New Appraisal Rules Frustrating Homebuyers

Read the full article here… Have Down Payment but Stuck In Appraisal Hell.

…Four months later, the Stiners and their buyer both gave up. Together, they were out $1,600 for seven appraisals. “As a result, we are now renting our home out, and renting the home we wanted to buy,” says Beth. “We were frustrated and we weren’t going to keep doling out cash for new appraisals. It felt like a game.”…

2010 NAR Public Policy Accomplishments

Throughout 2010, NAR made significant progress educating Congress and the Obama Administration that a stable and sustainable housing market is the primary building block for any economic recovery. NAR had a series of successes in the regulatory and legislative fields, some of which are highlighted below.

As we look ahead to 2011, NAR will continue to advocate policy initiatives that benefit REALTORS® and consumers in the residential and commercial real estate industry.

Wall Street Reform and Consumer Financial Protection – On July 21, 2010, President Obama signed into law the Dodd-Frank Wall Street Reform and Consumer Financial Protection Act of 2010. This comprehensive reform of the nation’s financial services sector is the most sweeping since the financial reforms ushered in during the Great Depression. NAR worked with both Democrat and Republican members of the House and Senate committees responsible for the legislation to secure a “real estate professional exclusion” ensuring that the daily business of REALTORS® was not negatively impacted by this historic piece of legislation.

Me etings with Lenders – Starting in the summer of 2010, NAR’s elected leadership initiated a series of meetings with large lenders and servicers to discuss issues of concern for REALTORS®. The topics included origination issues (underwriting standards, appraisal issues, credit policy, condo financing); short sales; bank-owned properties; and the impact of the Dodd-Frank Wall Street Reform and Consumer Financial Protection Act. NAR and the banks are discussing how we can work together to make significant improvements in all of these areas. The goal is to increase our mutual success and help support market recovery.

Health Insurance Reform – NAR successfully raised the profile of the challenges that face the self-employed and small employers, including REALTORS®, throughout the 111th Congress’ debate over health care reform. As a result, the underwriting and rating reforms in the final bill — guaranteed issue policies, ban on pre-existing condition exclusions, limited age rating, etc. — are in line with NAR’s policy principles and will give the self-employed access to insurance with most of the characteristics of a group plan. In addition, individual affordability credits and tax credits for small employers will help to make health insurance more affordable for many NAR members who are currently uninsured.

First-Time Homebuyer Tax Credit – In November 2009, the $8,000 credit was again extended for purchasers through April 30, 2010. Those under contract by April 30 retained eligibility for the credit, so long as the transaction closed before July 1, 2010. An additional $6,500 credit was created for current homeowners purchasing a new or existing home between November 7, 2009 and April 30, 2010. These buyers were also subjected to the July 1, 2010 settlement requirement. In June 2010, NAR noticed that many purchasers who had signed contracts on or before April 30 were unable to close their transactions, particularly in short sales. At NAR’s urging, Congress extended the closing date requirement through September 30, 2010.

Protecting the Mortgage Interest Deduction – The Administration’s proposed budgets for Fiscal Years 2010 and 2011 included a recommendation that health insurance reform be “paid for” by limiting the value of the mortgage interest deduction (MID) and other itemized deductions for upper income taxpayers. The limitation proposal was based on an individual’s tax bracket. Itemized deductions for individuals in tax brackets above 28% would have not have received the value of their higher tax brackets. Rather, the “value” of itemized deductions would have been limited to 28 cents on the dollar, rather than the 33 cents or 35 cents to which they would have otherwise been entitled. NAR aggressively and successfully fought off changes to the MID through grassroots, advertising and similar advocacy tools.

FHA and GSE Loan Limits – NAR successfully advocated for legislation to once again extend the temporary higher loan limits for FHA and the GSEs in both 2009 and 2010. Had the limits expired, NAR estimates that more than 612 counties in 40 states and the District of Columbia would be negatively impacted, with an average decline in loan limits of more than $50,000. The current limits (at the greater of $271,050 [for FHA] and $417,000 [for the GSEs] or 125% of local area median up to $729,750) are now in place through September 30, 2011.

Small Business Lending Fund – On September 27, 2010, the Small Business Jobs and Credit Act of 2010 (H.R. 5297) was signed into law. Under this bill, which NAR supported, the U.S. Treasury is authorized to lend up to $30 billion to interested community banks to further expand lending to small businesses. As an incentive for community banks to participate and increase small business lending, participating banks’ interest rates will be adjusted relative to the amount of their small business lending activity. It is estimated that community banks could use the $30 billion lending fund to leverage up to $300 billion in new loans to small businesses. Additionally, NAR successfully worked to include provisions in the legislation that enhance Small Business Administration (SBA) programs and provide $12 billion in tax relief for commercial real estate practitioners and small businesses.

Flood Insurance – NAR secured a full one-year extension through September 2011 of National Flood Insurance Program (NFIP) authority, after supporting legislation, which twice broke congressional stalemates that led to multi-week shutdowns of the program. Without the program, thousands of property owners in tens of thousands of communities across the U.S. would not have been able to obtain the insurance necessary for them to obtain a mortgage in federal-designated floodplains.

Development of NAR Credit Policy – The Conventional Finance and Lending Committee proposed a NAR Credit Policy for consideration by the Board of Directors in November 2010 which was approved. The new policy calls for the lending industry to reassess and amend its credit policies to increase mortgage liquidity for qualified home buyers, including low and moderate-income families and first-time home buyers. The policy also includes specific recommendations.

Appraisal Reform – On July 21, 2010, the President signed into law the Dodd-Frank Wall Street Reform and Consumer Financial Protection Act. The legislation includes the first major appraisal reforms in more than a generation. NAR worked with Congress on this legislation, which regulates appraisal management companies (AMCs), establishes new appraisal independence standards, and regulates automated valuation models (AVMs) and broker price opinions (BPOs). The legislation also sunsets the Home Valuation Code of Conduct (HVCC). NAR is currently working with the Federal Reserve on the implementation of regulations related to appraisal independence, which must be implemented within 90 days of enactment of the legislation.

NAR message to Congress about MID


  • Repealing the Mortgage Interest Deduction (MID) is a form of tax increase.

  • Families with children would bear more than half of the total increase.
  • IRS data show that taxpayers in the 35 – 45 age group take the largest MID on average compared to any other age group of taxpayers

  • First time home buyers would be hurt the most if the MID is curtailed.
  • Current data from the IRS show that 65% of the taxpayers who have claimed the MID made less than $100,000.

  • The housing market has not emerged from the crisis that began in 2007.
The 1.1 million members of the National Association of REALTORS® strongly oppose proposals to reduce the mortgage interest  deduction (MID). Hard-working American families’ budgets are already stressed. Reducing or eliminating the mortgage interest deduction would pull even more money directly out of their wallets. If this crucial deduction is eliminated or reduced, home values will further erode. That’s something America simply can’t afford in this unstable housing market.


The Facts Speak for Themselves.

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Hi speed rail is hi level scam

Any questions on why our state and country continue to swirl into the crapper can be answered by their continuing devotion to worthless money losing schemes like this. Read the article – they are going to spend over $ 4 Billion on a high speed rail line from nowhere to nowhere – and if that isn’t bad enough it will have no maintenance facilities, no power lines , no locomotives or rail cars. So in addition from going nowhere to nowhere, it will have no means too not get you there. $4.15 billion later…

California’s High-Speed Rail Authority has approved the first link in the bullet-train chain, a segment deep in the San Joaquin Valley. The LAT’s Dan Weikel and Rich Connell have the story.

“Costing at least $4.15 billion, the segment would run from the tiny town of Borden to Corcoran, an area hit so hard by the recession and agriculture declines that it has been dubbed the New Appalachia. Stations would be built in Fresno and Hanford.”

“Included in the plan are tracks, station platforms, bridges and viaducts, which would elevate the line through urban areas. The initial section, however, would not be equipped with maintenance facilities, locomotives, passenger cars or an electrical system necessary to power high-speed trains.”

When fireplaces are outlawed only outlaws will have fireplaces.

The South Coast Air Quality Management District (SCAQMD) has recently launched the latest salvo aimed at curbing individual freedoms and property right. This initiative, dubbed ‘Check Before You Burn’, is geared toward forcing people to refrain from using their wood burning fireplaces or other wood burning heaters in an effort to ‘improve wintertime air quality’.

Under this new program, the AQMD will issue no-burn advisories through the end of February for specific areas where ‘fine particulates are forecast to reach unhealthy levels’. For 2011 the no-burn prohibition is voluntary but starting in 2012 there will be a series of escalating fines from $50 to $500 or more if you light up during one of their advisory periods. They expect to see about 15 of these periods from November through February.

The AQMD claims that Southern California is home to about 1.4 million fireplaces or wood burning stoves. They claim that these spew 6 tons of soot into the air every day – 4 times the amount emitted by all the power plants in the southland. Really? But their spokes hole says people can avoid the problem just by switching to natural gas fireplaces.

But how about if you live in an area not served by natural gas? Say you live in the Temecula Valley Wine Country or up in the De Luz avocado groves, or the Meadowview area of Temecula? These areas are not all served by natural gas. Many rely on wood burning appliances to not just take the edge off a nippy winter eve, but to stay warm affordably. Electric heat isn’t cheap and many older residents or those on a fixed income will have to make tough choices.

Some of these homes have installed propane (bottled) gas to power certain appliances. But according to one resident I spoke to, their heating bill if they rely on propane alone can run to over $500/month during the winter. Simply burning a half cord of wood for $225 during the winter keeps the chill away and keeps their propane bill to under $200/month.

The AQMD knows this is a problem and have issued exemptions for areas over 3,000 feet elevation because they ‘recognize some mountain residents heat their homes that way’. How about recognizing that some residents below 3,000 do the same?

Is this a life changing event? Not for me. I’ve got four fireplaces in my house and they all burn gas. Goody goody for me. Will it severely impact a lot of people throughout our rural areas that can ill afford it? Probably not significantly if the no-burn events are held to no more than 15 random nights during the 4 month period. Maybe cost folks a few hundred extra bucks for heat, or a few hundred more for fines. Too bad for them.

But here’s my forecast – and I’ve been through this before so I’m not just whistling Dixie out my kazoo. Within 5 years, all wood burning devices will be banned. (When fireplaces are outlawed, only outlaws will have fireplaces).

Year one (2011) will be voluntary compliance with the no-burn. Year two (2012) the ban is no longer voluntary.

Year 3 (2013) will be more of the same – probably with a few more no-burn advisory days thrown in for good measure, or the particulate standards will be reduced to comply with some arbitrary ruling by the geniuses at the California Air Resources Board (CARB).

By year 4 (2014), based on the same specious studies that give us 6 tons of soot a day from fireplaces (did I mention that’s 4 times more than ALL the power plants in Southern California?), they will declare the project a resounding success but predicated on Californians need to be the leader in greenwashing reality, they will see the need to implement an outright ban on all woodburning devices. This will be voluntary in 2014 and there will be a call for increased state spending both to appoint a ‘smoke czar patrol’ to monitor the the state’s chimneys as well as to pay for people to switch to some alternate form of heat technology. By 2015 you’ll be subject to criminal prosecution if your chimney so much as farts during the winter.

Don’t believe me? I could direct you to several cities around the state and the country where that exact scenario has come to pass already. Meanwhile China continues to open a new coal-fired power plant every day. Arizona coal-fired plants will continue to provide electricity to Southern California. Our air will not be appreciably cleaner. But another of your simple pleasures, what you used to consider a right, will have been erased.

Aw, who cares? I’m heading for my little cabin in the woods. There’s plenty of down timber to cut up and not a neighbor around for miles to tattle if I stoke my fireplace. You can come drive by sometime if you get nostalgic for a whiff of pine smoke on a crisp winter morning.

Meanwhile if you want to learn if there’s a ‘no-burn’ advisory out tonight, here’s all you have to do:

• Check AQMD’s Check Before You Burn map at to see if a voluntary no-burn advisory has been issued for their area. Residents may also zoom into a particular neighborhood on the map by entering an address or zip code;
• Sign up to receive electronic e-mail notices when a no-burn advisory is issued for their area. Visit to sign up; or
• Call AQMD’s 24-hour Check Before You Burn toll-free information line at (866) 966-3293.

Long overdue – Stonewood scam goes to trial

At long last the trial has begun for the perpetrators of the so-called Stonewood Scam in Southwest Riverside County. Long time readers are acquainted with the basics of this story from my years-long chronicle of events. Our local association tried to bring this to the attention of law enforcement beginning in late 2004 but were unsuccessful in catching anybody’s ear until the scam had nearly run its course and started to collapse under its own weight.

The real estate part of it consisted of representatives from Stonewood Financial buying homes at significant premiums over asking price. As this was at a time our housing market was appreciating 20% – 30% a year, the fact that someone would pay a 25% or 30% premium on a home purchase was not enough to warrant investigation by the authorities. Homes listed at $500,000 were routinely selling for $600,000 or more. Targeting specific neighborhoods, after the first two or three sales were obtained with fraudulent appraisals, it became a self-feeding scheme since subsequent appraisals were now based on actual sales, albeit fraudulent. Turns out many of the buyers were either made of straw, or people talked into buying multiple properties they couldn’t begin to afford. Naturally other buyers into those neighborhoods also became victims since selling prices became predicated on fraudulently inflated values. In addition to the 200+ documented cases, many more innocent victims lost their homes when prices tumbled by more than 2/3 in some cases.

How did they do it? Well, partially through affinity fraud – many of the buyers were either members of the same ethnicity as the perpetrators or were nurses at the same facility where one of the perpetrators worked. They were also promised that the properties could be rented, that any shortage between the rental income and the mortgage payment would be paid for them, and that the $100,000+ overage collected by Stonewood or a related entity, would be paid to an investment account with the promise of even greater dividends to come.

Naturally there was no investment account to produce income, after a month or two the promised rental offset payments dried up and houses started going into foreclosure by tens, then by hundreds. When we became aware that something smelled bad here, we documented about 60 homes and about $40 million dollars in potential scams. By the time authorities finally acted on it the result was over 200 homes with the perpetrators indicated for over $120 million dollars. Our local District Attorney did not see fit to take action until the SEC, FBI and US Attorneys Office had finally acted, then he stood up on the podium all puffed up taking the credit. I like to hope in some small way it was part of the reason he was soundly defeated in his recent re-election campaign by a relative unknown.

Anyway, in addition to our local real estate fraud task force, reporters Chris Bagley from the Californian and Leslie Berkman from the Press Enterprise payed significant roles in shining the spotlight on these nefarious activities and our own attorney John Giardinelli and an attorney for some of the plaintiffs Richard Ackerman were pivotal in keeping the focus on.

It took too damn long and cost too many people – not to mention the damage done to entire neighborhoods and our cities – but as they say – sometimes the wheels of justice grind slowly. Let’s hope in this case they also grind exceedingly fine.

You can read the whole story and related elements here.

Press Enterprise – Fraud Trail Begins

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The opinions in this commentary are strictly Gene Wunderlich’s personal opinions. While any reasonable and/or rational indivdual should agree wholeheartedly, the opinons reflected herein may not necessarily be those of the Southwest Riverside County AOR,  or any local or state government or other mental institution.

Another Real Estate Scam to beware of.


Last week our local paper bestowed their ‘Raspberry’ award to a SoCal based attorney by the name of Michael T. Pines. Pines qualified for this award by virtue of the fact that his business model apparently involves advising clients who have been through foreclosure and been evicted from a home to break back into the home and set up residency. Of the four families he has recently convinced that his advice is sound, he has accompanied them to the house with attendant locksmith and whatever press he can scrounge up.

He garnered a couple headlines.

But most figured it for just what it appears to be – a scam based on the old ‘produce the original document’ scheme combined with his theory that since the bank has foreclosed and the underlying lien has been satisfied by the insurance company, the home has therefore been paid in full and the previous homeowner should be able
to reclaim it and occupy it. Yeah, I know. But he’s preying on unsophisticated and desperate people.

So a couple days ago a judge called him out for filing frivolous lawsuits and slapped him with a $16,000 judgment that he owes one of his clients for wasting their time and money. Today the 2nd family in Escondido who broke into their home to great fanfare a couple weeks ago, was unceremoniously dumped back out by the new owner of the house. According to Emiliano Bolanos, “The people that bought the house, they want to take it again.” DUH

Now here’s something that will surprise you – they haven’t been able to get in touch with Mr. Pines! Yeah, go figure. Mr. Bolanos said he talked to Pines last week and was promised some paper from a judge saying they could stay but the attorney never called back. Another Pines client up in Simi Valley was evicted on Tuesday and was told by the attorney he would be there along with some private security to stop the eviction. He never showed there either. Perhaps it was because Pines had been arrested for vandalism and trespassing a few days before trying the scheme yet again in Newport Beach. (WSJ 10/15/10)

Turns out, according to The Californian, Mr. Pines himself is in bankruptcy. He also has seven of his own properties in foreclosure and lost his own battles to keep his own home by litigating against his lender. Oddly enough, he apparently hasn’t broken back into his own homes – which include properties in Utah, Arkansas and his home and law building in CA. He also has two restraining orders against him in San Diego County for ‘civil harassment after a hearing’. Sounds like a fun guy.

Pines, who has had a law practice for over 30 years, switched to real estate law and investing in 2000. When the market headed south, and with his own personal business apparently tanking, Pines started doing seminars on strategic default, how to use Chapter 11 to your benefit and so forth. It is interesting to note that of the 70 or so cases he claims to represent, he hasn’t won one, including his own. Most real estate attorneys scoff at this sham practice and frown on yet another
‘professional’ victimizing people who have already been cracked once.

Funny thing is – nobody, including Mr. Pines, denies that his clients are deserving of foreclosure. There was no problem with the bank, they either bought way over their head, got caught in some other investment scheme that backfired, or simply ATM’s every nickel out of their home at peak value. Oh, Pines believes that the basic banking model is unsound and fraudulent – but doesn’t deny his clients were all waaaaay behind, several on homes worth a million or more.

Meanwhile, Mr. Bolanos, remember him?. The Bolanos family is now living with the Rochas family, another victim of Pines who referred Pines to Bolanos. Bolanos says “They haven’t called me yet. I’m waiting for their call.” Good luck on that Emiliano. If I were you and he actually does call, I probably wouldn’t take it. Way less trouble for you and your family – although you might get a friendly judge to force Pines to cough up a few more grand for your troubles.

Folks, I know you’re desperate out there but if the deal sounds too good to be true… if it sounds flaky and shaky and full of crap, go with your gut. Chances are you’ll thank yourself later. Unless you’re a professional victim and enjoy it, USE YOUR DAMN HEADS PEOPLE. After all, there’s a sucker born every minute and two grifters to fleece him.

Of course that’s just my opinion, I could be wrong .

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The opinions in this commentary are strictly Gene Wunderlich’s personal opinions. While any reasonable and/or rational indivdual should agree wholeheartedly, the opinons reflected herein may not necessarily be those of the Southwest Riverside County AOR, or any local or state government or other mental institution.

How Can You Lose Something You Never Had To Begin With?

How can you lose something you never had to begin with?

That’s the question that comes to mind when I read the Administrations continuing attack on housing. In Monday’s Wall Street Journal, another front page article states ‘Key Tax Breaks At Risk As Panel Looks At Cuts’. First sentence ‘Sacrosanct tax breaks, including deductions on mortgage interest, remain on the table…’ The article goes on to say ‘…these and other breaks cost the government about $1 trillion a year’. (emphasis mine).

But if the government never had these revenues to begin with, at least in the case of the MID, how can they claim it as a cost? It doesn’t cost them a dime. Wikipedia defines cost thusly: In business, retail, and accounting, a cost is the value of money that has been used up to produce something, and hence is not available for use anymore. Obviously that doesn’t apply here. The government hasn’t ‘produced’ anything of value and has not spent money on it therefore it is not a ‘cost’ to the government.

So the Government chooses to define costs as an economic model (unrelated to actual business, retail or accounting reality) and for their purposes they define it differently: Opportunity cost, also referred to as economic cost is the value of the best alternative that was not chosen in order to pursue the current endeavor—i.e., what could have been accomplished with the resources expended in the undertaking. In theoretical economics, cost used without qualification often means opportunity cost.

So apparently our government functions best in the world of theoretical economics where you can attribute something as a cost even if you produce nothing or spend any actual money on it. It’s not a real cost, it’s a theoretical cost. They could be making more money off us if we would just pay more taxes – so that lost opportunity becomes a cost in their eyes.

California has employed similar theoretical economics for years now – if we don’t increase a department’s budget as much as they requested, it’s called a cut even if they get more than they got last year. And you see where it got California.

The article went on to describe how the President’s Deficit Commission was looking at these ‘opportunities for revenue enhancement’ along with potential cuts in defense spending and a potential freeze on domestic discretionary spending. Hmmm, cut defense but just freeze spending at the current rate? How about this instead? How about making some REAL cuts to the massive spending and stimulus programs that aren’t working for sh**? How about that?  How about cutting the pork & earmarks like you campaignedyou would?

How about getting government out of the housing business and every other business which they are trying to regulate into insolvency and actually let businesses grow again and start creating real jobs instead of government jobs? When it has been proven time and again that a government run ‘business’ i.e. Postal Service, Welfare, Social Security, Fannie & Freddie, are not productive, are not competitive and constantly run at deficits in spite of massive infusions of our money, why would you continue to add more of these albatrosses – like healthcare, the financial regulatory agency, etc? Why is it that the only sector of our economy that has enjoyed robust job growth the past few years has been federal and state government jobs?

I was somewhat mollified to read an AP article a couple days later about the agenda Republicans are devolving, assuming they deliver the sound spanking on Tuesday anticipated by anybody this side of Mars (or Obama).  It involves $100 billion in spending cuts, tax reductions for individuals and businesses to stimulate real growth, and undoing elements of the healthcare program and the overreaching financial regulatory program. I hope they mean it. The attacks on housing have to stop.

Government, which has bloated up beyond all reasonable measure in this country, has exploded the past couple years and now encroaches into every aspect of our personal and business lives. It was  not meant to be so. If we don’t start reducing the role of government soon, we will either lose our Republic and the few remaining freedoms we take for granted today, or at some point we will face a much more volatile upheaval.

Well, Thomas Jefferson said it best when he said that every generation needs a new revolution. Hope and change wasn’t a revolution and has proven to be just more of the same – assuming you define ‘same’ as Chicago ward politics. Maybe this generation will finally stand up for something. You think?

Of course that’s just my opinion – I could be wrong.

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The opinions in this commentary are strictly Gene Wunderlich’s personal opinions. While any reasonable and/or rational indivdual should agree wholeheartedly,
the opinons reflected herein may not necessarily be those of the Southwest Riverside County AOR,  or any local or state government or other mental institution.

Another Mortgage Fraud Scammer Bites the dust.


Juan Rangel Agrees to Serve 15-Year Sentence for Targeting Spanish-Speaking Victims and Stealing Their Savings and Titles to their Homes

LOS ANGELES – A Downey man has agreed to plead guilty to federal fraud and money laundering charges, admitting that he ran two fraudulent operations – a Ponzi scheme that took in $30 million from more than 300 victims and a mortgage fraud scheme that preyed on homeowners by stealing the equity from their homes and secretly taking title to their properties.

Juan Rangel, 46, who is currently in federal custody, signed a plea agreement that was filed late Friday in United States District Court. Rangel agreed to plead guilty to one count of mail fraud and one count of money laundering. In the plea agreement, federal prosecutors and Rangel ask the court to impose a sentence of 15 years in prison.

Rangel agreed to plead guilty to a mail fraud count related to the Ponzi scheme in which Rangel and his company, the Commerce-based Financial Plus Investments, recruited new investors through Spanish-language newspapers and magazines, as well as in radio advertisements and infomercials broadcast on television. Rangel and Financial Plus promised to pay investors guaranteed returns of 60 percent each year out of the profits from Financial Plus’ real estate investments and lending business. However, Rangel admitted in the plea agreement that Financial Plus did not make any actual profits from real estate or lending. Rangel instead used the victims’ money to make Ponzi payments to other investors and for his own personal use, including the monthly mortgage payments on his $3 million home and monthly payments for his Lamborghini sports car.

In the plea agreement, Rangel also admitted that he and others operated a mortgage fraud scheme that targeted Latino homeowners at risk of losing their homes by offering them help to avoid foreclosure. Rather than assisting the distressed homeowners, however, Rangel took titles to their homes and drained the remaining equity out of the properties.  As part of this scheme, Rangel arranged to sell the homeowners’ properties, usually without their knowledge, to third-party straw buyers. He then applied for loans in the straw buyers’ names related to these supposed purchases, and used a variety of falsified documents to ensure that the fraudulent loans were approved. Rangel admitted that the scheme caused mortgage lenders to fund more than $10 million in fraudulent loans.

Rangel is scheduled to plead guilty Wednesday afternoon before United States District Judge S. James Otero. Once he pleads guilty, Rangel will face a statutory maximum sentence of 30 years in federal prison. Although the parties will recommend a sentence of 15 years, Judge Otero will make the final determination as to the appropriate sentence in the case.

A federal grand jury indicted Rangel last month in the Financial Plus schemes. The indictment also charges Javier Juanchi, 42, of Sherman Oaks, a vice president at Financial Plus, and Pablo Araque, 40, of Downey, who owns the Downey-based tax preparation and bookkeeping company A-One Tax Pros. Juanchi and Araque were charged in relation to the mortgage fraud and are currently scheduled to go to trial before Judge Otero on November 23.

The case involving Financial Plus is the result of an investigation by the Federal Bureau of Investigation, the United States Postal Inspection Service and IRS-Criminal Investigation.

CONTACT:        Assistant United States Attorney James A. Bowman

Major Frauds Section