Could It Be That Casey Serin Will Be Charged With Mortgage Fraud? Will I Be Posting An “I Was Wrong About That” Post?
Could be. According to ABC news Casey Serin has hired an attorney who expects Federal Charges to be filed against Casey.
According to his attorney, Serin is currently under investigation by the FBI. His attorney, Kevin Mark Wray, told ABC News that “as of yet, no charges have been brought against Mr. Serin. However, based upon conversations with the U.S. attorney’s office in California, federal charges related to Mr. Serin’s real estate transactions are expected to be brought against him. At this time, my office is reviewing Mr. Serin’s real estate transactions. I have engaged an expert on mortgage law and mortgage foreclosure. I expect to have a complete response in the next two weeks.”
Even before the investigation began, debt collectors were harassing Serin, and his mailbox was filling up with delinquent notices. Eventually, his lenders started foreclosure procedures. According to Serin’s Web site, five of his eight homes have been foreclosed on, two of his homes have been sold and one is under contract to be sold.
So, we will see. If and when charges are filed, I will post that I was wrong and my surprise because this is atypical based on the dollars involved. But, I guess if you want to make and example of someone it helps if that someone has a public profile.
Now, if they go after Serin for lying on his loan applications I wonder if they are going to be as aggressive on the others who have done the same thing only on a much larger scale. Several high profile gurus come to mind.
I won’t feel bad if I have to say I was wrong because if the Feds really are going to start enforcing this it will be “all good” for honest and above board investors like me and millions like me who are painted with the same tainted brush as the crooked ones like Casey and some of the gurus he follows.
I will post that I was wrong and my surprise because this is atypical based on the dollars involved.
Over two million dollars in fraudulent loans is “atypical”…? If anything, it’s atypical by being a much higher amount than the average mortgage fraudster is ultimately convicted of.
Do a Google News search for “mortgage fraud”, and you’ll find many examples of people charged for less. Here’s a story from two days ago. Key quote:
[Davis] was accused of taking out a total of more than $1.2 million in loans in less than 1½ years..
Yes, it was a slightly different scheme (I.D. theft), but the dollar value is key. Serin took out $2.2 million in fraudulently obtained loans in less than 1 year. Nuff said.
You can’t be that stupid. There is a big difference between what the fliptard Casey did and identity theft.
Benoit, I think you are blinded by your obsession.
Tim, you are right about the haterz obession with Casey. Over at ch.c there was a detailed thread spelling out all of Mark Villasenors previous dealings and it didn’t look good. The owners there removed it and banned anyone from discussing Mark Villasenors background or motives or anything. They want the hate and vile squarely focused at Casey. I have come to realise they are a discusting lot who need lives. The bunch at EN aren’t any better.
Rumour has it Duane and crew are now trying to blackmail Casey the ‘tard into doing what they think is right. You know when the feds do look into Casey they are going to go down every path. I hope they take a really good look at Duane and Mark.
Benoit, the Secret Service investigates identity theft not mortgage fraud. It isn’t the same. Identity theft will always get their attention at much lower dollar amounts than mortgage fraud.
I don’t think any of Casey’s loans were federally backed or insured and that makes it even harder to get their attention.
Could they take the step of making an example out of him because of his notoriety? Sure, but, if he gets charged, that is what drove it not the 2.2 mil. That is chump change when you compare it to the typical mortgage fraud they do go after.
:sigh: — my comment still stands, perhaps I picked a bad example with the ID theft scheme. The Mortgage Fraud Blog has plenty of non-ID theft examples in which the sum total amount defrauded was far less than Casey’s.
Notoriety or otherwise, the fact remains that the FBI is investigating Casey. Not local Sacramento law enforcement, not any state’s Attorney General Office, but the Federal Government. You can chalk it up to “notoriety” if you want, but you need to do some serious s**t financially to have an FBI case opened against you.
Benoit blathered
Yeah, it’s not like facts and details should get in the way of a good lynching.
Yeah, it’s not like facts and details should get in the way of a good lynching.
Way to ignore the remainder of my comment. So I’ll repeat — The Mortgage Fraud Blog has plenty of non-ID theft examples in which the sum total amount defrauded was far less than Casey’s.
And “lynching”? Yes, metaphorically at least — one should expect no less when they start a blog detailing their financial crimes, show utter laziness about rectifying the situation (getting a job), and dare law enforcement to do anything about it. I know you personally don’t support his actions, since you called the guy Fliptard, so what exactly is your beef against “the Haterz”? Remember again, there would be no “Haterz” if Casey never started the damn blog.
The ONLY reason Casey is being prosecuted is because of his fame. Had he not started the blog, chances are he would have flew under the radar. That petition to the FBI didnt help either. My prediction, he will serve 18 months
Benoit said:
But, they aren’t like Casey’s.
Most of the examples on the mortgage fraud blog involve active fraud. Let me explain.
Someone applies for a loan. To support their claims on the loan application they supply fraudulent documents like W2s, tax returns, bank statements or paystubs. From what I’ve read Casey didn’t supply any supporting documentation for his stated income loans. That is the idea behind a stated income loan. I haven’t even read where he signed something as simple as a form 4506 or 4506-T.
I looked on the mortgage fraud blog after your comment here. I can’t find one example where someone was prosecuted for fraud related to a stated income loan only, for any amount.
Maybe it is there and I’m sure if it is you will find it and rub my nose in it. But, I don’t see it.
If charges are filed against Casey it will be solely due to his notoriety and the mob of haterz screaming for his head.
So, what will you do with all your free time after you finish saving the world from Casey Serin?
Joe, you and I share the exact same opinion on any motivation behind him being prosecuted.
Tim,youe right, the majority of mortgage fraud prosecutions are against industry insiders, and involve fake documents etc. You never see mr and mrs jones, who bought their first home and inflated their income a little for the loan being sent off to prison. Or the couple that re-finances their family home……Casey’s problem, he starts a blog, and talks about “shady loans” etc…..I mean, Comon man, Casey is asking for it!!!!! a prosecuter would have little effort in his case to bring an indictment, since he admits lieing on mortgage aps. Caseys lawyer will have a hard time defending him thanks to that blog….Also, dont forget with Casey, its not only over inflating income, Its CASH BACK that wasnt disclosed to the banks, and 7 mortgages in 3 months that he claims he is living in the propertys. Had Casey never started that that blog, he would not have been in the deep doo doo he is in today. I still think though, all in all, Casey will end up serving about 18 months, get out of prison and make a carer out of his past mistakes.
Tim, also, if you think about it, if someone has tax returns that actually SUBSTANTUATE the stated income figure that that person is claiming on the app, then WHY on hearth would the applicant use a stated income product and pay as much as 2 points more for the loan??????Obviously IF the applicat could proove income via a tax return, he would not use a stated income loan. So therefor, almost ALL stated income loans will not have tax retuns backing up the number decalred. Sooo everyone could be prosecuted. Or could they? Well, yes, if you are a mobster or some other high target the government is after. thats why you see alot of mortgage fraud cases that are brought against these people who have other unrelated charges. They “throw the book at them” so to speak. Also, Tim as I am sure you know, the mortgage app says “monthly income” not yearly. so its a vague figure to begin with. which months income? Last month, the last 6 months, or the last 12 months? Of course if you work in mcdonalds and claim 10k a month then you have a problem
There are indeed times when a legitimate borrower has no tax returns to back up his income. We deal with that all the time when we are hiring on UK and German engineers who move here. They each have a good job (with us!) and many of them have had good incomes in recent years. However, try giving a German tax return to an underwriter and have him make sense of it. No way!
Hence, low-doc loans are the only way for them to go. Amazingly, their rates are often not paying very high interest rates, but of three I know quite well, they all had between 25% and 40% down payments. That makes the bank much more congenial!
in re Joe: “you’re right, the majority of mortgage fraud prosecutions are against industry insiders, and involve fake documents etc. You never see mr and mrs jones, who bought their first home and inflated their income a little for the loan being sent off to prison.”
hi. Casey-hater here. (low-level, I don’t devote a significant portion of my life to it or anything. I’m sure Mr. Serin and all the “main players” are unaware of my existence). But I did want to chime in on the logic I’m seeing in many of the comments here - “the feds rarely prosecute these types of cases, so it’s all due to his notoriety and the stupid haters” (I refuse to use the “z” form). This seems to imply that it’s “good” or at least “a-ok” that thousands of people commit mortgage fraud each year, and that they are not held accountable for their actions. Is there not a reason that it’s against the law to lie on your loan documents?
This is, oddly, the same logic that Casey Serin uses to defend his actions: “Everyone was doing it…. acceptable industry practice…. so it’s a gray area.”
I see the argument appearing here that somehow it’s “wrong” or “unfair” to prosecute Casey for his misdeeds because it is “motivated by his notoriety” or by the “lynch mob of haters”. Frankly, I think all those who bought homes they couldn’t afford by fraudulent means should be punished. (Yes, the buyers are responsible too!! It’s not the sole fault of the big mean mortgage brokers and banks)!!!
Here’s an example: I think (I hope) that we can all agree that driving drunk is wrong. It’s wrong because it’s reckless and dangerous to other people (incredibly selfish, too, IMO). However, most people who do drive drunk get away with it. Is that “right”? Do they have to actually harm someone to reach the threshold of law enforcement taking action? Surely no one would defend THAT position, right?
Also, as a sidenote, for those who might say “use the resources to prosecute/imprison the ‘real’ criminals”, I’d say this: research on detererence has consistently failed to show any significant impact of punishment on “street” criminals (e.g. those who commit crimes like burglary, drug trafficking, assault, even murder). The people who respond to deterrence are what are called “socially integrated offenders” - i.e. the white-collar offenders. Those living squarely in the “conventional” world have much more to lose than the meth addict who robs convenience stores, living at the fringes of society. It’s pretty simple and makes perfect sense, if you think about it. So, arguably, spending the resources to prosecute and incarcerate
Casey Serin (in a very public manner) will probably bring a much better pay-off to society than putting the corner drug dealer in prison for 3-6.
Crimekate, your drunken driving analogy does not work in this case. The lenders created the situation and encouraged its use. Casey is right in one aspect of what he said. The lender did factor in the risk associated with not verifying the application and adjusted the points and rates accordingly.
The lenders devised a system where absolutely no verification of the information relating to the ability to pay the loan would be required or happen.
Casey Serin commited mortgage fraud by lying about his income. Okay, fine. Apparently, now the feds have decided to actually enforce the law in that area and make an example out of Casey. They would not be doing it if he hadn’t been so high profile in his behavior.
He made himself a target. Like it, don’t like it, it doesn’t matter because that is the fact.
Casey did lots of stupid things, the stupidest was going public.
There most definitely HAVE been prosecutions based on stated income loans. That feature is not always included in the released information. I am aware of two in particular and will post the links at the bottom of this entry. Inflating income on a stated income loan is no less mortgage fraud than supplying false W-2s!!!
The big DIFFERENCE between the Casey Serin situation and other smaller cases that don’t result in indictment might just be the availability of admissible evidence. The fact is that these cases are very difficult, expensive and time consuming to investigate and prosecute. If the evidence is handed to the government by the alleged perpetrator himself, the cost of prosecution dives, the chances of obtaining a conviction rises and, I expect, the likelihood of prosecution also increases substantially.
Here are links to stated income prosecutions (these resulted in guilty pleas . . .)
http://www.mortgagefraudblog.com/index.php/weblog/permalink/alaska_originator_indicted_for_mortgage_fraud_with_stated_income_documentat/
http://www.mortgagefraudblog.com/index.php/weblog/permalink/two_indicted_in_florida_over_luxury_estate_mortgage_fraud/
MIA - Well, I think one could easily extend the drunk driving analogy — irresponsible lenders = irresponsible bartenders and servers. And the law does hold those entities accountable - as I believe the lenders should also be held accountable for their PART in this whole mess. I object to the contention that it’s ALL the fault of the lenders.
I think you and I generally agree on this issue. He flaunted his misdeeds, and that has a LOT to do with why he’s (probably) going to be prosecuted. I was taking issue with the tone of some of the earlier comments that seemed to think there was something WRONG with Casey’s notoriety resulting in his takedown.
Rachel,
The first link you gave was a prosecution of the originator, not a single borrower, and it involved straw buyers. Not even remotely similar to an inflated stated income situation. But, nice try.
Your second link involved forged documents to justify the loan applications. Again, not a stated income loan situation.
Rachel:
I agree, it is hard to prosecute solely based on “over-inflated” income, becuase its hard to proove. Epecially is someone is self employed. Many self employed people will look at the cash flow going through their hands every month, and “guestimate” their income. come the end of the year, when the accountant adds up all the expenses, the borrower made WAY LESS then he thought, or worse yet, was at a LOSS for the year! So is that mortgage fraud? No of course not. There has to be “intent” -
The Mexiacn dishwasher with a 700 fico who clims he earns six figures on a mortgage app…..thats another story.
And Rachel your right about Casey, he made it too easy and apealing for them. Caseys blog was really a “confession of guilt and it prooves intent” unfortunately for him
Remember, a self employed borrower can state his monthly income to be 10k, but last years tax return only show 40k in annual income. Perhaps the last 2 months of business has picked up alot? Also, self employed people can look at cash flow going through their hands and guesstimate their income, but then atthe end of the year when the CPA gets done they find out they actually had a LOSS for the year…..How the hell do you prove income was over stated on people like that? Its impossible to proove criminal “INTENT” solely on income. Remember the application asked for “monthly income” not last yuears income or 12 months of income. So which month is it? People who work regular W2 jobs can not relate to what I am saying here.
Unless of course there are other factors, straw buyers, fake docs, or the buyer is a Mexican immigrant working as a dishwasher claiming to make six figures………Its a shame for poor Casey. He basically turned his blog into a “confession” for them. I dont understand Casey, is he retarded to use terms like “shady loans” ????Well, enough said on this topic
There is a big point all of those calling for Casey Serin’s head do not seem to understand.
Unless the loans Casey got were ultimately sold to one of the government created aggregators like FANNIEMAE, FREDDIEMAC, FHA, VA, etc the criminal penalty part does not apply!
The 1003 loan application is not required by law for non-conforming loans and sub-prime loans are most definitely NON CONFORMING.
Civil penalties to those who suffered a loss? Sure.
Criminal penalties? Not simply because of what he put on that application for a sub-prime loan. It don’t matter what the dang thing says, the criminal parts only apply to government sanctioned aggregators.
Ted: Interesting points. I am neither a real estate professional nor an attorney, so I am not familar with the details of the documents - but my understanding is that even unorthodox loan documents contain the disclaimer that “all is true subject to penalty of law”. And wouldn’t the signer be subject to criminal penalties even for defrauding a non-governmental entity? (Perhaps it’s true that the State’s or US Attorneys might be less likely to bring charges in that case than they would be if it were a FannieMae et al being defrauded, but the taking of assets via fraud is most certainly a crime (as well as having civil liability implications).
crimekate, Title I of the US Code Section 1001 is what applies to the loan application if it is for a government sanctioned loan. It is right there in the applicaiton. That does not apply to someone making an application to a lender when it will be bundled into a security offering.
Think about it this way. For these sub-prime (they are called liar loans even by the lenders for a reason) the lenders say, tell us what you make and if you are putting enough down or your credit scores are acceptable we promise not to verify it.
Under that circumstance, if all he did was lie about his income it can’t be fraud because he didn’t induce the lender to create that program to make that loan, they did it on their own.
TED: I heard the same thing. I think it might be a much lower level of crime (false statement on loan app) but not “mortgage fraud” in the legal sense of the term. Its probably similar to lieing on a credit card app. But if they want you they can always use “wire fruad” etc since those apps are done online.
Crimekate said:
I submit there is a distinction between observing reality and making excuses.
I am not saying what Casey did was right, because at a moral level it certainly isn’t. But, the reality is the lenders created a situation where this can happen and they continued to use that situation even after abuses were discovered. Stated income loans are still available today and still without verification of income or assets or ability to repay. It is rather hard to be a fraud victim if you are still advertising stated income loans which you claim to be the instrument of the fraud perpetrated against you.
But, the feds are supposedly pursuing Casey, not the lenders. Which makes me suspect… nope, never mind, speculation can wait.
It is not a justification of Casey’s actions to say were it not for his attention seeking he would be safely under the radar. It is simply an observation of the reality in existence. I can’t find any case where someone was prosecuted for lying about their income on a stated income loan. That doesn’t mean I am condoning what he did.
Do you not see the difference? I can observe a situation without forcing myself to be part of it, even if in just a judgmental way.
Did Casey lie about his income on the stated income loans he obtained? Well, he has admitted to it. Is it criminal? I don’t know, so far I can’t find where anyone has been convicted of it.
Perhaps the courts will force Casey’s Legacy to morph and give us some brand new case law in this area. Now, that would certainly be ironic.