The Real News

RELAW, APC
April, 2016
Change in Re-Recording Requirements Implemented by County Recorders

In January of 2016, as a result of a new common practice and procedure promulgated by the County Recorder's Association of California, many County Recorders have implemented new requirements for the handling of documents that need to be re-recorded.  A re-recorded document is one that has already been submitted and recorded and needs to be recorded a second time.  Re-recording is done to correct an error on the originally recorded document.  Prior to this new common practice, a document could be submitted for re-recording without the need for re-execution by the parties.

Under the new guidelines, any documents submitted for re-recording will need to be re-executed by the appropriate parties.

  • Re-execution includes new signatures, acknowledgments and/or verifications, depending on the type of document being re-recorded
  • A completed coversheet will need to be included to provide adequate space for the new recording information.
  • The reason for re-recording must be noted on the coversheet or on the face of the document.
The only exception not requiring re-execution of documents to be re-recorded is for the sole purpose of correcting the order that the documents have been recorded.

Assembly Bill 1974 has been proposed for 2016 to codify these changes into law.

Case of the Month

United States v. Vera Kuzmenko
In this case the United States government brought an action against defendant Vera Kuzmenko, a real estate agent, and others, on account of a massive real estate fraud she orchestrated. The scheme involved the defendant obtaining real estate commissions by submitting grossly fraudulent loan applications to lenders on behalf of straw (fake) buyers.  According to the U.S. Attorney's Office who prosecuted the case, the loan applications contained "materially false" information about the straw buyers' income, employment, assets and intent to occupy the residences.  In one case defendant served as a straw buyer herself.
As part of the scheme the defendant and her cohorts also targeted distressed property owners, convincing them to agreed that upon sale only the mortgage would be paid off.  The actual sale price submitted to the loan companies (and hence the loan amounts approved by the lending institutions) were inflated by several mechanisms. For example, defendant manufactured higher property values by submitting to the loan company false invoices for purported work that the seller had performed on the property prior to close of escrow, and which were to be paid to shell companies from any proceeds received on the sale. As a result, the value of the house for appraisal purposes was artificially enhanced by the work performed. In reality, no pre-sale work was ever performed, and the entities listed on the invoices were shell companies run by persons who would profit together with defendant for the non-existent work.
Ultimately, of course, the lenders were forced to foreclose on the properties at great loss to the lenders. The government alleged that the scheme cost financial institutions over $16 million.
On December 4, 2015, after a 16-day trial, a federal jury today found defendant guilty of multiple counts of mail and wire fraud and money laundering.  Defendant was also found guilty of witness tampering and money laundering associated with the scheme.  With respect to the witness tampering count, the evidence showed that after defendant learned the FBI was investigating her, she told various witnesses to lie to the FBI and blame a dead woman for the fraud.  On March 15, 2016, United States District Judge John A. Mendez sentenced defendant to 14 years in prison.

Failure of Landlord to Read Lease Leads to Unusual Lease Term
A new internet story has surfaced claiming that a tenant, being sent a copy of the draft lease by the landlord in Word format instead of PDF or some other locked format, decided to make an alternation.  The purported alteration is clause 16 below:


Whether such an insertion of such a clause, without the landlord's knowledge or consent, is legally enforceable is open to debate.  In his social media post about it the tenant says he intends to hold the landlord to the lease term.  For the landlord's part, the lack of diligence in both the sending and reviewing of this lease would be hard to defend.


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April 20, 2016 - Ventura County Real Estate Fraud Advocacy Team

For inquiries or questions about any of these events, please email info@relawapc.com.

 

 

Jennifer Felten, Esq., Principal & Editor
(805) 265-1031
jennifer@relawapc.com 
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