Mortgage Fraud and the Consequences of Your Actions
In an effort to help Minnesota REALTORS® understand the serious nature and consequences of mortgage fraud, Jillian Lehn has drafted the following article about her experiences and the consequences of those actions. Ms. Lehn has pled guilty to wire fraud and money laundering. She faces a maximum penalty of $250,000 and up to 20 years in prison.
Tips On How To Ruin Your Life
Teresa
Good job. This kind of stuff is unpleasant, but needs to be publicized. I remember waiting for the phone call described by Jill. A post like this can do a great deal of good.
Athol – nothing grey about it. It is illegal. Sellers can pay the buyers closing costs and pre-paids but no “cash back”
It makes me angry. People being taken advantage of, criminal intent, just plain angry.
Oh, Jeez … I hadn’t paid attention to the story enough to realize that Ms. Lehn was right at the closing end of the industry. This makes a conversation I recently had with a friend of mine especially awkward.
She handles closings too, for a pretty large and well-known local realty agency. At least she was the last time I asked her directly … I don’t see her as often as I used to. Her career took her to the western suburbs, pretty much the opposite side of town from where I live.
But I still see her every few months or so, and over coffee with her a few days ago I brought up a case of fairly blatant mortgage fraud that I spotted in my neighborhood. Her reaction was not what I expected; she got this kind of clouded look on her face, and began to describe a sort of bunker mentality that had developed in her office, because “so many”** people had gotten themselves tangled up in these kickback schemes.
Unthinking doofus that I am, I immediately used her point yank the conversation into a general discussion of the effect a crackdown on this type of activity might have on overall property values. But she didn’t really want to talk about it anymore; only later (i.e. now) did it occur to me that I might have been talking to someone with dirty hands.
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**(my friend might have actually said “everybody” in her office had done it, but I’m not certain, so I’m going with a more conservative version of the quote.)
Thanks for the info. People need to see these types of posts to realize how imperative it is that something be done about this alarming trend. Ralph Roberts is quoted in the 2007 edition of the Swanepoel Trends Report by saying that more and more people are being sent to jail on charges of bank fraud and conspiracy to commit mortgage fraud. This is a major concern to me. Lenders will be tightening their loan requirements and making it harder for the honest homebuyer to acquire loans.
hello, don’t let her fool you she knew exactly what she was doing every inch of the way and no way i believe her husband had no idea!! come on !! i knew my husbands every move no man out there in the real world does not keep close tabs on his wife !!! it’s the 2007 not 1940!!
hello, don’t let her fool you she knew exactly what she was doing every inch of the way and no way i believe her husband had no idea!! come on !! i knew my husbands every move no man out there in the real world does not keep close tabs on his wife !!! it’s the 2007 not 1940!!
liar
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Yeah right – in her article, she said she was “annoyed” at getting caught! Give me a break, no conscious, no remorse, no apologies.
Kudos to Jill for sharing her story. It is real easy for everyone to sit back and pass judgement but the truth of the matter is that this is going on all the time. Right or wrong it is taking place and many times we as people feel that what we are doing is not so wrong. that is until the seriousness of our actions are brought to our attention. I have refused to do such things in the industry and have been shamed for not taking part in the scheme so it goes both ways. Just remember that in these transactions there is alot more people involved than just the closer. Never say it could not happen to you because good people make mistakes everday.
I have no sympathy for her plight. And the truth is, her husband is a liar if he says he didn’t know. They lived in a million dollar home in Prior Lake and lived a great and undeserved lifestyle. Expensive vehicles, vacations, all the nicest things…. Ha!!! Well…. welcome to reality.
I have no sympathy for her plight. And the truth is, her husband is a liar if he says he didn’t know. They lived in a million dollar home in Prior Lake and lived a great and undeserved lifestyle. Expensive vehicles, vacations, all the nicest things…. Ha!!! Well…. welcome to reality.
What’s most interesting to me about this story is the number of investing courses, infomercials, discussions with real estate investors, etc., who talk about cash back when buying likes it’s the coolest.
A couple years back someone tried to do such a deal on a property I owned. The lender didn’t go for it. That was a good thing for me, even though I took a big hit when I finally did sell it. Publicity on the illegality of such dealings started about that time. I’m amazed a Realtor brought her proposal to me in the first place, now that I understand it better.
How could husband not know about it? Do you show your wife all your football picks for fantasy league? I highly doubt anyone knows much about their spouses work other than they go there, some of the client names, some of their trials with other co-workers, but that’s it.
What’s amazing is that this person really didn’t make a great deal of money. Typically ‘crime pays’ before it’s prosecuted. She didn’t even get that, she got continued business from existing clients.
As people continue to get more desperate in this industry AND, the volume continues to decrease, more investigators will have more time to scrutinize files & deals. At some point, this industry will be quite clean again.
I witnessed the destruction of 2 title companies & their shady CBAs whereas the businesses were sham title companies. I even bothered to spar with the owner of the mortgage company, whom promptly tried to fire me, over usage of his CBA because I viewed it as illegal, and there was no benefit to justify the kickback.
After moving on to another company, I realized that they were using the same title company–thru this CBA affiliated business arrangement. After lecturing this employer, he backed down as I not only informed him of the history of his business partners, I also led the branch 2 months in a row & getting 30% of my action seemed a worth trade off for not using their $200-$450 kickback on each title deal.
Both title ‘agencies’ were shut down, censured, fined for 100% of their profit, and I am no longer in contact with either company. However, it does make me wonder how if I can be a leader of a branch, national sales convention calibre producer, 14 time combined branch leader & region leader without doing anything shady, why can’t these guys just make a few $100 less per deal.
In Jill’s case, continued Bad Business is not as good as continued Good Business. Every friggin sales manager in the history of any sales organization quotes movies like Boiler Room & Glenn Gary, Glenn Ross…but do they remember the ending scenes? The ones where they all go to jail for stretching their profits? Anyone remember those scenes.
In the end, the felons think, “..if I’m making money at it, and noone is crying, I must be providing a valid service…”
Nice informative post.It is illegal. Sellers can pay the buyers closing costs and pre-paids but no “cash back”..
Her husband was definitely in on the deal and should be in prison too. He should be investigated next.