Wednesday, May 12, 2010

Mortgage fraud arrests!

Someone commented on our blog last Friday that there was a mortgage fraud sweep at 5 am where a handful of fraudsters were arrested, we didn't think much of it since there was no news in the media to confirm until yesterday.  Let's take a look at the article from the herald and make some observations...
Homestead mortgage broker charged with fraud
A mortgage broker who dodged prosecutors' attention previously is now facing federal charges.


A key figure in a statewide mortgage fraud ring, who avoided prosecution despite convictions of several associates more than a year ago, was indicted by a federal grand jury on charges of lying on mortgage applications and pocketing the ill-gotten gains.
Interesting.  A statewide mortgage fraud ring.  Hmmm...
Yvette Valdes, a Homestead mortgage broker, is charged with falsifying loan documents on two properties in Southwest Miami-Dade County, including making up borrowers' employment information, assets and annual income.
Oh really?  Falsifying loan documents including employment information, assets and income?  Ok, Mr. Kostrzewski, did you ever wonder even if Mr. Barrera wasn't involved in the Oak Avenue mortgage fraud (HAH), who put together his loan application?  Who provided his employment verification etc?  Makes you wonder huh? 
She faces three counts of wire fraud and up to 30 years in prison. Reached on her cell phone Monday, Valdes said, ``You need to speak to my attorney,'' and declined further comment.
Yeah, hopefully you put aside enough money for a damn good one!
A 2008 Miami Herald series, Borrowers Betrayed, detailed Valdes' role in a massive, multi-million dollar home loan scam led by New York banker Orson Benn, who approved more than $550 million in mortgages across Florida at the height of the housing boom.
Jeeze, the media outed her TWO YEARS AGO and nothing was done?!  Way to go Task Force!
Benn, former vice president at Argent Mortgage Co., was convicted of racketeering by statewide prosecutors in Polk County in 2008. He is serving an 18-year prison sentence.

The newspaper's investigation found that Valdes, owner of Best Choice Mortgage, brokered $22 million of the Benn-approved loans over a 16-month period out of a small, nondescript office along South Dixie Highway. Nearly all of the mortgages contained false or misleading information, ranging from inflating a borrower's income more than fivefold to listing a non-existent job for a borrower who took out enough money to buy four homes.

In some cases, borrowers said they weren't aware of the inaccuracies.
SWEET!  Sort of like Bernie telling the cops he had no idea what was going on!  See a pattern here?
When reporters asked Valdes more than a year ago about the bogus information on her customer's mortgage applications, she responded: ``That's their problem.''
Yeah, FCUK THEM!  They got the money not her right?
Yet in this case, the borrowers are her own relatives.

The federal grand jury also indicted Valdes' daughter Jeannine Valdes-Perez, her brother Joseph Gonzalez and her son-in-law Victor Perez. All three worked at Yvette Valdes' Best Choice Mortgage.
It's a family affair folks!
Catherine Maiz, a partner owner of Absolute Title, was also charged.
Absolutely!  But Mr. Kostrzewski, why wasn't an attorney charged?  
The indictment alleges that the group falsely represented Victor Perez's job and annual income, among other information, on mortgage applications to Argent and banking giant JP Morgan Chase Bank.

Imagine that!  Why hasn't anyone rounded up all those SOB's from Argent that were practically giving money away to anyone with a pulse during the boom?  Hello Task Force!
The allegedly fraudulent applications resulted in the banks funding loans for two properties that totaled more than $500,000.

But the loans went unpaid, it's alleged in the indictment, and the loan proceeds were diverted ``for their own personal use and benefit.''
Diverted for their own personal use?  Is there any other kind of use for a fraudster?!
Assistant U.S. Attorney Joseph B. Shumofsky is handling the case.
A fed!  You think these guys will get something harder than the probation ASA Kostrzewski doles out?
The indictment, which was issued April 29 but unsealed Monday, comes long after red flags were raised about Valdes.

The Office of Financial Regulation, the state's banking industry watchdog, was alerted to Valdes' role in Benn's network in 2005, The Miami Herald reported.

The state regulator never took action.
Did you really expect anyone on the state level to do anything?  Come on!
Tampa brokers David Tuggle and Eric Steinhauser, who both worked under Benn, pleaded guilty in 2008 to conspiracy to engage in racketeering charges and were sentenced to two years in prison.


  1. Mr. Ferrer commended the investigative efforts of the U.S. Secret Service and the other law enforcement agencies comprising the Federal-State Mortgage Fraud Strike Force. The case is being prosecuted by Assistant U.S. Attorney Joseph B. Shumofsky.

    In this case you are confusing the Fed-State Strike Force with the MDPD Task Force. A persistant source of showboat envy.

  2. Thanks for that 1:49! I noticed that this article was missing the standard :

    "The arrests were made by the Miami-Dade Police Department's Mortgage Fraud Task Force, which was created in response to the massive mortgage fraud that plagued South Florida during the housing boom, and put the country's economic future at risk."

    that normally goes along with the Mayors Mortgage Fraud Task Force press releases.

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