Dec162013

San Clemente people’s champion sentenced to 4 years for jousting with financial institutions

Blair Christopher Hanloh will go to prison for four years. He stands convicted in October of filing false or forged documents that allowed him to fraudulently assume ownership of several houses and rent them out to unsuspecting tenants. Similarly, thousands of borrowers during the housing bubble, and many Rob-signing lenders filed false or forged documents. Both dishonest borrowers and lenders sins are forgiven, and rather than endure prison sentences, the dastardly doers collect bailout checks and spar over properties obtained through subterfuge. Mr. Hanloh should go to jail, but what should become of the miscreants from the housing bubble?

Mr. Hanloh isn’t the first person to figure out this scam. When the housing bust was fresh, many people walked away from their properties; Many unscrupulous realtors (is that modifier redundant?) took advantage of the situation, rented empty properties, and pocketed the cash. Most of these bad agents did not forge documents to claim ownership, they merely ripped off the tenants and disappeared when their ruse was discovered.

In mid 2011, I covered the story of Robin and Chris Duncan, the couple sentenced to three years for squatting without a mortgage. They occupied real estate they didn’t own and weren’t paying for just like millions of delinquent mortgage squatters across the country. Rather than being rewarded, the Duncans went to jail. Is there really much difference between them and the multitudes of delinquent borrowers? They failed to sign bogus mortgage documents before moving in, so they got three years in jail rather than three years free housing in a luxury mansion. Crime pays if your name is on title.

A man tried to get on title in Montana, but tripped up on a procedural mistake. Back in 2010, I covered the story of Brent Arthur Wilson, a homeless drifter who claimed Yahwah told him to break in to abandoned homes, change the locks, and file bogus property transfers. Mr. Wilson forged God’s signature to property transfers. Although local officials weren’t privy to Mr. Wilson’s private conversations with the Almighty, and they couldn’t dispute His authorization, since God was absent from the chain of title, local officials declared the transfers invalid, which they were.

Prosecutors accused Mr. Wilson of stealing property by filing strange paperwork with the County. Stealing a house by filing strange paperwork? Isn’t that what every liar loan applicant did during the housing bubble? People all over California filled out strange paperwork full of half-truths and outright lies about their income. Lenders authorized loans to transients and anyone else with a pulse. I’m sure many of those buyers thought it was a gift from God. Why should this guy be jailed for it if we are letting slide all those other people here in California who did the same thing?

Keith and Janet Ritter stole a house legally; Better than other delinquent mortgage squatters, they demonstrated the proper method for misappropriating real estate. They are grifters for God who fraudulently occupied a $1.3M home for five years. They went through the process of filling out mortgage paperwork to get their names legally on title, then they failed to make any payments, squatted for over five years, and fought any attempts to boot them out.

Mr. Hanloh, the focus of today’s featured article, attempted to emulate some of his dishonest neighbors by filling out shady documents to gain a claim to title. His brazen forgeries allowed him to rent his newly acquired properties. Many properties like these exist in a strange financial limbo called shadow inventory. Nobody makes payments or collects rent, so these become wasting assets. Mr. Hanloh contended he was an entrepreneur who acquired the properties through adverse possession. The judge didn’t buy it.

Bogus San Clemente Landlord Gets 4 Years

Blair Christopher Hanloh would file quitclaim deeds, then find tenants for homes he didn’t own.

Posted by Penny Arévalo (Editor) , December 13, 2013 at 02:38 PM

A 50-year-old man who filed quitclaim deeds on five “distressed” homes in Anaheim, Dana Point and San Clemente he did not own to make a profit by renting them was sentenced today to four years in Orange County Jail.

Blair Christopher Hanloh was convicted in October of filing false or forged documents. …

Mr. Hanloh didn’t make the same mistake Mr. Wilson did. He knew the owner shown in the chain of title must convey him the property in order to gain claim to title. Unfortunately, he forged the owner’s names without their knowledge or consent. That’s a crime.

Froeberg denied probation for Hanloh in part because he has shown no remorse and, “He believes he’s the people’s champion jousting with financial institutions.”The crimes were “retaliatory in nature,” because Hanloh lost a home of his own to foreclosure, Froeberg said.

Mr. Hanlow is not the first self-styled hero who tried to retaliate against the banks for foreclosing on his property.

Attorney Michael T. Pines lost his home to foreclosure, and he launched a one-man crusade against the system. It rightfully cost him is law license. Micheal Pines didn’t go down alone; He encouraged former owners to break into their homes and squat their until the police removed them.

Hanloh acknowledged that he tried the same stunt on 70 other occasions, Froeberg noted.

Hanloh’s attorney argued that her client sought “abandoned” homes and took control of the properties through a legal maneuver called adverse possession. …

Adverse possession requires no forged documents. To gain a property by adverse possession, a person must openly and notoriously occupy a property for 10 years without the legal owner taking any action to evict the adverse possessor. That isn’t what happened here. This guy forged documents to gain title illegally. His possession was certainly adverse, but when the people on title realized what Mr. Hanloh did, they took measures to assert their claim to title.

Hanloh filed quitclaim deeds against five homes facing foreclosure or already foreclosed upon and changed the locks, according to Pierce.

“It’s actually a scam, a con,” Pierce told jurors in his opening statement of the trial. “It was a fraud perpetrated against the victims and county officials. … It was a con so he could gather rent money from people he put in these homes.”

Victims? Who? The borrower who hasn’t made a payment in several years? The lender who refuses to foreclose on this home and properly recycle it? The tenants paid rent and lived in the property. They aren’t victims. The only victims I see are future homebuyers forced to pay bloated house prices because our leaders allowed and encouraged lenders and borrowers to avoid the cleansing mechanism of foreclosure.

The people discussed in today’s post are criminals. Many of them ended up in jail for their atrocious activities. It’s easy for us to condemn them because they obviously crossed the line. However, if you peek just across that line, you see people like Keith and Janet Ritter who legally squatted in their home for five years. They never made a payment — ever. The behavior of many borrowers and lenders wasn’t much more honorable than the criminals profiled today, yet society’s treatment of them is very different. We reward them with victim status, unlimited squatting, and bailout money.

Where’s the justice in that?

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$180,000 plus several years squatting

The former owners of today’s featured REO put nothing down, and they extracted $180,000+ in just a few years of what’s loosely called “ownership.” They never had any equity because the moment any appeared, they went straight to the bank to extract it. When the housing ATM was cut off, they squatted. It’s not clear exactly how long they lived payment-free, but their $417,000 loan ballooned to $539,864 by the time the bank finally foreclosed. We can conclude they obtained another $120,000 in squatter’s benefits.

Very honorable borrowers, wouldn’t you say?

1441 West PINE St Santa Ana, CA 92703

$424,900 …….. Asking Price
$233,000 ………. Purchase Price
4/11/2001 ………. Purchase Date

$191,900 ………. Gross Gain (Loss)
($33,992) ………… Commissions and Costs at 8%
============================================
$157,908 ………. Net Gain (Loss)
============================================
82.4% ………. Gross Percent Change
67.8% ………. Net Percent Change
4.7% ………… Annual Appreciation

Cost of Home Ownership
——————————————————————————
$424,900 …….. Asking Price
$14,872 ………… 3.5% Down FHA Financing
4.48% …………. Mortgage Interest Rate
30 ……………… Number of Years
$410,029 …….. Mortgage
$115,770 ………. Income Requirement

$2,073 ………… Monthly Mortgage Payment
$368 ………… Property Tax at 1.04%
$0 ………… Mello Roos & Special Taxes
$89 ………… Homeowners Insurance at 0.25%
$461 ………… Private Mortgage Insurance
$0 ………… Homeowners Association Fees
============================================
$2,991 ………. Monthly Cash Outlays

($496) ………. Tax Savings
($542) ………. Principal Amortization
$25 ………….. Opportunity Cost of Down Payment
$126 ………….. Maintenance and Replacement Reserves
============================================
$2,104 ………. Monthly Cost of Ownership

Cash Acquisition Demands
——————————————————————————
$5,749 ………… Furnishing and Move-In Costs at 1% + $1,500
$5,749 ………… Closing Costs at 1% + $1,500
$4,100 ………… Interest Points at 1%
$14,872 ………… Down Payment
============================================
$30,470 ………. Total Cash Costs
$32,200 ………. Emergency Cash Reserves
============================================
$62,670 ………. Total Savings Needed
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