PHH Files Civil Suit in Indianapolis Alleging Stacked Mortgage Scheme

Allison Tussey —  January 23, 2007 — 6 Comments

PHH Mortgage Corporation fka Cendant Mortgage Corporation filed a lawsuit in Federal Court for the Southern Division of Indiana, Indianapolis Division, against the following defendants:

Charles Brown, principal and/or manager of Central Fidelity Mortgage, LLC fka Admiral Fidelity Corporation, LLC;

Admiral Fidelity, mortgage broker;

Brooke L. Barnette, former wife of Brown

United Commonwealth Title Co., closing agent for real estate transactions. Brown is a principal of United;

Aimee Grantham, notary public and employee of United.

Brooke Howard, notary public and employee of United.

The following Corporate Defendants are alleged to be real or fictitious corporate entities of Brown:

Pacific Management Corporation,

Capital Companies, LLC,

Freeport Management, LLC,

Diamond Unlimited Properties, LLC,

Americas Title, LLC,

Nations Realty, LLC,

Onyx Construction Services, LLC,

Third Street Legal Consortium, LLC,

Sebastian Enterprises, LLC,

Capital Investments, LLC,

Capital Builders, LLC,

First Nations Capital, LLC,

United Commonwealth Title Co.,

Nations Finance of America, Inc.,

Dream Homes, LLC,

Prestige Abstract & Search, LLC,

Metropolitan Financial Group, LLC,

1st United Commonwealth Title Co.,

American City Mortgage Corporation,

Empire Trust, LLC,

Citizens National Fund,

Capital Investments, LP,

Colonial Chase Mortgage, LLC,

Colonial National Investments, LLC,

National Trust Administration, LLC

The complaint alleges that Brown, in conjunction with the Corporate Defendants, United, Grantham, Howard, Admiral Fidelity, and other unidentified individuals and business entities, defrauded PHH and multiple other mortgage lenders on numerous occasions, as more fully described below.

In May of 1999 Barnette owned the Parkshore property. She was slated to close on a loan closed by Admiral Fidelity with funds of Ohio Savings Bank. The transaction was recorded in June, 1999. The complaint alleges that the loan documents were actually forged by Brown, Grantham, Howard or another party. The loan was subsequently sold to Chase Home Finance, LLC.

In March of 2000, Brown took out a mortgage against the Parkshore property with RBMG, Inc., and two weeks later, obtained another mortgage through Southeastern Funding LLC. These mortgages were not recorded, and the title policies, purported to be issued by an agent of Conestoga Title Insurance Company, were forged.

In September 2001, Brown, Grantham, Admiral Fidelity and United conducted another real estate closing involving the Parkshore property, this time in the name of Barnette. PHH alleges that the company never received a complete copy of the mortgage, nor was it ever recorded by United. United issued a title commitment for the property, purportedly underwritten by Fidelity National Title Insurance Company to PHH. However Fidelity had revoked its underwriting agreement with United and United was no longer an approved agent. PHH alleges that the commitment was forged by Brown and United. At closing, Grantham, Brown or an individual acting at Brown’s direction forged Barnette’s name to the PHH mortgage.

In September 2002, Barnette purportedly conveyed the Marjac property to Brown and Brown executed a mortgage closed by Admiral Fidelity with funds of National City Mortgage . The closing agent was Barnes & Associates, in which Brown had an ownership interest. According to the complaint, Barnes & Associates’ chief operating officer has since been convicted of mortgage fraud.

This mortgage was not recorded. The closing funds were allegedly diverted to fictitious entities created by Brown, Citizen’s National Fund and Empire Trust based upon fabricated payoff statements. In July 2004, a Release of Mortgage was fraudulently created, forged and recorded on behalf of National City, according to the complaint. The property was then sold to Douglas and Mary Jo Ausenbaugh, who were unaware of the pre-existing mortgage to National City. The proceeds of the sale were divided among Admiral Fidelity and Brown.

The complaint includes causes of action for Civil RICO, Breach of Contract, Deception and Conversion. PHH is requesting triple damages.

The property addresses involved in the complaint are:

9943 Parkshore Drive, Noblesville, Hamilton County, Indiana

13451 Marjac Way, McCordsville, Indiana

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6 responses to PHH Files Civil Suit in Indianapolis Alleging Stacked Mortgage Scheme

  1. jeanne meyers July 28, 2010 at 9:02 pm

    I applied for a mixed use mortgage refinance through PHH Mortgage. They arroved me but later found out they made a mistake THEY DO NOT EVEN OFFER MIXED USE REFINANCING. Although they misrepresented their services offered they are refusing to return $500.00 charged to my credit card.

  2. I am 74 years old. I have owned my home in Northern California for four years. My mortgage loan was sold to National City Mortgage Co., early on.
    In August 2008 N.C.M. paid my property taxes, circumventing me even though I requested a delay on this – as I was renegotiating with the county tax assessor, and applying for California State relief for Senior Home Owners.
    N.C.M proceeded to erroneously double both the tax amount paid from the “new” Escrow Account and D O U B L E my monthly mortgage payment due!
    My financial situation had fallen into “hardship-due-to-the-declining-economy”, so that the error in the tax account and the error in the calculation of my monthly payment became insurmountable.
    Months of phone calls, affadavits, statements, documents, applications, and letters resulted in ABSOLUTELY NO RESOLUTION, or MODIFICATION.
    I was unable to pay double my mortgage ($3,000 a month); National City Mortgage soon refused my checks in the original and accurate amount; and my home fell into default and foreclosure.
    A very kind and fine attorney intervened; phoned enumerable departments at N.C.M.; and was utterly ignored. He has recorded conversations of admission of error; promise of correction; statements (however) that departments do not talk to one another; and, that they could not stop the foreclosure.
    We have had to Petition the court to place injunctions on National City Mortgage Company and their reconveyance company.
    A costly reinstatement is required before my home becomes fully mine again. Worse yet the reinstatement quotation includes thousands of dollars in wrongful foreclosure costs, due to National City Mortgage Co’s. error!!!!
    The inefficiency of National City Mortgage is “criminal”; and has been very painful for me.

  3. I refinanced two years ago with Wells Fargo. I had a rental property,and my dwelling property. They did not mention one time about stacked mortgages, or explain the consequences. I am not educated when it comes to loans, like they would not bbe educated in my profession.
    I had never heard of stacked mortgages until this year, when I tried to refinance the house through another financial institution. No one will, because it is stacked. I asked Wells Fargo if they could unstack them, and they said “NO”, because they would have to do two mortgages, and they would not do two for me within 30 days of each other. I then asked them if they would give an equity loan, and once again they said “NO”, not on a stacked loan.
    It seems as though I am stuck with them for the entire time until the loan is paid. This does not seem right to me. This seems like a type of fraud to me.
    Is there anything I can do?

    • I had the same issue, i asked at the time of the loan will i be able to sell on they told me no problem. in 2008-09 i went to sell one and was told i needed to pay off entire loan or sell both homes at same time. really in the middle of a housing crisis how would that be possible. i sold one home and did a deed in lieu for other home just to get rid of problem. they would not work with me on any loan mods to help keep me in my home. i now rent and it sucked through the whole process. lost everything because they put us into this kind of loan.

  4. In reply to the comment from Mr. Mulligan: Our company ethics and quality control policies do not permit for any “cash back” mortgage scams. SDG defends its right to free speech on the Internet, and sincerely doubts Mr. Mulligan’s purpose and motives due to the family nature of his comments. If any additional comments appear of this nature we ask for a fair and balanced consideration of those comments. Feel free to email me directly at any time if you would like additional information or clarification. R.C.M.

  5. Take a look at SDG mortgage and Soli Deo Group, located in Noblesville, IN. I suspect I have knowledge of a cash back mortgage scam. Their is quite possibly other transactions besides of the one I know of. I sure wish my father-in-law would have look at the HUD-1 statement, instead of defending his mortgage broker son-in-law and daughter.
    Jim Mulligan

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