Part III The Sting: An Appalling Impac, Chicago Title & IndyMac Lending Story
Originally posted April 23, 2008...
Much like in The Sting, where Doyle Lonnegan (Robert Shaw) who rigged the deck, wondered how Henry Gondorff (Paul Newman) wound up with 4 of a kind to take the pot…
One wonders how Mr. A. Pauling managed to encumber a home, which he clearly did not own, to the tune of $774K? Quite simply, despite title being held by a trust, the lenders never bothered to check the trust.
Instead, the lenders merely lent the money, instructing A. Pauling to first deed the property to himself as a widower(individual).
In fact, the lenders initially undertook to obtain a certification from the trustee that he had the authority to enter into these transactions, but never followed through.
The mortgage broker, lenders and title company explicitly instructed A. Pauling to do the following:
They had A. Pauling sign a blank certification of Trustee form containing no information regarding the trust. In order to obtain the new loans, he deeded the property from A. Pauling, trustee of the trust, to A. Pauling, widower.
After the loans funded, he in turn executed a second deed from himself as a widower back to A. Pauling, trustee of the trust.
Important note: All of the transactions for the final loans through IMPAC FUNDING, were accommodated by CHICAGO TITLE INSURANCE. We will come back to this.
All of the loans given to A. Pauling purported to be stated income, verified asset, reduced document loans.
A. Pauling's income was never verified, even though he claimed to make much more ($12K per month) than his pension & social security paid.
A common practice with stated income loans, however, had the lenders bothered to check, they would have found out that the corporation A. Pauling claimed to work for in Nevada,
PC-USA INC, his OWN corporation, had been DEFAULTED by the Nevada Secretary of State.
Further, the proof of assets (claiming $87,500 in assets) he provided was an account statement from UBS Financial Services. This balance consisted of funds provided by the former loans.
An examination of the UBS account statements shows that he deposited lump sum loan proceeds, used them to make the loan payments and then squandered the balance.
Isn't that extra special? Stated income OK, but no (VOE) verification of employer and no seasoning or source of funds on the (VOD) verification of deposit or assets.
Looks and smells like a lack of due diligence or negligence on the part of loan origination, loan processing and underwriting. Worse yet, the malodorous stench of intentionally fraudulent and invalid title transfers is wafting in the air.
More to come tomorrow in Part IV: What Exactly Do We Have Here?
Preface & Intro
Part I: The Hook
Part II: The Tale
Much like in The Sting, where Doyle Lonnegan (Robert Shaw) who rigged the deck, wondered how Henry Gondorff (Paul Newman) wound up with 4 of a kind to take the pot…
One wonders how Mr. A. Pauling managed to encumber a home, which he clearly did not own, to the tune of $774K? Quite simply, despite title being held by a trust, the lenders never bothered to check the trust.
Instead, the lenders merely lent the money, instructing A. Pauling to first deed the property to himself as a widower(individual).
In fact, the lenders initially undertook to obtain a certification from the trustee that he had the authority to enter into these transactions, but never followed through.
The mortgage broker, lenders and title company explicitly instructed A. Pauling to do the following:
They had A. Pauling sign a blank certification of Trustee form containing no information regarding the trust. In order to obtain the new loans, he deeded the property from A. Pauling, trustee of the trust, to A. Pauling, widower.
After the loans funded, he in turn executed a second deed from himself as a widower back to A. Pauling, trustee of the trust.
Important note: All of the transactions for the final loans through IMPAC FUNDING, were accommodated by CHICAGO TITLE INSURANCE. We will come back to this.
All of the loans given to A. Pauling purported to be stated income, verified asset, reduced document loans.
A. Pauling's income was never verified, even though he claimed to make much more ($12K per month) than his pension & social security paid.
A common practice with stated income loans, however, had the lenders bothered to check, they would have found out that the corporation A. Pauling claimed to work for in Nevada,
PC-USA INC, his OWN corporation, had been DEFAULTED by the Nevada Secretary of State.
Further, the proof of assets (claiming $87,500 in assets) he provided was an account statement from UBS Financial Services. This balance consisted of funds provided by the former loans.
An examination of the UBS account statements shows that he deposited lump sum loan proceeds, used them to make the loan payments and then squandered the balance.
Isn't that extra special? Stated income OK, but no (VOE) verification of employer and no seasoning or source of funds on the (VOD) verification of deposit or assets.
Looks and smells like a lack of due diligence or negligence on the part of loan origination, loan processing and underwriting. Worse yet, the malodorous stench of intentionally fraudulent and invalid title transfers is wafting in the air.
More to come tomorrow in Part IV: What Exactly Do We Have Here?
Preface & Intro
Part I: The Hook
Part II: The Tale
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