rodriguez case.

According to the clerk of courts website, tomorrow is the day that John Romney (yes the man that cleared $369,896.88 from this fraud) is going to enter his plea, get a slap on the wrist and get sent on his merry way. Any chance of justice being done will go up in smoke tomorrow morning at 9 am.

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