“Mortgage Fraud”: Husband And Wife Are “Bonnie and Clyde” Of Mortgage Fraud In Las Vegas

  “…Mazzarella and Grimm were the Bonnie and Clyde of mortgage fraud — among the greediest of a band of swindlers who took advantage of lax lending standards at profit- hungry banks, which stopped verifying income and assets for even questionable borrowers…”

“…They told the straw buyers they would pay the mortgages. Then they skimmed thousands of dollars from each of more than 432 transactions, the indictment says, stashing the cash in 80 bank accounts…”

http://www.bloomberg.com/news/marketsmag/mm_1208_trim2.html

Eve Mazzarella was a Las Vegas success story. The high-school dropout and former housemaid moved to the Nevada city in 2000 from Seattle, got a certificate from the ABC Real Estate School and started selling houses in what would become the hottest market in the country.

In 2006, Mazzarella recorded sales of $13.8 million and made the National Association of Realtors’ “30 Under 30” list, which names the best young agents in the nation. Mazzarella started her own company, Distinctive Real Estate & Investments Inc., in December 2003. She whipped around town in a Mercedes-Benz sport utility vehicle. She planned to build a three-story office building in Vegas’s shabby downtown north of the Strip and preserve a historic house on the site by lifting it onto the roof.

Her competitors were impressed. “She was an up and comer with a brilliant future,” says Forrest Barbee, a broker at Prudential Americana Group, a Las Vegas agency where Mazzarella once worked.

The dream ended at about 5 a.m. on March 13, when federal agents smashed through the door of a stucco home on a quiet, grassy cul-de-sac looking for Mazzarella, 31, and her husband, Steven Grimm, 45, an erstwhile mortgage broker.

The day before, the U.S. Attorney for Nevada had indicted the couple on 6 counts of bank fraud, later revised to 13. Prosecutors say the pair recruited fake — or “straw” — buyers to apply for loans to purchase 227 properties worth $107 million. They told the straw buyers they would pay the mortgages. Then they skimmed thousands of dollars from each of more than 432 transactions, the indictment says, stashing the cash in 80 bank accounts.

Bonnie and Clyde

They allegedly arranged fake sales on some houses five times. Then, according to the indictment, they walked away from the mortgages, leaving lenders in the lurch.

If prosecutors are right, Mazzarella and Grimm were the Bonnie and Clyde of mortgage fraud — among the greediest of a band of swindlers who took advantage of lax lending standards at profit- hungry banks, which stopped verifying income and assets for even questionable borrowers. Buyers who gave false information to mortgage lenders are technically guilty of fraud themselves. Yet authorities are mostly targeting schemes such as the one allegedly perpetrated by Mazzarella and Grimm.

What happened in Vegas didn’t stay in Vegas. Similar schemes across the country helped pump up a housing bubble whose rupture has triggered a global banking crisis, prompted government intervention not seen since the Depression and helped precipitate what economists predict will be a long and painful recession.

Plea: Not Guilty

Mazzarella and Grimm have pleaded not guilty to conspiracy and bank fraud in Nevada federal court in Las Vegas. They couldn’t be reached for comment on this story. Mazzarella’s attorney declined to comment; Grimm’s didn’t return phone calls.

Mazzarella’s father, a real estate lawyer in San Diego, says his daughter is innocent. “She was putting money in Las Vegas real estate like everyone else,” Mark Mazzarella says. “The targets are going to be higher up the food chain.”

Mazzarella and Grimm’s alleged scheme was just one of many in Las Vegas, where, throughout much of this decade, people wagered on houses like they were numbers on a roulette wheel. The advent of no-document “liar loans” fueled the frenzy, as maids, parking attendants and casino workers borrowed big to roll the dice on subdivisions rising amid the mesquite.

Like the city’s replicas of Venice’s canals and New York’s skyline, Las Vegas real estate became a caricature, rising faster and booming bigger than in the rest of the nation.

Beware New Fraud From “Foreclosure Consultants” Who Collect Fees Illegally And Don’t Perform

“…the seven companies collected upfront fees and then failed to negotiate or perform any services on behalf of the homeowners, leaving them at risk of losing their homes…”

“…the company promised a “money-back guarentee (sic)” on its web site and that it has a 97 percent success rate and a “combined 25 years of real estate, financial and lending experience.” By this evening it had removed the misspelled “guarentee.”

http://www.rrstar.com/news/x1720658976/Attorney-general-sues-Rockford-company-for-mortgage-fraud 

A mortgage-rescue company with a Rockford office was one of seven sued by Illinois Attorney General Lisa Madigan today.

Madigan’s office filed the lawsuit in Winnebago County Circuit Court against StopMyForeclosure.net, which appears to have a location on the 3900 block of Abbotsford Road, for violating the state’s Illinois Mortgage Rescue Fraud Act. The act prohibits companies from requiring payment from consumers before completing all terms of a rescue contract.

Madigan claims the seven companies collected upfront fees and then failed to negotiate or perform any services on behalf of the homeowners, leaving them at risk of losing their homes.

A record wave of foreclosures locally and nationally have pushed the economy to the brink of recession. As foreclosure actions have increased, so have the number of companies promising help to homeowners behind on payments.

Madigan has sued 22 companies, including those sued today, so far this year for violating the state mortgage rescue fraud act.

“There are so many of these companies, and most have no idea that the state has a law that restricts what they do,” said Bob Campbell, executive director of the Rockford Affordable Housing Coalition, a U.S. Housing and Urban Development-certified housing-assistance organization. “Since they don’t know that the law is in place, most of these for-profit companies end up violating the law.”

Early today, the company promised a “money-back guarentee (sic)” on its web site and that it has a 97 percent success rate and a “combined 25 years of real estate, financial and lending experience.” By this evening it had removed the misspelled “guarentee.”

The site also displays two seals of approval by the Better Business Bureau.

Dennis Horton, executive director of the Rockford office of the Better Business Bureau, said he believed both BBB symbols are pirated.

“This company is not registered with the BBB anywhere in the United States,” Horton said.

Rhonda Poshka, who said she is owner of the Queen Oak, Ariz.-based company, said the company is registered with the Arizona Better Business Bureau but not accredited.