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Loan Modification Fraud

Husband and Wife Charged with Short Sale Fraud – Violation of the Arm’s Length Affidavit

Cynthia Hosbrook, 41, currently a licensed real estate agent, and Robert Hosbrook, 51, formerly a licensed real estate agent, have been charged in U.S. District Court with conspiracy and fraud for making false statements to Wells Fargo Bank in order to get it to approve a short sale on their home.

The defendants are charged in a criminal indictment dated June 12, 2013, with one count of conspiracy to commit bank fraud and one count of bank fraud.

According to the indictment, the Hosbrooks solicited a friend to act as a buyer for their home which was listed as a short sale. In a short sale contract dated March 2, 2010, and in other paperwork submitted to Wells Fargo Bank, the Hosbrooks falsely represented that the sale of their home would be an “arms-length” transaction, that it was between two unrelated parties, that no party to the contract was a family member or business associate, that there were no agreements that the seller would remain in the property as a renter, and that the short sale did not constitute straw buying, when they allegedly knew that they were selling the residence to a known party/straw buyer.

The Hosbrooks also allegedly caused the straw buyer to falsely sign a title company form on July 9, 2010, stating that the buyer would be residing at the property, which the Hosbrooks knew was a false and fraudulent representation.

Cynthia Hosbrook and Robert Hosbrook have been summoned to appear before U.S. Magistrate Judge Carl W. Hoffman. If convicted, they face up to 30 years in prison and fines of up to $1 million on each count.

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LAWYERS REALTY GROUP is an attorney owned and operated real estate brokerage that was formed to help level the playing field between struggling homeowners and the banks who are threatening them with foreclosure, eviction, deficiency judgments, and collection actions.

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Derik N. Lewis, Esq., is the founder and president of Lawyers Realty Group. Derik is a California real estate attorney, a licensed Realtor® and a member of the National Association of Consumer Bankruptcy Attorneys. He graduated magna cum laude from Boston University School of Law and has nearly 30 years of real estate experience. For more than two decades as an attorney in private practice, Derik has represented California homeowners with difficult real estate matters. Derik previously served as legal counsel for some of the world’s largest lenders including Bank of America, Wells Fargo and JPMorgan Chase (he knows how they operate and how to work within their systems to help you achieve the best possible outcome). He is also a visiting lecturer at the University of Southern California School of Law speaking on real estate law, brokerage and litigation.

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