Monday, June 24, 2013

Tacoma Feds Pinch Local 'Loan Wolf' In Business Of Taking Away Homes From Financially Vulnerable; "I Am A Wolf!" Suspect Once Said In Response To Inquiries About Loan Agreements He Used With Hapless Borrowers

From the Office of the U.S. Attorney (Tacoma, Washington):

  • A hard money lender who resides in University Place, Washington was arrested [] after being indicted by the grand jury for conspiracy, making false statements on loan applications and mail fraud. EMIEL A. KANDI, 36,was taken into custody by the FBI this morning and will make his initial appearance on the indictment in U.S. District court in Tacoma at 2:30 today.

    “The business practices of this defendant harmed individuals who lost their homes. Then the lies told in mortgage documents harmed taxpayer funded institutions such as the Federal Housing Administration,” said U.S. Attorney Jenny A. Durkan. “These mortgage fraud cases result from thorough and intensive investigations. I’m grateful for the hard work of the dedicated agents and investigators working to hold Mr. Kandi accountable.”

    According to the indictment, between 2008 and 2009, KANDI submitted false information to obtain home mortgage loans. Some of these loans were designed to let KANDI cash out of properties that KANDI owned through his hard money lending. KANDI’s lending activities were typically secured by a borrower’s home and charged a high rate of interest.

    The hard money loans were structured, in some instances, to allow KANDI to seize control of a home if the borrower missed a single payment. Other loans included an inflated and often disguised commission payment to KANDI. In at least 19 loans, KANDI and his co-schemers submitted false information regarding the borrowers’ employment, salary, and intention to live in the home. Some of the loan paperwork included inflated appraisals so that KANDI could maximize the money he obtained in the scheme.

    The false statements were designed to make the loans appear legitimate and ensure that they would meet federal lending standards. Many of the loans were processed by Pierce Commercial Bank and were insured by the Federal Housing Administration (FHA), a unit within the federal Department of Housing and Urban Development (HUD).
For the U.S. Attorney press release, see Pierce County Hard Money Lender Indicted For Conspiracy, False Statements And Mail Fraud In Mortgage Fraud Scheme (Submitted False Documents Defrauding Bank and Federal Insurers).

Go here for links to earlier stories on Emiel Kandi.

See generally, The Seattle Times: Lender seizes desperate borrowers' homes (A Seattle Times examination of numerous Emiel Kandi loan deals shows that they are set up so he can quickly take borrowers' homes and in some cases flip them for a profit. And he gets away with it):
  • Kandi is the lender of last resort for some people who've been turned down by banks because of poor credit or limited income. He says his requirement for a borrower is merely "a pulse and a legal ability to sign." He admits he charges borrowers as much as he can get away with — 45 percent interest in one case — and makes it clear to them that if they fail to comply with the loan agreements, he will take their property. "I am a wolf," he explained.

    A Seattle Times examination of numerous Kandi loan deals shows that they are set up so he can quickly take borrowers' homes and in some cases flip them for a profit. And he gets away with it. "He's in the business of taking people's property," said Martin Burns, a lawyer who sued Kandi on behalf of [one homeowner]. "He finds vulnerable people and exploits them."(1)

(1) Reportedly, one of Kandi's common practices is to have his victims sign over their title to the property using a quitclaim deed, writing the loan as a purported 'commercial' (as opposed to a 'consumer') loan in attempt to dodge certain consumer protections, and employing 'hair-trigger' default clauses in the loan agreement that allow him to take possession of the house immediately using the deed after a missed payment without going through foreclosure, which includes a 190-day waiting period and several consumer protections.

No comments: