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Police Blotter – Mortgage Compliance Dragnet, August 2017

Attorney Involved in Scheme that Targeted Distressed Homeowners Sentenced to 30 Months in Federal Prison

07/17/2017 11:11 AM EDT

Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that BRADFORD BARNEYS, 51, of Odenton, Maryland, was sentenced today by U.S. District Judge Michael P. Shea in Hartford to 30 months of imprisonment, followed by three years of supervise release, for conspiring with Timothy W. Burke in a long-running fraud scheme that targeted distressed homeowners throughout Connecticut. BARNEYS was an attorney licensed to practice in Connecticut and has an office in Bridgeport.

According to court documents and statements made in court, between approximately 2010 and November 2015, Timothy W. Burke, formerly of Easton, engaged in a scheme to defraud individuals, mortgage lenders and the U.S. Department of Housing and Urban Development (HUD) by falsely representing to homeowners who were in, or facing, foreclosure on their homes that he would purchase their homes and pay off their mortgages. The distressed homeowners agreed to sign various documents that Burke presented to them on the understanding that, by signing the documents, they would be able to walk away from their homes without the burdens of their mortgage or other costs associated with home ownership. Burke also told homeowners that the process of negotiating with the lenders can take time and that, in the meantime, to ignore any notices regarding foreclosure. After he gained control of these houses, Burke rented out the properties to tenants by advertising the properties on craigslist.com and other means and falsely representing to tenants that Burke owned the property…

Final Civil Action Borrower Settled Allegations of Making False Statements to HUD for a Home Purchase Under the Federal Housing Administration Mortgage Insurance Program

06/30/2017 07:32 AM EDT

We received a referral from the Quality Assurance Division of the U.S. Department of Housing and Urban Development’s (HUD) Philadelphia Homeownership Center concerning a borrower who allegedly made false statements to obtain Federal Housing Administration (FHA) mortgage insurance.  The borrower provided false and conflicting employment and income information, which was used in originating and obtaining an FHA loan.  Further, the borrower certified that he intended to reside in the property but failed to do so.  We referred the violations to HUD’s Office of Program Enforcement for action under the Program Fraud Civil Remedies Act.

On December 4, 2009, the borrower obtained an FHA loan to purchase a property in Baltimore, MD.  The borrower falsely certified his employment and income information when he signed the uniform residential loan application.  The borrower also falsely represented on the loan application that he intended to occupy the property as his personal residence.  The property was vacant and was being offered for rent in May 2010, 6 months after the settlement date.  The borrower’s actions violated FHA requirements.  On November 17, 2016, HUD’s Office of Program Enforcement filed a complaint against the borrower under the Program Fraud Civil Remedies Act.  After negotiations with HUD, the borrower agreed to pay $10,000 to settle the matter.  The agreement did not constitute an admission of liability or fault by any party.  The borrower made an initial payment of $2,000 on April 11, 2017, and agreed to a repayment plan for the remaining $8,000.

 

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