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VISIT US ONLINE @ DSNEWS.COM Virginia rank: 46 90+ Day Foreclosure Unemployment Delinquency Rate RateRate may 2012 2.38%1.75% 5.6% year ago 2.57%1.89% 6.2% percent point change -7.6%-7.2%-9.7% Top County CHARLOTTE COUNTY 90+ Day Delinquency Rate Foreclosure Rate may 2012 2.62%4.04% year ago 2.82%1.69% percent point change -7.2%139.0% Top Core-Based Statistical Area WINCHESTER, VA-WV 90+ Day Foreclosure Delinquency Rate Rate may 2012 2.09%2.28% year ago 2.65%2.33% percent point change -21.1%-2.2% note: The 90+ Day delinquecy rate is the percentage of outstanding mortgage loans that are 90plus days delinquent. The foreclosure rate is the percentage of outstanding mortgage loans currently in foreclosure. State rank is based on the May 2012 foreclosure rate. All figures are rounded to the nearest decimal. The unemployment rate reflects preliminary May 2012 figures released by the Bureau of Labor Statistics. All other data courtesy of Lender Processing Services. IN THE NEWS Operator of Mortgage Modification Scam Gets 90 Months in Prison Howard R. Shmuckler, 68, of Virginia, was sentenced in late June to 90 months in prison, followed by three years of supervised release, for running a fraudulent mortgagerescue business that received substantial fees but only modified clients' mortgages in a few cases, according to a release from the Office of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP). "Mr. Shmuckler is a cunning criminal who took advantage of distressed homeowners in desperate need of help," said U.S. Attorney Neil H. MacBride. "Today's sentence should send a clear warning to other fraudsters of the heavy price they will pay for preying on vulnerable people looking for help to save their homes." On April 10, Shmuckler pled guilty to six counts of wire fraud. According to court records, Shmuckler, a convicted felon and disbarred attorney, owned and operated a Vienna, Virginia, mortgage-rescue business known as The Shmuckler Group (TSG). From June 2008 through March 2009, TSG took in nearly $2.8 million from approximately 865 clients whose mortgages were in distress and who came to TSG looking for relief. In reality, TSG was able to obtain relief for approximately 4.5 percent of its clients. "At a time when homeowners across the nation are struggling to keep their homes, Shmuckler actively targeted the most vulnerable of them with his mortgage modification scam," Christy Romero, special inspector general of SIGTARP, said. "Shmuckler exploited homeowners desperately seeking support through federal housing programs such as HAMP by essentially guaranteeing the homeowners mortgage modifications in exchange for an upfront fee." Court records indicate that Shmuckler instructed clients to terminate contact with their mortgage companies and to stop making payments to their lenders. TSG never facilitated a modification of the mortgages referenced in the statement of facts filed with his plea agreement. In addition, the court ordered this sentence be served consecutive to a 75-month federal sentence Shmuckler received on April 5, in Washington, D.C., involving a counterfeit check scheme. This case was investigated by SIGTARP, the FBI's Washington field office, and the FDIC-OIG. The special inspector general investigates fraud, waste, and abuse in connection with TARP. FGMC to Offer Home Rehab Loans with HAP First Guaranty Mortgage Corp. (FGMC) is making available 203k home rehabilitation loans as part of the Homeowner's Assurance Program (HAP). HAP was created by the National Association of Real Estate Brokers (NAREB) to address the mortgage crisis in urban communities across the United States. Under the program, participants can collaborate to acquire, manage, market, and dispose of non-performing loans and REO properties, many of which are in 25 urban metropolitan statistical areas and first ring communities. HAP will provide asset oversight, governance, and political and social capital management. FGMC will offer "common sense" underwriting support to NAREB members. FGMC was selected for the program because of the company's experience and expertise in the renovation lending field. "First Guaranty brings a common sense underwriting methodology to the table," said James Cromartie, FGMC AVP of national business development. "The 203k loan, for example, is an excellent product for home buyers seeking to turn a distressed asset into the American Dream. We also use quite a bit of manual underwriting, as we believe there is an incredibly underserved class of consumers who are, in reality, excellent prospects, even though they might not qualify under some desktop underwriting models." FGMC is a McLean, Virginia-based fullservice wholesale and retail national lender that offers mortgage solutions to clients of varying income and credit types. Investigative Firm Warns of New Foreclosure Rescue Scam Mortgage Fraud Examiners (MFE) issued an alert last month warning about a new foreclosure rescue scheme in which scammers dupe distressed homeowners by promising to reveal the actual owner of a promissory note through a "securitization audit." MFE warned that the perpetrators of these scams are charging fees for information that can be found for free. "The questionable outfits are targeting desperate families, giving them the impression they can make their mortgages disappear if they just pay for a securitization audit," said MFE founder Storm Bradford. "The idea is that the securitization audit will reveal the true owner of the mortgage, and that information can show the court that the foreclosing lender has no claim to the property," Bradford explained. "But here's the thing: Anyone can find out who owns their note with just a little digging. There's absolutely no need to pay a company for a securitization audit, but the peddlers of this scheme count on the fact that the average homeowner doesn't know that." Not only are they a poor use of money, but securitization audits are also typically inadmissible in a court of law. Attorney Gregory Bryl, who practices in Florida and Virginia, says most securitization audits are simply the opinions of their writers, who usually have no way to know what happened with a mortgage 107

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