Foreclosing on the American Dream

1. Foreclosing on the American Dream Stories from the Front Lines:Victims and Advocates Speak Out www.us-legalsolutions.com

2. U.S. Legal Solutions, LLC • Kenneth K. Schmitt, Attorney at Law • Gustavo Arango, Abogado • Sara L. Bollinger & Ashley Rothe, Assistants • 105 Concord Plaza, Suite 209St. Louis, Missouri 63128314-729-1049 (English)314-629-2538 (Spanish)314-722-2000 (Fax) • http://www.us-legalsolutions.com www.us-legalsolutions.com

3. del Rio v. Cots, Adewunmi et al. Cause No. 062-01033 • Alfonso del Rio, et al vs. AJ Adewunmi et al • Current defendants • Currently a class action lawsuit • Will be amended to bring individual claims • St. Louis City Circuit Court • Honorable Robert H. Dierker, Jr. www.us-legalsolutions.com

4. Who’s Who (Defendants) • AJ Adewunmi • REMAP 5, LLC (ReMax Associates Plus) • Cots Realty Investments, Inc. • Denisse Olmos • Christian Joel Juan • Jeffrey Epple www.us-legalsolutions.com

5. Other Interested Parties • US Attorney’s Office • Missouri Association of Realtors • PMI Insurers • Equal Housing Opportunity Council (EHOC) • Housing and Urban Development (HUD) www.us-legalsolutions.com

6. Pattern Peligroso (As Alleged in Petition) • Defendants purchased and titled properties in the name of Cots • Late or no disclosure of relationship between Cots and Adewunmi • Showing only Cots properties • Specific victims – targeted immigrant communities • Isolation of the buyer from normal protections • Fraudulent loan application on behalf of Buyer • Usurped role of closing agent • Misrepresented condition of properties and/or promises made as to house repairs www.us-legalsolutions.com

7. Unlawful Merchandising Practices §407.020.1-3 R.S.Mo:The act, use or employment by any person of any deception, fraud, false pretense, false promise, misrepresentation, unfair practice or the concealment, suppression, or omission of any material fact in connection with the saleor advertisement of any merchandise in trade or commerce or the solicitation of any funds for any charitable purpose, as defined in section 407.453, in or from the state of Missouri, is declared to be an unlawful practice…Any person who willfully and knowingly engages in any act, use, employment or practice declared to be unlawful by this section with the intent to defraud shall be guilty of a class D felony. www.us-legalsolutions.com

8. 407.025. Civil action to recover damages — class actions authorized, when —procedure. — • 1. Any person who purchases or leases merchandise primarily for personal, family or household purposes and thereby suffers an ascertainable loss of money or property, real or personal, as a result of the use or employment by another person of a method, act or practice declared unlawful by section 407.020, may bring a private civil action in either the circuit court of the county in which the seller or lessor resides or in which the transaction complained of took place, to recover actual damages. The court may, in its discretion, award punitive damages and may award to the prevailing party attorney's fees, based on the amount of time reasonably expended, and may provide such equitable relief as it deems necessary or proper. • 2. Persons entitled to bring an action pursuant to subsection 1 of this section may, if the unlawful method, act or practice has caused similar injury to numerous other persons, institute an action as representative or representatives of a class against one or more defendants as representatives of a class, www.us-legalsolutions.com

9. Current Status • Motion to Dismiss Olmos – Denied • Written Discovery – 75% Complete • Requests to Produce • Interrogatories • Depositions – started & ongoing www.us-legalsolutions.com

10. A Personal Story (One Example) Elizabeth Amezcua • Cots Purchase: $ 49,900 • Resale to Amezcua: 3 months • Amezcua’s Purchase Price: $103,000 So, what are the $53,000+ of improvements? • Amezcua’s Budget: $70,000 • Amezcua learned of actual purchase price months after the closing • Who actually closed the transaction? Juan • Who signed the HUD-1? TIA www.us-legalsolutions.com

11. Application Employer: Wausau Janitorial GC Services Salary: $36,108.84 Truth Employer: GC Services Salary: $20,820.00 Amezcua’s Loan Application www.us-legalsolutions.com

12. Other Examples of False Information on Loan Applications • Assets • False Employers • False W-2 • False check stubs • False social security number • Use of child’s social security number www.us-legalsolutions.com

13. Lessons Learned • Loan Application/Process • Know your lender • Know your application • Closing Process/Closing Statement (HUD-1) • Know your numbers • Know your closer • Purchasing a Work-in-Progress/ Work-in-Fantasy / Work Promised (Don’t believe everything you’re promised – Remember SOL) • Just don’t! www.us-legalsolutions.com

14. Residential Loan Application • Generally, loan application is done orally and not signed until closing • Should not be signed at closing without the buyer reviewing and understanding all parts of the document and information provided • Includes tax information and important employment/salary or wage figures and asset information that was used to determine the amount of the loan • All information must be true and accurate • Buyer should be dealing directly with a lender or loan broker – never through a real estate agent • Special note about loan brokers: Systemic problems • Dramatic increase in rate of FPD’s with sub-prime loans www.us-legalsolutions.com

15. Carefully check name, address and SSN of borrower Employment / Wage Data www.us-legalsolutions.com

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17. HUD-1 Settlement Statement • To be prepared and discussed with buyer thoroughly PRIOR TO signing on the day of closing • Watch out for: • Unexplained commissions • Unanticipated or unexplained costs assessed to the buyer • Unexplained credits/debits to buyer or seller • Who is reviewing the HUD-1 with you? www.us-legalsolutions.com

18. BUYER SELLER www.us-legalsolutions.com

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20. Misrepresentation of Conditions of House Sold • Cots purchase of property • Cots “investments” to “improve” the quality of the property • Cots sale of the property at a higher price than they purchased it for…were the improvements really made? • Misrepresentation to Plaintiff/Buyers • Misrepresentation to Cots’ lenders www.us-legalsolutions.com

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22. $933.55 $1278.75 964.17 1405.00 972.86 www.us-legalsolutions.com

23. 7400 Vermont? www.us-legalsolutions.com

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28. Calls to: United Kingdom Nigeria www.us-legalsolutions.com

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30. Sale of 7400 Vermont Closed on 12/30/2004 www.us-legalsolutions.com

31. Date of inspection: 12/8/2004 Date of closing: 12/30/2004 www.us-legalsolutions.com

32. In Summary • Real Estate transaction process in the United States has certain built in consumer protections • Real Estate Agent with no interest but the buyer’s • Lender who knows all the true facts • Independent Title Agent/Closing Agent • Education and hands on involvement of Buyer • All these protections failed in this case • Protections failed because this scheme intentionally removed protections from process www.us-legalsolutions.com

33. Questions or Comments? Thank you. www.us-legalsolutions.com