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92 California Man Convicted for Multi- Million Dollar Mortgage Reduction Scam A California man was convicted on several counts of fraud relating to a mortgage scam after a one-day bench trial in the court of U.S. District Judge Troy Nunley. Alan David Tikal, 46, of Contra Costa County, California, was convicted on Sep- tember 15 of 11 counts of mail fraud and one count of money laundering, according to an announcement by the special inspector general for the Troubled Asset Relief Pro- gram (SIGTARP) and members of both the federal and state Justice Departments. Evidence presented in the case indicated during a three-and-a-half-year period between January 2010 and August 2013, Tikal and his associates at a business called KATN defrauded homeowners out of millions of dollars by guar- anteeing them reductions of up to 75 percent, in some cases, on their outstanding mortgage debt, promising them that in exchange for fees, their current loan would be paid in full and a new loan would be issued at only 25 percent the amount of their original loan. According to evidence, Tikal targeted homeowners who were having trouble making mortgage payments, many of whom were non- English speakers, and misrepresented himself to these homeowners as a registered private banker who could use an enormous line of credit to pay off their mortgages. Tikal and his associates enlisted more than 1,000 homeown- ers in California and other states to participate in the fraudulent "loan reduction" program, collecting approximately $5.8 million in fees and payments from unsuspecting homeowners, many of whom lost their homes to foreclosure because they stopped making mortgage pay- ments, believing Tikal would bail them out. "Tikal exploited the financial crisis by setting out to hurt others and profit from that hurt, and he accomplished his mission through his crime," said Christy Romero, SIGTARP. "Homeowners struggling to keep their heads above water paid Tikal thinking they were getting their mortgages modi- fied, foregoing the chance to obtain a real mortgage modification through HAMP, the TARP housing program." Investigators could not find a single instance in which the money paid was put toward any kind of mortgage relief for homeowners. Instead, they found about $2.5 million went to Tikal and his family. Tikal was arrested and incarcerated on fraud charges relating to this mortgage reduction scam in September 2012, and he continued to run the scheme from his jail cell for another 11 months, according to Romero. "e financial crisis that hit our com- munities so hard made it very difficult for many of our citizens to make ends meet," said Benjamin B. Wagner, U.S. attorney for the Eastern District of California. "Alan Tikal cynically took advantage of their desperation for his own profit, stealing payments meant to preserve family homes. We are gratified by the court's guilty verdict." Co-defendants Tamara Tikal and Ray Kornfeld have pleaded guilty and are waiting to be sentenced. Alan Tikal is scheduled to be sentenced on December 11. He faces up to 30 years in prison and a $1 million fine. Colorado RANK: 51 90+ Day Foreclosure Unemployment Delinquency Rate Rate Rate AUGUST 2014 1.11% 0.54% 5.1 YEAR AGO 1.36% 0.76% 6.8 YEAR-OVER-YEAR CHANGE -18.0% -29.1% -1.7 Top County LAS ANIMAS COUNTY 90+ Day Foreclosure Delinquency Rate Rate AUGUST 2014 1.60% 2.64% YEAR AGO 3.66% 2.68% YEAR-OVER-YEAR CHANGE -56.3% -1.4% Top Core-Based Statistical Area MONTROSE, CO 90+ Day Foreclosure Delinquency Rate Rate AUGUST 2014 1.28% 1.36% YEAR AGO 1.60% 1.59% YEAR-OVER-YEAR CHANGE -20.1% -14.1% note: The 90+ day delinquecy rate is the percentage of outstanding mortgage loans that are seriously delinquent. The foreclosure rate is the percentage of outstanding mortgage loans currently in foreclosure. State rank is based on the August 2014 foreclosure rate. All fi gures are rounded to the nearest decimal. The unemployment rate refl ects preliminary August 2014 fi gures released by the Bureau of Labor Statistics. All other data courtesy of LPS Data & Analytics. Colorado Sees Unusual Foreclosure Surge in August Foreclosure activity took a significant up- ward turn in the historically foreclosure-slow state of Colorado in August, according to RealtyTrac's U.S. Foreclosure Market Report for August. During the month of August, 1,478 housing units in Colorado were in some state of foreclosure, representing a 23-percent hike from July and a 57-percent leap from August 2013. One in every 1,496 properties in Colorado were in some stage of foreclosure, which ranked the state 20th in the nation. Colorado's foreclosure rate was still below the national average of one in every 1,126 housing units, RealtyTrac reported. Scheduled foreclosure auctions, which are the start of the process in Colorado, fueled the large increase in the state. ere were 1,273 auctions scheduled in August, up 36 per- cent from July and 160 percent from August 2013, according to RealtyTrac. "e swell in foreclosure filings is likely fallout from pending litigation between the Colorado attorney general and two of the biggest foreclosure law firms in the state," said Daren Blomquist, VP at RealtyTrac. "e litigation has led to transfers of many fore- closure cases to new law firms, who in many cases are refiling the cases from scratch." Foreclosure starts experienced an unusu- ally high upturn in the Denver metro area, where a total of 749 in August was an increase of 54 percent from July and a whopping 307-percent jump from August 2013, Real- tyTrac reported. In Denver, RealtyTrac said one in every 1,304 housing units experienced some type of foreclosure activity in August, which is slightly below the national average but higher than Colorado's state average. "e surge in foreclosure activity is not the result of a faltering economy but instead problems in the foreclosure industry that have delayed some foreclosures," said Chad Och- sner, owner/broker at RE/MAX Alliance in the Denver metro area. "e good news for buyers is that this increase in foreclosure starts should provide more affordable inven- tory of homes for sale in the coming months." e one stage of foreclosure that saw a decline in activity was REOs (completed foreclosures), with 205 reported in Colorado for August, according to RealtyTrac. at number was a decline of 23 percent from July and 55 percent year-over-year. e Denver California reported the most notices of default of any state in September 2014 with 4,867, according to RealtyTrac. KNOW THIS

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