GREFPAC - New York Time GREFPAC NEWS
Official Publication of the Georgia Real Estate Fraud Prevention and Awareness Coalition, Inc.
A service to our members, industries and communities.
2011 Issue 1
INSIDE GREFPAC
 
Get Ready for the 7th Annual Educational Conference

The 7th Annual Conference will be held March 9, 2011 at the Cobb Galleria Centre.  The agenda is being finalized, but outstanding speakers will address evolving fraud trends as well as best practices to detect and prevent fraud.  CE credits will be available for attorneys, realtors, appraisers, and CFEs.

Identity Theft, Privacy Among Topics at December Meeting

We were honored to have Cindy Liebes from the Federal Trade Commission's Bureau of Consumer Protection as our speaker at the December educational meeting.  Ms. Liebes provided an excellent presentation on the FTC, identity theft prevention, the Red Flags Rule, data security and the FTC's response to the mortgage crisis.

NATIONAL NEWS AFFECTING GEORGIA

FinCEN Reports:  Mortgage Fraud SARs Rise; 7 Percent Increase in First Half of 2010
Fin. Crimes Enforcement Network | Dec. 14, 2010
 
The Financial Crimes Enforcement Network (FinCEN) released two mortgage fraud reports which together cover the first six months of 2010.  The reports show that suspicious activity reports (SARs) indicating mortgage loan fraud climbed seven percent, rising to 35,135 in the first half of 2010 compared with 32,926 in the first half of 2009. Read More

FinCEN Proposes AML Plan for Non-Bank Mortgage Lenders; Mortgage Brokers and More Mortgage Bankers to File SARs
Fin. Crimes Enforcement Network | Dec. 6, 2010

The Financial Crimes Enforcement Network (FinCEN) proposed a requirement that non-bank residential mortgage lenders and originators, like other types of financial institutions, establish anti-money laundering (AML) programs and comply with suspicious activity report (SAR) regulations.  Under current FinCEN regulations the only mortgage originators that are required to file SARs are banks and insured depository institutions.  The proposal would close a regulatory gap that allows other originators, such as mortgage brokers and mortgage lenders not affiliated with banks, to avoid having AML and SAR filing obligations. Read More

FTC Issues Final Rule to Protect Struggling Homeowners from Mortgage Relief Scams
Fed. Trade Comm'n | Nov. 19, 2010

The Federal Trade Commission issued a Final Rule and Statement of Basis and Purpose concerning the practices of for-profit companies that, in exchange for a fee, offer to work on behalf of consumers to help them obtain modifications to the terms of mortgage loans or to avoid foreclosure on those loans. The Final Rule, among other things, would: (1) prohibit providers of such mortgage assistance relief services from making false or misleading claims; (2) mandate that providers disclose certain information about these services; (3) bar the collection of advance fees for these services; (4) prohibit anyone from providing substantial assistance or support to another they know or consciously avoid knowing is engaged in a violation of the Rule; and (5) impose recordkeeping and compliance requirements. Read More

HUD Introduces Revised HECM Closing Certification
U.S. Dep't of Hous. and Urban Dev.  | Nov. 19, 2010
 
The U.S. Department of Housing and Urban Development (HUD) issued a letter to its approved mortgagees and Home Equity Conversion Mortgage (HECM) Counseling Roster Agencies which introduced a revised HUD-1 Settlement Statement closing certification.  The purpose of the certification is that, on the day of loan closing, the HECM mortgagor must certify the source of cash, or its equivalent, used for the monetary investment or closing costs was not provided by the seller, or any other person or entity that financially benefits from the transaction.  Likewise, the seller must certify the HECM mortgagor will not be paid or reimbursed for any part of the monetary investment or closing costs before, during, or after loan closing.  The certification must be printed at the bottom of the HUD-1 or attached to the HUD-1 as an addendum for all HECM transactions.  Read More

Click here for a copy of the addendum to HUD-1 Settlement Statement

FTC Announces Series of Actions Against Mortgage Relief Operations
Fed. Trade Comm'n | Nov. 19, 2010

The Federal Trade Commission (FTC) announced a series of law enforcement actions as part of its continuing crackdown on scams that target homeowners behind in their mortgage payments or facing foreclosure.  At the FTC's request, federal courts have halted two allegedly bogus mortgage relief operations that posed as government mortgage assistance programs, pending trial.  In addition, 17 marketers have been banned from selling mortgage loan modification and foreclosure relief services under court judgments and settlements in several previously filed law enforcement actions.  The FTC has charged another mortgage relief operation with contempt for violating 2008 court orders.  All of these cases involved alleged false claims that the defendants can obtain dramatically lower mortgage interest rates in exchange for hefty up-front fees. Read More

Federal Reserve Board Announces Interim Final Rule on Appraiser Independence, Replacing HVCC
Fed. Reserve Board | Oct. 18, 2010

The Federal Reserve Board published for public comment an interim final rule amending Regulation Z (Truth in Lending).  The interim rule implements Section 129E of the Truth in Lending Act (TILA), which was enacted as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act.  TILA Section 129E establishes new requirements for appraisal independence for consumer credit transactions secured by the consumer's principal dwelling.  The amendments are designed to ensure that real estate appraisals used to support creditors' underwriting decisions are based on the appraiser's independent professional judgment, free of any influence or pressure that may be exerted by parties that have an interest in the transaction.  The amendments also seek to ensure that creditors and their agents pay customary and reasonable fees to appraisers.  With the issuance of this rule, the Home Valuation Code of Conduct (HVCC) has no further effect.  Compliance with the interim final rule is optional until April 1, 2011. Read More

Fannie Mae Releases Article Exploring Short Sale Fraud Trends
Fannie Mae | Oct. 14, 2010

Fannie Mae released an article which explores short sale flips and non-arm's length short sales to facilitate a principal reduction-- the two primary short sale fraud trends that Fannie Mae has observed.  Read More

Fannie Mae Releases Mortgage Fraud Monthly Statistics
Fannie Mae | 2010

Fannie Mae posts "Mortgage Fraud Monthly Updates" which contain charts and tables depicting the distribution of misrepresentation findings by type and by geography.  The most recent update (released December 2010) lists Georgia as the tenth worst state for 2009-2010 loan originations with significant misrepresentation findings. Read More

HUD Proposes to Strengthen FHA Lender Indemnification Process
U.S. Dep't of Hous. and Urban Dev. | Oct. 8, 2010

The U.S. Department of Housing and Urban Development (HUD) proposed new regulations that would, among other things, strengthen its authority to force certain lenders to indemnify or reimburse the Federal Housing Administration (FHA) for insurance claims paid on mortgages that are found not to meet the agency's guidelines.  Most significantly, the proposed rule would provide additional guidance on HUD's regulations implementing the statutory requirements regarding mortgagee indemnification to HUD of insurance claims in the case of fraud, misrepresentation, or noncompliance with applicable loan origination requirements. Read More

Interthinx Releases Mortgage Fraud Risk Report for Q3 2010
Interthinx | Sept. 25, 2010

Interthinx released its quarterly Mortgage Fraud Risk Report, reflecting data collected in the third quarter of 2010. The report analyzes national fraud risk and indices for the four most common types of mortgage fraud risk.  According to the most recent data available, trends are emerging that may indicate that "fraud for property" (that is, fraud to attain homeownership), once considered to be less dangerous than "fraud for profit," is returning to the industry.  The report indicates that Georgia has the ninth highest mortgage fraud risk and that the Atlanta metropolitan statistical area remains in the "very high risk" category. Read More

GEORGIA NEWS
Fraudulent Mortgage Release Ruled Effective
Ga. Court of Appeals | Nov. 19, 2010

The Georgia Court of Appeals concluded that a corporate deed which was executed by someone fraudulently assuming authority of the company was not a forgery and released the property from the company's security interest as to a subsequent mortgage holder who was a bona fide purchaser for value. Deutsche Bank Nat'l Trust Co. v. JP Morgan Chase Bank, N.A., ___ Ga.App. ___, (Case No. A10A1509, decided Nov. 19, 2010). The Georgia Supreme Court has been asked to review this decision.

Title Insurance Company Must Issue Policy Despite Imposter Forging Deed at Closing
Ga. Supreme Court | Oct. 18, 2010

The Georgia Supreme Court considered whether a condition of a title insurance commitment was satisfied when the borrower who executed a security deed was an imposter who forged the true owner's name on the deed.  The court ruled that, in the absence of language in a title insurance commitment that plainly excludes coverage for a forgery, a commitment must be construed to provide coverage for forgeries.  Also, the condition that "[d]ocuments satisfactory to the Company creating the interest in the land and/or mortgage to be insured must be signed, delivered and recorded" was not plain and specific enough to exclude coverage for forgeries.  The court concluded that the insurer was required to issue the title insurance policy in question. Read More


Supreme Court: "Forged Deed is a Nullity"
Ga. Supreme Court | Oct. 4, 2010

According to the Georgia Supreme Court, a forged deed is a nullity and vests no title in a grantee.  As such, even a bona fide purchaser for value without notice of a forgery cannot acquire good title from a grantee in a forged deed, or those holding under such a grantee, because the grantee has no title to convey. Read More

Discipline Ordered for Attorney Who Pled Guilty to Mortgage Fraud
Ga. Supreme CourtOct. 4, 2010

The Georgia Supreme Court disciplined an attorney who, pursuant to a negotiated agreement, pled guilty to one felony count of residential mortgage fraud and was given a misdemeanor sentence of six months probation as a first offender.  Based on its review of the record and evidence presented, the court ordered a two-year suspension of the attorney from the practice of law, with his reinstatement being subject to certain conditions.
Emanuel County Couple Sentenced in Mortgage Fraud Scheme
U.S. Attorney's Office for the S. Dist. of Ga. | Sept. 28, 2010

Brian and Natasha Steptoe, both from Emanuel County, were sentenced in federal district court for their roles in a mortgage fraud scheme that occurred in Swainsboro.  Evidence presented during their guilty pleas revealed that the Steptoes, with the assistance of others, knowingly submitted a false loan application and other documentation to Bank of America with regard to a $400,000 home loan.  The investigation revealed that the Steptoes' scheme was to defraud Bank of America in order to pocket sizeable sums of money for themselves and others.  The property went into foreclosure soon after it was sold. Read More

Trial Court Erred in Dismissing Indictment Charging Defendants with Residential Mortgage Fraud
Ga. Court of Appeals | Sept. 15, 2010

The Georgia Court of Appeals ruled that the Superior Court of Fulton County erred in quashing an indictment charging multiple defendants with ten counts of residential mortgage fraud under the Georgia Residential Mortgage Fraud Act.  The Court of Appeals held that all counts of the indictment were legally sufficient. State v. Corhen, ___ Ga.App. ___, 700 S.E.2d 912 (2010).  The Georgia Supreme Court has been asked to review this decision.

NOTICE AND DISCLAIMER:
Copyright 2011 Georgia Real Estate Fraud Prevention and Awareness Coalition, Inc. All rights reserved. Unauthorized use of the Georgia Real Estate Fraud Prevention and Awareness Coalition, Inc. or GREFPAC names or logos is prohibited.  You may reproduce a reasonable number of copies of this newsletter for your own personal use or for non-commercial distribution, but all all copies must be unmodified and must include the above copyright notice.  Reproduction or distribution of this newsletter for commercial purposes is prohibited. GREFPAC cannot guarantee that material accessible from this newsletter is free of viruses or other malicious code, and GREFPAC does not accept any responsibility for any loss caused by any such code.  GREFPAC is not responsible for any third party content, products or services that may be accessed through this newsletter, and the availability of links in this newsletter to such third party content, products or services should not be construed as referrals to, or endorsements of, the linked entities or the content, products or services that they make available. GREFPAC will cease providing links from future issues of this newsletter upon request from the linked party.  The information in this newsletter is presented as general information and is not intended to be, and should not be relied upon as, legal advice or legal opinions on specific facts.  You should not rely on information in this newsletter or its applicability to any specific questions or circumstances without first seeking your own professional's advice.  GREFPAC is not a law firm and does not offer professional legal services.  The information in this publication is not intended to create, and the transmission and receipt of it does not constitute, a confidential or lawyer-client relationship.  The act of contacting GREFPAC will not create a confidential or lawyer-client relationship, and your communication will not be treated as confidential. GREFPAC makes no warranties, representations, or claims of any kind concerning the information available from, or the distribution of, this newsletter.  GREFPAC and contributing authors expressly disclaim all liability to any person in respect of the consequences of anything done or omitted to be done wholly or partly in reliance upon the use or contents of this newsletter.  The information contained in this newsletter may concern allegations made in civil lawsuits and in criminal indictments. Such allegations may be found by the court to be untrue.  All persons are presumed innocent of criminal allegations until convicted of a crime.  Court opinions may be subject to the parties' motion for reconsideration, the court's reconsideration, and editorial changes made by the reporter of decisions.  We are eager to make corrections quickly and candidly.  An aggrieved party need not have a letter to the editor published for us to correct a mistake. We will publish corrections on our own and in our voice as soon as we are told about them and can confirm them.
UPCOMING EVENTS
 AT A GLANCE

March 9, 2011
GREFPAC 7th Annual Educational Conference
7:30 a.m. - 4:30 p.m.
Cobb Galleria Centre, Two Galleria Pkwy., Atlanta, GA 30339

June 1, 2011
GREFPAC Quarterly
Educational Meeting
9:30 a.m. - Noon
Atlanta Jr. League 3154 N'side Pkwy. Atlanta, GA 30327

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2011 SPONSORS


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