Fraud scheme prosecuted

Robert Sedlar, the president of a mortgage foreclosure consultant company, was convicted in May 2023 of 100 felony counts for operating a mortgage fraud scheme as a foreclosure consultant throughout California, according to the Office of the Attorney General (OAG).

The operators of the foreclosure consultant company, Grand View Financial LLC, were Steven Rogers, Robert Sedlar and Audrey Gan. Collectively, they conspired to steal money and homes from distressed homeowners by advertising assistance to desperate homeowners facing foreclosure.

Between 2015 and 2019, the operators advised consumers to transfer title of their home to Grand View Financial and they will eliminate the mortgage lien and deed the home back to the homeowner, free of any liens. During this time, the operators filed false court documents, false documents with the county recorders offices and false bankruptcies that stalled the foreclosures but did nothing to eliminate the liens, as promised.

All the while, the operators continued collecting funds from the victims. Every single victim lost their home in the scam.

The scheme resulted in a combined loss of over $7 million. The victims were from the counties of San Diego, San Mateo, Alameda, Contra Costa, San Joaquin, Placer, Solano, Mendocino, San Francisco, El Dorado and Sacramento.

Steven Rogers, Robert Sedlar and Audrey Gan were indicted by a grand jury in the Sacramento Superior Court in 2019 for conspiracy, grand theft, elder abuse, filing false or forged documents in a public office and engaging in a prohibited act as a foreclosure consultant.

Steve Rogers and Audrey Gan entered guilty pleas before trial. Robert Sedlar proceeded to trial in March 2023 on all counts. In May 2023, Robert Sedlar was found guilty of Conspiracy, Filing False Documents, Grand Theft, Elder Abuse and Prohibited Acts by a Foreclosure Consultant. He will be sentenced in July 2023.

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Mortgage relief scams

Scam operations offering to help with mortgage debt frequently want the homeowner to pay them an upfront fee before giving them any services. But under the Mortgage Assistance Relief Services (MARS) Rule, it’s illegal for a company to charge a homeowner anything until after:

  • the homeowner has received from the homeowner’s mortgage servicer or lender a written offer for a mortgage modification or other relief; and
  • the homeowner accepts the offer.

Companies who demand upfront payment are a red flag, are to be avoided, and reported to state agencies.

Scammers often convince homeowners to transfer title to their home to them, as the company in this case did. The transfer of title by a grant deed is initial evidence about who owns the home. When a homeowner transfers title, they’re not likely to get it back. No one did in this case.

Scammers have a variety of techniques to pressure homeowners into paying them, including:

  • offering phony counseling;
  • claiming they are mortgage loan auditors;
  • rent-to-buy scams, claiming the transfer of title to the scammers is security for advances they will make to cure the mortgage delinquencies, that the homeowner remains in the home as a tenant and pays rent until they can repurchase the home; and
  • bait-and-switch or rescue loan schemes, in which the scammer claims they will help the homeowner with junior financing for funds to bring their existing mortgage current. In the documentation for the loan, the homeowner transfers title to the scammers.

The most likely effective option for a struggling homeowner facing foreclosure is to first contact their mortgage servicer or lender. The lender does not want a foreclosure. Mortgage lenders are allowed — even encouraged — to use numerous methods for getting the homeowner current through modifications the owner is qualified to comply with.

Homeowners under threat of foreclosure may also visit the Department of Housing and Urban Development’s (HUD) list of approved housing counseling agencies for free legitimate help and for someone to explain their options.

Mortgage fraud follows economic distress. Keep an eye out for mortgage fraud schemes during and following the recession, likely to officially arrive in the third quarter (Q3) of 2023. Then report schemes to the OAG to keep real estate a sound investment.

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Regulators nab two California-based mortgage relief scammers