Maryland Woman Convicted for Role in Mortgage Fraud Scam

A Maryland jury has convicted Annika Boas, 37, for her role in a residential mortgage fraud scheme, U.S. Attorney for the District of Maryland Rod J. Rosenstein announced late last week.
Boas was convicted of two counts of wire fraud and two counts of making a false statement on a mortgage application, according to Rosenstein.
Boas committed the mortgage fraud between March 2007 and November 2008, according to evidence presented at the trial. Along with real estate agent Edgar Tibakweitira and Ayoub Luziga (with whom Boas was in a relationship) and several others, Boas allegedly made false statements on residential mortgage applications to obtain the loans, then used stolen or false identity documents to lure the lenders into giving loans to straw buyers such as Boas and her conspirators. Evidence revealed that Tibakweitira, the real estate agent, created false documents for repairs and renovations in order to inflate the price of the properties. The conspirators then divided the money that supposedly went to repairs amongst themselves following settlement, according to evidence presented.
Witnesses testified at the trial that Boas and the conspirators used the identify of at least four individuals to fraudulently obtain residential mortgage loans, including a driver’s license from North Carolina with the victim’s name and Boas’s photo. According to evidence, federally-insured financial institutions incurred between $400,000 and $1 million as a result of the scam.
Rosenstein announced the conviction along with Special Agent in Charge Cary A. Rubenstein of the Housing and Urban Development Office of Inspector General – Office of Investigations (HUD – OIG); Acting Inspector General Michael P. Stephens of the Federal Housing Finance Agency Office of Inspector General (FHFA – OIG); Special Agent in Charge Kathy Michalko of the U.S. Secret Service – Washington Field Office; John L. Phillips, Assistant Inspector General for Investigations, U.S. Department of the Treasury – Office of Inspector General; and Special Agent in Charge William Winter of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI).
“The United States Department of Housing and Urban Development, Office of the Inspector General investigates allegations of waste, fraud and abuse in HUD sponsored programs such as our FHA program,” said Rubenstein, who is the Special Agent in Charge of HUD-OIG’s Mid-Atlantic Region. “This group, including several mortgage industry professionals, perpetrated a sophisticated mortgage fraud scheme designed to enrich themselves at the expense of lenders and the FHA Insurance Fund. The efforts that brought us this verdict demonstrate that when law enforcement is made aware of schemes that place the public and the FHA Insurance program at risk, we will commit the necessary resources to make sure the fraudsters are brought to justice and are no longer in a position to engage in fraud.”
Boas is scheduled to be sentenced on January 7, 2015, and faces up to 30 years in prison. Tibakweitira, 46, and Ayoub Luziga, 35, have pleaded guilty to charges relating to the scam and are scheduled to be sentenced in November. Five others have pleaded guilty to charges stemming from the scam; one was sentenced to five years in prison and one was sentenced to time served. The other three are awaiting sentencing.

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HUD, Treasury, Ad Council Target Struggling Homeowners with PSAs

The U.S. Department of Housing and Urban Development (HUD), the U.S. Department of Treasury, and the Ad Council have teamed up for a series of public service announcements (PSAs) in an effort to reach struggling homeowners and prevent foreclosures, HUD announced on Wednesday.
The PSAs are part of the Foreclosure Prevention Campaign and are meant to raise awareness of resources available through the Make Home Affordable (MHA) program for those at risk of foreclosure. MHA was created in 2009 in response to the housing crisis of 2008 with the goal of stabilizing the housing market by offering solutions to struggling homeowners, including lowering monthly mortgage payments. MHA’s goal of assisting homeowners is part of a broader goal of improving the overall economy. Since it was formed five years ago, MHA has assisted more than 1.5 million families.
The MHA program has been extended until December 31, 2016, due to ongoing need; HUD estimates that almost one in every 17 homeowners is behind on his or her mortgage payments.
The new series of ads will be directed at homeowners who are current on their mortgage payments but struggling to stay afloat due to a hardship that may have placed a strain on their finances. HUD believes that many of these homeowners may not be aware of the MHA program, which may be able to offer them a solution.
“As the economy continues to heal from the Great Recession, many homeowners still struggle to make their mortgage payments,” Deputy Treasury Secretary Sarah Bloom Raskin said. “The good news is that help is still available. This new PSA campaign is our latest effort to raise awareness of the free government resources available through Making Home Affordable to assist struggling homeowners in avoiding foreclosure.”
The new ads will be available in both English and Spanish and will provide a toll-free number for interested homeowners to call for more information.
“Although the housing market and economy are making a steady recovery, many struggling homeowners would still benefit from the one-on-one counseling services a HUD-approved housing agency can provide them,” Federal Housing Administration (FHA) Commissioner Carol Galante said. “More than 1.5 million families have already benefited from the Making Home Affordable Program, and we hope this effort to educate homeowners will lead to many more families using these free services and getting the help they need to stay in their homes.”

Housing Demand Stays Strong Despite Drop in Inventory

Late-summer housing market trends point to an “unusual twist” in sales activity for the fall, national brokerage Redfin said Wednesday in its latest Real-Time Housing Market Tracker.
Examining August activity in more than 30 markets nationwide, the company reported a 1.4 percent month-over-month dip in home sale prices to a median $281,000, reflecting a gain of just 5.1 percent over last year. Meanwhile, home sales weakened to 134,143, down 5.1 percent from July and 8.3 percent from August 2013.
More interesting, Redfin said, was the shift in supply and demand dynamics: Even as new listings plunged 9.3 percent—nearly triple the average July-to-August decline—numbers of customers touring homes and making offers rose, demonstrating buyers aren’t backing off.
At the same time, fewer homes are being sold above their list price (2 percent less than July and 7 percent less than a year ago), meaning that same group of buyers is willing to take a slow approach in a market where high demand would normally drive up prices.
“Our take is that the seemingly incongruous August numbers reflect the mindsets of buyers and sellers,” Redfin Chief Economist Nela Richardson said. “Buyers want to buy, but they’re patient, and more careful not to overpay. At the same time, sellers are adjusting to having less power, which seems to have put a damper on some listing their homes.”
With the groundwork of strong demand and short supply in place, Richardson said the company expects a fall selling season marked by slower price growth and stronger sales than last year.
“A surprising drop in newly listed homes combined with strong homebuyer demand could suggest that home prices will spike upward this fall as they did much of last year. Not so,” she said. “We actually expect prices to continue to soften in the next few months as investors and all-cash buyers continue to retreat from the market.”

Distressed Home Sale Prices Increase in August

The August median price of U.S. distressed homes climbed both monthly and annually, according to RealtyTrac’s August 2014 U.S. Residential and Foreclosure Sales Report released on Sept. 25.
Distressed properties, which are homes that are either in foreclosure or owned by banks, saw their average sale price jump up to $129,000 for August, which is an increase of 2 percent from July and 15 percent from August 2013, RealtyTrac reported. That price, despite the monthly and annual increases, is still 37 percent below the national median price of a non-distressed home, which was reported at $205,000.
Meanwhile, the number of combined short sales (defined as sales of residential properties where the sale price is below the combined total of outstanding mortgages secured by the property) and distressed sales made up 13.5 percent of all sales of residential properties in the U.S. in August, a number that increased by 10 percent from July but dropped 14.3 percent from August a year ago, according to RealtyTrac. The markets where short sales and distressed sales made up the highest percentage of residential sales were Modesto, California (36.1 percent), Lakeland, Florida (35.9), Stockton, California (33.4), Las Vegas (33.2), and Orlando (29.3).
The percentage of all residential sales that were short sales (4.6 percent), bank-owned (REO) sales (7.8 percent), and foreclosure auction sales (1.0 percent) all declined year-over-year in August, according to RealtyTrac.

Foreclosure Inventory Falls, But Delinquency Rate Rises in August

Foreclosure inventory is down nationwide, but the delinquency rate is up, according to Black Knight Financial Services’ “First Look” at August Mortgage Data released on September 25.
Foreclosure starts declined by 10 percent from July to August and by 24 percent from August 2013 to August 2014, according to Black Knight. The month-over-month decrease in foreclosure starts was the first in five months. The total number of foreclosure starts in August was reported at 81,600. Foreclosure inventory, which is the total number of loans in foreclosure, fell to 913,000, its lowest point since March 2008. According to Black Knight, foreclosure loans are past due for an average of 1,010 days.
The monthly prepayment rate, which is historically a good indicator of refinance activity, fell by more than 8 percent from July to August, ending a string of five consecutive months with an increase, according to Black Knight.
While foreclosure starts and overall inventory fell, however, the mortgage delinquency rate took a 5 percent month-over-month leap in August up to its highest point since February; the delinquency rate declined year-over-year, however, by 4.8 percent, Black Knight reported. The majority of new delinquencies reported in August were in the early stage of delinquency. The total number of delinquent loans increased by 146,000 from July to August. Delinquent loans are defined as those more than 30 days past due but not in foreclosure.
“While August’s delinquency rate did rise nearly 5 percent, it’s important to realize that the vast majority of these new delinquencies are early stage – just 30 days past due,” said Kostya Gradushy, manager of research and analytics for Black Knight. “This can be a particularly volatile metric, as many borrowers who miss a single payment do tend to self correct. At the same time, the foreclosure rate continued to decline in August, down more than 33 percent from last year, with inventory reaching a six and half year low. Overall, the long term trends in both delinquent mortgages and loans in foreclosure continue to be positive ones.”