Swindlers have been bilking homeowners in trouble since the housing market meltdown began. But some scam artists are getting bolder. They have figured out a way to “steal” houses through forged signatures and phony appraisals. And once they win the title to a property, they squeeze out the equity. Then they vanish.
KPCC’s Shirley Jahad tells us about an Anaheim woman who’s trying to recover her “stolen” home.
Shirley Jahad: It’s another busy day for Patricia Bell. She’s running from courthouses to legal aid offices. Orange County Sheriff’s deputies came knocking this week to order her family out of their Anaheim house by next week. Bell is spending this day trying to get a judge or a court commissioner to hear an appeal.
Patricia Bell: We’re off to the Fullerton courthouse. We’re trying to get an appeal. Prayfully trying to get an appeal.
Jahad: In the meantime, you don’t want to get kicked out of the house.
Bell: Definitely not, because there’s so many of us. Ten people. Where are we going to go in five days?
Jahad: Patricia Bell is in a legal labyrinth. She just made a phone call three-and-a-half years ago to ask a broker about refinancing the property. She gave the broker some info over the phone. Then she waited for word about whether the re-fi went through.
Bell: We was going for a re-fi. Instead, these people did a purchase. Without our knowledge, without our signature. Without our permission.
Jahad: You weren’t trying to sell.
Bell: We were just trying to do a refinance, which turned into a purchase. Behind our backs. Without our knowledge. Without our permission.
Jahad: Stolen out from under you?
Bell: Just stolen.
Jahad: Bell says no one in her family ever signed a paper. They forged her father’s signature to get the title. She says it was obvious the signature was fake.
Bell: The forgery didn’t even spell my dad’s name right. They spelled his name “J-I-M-M-Y” instead of “J-I-M-M-I-E” – the correct spelling of my dad’s name.
Jahad: Using forged signatures and a “straw buyer,” the broker gained the title to the house. He bought and sold it a few times, and pocketed the profits. The mortgage went from about $500,000 to more than $700,000. And that’s how the house ended up in foreclosure. Orange County prosecutors say the straw buyer scam is getting more common.
Elizabeth Henderson: There are con men out there who transfer your property to themselves. When they use the “straw buyer,” they use some someone off the street pay them $200 or $300 to act as “straw buyer.” Then they quit claim property to them using fraudulent documentation.
Jahad: Elizabeth Henderson heads the major fraud unit at the Orange County District Attorney’s Office.
Henderson: It’s really nefarious because then they just transfer it and transfer it, use crooked appraisers. They appraise the house higher. Then they refinance and suck out all the money.
Jahad: The scam is growing faster than law enforcement, housing, and legal aid officials can keep up.
Chrystal Sims: This is not how you’d see things done in a big law firm.
Jahad: Chrystal Sims is an attorney with Orange County Legal Aid. She’s sorting and stapling stacks of legal documents.
Sims: I am getting all the paperwork ready for Ms. Bell to file an appeal, and hopefully she will get to stay in her home while an appeal is going on. She has to file notice of appeal today and hearing tomorrow will determine whether she can get the stay.
Jahad: While Patricia Bell fights to keep her home, the guys who stole it are on the loose. Bell went to the police – all over the Southland.
Bell: We went to police in Fontana where the escrow company was. We went to Irvine where Dana Capital was. Went to Anaheim. San Bernardino. Dana Capital filed bankruptcy, no longer in business. Went to the escrow company accompanied by Fontana Police Department. They went in and found these people had moved out. So we got nowhere with that. Most of them turned over. There’s no one to be held accountable.
Jahad: ‘Cause they all shut down?
Bell: They all shut down.
Jahad: Bell hopes to settle with Goldman Sachs. It owns the house now. She says she would start over with a new loan.
Bell: This is just the right thing to do. I’m not asking someone to give me something that don’t belong to me. It belongs to my family and all I’m asking is for them to return it to the proper owner.
Jahad: If Patricia Bell doesn’t get a settlement or win an appeal, she has orders to vacate the house next week.