Archive for June, 2010

The Office of Housing’s latest efforts have a common thread: the continued need to strengthen protections for consumers in the home buying process. We are working to make the housing market stronger, sustainable, and safer. Two examples of our efforts to accomplish this goal are the recent reform of HUD’s Real Estate Settlement Procedures Act (RESPA) regulations which make mortgages more transparent and understandable, and the development of Safe Mortgage Licensing Act (SAFE) regulations which better protects consumers.
Transparency is important for consumer protection. Fair dealings require open, clear information. The SAFE Act helps increase the integrity of the mortgage process and prevent fraud. In combination with RESPA reform, consumers have greater protection from possible bad actors in the marketplace. These two measures highlight our commitment to regulatory reform and consumer protection in order to bring trust and stability back to the housing market.
In a previous edition, I briefly discussed some aspects of the Real Estate Settlement Procedures Act (RESPA) Rule. I now want to update you on the great efforts the Department has made providing clarity to the industry during the implementation phase, primarily involving the use of the standardized Good Faith Estimate (GFE) and the revised and expanded Settlement Statement (HUD-1).
The Office of Housing has delivered a live webcast and hosted an Industry Roundtable, and has also met with and trained many lenders and others in an effort to resolve industry implementation inconsistencies. The RESPA staff has participated in more than 150 formal speaking engagements to educate industry professionals and state and federal regulators on the new RESPA rule and plan more in the future. The response has been overwhelming. Since HUD press releases RESPA Webcast RESPA FAQs Homeowner Warranties and Related Compensation SAFE Act
the start of the year, we’ve received and answered more than 7,000 emails. Finally, the Office is currently developing multi-media guidance and education for consumers.
Most recently we have posted additional Frequently Asked Questions (FAQs) on our website aimed to give detailed guidance on topics about which we have had the most inquiries. Two of the hottest topics are pre-approvals and the use of worksheets. For full information and guidance, please refer to the FAQ’s.
A pre-approval is a document issued by a lender stating that a consumer qualifies for a specific loan amount prior to the consumer choosing a specific property.
If the loan originator is missing one of the elements it requires for a loan application (e.g., the property address) and is not required to provide a GFE, the originator is not prevented from verifying information for which the customer voluntarily provides documentation.
Also, a loan originator IS PERMITTED to determine that a property address is not one of the required pieces of information that the loan originator needs in order to issue a GFE. It is important to note that a loan originator must consistently apply its policy on the information it deems necessary to issue a GFE, and the RESPA rule requires a loan originator to issue a GFE whenever it receives information sufficient to complete an application for a GFE.
A worksheet is a document issued by a loan originator that may include generic information regarding interest rates and loan fees, or a document that may provide additional information to the consumer regarding the cost of the overall transaction outside of loan fees that are disclosed on the GFE.
A worksheet may be provided to a customer for a rate quote if the consumer does not want to provide the information necessary to generate a GFE. However, loan originators should ensure the following: (1) to eliminate consumer confusion, a worksheet should
not look like a GFE and should not lead the customer to believe that it is a GFE and (2) a loan originator should NEVER use a worksheet in lieu of a GFE.
A loan originator may also use a worksheet to provide the consumer with additional information about his or her loan transaction, such as the amount of cash needed to close, seller credits, and other non-loan transaction fees that would be helpful to the consumer.
Another recent development in RESPA is that HUD’s Office of General Counsel has issued additional guidance on “Home Warranty Companies’ Payments to Real Estate Brokers and Agents.” This new rule interprets section 8 of RESPA and HUD’s regulations as they apply to the compensation provided by home warranty companies (HWCs) to real estate brokers and agents.
Specifically, the rule provides: “(1) A payment by an HWC for marketing services performed by real estate brokers or agents on behalf of the HWC that are directed to particular homebuyers or sellers is an illegal kickback for a referral under section 8; (2) Depending upon the facts of a particular case, an HWC may compensate a real estate broker or agent for services when those services are actual, necessary and distinct from the primary services provided by the real estate broker or agent, and when those additional services are not nominal and are not services for which there is a duplicative charge; and (3) The amount of compensation from the HWC that is permitted under section 8 for such additional services must be reasonably related to the value of those services and not include compensation for referrals of business.”
This rule was published on June 25. You may view this interpretive rule here.
Passed by Congress as part of the Housing and Economic Recovery Act of 2008 (HERA), the SAFE Act mandates that all individual Mortgage Loan Originators (MLOs) either be licensed by the state where they do business or, if they are employed by a federally-regulated depository institution, be
registered. Both licensing and registration must be done through the Nationwide Mortgage Licensing System and Registry (NMLSR), which also provides MLO’s with unique identifiers. The SAFE Act sets forth minimum standards for state licensing.
HUD is responsible for ensuring that state regulators implement and maintain SAFE Act-compliant licensing systems, as well as ensuring the overall effectiveness of the NMLSR.
HUD’s SAFE Act Office has worked closely with the Conference of State Bank Supervisors (CSBS), the American Association of Residential Mortgage Regulators (AARMR) and the states to ensure that all U.S. jurisdictions enact SAFE Act-compliant licensing systems through legislation or regulations.
Final Rule Status
HUD published a proposed rule in the Federal Register on December 15, 2009, setting forth the minimum requirements that a state would have to meet in order to be compliant with the SAFE Act. As of this date, the proposed rule has not been finalized. In the absence of a final rule, HUD cannot provide definitive guidance regarding certain compliance issues.
HUD received over 5,300 comments from the public during the comment period on the proposed rule. Most of the comments were from organizations and individuals concerned that they would need to license their employees.
Those who commented included: non-profit agencies, housing counseling organizations, loan modification and servicing specialists, housing finance agencies, those involved in owner/seller financing, mortgage industry groups and other interested persons. In developing its final rule, HUD is working to address concerns raised by comments.
In closing, I hope you find these overviews helpful. I am confident that updating the RESPA Rule and implementing the SAFE Act will lead to clear regulations for the housing industry, stronger protections for consumers, and a more stable housing market.


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GRA10764 S.L.C.

AMENDMENT NO.llll Calendar No.lll

Purpose: To improve oversight of appraisers.


S. 3217

To promote the financial stability of the United States by

improving accountability and transparency in the financial

system, to end ‘‘too big to fail’’, to protect the

American taxpayer by ending bailouts, to protect consumers

from abusive financial services practices, and

for other purposes.

Referred to the Committee on llllllllll and
ordered to be printed

Ordered to lie on the table and to be printed

AMENDMENT intended to be proposed by lllllll


1 On page 1522, between lines 6 and 7, insert the fol2


3 Subtitle I—Appraisal Activities


5 (a) IN GENERAL.—Chapter 2 of the Truth in Lend6

ing Act (15 U.S.C. 1631 et seq.) is amended by inserting

7 after 129B (as added by this Act) the following new sec8



GRA10764 S.L.C.


2 ‘‘(a) IN GENERAL.—A creditor may not extend credit

3 in the form of a subprime mortgage to any consumer with4

out first obtaining a written appraisal of the property to

5 be mortgaged prepared in accordance with the require6

ments of this section.


8 ‘‘(1) PHYSICAL PROPERTY VISIT.—An appraisal

9 of property to be secured by a subprime mortgage

10 does not meet the requirement of this section unless

11 it is performed by a qualified appraiser who con12

ducts a physical property visit of the interior of the

13 mortgaged property.



16 ‘‘(A) IN GENERAL.—If the purpose of a

17 subprime mortgage is to finance the purchase

18 or acquisition of the mortgaged property from

19 a person within 180 days of the purchase or ac20

quisition of such property by that person at a

21 price that was lower than the current sale price

22 of the property, the creditor shall obtain a sec23

ond appraisal from a different qualified ap24

praiser. The second appraisal shall include an

25 analysis of the difference in sale prices, changes

26 in market conditions, and any improvements

GRA10764 S.L.C.

1 made to the property between the date of the

2 previous sale and the current sale.

3 ‘‘(B) NO COST TO APPLICANT.—The cost

4 of any second appraisal required under sub5

paragraph (A) may not be charged to the appli6



8 purposes of this section, the term ‘qualified ap9

praiser’ means a person who—

10 ‘‘(A) is, at a minimum, certified or licensed

11 by the State in which the property to be ap12

praised is located; and

13 ‘‘(B) performs each appraisal in con14

formity with the Uniform Standards of Profes15

sional Appraisal Practice and title XI of the Fi16

nancial Institutions Reform, Recovery, and En17

forcement Act of 1989, and the regulations pre18

scribed under such title, as in effect on the date

19 of the appraisal.

20 ‘‘(c) FREE COPY OF APPRAISAL.—A creditor shall

21 provide 1 copy of each appraisal conducted in accordance

22 with this section in connection with a subprime mortgage

23 to the applicant without charge, and at least 3 days prior

24 to the transaction closing date.


Fuzz Buzz

Join Date: Apr 2009
State: California
Professional Status: Gvmt Agency, FNMA, HUD, VA etc.
Posts: 5

smut shop’s negative impact on surrounding property values

Hello, appraisers. This is my second thread commenced on this forum. I am an in-house civil attorney for the County of Fresno, California. I have been assigned the prosecution of an adult business for violation of County ordinance, which prohibits locat1on of a smut shop within X distance of residences, churces, and schools. Another attorney in my office has handled the litigation to this point; he went to court to get a preliminary injunction against the smut peddler, and the court denied it. The court reasoned that the County would need to show — but had not established — actual harm to the surrounding community. Trial is coming up, so we have another bite at the apple — but apparently, this judge will still want us to establish actual harm at the trial as well.

I was thinking that one way to make that showing would be to present evidence that the establishment of a smut shop has a negative impact on surrounding property values. There are residences within a quarter mile. I think that information to be derived from comparable sales is not going to be of much assistance, unfortunately. So my question, in the absence of help from comparable sales, is whether you are aware of any studies or well-regarded written expert opinions taking the position that adult business establishments negatively influence surrounding property values? Or do you have any other reason to believe that smut shops have such a negative influence, or any other method to establish the same?




First Time HomebuyersHousing PartnersMy

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Lender Training Classes

Regional CalHFA Homeownership Policy and Procedure Training

The Policy and Procedure Training is available to all CalHFA-approved Lenders and Brokers or Correspondent Lenders who are sponsored by an Approved Lender. We will also accept attendance requests from nonprofit agencies whose main focus is affordable housing.

Special CalHFA Homeownership Policy and Procedure Training

Other options for training include a special session within your own office or facility. If a CalHFA Approved Lender has training needs, can supply the meeting facilities and can guarantee attendance of approximately 20 people, a CalHFA Trainer will schedule an in-house special session for your office.

CalHFA Purchase Review Training

CalHFA also offers a specialized class for your shipping department. This training session will cover stack order, document lists, and submission criteria to enable your loans to be purchased by the agency.

Lender Training contact information:


Angelique Piliotis (916) 445-9914
Robin Monk (916) 324-5019
Leanne Walker (916) 445-7463
Molly Ellis (916) 324-4653
Lynda Stovall (916) 324-8467


(Need help? See this quick reference guide to webinars)

This session will provide comprehensive training on CalHFA’s first mortgage products and Down Payment Assistance Programs. It will also include a detailed review of policies and procedures, CalHFA’s borrower and property eligibility, process underwriting, recapture and document requirements will be reviewed.
Highly Recommended for: All

Tue, Jul 6, 2010 10:00 AM – 12:00 PM

This session will include training on CalHFA’s first mortgage products and down payment assistance programs.
Highly Recommended for: Loan Officers (Sales), Realtors
Useful for: Processing, Underwriting

Thu, Jul 1, 2010 10:00 AM – 11:00 AM
Thu, Jul 8, 2010 10:00 AM – 11:00 AM
Thu, Jul 15, 2010 10:00 AM – 11:00 AM
Tue, Jul 20, 2010 10:00 AM – 11:00 AM

CalHFA FORMS (Subject Specific for Lenders Only)
This session includes a review of CalHFA’s Form requirements.
Highly Recommended for: Loan Officers (Sales), Processing
Useful for: Underwriting

Tue, Jul 13, 2010 10:00 AM – 10:45 AM

CalHFA LOAN PACKAGING (Subject Specific for Lenders Only)
This session will review the process for packing and submitting CalHFA loans.
Highly Recommended for: Processing

Tue, Jul 13, 2010 11:00 AM – 11:30 AM

CalHFA UNDERWRITING (Subject Specific for Lenders Only)
This session will review CalHFA’s Underwriting Guidelines.
Highly Recommended for: Processing, Underwriting

Wed, Jul 7, 2010 10:00 AM – 11:15 AM
Wed, Jul 21, 2010 10:00 AM – 11:15 AM

CalHFA CHDAP Subordination (Subject Specific for Lenders Only)
This session will review CalHFA’s subordination process.
Highly Recommended for: Loan Officers (Sales), Processing, Underwriting

No dates scheduled at this time.


Homebuyers interested in applying for financing should contact one of CalHFA’s approved lenders.

CalHFA does not lend money directly to consumers. CalHFA works through and uses approved private lenders to qualify consumers and to make all mortgage loans. CalHFA purchases closed loans that meet CalHFA’s requirements. The fees consumers pay could be different depending on the lender and the program.

Web Site Survey: Let us know what you think. ® 2008 CALIFORNIA HOUSING FINANCE AGENCY | e-Privacy Policy


Selling Guide Announcement Issued

Selling Guide Announcement Issued
Fannie Mae has issued the following Announcement:

SEL-2010-08, Underwriting Borrowers with a Prior Foreclosure
Fannie Mae has issued Announcement SEL-2010-08, Underwriting Borrowers with a Prior Foreclosure, to modify the waiting period that must elapse before a borrower is eligible for a new mortgage loan after a foreclosure. A seven-year waiting period after a prior foreclosure will apply for all borrowers, unless the foreclosure was the result of documented extenuating circumstances, which requires a three-year waiting period with additional eligibility requirements.


The California Housing Finance Agency

The California Housing Finance Agency has released the following Press Release:

#2010-05 – CalHFA Allocated $700 Million from New Federal Program to Assist Homeowners

To view this release, see the Press Release page on CalHFA’s web site.

For more information on the approved Hardest Hit Fund Programs, visit the Keep Your Home web site at

For questions about this announcement, contact CalHFA Marketing Division by phone 916.322.0249 or by email at You can always visit CalHFA’s web site at:

CalHFA thanks you for your business and we look forward to continuing to support your affordable housing loan needs.


Regulation Z

§ 226.36 Prohibited acts or practices in connection with credit secured by a consumer’s principal dwelling.

(a) Mortgage broker defined. For purposes of this section, the term “mortgage broker” means a person, other than an employee of a creditor, who for compensation or other monetary gain, or in expectation of compensation or other monetary gain, arranges, negotiates, or otherwise obtains an extension of consumer credit for another person. The term includes a person meeting this definition, even if the consumer credit obligation is initially payable to such person, unless the person provides the funds for the transaction at consummation out of the person’s own resources, out of deposits held by the person, or by drawing on a bona fide warehouse line of credit.

(b) Misrepresentation of value of consumer’s dwelling–(1) Coercion of appraiser. In connection with a consumer credit transaction secured by a consumer’s principal dwelling, no creditor or mortgage broker, and no affiliate of a creditor or mortgage broker shall directly or indirectly coerce, influence, or otherwise encourage an appraiser to misstate or misrepresent the value of such dwelling.

(i) Examples of actions that violate this paragraph (b)(1) include:

(A) Implying to an appraiser that current or future retention of the appraiser depends on the amount at which the appraiser values a consumer’s principal dwelling;

(B) Excluding an appraiser from consideration for future engagement because the appraiser reports a value of a consumer’s principal dwelling that does not meet or exceed a minimum threshold;

(C) Telling an appraiser a minimum reported value of a consumer’s principal dwelling that is needed to approve the loan;

(D) Failing to compensate an appraiser because the appraiser does not value a consumer’s principal dwelling at or above a certain amount; and

(E) Conditioning an appraiser’s compensation on loan consummation.

(ii) Examples of actions that do not violate this paragraph (b)(1) include:

(A) Asking an appraiser to consider additional information about a consumer’s principal dwelling or about comparable properties;

(B) Requesting that an appraiser provide additional information about the basis for a valuation;

(C) Requesting that an appraiser correct factual errors in a valuation;

(D) Obtaining multiple appraisals of a consumer’s principal dwelling, so long as the creditor adheres to a policy of selecting the most reliable appraisal, rather than the appraisal that states the highest value;

(E) Withholding compensation from an appraiser for breach of contract or substandard performance of services as provided by contract; and

(F) Taking action permitted or required by applicable federal or state statute, regulation, or agency guidance.

(2) When extension of credit prohibited. In connection with a consumer credit transaction secured by a consumer’s principal dwelling, a creditor who knows, at or before loan consummation, of a violation of paragraph (b)(1) of this section in connection with an appraisal shall not extend credit based on such appraisal unless the creditor documents that it has acted with reasonable diligence to determine that the appraisal does not materially misstate or misrepresent the value of such dwelling.

(3) Appraiser defined. As used in this paragraph (b), an appraiser is a person who engages in the business of providing assessments of the value of dwellings. The term “appraiser” includes persons that employ, refer, or manage appraisers and affiliates of such persons.

(c) Servicing practices. (1) In connection with a consumer credit transaction secured by a consumer’s principal dwelling, no servicer shall–

(i) Fail to credit a payment to the consumer’s loan account as of the date of receipt, except when a delay in crediting does not result in any charge to the consumer or in the reporting of negative information to a consumer reporting agency, or except as provided in paragraph (c)(2) of this section;
(ii) Impose on the consumer any late fee or delinquency charge in connection with a payment, when the only delinquency is attributable to late fees or delinquency charges assessed on an earlier payment, and the payment is otherwise a full payment for the applicable period and is paid on its due date or within any applicable grace period; or

(iii) Fail to provide, within a reasonable time after receiving a request from the consumer or any person acting on behalf of the consumer, an accurate statement of the total outstanding balance that would be required to satisfy the consumer’s obligation in full as of a specified date.

(2) If a servicer specifies in writing requirements for the consumer to follow in making payments, but accepts a payment that does not conform to the requirements, the servicer shall credit the payment as of 5 days after receipt.

(3) For purposes of this paragraph (c), the terms “servicer” and “servicing” have the same meanings as provided in 24 CFR 3500.2(b), as amended.

(d) This section does not apply to a home equity line of credit subject to § 226.5b.

[Codified to 12 C.F.R. § 226.36]

[Section 226.36 added at 73 Fed. Reg. 44604, July, 30, 2008, effective October 1, 2009]

§ 226.37–226.45 [Reserved]

Subpart F—Special Rules for Private Education Loans


Financial Fraud Enforcement Task Force Announces Regional Results of “Operation Stolen Dreams” Targeting Mortgage Fraudsters

Department of Justice Press Release

For Immediate Release
June 17, 2010 United States Attorney’s Office
Eastern District of California
Contact: (916) 554-2700
Financial Fraud Enforcement Task Force Announces Regional Results of “Operation Stolen Dreams” Targeting Mortgage Fraudsters
46 Defendants Charged with Mortgage-Fraud Offenses in Cases Filed by Federal Prosecutors in the Eastern District of California, at Least Nine More Charged by District Attorneys During Three-and-a-Half-Month Period of Operation Stolen Dreams

SACRAMENTO, CA—Following an announcement today by Attorney General Eric Holder in Washington, D.C., representatives of the Financial Fraud Enforcement Task Force in the Eastern District of California, including U.S. Attorney Benjamin B. Wagner, FBI Assistant Special Agent in Charge Michelle Klimt, IRS-Criminal Investigation Special Agent in Charge Scott O’Briant, HUD-OIG Assistant Special Agent in Charge James Luu, California Department of Real Estate Commissioner Jeff Davi, Sacramento County District Attorney Jan Scully, and Butte County District Attorney Michael Ramsey announced the regional results of the nationwide takedown, Operation Stolen Dreams, which targeted mortgage fraudsters in the Eastern District of California and throughout the country.

The national takedown was organized by the Mortgage Fraud Working Group of President Obama’s interagency Financial Fraud Enforcement Task Force, which was established to lead an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. U.S. Attorney Wagner is a co-chair of the Mortgage Fraud Working Group. Starting on March 1, 2010, Operation Stolen Dreams resulted in the filing of 673 federal mortgage fraud cases in which 1,215 defendants were charged nationally. Operation Stolen Dreams cases were brought in every region of the United States. The FBI estimates that approximately $2.3 billion in losses were inflicted by the mortgage fraud schemes employed in these cases.

“Mortgage fraud ruins lives, destroys families, and devastates whole communities, so attacking the problem from every possible direction is vital,” said Attorney General Holder. “We will use every tool available to investigate, prosecute, and prevent mortgage fraud, and we will not rest until anyone preying on vulnerable American homeowners is brought to justice.”

During the takedown period for Operation Stolen Dreams, from March 1, 2010 to the present, charges were filed in 16 cases in the Eastern District of California, charging 46 defendants with felony mortgage-fraud offenses. During the three-and-a-half-month period of Operation Stolen Dreams, 11 federal felony guilty pleas were secured, and one defendant was sentenced. Additional federal mortgage fraud cases were filed prior to the commencement of Operation Stolen Dreams, and many mortgage fraud investigations are continuing, with future charges anticipated.

As part of Operation Stolen Dreams, the Tulare County District Attorney’s Office charged four defendants with mortgage fraud offenses and arrested a fifth. In addition, three defendants pleaded guilty and five defendants were sentenced in mortgage fraud cases brought by the Tulare County District Attorney’s Office. In cases brought by the Sacramento County District Attorney’s Office, two defendants were charged in one case and two more pleaded guilty in another. In two cases brought by the Stanislaus District Attorney’s Office, one defendant was charged and another was convicted and sentenced in mortgage fraud cases. The Merced County District Attorney’s Office also charged a defendant in a mortgage fraud case, the San Joaquin County District Attorney’s Office secured a guilty plea in a mortgage fraud case, and the Fresno County District Attorney’s Office secured a guilty plea and a conviction in a mortgage fraud case as part of the operation. In total, six district attorneys’ offices filed seven new criminal mortgage fraud cases against at least nine defendants, secured eight guilty pleas in previously filed cases, and had nine defendants sentenced.

U.S. Attorney Wagner stated, “Operation Stolen Dreams was an unprecedented mobilization of federal, state, and local resources to combat mortgage fraud. The results announced today reflect months of hard work by investigators and prosecutors from many agencies, working side by side, and I want to thank all my partners in this effort.” Wagner continued, “While today marks the end of Operation Stolen Dreams, it is only the beginning of our common fight against mortgage fraud. The resources that we have dedicated to this problem, the alliances of federal, state, and local law enforcement officials that we have formed, the experience that we have gained, and the intelligence we have gathered will continue to be deployed in a sustained battle against mortgage fraud in California.”

“The last number of years have seen enormous and damaging developments in the mortgage and housing markets with an urgent reliance on the government to bolster unstable marketplaces and devastated communities,” said Kenneth M. Donohue, Inspector General of the Department of Housing and Urban Development. “The HUD OIG, in partnership with other federal agencies, is deeply committed to ensuring that scarce resources are not diverted to those who seek to enrich themselves at the expense of those who so desperately need assistance.”

“Mortgage fraud is an escalating problem that has quite literally stolen the American dream of owning a home for many people,” said Scott O’Briant, Special Agent in Charge, IRS-Criminal Investigation. “The impact on homeowners and communities is devastating. IRS-CI will continue to utilize its financial investigative expertise to aggressively investigate criminal activities that adversely affect our financial system and prey on unwitting victims.”

California Department of Real Estate Commissioner Jeff Davi remarked, “Mortgage fraud activities have reached an all time high in recent years as a result of the abuse of subprime lending, predators in the marketplace, and the economic recession. Because of the collaboration and cooperation of the Department of Justice and other law enforcement and administrative prosecutorial agencies, we have been able to combat mortgage fraud better than ever before. We must continue to be relentless when it comes to taking action against those who profit or benefit from the perpetration of illegal activities against our fellow citizens.”

“With Sacramento County among the highest nationwide in foreclosure rates, we are taking strategic action to protect our distressed homeowners from becoming victims of mortgage fraud,” said Sacramento County District Attorney Jan Scully. “Our partnership with the Financial Fraud Enforcement Task Force and Operation Stolen Dreams has undoubtedly strengthened efforts to crack down on mortgage fraud locally and across the entire Eastern District of California.”

Unlike previous mortgage fraud sweeps, Operation Stolen Dreams focused not only on federal criminal cases, but also on civil enforcement, restitution for victims, and increasing cooperation with state and local partners. As part of the national operation, almost 200 civil enforcement actions were filed by the U.S. Department of Justice, the FTC, and other federal agencies.

The President’s Financial Fraud Enforcement Task Force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes. For more information on the task force, visit

In the Eastern District of California, the work of the Financial Fraud Enforcement Task Force is being carried out by two task forces, consisting of federal, state, and local investigators and prosecutors. The Sacramento Division task force includes the FBI, IRS-Criminal Investigation, the HUD Office of Inspector General, U.S. Secret Service, U.S. Postal Inspection Service, the Veterans Administration Office of Inspector General, the FDIC Office of Inspector General, the U.S. Department of Labor Office of Inspector General, the California Department of Real Estate, the California Department of Corporations, the California Department of Financial Institutions, the California Office of Real Estate Appraisers, and the District Attorneys’ Offices for Butte, El Dorado, Nevada, Placer, Sacramento, San Joaquin, Solano, and Yolo Counties. The Fresno Division task force includes the FBI, IRS-Criminal Investigations, the HUD Office of Inspector General, U.S. Secret Service, Social Security Office of Inspector General, USDA Office of Inspector General, the U.S. Trustee’s Office, the California Attorney General’s Office, the California Department of Real Estate, and the District Attorneys’ Offices for Fresno, Kings, Merced, San Joaquin, Stanislaus, and Tulare Counties.

Some of the significant federal prosecutions filed as part of Operation Stolen Dreams include the following:

United States vs. Anthony Symmes
Cr. 10-200 EJG

On May 28, 2010, Symmes pleaded guilty to mail fraud conspiracy and money laundering in connection with a large-scale builder-buyout mortgage fraud scheme. For many years, Symmes was the largest homebuilder in Chico. In 2006, as the market cooled, Symmes had a significant amount of unsold new homes in inventory. Symmes established relationships with several unlicensed mortgage brokers to “sell” his homes to straw buyers at inflated prices. The entire reported purchase price was 100% financed on each home with various subprime lenders. Typically, the day after escrow closed, Symmes then rebated $40,000 to $60,000 of the reported purchase price per home to shell companies controlled by the buyers’ agents. The rebates were not disclosed to the lenders. Altogether, from 2006 through 2008, Symmes sold 62 homes with undisclosed sales rebates. The homes were financed in the aggregate amount of $21 million. To date, 38 of the homes have fallen into foreclosure and 10 more have been the subject of short sales, causing losses to date of $5 million. Symmes has pleaded guilty, is presently cooperating in an ongoing mortgage fraud investigation, and has already paid $4 million toward restitution/forfeiture. He is currently scheduled to be sentenced on September 3, 2010.

United States vs. Garret Gililland, et al.
Cr. S 08-0376 EJG

This morning, a federal grand jury returned a second superseding indictment against Garret Griffith Gililland and Nicole Magpusao who were originally charged in 2008 with mail fraud and other charges relating to a multimillion dollar “builder bailout” mortgage fraud scheme in Chico. The new charges add eight defendants with participation in that scheme or related to it. Chico-area homebuilder William E. Baker; Nor Cal Innovative Investments Inc. president Shane Burreson; Leonard Williams, a licensed real estate professional; Christopher M. Chiavola, Brandon Resendez, Niche Fortune, and Kesha Haynie–all former employees of Gililland and Burreson; and Remy Heng. According to the new indictment, Gililland, Burreson, Chiavola, Resendez, and Williams recruited various individuals to purchase residential real properties. Gililland and his associates acted as the mortgage broker and real estate agent in connection with the transactions. Gililland, Burreson, and others assisted in obtaining residential loans for the transactions causing materially false loan applications to be prepared on behalf of the purchasers. Gililland, Burreson, Chiavola, and others arranged with the sellers of the properties to purchase the properties at a price above the true market price. The defendants also arranged to credit a percentage of the margin between the actual market price and the inflated purchase price of the properties after the close of escrow to various bank accounts controlled by defendants. At the same time, defendants caused the credits to be concealed from the lenders. As a result of the scheme to defraud, lenders issued loans in an aggregate amount of approximately $21 million. Bank accounts controlled by Gililland, Burreson, and others, received over $2 million in fraud proceeds, and defendants Gililland, Burreson, and others, ultimately caused losses to lenders of over $4 million.

The new indictment separately alleges that Chiavola, Resendez, Fortune, and Haynie, after leaving the employment of Gililland and Burreson, replicated the scheme on their own. Gililland, Burreson, and Chiavola are further charged with money laundering for bank transactions involving the proceeds of the fraud. Finally, Remy Heng is charged with bulk cash smuggling for attempting to ship $20,000 in cash in a Pringles potato chip can via Federal Express to Gililland in Spain while Gililland was a fugitive.

United States vs. Hoda Samuel, et al.
Cr. S 10-0223 JAM

On June 10, 2010, a federal grand jury returned an indictment charging 10 individuals with 48 counts, including charges of conspiracy to commit mortgage fraud, mail fraud, and making false statements in mortgage applications. The indictment focuses on two Elk Grove businesses owned by defendant Hoda Samuel—Liberty Real Estate and Investment Company and Liberty Mortgage Company. From April of 2006 through February of 2007, Samuel and other Liberty employees are alleged to have been involved in at least thirty separate residential real estate transactions involving fraud. Specifically, the indictment alleges that loan applications contained misrepresentations concerning loan applicants’ employment and income. In addition, the indictment alleges that many of the transactions involved the payment of cash-back to buyers, often disguised as payments to contractors for repair and remodelling work, and usually not revealed to the lenders. As a result of these undisclosed payments, lenders were led to believe that the houses being purchased were worth more than the buyers were actually paying for them. Of the thirty transactions described in the indictment, at least twenty-eight have now gone into foreclosure, causing a collective loss to the lenders of more than $5.5 million.

United States vs. William T. Bridge
Cr. S 08-275 WBS

William Bridge wilfully failed to report over $3.8 million dollars on his 2003-2006 federal tax returns that he had earned as a licensed real estate mortgage broker doing business as The Loan Center in San Francisco. In completing his tax returns, Bridge reported only the compensation he earned as part of the “yield spread premium” that was reported by the lending institutions themselves to the IRS. He did not report his full commission, which involved substantially more money. During the same time, Bridge was paying thousands of dollars in kickbacks to an employee of Long Beach Mortgage (formerly a subsidiary of Washington Mutual bank) to process what he knew were fraudulent loans application packages to be secured by residential properties located in the Sacramento and Stockton areas. Bridge pleaded guilty to multiple counts of filing false tax returns and paying kickbacks in connection with real estate loan transactions in 2008. On April 9, 2010, Bridge was sentenced to 21 months in prison, to be followed by one year of supervised release, $1,057,700.90 in restitution to the Internal Revenue Service, and a $60,000 fine. A co-conspirator, former Long Beach Mortgage employee Joel Blanford, is currently on trial in federal court in Sacramento.

United States vs. Eric Ray Hernandez, et al.
Cr. S 10-249 AWI

Eric Ray Hernandez, Monica Marie Hernandez, and Evelyn Brigget Sanchez, all of Bakersfield, were charged with submitting loan applications to lenders containing false and fraudulent information that caused lenders to fund mortgage loans based on such fraudulent applications. The indictment alleges that the defendants caused false statements to be submitted to lenders concerning buyers’ income, assets, and liabilities, buyers’ employment status, and buyers’ intent to occupy the properties as their personal residences. Additionally, the defendants are alleged to have submitted false supporting documentation in support of mortgage loan applications, including false pay stubs, false letters purporting to be from the buyers’ tax accountant, false customer letters purporting to support the buyers’ self-employment status, and false verifications of the buyers’ bank funds on deposit. The indictment alleges that the defendants defrauded lenders of in excess of $2.5 million through this scheme.

United States vs. Albert Lewis Ellis, et al.

This morning, a federal grand jury in Fresno returned a five-count indictment against Albert Lewis Ellis, 46, of Fresno, Richard Keith Hanna, 42, of Elk Grove, and Wrenl Burge, 38, of Fresno charging them with conspiracy to commit mail fraud, three counts of mail fraud, and one count of identity theft. The defendants used social security numbers belonging to another person to establish credit and then apply for a mortgage making materially false statements by listing the victim’s social security number, listing false and fraudulent employment information, including the false credit report. The defendants caused false and fraudulent loan applications to be submitted to seven different lending institutions and because of the conduct, the defendants defrauded lenders of in excess of $2 million.


Manufactured Home Construction and Safety Standards, Test Procedures for Roof Trusses



24 CFR Part 3280 [Docket No. FR-5222-P-01] RIN 2502-A172

TITLE: Manufactured Home Construction and Safety Standards, Test Procedures for Roof Trusses

AGENCY: Office of the Assistant Secretary for Housing — Federal Housing Commissioner, HUD.

ACTION: Proposed rule.

SUMMARY: This proposed rule would amend the Federal Manufactured Home Construction and Safety Standards by adopting proposals made by the

Manufactured Home Consensus Committee (MHCC), as modified by HUD…

To read this proposed rule in its entirety, please visit:


HUD-FHA has new career opportunities for qualified individuals. Recently posted online is the position of:

Deputy Assistant Secretary for Operations, Vacancy announcement 00-ER-10-0012, (Washington DC)

The Vacancy Announcements are posted at Please visit that website to view the announcements, additional information and to search for additional new HUD job listings. HUD-FHA also has job opportunities in other locations around the nation. Please bookmark and revisit frequently to see the new jobs as they appear online. Application forms can be found at:


FHA Loss mitigation training around the nation:

June 22, 2010 – Charlotte, NC. Loss Mitigation Training by the Atlanta Homeownership Center. This training is for HUD-approved Mortgagees, HUD-approved Housing Counseling Agencies & Nonprofit Housing Counselors. Registration required, no fee. More info at: More info at:

July 01, 2010 – Flint, MI. Loss Mitigation Training by the Philadelphia Homeownership Center. This training is for HUD-approved Mortgagees, HUD-approved Housing Counseling Agencies & Nonprofit Housing Counselors. Registration required, no fee. More info at: More info at:

July 20, 2010 – Atlanta, GA. Loss Mitigation Training by the Atlanta Homeownership Center. This training is for HUD-approved Mortgagees, HUD-approved Housing Counseling Agencies & Nonprofit Housing Counselors. Registration required, no fee. More info at:

July 21, 2010 – Nashville, TN. Loss Mitigation Training by the Atlanta Homeownership Center. This training is for HUD-approved Mortgagees, HUD-approved Housing Counseling Agencies & Nonprofit Housing Counselors. Registration required, no fee. More info at: More info at:

July 27, 2010 – Knoxville, TN. Loss Mitigation Training by the Atlanta Homeownership Center. This training is for HUD-approved Mortgagees, HUD-approved Housing Counseling Agencies & Nonprofit Housing Counselors. Registration required, no fee. More info at: More info at:

August 24-25, 2010 – Oklahoma City, OK. Early Delinquency Servicing & Loss Mitigation Program Training for HUD-Approved mortgagees, HUD-approved Housing Counselors & Nonprofit Housing Counselors. Registration required, no fee. More info at:

Electronic Class (EClass) on FHA Loss Mitigation & Servicing System: The EClass System provides additional training on FHA’s Loss Mitigation Programs, including FHA’s Home Affordable Modification Program (FHA-HAMP), as well as continuing education on loss mitigation & servicing issues that have generated the most industry questions & requests for further training. The EClass System is designed to provide web-based training to HUD-Approved Servicers, HUD-Approved & Non Profit Housing Counseling Agencies. More info at:


Help Prevent Loan Scams:

Homeowners facing foreclosure are losing their money and their homes to loan modification scams. Information is your best defense. If you see the signs of a scam and know the facts, you can protect yourself. To learn more about loan scams please visit: To learn how you can help prevent loan scams, please visit:



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