TICK TOCK: Michigan Continuing Education due by October 31

TICK TOCK: Michigan Continuing

Education due by October 31!

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Fair Housing Lawsuit Filed Alleging Racial Discrimination at Apartment Complex

Here is another example of a recent Fair Housing Act lawsuit brought by the United States Department of Justice (“DOJ”). I try to post case summaries in order to provide timely updates to real estate professionals about the "dos and don'ts" under the Fair Housing Act, since fair housing is such an important issue.

This afternoon (July 21, 2009), the DOJ filed a lawsuit against the owner and employees of Rolling Oaks Apartments, a 72-unit complex in Clanton, Alabama, for violating the Fair Housing Act by discriminating on the basis of race or color in the rental of apartments.

The lawsuit alleges that the employees told white testers that a selling point of Rolling Oaks Apartments was the lack of African American tenants and that they had adopted rental policies intended to discourage African American rental applicants. The lawsuit is based on evidence generated by the DOJ’s Fair Housing Testing Program, in which individuals pose as renters to gather information about possible discriminatory practices. The complaint also named the owner of the apartment complex.

The lawsuit seeks monetary damages for those harmed by the defendants’ actions, civil penalties and a court order barring future discrimination. The lawsuit is an allegation of unlawful conduct. The allegations must still be proven in court. I will try to follow this case and provide an update when the case is resolved.

Source: U.S. Department of Justice

It is important for all real estate professionals to remember that the federal Fair Housing Act prohibits discrimination in housing on the basis of race, color, religion, sex, familial status, national origin and disability.

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To learn more about fair housing issues (and many other real estate topics), please visit us at www.123ConEd.com. We are a leading online provider of Michigan real estate continuing education. All of our courses are fully approved and properly certified by the State of Michigan, and are offered online.

Copyright © 123 ConEd LLC 2009. All rights reserved.

Fair Housing Lawsuit Filed Against Mobile Home Park

Here is another example of a recent Fair Housing Act lawsuit brought by the United States Department of Justice (“DOJ”). I try to post case summaries in order to provide timely updates to real estate professionals about the "dos and don'ts" under the Fair Housing Act, since fair housing is such an important issue.

On Friday, June 19, 2009, the DOJ filed a lawsuit against the former owner and managers of Homestead Mobile Home Village, a mobile home park in Gulfport, Mississippi, for violating the Fair Housing Act by discriminating against black tenants on the basis of race or color. The lawsuit also names as a defendant Indigo Investments LLC, the owner of Homestead Mobile Home Park at the time of the alleged discrimination.

The lawsuit alleges that Edward and Barbara Hamilton, the former managers of the mobile home park, unjustly sought to evict a black couple and their five minor children who had moved there after being displaced by Hurricane Katrina. According to the lawsuit, the Hamiltons attempted to evict the family and other black residents for allegedly violating the rules of the park, but did not attempt to evict white residents for as many or more violations. The lawsuit also alleges the Hamiltons harassed and intimidated black tenants and that the defendants’ conduct constituted a pattern or practice of discrimination or a denial of rights to a group of persons.

The lawsuit arose from a complaint filed with HUD by two black residents of Homestead Mobile Home Village. The complainants also sought assistance from the Gulf Coast Fair Housing Center, a private, non-profit fair housing organization which provided additional information to HUD. After investigating the complaint, HUD issued a charge of discrimination and after one of the respondents named in HUD’s charge elected to have the case heard in federal court, the case was referred to the DOJ.

The lawsuit seeks monetary damages for those harmed by the defendants’ actions, civil penalties and a court order barring future discrimination. The lawsuit is an allegation of unlawful conduct. The allegations must still be proven in federal court.

Source: U.S. Department of Justice

I will try to follow this case and provide an update when the case is resolved.

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To learn more about fair housing issues (and many other real estate topics), please visit us at www.123ConEd.com. We are a leading online provider of Michigan real estate continuing education. All of our courses are fully approved and properly certified by the State of Michigan, and are offered online.

Copyright © 123 ConEd LLC 2009. All rights reserved.

Real Estate Professionals Arrested in Mortgage Fraud Scheme

Here is another example of a recent legal case involving mortgage fraud. I try to post case summaries in order to provide timely updates to real estate professionals on important issues.

On June 3, 2009, five people were arrested for their roles in a mortgage fraud scheme in the Washington State that bilked banks and property sellers out of more than $18 million. The arrests came as a result of an extensive investigation by United States Immigration and Customs Enforcement (“ICE”).

Humerto A. Reyes-Rodriguez, Alexis Ikilikyan, Micki S. Thompson, Mario Marroquin, and William S. Poff were indicted by a federal grand jury last month on charges of money laundering and conspiracy to commit bank and wire fraud (they were arrested on June 3, 2009). The indictment alleges that over a three-year period starting in 2004, they were responsible for 80 fraudulent loan transactions in communities throughout King County and Pierce County, Washington.

Mr. Reyes-Rodriguez and Ms. Ikilikyan were licensed real estate agents and mortgage loan originators. Mr. Poff is Ms. Ikilikyan's ex-husband and was a licensed notary and loan originator. Mr. Thompson was employed by Great American Escrow and acted as the closing officer for many of the fraudulent sales. Mr. Marroquin acted as a straw buyer and oversaw fictitious home repair companies.

According to court documents, the five defendants worked together to obtain financing from banks to purchase homes. At the same time, they convinced innocent home sellers to extend private loans to the buyer of the home to cover a portion of the purchase price.

The sellers did not know that the conspirators had already obtained financing from commercial lenders to cover the full cost of the home. When payments were not made, the properties fell into foreclosure. The homes were then sold for less than the total of all loans secured for the property. The sellers who had extended private loans to the buyers were left with nothing.

The conspirators also used straw buyers to purchase and resell properties and then submitted false information to the banks such as employment, income, citizenship status, assets and liabilities. They submitted bogus appraisals and hired fictitious home repair companies to do repair work on the properties. Proceeds from the home sales would go to the fake companies that had, in fact, done no work.

This case uncovered a group of real estate professionals who manipulated home sales for pure profit while some of the properties went into foreclosure and innocent private citizens were defrauded.

The conspiracy and money laundering charges are punishable by up to 20 years in prison and a $1 million fine. An indictment is merely a formal charge by the grand jury. Each defendant is presumed innocent unless and until proven guilty in court.

I will try to keep following this case and post an update when the case is ultimately resolved, hopefully with all of the defendants getting long prison sentences.

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To learn more about a variety of real estate topics, please visit us at www.123ConEd.com. We are the leading online provider of Michigan real estate continuing education. All of our courses are fully approved and properly certified by the State of Michigan, and are offered online.

Copyright © 123 ConEd LLC 2009. All rights reserved.

Lawsuit Filed Against Mortgage Lender Under False Claims Act

Here is another example of a recent legal case involving a fraudulent real estate scheme, this time committed by a mortgage lender. I try to post case summaries in order to provide timely updates to real estate professionals on important issues.

On June 9, 2009, the United States Department of Justice ("DOJ") filed a lawsuit against California mortgage lender Capmark Finance Inc., charging that Capmark violated the federal False Claims Act by making false statements on applications for federal mortgage insurance covering residential nursing homes. The lawsuit relates to a federal program under which the United States Department of Housing and Urban Development (“HUD”) guarantees mortgage loans used to acquire healthcare facilities such as hospitals and nursing homes.

The lawsuit alleges that Capmark made false statements in HUD applications to guarantee mortgage loans made to acquire the Canoga Care Center, a residential nursing home facility in California, and the Hudson Valley Care Center, located in New York. After accepting Capmark’s applications for mortgage insurance, HUD was forced to pay $25,895,701.21 when both the Canoga Care Center and Hudson Valley Care Center defaulted on their loans. Pursuant to the False Claims Act, the DOJ is seeking treble (triple) damages and penalties.

The lawsuit is an allegation of unlawful conduct. The allegations must still be proven in federal court. I will try to follow this case and provide an update when the case is resolved.

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To learn more about a variety of real estate topics, please visit us at www.123ConEd.com. We are the leading online provider of Michigan real estate continuing education. All of our courses are fully approved and properly certified by the State of Michigan, and are offered online.

Copyright © 123 ConEd LLC 2009. All rights reserved.

Have You Heard the Story of Stanley Watras?

Stanley J. Watras was a construction engineer at the Limerick nuclear power plant in Pottstown, Pennsylvania. A monitor was installed at the plant to check workers to make sure they did not accidentally accumulate an unsafe dose of radiation at work.

One day, on his way to work, Mr. Watras entered the plant and set off the radiation monitor alarms that help protect workers by detecting exposure to radiation. Safety personnel checked him out, but could not find the source of the radiation. Interestingly, because the plant was under construction at the time, there was no nuclear fuel at the plant, so there was no way for Mr. Watras to have been exposed to any radiation at work.

Eventually, they discovered that Mr. Watras was not picking up the radiation at work, but rather was bringing it to work from home! A team of specialists was sent to the Mr. Watras' home to investigate. There, they measured radiation levels about 700 times higher than the maximum level considered safe for human exposure (the home tested at 2,700 pCi/L and a safe level is at or below 4 pCi/L). The source of this enormous amount of radiation turned out to be radon, a naturally-occurring gas that made its way into the Watras home from underground. It had nothing to do with Mr. Watras’ job. The entire family was living in an environment roughly equivalent to smoking a couple of hundred packs of cigarettes per day. They moved out of the house immediately, while the problem was being fixed.

After Mr. Watras and his family evacuated their house, the United States Environmental Protection Agency (EPA) and Pennsylvania officials turned it into a laboratory for long-term measurement of radon and radon decay products and evaluation of radon mitigation techniques. After many months, they reduced the radon concentration to an acceptable level, and the family was able to return. After installing a radon-reduction system, radon levels in the home tested below 4 pCi/L.

Although this case occurred in 1984, residential indoor radon exposure as a health hazard flies below the radar of many real estate professionals. Radon is a Class A carcinogen, which means it is known to cause cancer in humans. Most people do not know that radon is the second leading cause of lung cancer in the United States, resulting in approximately 21,000 lung cancer deaths each year. Only smoking causes more lung cancers.

The U.S. Surgeon General and the EPA recommend that all homes in the United States be tested for radon. In fact, in May 1993, the National Association of Realtors (NAR) joined the EPA in urging all Americans to test their homes for radon. The NAR encouraged state associations to develop and support legislation or regulation requiring mandatory property condition disclosure, including radon, by the seller.

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123 ConEd LLC offers online real estate continuing education to Michigan agents and brokers. We offer numerous different course titles on our easy to use and easy to navigate website (www.123ConEd.com). All of our courses have been approved and certified by the State of Michigan.

Copyright © 123 ConEd LLC 2009. All rights reserved.