KeNo's Housing and Economic Portal: Thursday March 31 Housing and Economic stories

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Realtor charged in mortgage fraud case - (www.news-journalonline.com) A top-producing Flagler Beach Realtor is one of 11 people charged in an investigation of mortgage fraud, the Florida Department of Law Enforcement said today. Linda Barlan Kasper, 63, was arrested Friday on charges of racketeering and conspiracy. Investigators said a two-year investigation revealed banks were cheated out of $9 million in phony homebuyer loans. "Operation Fast Cash targeted 15 subjects who infiltrated the housing industry as mortgage brokers, appraisers, Realtors and straw buyers with the sole purpose of lining their pockets with illegal money," said Dominick Pape, an FDLE special agent in charge. The group operated in Flagler, Lake and Volusia counties. They bought 23 homes, then, agents say, they over-appraised the values and sold the properties to "straw buyers," who got mortgages and then let the homes go into foreclosure.

'Break-in' lawyer threat to the public, Bar says - (www.mortgage.ocregister.com) A Carlsbad lawyer who made national headlines when he told Orange County residents and others to break into their foreclosed homes and take them back poses a “substantial threat of harm to the public,” and should have his license yanked, lawyers with the State Bar of California said today. Michael T. Pines, 59, who told clients in Newport Beach, Carlsbad and Simi Valley to re-enter their repossessed homes and start living in them again, had no right to do so, the Bar said in pleadings to take away the license. In the Newport Beach case, shown here, Pines, center, helped a 72-year-old man break into a 5-bedroom, 4,400-square foot home in Crystal Cove that he had lost to foreclosure, and that was back on the market at $3.8 million. The ex-homeowner was accompanied by Pines and, wielding a hammer, broke a window to gain entry to the house. Officers arrested Pines and his client for trespassing and took them away in a police car.

Fannie Mae's Fraudulent REO Disclosure Practices - (www.housingstorm.com) It is high-time to call attention to Fannie Mae’s dastardly practice of NOT disclosing existing inspections and reports to buyers of their REO properties. Fannie Mae is knowingly breaking real estate law and asking it’s REO listing agents to do so as well. Pretend you buying a foreclosed property owned by Fannie Mae. The listing agent sends you over a package of disclosures (or most of them anyway). They are also required to send over all inspections and reports from any previous escrows. But, they don’t and they won’t. Yes, the agents are to blame and they are creating a huge liability for themselves if they ever get caught. Fannie Mae, however, really puts the listing agents in a bind: the agents know what they are being asked to do is wrong, but they will be fired if they don’t comply. I have personally seen this, many times, from both the listing and selling agent’s side. I used to work with a small team of REO listing agents and we had a Fannie Mae account. The asset managers expressly forbid us from sending them any reports or inspections on the properties. Even worse, they expressly forbid us from accepting or even looking at any inspections or reports done by buyers during an escrow. Their advice to us was that if a buyer’s agent emailed over an inspection report, delete it. Yes, the asset managers actually told us to delete files.

The rich, bankers especially, can defraud without consequences - (www.nytimes.com) Count me among those who were glad to see the documentary “Inside Job” win an Oscar. The film reminded us that the financial crisis of 2008, whose aftereffects are still blighting the lives of millions of Americans, didn’t just happen — it was made possible by bad behavior on the part of bankers, regulators and, yes, economists. What the film didn’t point out, however, is that the crisis has spawned a whole new set of abuses, many of them illegal as well as immoral. And leading political figures are, at long last, showing some outrage. Unfortunately, this outrage is directed, not at banking abuses, but at those trying to hold banks accountable for these abuses. The immediate flashpoint is a proposed settlement between state attorneys general and the mortgage servicing industry. That settlement is a “shakedown,” says Senator Richard Shelby of Alabama. The money banks would be required to allot to mortgage modification would be “extorted,” declares The Wall Street Journal. And the bankers themselves warn that any action against them would place economic recovery at risk.

Hackers Release BofA Mortgage Emails - (www.forbes.com) Hackers have released emails that they claim reveal Bank of America purposely concealed information about mortgage foreclosures. A group known as Anonymous posted emails provided by a former employee of Balboa Insurance, which was acquired by Bank of America ( BAC - news -people ) as part of its Countrywide acquisition. The group contends the emails prove the Bank of America affiliate purposely removed information from mortgage documentation. Bank of America told Reuters that the claims are untrue, and that the emails in question merely pertain to clerical matters and are not foreclosure related. Bank of America has agreed to sell the unit to QBE Insurance Group. Bank of America shares are trading down about 1% Monday. BofA is the top stock in the Rydex 2x S&P Select Sector Financial ETF , trading down 6.7% today. Other top stocks in the fund include JPMorgan Chase, trading down 1.4%, and Wells Fargo, trading down .9% Monday.