"Homeowners get mortgage fraud alert"
From The Ann Arbor News
Monday, 24 July 2006
THIS IS A REPUBLISH ARTICLE BY MARK MAUPIN.

Mortgage Fraud - Michigan one of ten hot spots
Monday, 24 July 2006
Homeowners get mortgage fraud alert
While it may seem an unlikely threat, mortgage fraud was a $26 million problem in Michigan last year, up from $9 million in 2003. Seven new OFIS field examiners have joined six others to investigate the crime. The FBI underlined the problem in Michigan last year when it identified the state as among 10 hot spots for mortgage and deed fraud.

Homeowners get mortgage fraud alert

Sunday, July 23, 2006

With little fanfare, the state this month more than doubled the number of examiners employed by the Office of Financial and Insurance Services to go after people trying to steal your home.

While it may seem an unlikely threat, mortgage fraud was a $26 million problem in Michigan last year, up from $9 million in 2003. Seven new OFIS field examiners have joined six others to investigate the crime.

The FBI underlined the problem in Michigan last year when it identified the state as among 10 hot spots for mortgage and deed fraud.

"Why us?'' is the logical question Michigan homeowners may be asking about our status as prime targets for shysters.

Republicans last week supplied the context that the Democratic Granholm administration may have declined to address: Michigan's dire economic straits.

"The only thing worse than Michigan's current economic crisis is a criminal who uses that crisis to victimize people,'' Rep. Rick Baxter of Concord said during a press conference announcing a GOP plan to crack down on the crime.

He said many cash-strapped homeowners have been forced to tap their equity just to make the nut every month, and they're increasingly susceptible to shady dealers.

Unscrupulous lenders deceive homeowners - often senior citizens - into signing over the title to their property when they refinance, in one of several types of mortgage fraud.

"We intend to go after these criminals who are picking on our most vulnerable citizens,'' said Rep. Fran Amos, R-Waterford. "Michigan does not want to be known as the state where you can come in and do this.''

"This'' can include a fairly easy process whereby a con artist claims ownership of a home by presenting phony documents to the county registrar of deeds and then sells the property. In cahoots with the fake owner, the "buyer'' mortgages the house and walks away with the cash, leaving the real homeowner with the bill.

Amos' legislation would make mortgage fraud, now a misdemeanor, a felony punishable by a $5,000 fine and/or 10 years in prison.

Baxter's bill would rev up enforcement by allowing the state Attorney General's Office to use the $3 million in the Real Estate Enforcement Fund, currently used to pursue unlicensed brokers, to investigate and prosecute mortgage fraud.

Mortgage fraud is a concern because it affects not only homeowners and lenders, but the economy and a broad range of consumers by artificially inflating real estate prices and pushing up interest rates and fees.

The FBI says 80 percent of perpetrators are industry insiders - appraisers, bankers, lawyers, real estate brokers.

OFIS' goal is to examine each of the some 3,200 licensed mortgage companies in Michigan every five years, Linda Watters, the state's insurance commissioner, said in a statement announcing the new workers.

"These examiners will be the agency's eyes and ears in the field, and will provide invaluable information regarding market practices occurring in Michigan,'' she said.

OFIS officials say the stumbling economy isn't as much a factor in Michigan's fraud rate as the concurrent growth in a similar crime, identity theft. Raising consumer awareness is key.

They suggest that consumers check with OFIS to make sure the mortgage brokers, lenders and servicers they're dealing with are licensed. The toll-free OFIS hotline is 877-999-6442.

Contact Sharon Emery at 517-487-8888, ext. 236 or e-mail her at semery@boothnewspapers.comThis email address is being protected from spam bots, you need Javascript enabled to view it .

http://www.mlive.com/business/aanews/index.ssf?/base/business-4/1153649712258280.xml&coll=2

Common Marketing Mistakes Done By Investors In Real Estate Investment And how To Avoid Them - Guided by Mark Maupin

We are all familiar with usual marketing strategies like badit signs, classified ads and postcards etc. Now, these marketing strategies in themselves are not bad but it is sadly the method how these marketing activities are applied where investors get into trouble. Let us explain you how to avoid common mistakes while making real estate investment. Mr. Mark Maupin has successfully taught all the techniques to many new real estate investors.

Not Staying Within a Budget and Wasting Your Money.

If you only have $100 or $500 per month to spend on marketing then you need to stick to that amount and use strategies that fit into your budget. This is because you may not have money for a longer period of time for real estate investment business. Mark Maupin always emphasis this point, because it affects your cash flow.

Not Being Persistent.
It is fact that, if you will be persistent in whatever you are doing, then you will win or get success at the end. Many people do not remember this fact and quit with a huge database of leads they accumulated from haphazard marketing efforts. All it asks is some nourishment and follow up.

Having No Competitive Advantage Above Other Investors

I know my personal bias towards attorneys and using free publicity as my competitive edge. What is yours? still don't know, develop one.

Not Identifying Strategies That Work and Sticking With Them

There are somany ways to skin a cat. It is the lack of not knowing what works and what works well that leads many astray and cost them a lot of money in the process and progress.

Following the Herd and Using the Same Marketing Strategies

If you don’t have answer of the question that with same strategies used by fellow investors in your market,why would a seller call
you ?Then you need to think of a different strategy like marketing to attorneys. When you market to attorneys there is no competition problem and no negotiation problem. Mark Maupin would like to say about this approach is that the attorneys may times would send pre-qualified leads your way which makes negotiations much less complicated.

Not Having a Marketing Strategy At All
Intersections without planning, testing and reviewing the quality response rate from your signs is a sure recipe for failure.

For More Information, please visit - Mark Maupin

"Michigan Legislators Take Up Real Estate Fraud Legislation"
FlippingFrenzy.com
THIS IS A REPUBLISHED ARTICLE SUBMITTED BY MARK MAUPIN

Michigan legislators have unveiled a legislative package they say will help stop the increasing number of mortgage fraud cases by making the crime a felony and freeing millions of dollars to investigate and fight real estate-related scams. Michigan’s real estate fraud losses have skyrocketed from almost $9 million in 2003 to $26 million in 2005, according to the FBI.
House Bill No. 6267, introduced by Representative Rick Baxter, allows money in Michigan’s Real Estate Enforcement Fund to be used by the state’s Attorney General’s Office to investigate and enforce mortgage fraud. The money, reported to be around $3 million, is currently restricted for prosecuting unlicensed activity.

Michigan’s struggling economy has given rise to a particular form of mortgage fraud. Many of the state’s residents are refinancing their homes to help pay bills, but some unscrupulous lenders are deceiving them into signing over their titles. House Bill 6267, which makes mortgage fraud a felony, also provides prosecutors with the flexibility necessary to try cases more efficiently because real estate fraud crimes can overlap many legal jurisdictions.

The legislative package introduced yesterday targets several types of real estate fraud, including equity skimming, mortgage-related identity theft, and the widespread use of property flipping, which regular readers of this blog know involves purchasing property and artificially inflating its value through false appraisals.

The package also includes a bill to prevent an appraiser from modifying appraisals in exchange for repeat or future business. The bill creates a felony class violation for appraisal fraud on any level, including influencing appraisers.

The FBI has ranked Michigan as one of the Top Ten “Hot Spots” nationwide for mortgage fraud, and has publicly made combating the crime a priority because real estate fraud hurts the overall economy and negatively affects consumers through increased interest rates and bank fees.

"Beware of Loan Offers Involving Wire Transfers"
July 15, 2006
THIS IS A REPUBLISHED ARTICLE SUBMITTED BY MARK MAUPIN.

Michigan Warns of Advance Fee Loan Scams

Beware of Loan Offers Involving Wire Transfers
July 15, 2006 Michigan Attorney General Mike Cox is warning consumers that advance-fee loan crooks are using false Michigan business addresses and targeting people with debt problems through websites.

Cox highlighted recent complaints regarding the Royal Oak Financial Group and SouthField Financial Group, both of whom falsely claim to be headquartered in Michigan.
"Consumers should completely avoid any lender that requires up-front payment to guarantee a loan, followed by payment by wire transfer," said Cox. "Consumers have little recourse if there's a problem with a wire transaction. Moreover, legitimate lenders don't pressure customers to wire funds."

Recent complaints and calls received by Cox's office evidence consumers who wired hundreds of dollars in up-front fees to secure personal loans but then failed to receive either the loan proceeds or payment refunds. After applying for a loan online through the website of Royal Oak Financial Group, consumers were directed to pay upfront for insurance by wire transfer to Canada and directed to a named individual, rather than the company name.

While the Royal Oak Financial Group purports to be located at 1441 East Maple Road, Suite #103, Troy, Michigan, postal authorities report that Royal Oak Financial Group mail sent to that address is not being recognized by the postal service and is, therefore, being returned as undeliverable.

Royal Oak Financial Group is not a licensed mortgage lender by the Michigan Office of Financial and Insurance Services, even though the company's website offers mortgage loans. Postal authorities likewise report mail sent to SouthField Financial Group at 2700 Civic Center Drive, Southfield, MI, is not being recognized by the postal service.
The SouthField Financial Group website also offers personal loans, and includes a testimonial from "Jason D." of "Flynt, MI."

Cox added, "The problem of advance-fee loan scams is substantial, and a recent upsurge in inquiries and complaints from consumers both in Michigan and out of state suggests that the use of the Internet to commit this type of fraud is on the rise." Complaints received involving out-of-state victims who remitted payment to Canada are being shared with the Federal Trade Commission and Project Phonebusters in Canada.

"Commercial Real Estate Seminars"
From The Detroit News
July 7, 2006
THIS IS A REPUBLISHED ARTICLE SUBMITT BY MARK MAUPIN

LOCATION CHANGED TO HOLIDAY INN, SOUTHFIELD, MICHIGAN
Free Commercial Real Estate Seminar, Livonia, Michigan!

Investing Information, On How To Get Started, In Livonia, Michigan!
National Real Estate Network’s number one ranked commercial real estate speaker, Pat Winter, has just launched his new web site, http://www.mrcommercialre.com/, to offer the public information and educational products regarding commercial real estate investing.

Known as Mr. Commercial Real Estate, Pat Winter started out as a teenager working for his father, an established commercial real estate investor. As an adult, Mr. Winter went on to manage his own successful commercial real estate investing business, which includes retail, manufacturing and office properties. His new web site now provides a place for people to get information about these commercial investing opportunities.

Mark Maupin, one of founders of the National Real Estate Network LLC, recently said, “In my 29 years in real estate I have never seen anyone provide the information Mr. Commercial Real Estate gives away on topics that are never discussed in real estate investors clubs.” Mr. Winter is going to be the speaker for National Real Estate at Free Seminar July 24, 2006 (open to the public).

Members of National Real Estate Investors Network, LLC, will get an opportunity to meet Pat Winter in person at 17177 Laurel Park Dr., Suit 265, Livonia, Michigan, July 24, 2006, 6:00pm to 8:00 pm.

Contact: National Real Estate Network, LLC http://www.megaeveningevent.com/ Ralph (Mark) Maupin Tel: 734-402-0180

"Lawmakers propose bills to crack down on mortage fraud
Associated Press"
Grand Forks Herald.com by David Eggert
July 10, 2006
THIS IS A REPUBLISHED ARTICLE SUBMITT BY MARK MAUPIN

LANSING, Mich. - State lawmakers hoping to stop the fast-growing crime of mortgage fraud unveiled legislation Monday that would devote money to prosecuting offenders.
House Republicans said their bills would designate $3 million for prosecution from a fund that is now used to investigate unlicensed real estate brokers. Another bill would specifically make mortgage fraud a felony punishable by 10 years in prison for a first offense.

Mortgage fraud losses in Michigan have jumped from almost $9 million in 2003 to $26 million in 2005, according to the FBI.

"We intend to go after these criminals who are picking on our most vulnerable citizens and put them behind bars," said Rep. Fran Amos, R-Waterford, who is sponsoring legislation along with GOP Reps. Rick Baxter of Concord and Jim Marleau of Lake Orion.

Last year, federal authorities charged 20 people with fraud and related counts, disrupting five separate mortgage fraud organizations in the Detroit area. The groups - operating independently - are accused of bilking financial institutions out of $10 million.

One bill proposed Monday would allow the state attorney general to use $3 million in the Real Estate Enforcement Fund to investigate and prosecute mortgage fraud. The money comes from a $15 fee levied on licenses for real estate brokers and associates.

Oakland County Clerk Ruth Johnson, a former state representative, joined the legislators to give examples of mortgage fraud.

Criminals claimed ownership of a woman's Bloomfield Township home by using forged documents. Then they sold the property to another person, who obtained a $278,000 mortgage.

"They took the money, ran, and the lending institution is currently in the process of foreclosing on her property," Johnson said.

She also cited a situation where a woman returned to a home she owned and found another family living there who thought they had bought it legally. Johnson's office has installed two security cameras in the register of deeds office to try and stop mortgage and deed fraud.
The legislative package also includes a bill that would prevent an appraiser from modifying an appraisal in exchange for more business. Another component of mortgage fraud is appraisal fraud, where property is bought and appraised at an artificially high value.

About 80 percent of fraud losses involved collaboration by industry insiders, according to the FBI.

"Lawmakers Plan to Crack Down on Mortgage Fraud"
From NEWS 6 WLNS.com
July 10, 2006 03:23PM CDT
THIS IS A REPUBLISHED ARTICLE SUBMITT BY MARK MAUPIN



Lawmakers announced a plan to crack down on mortgage fraud. Michigan's one of
the top ten states for mortgage scams, according to the FBI.

The house republicans revealed a bill package to make mortgage fraud a felony, and three
million dollars can be used to investigate and enforce the crime.
Representatives say it's a first step towards stopping the growing problem.

State Representative, Rick Baxter (R) Concord: "We not only don't have a lead
agency in the state to go after these people, we also don't have any resources
by which they can prosecute. The third part really is we don't have a big
enough club to beat these people with to say, 'if you're gonna do this, we're
really going to make sure that you pay for it.'"

In Michigan, victims lost around 26 million dollars to mortgage fraud last year. Criminals
usually forge documents or make false appraisals to steal homes and make a
profit.

The Associated Press
July 15, 2006
THIS IS A REPUBLISHED ARTICLE SUBMITT BY MARK MAUPIN

State foreclosure rate again tops nation
THE ASSOCIATED PRESS
DENVER - Colorado had the highest home foreclosure rate in the country in June for the sixth consecutive month, according to a new report.

Foreclosure.com, which tracks foreclosures nationwide, said Wednesday that Colorado had 5,928 active foreclosures last month, or one for every 280 occupied homes.

The number of foreclosures in Colorado fell by more than 1,000, or 18 percent, from January to June, but it wasn’t enough of a decline to knock the state from the top ranking.

Texas, Michigan, Ohio and Georgia had more foreclosures than Colorado, but they had lower foreclosure rates because they have far more houses.

Earlier this week, county records showed foreclosures in Denver and six surrounding counties jumped by nearly a third in the first half of 2006 compared with the same period last year.
Public trustee records made available Monday showed 9,424 home foreclosures were reported in the Denver area in the first half of this year, compared with 7,144 last year, an increase of 31.9 percent.

Some officials have blamed loose lending practices and aggressive building for both the Denver-area and statewide foreclosure rates.

Colorado Attorney General John Suthers said Wednesday that ‘‘creative financing’’ techniques such as interest-only loans, coupled with slow increases in home prices, are bigger factors in the foreclosure rate than fraud.

‘‘If home prices are going up 10 percent, 15 percent or more each year, it doesn’t matter what kind of loan you have,’’ Suthers said. ‘‘But in a market like this, where homes are going up 3 percent or 4 percent, you face losing your home to foreclosure if your mortgage adjusts upwards by hundreds of dollars each month.’’

THIS IS A REPUBLISHED ARTICLE SUBMITT BY MARK MAUPIN

DESPERATE HOUSE SELLERS : Sell this house, get a BMW!

Competition for scarce buyers forces sellers to get creative.

Dorothy Bourdet / The Detroit News

Buy a condo from developer Louis Beaudet in Ypsilanti, get $3,000 paid on closing costs and a new washer and dryer. Buy a house from Hornbrook Estates subdivision in Lyon Township, get a free two-year lease on a four-wheel-drive Dodge Dakota pickup. List your house with Realtor Mark Beydoun, get an extra sign in your yard touting no-money-down financing.

The perks don't end with buyers. Courtney Tursi is offering a two-year lease on a BMW X3 SUV to any real estate agent who finds a buyer for her $699,999 house in Commerce Township.
Real estate agencies, Realtors, builders and even home sellers are pulling out the stops to counter one of the slowest housing markets in Michigan history, where homes for sale are a dime a dozen and home buyers are gold.

Competition for those scarce buyers is forcing the real estate industry to come up with new ways of doing businesses, from giveaways of gas and vehicles, to 99-cent upgrades on new homes, to full payment of the buyer's closing costs.


Even home sellers are getting some breaks in this competitive environment, through Web sites where real estate agents will compete for listings

Mark Beydoun, a Realtor with RE/MAX Team 2000, just bought a bundle of yard signs advertising zero-down financing for homes.

"It might give them pause and (they will) say, 'I didn't know I could get zero down,' " he said.
Sterling Heights agent Jason Strat has mortgage information on nearly all of the signs for his resale listings. They provide one-stop shopping for potential buyers, he said.

"It's becoming more visible mainly because there are more homes on the market," he said. "In the past, these homes didn't stay on the market too long, so these signs weren't necessary."


Real estate market hit hard

At the suggestion of her Realtor, Furhad Waquad, Courtney Tursi decided to give away a two-year lease on a new BMW X3 to the real estate agent who finds a buyer for her $699,999 house in Commerce Township.
She figures it could reel in agents and the potential buyers who come with them.
"Whether or not they're looking for a house like this, it will increase traffic and the more traffic you have, the more people seeing your house, the better off you will be," Tursi said.
Unusual incentives like the BMW lease are symptoms of how the state's sagging economy and low consumer confidence are sapping the real estate market, said Waquad, a Realtor with Real Estate One in Bloomfield Hills and president-elect of the Michigan Association of Realtors.

"We are a single-state recession in the United States, real estate-wise. Our real estate market has been affected so much because of our manufacturing base," he said. "We are a product of how confident the consumer is in the market, or lack thereof."

Builders also offering perks
Whether with 99-cent upgrades on new homes (such as stainless steel appliances and better carpet) or free gas, builders are also stretching for buyers. A National Association of Home Builders survey of 500 builders in January found 41 percent are offering free appliances, 31 percent are paying closing fees and 15 percent are paying up-front financing.

BRG Custom Homes just completed a stretch where it offered $3,000 in free gas with the purchase of a Rivergrove Village Condominium in Ypsilanti Township.

"The market being what it is today we decided to spice it up a little bit. Who can't use $3,000 worth in gas?" said Louis Beaudet, a principal with the Southfield-based developer.

The eye-catching ads brought in foot traffic and one buyer, Beaudet said. Now the company is offering to pay up to $3,000 in closing costs in addition to throwing in a free washer and dryer.
But Beaudet predicts the flurry of incentives will be short-lived.

"We're doing a disservice to ourselves as an industry because we're artificially deflating the price of our homes," he said. "Homes need to sell on virtue of their quality. I believe that as the market corrects itself, you will see the incentives diminishing across the board."

In Lyon Township, slowing sales of new homes in the Hornbrook Estates subdivision has prompted developers to sweeten the deal. The next person to buy a ready-to-go home will get a free two-year lease on a Dodge Dakota pickup.

"The truck is not going to make somebody buy the house, but it is a nice little incentive," said Faye Armstrong, sales manager for the subdivision.

Sellers turn to the Web

Home seller Matt Bontomasi switched the tables on incentives, with the help of a recently launched Web service. Bontomasi posted details about his 1,100-square-foot St. Clair Shores ranch on HungryAgents.com, a Web service where real estate agents "bid" for sellers' business with their commissions.
Realtor Tony Dabaldo offered and Bontomasi accepted a 4.5 percent commission, versus the typical 6 percent. The house sold in seven days for $165,000, just $4,000 less than the asking price.
"I wanted to get a discount on the commission, but I wasn't going to go with an inadequate agent," he said. "For me, it was excellent. I got a discount on the commission, I got hooked up with an excellent real estate agent and I was able to sell my house in about a week for almost the asking price."
For Dabaldo, earning a loyal client and the referrals they may bring is more important than a one-time commission.

"The referrals alone outweighed (the cut in commission) and I know he's going to be a customer for life," said Dabaldo, a Realtor for Utica-based RE/MAX Metropolitan. "That's what it's all about."
Saving on the commission is especially attractive now for sellers, many of whom will have to bring money to their closing because they're accepting offers for less than they owe on the house.
"Across the country, about 40 percent of sellers will have to bring a check to the closing table," said Jim Tullman, general manager and chief marketing officer for Missouri-based HungryAgents.com. "Because of that, they need to save money on the sale of their property and if they can save thousands on the commissions, that helps them pay part or all of the amount that they would need to bring to the closing table."
Those looking to unload their houses quickly are increasingly looking at house auctions.
An auction offers a quick sale -- the pre-auction process takes five weeks and bidding usually lasts five minutes -- and a competitive bidding process."It works very well not only for the buyer but also for the seller," said Gary M. Berry, owner of Gary M. Berry Auctioneers in Rochester Hills.

Other strategies real estate agents are employing these days: Being choosy about the kind of homes they list and making sure they have a strong Web presence.
Beydoun won't take on clients who insist on selling their house for a certain amount when the market won't support that price. "If I know it's not going to sell, I won't take the listing. I won't make myself look bad."
Cathy Tishhouse, a Realtor with RE/MAX Showcase Homes in Birmingham, is trying to beef up her presence on the Web, where home sellers often go to do research before calling an agent.
"You'll see more and more people, I think, looking at what they can do on the Web."

Views of market differ

Depending on their vantage point, sellers, Realtors and builders have varying views on where the market is going.

"People kind of lost faith in the real estate market," Beydoun said. "The bright spot is I don't think it can get any worse."

For Tursi, who is trying to sell her home, the market is "horrible."

"It's like the last person out of Michigan shut the lights off," she said. "People are leaving and there's nobody coming into the market. Somebody's gotta do something to bring the jobs back here. (People are) all putting their house up for sale because everybody's bolting."

But developer Beaudet is optimistic. "I'm very positive, but I'm disappointed to see how negatively the state of our economy has been taken by our target market. People are doom and gloom, and it's just difficult.
"We can decide whether our cup is half-full or half-empty."

THIS IS A REPUBLISHED ARTICLE SUBMITTED BY MARK MAUPIN.

A Secret System of Ancient Merchants and Government Database Result In a Report on Where Home Prices Are Going

This report has serious implications for property owners and investors by AutoAppreciation.comFor real estate investors and home owners wondering where home prices are going and have tried to watch their local news affiliate, they've likely been confused and amused. Amidst all the talk of the housing bubble and housing boom, the media has done its level best to keep up. However, investors are frustrated by the "fair and balanced" media approach of saying prices are going up and saying they're going to crash sometimes in the same show.

A sample of this kind of media "waffle-waffle" can be seen at http://www.autoappreciation.com/ On a more serious note, the subject of housing prices has mystified investors and home owners alike for years. But, Ken Wade, a Harvard MBA, has an answer and he wrote a rather shocking report.

Wade who has been investing in land and property for 20 years says, "I can predict market trends in almost any local market in the United States." He also can predict national trends but points out they're of little meaningful interest. "

Each area in the nation is unique in where it's been and where it's going," he said. "It's like areas have pricing fingerprints." Wade, who has conducted over $100-million in real estate deals, has authored a white paper that is free to real estate investors. “This report has serious implications for property owners and investors.” he said. “And the news is as relevant to the places which have had low appreciation as those like Las Vegas, NV or San Diego, CA which have had record producing appreciation.”

Visit http://%20www.autoappreciation.com/ to download "Shocking Report" that talks about the connection between investors, gamblers, speculators, and the future of housing prices. ### Contact: National Real Estate Network, LLC Mark Maupin Tel: 734-402-0180

THIS IS A REPUBLISHED ARTICLE SUBMITTED BY MARK MAUPIN.

What Determines Price You Pay For Investment Property?

The comparable sales in a one-mile area around the property will be the ones you want to be looking at. This is a general rule. There are many areas where you have do comparable sales block-by-block, or street-by-street. A comparable sale would be a similar property that has sold in the last six months compared to the one you are buying.

For example, if you were going to buy a 1000 square foot, 3 bedroom house, brick, with attached 2 car garage, and full basement, you would want to look for similar properties in that one mile radius or closer, in some cases. If you are looking at a house that differs in size, square footage, bedrooms you will need to make adjustment in pricing to have a comparable to the target property.

For example if the target property has a 3 bedroom house with basement, and you are using a comparable 3 bedroom house with no basement, you might have put a downward adjustment factor of $10,000 to compensate for the missing basement in order to get a real value of the comparable sale.

You need to look at the amount of time the house was on the market (the number of days it took to sell the house). You don’t want to be basing your buy on a house that was on the market for long periods of time. If you use comparable sales that all took 10 months to sell and you are looking to buy the house, fix it up and sell it in 3 months, you sure don’t want to use these houses as “comps” that took 10 months to sell.

So we now know how to determine what the house we are looking at would sell for. I am going to suggest that if you are getting into this business to be a landlord that you treat your rental business as if it were the business of finding, fixing, and reselling. I say this because most landlords will be selling at some point in time.

So don’t just look at buying houses based on cash flow, or tax benefits. You need to look at it from the point of view that if you were to get sick tomorrow could you resell the property at a profit. Let’s talk about profit, after all this is a business and that is what you are after. So what is the profit you want to make in this business? That’s right; profit is where you want to start! Let’s assume that I am looking at houses that sell in 3-month period for $60,000.

Let’s say we are looking at a house that needs a new kitchen, paint and carpet. If all those repairs were done, the house would sell most likely for $60,000.00 in three months based on comparable sales. So another way to say this would be that the after repair value of the home would be $60,000.00.

Some nonconforming lenders and HUD 203-k mortgages use what is called a “subject to appraisal” (which is another way of saying the after repair market price). So we have a minimum profit goal for this $60,000.00 after market value home of $12,000.00. So we now build the model to determine what the maximum $ we want to pay for the house we found are. You now have to start adding in your cost? The costs you need to add up are as follows:


a. Your time - What is your time worth? How much time are you personally going to be spending on the buy, rehab and etc? Put a dollar figure to your time.

b. How much is the rehab going to cost? I have seen a lot of people in this business that are very experienced. The majority of them will tell you that their rehabilitation cost will run 1 ½ more than they expected or estimated. It’s a must to build in cost over runs. If you are a new investor take your estimated cost and double them for figuring your rehab.

c. What is cost of your holding time? You need to look at how long you think it will take you to rehab the property. If you think it will take you 3 months to fix the property up – double the time to 6 months when doing the financial analysis. If comparable sales show 3-month selling time – double that time and cost. So if your property insurance, lights, gas, gas cutting, house cleaning, alarm system, mortgage payment are running you $800 month you need to take that cost times 12 months since we have double our 3 month rehabilitation time, and double our 3 month expected selling time.

d. What kind of reserves for breakdowns have you figured in? I once had a partner in the rehab of a house where he put up the money for rehab up as his contribution. I chose a contractor (this one actually had been with me for awhile and did good work) and purchased the supplies. The contractor kept giving me updates but coming up with problems that needed more money to handle. The reality was that the contractor had actually returned for a refund all the supplies or sold them and took off to parts unknown after going through all the allotted money my investor had supplied for the rehab.

Or this one---my partner researched the property at the city but “Oops, I don’t know why the condemnation notice wasn’t in the file but it is condemned and now requires a city team inspection which quadruples the cost. In addition, we are now on our third contractor—each of which requires money up front to get started.

Or, you are almost done with the rehab and someone breaks in and steals all the Kitchen cabinets, the furnace, or all the siding off the house. At one point in my life I found out that rival contractors that I hired were breaking into each other’s jobs and stealing everything. (Not a good idea to have them all meeting on one day of the week to collect their checks—it gives them opportunities to know their rival’s business.)

Or, oops, I am sorry the city water department read the wrong meter reading and you house is the one that had water flowing for a year because of squatters and you owe $3,000.00.

Oops, that wall in the basement that just needs to be straightened out and supported is actually crumbling from a chronic water problem and you will have to dig a new basement. What if, half way through the rehab you find out you have a problem that requires you to “quiet the title” to make it clean and sellable?

e. Don’t forget you might have mortgage costs for the buy and sell. You will also have other closing cost like commissions to realtors, title insurance, title fees and recording fees. All these need to be figured in your cost on the buy. f. Don’t fool your self into thinking you will be able to buy fix and sell a house in 6 months. Base your buy on cost over runs! If you do bring your project in on budget then you are going to be smiling.

OUR EXAMPLE OF SETTING MINIMUM BUY PRICE: $60,000.00 Real estate commissions based 6% (3,600.00) closing cost seller pay 6% allowable closing subject to appraisal (after repaired value) project profit (12,000.00) cost for buyer, (title insurance, recording fees etc) (4,800.00) Cost of mortgage on buy (appraisal, mortgage cost) (4,600.00) use 12 months (taxes, gas, electric, grass, mortgage payments) (9,600.00) Rehabilitation cost – est. $7,000.00 (Double cost) (14,000.00) price you purchase property for: (11,400.00) 60,000.00 This may appear as extreme example of cost over runs. I have doubled your cost and assumed that you had a realtor sell the house.

I am clear as a person who has seen a lot of people come and go in this business, you need to figure your cost high and you need to be able to do your own comps (comparable sales) I recommend that people get real estate license.

Why? Because the advantage is that it will give you access to MLS (listing service), which will give access to sales reported to the MLS. More importantly, it will train you to be a knowledgeable buyer and know first hand what is required to have your real estate transactions comply with federal, state, and municipal restrictions.

Plus, you will learn what is necessary to have the transaction be complete and within integrity guidelines. In addition, you will be putting you license with a broker who will be there to train you while doing your beginning deals. It requires 40 hours of classroom on Michigan real estate, plus passing a test to get your license---even if you don’t end up getting your license.

The knowledge you get in these training courses is invaluable. I prefer to work with licensed investors, especially with challenged properties, because it assures me that the person you are working with has at least a basic level of knowledge of Real Estate. The more knowledgeable a person is, the more likely they are to achieve their goal. In fact some of the investors that have worked with me generally end up getting their license and sometimes even become licensed under the same broker I am. There are many reputable real estate schools.

If you are not a realtor and you are looking for comparables, you can go on to your Internet server and look under real estate, there will be comparable sell section you can use.

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Ralph Mark Maupin has purchased in excess of 3,500 single-family homes and many multi family properties. Mark teaches real estate investing seminars, and has real estate mentoring program. http://www.megaeveningevent.com/ or http://www.mrleaseoption.com/

New Internet Liquidation Business Gets It's Start In Huge Light Fixture Liquidation!

From Where Art Starts To Light Fixture Liquidation

Livonia, MI -- A liquidation group in Detroit, Michigan is trying something different from what they have done in the past. Mr. Lee Caudill, Light Fixture Liquidation Manager, reduce prices 50% to 90% on Major Manufacture Closeout! Mr. Caudill said “I don’t understand why we have not moved the plus 50,000 lights in our Detroit warehouse. In the past I have had large builders buy up the inventory. I think it is refection of what the housing market is doing in Michigan. So I think its time to open my business up to world!”

Mr. Caudill has awarded Kirsten Turner the job of liquidation by Internet. Kirsten Turner has a successful Internet eBay store and web business. Her current site is www.whereartstarts.com , is a successful Classic Pens Web Site.

Kirsten Turner said we have over 100 types of lights fixtures to choose from. We have basic builder outdoor lights to Tiffany Style, Chandeliers, and Bathroom lights.

Our web site will be up at end of week but it you like a preview of one the Tiffany lights you can see at: http://cgi.ebay.com/ws/eBayISAPI.dllViewItem&item=110010017978&rd=1&sspagename=STRK:MESE:IT&rd=1

Kirsten Turner said “I am used to giving great value on pens, but this is really something, I compare what they were selling one light fixture for at Home Depot and it was way less” Based on my Experience we will sell out of this inventory in a week” Kirsten went on to say “If someone wants volume discounts we are ready to deal.

Until my web site is up you can reach me by email at toofatcat_com@yahoo.com or give me a call at 248-515-5524 to get a fax or email list of light fixtures.”

The answer in one word is: UGLY. You need to have a motivated seller (DON’T WANTER) and property that is ugly. Great buys in real estate are in rough condition. I can count the nice properties on one hand that I got great buys in over the years. I am talking about thousands of properties. So if you have not guessed it yet, if you get in this business you are going to need to be in the rehabilitation of property business. What do I mean by ugly:

a. Weeds two feet high in the yard
b. Gutters hanging down from the house
c. Holes in the roof are good
d. Maintenance neglected
e. Out dated kitchens, shag carpet, unpainted walls for 10-20 years

Some of examples of a great buy:

a. “Keep cool indoor pool”. I bought a house in Pontiac once such that when you walked in the front door, the paint was pealing from the walls. The house was full of moisture. When you got to the top of stairs to basement, you ran into crystal clear water. The water was to the top step. Someone had stopped up the floor drains and broken a water pipe. Water was running out of the basement windows. I had no competition on buying this house. We called the water department and had the water turned off at the street. We had the house dried out and got a great buy. The point is that there was little competition to buy this home. They could not see past the water coming out of basement windows. This was a foreclosed property and the bank was a motivated seller.

b. “A little smell” I purchased a house where the owner had a dump truck load of sand poured into the basement. The sand was for a permanent litter box for her 25 cats. I had to take my clothes off in the garage when I got home. Again, I had no competition on the buy. The rehab on this house was labor intense.

c. “Moving walls” In this house, you opened the door and roaches fall on you or better said, “the walls move”. Again, the competition fell away- this required an exterminator and all was well. d. Also look for backed up sewers, fleas, houses full of trash, as things to look for when looking for a great buys. This business requires hard work but the rewards can be great.

The majority of properties that people donate to charities meet the above conditions. There are great buys in real estate but it requires investors with a talent to restore the homes to a classic condition. Restoring homes, and putting them back in great shape, is for me, part of a process of fulfilling the American dream for homeowners and is what I love most about this business.

The investors who look and see fully restored homes instead of the above are ones that get the great buys on homes they otherwise couldn’t afford. If you are new investor, I recommend you focus on the lighter rehabs, paint and carpet changes for example. Some of the examples above were light rehabs they just had obstacles that others could not see past.

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Ralph Mark Maupin has purchased and sold in excess of 3,500 single-family homes and many multi family properties. Mark teaches real estate investing seminars, and has real estate mentoring program.
http://www.mrleaseoption.com/ or http://www.emailwire.com/cgi-bin/news/www.megaeveningevent.com

What are the Tax Benefits of Donating Real Estate to a Church or Charity?

Most people think that donating real estate to a charity is for the rich. This simple is not true. I have worked individuals, charities, and small corporations for years with donations process. For many people and companies is about the able to rid themselves of unwanted property. They simple want out. They are tired of property taxes, insurance cost and the liability exposure.

The following are the rules that apply for real estate donation:

Individuals:

The following rules apply if the donated property is owned in your own name, with your spouse or other persons:

If you have held the property for more than one year, it is classified as long-term capital gain property. You can deduct the full fair market value of the donated property. Your charitable contribution deduction is limited to thirty percent (30.00%) of your adjusted gross income.

Excess contribution value may be carried forward for up to five years. If the property has been depreciated, the fair market value must be reduced by its accumulated depreciation through the date of contribution. Fair market value is most commonly determined by an independent appraisal.

If you elect to deduct your cost basis of the donated property you are allowed a deduction of fifty percent (50.00%) of your adjusted gross income. Excesses here again can be carried forward up to five years. Which method you elect is dependent on the cost basis in the property donated, your tax bracket, the age and health of the donor and whether you plan to make future contributions.

Corporate Donors

The following rules apply if a corporation makes your contribution, these rules apply:

If you have a controlling interest in the corporation and the property has been held for more than one year, the corporation can deduct up to ten percent (10.00%) of the net profit of the corporation. Excess contribution amounts can be carried forward up to five years. The fair market value here must be reduced by the amount of accumulate depreciation. If the corporate has elected "Subchapter S" status, then the contribution allowed will be reported on the individual shareholders K1 and may be deducted on the individual return.

Partnerships, S-Corporations and Limited Liability Companies

The following rules apply if a partnership, S-Corporation or limited liability company is making your contribution:
The corporation may not claim a deduction for the property donated. Rather, the contribution passes to the individual shareholders on a pro-rated based on their percent ownership in the S corporation. The shareholder can claim this deduction on their individual tax return. The same limits and carry forward rules will apply. Partnerships and limited liability company contribution rules are the same as an S corporation with one exception the partners or member can claim a deduction even if they have no basis in the partnership or limited liability company.

Real estate investing by nature is risky. You can win, lose, or break even. We cannot guarantee a profit or loss. We do not provide legal, accounting, or contracting advice.

* Please consult your CPA/Attorney for your specific tax benefit.

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Ralph Mark Maupin has purchased and sold in excess of 3,500 single-family homes and many multi family properties. Mark teaches real estate investing seminars, and has real estate mentoring program. Mark co-founded company Donate Real Estate, LLC http://www.donaterealestate.com/

Lessons Learned About Buying Foreclosures And Selling On Land Contract (Contract For Deed)!

Investing In Foreclosures

What are Pre-foreclosures?

A property enters into pre-foreclosure when the homeowner/s fail to submit their mortgage payments for two or more months. When the minimum time has been reached, a notice is issued with the County Clerk's office in the homeowners' state of residence. Depending on the state, the initial pre-foreclosure notice may be called Notice of Default, Notice of the Trustee's sale, or Lis Pendens. How do I contact the homeowners? Because homeowners in default are anxious to list and sell their home before foreclosure occurs, it is important to be assertive. You may benefit from traveling to their home and meeting with them personally. If you have a homeowner's phone, it is in your best interest to give them a call as soon as possible. You can also contact homeowners via the US Postal Service.

Today’s questions are several. Can you buy a house in foreclosure and resell it on a land contract (contract for deed) or lease option to the person losing it? Can you buy a home on a new mortgage and resell it on a land contract?

It is very common for someone in foreclosure to ask someone to buy their home out of foreclosure and resell it to them on a land contract or lease option. Does it seem ok to buy a house out of foreclosure for $100,000 and then give the person who was foreclosed on a one-year lease option for $130,000?? In my world, the answer is no! If you are in front of a judge, if it looks like a duck, walks like a duck, and acts like a duck, it is a duck. The interest earned on this transaction is 30%. If this is declared an equity loan, the Optionee can use usury as a defense against you. The result could be high legal fees, and a loan re-computed to zero interest.
You are also subject to penalties by law. A better solution to the above situation would be to do a lease option for this person on a different property if you feel that he is credit worthy.

What is the proper way to resell a house in which you have purchased on a new mortgage? It has been a very common practice to sell the house on a land contract. The new owner then continues to make payments on the mortgage without the mortgage company knowing that there, as been a land contract sale. I recently attended a Continuing Education class for realtors and learned that this is in violation of Federal law.

Rather then sell the property on a land contract you might consider doing a lease option on the home thus not being in violation of any law. You should be aware that mortgages generally have acceleration clauses that allow them the discretion to declare the mortgage balance due if you violate their prohibitions against re-selling or doing conveyances that look like a sale.

Disclaimer: Real estate investing by nature is risky. You can win, lose or break even. We cannot guarantee a profit or loss. We do not provide legal, accounting or contracting advice.

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Ralph Mark Maupin has purchased and sold in excess of 3,500 single-family homes and many multi family properties. Mark teaches real estate investing seminars, and has real estate mentoring program.
www.detroitinvestmenthomes.com
www.mrleaseoption.com
http://www.megaeveningevent.com/

What Does A Real Estate Investor Need To Know About Hiring Contractors?

Where do you find contractor? Ask for referrals from other investors. You can also go to Home Depot early in the morning where the contractors check out. Talk to the clerks about who are the regulars and talk to the contractors in line. Check out their work start to finish and their references. Home Depot is a great place to find a reasonable crew that works for builders.

Does the contractor need insurance?
You need to make sure you or your contractor has two types of insurance.

The Two Types Are:

A. Workman’s Compensation Insurance: If you are doing a lot of rehabs, you will want to get a minimum workman’s compensation insurance. If your contractor has workman’s compensation insurance, you will want him to give you a copy of his insurance with you shown as an additional named insured. You then have proof of coverage. Even if you have a minimum policy covering you, you will still need the proof of coverage for your insurance carrier or you will be charged for their cost on your own policy. If you hire a contractor working by himself he can choose to exempt himself from workers compensation, but he needs to sign a form that you get from your insurance company.

B. Liability Insurance: Make sure again that you’re named as additional insured on your contractor’s policy or have your own policy. You should talk to insurance experts to determine the amount of coverage you need.

C. Builder’s Risk Insurance: You may want to check on getting builders risk insurance for other coverage on your equipment, tools, and etc.

How do you pay your contractor? If you are dealing with new contractors that you don’t have a track record on, I recommend that you buy a small amount of materials and see that they get the materials to the job. Only pay for the work that gets done. The question you need to ask yourself is if the contractor walks from the job is there enough money to hire someone to finish the job. Even experienced investors, as well as new investors make the mistake of paying out too much on the job all the time.

I have had Home Depot call me and tell me that my contractor is bringing materials back for cash refund. I have had great contractors who I have had a long relationship with me walk off the job. It is a must to hold back enough dollars to hire someone to finish the job. I don’t care how long you have worked with contractors you have to inspect the job before paying. If you don’t inspect the work, don’t get in the business. Consider placing a provision in your contract that final payment is contingent on passing a city certification inspection.

Should you have a contract with your rehab crew? I say yes. At the end of this article is a sample contract. See your attorney for what you need in your contract.

Should you pull permits? Yes, Yes, Yes!!! The people I see who try to bypass the system and city inspectors just end up in trouble and end up doubling their cost. The short cut to getting the job done is to pay for the permits required. The comments in shared personal experiences. They are not intended to be legal or accounting advice nor solutions. You should always consult with the appropriate professional when making decisions.

A Sample of Contract I Have Used: INDEPENDENT REHAB CONTRACTOR AGREEMENT This agreement is entered into this day of _________________________. 20 , in the city of ___________________, State of Michigan between ____________________, (owner) of 17177 Laurel Park N, Ste. 265, Livonia, MI 48152 and: Contractor: ________________________________________________________ Contractor is a Corp. ( ), Ltd Liab Co. ( ) Partnership ( ) Sole Proprietorship ( ) Street Address: ____________________________________________________ City, State, and Zip: ___________________________MI___________________ Phone: ( ) ___________________ Fax: ( ) _________________________ Pager: ( ) ____________________ Cell Phone: ( ) ____________________ Emp. Fed. Tax ID No (EIN):_________________ Soc. Sec. No._____________ Contactor License No (s):__________________ Type of License: ____________ Person authorized to sign and bind Contractor: ____________________________

1. Schedule: The Contractor agrees to commence work on: __________________, 20 . The Contractor agrees to complete all work by: ______________________, 20 , subject to excusable delays such as strikes, unavailability of building supplies or acts of nature. Owner reserves the right to cancel this agreement and Contractor agrees to forfeit the balance of money due under contract if work is not completed by this date. The contract herein shall be void at the option of Owner, if contractor does not commence work within ___________________________ (____________) days from the date of the signing of this contract.

2. Scope of Work: Contractor agrees to provide the following described labor, materials and construction in accordance with plans and specifications as may be referred to herein on the following described property: (A) Address of work site: ___________________________________________________ (B) Description of work (Describe Labor, materials and Equipment to be furnished. Attach additional pages, estimates, and work sheets if necessary. ________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________ Other Special Provisions:______________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________ The Contractor’s supervisor/project coordinator of this project shall be designated agent for the Contactor. The name of the person is: ___________________________________

3. The Contractor agrees to perform this work in a workmanlike manner and to comply with applicable building and construction codes for residential and commercial structures. The Contractor warrants that his work will conform with such codes and pass any governmental inspections. (If any plans or specifications are part of his job, they are to be attached and made part of this contract).

4. Price: Owner agrees to pay to the contractor for the satisfactory performance of the contractor’s work subject to the terms and conditions of this agreement: Total Contract amount: _________________________. Initial Payment Amount: _________________Payable on _________________.

Extra work, if any, will be priced as agreed. Payments will be made only on satisfactorily completed work based on progress inspections done by Owner’s approved supervisors. Contractor has the responsibility of arranging time for inspections. All check requests must be submitted by Wednesday proceeding for Friday payments. Should work not be performed to Owner’s satisfaction and /or accordance with the codes and standards in paragraph #2, Owner will retain a sufficient amount to complete the work as a final payment until the contractor brings the job up to code and/or Owner’s satisfaction.

5. The following is prohibited unless agreed to in writing and signed by Owner and Contractor: extra services and work, deviation of the work as specified herein, or assignment or subcontracting of the work to be performed.

6. The Contractor agrees to indemnify and hold harmless the Owner of the property from any liability or claims arising directly or indirectly from the Contractor’s work under this contract whether due to Contractor, its employees, workers, and agents or any other person hired by the contractor. (This includes Construction (including mechanics and materials) liens). Contractor agrees to pay all fees and costs incurred in defense of Owner and or Owner. Contractor specifically agrees to assume and pay any liens that shall be filed by its sub-contractors.

7. The Contractor agrees to obtain and pay for: Workers Disability Compensation Insurance, Personal liability Insurance, Errors and Omissions and/or contractual Insurance, Public Liability Insurance, and any other Insurance or Bond coverage, or submit appropriate waivers which may be necessary or required by Owner, the municipality and/or State of Michigan. Copies of such documents, binders, declaration sheet, proofs, or waivers will be presented to Owner before commencing work.

8. The Contractor agrees to pay and withhold where required all federal, state and local taxes on the money earned from Owner for itself or its employees and to file all proper tax returns. Owner will not withhold any sums for any sums for any taxes due Contractor. Contractor’s relationship to the Corporation shall be that of an independent contractor and not of an officer, employee, or agent of Owner. No partnership, joint venture, or similar relationship is created by this Agreement. The Corporation shall have no liability to Contractor except to pay its compensation under this contract.

9. Building permits will be pulled by: _______________________. Costs will be paid by: __________________________. City certificates will be obtained by: ___________ _________________________________.

10. No modification of this contract will be effective unless it’s in writing and is signed by both parties hereto. This contract binds and benefits both parties, assigns, personal representatives and any successors. Time is of the essence of this Contract. This document, including any attachments, is the entire agreement between parties. The laws of the State of Michigan govern this Contract. This is a legal contract. If there is anything you do not understand about this contract or the language, DO NOT sign it. It is recommended that you consult with a legal or tax advisor of your choice. It is assumed by you signing this contract that you have either consulted with your advisors or have decided not to do so. The parties accept the terms and agree to abide by them.

Owner: Dated____________________20___By:___________________________ Contractor: Dated____________________20___By: ___________________________


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Ralph Mark Maupin has purchased and sold in excess of 3,500 single-family homes and many multi family properties. Mark teaches real estate investing seminars, and has real estate, http://www.megaeveningevent.com/ or http://www.mrleaseoption.com/

THIS IS A REPUBLISHED ARTICLE SUBMITT BY MARK MAUPIN FROM:
The Denver Post, July 17,2 2006
By David Olinger, Greg Griffin and Aldo Svaldi
Denver Post Staff Writers
http://www.denverpost.com/business/ci_4058172


Pueblo - His down payment was a beat-up car that wouldn't shift into reverse.
His factory-made home had not been installed on his land, yet when he signed his first home loan, Frank Finn Jr. thought his family was getting a great deal. He borrowed $102,500, the cost of the land, home and installation. The appraisal showed his home in West Valley Estates, a community of factory-made homes, would be worth $130,000 - $55,700 above the ZIP code's median house price.

"We were so happy," he said. "I was like, 'Right on; geez, I'm really making out on this. I've already got $28,000 in equity."

Six years later, Finn is a foreclosed homeowner with ruined credit and monthly rent bills. So are his old neighbors.

Of 65 homes in West Valley Estates, 28 were foreclosed from 2002 to 2006. Nine others were deeded to lenders without a foreclosure. The appraiser of Finn's home and others in the development lost his license.

The sale price of Finn's home after his foreclosure: $57,700.

Finn and many of his former neighbors believe they were victims of appraisal fraud, a hidden crime that officials say is helping fuel Colorado's nation-leading foreclosure rate.
Reports of all mortgage fraud nationwide have tripled since 2003 to nearly 22,000 last year, the FBI said.

In the past five years, appraisal fraud has been involved in up to 40 percent of fraudulent mortgage reports, according to the Mortgage Asset Research Institute.

In Colorado, mortgage fraud is "a significant factor" in the rising number of foreclosures, and "bogus appraisals are a big, big part of it," said Colorado Attorney General John Suthers.
Suthers' office is pursuing six mortgage-fraud investigations, including cases involving inflated appraisals.

Lenders estimate "as much as 15 percent of all appraisals are overvalued" though not necessarily fraudulent, said David Berenbaum, a board member of the national Center for Responsible Appraisals and Valuations. "We're questioning a large volume of the loans today."
An inflated appraisal can lead an innocent buyer to pay too much for a home, putting the buyer at greater risk of foreclosure.

As part of a mortgage- fraud scheme, a bogus appraisal can leave lenders with foreclosed properties worth well below the value of their loans and millions of dollars of losses on their books.

Mortgage fraud hurts "the whole community - you, me, everybody else," said Ivor Hill, a Pueblo appraiser who's on a state mortgage fraud task force.

"The lender takes a hit. The buyer's credit is ruined by a foreclosure. The tax base of the local community is skewed by inflated appraisals, and future buyers of other properties may pay too much for a house."

In Pueblo, local, state and federal agencies are investigating three real estate deals - including West Valley Estates - in which criminal wrongdoing is suspected. Two of the cases involve bogus appraisals.

In one case, the FBI is examining the sale of 22 homes by a Pueblo couple to an Aurora investor at inflated prices, sources told The Denver Post. All of the homes went into foreclosure, and the appraisal for one property was riddled with errors.

State among fraud leaders

Colorado has the worst foreclosure rate in the United States.

One of every 436 Colorado homes was in foreclosure in May, 2.8 times the national average, according to RealtyTrac, which tracks foreclosures.

Loose lending and aggressive building are the main culprits. Mortgage fraud also plays a role, officials say. There, too, Colorado is distinguished.

The state ranks fourth in the nation for mortgage fraud based on dollar loss and cases under investigation, said Denver-based FBI agent Jean Andersen.

For the past three years, Colorado has ranked among the top five states for mortgage fraud, according to the Mortgage Asset Research Institute. Last year, the state's mortgage-fraud rate was 75 percent above the national average, the institute reported. The group would not release the specific numbers.

The rankings are based on lenders' reports of suspicious activities such as falsified applications and inflated appraisals.

Inflated appraisals can lead to mortgage fraud and foreclosure in several ways.

An appraiser may boost the value of a house to benefit the seller, mortgage broker and real estate agent, who all gain from the higher sales price.

The victim is buyers, who may not realize they borrowed more than the house is worth until they try to sell or refinance.

The biggest fraud losses come when brokers, real estate agents and appraisers "are gathering in a conspiracy to inflate appraisals," said Andersen of the FBI.

Appraised at double value

John Scherling, an Aurora real estate investor, bought 22 houses in Pueblo in one month of 2004 from Jose and Joan Aguilar, borrowing almost $2 million. In 2005, all 22 were foreclosed.

A copy of the appraisal report for one of those purchases was obtained by The Denver Post.
The house sits at 921 E. Seventh St., in an aging neighborhood of low-cost rental homes.
Scherling bought the house in July 2004 for $102,000 based on an appraisal of $103,000. Two years earlier, Aguilar had paid $52,000 for the house, and after Scherling lost it to foreclosure, it sold for $47,000.

The appraisal had errors that falsely boosted the home's value, including misstated square footage and use of inappropriate comparable home sales.

Distances of the comparable properties were understated, and incorrect photographs were attached to the appraisal.

James Esters of Parker, a licensed appraiser

Tom Ruble and his wife, Loretta, stayed in Pueblo's West Valley Estates even as neighbor after neighbor left. (Post / John Leyba)

since 2004, confirmed that he prepared that report. He did not deny that errors may have been made but said they were honest mistakes.

"Wow," he said of the incorrect photograph of 1339 Carteret Ave. "It's so easy to verify if it's wrong. Why would anybody do that? It had to be unintentional."

That report "was back when I first started" as an appraiser, he said. "I didn't know the ins and outs of the business."

Last month, Esters was disciplined by the state for allegedly misstating square footage and omitting information in two unrelated appraisals. He agreed to a $1,000 fine and other sanctions but retained his license.

Englewood-based Pulte Mortgage hired Esters for the East Seventh Street appraisal and was the lender on seven of the Scherling properties. Spokeswoman Melanie Hearsch said Pulte relies "on the credibility of licensed independent appraisers."

"When a licensed independent appraiser presents home sales as 'comparable' that are in fact misleading, it can be difficult to detect," Hearsch said.

Mortgage lenders concerned with risky loans increasingly use databases to track brokers and properties, but the system isn't foolproof. Industry insiders said brokers shop fraudulent loans until they find willing lenders.

Scherling and Aguilar did not respond to numerous phone calls or a reporter's visit to each of their homes. Scherling filed for Chapter 7 bankruptcy protection after his properties - including others in the Denver area - went into foreclosure.

The FBI is investigating Aguilar's sales to Scherling and to other sellers that resulted in foreclosures, according to sources familiar with the case.

Experts say a bulk sale at dramatically high prices, followed quickly by foreclosure, can be a strong indicator of fraud.

For example, a buyer and seller might have a secret agreement to split the seller's profit and let the property go into foreclosure.

"We do find a good correlation between early payment default and mortgage fraud," said Nick Larson, an assistant vice president with Mortgage Asset Research Institute. "If you find a loan where the first payment is missed, that is a very high likelihood of fraud."

Nationally, appraisers are feeling so much pressure to justify questionable home loans that nearly 10,000 have signed a petition calling on Congress to protect their independence.
In a recent poll, they were asked how often they felt their peers succumbed to pressure. The leading response: 41 percent to 50 percent of the time.

Some appraisers say corrupt mortgage brokers and loan officers have compromised the appraisal industry, which has long been considered the primary check against fraud.
"I am battling against appraisers who are on steroids - guys who are saying, 'What number do you want?"' said Matt George, a Littleton appraiser

Charities Seeking Help, With Real Estate Donations, Find Specialized Knowledge!

Mark Maupin, Jr., Ask Can Wallets Get Fat From Donate Real Estate?

Donate Real Estate's primary goal is to generate revenue for charities in need of funds. Through the generosity of many donors, we have been able to distribute a considerable amount of proceeds to a number of charitable foundations.

Though we have working relationships with many national non-profit organizations, we find that some of our donors give with a specific charity in mind. Often, donors wish to give to organizations that may not have the resources to accept and manage a real estate gift.

For these instances, we are pleased with the addition of the Real Gifts Foundation to help us accommodate those wishing to direct real estate proceeds to specific charities. The Real Gifts Foundation is a non-profit organization that compliments our program by providing a service to those charities that are unable to accept real estate gifts. Real Gifts assists by accepting the donated property on behalf of the intended charity. By doing this, Real Gifts assumes all of the responsibilities associated with the property, so that the charity can receive proceeds from property and the donor can receive the entitled tax benefits. Even if a donor does not have a specific charity in mind, but would like to support a certain cause, Real Gifts can assist by using the donor's charitable intent as a guide for locating the non-profit organizations that fulfill those intentions.

The Real Estate Gifts Foundation is dedicated to promoting philanthropy. Its mission is to help continue a tradition of lifelong giving to benefit future generations. Real Gifts believes that building a strong foundation for future giving can be achieved through the contribution of real estate, which is the most concentrated form of wealth in the nation. It supports its mission is by helping convert the wealth found in real estate into valuable resources for many non-profit organizations.

The Real Gifts Foundation is the perfect addition to the Donate Real Estate program by allowing us to further assist donors and charities in the completion of the donation process. We are confident that we provide a program complete with all of the resources necessary for obtaining the most significant benefits for all parties involved.


Contact Persons: Roy Frank Or Mark Maupin
Phone: 734-452-4050
www.donaterealestate.com

When And Where Does a Church or Charity Seek Help With a Real Estate Donation?

Marketing consultant as recognized by investors, donors and charities!

Donate Real Estate's primary goal is to generate revenue for charities in need of funds. Through the generosity of many donors, we have been able to distribute a considerable amount of proceeds to a number of charitable foundations.

Though we have working relationships with many national non-profit organizations, we find that some of our donors give with a specific charity in mind. Often, donors wish to give to organizations that may not have the resources to accept and manage a real estate gift. For these instances, we are pleased with the addition of the Real Gifts Foundation to help us accommodate those wishing to direct real estate proceeds to specific charities.

The Real Gifts Foundation is a non-profit organization that compliments our program by providing a service to those charities that are unable to accept real estate gifts. Real Gifts assists by accepting the donated property on behalf of the intended charity. By doing this, Real Gifts assumes all of the responsibilities associated with the property, so that the charity can receive proceeds from property and the donor can receive the entitled tax benefits. Even if a donor does not have a specific charity in mind, but would like to support a certain cause, Real Gifts can assist by using the donor's charitable intent as a guide for locating the non-profit organizations that fulfill those intentions.

The Real Estate Gifts Foundation is dedicated to promoting philanthropy. Its mission is to help continue a tradition of lifelong giving to benefit future generations. Real Gifts believes that building a strong foundation for future giving can be achieved through the contribution of real estate, which is the most concentrated form of wealth in the nation. It supports its mission is by helping convert the wealth found in real estate into valuable resources for many non-profit organizations.

The Real Gifts Foundation is the perfect addition to the Donate Real Estate program by allowing us to further assist donors and charities in the completion of the donation process. We are confident that we provide a program complete with all of the resources necessary for obtaining the most significant benefits for all parties involved.

Contact Persons: Roy Frank or Mark Maupin

Phone: 734-452-4050 www.donaterealestate.com

Netvision Solutions Has the Solution for You

Ralph Mark Maupin, with Detroit Investment Homes www.detroitinvestmenthomes.com said “my data base feeding my web site had many breakdowns from previous web designers, Netvision Solutions was able correct the breakdowns overnight and put me back in business”.

Netvision Solutions is a leading Graphic Design, Web and Software Development Company. It was formed by two enthusiastic and creative designers to offer every kind of web-based and multimedia solutions at one place. They have been operating in the Web space for many years, which makes them one of the oldest and most experienced companies in this business domain. Their team possesses extensive intellectual capital across the entire Internet services spectrum.
Netvision Solutions combines art and technology to deliver consistent branding and solid e-business solutions that span the Internet, print, and other media, taking advantage of the unique benefits of each. We have extensive experience in providing professional web design, web development, e-commerce solutions and web site maintenance services to a wide array of business segments.

Netvision has a strong reputation within this niche marketplace and continue to build an impressive portfolio of clients. Their client base is diverse and they are happy to provide solutions to all commercial sectors.

The people of Netvision Solutions are dedicated to help their clients achieve market advantage through the use of advanced Internet-based technologies and multimedia. Netvision Solutions wants to help any business or organization that is serious about making a proper investment in developing a website.Check out what Netvision Solutions has to offer at, or send inquiries to Netvision Solutions directly through:

http://www.netvisionsolutions.us/default.htm

FOR INFORMATION:
Rujan Aleti (REDDY)
Phone 313-282-5113


Mark Maupin 17177 North Laurel Park Dr.Suite 265
Livonia, MI 48152
mmaupin@donaterealestate.com
www.detroitinvestmenthomes.com
www.mrleaseoption.com

Free Stock Trading Report Answers Top 17 Survey Questions

Farmington Hills, MI, July 11, 2006 – Profits Run, Inc. recently released the results of a survey sent out to over 20,000 active stock traders and investors that asked for their most pressing questions and concerns about trading. The free, 55-page “Swing Trading Principles” report specifically addresses the top 17 questions submitted by traders, by providing step-by-step tactics and strategies based on over 30 years of real world trading experience from Profits Run President, Bill Poulos.

After tutoring thousands of stock trading students from around the world for over three years, Poulos began to notice a common need among many of his students. “I discovered that most people are deluged with conflicting information about trading stocks. And when they try to actually make money using this conflicting information, they usually fail, and wonder why.”

Poulos said that it was this basic confusion that prompted him to discover what the most common concerns facing traders today are. “Based on my own experience in the markets,” Poulos commented, “I knew that there was a base level of understanding that could potentially save a lot of traders a lot of grief, and potentially a lot of money.”

After finishing his “Swing Trading Principles” report, Poulos considered selling it, but then decided to give it away as a gift to the trading community. “I’ve always taught reality. I’m so tired of all the misinformation out there about how to trade the stock market. There are too many so-called gurus misleading the novice trader into thinking he can get rich overnight. My goal is to give this report away to as many traders as possible so they can become educated quickly and effectively with the core, basic information that can give them a good chance to potentially succeed in the markets.”

For a limited time, Poulos’s “Swing Trading Principles” report can be downloaded for free at http://www.quantumswingtrader.com/z/?i=343990&l=q1


About Profits Run, Inc.:
Profits Run, Inc. has been educating traders on stock, futures, and forex trading online since 2001.

Google Alert for: Mortgage Fraud Michigan

Lawmakers Plan to Crack Down on Mortgage FraudWLNS - Lansing, MI ,USA Lawmakers announced a plan to crack down on mortgage fraud. Michigan's one of the top ten states for mortgage scams, according to the FBI. ...

THIS IS A REPUBLISHED ARTICLE SUBMITT BY MARK MAUPIN

Bills Offer Protection From Shady Home Deals

Refinancing Schemes Costly

July 11, 2006
BY SUZETTE HACKNEY
FREE PRESS REAL ESTATE WRITER

What you can do:
If you think you may have been a victim: Contact your local sheriff's office, the FBI's Detroit field office at 313-965-2323 or the FBI's Oakland County office at 248-879-6090.
To let legislators know how you feel about the proposed bills: Go to http://house.michigan.gov/replist.asp to find representatives' phone numbers and e-mail addresses.

An increasing number of Michigan residents tapping the equity in their homes to pay overdue bills and maintain their lifestyle during rocky economic times are becoming victims of mortgage fraud, costing them thousands of dollars -- and sometimes even the roof over their heads.

A package of bills unveiled Monday would offer people refinancing their homes more protection from lenders who are defrauding the real estate industry by giving law enforcement officials more muscle to investigate and prosecute such cases.

The state has one of the fastest-growing mortgage-fraud problems in the nation, according to the FBI. Michigan's mortgage-fraud losses jumped from nearly $9 million in 2003 to $26 million in 2005.

The bills presented by Republican state Reps. Fran Amos of Waterford, Rick Baxter of Concord and Jim Marleau of Lake Orion would make mortgage fraud a felony, reallocate $3 million in broker fees to the attorney general for the investigation and prosecution of fraud and prevent appraisers from modifying appraisals in exchange for business.

"I'd like for them to do whatever they have to do to make these people pay for what they're doing to us," Rosalie Seay, 78, of Pontiac said Monday. She and her husband, Claude, 82, believe they are mortgage-fraud victims.

The Seays, who owned four investment properties in Pontiac, said they thought they were refinancing the homes last August to make improvements on them and to help pay for their son's medical bills after he developed a brain tumor.

Instead, they said, they unknowingly signed over their homes using a blank quit-claim deed later filled in by a company that Rosalie Seay said she either found in the phone book or saw on television.

Now the Seays are trying to get their homes back and have made repeated appearances in Oakland County Circuit Court trying to prove that they were duped out of at least $300,000. The next court date is scheduled for November; the FBI also is investigating.

Getting tough on fraud

Key points of the proposed legislation:

Individuals convicted of residential mortgage fraud would become felons and spend up to 10 years in prison and pay a fine of up to $5,000. Repeat offenders would be imprisoned for up to 20 years and pay a $10,000 fine.

Money from the Real Estate Enforcement Fund, $3 million, would be reallocated to the state Attorney General's Office to investigate and prosecute residential mortgage fraud. Currently, the fund, paid by brokers and associate brokers, is used only to investigate unlicensed activity.

The Michigan Mortgage Brokers, Lenders and Servicers Licensing Act would be amended to prevent influence on appraisers, such as setting preconditions on the outcome for being selected to conduct the appraisal or indicating that payment for the appraisal will be received only if the lending agent is given a desired value.

The Seays are hopeful that the proposed bills can protect other unwitting homeowners.

"They are preying on senior citizens like myself," Rosalie Seay said. "I've always worked for everything; I never had a handout. For someone to come and take it away at the blink of an eye is awful."


Contact SUZETTE HACKNEY at http://by109fd.bay109.hotmail.msn.com/cgi-bin/compose?mailto=1&msg=F49BB4DE-D897-497D-856C-D3AD272DC5B4&start=0&len=20992&src=&type=x&to=shackney@freepress.com&cc=&bcc=&subject=&body=&curmbox=00000000-0000-0000-0000-000000000001&a=358c75aa138528a5bb339c018dbb0017cb96dfe55065779ca10233de7c3b1afe.






Article Submitted By:
John Lopez
Budget Realty
Livonia, MI
Cell: 313-258-1001
Top Secret Fax: 480-393-4049


http://by109fd.bay109.hotmail.msn.com/cgi-bin/compose?mailto=1&msg=F49BB4DE-D897-497D-856C-D3AD272DC5B4&start=0&len=20992&src=&type=x&to=RealEstateMichigan@Yahoo.Com&cc=&bcc=&subject=&body=&curmbox=00000000-0000-0000-0000-000000000001&a=358c75aa138528a5bb339c018dbb0017cb96dfe55065779ca10233de7c3b1afe
www.MichiganInvestorNetwork.com


Michigan Investor Network: http://groups.yahoo.com/group/MichiganInvestorNetwork


Other Michigan Investor Network Sites: http://groups.yahoo.com/group/DetroitForeclosureList http://groups.yahoo.com/group/HUDForeclosureList http://groups.yahoo.com/group/WayneCountyForeclosureList http://groups.yahoo.com/group/OaklandCountyForeclosureList ..

SPONSORED LINKS
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Detroit michigan real estate
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YAHOO! GROUPS LINKS
Visit your group "MichiganInvestorNetwork" on the web.

THIS IS A REPUBLISHED ARTICLE SUBMITT BY MARK MAUPIN

Lawmakers Propose Bills to Crack Down on Mortage Fraud

DAVID EGGERT
Associated Press

LANSING, Mich. - State lawmakers hoping to stop the fast-growing crime of mortgage fraud unveiled legislation Monday that would devote money to prosecuting offenders.>> House Republicans said their bills would designate $3 million for prosecution from a fund that is now used to investigate unlicensed realestate brokers. Another bill would specifically make mortgage fraud a felony punishable by 10 years in prison for a first offense.>>

Mortgage fraud losses in Michigan have jumped from almost $9 million in 2003 to $26 million in 2005, according to the FBI.>>

"We intend to go after these criminals who are picking on our mostvulnerable citizens and put them behind bars," said Rep. Fran Amos, R-Waterford, who is sponsoring legislation along with GOP Reps. Rick Baxterof Concord and Jim Marleau of Lake Orion.>>

Last year, federal authorities charged 20 people with fraud and related counts, disrupting five separate mortgage fraud organizations in the Detroit area. The groups - operating independently - are accused of bilking financial institutions out of $10 million.>

One bill proposed Monday would allow the state attorney general to use$3 million in the Real Estate Enforcement Fund to investigate and prosecute mortgage fraud. The money comes from a $15 fee levied on licenses for realestate brokers and associates.>

Oakland County Clerk Ruth Johnson, a former state representative, joined the legislators to give examples of mortgage fraud.>> Criminals claimed ownership of a woman's Bloomfield Township home byusing forged documents. Then they sold the property to another person, who obtained a $278,000 mortgage.>>

"They took the money, ran, and the lending institution is currently inthe process of foreclosing on her property," Johnson said.>> She also cited a situation where a woman returned to a home she owned and found another family living there who thought they had bought it legally.>> Johnson's office has installed two security cameras in the register of deeds office to try and stop mortgage and deed fraud.>>

The legislative package also includes a bill that would prevent an appraiser from modifying an appraisal in exchange for more business. Another component of mortgage fraud is appraisal fraud, where property is bought and appraised at an artificially high value.>> About 80 percent of fraud losses involved collaboration by industry insiders, according to the FBI.

Article Submitted By:> John Lopez

Budget Realty>
Livonia, MI>
Cell: 313-258-1001>
Top Secret Fax: 480-393-4049>
RealEstateMichigan@Yahoo.Com>
www.MichiganInvestorNetwork.com

This is a website focused on helping people with financial problems keep their homes.
http://helpingustay.com

THIS IS A REPUBLISHED ARTICLE SUBMITT BY MARK MAUPIN

Detroit Mortgage Scam Hurts Elderly

www.TheRealEstateBloggers.Com

This has to be one of the lowest forms of mortgage fraud I have ever seen. A loan officer outside of Detroit arranged reverse mortgages for elderly customers and only gave them part of the proceeds while keeping some for himself. A reverse mortgage is one where it pays out while accruing interest against a home that was typically paid off so that an elderly person could have an addition income.

But this dirt bag preyed on elderly homeowners and lied and stole from them. The police feel they are just at the tip of an iceberg with these scams and that dozens of people may have been stolen from.

Anthony Darryl James, 43, is scheduled to be arraigned today in 34th District Court in Belleville on two felony charges stemming from a $103,000 loan he obtained for 84-year-old Shirley Schultz. Wayne County Prosecutor Kym Worthy said Schultz thought the loan was for $61,000 and didn't know that James had secretly kept a $42,000 check for himself.Schultz later learned the full amount when she started receiving bills for a loan that, with interest, totaled $131,000, Worthy said."We feel this is just the tip of the iceberg," Worthy said, referring to the ongoing investigation against James. "This is a far-reaching scam."

Worthy said James is suspected of defrauding senior citizens in Wayne and Oakland counties. Reverse mortgages are legal, tax-free loans or credit lines homeowners can take against the equity they have in their properties. They are often used by the elderly, who frequently own their houses outright. Prosecutor: Loan scam duped dozens - 06/15/06 - The Detroit News Online.
Article Submitted by: John Lopez

Budget Realty
Livonia, MI
Cell: 313-258-1001
Top Secret Fax: 480-393-4049
RealEstateMichigan@Yahoo.Com
www.MichiganInvestorNetwork.com

Where Does One Find Grants For Real Estate Buys In Michigan?

National Real Estate Network, LLC will present at the next networking opportunity, Mary E. Blanding, President - Director of Partnership to Homeownership Inc.

An experienced realtor, Ms. Blanding has closed over 3 million dollars worth of Real Estate. Ms. Blanding developed this non-profit group with the vision of making a difference in her community through developing a more educated homebuyer in order to prevent predatory lending practices, and to decrease the amount of foreclosures in the Detroit Metropolitan Area.

She believes in self-empowerment through knowledge. Ralph Mark Maupin, founder of National Real Estate Network, LLC. said, “Marry Blanding is always there making difference for people who never thought they could have the American Dream of home ownership. We are very lucky to have come to our monthly meetings to help future home owners and investors.”

Ms. Blanding’s program is designed to have ongoing classes for homebuyers that answer such basic questions as:

1. What are the advantages and disadvantages of homeownership?

2. What price can prospective homeowners realistically afford?

3. What is “Credit” all about and what do those terms the loan officer uses mean? In addition, participants can qualify for down payment assistance after completing this program. All classes are facilitated by a MSHDA Certified Counselor. Mary Blanding and “Partnership To Home Ownership,” a non-profit organization, will be one the resources available at National Real Estate Network LLC’s Mega Evening Event on Thursday June 15th. They will be offering a ten-week training for homeownership that is free for homebuyers.

Though this program consumers will receive training on the following:

· The Mortgage Process
· The grant programs and down payment assistance
· Home Inspections
· Selecting a Home/Working with a Realtor
· Budgeting/Credit/Savings
· Purchase Agreements
· Foreclosure Preventions
· Community Resources
· Basic Home Maintenance

Mary Blanding will be present from 6pm till 7pm to answer questions. Coupled with this Grant Program there will also be a National speaker, Patrick Snow, speaking 'Creating your own Destiny."

Set financial goals for this year. Come and build wealth skills, celebrate success, and be inspired.

HOW THE MEGA EVENING EVENT WILL GO:
6:00PM—Networking Session: Come early and network with other real estate investors from all over Michigan. Many of our Business Associates will be hosting tables making it convenient to talk with them about specific questions you may have. This is an excellent time to build your team of advisors and providers.

7:00PM—National Real Estate Network Update: Find out the latest benefits and updates for our Members. WWW.MEGAEVENINGEVENT.COM

7:30PM—Guest Speaker: Patrick Snow

Register Today By Calling 248-762-0800

Date: Thursday, July 20th, 2006

Time: 6:00PM-9: 30PM Location: Laurel Manor* 39000 Schoolcraft Road Livonia, Michigan 48150
*LAUREL MANOR IS LOCATED ON SCHOOLCRAFT ROAD, 1/2 MILE WEST OF NEWBURGH ROAD

The meeting is free to members of National Real Estate Network.

Mark Maupin
17177 North Laurel Park Dr.
Suite 265
Livonia, MI 48152
mmaupin@donaterealestate.com
www.detroitinvestmenthomes.com
www.mrleaseoption.com

THIS IS A REPUBLISHED ARTICLE SUBMITT BY MARK MAUPIN

Investor suspected of bilking county residents of millions

By Jennifer Squires Sentinel Staff Writer

SANTA CRUZ — The biggest fraud case in county history could get bigger.

A Santa Clara real estate investor is suspected of defrauding at least seven county residents of $17.5 million, District Attorney Bob Lee said Friday, and investigators say there may be more victims who fell prey to his scheme.

This week, the Santa Cruz County District Attorney's Office filed 103 felony counts, including burglary, forgery, embezzlement, theft and elder financial abuse against Michael J. Schneider.

According to the District Attorney's Office, Schneider, 44, solicited clients to invest in what he advertised as secure real estate loans through his company, California Plan Inc. Turns out, Lee reported, Schneider was keeping the money for himself while sending his clients phony statements leading them to believe they were earning
income from their investments.

The district attorney's investigation uncovered 71 loan transactions from 1995 through December of 2005 that were part of Schneider's scheme, Lee reported.

Lee called the scheme a "house of cards."

Schneider's company specialized in finding private money lenders to make equity mortgage loans to borrowers who were in need of money, Lee reported.

Both Schneider and his company were licensed by the Department of Real Estate as mortgage brokers.

Schneider apparently took money from one investor to pay off dividends to other investors, investigators said. He also created phony deeds or trust and approved them with a phony recording stamp, investigators said.

"Victims felt their money was secure," Lee said.

In the few cases that Schneider actually recorded a deed of trust, he wouldn't tell the investor when the loan was paid off and instead kept the loan payoff, investigators reported. To keep the investors from discovering his fraudulent acts, Schneider's company would send monthly loan payments to the investors, as if the loans were active and valid, investigators reported.

"He was stealing the retirement from hundreds of our citizens," Lee said.
Victims identified so far lost between $25,000 and $500,000 to Schneider, prosecutor Bill Atkinson said.

Investigators are still looking for the money.

Schneider, who had offices in San Jose and Sacramento, may have stolen up to $50 million from investors in Santa Cruz and Santa Clara counties, investigators said.

He was arrested on May 1 by authorities in Santa Clara County and remains in custody.

Contact Jennifer Squires at jsquires@santacruzsentinel.com.