Vol. 2, No. 13
.jpg)
May 1, 2006
 |
 |
 |
 |
 |
 |
 |
 |
| . | |||||||
 |
CRIMINAL DEFENSE |
COPYWRITING
|
|
.
Another Mortgage Lending Company In Financial Difficulty
No Criminal Charges Filed Yet, May Be On The Menu Later
The mortgage lending company USA Capital has filed for bankruptcy but the state Mortgage Lending Division didn't see the economic problems coming. According to the state division all the audits conducted by them indicated the company was economically sound. After further review, as they say, it was discovered the company had been paying their investors out of company funds rather than from interest payments by borrowers. That is against the law but no charges have been filed as we go to press.
Mortgage division director Scott Bice said it has come to light that as many as 62 outstanding loans were delinquent by as much as two months and that 47 of those loans had been made to companies and properties owned in part by current or former owners of USA Capital. Bice also said the company had at least 107 loans they were supposed to be collecting payments and interest on.
Whether or not the illegal transactions will have an effect on the bankruptcy proceedings also is an unknown at this time. The company filed under Chapter 11, which is designed to allow them to reorganize. There are as many as 3,600 investors in USA Capital.
At least one investigator alleges the company was co-mingling its assets to hide the fact that borrowers were not making their interest payments and the state mortgage division did not catch the alleged fraud. USA Capital is one of many lenders of money in Nevada. The short-term lenders accept investment funds and make them available to developers, builders, and others that desire short-term loans. Often the interest rates are double digit high.
There has been no word from Mortgage division Commissioner Bice on whether a criminal investigation either by his division or by the Attorney General is underway at this time. Many of the investors are upset that the state division was giving good marks to USA Capital right up to the minute of bankruptcy filing by the company. The company has indicated they want to reorganize and continue in business.
•••