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Evidence Excluded from Mortgage Fraud Scheme Case

newswest9.com | July 28, 2014

By Kim Powell

MIDLAND - Roughly 100 pages of written arguments were sent between the US District Court and the four defendants who are accused of a massive mortgage fraud scheme that involved about 800 properties and $45 million in bank loans.

Investigators say that between March 2003 and August 2011 that the four came up with a "same-day property" flip scheme, where Stephen Hilliard and Michael Cowan would buy property used for one of their investment companies, and then sell the same property at a higher price to another investment company.

The two would receive mortgage loans by submitting fake and misleading documents to the bank. As for Cynthia Hirsch and Berta McFaddin, they are accused of getting the papers needed to get the properties and bank loans.

Now, the court has been trying to get several categories of evidence excluded from the case as they could mislead the jury.

According to court documents, the defendants have argued that, "evidence that they have repaid many of the fraudulently obtained loans and thus, as a consequence, the banks have been or are being made whole and will not suffer any loss."

The court fears that could lead to the jury believing that there is no harm, no foul. Even though the four paid back the banks who fell victim to this scheme, a crime was still committed.

Cowan argues that, "the very fact that the banks repaid and that the defendants had demonstrated a history of repayment, might provide a background context that would make any later misstatement (assuming one occurred) immaterial."

Evidence that suggests the banks are partially responsible for not catching the fraud as it happened will also be prohibited from the case, as blaming the victim is not a defense in a mortgage fraud case.

However, the court will allow evidence that the appraisals for the homes were legitimate.


Back to July 2014 Archive

CFLA was founded by the Nation's Leading Foreclosure Defense Attorneys back in 2007 to serve the Foreclosure Defense Industry and fight pervasive Bank Fraud. Since opening our virtual doors, CFLA has rapidly expanded to become the premier online legal destination for small businesses and consumers. But as the company continues to grow, we're careful to hold true to our original vision. For us, putting the law within reach of millions of people is more than just a novel idea—it's the founding principle, just ask Andrew P. Lehman, J.D.. With convenient locations in Houston and Los Angeles, you can contact Our National Account Specialist and General Manager / Member Damion W. Emholtz at 888-758-2352 for a free Mortgage Fraud Analysis or to obtain samples of work product, including cutting edge Bloomberg Securitization Audits, Litigation Support, Quiet Title Packages, and for more information about our Nationally Accredited and U.S. Department of Education Approved "Mortgage Securitization Analyst Training Certification" Classes (3 days) 24 hours for approved CLE & MCLE Credit (Now Available Online).

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