one indictment for bank fraud regarding HELOCs

[patb]

http://www.washingtonpost.com/local/crime/dc-council-chairman-kwame-brown-to-be-charged-with-fraud-as-soon-as-today/2012/06/06/gJQAUXJqIV_story_1.html

Washington DC City Council Chair, Kwame Brown to be indicted for Bank Fraud.

[briansd1]

Kwame Brown is not the only one to overstate his income to get a loan.

At the height of the market, millions used stated income (liar) loans to obtain credit. I would bed that 90% of stated-income or minimum-review loans are fraudulent in one way or another.

Too bad for him that the banks sued him and uncovered the fraud.

Too bad for him that owing money is a civil case; but lying on loan applications is a criminal matter that carries jail time. Creditors who are trying recover funds might just want to use this as a carrot to get deadbeats to pay up.

Most of the time, banks don’t sue because there’s no money to recover…. But banks and credit collection agencies are starting to sue more aggressively to recover money. Fraud that creditors uncover can be send to the police and prosecutors for further action.

The three-page charging document says that Brown provided Industrial Bank of Washington “falsified documents” that overstated his income by “tens of thousands of dollars” to allow him to obtain a home equity loan and to purchase a boat. Prosecutors wrote that the two-year scam started in August 2005.

Bank fraud carries a maximum penalty of 30 years in prison, but Brown is sure to be exposed to far more lenient punishment under federal sentencing guidelines.

In 2010, three credit-card issuers sued Brown in D.C. Superior Court, alleging nonpayment of bills and interest exceeding $55,000, court records indicate. The outcome of those cases could not be determined Wednesday. At that time, Brown estimated that his personal debt exceeded $700,000.

[bearishgurl]

I also know someone who borrowed $65K (unsecured) in early 2010 and used it to purchase a boat and never made one single payment on the loan. He still has the boat. The lender, one of the Big Banks, sued and won a default judgment against him and then filed an abstract of judgment on him. Since he repeatedly cash-out refied his residence to more than it is worth today (hence, took out the “unsecured loan”), the judgment creditor never tried to foreclose and likely won’t in the near future and the judgment debtor will likely never sell his residence. What I don’t understand is why they JC won’t bring him in for a debtor’s examination and why they haven’t sent an investigator out to see what assets are parked on his property. It’s as plain as day, in excellent condition and very much “seizable” with a proper writ of execution.

These Big Banks were stupid and incompetent … yes, even as late as 2010.

Besides incompetent lenders and CC companies, deadbeats like him are more than 50% responsible for the reason the cost of consumer debt is so high. It’s nothing but premeditated theft in my mind.

[briansd1]

Well, BG, the banks have to pass the fraud information they undercover to prosecutors who can bring criminal charges.

Lying on a job application, or lying to your spouse is not criminal… but bank fraud is criminal.

I think that Kwame Brown pissed off some people, or committed other crimes, but they used those charges to get him.

Like I said, millions of people who took out liar loans committed fraud. I don’t think we have enough prison cells to hold them all.

[Author]

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