Mortgage Fraud: Realty Company Pays Piper in Arizona

The good news is that there are people out there who are looking to help you. The bad news is that most of them are not out to help you but rather to help themselves. Check references carefully. Beware of big promises and too little information. Foreclosure defense in the mortgage meltdown and credit crisis environment brings out the worst vultures praying on people when they are at their most vulnerable.  Most of them are engaged in the unauthorized practice of law and are quite likely to go to jail. Emotionally you can fall apart later — for now, keep a cool, clear head and get some people around you who can help you with that. 

Chandler company must pay $1.2M in mortgage fraud case

A Chandler company and its owner have been ordered to pay $1.2 million in restitution and fines for violating the Arizona Consumer Fraud Act and state banking laws, the Arizona Attorney General’s office announced Thursday.

The ruling was made by Maricopa County Superior Court Judge Edward Burke against Virtual Realty Funding Company and its owner, Kenneth D. Perkins.

The state Attorney General‘s office filed a consumer protection lawsuit in 2005 after receiving many consumer complaints.

The company advertised it could help homeowners who were behind in their mortgage payments avoid losing their homes. In fact, the transactions offered by the company were structured so that homeowners would transfer title to the company or sell the home to a business associate of the company.

“This case represents the worst in our community,” Attorney General Terry Goddard said in a statement. “This company took advantage of homeowners desperate to save their homes from foreclosure and deceived them into turning over their homes.”

The court ordered Perkins to pay $620,000 in civil penalties and $611,950 in restitution.

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1275 W. WASHINGTON STREET PHONE: (602) 542-8019 

PHOENIX, ARIZONA 85007-2926 CELL PHONE:  (602) 725-2200  






Court Orders Realty Firm to Pay $1.2 Million for Violating Fraud, Banking Laws 


(Phoenix, Ariz. – May 29, 2008)  Attorney General Terry Goddard and Department of 

Financial Institutions Superintendent Felecia Rotellini today announced that Maricopa 

County Superior Court Judge Edward Burke has ruled that Virtual Realty Funding 

Company (VRF) and its owner Kenneth D. Perkins violated the Arizona Consumer 

Fraud Act and state banking laws and ordered them to pay $1.2 million in restitution and 

civil penalties. 


In 2005, the Attorney General’s Office filed a consumer protection lawsuit against VRF 

after receiving multiple consumer complaints. The company advertised that it could help 

homeowners who were behind in their mortgage payments avoid losing their homes. In 

fact, the transactions offered by VRF were structured so that homeowners would 

transfer title to VRF or sell the home to a business associate of the company.  


“This case represents the worst in our community,” Goddard said. “This company took 

advantage of homeowners desperate to save their homes from foreclosure and 

deceived them into turning over their homes.” 


“The Department of Financial Institutions applauds this court’s order,” Rotellini said.  

“The message is clear: Obey the law or you will be held responsible.” 


According to court documents, although neither VRF nor Perkins were licensed by the 

Department of Financial Institutions as mortgage brokers or bankers, VRF loaned 

money to more than 60 homeowners facing foreclosure or in need of money. VRF 

designed its loans, which it called reverse sales, to evade laws protecting mortgage 

borrowers by structuring them as an outright sale of the property by the borrower, who 

then rented back the home with an option to repurchase it.   


The reverse sale agreements required homeowners to rent back their homes from VRF 

for a monthly amount equal to the monthly mortgage payment plus an additional charge.  

In the case of one homeowner, the monthly mortgage payment was $613 and the 

additional charge was $157, making a monthly rental payment of $770. In return for 

Office of Attorney General Terry Goddard 

Office of the Attorney General 

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“helping” the homeowners keep their homes, VRF agreed to transfer title back to the 

homeowner through a warranty deed if the homeowner met specific conditions.  

Conditions included the payment of all rent on time (and prior to a specified date, 

payment to VRF for bringing the mortgage current), unspecified escrow fees and a 

“funding fee,” which was at times as high as $9,000. If homeowners were late on a 

rental payment or unable to repay the loan and funding fee within two years, they could 

lose their homes and any equity in them.  


In an order issued by Judge Burke, Perkins and VRF are forbidden from:   


 Advertising or making any mortgage loan, regardless of how characterized, unless 

licensed as a mortgage broker or mortgage banker by the Arizona Department of 

Financial Institutions. 


 Participating in reverse sale or similar sale-leaseback transactions with a repurchase 

option involving residential real estate.  


 Making any false, misleading or deceptive statements in connection with the sale or 

advertisement of any product or service that is connected to a transaction involving 

real estate, mortgages or loans. 


The court ordered Perkins to pay $620,000 in civil penalties for violating the Arizona 

Consumer Fraud Act and Arizona banking laws and $611,950 in restitution.  James A. 

Busche, the Tucson agent for VFR, was ordered to pay $10,000 in civil penalties. 


This case followed investigations conducted by the Department of Financial Institutions, 

the Department of Real Estate and the Attorney General’s Office.  A copy of the order is 

attached.  Assistant Attorney General Bob Zumoff handled this case.

One Response

  1. Truth Doesn’t Matter There Is No Justice Nobody Cares
    case# S-8015-CV-20071977
    National Bank of Arizona,Richard Ellis,Law Office Bruno Brooks and Goldberg,RF Properties,Cummins Investments has STOLEN our home and the homes of many families just like us.

    Banks,Law Firms and Investment Groups in the state of Arizona are given the right to be thier own Judge and Jury in all Non-Judicial Foreclosures. Unfair banking,Breech of Contract and Mortgage Fraud has now became the new “Norm”. Local and State Goverment has turned a blind eye,allowing our homes to be auction off far below ” Fair Market Value “. Our homes are being stolen and Nobody cares.
    I have documented proof,receipts,payment history from National Bank of Arizona that not only shows we were not in default of our loan,proves Richard Ellis commited fraud. I have every letter and post marked envelope sent from bank and Jeffrey A.Goldberg. National Bank reported to Equfax 08/2007 a charge off in the amount $32,165.00 two months prior to the so-called auction and sale of our home to RF Properties / Cummins Investments paying $5.00 more than the balance of loan on our home.

    Every attorney we contacted in Mohave County would not take our case do to “Conflict of Interests” We finally found and hired Attorney Tim Bennet. After paying thousands of dollars,and losing every arguement filed and finding out Tim never filed a motion our first time to the Appellant Court,telling us our case had been thrown out,we didn’t have a legal leg to stand on.never being allowed to show proof of Unfair Banking,Fraud,Breech of Contract,Mortgage Fraud the list goes on.The loss of our home,given twenty minutes to grab as much as we could,we were removed by Mohave County Sheriff Deputies. I now wonder if Tim helped the other side

    For those of you that think I will go away,your wrong. I will never stop,until the truth has been heard. Proof has been seen. Justice has been won.
    Julie A. Rebai
    501 S.Higley Rd.
    Golden Valley,AZ.86413
    former home address
    (928) 377-6345

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