Three out of Four Mortgage Fraudsters Sentenced to Prison Edward McGee was sentenced to three years probation and fined $140,000. His son, Kenneth O. McGee was sentenced to 32 months in prison and fined $12,500. Robert Mitchell was sentenced to 32 months in prison and fined $12,500. Kamal J. Gregory was sentenced to 10 months in prison and fined $12,500. This scheme involved arranging, facilitating and manipulating documents associated with real estate sales and closings in order to fraudulently obtain excess mortgage loan proceeds generated from the sale of residential properties for the personal benefit of the co-conspirators.

“We’ve given up on this dream of having equity in our home,” Conroy said. “We don’t expect to walk away with cash in hand, we expect to pay.” In San Diego, where Conroy lives, home values are down about 40 percent since March 2006 when he bought his place, according to the S&P/Case-Shiller Index of 20 U.S. metropolitan areas. “You’re looking at an extremely long horizon in order to see a return of home values to where they were at their peak,” said Stan Humphries, chief economist for Zillow.com, the Seattle-based real estate data service. “It could be 15 to 20 years in some markets.” “You have to ask yourself: Are you just renting the home from the bank?” said Michael Joe, a foreclosure expert at the Legal Aid Center of Southern Nevada. Morality and social stigmas play an important role in whether someone who can afford the payments will walk away, said Paola Sapienza, professor of finance at Northwestern University’s business school, in a July study on strategic defaults. Eighty-one percent of 1,646 homeowners interviewed think it is morally wrong, the study found. And in California, a second-mortgage holder may try to pursue a delinquent borrower to repay through litigation, said Rick Brooks, a financial adviser with the San Diego-based wealth advisory firm Blankinship & Foster.

Elderly Bank Bandit: I Robbed to Pay Off My Mortgage Listening to how Michael Casey Wilson of Santee tells it, a 17 percent mortgage, the threat of homelessness and a terminal health condition will turn a man to crime. Wilson, 69, is accused of walking into the Bank of America branch in the 4100 block of El Cajon Boulevard in City Heights and handing a bank manager a demand note, saying he had a bomb.

43 Percent of San Diego Homeowners are Upside-Down The share of San Diego homeowners who owe more on their mortgages than their houses could sell for today has grown significantly this year. According to new data released by First American CoreLogic, 43 percent are underwater, with another 4 percent close to being underwater.

No light yet at end of California real-estate tunnel Despite some claims, the situation actually may be getting worse. Median prices in Stockton -- a contender for the title of Subprime Central -- have been falling by a little over 2% percent a month for the past three months. That may sound pretty bad -- it is pretty bad -- but everything needs context: Last winter the rate was more than 3% a month, and early last year the rate was nearly 4% a month. But notices of default have been surging in recent months, and the number of jobless has doubled since the start of the recession. The unemployment rate is now 11.6%. Meanwhile, negative equity is at surreal levels.

Regulators Shut Down Two More Insolvent California Banks Temecula Valley Bank, in Temecula, Calif., with $1.5 billion in assets and deposits of about $1.3 billion and Vineyard Bank, National Association, of Rancho Cucamonga, which had assets of $1.9 billion and $1.6 billion in deposits, have failed and are now permanently shut down.

U.S. mortgage fraud reports jumped 36 percent last year as desperate homeowners and industry professionals tried to maintain their standard of living from the boom years, the FBI said California and Florida, centers of the housing bust, had the highest numbers of suspicious reports as foreclosures jumped, the stock market dropped and credit dried up. "These combined factors uncovered and fueled a rampant mortgage fraud climate fraught with opportunistic participants desperate to maintain or increase their current standard of living," the Federal Bureau of Investigation said in its report.

Pricey neighborhoods seeing more defaults For months, San Diego County's housing market has been ravaged by thousands of foreclosures in low-priced neighborhoods, where families saw their American dreams vanish as their subprime loans went bad. Now, according to figures released yesterday, the pain is lessening in those areas while becoming more acute in high-priced neighborhoods. Beyond the numbers are individual hard-luck stories like that of David Peterson, 45. He moved with his wife and two daughters to San Diego in 2006 from Connecticut in a career switch from managing furniture stores to marketing software. But three years after buying an $880,000 home in 4S Ranch west of Rancho Bernardo, he finds himself in a much lower-paying, all-commission sales job. He's also serving as a part-time greeter at Padres games and burning through his savings to cover $4,500-a-month mortgage payments. "I bought thinking my income would be X and now it's X-minus,” Peterson said, and when he tried to get his loan modified through Bank of America, he said he got the runaround from a call center in India. Here I am trying to create rain, earn a living, work two jobs, spending 70 hours a week, my wife's working ... I'm waiting for that angel."

By the end of last year, 31 percent of homeowners in San Diego County were upside-down. Nearly 45,000 adjustable-rate loans of all types have already hit the payment-shock point in San Diego County in recent years, according to LoanPerformance. In the next year, another 24,638 will hit that point, followed by another 95,209 the year after that. Dave McDonald, a local mortgage broker and president of the San Diego chapter of the California Association of Mortgage Brokers, said he's been hearing from clients with Alt-A loans. Now, their homes are worth $200,000 less than their mortgages, in some cases. Even though mortgage rates are relatively low, their loans can't be refinanced because they're too far upside-down, he said. "What's kind of scary to me is that these people are calling me, asking, 'Should I stop making payments?'" McDonald said. "They're literally stuck, and stuck with very few options other than a short sale or a foreclosure."

Another 3,600 Delinquent San Diego Mortgages Went into Default Last Month Additionally, 988 previously-defaulted homeowners received notice of imminent repossession. San Diegans are defaulting on their mortgages in near-record amounts, but lenders aren't following through with the foreclosures at nearly the pace they were last year.....a big slug of foreclosed properties will hit the markets soon enough.

More Details in Yet Another Routine San Diego Mortgage Fraud Scam Involving Over 200 Houses Details about the lives of the principals and smaller players in the scheme emerge from court records scattered across San Diego. Taken together, they begin to outline possible connections among the diverse group of people – accountants, street gang members, an escrow officer to name a few – who engineered what prosecutors allege was a racketeering conspiracy that netted the group at least $11 million in profits. The indictment says the scheme ran from 2005 to 2008. It targeted properties that had languished on the crumbling real estate market, and made offers above the asking price. Straw buyers, such as Logan, were used to secure loans from lenders. The extra amount of the loan was funneled at the time of closing to an account for a shell construction company stared by Bell. All the homes were bought with 100 percent loaned money, and the buyers simply walked away after the purchase. All 220 of the homes went into foreclosure.

Mortgage delinquencies hit new high, suggesting foreclosures will continue to weigh on home prices Areas such as Valley Center and Rancho Bernardo shot up to be among the leaders in North County for most foreclosure notices per 1,000 houses. In March, there were 67,005 homes across the state scheduled to be foreclosed upon. But banks seized only 10,040 foreclosures, according to ForeclosureRadar. As a result, there are tens of thousands -- maybe hundreds of thousands -- of foreclosures across the state poised to hit the market but have yet to, also known as "shadow inventory."

Another San Diego Real Estate Scam -- Rented Identities, Extravagant Prices, Then Foreclosure A staggering real estate swindle involving fake buyers, duped lenders, forged documents and extravagant purchase prices: By arranging purchase prices well above market value, Jim McConville was able to pay off the developers and capture more than $12.5 million. Now, 74 of the 81 homes involved in the deals are in the first stage of foreclosure.

24 People Indicted in California Mortgage Fraud Scam SAN DIEGO — Twenty-four people have been indicted on racketeering conspiracy charges, accused of participating in a mortgage fraud scheme that earned about $9 million by fraudulently inducing lenders to give loans to people who didn't qualify for them. If convicted of racketeering conspiracy, each defendant faces up to 20 years in prison. Prosecutors said the scam that ran from January 2005 to April 2008 involved more than 200 homes. Among those who were indicted were a real estate agent, an escrow officer, an appraiser and an accountant.

Biggest Drop Since 1977 for San Diego Economy Alan Gin's index of Leading Economic Indicators has now dropped for 34 of the last 35 months. The index tracks six components. Four were sharply negative this month: building permits, unemployment insurance claims, consumer confidence and help wanted ads. February’s employment report for San Diego showed that the county lost an astonishing 37,900 jobs compared to the same month last year.

San Diego Mortgage Defaults Hit All-Time Highs 3,705 homes entered this initial stage of foreclosure last month, surpassing the previous high of 3,601 default notices delivered in April 2008.

U.S. Prosecutor Targets Cheating Borrowers for Mortgage Fraud Thousands of Californians who defaulted on their home loans may face prosecution for providing false information to qualify for the mortgages, San Francisco U.S. Attorney Joseph Russoniello said. Russoniello, 67, leads a task force of 20 federal, state and local law-enforcement officials that is looking into as many as 11,000 cases of mortgage fraud in the San Francisco Bay area. Borrowers who overstated income or concealed debt when they took out loans are partly to blame for the housing crisis, he said. Accused cheaters may avoid prison time by agreeing to pay a fine and restitution equal to the difference between the loan amount and the value of the home assumed by the lender. If brokers or community groups helped borrowers commit fraud, they also may be prosecuted.

You Lied on Your Mortgage Application? You Might Be Going to Prison. Henry Broussard, 39, admitted to fraudulently obtaining a loan of about $60,000 from Wells Fargo Home Mortgage. At sentencing, which is set for April 2, Broussard faces up to 20 years in prison, a fine of up to $250,000 and restitution. "Fraudsters like this have destabilized the real estate market, the banking industry and the broader economy," said U.S. Attorney Catherine Hanaway.

As San Diego's housing downturn drags into a fourth year, homeowners and home builders are increasingly having the same problem: keeping up with their mortgages. In the past six months, a series of builders has defaulted on loans or lost property to foreclosure. “Land has lost 95 percent of its value,” said Graham Weiss, president of GW Realty Co., which specializes in residential land sales.

Another Resale Home Price Drop in December The median price per square foot for single family homes fell 2.6 percent for the month, racking up a decline of 27.8 percent for the year and 42.7 percent from the September 2005 peak.

Gas Station Owner Charged In Deadly Ramona Arson Fire A North County businessman who owned a rental home that blew up early Halloween morning, killing one of his employees, was arrested Thursday on suspicion of murder and insurance fraud. County records show that Kurtenbach owed $16,600 in back taxes on his Ramona-area rental property at the time of the fire.

The Median Price of a House in San Diego North County Took an Absolute Beating in November, Dropping 12 Percent in Just One Month. That brought the median price in November to 40 percent below the same month a year ago, dropping to $358,000. "Unemployment is skyrocketing, expectations about the economy are falling."

Guilty Pleas in San Diego Mortgage Fraud Scheme Defendants Rafael Santiago and Angel Armendariz pleaded guilty Thursday to conspiring to commit wire fraud, and defendants Abner Betech, Said Betech and Aviva Betech pleaded to those charges on Nov. 13. One defendant, Lucette Montane, remains at large. The defendants face 20 years in prison, fines of $250,000 and three years of supervised release, according to the U.S. Attorney's Office.

San Diego Home Prices May "Bottom Out and Turn Around" Zillow.com, a Seattle-based Web site that follows the housing market nationally, released figures yesterday that illustrate the gap between "prices" and what it estimates as the "true value" of homes. Using sophisticated mathematical models and sales trends over time, Zillow calculated individual prices for all properties and arrived at a Zillow Home Value Index for San Diego. The "value" index at the end of the third quarter, Sept. 30, stood at $391,565, down 28.3 percent from $546,299 in the third quarter of 2005. DataQuick's comparable figures are $348,000 for the median "price", down 32.4 percent from the peak reached in the fourth quarter of 2005. Zillow also found that 52.5 percent of San Diego homes sold at a loss in the past 12 months. It said 30.4 percent of all homes – and 51.3 percent of those bought since 2003 – are worth less than their original purchase price. “Housing in San Diego has obviously fallen off a cliff,” said Spencer Rascoff, Zillow's chief operating officer. “San Diego's home prices are now back where they were in the middle of 2003." But San Diego may bottom out and turn around, possibly about this time next year, he said.

"A Nail in the Coffin" for San Diego Home Prices The cap on single-family home loans in San Diego County that can be purchased by government-sponsored Fannie Mae and Freddie Mac will be reduced in January from $697,500 to $546,250. Lowering the limit is expected to place downward pressure on home prices. “I think that this is basically continuing the credit squeeze,” said Dave McDonald, president of the local chapter of the California Association of Mortgage Brokers. “It's a nail in the coffin, as far as options for buyers and sellers” of homes exceeding the new limit.

Man Killed in House Fire; Arson Not Ruled Out by Investigators Joseph Nesheiwat, 24, was found dead early Friday in the backyard of a burning house in Ramona after neighbors and firefighters were awakened by a loud explosion. A neighbor reported seeing a man stumble outside the house and collapse. Nesheiwat had worked at a gas station for seven years, said his mother, Terry Sellers. The station is owned by Jim Kurtenbach, 47, of Poway, who also owns the house where Nesheiwat died. The Medical Examiner's Office concluded the death was an accident. It said Nesheiwat died of second-and third-degree burns and inhalation of products of combustion. Other contributing factors were blast injuries to his face and chest.

More Pain Coming from San Diego Case-Shiller Housing Data Keep in mind that the Case-Shiller data lags quite a bit. The latest figure is calculated based on sales closed in June, July, and August. Here at the end of October prices have almost certainly dropped further than what you see in the chart.

Home prices see another record plunge; 10 years of gains wiped out Experts expect the declines to continue. Peter Schiff, president of broker-dealer Euro Pacific Capital, explained that the housing boom's exotic mortgages, which let people buy homes with zero money down, have vanished. Now people must save to afford a home. But easy credit means people will buy more consumer goods and save less to put towards housing. As a result, he expects home prices to fall a lot more. "They'll surrender all the gains they made in the past 10 years," he said, "and be even lower than they were 10 years ago."

San Diego Woman Chains Self To Home To Protest Eviction Like thousands of others in California, June Reyno and her husband took out an adjustable rate mortgage. When the monthly payment jumped to $5,800 the Reynos defaulted on their loan. A representative of the local property management company said they've bent over backwards to work with the Reynos, and now it is time to follow the law and vacate their home.

Home Prices Down 66% and Still Falling in Los Banos, CA Here, most homeowners owe more on their mortgages than their houses are worth. Some stop paying, pocketing the money while they wait for their lenders to kick them out. "I am one of those troubled borrowers not making any mortgage payments," Steve Sherman said. The 61-year-old shipping and warehouse supervisor refinanced his house in Los Banos two years ago for $365,000, spending much of the new loan on home renovations. Now, he figures, the house is worth $140,000. So four months ago he stopped writing mortgage checks, setting the cash aside in his retirement savings. He says he's waiting for his lender to kick him out or to reduce his loan amount. He'd also be happy for the government to modify his loan. "I don't deserve a bailout," Mr. Sherman said. "Will I take one? You are darned right I will."

San Diego Home Prices Plunge Again, Back to 2002 Levels The overall median price dropped in September to $328,000, the lowest since June 2002. Owners now find themselves owing more than their homes are worth and deciding to let their properties fall into default and foreclosure when their adjustable mortgage payments reset to unaffordable levels.

California Home Prices Drop Record 41% in August Amid Defaults Sept. 25 (Bloomberg) -- California home prices tumbled a record 41 percent in August from a year earlier. The median price of an existing, single-family detached home fell to $350,140 and will likely fall further, the Los Angeles- based California Association of Realtors said today.

Men Plead Guilty In Foreclosed Homes Scam Alexander Braslavsky, 34, and Anthony Patrick Marshall, 38, will be sentenced Nov. 10 in Vista. Under the terms of a plea agreement, they must pay $15,000 in compensation to four victims by the sentencing date. They each face up to 90 days in jail. Braslavsky and Marshall -- who has a real estate license -- posted ads on the Craigslist Web site for five foreclosed homes in Carlsbad, Corona and Stanton and rented them out.

San Diego Mortgage Fraud Recovery Strategy: "Flip This House"??? A new plan to assemble taxpayer, private and philanthropic dollars to purchase foreclosed houses, a "land bank", would seek to purchase those properties in bulk, directly from the bank, paying 50 percent of the ultimate resale price. So the land bank would try to purchase a house for $100,000 to $150,000 from the bank, rehab it, and sell it for $200,000 to $300,000. Barry Schultz, CEO of the San Diego Capital Collaborative, said he will have additional information soon about the financial feasibility of the plan.

San Diego Home Price Decline Approaching 40% From the September 2005 peak through August 2008, the size-adjusted median is down 33.9 percent for single family homes, 38.7 percent for condos, and 35.6 percent overall. It appears that while there is a lot of variation from one area to another, San Diego home prices on the whole are still heading down.

Another Report of San Diego Homes Bought With Money from Smuggling Illegal Aliens and/or Drugs SAN DIEGO -- The leader of an alien smuggling ring that transported more than 100 undocumented immigrants across the border over a seven-year period was sentenced Friday to 63 months in federal prison and ordered to forfeit a house and $598,775 in cash. Marisela Castro-Juarez of Chula Vista pleaded guilty May 15 to bringing undocumented aliens to the United States for financial gain and engaging in financial transactions of more than $10,000 with money derived from alien smuggling. Between 2001 and 2006, the 38-year-old defendant made deposits of more than $590,000 generated from the smuggling operation into her personal bank account and used the profits to purchase a home in the South Bay, according to the U.S. Attorney's Office.

A Lakeside man who shot his real estate agent twice in the head during an argument over a condominium deal was convicted Tuesday of second-degree murder EL CAJON, Calif. -- After two days of deliberations, a jury found Michael Ray Jennison guilty of murdering 64-year-old James Magot. According to testimony, Jennison shot Magot after the two argued about the sale of a condominium on Wintergardens Boulevard that the 38-year-old defendant inherited from his grandmother.

Officials announced Sunday that both Fannie Mae and Freddie Mac were being placed in a government conservatorship, a move that could end up costing taxpayers billions of dollars. Treasury Secretary Henry Paulson refused to estimate how much the takeover of the two companies will cost the government. Paulson said "we obviously don't know" when asked how much the takeover could end up costing taxpayers. He said that will depend on how quickly the housing market turns around. The Treasury Department said it was prepared to put up as much as $100 billion over time in each of the companies if needed to keep them from going broke. "I think the government will end up having to put in far more money then they are planning right now," said Sung Won Sohn, an economics professor at California State University. Paulson said that it would be up to Congress and the next president to figure out the two companies' ultimate structure. If the plan does the trick of stabilizing the housing market and home prices stop falling and rebound, then the assets of both Fannie and Freddie should rise in value and the government should be able to sell off the companies and recoup its investments. But it could take a long time to work through that process given all the headwinds facing housing at the moment from the plunge in home prices to soaring defaults on mortgages which are dumping more homes on an already glutted market.

Escalating job losses and the decaying housing market weighed down the local economic outlook once again in July, leaving little doubt among economists that the San Diego region is in recession. The intensity of the housing downturn has overshadowed any gains by other sectors, dispelling the notion that San Diego's economy was too diverse to suffer much in a recession. Alan Gin, an economist with USD's Burnham-Moores Center for Real Estate, used to endorse that theory. Not anymore. “It turns out the damage from housing, the loss of employment from housing, is much more severe than I would have thought,” he said. “It's not just that home prices have fallen,” said Kelly Cunningham, an economist with the San Diego Institute of Policy Research. “It's the fact that so much money has been withdrawn. That's really what kept the economy going for so long – people being able to take money out of their homes and spend it.” Cunningham thinks the recovery isn't in sight yet. Though the pace of home-price declines may slow, there is no sign of a bottom.

"Buy and Bail": Some homeowners tempted to buy a more affordable house in a declining market have committed fraud to ditch the supersized mortgage they no longer want. On the loan application, they led the lender to believe they intended to put a tenant in the first house so they could afford the two mortgages. But once escrow closed on the new house's purchase, they stopped making payments on the first house, letting it go into foreclosure. In another scam on lenders, homeowners have been lowering their mortgage payments by arranging fraudulent "short sales" at prices less than what they owe their lenders. The buyer whom the seller chooses, who may be a relative or friend or a "straw buyer" paid for his service, agrees to transfer ownership back to the seller, who winds up with a smaller mortgage on the same house and never has to move. In such a short sale, the seller commits fraud by having a side arrangement with the buyer that he does not disclose to the lender. A borrower who takes part in one of these scams can be sued by the lender or criminally prosecuted. The real estate agent involved can be prosecuted and lose his or her license. And a lender who discovers he has been bamboozled into approving a loan with phony information can require the agent or borrower to pay off the mortgage immediately.

The Housing and Economic Recovery Act of 2008, designed to help pull the nation out of an epic housing market meltdown, takes effect Oct. 1st and the act specifically prohibits sellers from offering down-payment assistance if they would benefit financially from the sale of their home. "Loans that are assisted with seller-funded down-payment assistance fail at two or three times the rate of other loans," said FHA spokesman Brian Sullivan. "Common sense tells us we've got to end this practice." By 2006, loans with nonprofit seller-assisted down payments accounted for about 32 percent of the FHA portfolio, Sullivan said. Now the FHA has a growing portfolio of foreclosures to deal with. "We've got to stop this process," Sullivan said. "It's killing us." But Maxine Waters, Dem.-Los Angeles, joined three others in backing a bill that would reinstate the down-payment assistance.

Home prices in San Diego dropped again in June, reaching a point not seen since September 2003, according to the Standard & Poor's/Case-Shiller Index released Tuesday Prices in the lowest tier have now fallen 39.5 percent from that tier's peak in June 2006. Chris Thornberg, founding partner at Beacon Economics and former economics professor at the University of California, Los Angeles has forecasted that the region is halfway through its market downturn, a prediction he stuck to Tuesday. "People are saying the reason prices are falling are because of all of the foreclosures, but the foreclosures are happening because the prices are falling," Thornberg said. "They've got it backwards. The prices are falling because they're too freakin' high."

Would-be renter says she lost $4,500 in scheme In what may be yet another wrinkle in the collapse of the housing market, prosecutors allege that Alexander Braslavsky, 34, and Anthony Patrick Marshall, 38, posted ads on Craigslist for five foreclosed homes in Carlsbad, Corona and Stanton and rented them to people like Smith. The two Orange County men pleaded not guilty Monday in Vista Superior Court to four counts of felony grand theft, one count of felony conspiracy, and one count of felony attempted grand theft. Prosecutors say the pair took in about $16,500. Braslavsky and Marshall, who has a real estate license, face up to six years and eight months in prison .

Russian musical composer Vladimir Shainskiy duped in Carmel Valley Mortage Fraud Scheme Vartan allegedly conspired with his sons so that Shainskiy would pay $1.299 million for Andrew Vartani's house -- a total of $100,000 more than the asking price. The suit alleges that Michael Vartani used his broker's login to the Multiple Listing Service to change his brother's asking price to a range of $1.299 million to $1.399 million, to cover the fact that they were charging Shainskiy the extra amount. Michael Vartani acted as agent for both his brother, the seller, and Shainskiy, the buyer, netting commissions on the transaction.While he was out of the country, the defendants obtained the two mortgages for the condo and house without the Shainskiys' knowledge, using false information about who Shainskiy was and how much he was worth. They said he was single, with no dependents, and that he earned $50,000 a month, the suit alleges, even though Shainskiy is retired and only earns occasional royalties on his composed works.Dubinin and Michael Vartani allegedly forged Shainskiy's signature on the loan application.

San Diego County's office market continued to soften in the second quarter, with vacancy rates reaching 16%, Carlsbad 24%, Rancho Bernardo/Poway 25% Since office demand is tied directly to job growth, the spike in vacancy shouldn't be surprising, according to brokers. The county posted a year-over-year decline of 4.900 jobs in June. Most of those job losses were in real estate. And much of the office space being shed these days comes from banks, title companies, mortgage brokers and others linked to residential real estate.

As if the local housing market weren't bad enough, there's another storm cloud on the horizon: rising mortgage rates. “The day of low interest rates is over,” said Dan Seiver, an economist at San Diego State University...."having rising mortgage rates in the current real estate environment is like pouring water on a drowning man.” Brokers say rising interest rates will push prices even lower, since it will make the monthly payment on a home purchase less affordable. “I wouldn't at all be surprised to see mortgage rates jumping between 1 and 1.5 percentage points over the next year,” said David Galland, managing director of Casey Research in Vermont.

San Diego Median Home Price Falls Back to 2003 Level Home prices continued to tumble in San Diego County last month, with the median of $380,000 reaching its lowest level since September 2003. A trio of factors – surging foreclosures, tougher lending standards and a weak economy – further pressured prices and demand for housing, according to La Jolla-based DataQuick Information Systems. May's median price was down nearly 23 percent from a year earlier.

San Diego Home Prices Drop Again in April April's decline in the aggregate index brought overall home prices back to a level last seen in November 2003. Adjusting for the effects of inflation as measured by the Consumer Price Index, home prices were just below where they had been in November 2002.

Foreclosures bringing cases of fraud to light In these scams, the idea was not to own the property long-term but instead to siphon off as much money as possible from commissions, rental income or undisclosed cash kickbacks before letting the home fall into foreclosure. “Many people just assume these foreclosures are part of the subprime meltdown,” said Todd Lackner, a real estate appraiser in San Diego. “This is not true. These properties were purchased with the intention of being foreclosed on.”

In San Diego, prosecutors have charged six people associated with downtown mortgage broker and real estate firm Creative Financial Solutions with Mortgage Fraud. The FBI analyzed 21 loans that CFS made from November 2005 to August 2006 and found that 18 of them have resulted in foreclosure or are in the process of foreclosure. In the San Diego case, prosecutors say lenders have lost nearly $3.9 million from CFS-related loans and could lose an additional $1.1 million. Charged in the case are Abner Betech, 27, Said Betech, 32, and Aviva Betech, 29 – all of San Diego. They have appeared in federal court and are free on bail, according to Assistant U.S. Attorney Christopher Alexander. Also named in the complaint are Rafael Santiago, 39, of Riverside; and Angel Armendariz, 27, and Lucette Montane, 25, both of Chula Vista. They are fugitives, Alexander said.

Hundreds Swept Up in Mortgage Fraud Arrests The FBI says it has arrested about 300 real estate industry players since March — including dozens over the last two days — in its crackdown on incidents of mortgage fraud that have contributed to the country's housing crisis. Across the country, reports of mortgage fraud have soared over the past year as the subprime mortgage market collapsed and defaults and foreclosures soared. The most common type of mortgage fraud was misstatement of income or assets, followed by forged documents, inflated appraisals and misrepresentation of a buyer's intent to occupy a property as a primary residence.

As of March, San Diego single family home prices in aggregate had declined 25.9 percent from their collective November 2005 peak The low-priced tier continues to take the brunt of it, down 3.4 percent for the month and 33.8 percent from its June 2006 peak.

Real Estate Plunge Deepens "It's not a market where anybody would want to voluntarily sell a home today," Ayad said. "I have definitely seen houses that have fallen to 50 percent of what they were selling before." The hope espoused by some perky agents -- that the market will soon turn around dramatically -- doesn't fit the nature of a slow-moving regional housing market. "Home markets do not bounce, they splat," Thornberg said. "We're not dropping a rubber ball here, we're dropping a watermelon."

San Diego County home prices took yet another beating in March, reaching the largest rate of decline yet Home prices in March were 20.5 percent below the same month a year earlier, the first time county home prices were more than 20 percent below the price from a year before. "Nobody is buying ... and the only ones that are selling are those that are reducing their prices because they absolutely have to."

Foreclosure Fraud Potentially Victimized more than 400 Homeowners in San Diego County The defendants allegedly convinced homeowners that a loophole leftover from the 1872 Spanish land grant allowed them to deed over their property to the company, which would shield it from foreclosure. The defendants earned their money by charging homeowners $10,000 up front or by setting up leases with the homeowners, charging them monthly "rent" in order to stay in their homes, officials allege. But, in the end, the foreclosures weren't thwarted, the homeowners were evicted from their homes anyway and they retained no legal ownership of their property.

Must-Sell Housing Supply Overwhelms Demand By dividing the number of home sales by the number of Notices of Default (NODs) in a given month, we can see how demand stacks up against likely must-sell supply. The accompanying graph shows that it pretty much doesn't stack up at all. April's 1,707 single family home sales, while a huge improvement from the prior month, were dwarfed by that month's 3,601 NODs for a sales-per-default ratio of .47. This compares quite poorly to the early-1990s bust, in which the sales-per-default ratio bounced between 1.25 and 2.25 for the bulk of the time.

FBI Looking at More Mortgage Fraud Cases FBI Director Robert Mueller on Wednesday described a "tremendous surge" in mortgage fraud investigations that he said has diverted agents from other cases and is expected to keep growing. At a Senate hearing, Mueller said the FBI is investigating an estimated 1,300 mortgage fraud cases.

Another Record Month for San Diego Foreclosures The month of April saw 3,601 default notices and 1,512 trustee sale notices. The former indicate homeowners who've been put on notice for mortgage delinquency; the latter are sent to owners about to have their homes repossessed. Both are at all-time records....the current pace of foreclosure activity is leaving that of the 1990s housing downturn in the dust.

Mortgage Registry Could Help End Fraud “It's incredible how much mortgage fraud is out there and how pervasive it is,” said Bill Matthews, senior vice president of the Conference of State Bank Supervisors, which owns and operates the Nationwide Mortgage Licensing System.

San Diego Loan Fraud: Kickbacks and Consequences The untallied costs of these real estate and lending crimes and schemes have contributed enormously to the current real estate crisis... For example, we had an Imperial Beach home listed at close to $500,000, based on the owners 2005 refinance appraisal. Because the property needed so much work, the motivated absentee seller agreed to reduce the price to $399,000 and sell the home in as-is condition. Almost immediately, we had an offer for $500,000 (100 percent financing) with $120,000 to be credited back to the purchaser at close of escrow. The South Bay agent assured us the buyer was approved by their crooked in-house lending operation. We presented the offer to the seller, and advised to him reject it outright. It was an obvious case of loan fraud. A few months later, we had another fraudulent purchase attempt on a home we had listed in Carlsbad. It was a lovely listing in Rancho Carrillo that had also had a substantial reduction in price. We received a verbal offer from an out-of-area contractor who had never seen the property. His loan broker called from Northern California, and explained that their offer (100 percent financing again) required over $100,000 back because of all the work this contractor would have to do....We shot back a quick rejection....This time, though, I called the San Diego office for the FBI, and reported all the information I had regarding this attempted fraudulent purchase. I provided names, telephone numbers and email addresses. There is also the technique of hiding a kickback in inflated commission, because lenders aren't privy to real estate commissions paid.

California Foreclosures Soar Even Higher Remember folks, we are undercounting foreclosures as a lot of them are stuck in that limbo-land of recurrent postponements. And we are undercounting notices of default as the banks are so overwhelmed they are letting late payments go for much longer before the notices go out.

The subprime mortgage market is a "total unmitigated disaster" as will be the real estate market, for those mortgages were used to buy property. It's only a disaster because of mortgage fraud - without which California strawberry pickers making $17,000 a year would not have been able to buy $700,000 houses (true story) - and so many bought more house than they can truly afford. Real estate prices are in the process of reverting to where they should be, about 50 percent less than peak.

San Diego employment has just decreased on a year-over-year basis ...even though we are not in an officially recognized recession, San Diego's employment situation is worse than it ever got in the aftermath of the 2001 recession. San Diego's March unemployment rate was 5.3 percent, up from 5.0 percent in February and 4.2 percent a year prior. Construction was hit the worst, declining for the year by 9,100 jobs or 10.3 percent. The finance sector, which includes real estate, lost 5,700 jobs or 7.0 percent. The retail sector, which was a more indirect beneficiary of the boom, was down by 1,400 jobs or 1.0 percent.

The number of California homes lost to foreclosure in the first quarter surged 327% from year-ago levels -- reaching an average of more than 500 foreclosures per day DataQuick president Marshall Prentice: "The main factor behind this foreclosure surge remains the decline in home values. Additionally, a lot of the 'loans-gone-wild' activity happened in late 2005 and 2006 and that's working its way through the system. The big 'if' right now is whether or not the economy is in recession. If it is, the foreclosure problem could spread beyond the current categories of dicey mortgages, and into mainstream home loans."

Hundreds seek help at free clinic for ailing homeowners The large turnout for the Smart Money Summit 2008 reflected just how big the foreclosure problem has become in San Diego County, said Gabe del Rio, president of the nonprofit Housing Opportunities Collaborative. After taking out adjustable-rate subprime loans during the housing boom, many borrowers are unable to keep up with rising interest rates, del Rio said. They can't refinance because their homes are worth less than they paid for them.

North San Diego County Association of Realtors Reports March worst month yet for housing market The area's median sales price continued to take a beating and also showed the largest annual decline yet. In March, it dropped below $500,000 for the first time since 2003. Foreclosures leaped in March, with new notices of default in San Diego County more than doubling from a year ago, to 3,116. "We haven't hit the terrified phase yet," said Shawn Harris, an Oceanside mortgage broker. "The sellers are going through the seven stages of denial. ... Eventually, they will get to the stage where it's, 'Holy crap, I'm not going to be able to make this mortgage payment anymore.'"

San Diego's office vacancy rate spiked to its highest level since 1996 in the first quarter thanks to a combination of weak demand and new buildings coming to market. The availability rate, which includes sublease space, buildings under construction and offices on the market but not yet vacant, came in at 21.3 percent for the quarter. “The residential real estate industry ripple effect is a blood bath,” said David Marino of Irving Hughes, which specializes in representing tenants. “When we got hit hard in 2001 through 2003 in the tech side, the residential real estate guys took a lot of that space. Today, there's no recovering industry sector to offset” the decline from housing-related companies.

Mortgage fraud reports up 42% in 2007 The U.S Treasury says there were 52,868 reports of fraud last year as banks are more suspicious of lies on loan applications. The most common type of mortgage fraud was misrepresentation of income or assets, followed by forged documents, misrepresentation of a borrowers' intent to occupy a property as a primary residence occupancy fraud and inflated appraisals. It also cited growth in fraud reports tied to "cash-out" refinancing, in which borrowers are able to pull out equity from their homes.

Nationally, prices fell over the past year at a rate of $338 per week; in California, prices fell at a rate of $2,788 per week. The California Association of Realtors reports median prices fell 27.2% from year-ago levels in the hard-hit Inland Empire east of Los Angeles, 30.9% in Sacramento, and 39.1% in Santa Barbara County. "It's bad. It's really bad," market analyst Nima Nattagh told the Daily News.

S.B. County Makes Arrests in Suspected Mortgage Fraud Ring The San Bernardino County district attorney's office has taken five people into custody and is seeking two more who are suspected of running a bait-and-switch ring using lies and forgery to sell mortgages at predatory interest rates throughout California.

California Prosecutors Shut Mortgage Firms Accused of Preying on Homeowners “As the mortgage crisis worsens, a growing number of fly-by-night companies are employing increasingly brazen tactics to push desperate homeowners into illegal and unconscionable loans,” Attorney General Jerry Brown said. “This is among the worst we've ever seen,” Brown said. “This is not just exaggeration and puffing. This is straight-out, deliberate stealing and fraud.” The suspects are accused of forging signatures when consumers would not sign paperwork, making false promises about favorable loan conditions and ignoring requests to cancel loans within the three-day window provided by the federal Truth in Lending Act.

"For the first time, the industry is getting a real-time look at the scope of mortgage fraud, and these numbers are staggering," ...said a statement by Kevin Coop, president of Interthinx, which has about 1,400 clients nationwide, including 15 of the top-20 mortgage lenders and three of the five largest financial institutions. Company analysts found that in the last half of 2007, about 42,000 mortgage applications for property valued at $11 billion misrepresented the borrowers' earned income.

Home Prices Plunge Across California The drops reflect a deepening housing crisis in the state, which saw home values soar during the housing boom then decline sharply in most areas. The dynamic has worsened the prospects for many homeowners desperate to sell as falling home values drain their equity.

San Diego Median Home Prices Pummeled in February Between January and February, the size-adjusted median price declined 5.7 percent for single family homes and 7.7 percent for condos.

San Diego Home Prices End 2007 with a Thud As of December, the aggregate price index had declined by 19.1 percent from its peak in November 2005.

Prices Plunge, Foreclosures Spike "No buyer wants to feel like they're going to buy a house today and it's going to be worth less tomorrow," real estate associate broker Kris Berg said. "Some communities are being hit more dramatically -- the lower end communities, like Mira Mesa. And certainly the condo markets, regardless of their location".

California exodus turns to stampede - High taxes drive jobs, people from one state to another California, which once lured Americans from near and far, is now driving out millions of the most productive residents – including high percentages of the most affluent. The bad news for California is that it faces a $14 billion deficit this year, despite boasting one of the highest tax burdens in the nation.

San Diego home loans failing at record rates; foreclosures up 257% over Jan. '07 The number of foreclosures in the county was 1,305, up nearly 257 percent from January 2007. Notices of default totaled 3,109, up 145 percent from the previous year.

FBI investigating 14 companies for mortgage fraud The number of suspicious activity reports they review for potential investigation skyrocketed from 3,000 in fiscal year 2003 to about 48,000 in 2007. Officials identified the states that are the "top 10 mortgage fraud hot spots" as California, New York, Texas, Florida, Georgia, Utah, Illinois, Indiana, Ohio and Michigan.

Cuomo challenged banks to clean up appraisal fraud. To settle an investigation by New York Attorney General Andrew Cuomo, Fannie Mae and Freddie Mac agreed yesterday to require greater independence for real estate appraisers, whose practices during the real estate boom have been criticized for leading to bad loans and the current subprime mortgage meltdown and credit crunch. “Today's agreement with Fannie Mae and Freddie Mac begins to set right what had gone so horribly wrong in the mortgage industry – rampant appraisal fraud,” Cuomo said in a statement.

Just when we thought all these fraudsters will all be getting off scot-free It looks like the Feds have just gotten 4 of these fraudsters in San Marcos to plead guilty to wide reaching real estate fraud.

Cunningham Briber Gets 12-Year Sentence Defense contractor Brent Wilkes was sentenced to 12 years in federal prison Tuesday for bribing former Rep. Randy "Duke" Cunningham with cash, trips, the services of prostitutes and other gifts in exchange for nearly $90 million in Pentagon work.

New York mortgage broker John Michael, 36, pleaded guilty to a charge of conspiracy to commit money laundering and to subsequently lying to a federal grand jury. In entering his guilty pleas in San Diego federal court, Michael admitted that a $525,000 mortgage his company processed in late 2004 was part of a money laundering plan to hide the fact that the funds were actually bribe money to Cunningham. Michael faces a maximum of five years in prison on each charge and a $250,000 fine.

Kontogiannis had continued running an unrelated $100 million mortgage fraud scam for months after he'd pleaded guilty in the Cunningham case. Kontogiannis admitted that he orchestrated a plan, using his nephew's company, to funnel bribe money to pay off mortgages on Cunningham's home.

La Jolla home prices down 26% based on price per square foot

With Fraud Gaining Attention, New Appraisers Now Must Go to College With prosecutors nationwide illuminating real estate fraud schemes undertaken during this decade's heated housing market, at least one of the state's legions of real estate professionals face new training requirements. California's Office of Real Estate Appraisers raised the bar last week for would-be appraisers wishing to join the 19,500 appraisers already licensed and working around the state. "While appraisers aren’t the ones to completely blame for [the prevalence of fraud], certainly they’re a part of the process and the process needs to be looked at."

San Diego County housing prices last month tumbled 13.1 percent from those in December 2006, the biggest drop in 20 years. The overall median price for all homes stood at $430,000 in December. The latest price represented a 16.9 percent drop from the county's all-time peak of $517,500 in November 2005.

Since September of 2005, the size-adjusted median price in San Diego has dropped 19.7 percent for single family homes and 23.1 percent for condos.

Downtown San Diego Condo Price Drops 40% Acqua Vista condo unit No. 1703, sold last month as a bank-owned property for $595,000. That same unit sold in June 2005 for $983,000.That's a 40 percent difference.

Rising mortgage obligations in San Diego drove up personal bankruptcy filings dramatically in 2007. About 7,640 debtors filed Chapter 7 or Chapter 13 petitions in the local court last year, an 83 percent increase from 2006.Many borrowers bought homes between 2004 and 2006 using adjustable-rate loans, and have seen payments increase beyond their ability to pay.

San Diego County Faces Glut of Office Space Credit turmoil this fall, when big lenders took billions in write-downs on their subprime mortgage holdings, helped stall the commercial real estate market, according to CB Richard Ellis.

In Chula Vista, a number of houses have been trashed by college students who have held parties in the vacant properties. Compliance, says Chula Vista code enforcement manager Doug Leeper, has been spotty. "What I need them to do is keep the water on and keep the lawn green," he says, noting that the first sign of abandonment is often a yard that has turned brown and a pool that has gone murky green.

The obligatory attempt to scare people into buying before the market runs away from them. But we've heard this tune before.

San Diego Case-Shiller Home Prices Resale home prices as of September were down 7.2 percent for high-priced homes, 12.3 percent for mid-priced homes, and 16.4 percent for low-priced homes.

Alejandro Lopez, Emilio Lopez, Ravinderjit Singh Sekhon, and Linda Velasquez each pled guilty in federal court in San Diego to conspiracy and wire fraud charges. The defendants admitted that they obtained $1,070,000 in mortgage loan commissions. At times they used third parties with higher credit scores as "straw buyers," misrepresenting to lenders that the third parties would occupy the homes. To fraudulently qualify clients for loans, the Lopez Team inflated clients' incomes and bank account balances; falsified employment, rent, and credit information; misrepresented that clients were United States citizens; used altered social security cards and bank statements; and purchased from tax preparers letters that misrepresented that clients were business owners and that the tax preparers had prepared the clients' tax returns. When lenders called to check the references, they impersonated employers, landlords, and creditors to falsely verify the information.

San Diego County's economic outlook darkened considerably last month, driven by a large jump in unemployment filings and a sharp decline in residential construction It was the 18th time in 19 months that the index has dropped. It is now at its lowest point in more than four years. And USD economist Alan Gin, who compiles the index, said more bad news is ahead. During the past year, housing prices in San Diego County have dropped 9.6 percent, according to the Case-Shiller Index of real estate prices. At the same time, mortgage defaults and other foreclosure-related filings have jumped 155 percent. Help wanted ads were down for the 14th consecutive month. And the weak job outlook - combined with higher fuel costs and softening home prices - helped push consumer confidence to its lowest level since March 2003.

San Diego region sees lowest median price since 2003, worst-ever October sales It was the slowest October since at least 1988, when DataQuick began keeping records, and the 41st consecutive month of year-over-year declines. Norm Miller, director of real estate academic programs at the University of San Diego, advised homeowners who have seen their equities melt by 20 percent to 30 percent to think objectively about where San Diego's market has taken them. “I have no sympathy with somebody who bought at $200,000, saw their value go to $900,000 and now it's worth $700,000,” he said. “Boo hoo! They're still way ahead of the rest of the country.”

North San Diego County Home Prices Fall Below 2005 Levels For the first time in nearly three years, the median price of a single-family home has fallen below $600,000 to $580,000 this October. The North County median was $589,000 in January 2005.

California Spirals Down Into Foreclosure-Driven Housing Recession Damaged by the largest number of foreclosures since the early 1990's, the California housing market has developed into a full blown housing recession, according to the latest analysis by Housing Predictor.

California Foreclosures up 254.2% in 3rd Quarter 2007 California’s third-quarter foreclosure rate of one foreclosure filing for every 88 households ranked second highest among the 50 states, with another 148,147 foreclosures filed

Californians At Higher Risk For Mortgage Fraud California's law enforcers are on the look out for foreclosure rescue scams swarming the state as risky-loan meltdown is leaving home owners vulnerable.

New California Appraisal Fraud Law "In order to take immediate steps to bring credibility to mortgage lending in California, and to protect consumers and other participants in mortgage transactions from fraudulent and deceitful practices, it is necessary that this act take effect immediately."

Mortgage Fraud Rising Fast; Florida and California Now the Hot Spots Mortgage fraud -- from bogus appraisals to consumer lies about employment and income -- is booming, up by 30 percent in the last year, according to a comprehensive new study prepared for the Mortgage Bankers Association of America using FBI and private mortgage industry data. Mortgage fraud in Florida jumped by 143 percent from 2005 to 2006, while California reported an increase of 214 percent.

Western U.S. Leads Nation in Mortgage Fraud Regional analysis of suspicious activity reports (SARS) indicating Mortgage Fraud violations indicates the West region of the U.S. led the nation with 35.9 percent of Mortgage Fraud-related SARs filed during FY 2006

Prices for standalone resale homes in San Diego County logged an 8.3 percent drop over the year ending in August San Diego's price drop was third largest among the 20 metropolitan areas followed in the index, behind Tampa and Detroit. "Price per square foot has gone down pretty consistently. That doesn't include any incentives, and they're pretty rife in the market."

Mortgage originators acting more like street toughs than representatives of lending institutions have contributed to the current crisis. "I refinanced my mortgage in April of 2006 with Aegis Lending Corporation. They did a ‘no doc’ loan and lied about how much I made to make a high mortgage amount work. I was trying to take out $25,000 to finance my daughter’s college needs at the time. They said I made enough to cover a $493,000 mortgage! In reality I earn only about $55,000. I now have house payments that eat up about 98 percent of my monthly income. Instead of refinancing my loan, Aegis sold it within a week after closing to GMAC Mortgage company and then filed for Chapter 11 Bankruptcy."

Mortgage vendors talk up a loan in Spanish, but then they pressure customers to sign documents in English with different terms. Before he knew it, Yanez had traded a $40,000 mortgage at 7 percent for a $70,000 mortgage at 12 percent.

A disturbing number of homeowners across San Diego County are not paying their monthly homeowners association dues in the midst of a wave of defaults tied to rising mortgage rates. Especially vulnerable are smaller condo-conversion projects and developments in more affordable areas where first-time homeowners stretched themselves financially to buy, using loans with low teaser rates that have since reset upward. “We will most likely need to raise the dues for everyone for the next calendar year to make up for the dues not being paid, so every homeowner will suffer for this.”

California Woman Sentenced in Theft of Foreclosure Proceeds Maria De Lourdes Navarro was sentenced in U.S. District Court in San Diego to serve 30 months in federal custody, based on Navarro's conviction for bank fraud arising from her diversion of proceeds of foreclosures.

On the surface, cash back at closing seems like a win-win. The buyer pays more for a property than it’s worth (sometimes a lot more), and the seller agrees to kick back some of the surplus cash to the buyer or one of several third parties. Anyone who goes along with the scheme——the buyer, seller, appraiser, loan officer or anyone else who provides a false statement——becomes an accomplice, subject to prosecution. Mortgage fraud is a federal crime, punishable by up to 30 years in prison and a $1 million fine.

San Diego County, as well as the rest of Southern California, experienced plunging home sales in September Sales counts for San Diego were at their lowest monthly levels since January 1996. The total last month was 2,152, down 35.5 percent from September 2006.

When real estate markets change swiftly to the downside, as they have in San Diego County, there is a window of opportunity where a given property could support an inflated appraisal and a motivated seller might accept a lowball net. Partner these conditions with slick financial hoodlums, and you have a white collar crime that can generate $100,000 (or more) per transaction-and millions before very long.In the first case , the listing had had a $500,000 refi appraisal done in late 2004. The listing languished until we reduced the price to $399-449,000. Almost immediately, a real estate agent brought in an offer for $500,000 with $100,000 to be credited to the buyer outside of escrow. In the second case, there was a distinct pattern of fraud with a "lending investor," working with an out-of-state (Seattle) straw buyer, who made offers on several properties in the San Diego market. Surely central to their crime was a cooperating escrow company located two counties away, probably a dicey appraisal, and a lender who was likely hoodwinked. They also needed cooperating real estate agents who were either ignorant or stupid (and neither should be licensed).

Rollo Richard “Rick” Norton II and Scott Greer pled guilty in federal court in San Diego to a felony charge of mail fraud, arising from their participation in a scheme to draw equity out of a San Diego condominium complex through a series of sham purchase transactions and refinances. As part of the scheme, Norton induced straw purchasers to let him use their names and credit histories to obtain new mortgage loans. Keith Slotter, Special Agent in Charge of the San Diego FBI Office stated, “The FBI is proactively working with the mortgage industry and our law enforcement partners to protect citizens from mortgage fraud crimes. This prosecution should send a clear message to those who would participate in mortgage fraud, that such conduct will not be tolerated.”

Bemilda Ruiz was sentenced to 4 years in prison for immigration fraud and real estate fraud. She convinced undocumented individuals to give her money to help them with their immigration paperwork and then used their personal identifying information to purchase property and take out loans.

San Diego woman chased American dream, now lives in a garage Just one of thousands or even hundreds of thousands of Americans who find themselves homeless and broke in the aftermath of the housing bust.

San Diego County's Home Repos Skyrocket The number of homes reaching the last stage of foreclosure -- becoming bank-owned -- skyrocketed in September, reaching 866 last month. That's a 44 percent jump up from August and a 1,297 percent (14-fold) increase from September 2006.

San Diego job losses mount as real estate declines Job losses in construction and real estate pushed the local unemployment rate above the national rate for the first time in seven years. Because of reliance on the business of buildings during the last few years of economic growth, the region has little choice but to feel the pain now. Home buyers chose riskier mortgages. So when the mortgage market soured, San Diego County was exposed.

San Diego Real Estate Broker Incomes Decline by 73% From 2000 to 2007, membership in the San Diego Association of Realtors nearly tripled from about 4,200 to 11,424 members. But the number of homes selling in the county has declined from about 24,000 in the first two-thirds of 2000 to about 18,000 in the same period this year. That means there were an average 5.81 transactions per SDAR member in 2000. That figure has dipped to about 1.59 transactions per SDAR member this year, a 73 percent decline. More agents are fighting for pieces of a smaller pie.

Firefighters battle a massive fire at a partially built condominium development in Escondido

Arson Experts Assist To Determine Cause Of Escondido Condo Fire A team of federal arson experts will join Saturday in efforts to determine the cause of a huge fire that leveled a high-density condominium project under construction in a busy North County district.

Ground Zero in San Diego's Mortgage Mess On a hushed street in the middle of a neighborhood that didn't exist a few years ago, foreclosure is a constant neighbor. Little Lake Street in Chula Vista is one of many spots countywide where next-door neighbors are simultaneously drowning in their mortgages. The street holds 43 cookie-cutter new homes in the Hillsborough neighborhood of Chula Vista's Otay Ranch. Eager would-be homeowners once waited in line to purchase a place here. But now, a big wave of trouble has washed over Little Lake Street. Buyers borrowed loans at terms they can no longer -- or couldn't ever -- handle. And they overwhelmingly used loans to cover 100 percent of the purchase price.

San Diego Real Estate Fraud Ring Convicted Rolando Montez, 51, of Vista, who was described as the leader of First Latino Group, was found guilty of four criminal charges, including conspiracy to commit grand theft, conspiracy to obtain property by false pretenses and conspiracy to commit forgery. AdvertisementTwo defendants, Franklin Ontiveros, 43, of Oceanside and Johnnie Mae Johnson, 57, of Vista, each were convicted of two conspiracy charges and acquitted of two others. A fourth defendant, North County resident Jacob Miller, 76, was convicted of one conspiracy charge. San Diego Superior Court Judge Howard Shore allowed all four defendants to remain out of custody and set a sentencing hearing for April 20. Montez faces the stiffest sentence and could be sent to prison for up to 12 years, prosecutors said.

San Diego journalist punched, eyes gouged while pursuing story on mortgage scam Treated for cracked ribs, bite wounds and cuts to his face. "He had his fingers in my eye socket, he was ripping my face apart, he was pulling my ears, he was biting."      Click here for video

"They use your identity to buy homes and never pay the mortgage." John Mattes was viciously attacked by a man who had been making threats for weeks. The attackers are Sam Suleiman and his wife Rosa. Mattes was doing a follow-up interview on a real estate scheme involving Suleiman which Mattes first exposed in July.

FOX Reporter John Mattes Is Attacked With Cameras Rolling

Man who attacked television reporter in La Jolla sentenced to year in jail Assad "Sam" Suleiman, 37, pleaded guilty April 20 to assault with force likely to cause great bodily injury for beating Fox 6 News reporter John Mattes on Sept. 5. The attack -- caught on videotape by Mattes' cameraman -- occurred at a private residence on Draper Avenue in La Jolla, close to a construction site where Suleiman was gutting and renovating a building.

Mattes' Attacker Sentenced He plead guilty to beating an investigative reporter and today Sam Suleiman learned he'll spend a year behind bars. Mattes was reporting on the real estate investor's deals. Deals in which people claimed they'd been swindled out of millions by Suleiman. Mattes insists his investigation of the real estate investor is not personal, "It's over. Justice is done. He tried to silence me. He failed." Mattes says Suleiman stalked him and called him late at night. "I don't have to look over my shoulder anymore and that's a good thing."

Median price for San Diego single family homes down a whopping 7.0 percent in one month (September 2007) The size-adjusted median price fell for the month by 3.1 percent for condos and 2.0 percent for single-family homes. This brings the size-adjusted median condo price down 9.6 percent for the year and 15.4 percent since the peak in November 2005. The size-adjusted single family home median is down 5.6 percent since last year and 11.2 percent since its peak.

With Ruined Credit, Ex-Homeowners Search for Shelter Thursday, Oct. 4, 2007 | As the number of San Diegans facing foreclosure rises meteorically month after month, landlords and property managers are bracing for an influx of former homeowners now looking for a place to rent. The credit-marring mark of foreclosure complicates finding an apartment, but some landlords and companies are turning a sympathetic ear to the plight of the foreclosed-upon. Foreclosure leaves a big, seven-year mark on credit histories. Under some companies' policies, such would-be renters might be automatically denied from leasing a unit because of their ruined credit.

The era of NINJA ("no income, no job or assets" ) subprime loans sold by fast-talking storefront mortgage brokers is dead By some estimates, up to three quarters of sales made in Southern California, Nevada and Florida in the go-go era of 2004-2006 involved some sort of fraud, particularly in the form of exaggerated income. Foreclosure rates are soaring, and as those owners are kicked out of their homes for not paying, the structures are sitting empty, with no one waiting in line to buy at any price.

Wave of Foreclosures Community leaders are increasingly blaming the types of loans people used to get into their properties. Many worry that fallout from the lax lending practices of the past few years mean that foreclosure rates will only continue to rise.

Mortgage fraud on rise in California Analysts say incidence of mortgage fraud in California most likely has been higher than reported for several years. It is only becoming apparent now as the housing market cools off and those who commit fraud can't hide behind housing profits, they add. Bob Simpson, president of Irvine-based Investor Mortgage Asset Recovery Company, said more and more fraud is being discovered in a cooling real estate market. "When values don't go up, lenders foreclose and they conduct investigations," Simpson said. "I expect the number of frauds to increase at the same pace as the number of foreclosures."

Real estate scam emerges -- 'Crash and inflate' method generally leads to foreclosure SAN DIEGO ---- Real estate appraiser Todd R. Lackner's second job as mortgage fraud investigator began when he stumbled onto a suspicious-looking transaction while online one day last March, he said last week. Within weeks, he was chest-deep in dozens of investigations of suspected mortgage fraud, and was helping federal investigators get the goods on real estate scammers who commit what are known as inflated-sale and-crash schemes, Lackner said. The term refers to a scam in which a buyer ---- with the help of dishonest real estate agents and appraisers ---- purchases a home for more than market price, receives cash at the closing of escrow and then lets the property fall into foreclosure. Lackner has uncovered more than 400 such cases, he said.

How Mortgage Fraud Functions The most prevalent kind of mortgage fraud against lending institutions in San Diego County: Typically called "cash back at closing," an example of the scheme looks like this: A house has been listed on the market for several months at $500,000. Then, without fanfare, the listing agent raises the price to $625,000, and hires an appraiser to say the house is worth the new, higher amount. Based on that appraisal, a lender approves a loan for $620,000. Soon, the buyer purchases the house for $620,000, using a mortgage for 100 percent of that amount. The sellers get their full price, the buyer gets close to $100,000 cash, and the agents for the buyer and seller garner a higher commission than they would have on the original list price. Eighty percent of the mortgage fraud nationwide is attributable to collusion between real estate industry insiders. Borrowers who misrepresent their own incomes or identities constitute the other 20 percent, according to the report. "It's my goal to get every one of these people busted," said local mortgage fraud expert Todd Lackner. "I just don't know how they sleep at night."

Senate takes aim at mortgage fraud The "Stopping Transactions Which Operate to Promote Fraud, Risk and Underdevelopment Act," or the "STOP FRAUD Act," for short, the bill would expand the SARs reporting requirement, establish a database of censured and debarred mortgage professionals, and provide funding for a number of enforcement activities.

Mortgage scams and now a new twist The set up is simple: Joe Smith’s mortgage has adjusted from his fancy 3% rate to an ugly rate of 11%. His home is not worth what he paid for it 2 years ago. Joe calls his lender and begs to be relieved of some of the debt he owes and asks his lender to allow him to list the home as a short sale. Joe then asks his brother-in-law to purchase the home at the new “lower” discounted price of the short sale. Joe’s brother-in-law fraudulently purchases the home as “owner occupied”, saves thousands for Joe Smith and Joe stays in his home.

Amazing Case of Loan and Mortgage Fraud This scheme shows the terrible power of shifty loan sharks and identity thieves. They will stop at nothing to fabricate documents. The paperwork says Juliet Al lived in Las Vegas for 26 years even though she's been in San Diego since 1979. They also said she has been renting a property on Piney Summit. The Piney Summit address in Las Vegas is actually a vacant home filled with trash and feces. Neighbors say it's been abandoned for a month-and-a-half. Angel Mora used to live in the home. "I'm struggling right now," said Paul Mangione who admits he's on a slippery slope toward self-destruction. He is about to lose his house to foreclosure. "I was ready to flip out. That's why my walls look like this," Mangione says he went nuts and took a crowbar to the walls. He says he got in touch with a man named Angel Mora, who said he worked for Best Rate Funding, a loan company.

San Diego condominium auction under wraps Home builder D.R. Horton has clamped down on public attendance and media coverage of a planned auction today of condominium units at two San Diego developments. “We are going to be closing the auction to the press tomorrow,” said Michael Schack, senior vice president of REDC. “We are only allowing registered bidders in. We are not allowing cameras, photography, press, media.” The homes previously valued at $309,990 will have starting bids of $149,000. Bidding for units previously valued at $546,900 will start at $249,000.

San Diego condos liquidated at auction between 68 and 74 cents on the dollar D.R. Horton also threw in a washer-dryer and $2,500 toward closing costs.

No denying San Diego mortgage crisis likely will worsen As far as San Diego bankruptcy attorney Mark Miller is concerned, many homeowners are only in the “denial” stage regarding the subprime lending crisis, although they may soon slip into “anger.” Miller deals with the crisis every day. In the past eight months, he has watched as clients lost about 150 homes through foreclosure. During the year ended Jan. 31, there were 13,249 homes in default or foreclosure in San Diego County – a 192 percent jump from the previous year.

False demand created by fraud schemes has skewed the markets, particularly in Las Vegas, San Diego and Miami. Fraudsters have lined up for large condo construction projects, putting up small deposits as low as $1,000 to tie up a property before it is built and then reselling it before the project is completed for a fraudulent profit, allowing builders to obtain construction loans for projects that normally would have no demand.

MBA calls more laws to fight mortgage fraud unnecessary A bill sponsored by Sen. Barack Obama -- SB 1222, the "STOP FRAUD Act" -- would impose a fine of up to $5 million and imprisonment of up to 35 years for mortgage fraud.

Bad guys might want to purchase your house Whatever the seller's sad story, along comes a fake buyer who proposes a happy ending. He'll not only buy Harry's house, he'll pay $100,000 more than Harry is asking. All Harry has to do is give back the extra hundred grand in cash after the deal closes. Bite, says McLaughlin, and you're an accomplice to a felony.

4 charged with stealing ID's by accessing mortgage company credit search database If convicted on all counts, the defendants are facing possible maximum sentences of up to 96 years. They are all being held on $500,000 bail each. Between January 1, 2005 and January 31, 2007, defendants are accused of using a mortgage finance company, First Choice Mortgage in Vista, San Diego County, to access the databases of three major credit agencies including Experian Corporation, TransUnion Corporation, and Equifax Corporation. The defendants are accused of gaining access to the credit agencies’ confidential files and stealing the personal information of more than 100 victims in Southern California counties, including Orange County and San Diego County.

Man arrested, accused of ID Theft and Loan Fraud The North County Times reports that Escondido Police (CA) are continuing to investigate the activities of Hossein Lotfinja an Escondido mortgage broker. Lotfinja was arrested recently and charged with loan fraud and identity theft. Detectives had obtained a search warrant for the One Stop Financial business at 410 W. Felicita Ave., seized computers and documents and impounded a car. Police had received complaints that the suspect allegedly helped a half-dozen people obtain home loans, then used their personal information to buy merchandise such as cars.

San Diego Real Estate Market Conditions

Foreclosed homes a messy problem in Escondido About 200 abandoned Escondido, CA homes are now in the midst of foreclosure proceedings, and banks and mortgage companies have become the official owners of more than half of them. The foreclosure epidemic, which officials blame on gimmick loans given to marginally qualified buyers, is not unique to Escondido.

The mortgage market meltdown - For many, the dark clouds have a silver lining The consensus of the roundtable was that we have not yet seen the worst of mortgage market problems. Several held out hope for spring 2008, more looked toward late 2008 to early 2009, and at least one – an appraiser – foresaw three to four years before a real recovery was under way. That said, there are some bright spots in these stormy times. The affordability of San Diego's housing markets will improve for future buyers and help this region's employers attract and retain key employees. In addition, while the replacement/construction cost of new apartments remains high and may inhibit new construction, look for apartments that had been purchased for condo conversion to revert back into apartments, thereby increasing the supply of apartments, which may alleviate pressure on rental rates.

"Safe Harbor Financial" Norton would buy condominiums in his clients' names at Crown Point Villas, a 116-unit complex he owned in Pacific Beach. Then, with the help of three of his employees and three employees at Chicago Title Co., he stole clients' equity by forging their names on more than 300 documents, the lawsuits contend. Thirty of the 116 condos sit empty, despite their sweeping views of Mission Bay and downtown San Diego. Some are gutted, with plumbing materials and paint cans strewn about the bare concrete floors. Others are completed but remain vacant as lawyers try to figure out who owns them. Occasionally, condo association treasurer Susan Dube gets a call from one of Norton's former clients, asking to see one of the units. She obliges, opening the door to the apartment before stepping aside to watch the owners walk though, usually in silence, surveying the property they never knew they owned.

Judge rejects bail for Chula Vista suspect in case of real estate fraud Bernal passed himself off as a real estate salesperson and lender to potential investors, and but didn't follow through after they paid him, prosecutor Fiona Khalil said in a court declaration. Bernal, 29, doesn't have a license to sell real estate or handle mortgage loans, she said.

Another city official has raised questions about the state of the San Diego pension system's investments The pension system, which serves nearly 19,000 members, has about $19 million of its $5 billion in assets invested in mortgage-backed bonds, but none in the sub-prime category.

Foreclosure consulting scams target struggling homeowners With credit tightening and foreclosures mounting to record highs in San Diego County and elsewhere in the nation, there is no shortage of opportunists looking for ways to profit from people on the verge of losing their homes. Desperate homeowners increasingly are falling prey to individuals who claim they can save properties but instead leave families broke or without a home, say local attorneys and county prosecutors.

An attorney for a New York mortgage broker indicted in the Randy Cunningham scandal says the charges against his client should be dismissed, also asks that the entire San Diego U.S. Attorney's Office be kicked off the case. Search warrant applications by government investigators for Kontogiannis' businesses alleged that Kontogiannis used numerous bank accounts connected to his various businesses to further his mortgage frauds, according to the papers filed by Granger. One of the bank accounts was used in May 2004 to launder bribes to Cunningham to pay off a mortgage on the former congressman's Rancho Santa Fe mansion, according to Granger's motion. Kontogiannis, a New York developer who has previously been convicted of bribery and bid-rigging charges, has remained free on bond since his February guilty plea. He faces a maximum of 10 years in prison.

Investigators and lending risk analysts say there's almost no end to the ways mortgage fraud can be perpetrated. “Southern California is fertile ground for people who want to commit fraud because there is such value in real estate,” said David Cabot, president of the San Diego Association of Realtors. About 80 percent of all reported fraud losses involve collaboration between real estate professionals, according to the FBI. It's a challenge for consumers to avoid being caught up in schemes that may involve knowledgeable industry insiders, such as brokers, agents, appraisers and investment clubs.

Slump Leaves Some Real Estate Workers Reeling, Jobless "It was a pretty lucrative career in the San Diego area for the past couple of years. But I came in at probably the worst time to get into real estate. I missed the party, so to speak."

In a wood-paneled office on University Avenue in La Mesa, one family rallies around the real estate F-word: Foreclosure. For most families, the thought of losing their home due to missed mortgage payments is their worst nightmare. But for Donna Sanfilippo and two of her sons, Erik and Robert Weichelt, foreclosures are the family business. Robert Weichelt picks up a stack of files for the afternoon drive and heads out to his silver Mercedes-Benz. Its license plate is emblazoned with "Team RLW," his initials. A Lincoln Navigator and a Cadillac Escalade are among other cars parked out back. "Some of these people can't even afford to keep their lights on and I'm rolling up in a car that could probably pay off their house," he says.