twitter linkedin
facebook google+
Search:

Branch Opportunities

Mortgage News

News by Subject
Complete list of specialty news sections

Purchase Subscription
Subscribe to MortgageDaily.com and get immediate access to all news, statistics and archives.

Mortgage Advertising
Reach mortgage executives, loan originators and other people tied to mortgage industry.

Consumer Mortgage News
Free mortgage news for prospective borrowers.

Mortgage Newsletter
Free e-mail newsletter with the latest headlines from MortgageDaily.com.

Mortgage News Reprints
Put entire MortgageDaily.com stories in your online or printed newsletter or publication.

Mortgage Feedget RSS code
Condensed MortgageDaily.com stories free on your Web site or for your RSS reader.

News Archives
Archive of MortgageDaily.com stories by month going back to 1999.

Press Releases
Reports and announcements from MortgageDaily.com.

Mortgage Statistics
Data and statistics for real estate finance.

Mortgage Directories
Directories of lenders, branch operators and mortgage service providers.

Mortgage Graphs
Directories of lenders, branch operators and mortgage service providers.

home subscribe advertise reprints e-mail help RSS about us LOG IN

Mortgage News

 

Mortgage News

HOT Topics

production

servicing

compliance

legal

fraud

secondary

jobs

appraisal

site map


subscribe to free Mortgage Daily email newsletter


Mortgage Fraud News | Fraud Statistics | Fraud Index | Fraud Blog
Mortgage broker, originator and banker criminal cases. Real estate flipping and appraisal fraud. Mortgage fraud prevention, studies and analysis.



P R E S S   R E L E A S E

FOR IMMEDIATE RELEASE:

Jan. 27, 2012


Two Bloomington Residents Indicted In Mortgage Fraud Scam

MINNEAPOLIS—Two Bloomington residents have been indicted in U.S. District Court for allegedly defrauding financial institutions and homeowners under the guise of a program to rescue homes from foreclosure. Richard Scott Spady, age 38, and Michele Denise Sengstock, age 48, were charged with one count of conspiracy to commit wire and mail fraud, one count of wire fraud, one count of mail fraud, and one count of money laundering. Yesterday, both defendants made their initial appearances in federal court.

The indictment alleges that the scheme occurred between 2005 and October of 2007. Allegedly, Spady identified homeowners facing mortgage foreclosure or already in foreclosure proceedings and then counseled them that Unified Home Solutions ("UHS"), a purported nonprofit business he owned, could help them. Through UHS, he then purportedly found third parties to purchase the homes, telling the original homeowners that the homes would be sold back to them after one or two years. During that time, the original homeowners were to regain their financial footing.

At the time the transactions were closed, checks were issued to the original homeowners for the proceeds of the sale minus the outstanding mortgage loan. However, those homeowners were then allegedly instructed to sign over the proceeds checks to the buyers. If they refused to do so, they were not allowed to take part in the program and remain in their homes. Once the proceeds—the homeowners' equity—had been paid over to the buyers, a "risk fee" was paid to the buyers with the rest divided between the buyers and UHS. The buyers allegedly used the money to repay their down payments and to make monthly mortgage payments. The scheme purportedly stripped the original homeowners of the equity they had earned in the property.

Spady allegedly misled the original homeowners as to the likelihood of them regaining ownership of their properties. In fact, only six percent of the homeowners who used the UHS program were able to repurchase their homes. In addition, Spady and his associates allegedly concealed material information from lenders who financed the third-party purchases. Through Spady's company, Spady provided false information to those lenders about the third parties' financial circumstances and routinely arranged to provide down-payments for them without informing the lenders of that action. Spady also allegedly concealed from lenders the payments flowing to UHS and the third parties from the sale proceeds.

According to the indictment, Spady and Sengstock, who was one of the third parties who purchased properties, also made it more difficult for original homeowners to buy back their homes. The two are alleged to have borrowed additional funds against the properties and to have filed liens in favor of MLAA Holdings, Sengstock's company, against at least one of homes involved in the UHS program. In total, the indictment states, lenders and original homeowners were defrauded out of more than $ 8 million.

If convicted, the defendants face a potential maximum penalty of 20 years in prison on the conspiracy, wire fraud, and mail fraud counts and ten years for money laundering. All sentences will be determined by a federal district court judge. This case is the result of an investigation by the United States Postal Inspection Service and the Internal Revenue Service-Criminal Investigation Division. It is being prosecuted by Assistant U.S. Attorney Robert M. Lewis.

This law enforcement action is in part sponsored by the interagency Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. It includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and, with state and local partners, investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.


Source: United States Attorney's Office for the District of Minnesota

Local Mortgage Fraud news
News about local mortgage fraud.


Logout forgot
password?

Mortgage Fraud Statistics
Government and private data on volume of mortgage fraud activity.



Mortgage Fraud Index
Dollar and index amount by quarter and state.



Mortgage Fraud Litigation
Lawsuits and settlements invoving mortgage fraud by a lender insider. From 2007 through first-quarter 2013



Mortgage Fraud News
News stories about fraud committed against home lenders.



Mortgage Fraud Blog
Actions in mortgage fraud criminal and civil cases.



local mortgage fraud


mortgage fraud links



SUBSCRIBERS: Edit Subscription | Subscription Help | or call Holly at 214.521.1300

Subscribe Contact Us Site Map

Copyright © 2014 Mortgage Daily, D a l l a s
Subsribers Only:

AMC directory

ARM indexes

mortgage company directory

mortgage regulations

net branch directory

p r i c i n g engine directory

wholesale lender directory

More Mortgage News Resources (full site map):

advertising news

appraisal news

bank news

biggest lenders

commercial mortgage news

corporate mortgage news

credit news

FHA news

financial regulation news

foreclosure news

free mortgage news

GSE news

jumbo mortgage news

interest rates

loan modification news

loan originator survey

LOS Newsletter

MBS

mortgage associations

mortgage-backed securities

mortgage books

mortgage brokers

mortgage compliance

mortgage conferences

mortgage directories

mortgage education

mortgage employment

mortgage employment index

mortgage executives

mortgage fraud

mortgage fraud blog

mortgage fraud local news

Mortgage Fraud Index

Mortgage Graveyard

mortgage insurance news

mortgage lawsuits

mortgage leads

mortgage lender ranking

mortgage licenses

mortgage litigation

Mortgage Litigation Index

Mortgage Market Index

mortgage mergers

mortgage news

mortgage politics

mortgage press releases

mortgage production

mortgage public relations

mortgage rates

mortgage servicing

mortgage statistics

mortgage technology

mortgage video

mortgage Webinars

net branch

net branch directory

nonprime news

origination news

originator tools

real estate news

refinance news

reverse mortgage news

sales blog

secondary marketing

servicing news

subprime news

wholesale lenders

wireless mortgage news