Time and time again throughout the various mortgage fraud cases we've written about we find a reoccurring theme used by the government to go after the alleged fraudsters. In the Plantation Cops mortgage fraud trial, it seems that every other word out of the prosecutions mouth is that the defendants had made false statements on their 1003 loan applications, specifically that the borrowers lied about the property that they were borrowing on being their primary residence. From the indictment...
e. Defendants signed and caused to be signed at closings Affidavits of Occupancy, Mortgage Notes, Disclosure Notices, Borrowers' Certification and Authorization forms, and other documents indicating that the property they were purchasing was to be owner-occupied and their primary residence, when in fact, these defendants had no intention of living in these properties...that upon the occupancy of the property, they would not have any other permanent and primary residence; and that they were not occupying or purchasing the property for investment purposes;Simple enough, the governments contention is that by the borrowers allegedly lying about the homes in question being their primary residences, they were able to enjoy a lower interest rate and therefore lower monthly payments for these homes that were actually investments purchased solely with the intention of resale. Despite the fact that it's been proven ad nauseum that the borrowers did not indicate that they homes were going to be primary residences and that it was the mortgage brokers, Matt Gulla and Rene Rodriguez Jr., that had altered the loan applications and forged the borrowers signatures to reflect that the homes that were being purchased were going to be primary residences, every chance the prosecution gets they ram this primary residence thing down the courts throat. Once again...
Form 1003, for the first mortgage loan on said property and occupancy agreements for the first and second mortgage loan on said property, which contained materially false and fraudulent statements.I'm not sure why the prosecutors keep harping on this "primary residence" thing but judging by their reluctance to let up on the home the borrower resided in (regardless of the fact that it's been proven that the borrowers had not declared the homes were primary residences or not), you'd think that lying about your primary residence is a big deal, in fact from what we've now learned it's a federal offense! That brings me back to another instance we've seen where one of the people we've written about has lied about their primary residence on a mortgage, does anyone remember this guy...
That's City of Miami commissioner Marc Sarnoff, the same commissioner that seemed to have trouble figuring out where his primary residence was, from our friends over at Investigation Miami...
Based on what we've seen in the various mortgage fraud cases we've written about, shouldn't this be a major issue? Once again from Investigation Miami...So here's the rundown of Marc Sarnoff's primary residences per mortgage records:
- 1993 3197 Virginia
- 1998 3000 Shipping
- 2000 3100 Virginia
- 2001 3197 Virginia
- 2002 3100 Virginia
- 2010 Marc Sarnoff - 3000 Shipping, Wife Teresa - 3100 Virginia
I wonder what the bankers would think of a guy too cheap to pay a little higher interest rate on an investment property loan so he would not tell the truth by saying the property is his primary residence. I wonder what the Florida bar would think of an attorney who has demonstrated a habit of fibbing on bank loans. I'm not naive, I know a lot of people do it. But Marc David Sarnoff is an attorney. And to him, the LAW should be gold....or something to that effect.
So what gives here? We've spent months on end hearing the federal prosecutors beat this lying about your primary residence thing being a federal criminal offense into our head, so why haven't the U.S. Attorneys who are so fond of this concept charging commissioner Marc Sarnoff for the same thing? In fact, Frank Alvarado from the Miami New Times even went so far as to write the U.S. Attorneys office a letter about Mr. Sarnoff lying on his mortgage applications...
Wilfredo FerrerI suppose the claims of selective prosecution by the defendants in the Plantation cops mortgage fraud trial who are accused of doing exactly the same thing that Sarnoff did doesn't seem so far fetched after all.
United States Attorney, Southern District of Florida
99 NE Fourth St., Miami, FL 33132
Dear Mr. Ferrer,
Banana Republican commends you for cracking down on the scoundrels responsible for the rampant mortgage fraud plaguing South Florida. With that in mind, we want to bring a related case to your immediate attention. We have reason to believe Miami Commissioner Marc Sarnoff is gaming the mortgage lending system.
A man with your keen understanding of mortgage applications knows that when buyers apply for a home loan, they are required to reside at the property if it is not for investment purposes.
Well, it seems Commissioner Sarnoff -- a Florida Bar-admitted attorney who authored ethics legislation for city officials -- has abused the requirement in order to obtain lower interest rates. Banana Republican has reviewed the commission chairman's mortgage documents for three properties he purchased in Coconut Grove between 1993 and 2000. We're pretty sure he hasn't lived at all of them at the same time.
- 3197 Virginia St.: Sarnoff purchased this lovely two-story townhouse for $160,000 in 1993. According to the loan documents recorded with the Miami-Dade County clerk's office, he was required to occupy the property as his primary residence.
- 3000 Shipping Ave.: Five years later, the commissioner upgraded to a beautiful abode for $240,000. Even though he was still required to live at 3197 Virginia per that property's loan documents, Sarnoff affirmed he would reside at 3000 Shipping, according to the mortgage he signed with Northern Trust Bank.
- 3100 Virginia St.: In 2000, Sarnoff expanded his real estate portfolio when he paid $340,000 for this residence next door to his Shipping Avenue home. His lender, Citibank, stipulated he had to reside at 3100 Virginia. Of course, he was already required by his other mortgage lenders to live at 3197 Virginia and 3000 Shipping.
- What's more, Sarnoff refinanced 3197 Virginia in 2001 and 3100 Virginia in 2006. He again signed documents stating the properties would be his primary residences. (Sarnoff sold 3197 Virginia in 2002.)
We don't need to tell you that lying on mortgage applications has landed a lot of people in trouble in these days of rampant mortgage fraud. Indeed, this past August 30, you squeezed guilty pleas from four defendants who had set up fraudulent mortgage transactions by falsifying information on loan applications.
In the late '90s, then-Miami Commissioner Humberto Hernandez was convicted of using false documents to secure loans from financial institutions. The same treatment should be afforded to Commissioner Sarnoff.
With sincere regards,