Tag Archives: Florida mortgage fraud

State of Washington Fines Countrywide for $1 Million for Discriminatory Lending — Will Seek to Revoke Countrywide’s License to Do Business in State

Washington Governor Christine Gregoire today announced plans by her state to fine Countrywide Home Loans $1 million for discriminatory lending.

In addition, the company will be required to pay more than $5 million in back assessments the company failed to pay.

Gregoire also announced the state is seeking to revoke Countrywide’s license to do business in Washington for its alleged illegal activity.

Joining Gregoire at today’s announcement was Deb Bortner, director of consumer services at the Washington state Department of Financial Institutions (DFI), and James Kelly, president of the Urban League of Metropolitan Seattle.

“The allegation that Countrywide preyed on minority borrowers is extremely troubling to me,” Gregoire said. “And I hope to learn eventually just how much this may have contributed to foreclosures in our state. The allegation offers evidence that Countrywide engaged in a pattern to target minority groups and engage in predatory practices.”

“That’s why we intend to bring the full weight of the state on Countrywide to rewrite home loans for minority borrowers who may have been misled into signing predatory mortgages,” the governor noted. “My job is to protect hard-working Washingtonians, and protect them we will.”

DFI is required to examine every home-lender licensed in the state of Washington. The agency conducted its fair lending examination of Countrywide last year. At that time, DFI looked at roughly 600 individual loan files and uncovered evidence that Countrywide engaged in discriminatory lending that targeted Washington’s minority communities. The agency also found significant underreporting of loans during its investigation.

“The Urban League is seeing far too many families caught up in the mortgage crisis who are being steered into bad loans,” stated James Kelly. “Today’s announcement from the governor is consistent with her message of protecting Washingtonians from national mortgage instability.”

DFI sent Countrywide a statement of charges on June 23, notifying the company of the fine and the back assessments the state plans to pursue.  Washington says that the investigation continues.

We have written on the disproportionate impact that the mortgage meltdown and housing crisis has had on minorities.

Washington’s action against Countrywide comes on the heels of lawsuits for fraud, deception, and unfair trade practices filed against Countrywide by the states of Illinois, California, and Florida.

 

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Florida Joins States Suing Countrywide

Florida has joined Illinois and California as states suing subprime lender Countrywide Financial for deceptive and unfair trade practices.

The Florida lawsuit claims that Countrywide put borrowers into mortgages they couldn’t afford or loans with rates and penalties that were misleading.

As in the Illinois and California actions, Countrywide CEO Executive Angelo Mozilo was also named as a defendant.

Here you can read the complaint filed Broward County Circuit Court in Attorney General, Department of Legal Affairs, State of Florida v. Countywide Financial Corp., Countrywide Home Loans Inc., and Angelo Mozilo.

Here you can read our earlier reports on the Illinois and California lawsuits against Countrywide.

In filing the lawsuit, Florida Attorney General William “Bill” McCollum said that “It is unthinkable that a company would try to take advantage of someone’s dream of homeownership. Florida homeowners who are trying to protect their homes from foreclosures shouldn’t have to worry about their mortgage brokers or lenders unfairly profiting at their expense.”

“Similar to other mortgage lenders, Countrywide attempted to generate large numbers of mortgage loans for resale on the secondary mortgage market. In doing so, the company purportedly originated loans with little concern about whether the borrower could afford and maintain payments on these loans. In the process, the company allegedly eased or ignored its own underwriting standards and encouraged borrowers to enter into “teaser” rates while concealing or misrepresenting that much larger payments would become due.”

According to Marc Taps of Legal Services of North Florida, “Our legal services programs throughout the state have seen a large number of clients who are now in default on mortgages written by Countrywide. It appears to us Countrywide did no due diligence and accepted applications which were patently fraudulent and reflected no ability on the part of the borrowers to make the required payments. We cannot help but conclude that the most financially unsophisticated segment of the population was targeted by the brokers who knew Countrywide would write these mortgages.”

The lawsuit also claims that Countrywide hid any potentially negative effects of “teaser” loans, including rising rates, prepayment penalties and negative amortization, which borrowers would inevitably face if they were making minimum payments or trying to refinance.

Traditionally, lenders require borrowers to document income and assets, but investigators with the Attorney General’s Office believe Countrywide offered reduced or no documentation loan programs to increase its loan sales. Countrywide also allegedly paid greater compensation to brokers for loans with higher interest rates and prepayment penalties because it could sell those loans for higher prices on the secondary market.

The Florida Attorney General’s Office also asserts that “[Countrywide’s] deceptive marketing practices were supposedly designed to sell costly loans while hiding or misrepresenting the terms and dangers. Countrywide’s deceptive sales practices resulted in a large number of loans ending in default and foreclosure, with the company reporting earlier this year that more than 25 percent of its subprime loans were delinquent. The Attorney General’s Office received more than 150 complaints about Countrywide, prompting a subpoena in February and ultimately leading to today’s lawsuit.”

In a sign that the growing state legal assault on Countrywide is a bipartisan project, McCollum is the first Republican state attorney general to sue Countrywide.

As we’ve observed before, Countrywide’s expanding legal troubles do not bode well for Bank of America, which plans to acquire Countrywide.

Adding to the pressure on Bank of America to abandon the Countrywide deal, McCollum vowed that he would go after Bank of America’s assets to pay for the damages owed by Countrwide if the sale goes through.

Florida asks consumers who believe they have been victimized by Countrywide to call the Attorney General’s fraud hotline at 1-866-966-7226 or  file a complaint online at: http://myfloridalegal.com.

 UPDATE:

The state of Washington is expected to file a lawsuit against Countrywide soon, accusing Countrywide of discriminating against minority borrowers. The state wants to fine the mortgage lender and revoke its license to conduct business in the state.

Mortgage Fraud Conspirators Get Their Day in Court — And You Can See a Preview on YouTube

Two conspirators in a Florida mortgage scam that prosecutors described as an “equity stripping” mortgage fraud scheme that included identity theft and resulted in more than $6 million in fraudulent loans had their day in federal court in Tampa last week.

Federal prosecutors had claimed that the conspirators fraudulently submitted mortgage applications under false pretenses, obtaining and disbursing the proceeds of those loans to bank accounts in their control.

Last Thursday, mortgage broker Luis Uribe pleaded guilty to one count of wire fraud and one count of aggravated identity theft. He could face as much as 30 years in prison and a $1 million fine.

Uribe, 28, was a licensed mortgage broker involved in Bay General Contracting Services, a non-licensed contracting service firm. Federal prosecutors alleged that the company obtained dozens of fraudulent loans between July 2006 and September 2007, but never built anything. Bay General never hired any employees and brought in no one to work on the projects it had obtained loans for, prosecutors said.

Prosecutors also alleged that Bay General was used to improperly inflate the value of properties being bought, to strip actual and fraudulently created equity out of properties and to serve as a vehicle for “siphoning the proceeds” from fraudulently obtained loans.

On Friday, Andrea Batronie, 31, a licensed title agent from Land O’Lakes, Florida, was sentenced to 30 months in prison for her part in the scheme.

Batronie was found guilty last October of conspiracy to commit mail, bank and wire fraud.

Uribe is said to have obtained mortgage loans under false pretenses through a shell contracting company using stolen identities, apparently on the premise of additional construction work to be done. At closing, Batronie would divert the funds into bank accounts under their control.

This may not be Andrea Batronie’s first time in court.

On June 9, 2001, the TV program “Judge Hatchett” featured a Michael Cericola verses a Scott and Andrea Batronie of Florida. Cericola claimed that Scott and Andrea Batronie had sold him a scuba tank on ebay that was unusable.

Cericola won.

You can view part of the episode on YouTube here.

UPDATE:

Unfortunately — although it’s not a surprise — the YouTube video has been “removed by the user.” 

We’re guessing that Scott and Andrea Batronie didn’t find it very funny anymore, after Andrea had to go before a real court and got a real sentence.

 If you can find another copy of it online, please let us know.

UPDATE:

U. S. District Judge Steven Merryday in Tampa sentenced Luis Uribe to 8.5 years in prison for his role in the  “equity stripping” mortgage fraud scheme that included identity theft.  

This sentence is in addition to a 34 month sentence that Uribe received for a $3.8 million mortgage fraud scheme in Chicago.

The Tampa Tribune reports that Uribe cooperated with investigators after his arrest, giving them information about the schemes and his co-defendants.  The newspaper also reports that “Before he was sentenced, Uribe apologized to the victims and to his family.  ‘I’ve been incarcerated nine months,’ he said. ‘I’m not the same person as when I came in.’ He said his wife divorced him as a result of this. ‘I ask the court to consider I have a responsibility as a father. … I can only ask the court to be as lenient as possible.’

“He said he hopes to enroll in spiritual and educational programs in prison.  ‘I want to live a good life that’s free of shame and crime,’ he said.”

“Merryday paraphrased his interpretation of the defendant’s plea for lenience: ‘Judge, don’t let the blood in your veins run as cold as mine was the day I committed this offense.’ The judge added, ‘I guess I would ask the same favor if I was in your shoes’.”