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Monday, Sep. 22, 2014

Mortgage fraud scheme: Despite the woes, some walked away winners from foreclosures

Wednesday, December 5, 2007

Original sellers profited, Scott County earned fees

SIKESTON -- Tom Dirnberger, Scott County's recorder of deeds, said "we could make a movie called the Good the Bad and the Ugly," with all those who played a role in the housing fraud.

The good part is that a few parties benefitted, namely those who sold there properties for more than they were worth. "Plus, they sold numbers of them, not just one or two," Dirnberger said. "Also, they were glad to get rid of them."

Jack Vincent, a local broker who managed some of the properties and also sold two homes agreed. "I don't think there are any unhappy sellers," he said.

Although it's been more work, Dirnberger's office has also benefitted through fees collected for warranty deeds, marriage waivers, deeds of trust, deed of trust assignments, appointments of successor trustee and foreclosures.

All in all, Dirnberger estimated $19,000 in fees to the state and more than $40,000 to Scott County.

Most of the foreclosures now have a preforeclosure appraisal, so appraisers are making about $60,000 total, Dirnberger said.

There are also City of Sikeston fines, attorneys in Scott County that are handling the cases, and title companies.

And then there is the bad -- people who made fraudulent gains, and those who lost money and other resources.

For instance, the owners whose names were forged have lost the ability to sell there property to anyone until the matter is resolved, because there is a stray deed, said Jim Robison, a Sikeston attorney. Since these owners were intending to sell anyhow, that is a big loss. "And in some cases, there has been confusion about rent; and some have moved out, so there is a loss of rental income," he said.

Also losing out are those who thought they bought a property, all of whom will likely end up filing for bankruptcy. "Some lender is probably going to enforce those notes against them," Robison said.

In turn, those lenders will also lose some money. He said it was "frightening," since some lenders are among top financial institutions and the nation is already facing a crunch in the housing market.

Dirnberger named Long Beach Mortgage, Argent Mortgage, OWNIT Mortgage and Washington Mutual as a few of the mortgage companies that will be affected. He estimated about $16.5 million in losses.

Robison noted that in the cases of the forged deeds, individuals who bought the properties at foreclosure sales and paid cash money won't have any title to the properties, since the deeds were forged.

The agent who sold the properties, and kept the money borrowed on the home that wasn't used toward the mortgage payment, pocketed a large amount of money -- about $7 million, Dirnberger estimated. He noted in some cases, profits or other funds were promised to be split with buyers, but that didn't happen.

The "ugly" part of the equation comes on the aftereffects, according to Dirnberger. Those include people who have filed for bankruptcy and divorce, experienced families problems and depression, or had IRS tax liens on property they didn't receive.

There are also the tenants who rented the homes that have been or are in the process of being foreclosed, that have no place to live, or are paying higher rents.