Comments on: Mortgage Fraud Part 2: Case Studies

By: Former Loan Originator Eliza Bautista Finally Arrested in Seattle | Rain City Guide

Thu, 12 Aug 2010 02:58:31 +0000

[...] Jillayne Schlicke on 08 11, 2010 tweetcount_url='http://raincityguide.com/2010/08/11/former-loan-originator-eliza-bautista-finally-arrested-in-seattle/';tweetcount_title='Former Loan Originator Eliza Bautista Finally Arrested in Seattle';tweetcount_cnt=0;tweetcount_src='RT @raincityguide: ';tweetcount_via=false;tweetcount_size='large';tweetcount_api_key='3fc50917f95c78d4d4955674d43795e0';Liza Bautista was a mortgage broker with a strong client base inside her Christian church in Tukwila. After successfully closing several prime loans for folk with A-paper credit, she targeted consumers who were turned down by lenders and created two sets of loan documents. She submitted the credit history and identity of her prime, A paper clients to the lender funding the loan. When it was time to sign papers, she forged her A paper client’s names on the loan documents and sent everything in for funding. For the poor credit clients, she hand carried a second set of documents to be signed and then made a special offer to personally hand carry their mortgage payment to the lender each month. (Note to consumers, don’t ever agree to this.) Of course, the payments never made it to the bank. Liza kept the money and subsequently, the lender started to foreclose on the A-paper owners, whose name appeared on title as the owners of record. When the A-paper clients were finally contacted by the lender and claimed they did not own said house, Liza started running out of places to hide. The poor credit clients who were thrilled to be homeowners were obviously upset that their name were not on the title to the home and they were evicted after foreclosure. [...]

By: mf

mf — Wed, 11 Aug 2010 23:35:59 +0000

Liza Bautista was finally arrested yesterday in Seattle. Here’s more:
http://mortgagefiduciaries.com/2010/08/300/

By: National Association of Mortgage Fiduciaries

National Association of Mortgage Fiduciaries — Wed, 11 Aug 2010 23:31:48 +0000

[...] Liza Bautista was a mortgage broker with a strong client base inside her Christian church in Tukwila. After successfully closing several prime loans for folk with A-paper credit, she targeted consumers who were turned down by lenders and created two sets of loan documents. She submitted the credit history and identity of her prime, A paper clients to the lender funding the loan. When it was time to sign papers, she forged her A paper client’s names on the loan documents and sent everything in for funding. For the poor credit clients, she hand carried a second set of documents to be signed and then made a special offer to personally hand carry their mortgage payment to the lender each month. (Note to consumers, don’t ever agree to this.) Of course, the payments never made it to the bank. Liza kept the money and subsequently, the lender started to foreclose on the A-paper owners, whose name appeared on title as the owners of record. When the A-paper clients were finally contacted by the lender and claimed they did not own said house, Liza started running out of places to hide. The poor credit clients who were thrilled to be homeowners were obviously upset that their name were not on the title to the home and they were evicted after foreclosure. [...]

By: Angie Williams

Angie Williams — Thu, 27 May 2010 01:06:19 +0000

With this article being written in 2008, it highlights the schemes and brings about their awareness. It only makes me understand and appreciate the rules which have been set forth thus far. Including the licensing requirements, background checks, continueing education. Even the 2010 gfe.
The other good part about bringing the statistics to the forefront is those who thought something as little as marking an application as owner occupied on a transaction which was really meant for investment could spell out big default when one walks from mortgage because there was less of a down payment on the owner occupied transaction. It’s not just the big fraud.. it’s all fraud that played a role.

By: Daniel Mulvehill

Daniel Mulvehill — Sat, 27 Feb 2010 17:12:00 +0000

It is obvious there will be these type of people who try and beat the system, but get busted? It is a very benefical to put these people out of business, what is there fear factor or ethics, none they beleive they are above the law and if they get caught it will take years to be convicted and fined. So what is the fastest way to antimidate these low class people, set the bar that if you participate in this kind of fraud you will be sent to jail and kept there for a period of time until your case is quickly reviewed seize all of there assests that isn’t there’s to begin with demote them to a low level and through away the key.

By: Jillayne Schlicke

Jillayne Schlicke — Tue, 23 Feb 2010 23:01:04 +0000

Hi Alison,

Our state regulators maintain a list of consent orders as part of the public records system.

For WA State, here is the link.
http://www.dfi.wa.gov/cs/adminactions.htm

By: Alison Clark

Alison Clark — Tue, 23 Feb 2010 22:55:13 +0000

It seems to me in all of the case studies something should have been seen by someone with a Conscience or at least empathy for the people being hurt. This deeply disturbs me as I was unaware that so many people could hurt so many others. I guess the numbers are all there and brings me to my point again that the innocent. I would like to know the AKA’ of these bad people and I think they should be posted if the are not already on our limited denial of participation and excluded parties list. I know as I have worked as a processor for the last 5 years that it makes me more aware of what I should be looking for as making sure the files that LO’s (especially new ones) give me are in compliance and nothing is suspicious is the most important part of it.

By: Chris Yanke

Chris Yanke — Wed, 30 Dec 2009 22:06:23 +0000

As you can see regardless of background, profession, and/or idealology Greed can unify us all. These studies all have on thing in common, they required multiple parties on several levels to complete this transaction. No one party could have been able to succeed without the cooperation of the other parties involved. Granted it’s also hard considering that the bank that funded these loans is also out of the business so the next question is, what happened to the investors who put the money into this and why haven’t we considered the bank’s underwriting?

By: Yvette

Yvette — Fri, 18 Dec 2009 07:39:01 +0000

I have been in the industry for a lot of years, and in this industry I seem to run into the same people all of the time. Those are the honest ones who still remain. All of the names in all of the schemes are people I have never heard of and most probably came in the industry to gain a quick buck because of their greed. If they have gotten away with it with all of the new regulations are probably not doing it anymore or have moved to other states where the licensing requirements are not as stringent. They will still do fraud, but hopefully we are starting to weed them out of our State.

It is nice to know the names of the people that are committing fraud so that if we do cross their paths, we can report them to DFI.

By: Raylene Ramos

Raylene Ramos — Thu, 23 Apr 2009 22:55:20 +0000

This is about greed and nothing short of it! What comes around goes around and that’s why they were caught and slapped with some serious penalties. These are cases of a team of fraudsters working together and someone is going to get burned! The industry has fallen so hard so fast and now decent consumers are the ones getting burned. And decent LO’s are getting a bad reputation and making it harder to do business and therefore they are getting burned as well!

By: Mary McGraw

Mary McGraw — Wed, 22 Apr 2009 00:24:30 +0000

It just bothers me that people can go out there to the consumer and say and do the things to them just to feel good about themselves. How can they” wheres the heart. Because there are people out there that do have a heart and really want to help others.

By: Mary McGraw

Mary McGraw — Tue, 21 Apr 2009 23:33:12 +0000

I just cant believe that people could have the heart to do those things to people and feel good about themselves.And it really hurts the industry from those who are trying to do the right thing.

By: Chris Madden

Chris Madden — Sat, 28 Feb 2009 18:18:51 +0000

Once again complex schemes, several different career minded participants. They only way to really stop people from risking everything, is tougher sentences for those that hurt the indusrty integrity. In the example of the LO, from tukwila, this women ruined several consumers credit, and pockets several dollars(felony)and she’s not in prison somewhere?

By: Sharon Eva

Sharon Eva — Wed, 11 Feb 2009 16:55:02 +0000

Wow. I am amazed at how easily fraud can occur. In the case of Liza Bautista, has she not gone to jail for her crime? I feel that there are too many hands that go into the loan process. Maybe the government should require a case manager (3rd party) to over see loan documents, escrow, title, etc. to verify all information is accurate. I believe that laws should be harsh on consumers for fraudulent activities. The fact that average citizens are able to get away with fraud makes it more appealing since there is little to no punishment. This might prevent future fraud from occuring.

By: Teresa Tait

Teresa Tait — Tue, 10 Feb 2009 06:32:27 +0000

I actually heard about these cases when they first came out in the media and was embarrased by the negative publicity that our profession was getting. It is sad that these are the stories that hit the news rather than the positive ones telling about how we help people purchase homes, refi to pay off debts/purchase 2nd homes,investment properties etc.We can only hope that because of this huge mortgage implosion that we will all end up in a much more professional field where the amount of fraud taking place will be so minimal that it wont even hit the papers.

By: Robert Paterson

Robert Paterson — Mon, 09 Feb 2009 22:11:03 +0000

These people must truly believe that they are above the law and better than every one else. I was glad to read that these “professionals” either lost their licenses or ended up in jail for the most part. These people give everybody in the whole mortgage process a black eye. I guess where you have cash and desperate people you will have fraud.

By: Scott

Scott — Tue, 27 Jan 2009 01:49:54 +0000

These case studies are not surprising considering it is all centered on greed, when you have sellers that premium price there homes and after many months and something years they receive an offer that nets them the inflated dollar amount the temptation is overwhelming. It’s unfortunate that straw buyers, lenders and appraisers will prey on desperate sellers. Keep in mind there are desperate sellers in hot and cold markets. These stories are sad and hopefully the filters in place will help eliminate them.

By: Carla

Carla — Wed, 14 Jan 2009 00:32:03 +0000

Individual responsibilty? Don’t see much of it in these case studies. Integrity? Doesn’t seem to exist here.
What is needed by all is a higher set of moral standards.

By: Mary Schimmelbusch

Mary Schimmelbusch — Wed, 31 Dec 2008 22:33:21 +0000

How do you get so many (un)professionals to participate in this fraud? You would think that one would have the sense to realize this is a criminal act. Then you find yourself in jail and out of the mortgage buisness for life! Unless, that is, you commit more fraud under a different identity as in the case of Bautista. I am truly amazed at what people will do for money.

By: Cheryl J Barr, 510-LO-38949

Cheryl J Barr, 510-LO-38949 — Wed, 31 Dec 2008 19:31:08 +0000

The case of the 80/20 mortgage fraud in Spokane seems like the most likely to lur people in. But in a time when lending was so easy it seems amazing to me that realtors, apprasiers, LO got together to commit these acts. As for the flips of properties and gving your monthly payment to someone who will take it to the bank for you…who comes up with these ideas and furthermore, who in their right minds acts on these. I know fraud was committed and it was wrong and should be punishable but there needs to be some personal responsiblity on the consumers part. We are head to much more stringent regulations.

By: John Sarausad

John Sarausad — Wed, 31 Dec 2008 09:14:56 +0000

I feel that fraud is something we have to all work together on in preventing. To read stories in our local area about mortgage fraud is quite surprising, especially after what has been going on over the last year and a half. I don’t think we could ever permanently delete fraud because there will always be criminals trying to make a quick buck and criminals can also be smart and intelligent in such a evil way.

By: Joe Hrebik

Joe Hrebik — Wed, 31 Dec 2008 08:04:23 +0000

The property flipping case study is very surprising… it should have been easy to spot and prevent. A property increase of $100K in a short period of time? Why can’t Automated Underwriting software be revised to catch this type of trend?

Software can be written to detect a lot of complex things these days, after all it is almost 2009…. seems like the current underwriting software is too high level and basic!

By: Dennis Tyler

Dennis Tyler — Tue, 30 Dec 2008 21:46:09 +0000

Unfortunately, some of the investment seminars prime the pump for this kind of dishonest activity. Individuals, with few morals, can’t imagine how they are hurting anybody, especially if it is the bank that will foreclose. After all, the banks/lenders have deep pockets and it won’t hurt them for someone to “stretch” the truth a little.
Sadly enough, in economic times like we are currently experiencing, there will be more schemes originated to steal from other people. Hopefully we all will be more aware and vigilant, each helping to police these situations.

By: Brian Paine

Brian Paine — Tue, 30 Dec 2008 20:08:15 +0000

This follows suit with one of my latter comments…there’s fraud happening right now here in the state of Washington and it’ll have a new twist. Jillayne, as you stated in one of your blog comments, we’re in a era of desperation on behalf of everyone associated with this industry and predators will prey on the uninformed, the uneducated, and the weak, and we’re all a little weak. It’ll be ultimately interesting to see the positive changes coming down the pike and how they’ll influence the industry.

Here’s a question: How do you, in an email or a phone call with a potential customer, relay the honesty and integrity of the service you provide?

Thanks

By: shelley safronek

shelley safronek — Tue, 30 Dec 2008 16:11:27 +0000

These schemes appear to be very complicated and time consuming. Why these same inventive people do not channel their energy in to good old fashioned clean business practices is beyond me. This is not an easy or glamorous business, but if done with integrity ….over the years when that young family that you helped place in their home (legitimately) comes back to you for the move up home, it is very rewarding to see the loyalty. That is not a given….it is earned!