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mydogsarelazy
ParticipantDetails emerge in alleged scam
MORTGAGE: A Temecula woman says hundreds of property investors faced foreclosures and more.
10:00 PM PST on Friday, January 12, 2007
By LESLIE BERKMAN
The Press-EnterpriseAt least 400 investors, many of them part of Southwest Riverside County’s Filipino community, are said to be victims of a mortgage-fraud scheme detailed in a lawsuit amendment filed Friday in Riverside Superior Court
The anonymous plaintiff in the original Jan. 5 filing was identified Friday as Vicky Reiss, a 40-year-old nurse from Temecula. The complaint also extended the list of defendants to include, among others, Stonewood Consulting Inc., Pacific Wealth Management and its operators, James Duncan and Maurice McLeod.
Pacific Wealth Management, a Nevada company named as a defendant, is not affiliated with the San Diego investment company of the same name, according to the suit.
In addition, the Riverside County district attorney is investigating the same investment group for possible violations of the law, said Deputy District Attorney Raymond Ramirez.
Friday afternoon, William H. Sauls, attorney for Stonewood Consulting, and Stonewood President Hendrix Montecastro, were not available for comment. Montecastro is named in the lawsuit as “the principal operator of the entire scheme,” and the contact between the investors and the other defendants.
James Duncan, who is an Orange County resident associated with Jovane Investments, named as a defendant in the original lawsuit, declined comment.
The amended lawsuit said starting about November 2004, the defendants held investor meetings to encourage Temecula and Murrieta residents to purchase houses in the area as investments.
The suit says the defendants falsified loan applications, charged excessive fees and opened lines of credit in the names of the investors.
According to the suit, the properties were appraised above the market value and surplus proceeds from mortgages were routed directly to the investment group rather than the buyers. The lawsuit said the defendants promised to rent out and manage the properties and pay the difference between the rent and the mortgages, an amount that for Reiss totaled $20,000 monthly on five houses.
In late 2006, the lawsuit said, the defendants demanded that the investors, including Reiss, cash out all of their open lines of credit and pay the proceeds to the defendants or face foreclosure. Other investors were told to cash out retirement and other accounts or be financially ruined, the lawsuit said.
Reiss said in an interview that because she depended on the defendants to pay the mortgages, she had difficulty saying no to their demands.
“I felt these people had a noose around my neck,” she said.
Richard Ackerman, Reiss’ lawyer, said in November that Reiss and other investors stopped receiving money from the defendants to pay their mortgages.
According to the lawsuit, at recent meetings with investors, including one on Wednesday, the defendants promised to continue making mortgage payments only on the investors’ primary residences, with the rest of the houses likely going to foreclosure because of the defendants’ alleged inability to release investment funds.
.comParticipantHi OCRenter,
I agree this is just huge, and I don’t understand either why it is not getting more coverage in other papers.
Just one aspect of it that blows my mind is the way that this caused price statistics to balloon upwards.
I don’t know how to properly post a link, but I found the story by search google news for “Murrieta.” It was in the Californian, part of the NCTimes on Jan. 10th.
JS
January 4, 2007 at 5:42 AM in reply to: Shoddy Construction of 2000-2005 Housing Boom: Beware of National Builders #42654ParticipantWe own a KB home built in 2004 in Murrieta.
After the close of escrow we had the home professionally inspected and found only a few minor issues — a cracked roof tile, and a place that wiring needed to be re-shielded.
During the warranty period we contacted the builder twice for minor repairs which were instantly and expertly taken care of.So, just one anecdote here, but we are very satisfied with the quality of our new home.
JS
ParticipantAmerica is a great nation in decline. We are Rome in the Third Century AD.
That doesn’t mean that great leaders and new ideas can’t emerge to stem the tide, but Imperial America is a very flawed nation. The part that concerns me the most is that our flaws tend to be what we export.
There is no doubt in my mind that Bush is the worst president of my 49 year lifetime. Nixon was a cynical, paranoid cheater but he was visionary compared to George W.
JS
ParticipantMy list of the best places would include:
Thornton Winery
Bailey’s in Old Town
Gourmet Italia (3 locations)
Great Oak Steakhouse at Pechanga Casino
Harry’s Pacific GrillIf I had to choose one, try Harry’s next to the mall. It has a great bar and the food is excellent. It has just been open a few months.
JS
ParticipantSome years ago the British rail Pension system invested in blue chip art with expert advice. I think that over time they more or less achieved the same return as they would have in the stock market.
Right now, collectors/dealers seem to be trying to out do each other in a game of who can get the most for a work of art. Steve Wynn would have held the title if he hadn’t put his elbow through a Picasso, but now David Geffen has the title, having sold his Pollock for a reported $145 million.
I call that a bubble.
Regarding that possible Sargent, I would take it to a reputable auction house on their “free evaluation” day. They will do a good job for you, and unlike dealers they have nothing to gain by misleading you.
I think Bonhams and Butterfields has at least one evaluation day per month.
JS
ParticipantHi Lostkitty,
Yes, I have a lot of connections to the art world…
Am an artist, art professor, art journalist.
I am afraid I don’t know of any free online art price resources. Have you looked for records of anything sold on eBay?
JS
ParticipantI grew up in Brentwood/West Los Angeles in a home that my parents bought for $37,500 in 1959. My mother cried after signing the mortgage because it seemed like so much debt. When a large local property was subdivided and developed in the mid 1960’s I remember going over to look at the new houses with my parents who were saying “Nobody is ever going to pay one hundred thousand dollars for a house.”
When they retired in the mid-eighties they sold their home for $750k to a man who remodelled it and sold it for $1.1 million.
OK, where am I going with this?
Yes, buying California real estate, holding on to it and watching it appreciate has been the single most important thing my parents or I ever did.
That said, I think the folks on this board have it right. People who sold in 2004-5 and ran away with the cash have done themselves and their families a huge favor. They are someday going to be compared to those who sold stocks before the 1929 crash.
I apreciate the civility of the broker from Pasadena, but telling people “Don’t hold your breath” is an easy thing for someone to do when they profit on transactions.
By the way, I am not a real estate professional of any kind, just a middle class guy sharing his personal, possibly deluded opinions.
JS
ParticipantAs a poor Temecula/Murrieta dweller just barely scraping by on $100k a year this thread has entertained the &%#* out of me!
The only person I know who lives on Coronado is an in-law of my sister’s. He always has the newest model customized BMW and reportedly takes an hour and half to shower and mousse every morning. He has a personal shopper at Neiman Marcus and peppers his conversation with phrases like “Istanbul has really changed…”
Now I can imagine his mansion built over a moldy dump and I can hear the squeaking of the rats running down his electrical wires at night. At least
he is not a renter so he doesn’t have to be looked down on by his neighbors!Only in California can someone feel “priced out” of such a place!
Let’s be honest, I would love to breathe the cool ocean air down there at Coronado — even if it has a slight aroma — but the snobs would do me in.
JS
ParticipantHere are two anecdotes.
The house across the street — we live in a new area of Murrieta — has been for sale for $550 for six months. Talked to the renter who lives there today and found out that there has been NO interest. The owner offered it to the tenants for $450k and they said “No thanks.”
My other anecdote, a relative of mine needs to sell his home in Menifee. He has already closed escrow on another home so he is paying two mortgages. He has it listed, and of course there is no interest, but he wants to find another agent who will PRICE IT HIGHER!
Hello!
JS
ParticipantMy wife used to work at the Union Tribune in San Diego and live in South Temecula. Her commute was OK but that was because she worked off hours.
The traffic coming north on the 15 into Temecula is now bad most afternoons and a nightmare on Fridays.
The comment about the schools is right on. Excellent schools in Temecula and Murrieta, and both areas have more and more activities for children.
JS
ParticipantSince you mention the figure of $42,000.00 here is an anecdote about a loss of around that amount.
A young couple who I worked with bought a house in late 2004 in Wildomar. It was a very deluxe house, around $700k. Their intention was to have it be an investment.
When the husband got a new job out of state they put it on the market and after almost a year of listing it they managed to sell it themselves a few months ago. They did so after borrowing $40k from their parents to cover their loss.
I figure they were lucky to get out and only lose $40k, but still, that is a lot of money to burn.
JS
ParticipantHi startingout,
No doubt about it, the Inland Empire will drop more than 10%.
I live in an area of new, larger homes in Murrieta, and none of the 8-10 homes with for sale signs up have sold in the past 6 months, and nearly all have “price reduced” signs. One home that I have kept an eye on started at $725k a month ago and is already down to $625k. Never mind that the first price was a speculator’s “let’s see if I can nail some fool” price…
Another house across the street was first listed at $535k and is now at $515.
When I dropped by the open house last weekend someone had written “Call me if you will take $400k” on the interest list.JS
Participanthi malfred,
I corrected your grammar to get your attention and see if I could knock you off your high horse for a moment. You took a shot at me and I reacted in a very human way to protect myself.
To change tone for a minute, I know that on the net things are very impersonal and the words don’t have a person’s face or a tone to go with them. Chances are that if you met me you might actually like me and we might have a terrific conversation. People who know me know that I give advice in the spirit of “take it if you wish” and not as any kind of authority figure.
I did pay attention to your comments, and obviously you have a lot of acumen and achievements for your age.
I do get the sense — and please forgive me if I am wrong — that you could benefit from being more respectful towards others and more open to their ideas. The advice that I presented in my first post really does represent the best advice I can give in an internet forum setting.
JS
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