Los Angeles Fraudsters Convicted in $10 Million Loan Modification Scam

Los Angeles Fraudsters Convicted in $10 Million Loan Modification Scam

Three people were convicted this past week by a federal jury for their involvement in a nationwide loan modification scam that stole approximately $10 million from victims, according to the United States Department of Justice (USDOJ).

The defendants, Sammy Araya, Michael Henderson, and Jen Seko, all from the greater Los Angeles area, operated the massive fraud that victimized struggling homeowners across the country for several years.

Sammy Araya was the alleged criminal mastermind behind the scheme and used the millions made from the fraud to fund his fake lavish lifestyle by buying expensive cars, a racehorse, and many other luxury goods, as well as to fund his personal travel and a reality television show he produced called “Make It Rain.TV.”

Araya took on the stage name of “The Boss Man Samaraii” in these videos acting as if he was helping the East LA. community by throwing money above their heads and make them chase it like fools. The true reality was the fact that he was stealing from hard working Americans all across the country to fund his lavish lifestyle and make it rain with stolen cash.

The USDOJ had said that throughout this process, the members of the conspiracy represented themselves to homeowners in mass mailings, phone calls, emails, and other communications using a laundry list of aliases and fictitious entity names. Some of those fictitious entities included “Equity Restoration Group,” “Neighborhood Counseling Services of America,” and “Home Retention Center,” among many others. The conspirators changed their aliases and entity names regularly, in an effort to evade detection by law enforcement. The conspirators also falsely represented themselves as a “non-profit” organization or as affiliated with the federal government or the victims’ lenders, and they directed the victims to make their checks and money orders payable to other fake entities, such as “Payment Processing Services,” “Default Servicing,” and “Trust Funding.” They then opened bank accounts using those false entity

The conspirators changed their aliases and entity names regularly, in an effort to evade detection by law enforcement. The conspirators also falsely represented themselves as a “non-profit” organization or as affiliated with the federal government or the victims’ lenders, and they directed the victims to make their checks and money orders payable to other fake entities, such as “Payment Processing Services,” “Default Servicing,” and “Trust Funding.” They then opened bank accounts using those false entity names, and used those bank accounts to briefly deposit victim payments before withdrawing the funds and distributing the proceeds among the members of the conspiracy.

The victims of this scheme dutifully sent their payments to the fraudulent entities as instructed by the conspirators, only to discover that they had not been granted a mortgage modification by their lenders. When victims confronted the members of the conspiracy about this fact, the conspirators would make lulling statements designed to reassure the victims, such as telling them that the mortgage modification process takes time, and that they were dealing with individuals at a higher level at the bank than the lender representatives with whom the victims had spoken. In reality, however, the members of the conspiracy were simply diverting the victims’ payments for their own personal benefit, without doing anything to assist in modifying the victims’ mortgages.

“Today justice was served to three scam artists who preyed upon hundreds of desperate homeowners taking money in exchange for empty promises of admission into the HAMP program,” said Christy Goldsmith Romero, Special Inspector for the Troubled Asset Relief Program (TARP). “This was a scheme of deception and thievery: the defendants pocketed the homeowner dollars but did nothing to help their victims. I thank U.S. Attorney Boente and his team for their hard work and commitment protecting homeowners getting help through HAMP.”

Twelve defendants have been convicted in the Eastern District of Virginia in this case and a related case. They include the following individuals:

Read more from the USDOJ 

Existing Homes Sales Climb 4.4% in March

Existing Homes Sales Climb 4.4% in March

Spring sales of existing-homes climbed to their highest pace in over 10 years for the month of March and a severe lack of housing inventory resulted in much less time on the market, according to the National Association of Realtors® (NAR). Only the West saw a decline in sales activity in March.

Total existing-home sales in March for single-family homes, townhomes, condominiums and co-ops, increased 4.4% to a seasonally adjusted annual rate of 5.71 million from a downwardly revised 5.47 million in February. March’s sales pace is 5.9% above a year ago and surpasses January as the strongest month of sales since February 2007 (5.79 million).

First-time buyers made up the bulk of the sales in March with 32% of home sales, which is the same as the previous month and a 30% increase from a year ago. All-cash sales represented 23% of transactions in March, down from 27% in February and 25% a year ago. Distressed sales (foreclosures and short sales) were 6% of sales, 7% lower than February and down 8% from the previous year.

The NAR said that home sales in most areas of the country saw improvement in March except in the West where sales were down by 1.6% to an annual rate of 1.22 million, but are still 5.2% for this same time last year. The median sales price was $347,500, an increase of 8.0% from March 2016.

The Northeast saw sales soar 10.1% to an annual rate of 760,000, and are now 4.1% above a year ago. The median price in the Northeast was $260,800, which is 2.8% above March 2016.

The Midwest also saw sales jump in March 9.2% to an annual rate of 1.31 million. A 3.1% increase from a year ago. The median price in the Midwest was $183,000, up 6.2% from a year ago.

Existing-home sales in the South in March rose 3.4 percent to an annual rate of 2.42 million, and are now 8.5 percent above March 2016. The median price in the South was $210,600, up 8.6 percent from a year ago.

The total number of existing homes for sale climbed 5.8% to 1.83 million existing homes available for sale, but is still 6.6%t lower than a year ago (1.96 million) and has fallen year-over-year for 22 straight months. Unsold inventory is at a 3.8-month supply at the current sales pace (unchanged from February).

Lawrence Yun, NAR chief economist, says existing sales roared back in March and were led by hefty gains in the Northeast and Midwest. “The early returns so far this spring buying season look very promising as a rising number of households dipped their toes into the market and were successfully able to close on a home last month,” he said. “Although finding available properties to buy continues to be a strenuous task for many buyers, there was enough of a monthly increase in listings in March for sales to muster a strong gain. Sales will go up as long as inventory does.”

Added Yun, “Bolstered by strong consumer confidence and underlying demand, home sales are up convincingly from a year ago nationally and in all four major regions despite the fact that buying a home has gotten more expensive over the past year.”

Properties typically stayed on the market for 34 days in March, which is down significantly from 45 days in February and 47 days a year ago. Short sales were on the market the longest at a median of 90 days in March, while foreclosures sold in 52 days and non-distressed homes took 32 days (shortest since NAR began tracking in May 2011). Forty-eight percent of homes sold in March were on the market for less than a month.

“Last month’s swift price gains and the remarkably short time a home was on the market are directly the result of the homebuilding industry’s struggle to meet the dire need for more new homes,” said Yun. “A growing pool of all types of buyers is competing for the lackluster amount of existing homes on the market. Until we see significant and sustained multi-month increases in housing starts, prices will continue to far outpace incomes and put pressure on those trying to buy.”

NAR President William E. Brown, a Realtor® from Alamo, California, says patience is a virtue for prospective first-time buyers this spring. “Realtors® in most markets are saying interest from first-timers is up this year, but competition is stiff for listings in their price range,” he said. “The best advice is to lean on the guidance of a Realtor® throughout the home search and be careful about stretching the budget too far. Don’t get frustrated by losing out on a home and know the right one will eventually come along in due time.”

CFPB sues Ocwen for years of mortgage servicing abuse

CFPB sues Ocwen for years of mortgage servicing abuse

For the last 10 years, I have heard hundreds, if not thousands of complaints from homeowners who have been used and abused by one of the nation’s largest nonbank mortgage servicers, Ocwen. This company has a long history of mortgage servicing violations so it is no surprise to me that the Consumer Financial Protection Bureau announced yesterday that they are suing Ocwen Financial Corporation and its subsidiaries for failing borrowers at every stage of the mortgage servicing process. (more…)

New Housing Production Drops 6.8% in March

New Housing Production Drops 6.8% in March

After a strong posting in February, U.S. housing starts dropped 6.8% in March to a seasonally adjusted annual rate of 1.22 million units, according to the latest report from the National Association of Home Builders (NAHB). However, new housing production remains strong in the first quarter of 2017 despite the decrease and is still 8.1% higher than this same time last year. (more…)

California attorney disbarred for failing to adhere to suspension order

California attorney disbarred for failing to adhere to suspension order

A California attorney was recently disbarred from the practice of law by the State Bar for failure to adhere to the terms of a prior suspension.

Robert G. Scurrah Jr., 68-year-old Orange County lawyer from the city of Tustin was disbarred on February 4, 2017, after he failed to comply with the California Rules of Court Rule 9.20 subsections (a) and (c). (more…)