August 3rd, 2008
This is an open letter about mortgage fraud in Aurora, Colorado. Distribution on this letter is by email and also published on my blog.
Index of Attachments
Buy One, Get One Free
Del Monte Catsup at King Soopers – buy one get one free. Sounds crazy to talk about $900,000 houses as – ‘buy one get one free’. Right?
Brian Waring
16713 E Lake Dr, Aurora, CO 80016 (Piney Creek Village). This home was built in 2002 – one of many built and sold by Golden Design Group. In late 2003 this property had been sitting there for about 12 months – and the sales crew at Golden Design had several houses they wanted to sell. So Pete Capra (Golden Design CEO) worked out a deal with Brian Waring. Brian bought this property approximately 12/12/03. The purchase price is recorded as $730,000 with a $730,000 mortgage loan provided by the good people at First Franklin Financial Corp.
Nicholas J Beal
Three months later, this property went on the market with an MLS listing asking $775,000. After 85 days on market there was no sale – the listng was withdrawn 06/11/04. 17 monts later it went back on the market (October 2005) asking $899,000 – a significant price increase. The listing history shows the property “under contract” 2 weeks later (11/27/05). Then Nicholas J Beal bought this property from Brian Waring sometime in late December, 2005 – with the loan recorded on 01/4/06. Somehow this sale happened without the knowledge of the listing agent. The property remained as an active listing for 4 more months until the listing expired 4/20/06. The sale was not recorded in MLS. It’s not clear if the listing agent collected a commission.
The sale price is recorded in public records as $849,000 with a mortgage loan provided by First Magnus Financial Corp.
On August 17, 2007, the New Jersey Department of Banking and Insurance (NJDOBI) issued legal documents ordering First Magnus Financial Corporation to stop doing business in the state and took the initial step toward revoking the company’s mortgage lender license.
The public records makes it look like Nicholas J Beal (the buyer) made a $200,000 down payment – but I don’t believe that.
Brain Waring was able to “sell” (I use the term loosely) for $119,000 more than he “paid” (I use the term loosely). That’s an increase of about 8% per year for the 2 year time frame.
The sole purpose of this (Dec 2005) transaction was to generate excess mortgage funds, a/k/a cash back at closing, a/k/a mortgage fraud. Nobody ever moved into the house, and Nick Beal never made a payment. The house promptly went into foreclosure.
This house sold 04/07/08 for $496,000 after 218 days on market. This house lost $350,000 in value from January 2006 to August 2007. That’s $350,000 in about 20 months time.
There is some good entertainment value associated with the REO sale. Michael Garard (the listing agent) included this note in the sold listing -
Appraisers – the buyer was an agent and took 0% commission and the price was reduced
My best guess is that Michael is thinking this property sold below market value, i.e. – the true market value is higher than the contract price. This would make perfect sense to Darren J Hayden.
Public records shows the buyers are Radu Demetrescu Vulcan and Marioara Demetrescu Vulcan (I’m not making this up). Radu Vulcan is not a licensed real estate agent. As near as I can tell, the selling agent is/was Tom M Basile (ER154461) of Partners West in Wheat Ridge. There is a mortgage loan of $278,000 recorded by the lender, American Mortgage Network, Inc., a/k/a Vertice, a/k/a Wachovia.
So lets see if I have this right – Radu and Marioara were able to make a $220,000 down payment and Tom Basile helped them buy the house for a commission of $zero. Do I have that right?
What could possibly go wrong here?
Get One Free
6159 S Memphis Ct, Aurora, CO 80016 (Piney Creek Village). About a month after he bought 16713 E Lake St (01/31/06), Nicholas J Beal bought himself another house. The sale price is recorded as $940,509 with a mortgage loan of $940,000 provided by the good people at American Brokers Conduit – now kaput.
At the time Nicholas bought this house, it was on the market with an asking price of $988,000. The sale is not recorded in MLS and the listing was withdrawn 4 months after the sale. It’s not clear if the listing agent collected a commission.
Golden Design Group
Nicholas J Beal bought this property from Golden Design Group / Pete Capra. The sole purpose of this transaction was to generate excess mortgage funds, a/k/a cash back at closing, a/k/a mortgage fraud. Nobody ever moved into the house, and Nick Beal never made a payment. The house promptly went into foreclosure. The REO listing says “like new needs landscaping”.
This property was listed on MLS for sale in January 2007. It’s still active on MLS – currently asking $624,900. That’s $315,000 less than the loan amount, and of course it remains to be seen what this house will sell for. It could get worse.
Conclusion
If you buy a house – but never make a down payment and never make a monthly payment – that’s free. Right? And if you walk away from the closing table with $200,00 cash in your back pocket that’s better than free. Right? And if you can do it twice, why not go for 20?
My (educated) guess is that during 2006 Pete Capra was knee deep in a lot of these deals. At $250,000 (cash) mortgage fraud per transaction, it adds up to some serious cash.
Who did all those appraisals? Maybe it was someone already on Erin Toll’s list of “bad actors“. If you believe (like I do) that the person(s) who did these appraisals did not play by the rules – and if you believe (like Erin Toll does) that “virtually all” licensed appraisers “play by the rules” – it would mean that it virtually must have been James Esters who did all those bogus appraisals. Whew.
Disclaimer
Everything in this document is my interpretation of information found in the public records. It’s my opinion, take it for what it’s worth.
Sincerely,
Philip G Rice
11268 E Linvale Dr
Aurora, COÂ 80014
720-282-3376
phil.rice@mkgappraisal.com
ps – To all who have read this far, please take a minute and think creatively about something you can do. Make a positive difference. If you need help, call me at 720-282-3376 or send an email.
– End of Letter –
