realtor | Black & LoBello

Following the purchase of a property, whether it is your home or an investment, an owner would like to believe that the property will increase in value over time. The past few years have shown quite the opposite trend and most Nevadan’s are aware of the decrease in the value of their home or investment property. This is far from surprising, considering it is nearly impossible to miss the foreclosure signs all across the valley. It’s just as hard to miss the newspaper, radio and TV news that report the sad state of our economy and fallen real estate prices. Still, many borrowers do not realize how much value their property has lost. How can a borrower know the reality when many are given false hope due to inaccurate home value websites and other unrealistic assessed values?

Nearly every day we meet with a borrower who believes his or her house is worth tens of thousands of dollars more than it truly is. It is not that the homeowner is uninformed, but rather, they are being improperly informed. For instance, a local realtor recently advised that her client had researched the value of their home on the web and the client believed their property should be listed for approximately $145,000. However, upon receiving comparables for the community the realtor noted that the home could not be listed for that price but rather should be listed closer to $135,000. That same home, one month later, still received no activity at $135,000 and is now listed at $129,000. This situation is not uncommon.

In order to avoid the inflated home value predicament, borrowers should contact a realtor and ask them to provide the borrower with “comps.” This information will afford a borrower the opportunity to review an appropriate approximation of the true value. In real estate, a true value can only be reflected by what the market can bear.

Carlos L. McDade, Esq.
Kelle L. Kuebler, Attorney*
*Licensed only in New York and Connecticut

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Dennis G. Sartain of Hilliard, Ohio; and Bonnie Helt, of Columbus, Ohio, pleaded guilty on January 21, 2010, to conspiring to commit mortgage fraud, money laundering and obstruction of justice. In a press release, the Justice Department and Internal Revenue Service (IRS) announced that Sartain, the accountant for co-defendant Thomas Parenteau, pleaded guilty to one count of conspiring to defraud the United States by impeding and impairing the IRS, one count of conspiring to commit money laundering, and one count of conspiring to obstruct justice. Helt, a real estate agent for co-defendant Parenteau, pleaded guilty to one count of conspiring to commit bank and wire fraud and one count of conspiring to obstruct justice.

According to the indictment and statements made at the plea hearing, Sartain conspired with Parenteau and others to prepare a $4.5 million fictitious loan application to refinance to improve a 30,000 square foot home. As a result of the fraudulent loan documents, McCarty obtained nearly $4.5 million from one bank and an additional $1.5 million from a second bank, and she transferred the money to Parenteau. From March 2004 through September 2006, Parenteau and Sartain dispersed in excess of $1 million of the loan proceeds back to McCarty by disguising the payments as payroll checks from Your Home Source (YHS) and JSS Investments, rental payments and consulting payments from YHS and other miscellaneous payments. On Jan. 31, 2007, Parenteau and his wife refinanced the 30,000 square foot property and received a $12 million loan, which was used in part to pay off McCarty’s existing obligations at the two banks.

Helt admitted that from 2005 through 2007, she, Parenteau, and others negotiated and participated in real estate deals in which they sold luxury homes for a falsely inflated purchase price from the builder in exchange for undisclosed or disguised kickback. In many of the transactions, the buyers misrepresented their income and assets in order to obtain financing of the inflated purchase price. The buyers and sellers in the transactions attempted to justify the inflated purchase prices by creating false work change orders and addendums which created the appearance that the inflated price represented additional substantial work to be completed on the homes. No such agreement was actually intended by any party. Further, those documents were not disclosed to the lenders. The object of each transaction was to use the loan proceeds in excess of the actual purchase price in order to fund hundreds of thousands of dollars in kickback payments to the buyers. The loans associated with several of the real estate purchases have gone into default.

The U.S. District Court Judge Michael H. Watson has not scheduled a sentencing date. Sartain faces a maximum sentence of 30 years in prison and a maximum fine of $1 million or twice the monetary loss or gain from the offense. Helt faces a maximum sentence of 35 years in prison and a maximum fine of $1.25 million or twice the monetary loss or gain from the offense.

Carlos L. McDade, Esq.

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