Forget the fact that folks were being ripped off and breaking a federal law. From the Journal-Gazette:
An administrative panel is recommending a Fort Wayne Realtor’s license be suspended indefinitely and that he forever lose the right to run a real estate office.
The Indiana Real Estate Commission is scheduled to vote Wednesday on a 38-count complaint against Michael G. Radabaugh that relates to 12 transactions completed in 1999. Eleven other Realtors who participated in the transactions are also facing sanctions, and an appraiser who was accused of inflating values for eight of the houses involved has already had his license suspended for a year.
Radabaugh, of Radabaugh Auctioneers & Real Estate, 2825 Maplecrest Road, had his auctioneer’s license permanently revoked last month after failing to pay the sellers of property he auctioned.
As the economy and the financial markets are roiled by banks taking huge losses because of bad mortgages, many say the anything-goes mortgages and lax oversight over home loans written in the late 1990s and early 2000s are a major contributor. Critics say many of the nation’s mortgages now in default should have never been made in the first place.
An administrative panel recommended Michael Radabaugh’s real estate license be placed on indefinite suspension with no right to ask for reinstatement for at least a year and only after he has completed 10 hours of continuing education on mortgage fraud or other mortgage-related classes.
If his license is reinstated, the panel recommends it be put on indefinite probation, with the requirement that he may not be a principal broker, managing broker, corporate broker or limited liability broker.
Radabaugh declined to talk about the case Friday except to call it “a buncha crap.” He referred additional questions to his attorney, Don Swanson.
Swanson said he represented Radabaugh several years ago when the transactions were investigated by a federal grand jury. Radabaugh was never indicted in the case.
“But that doesn’t stop the administrative side from doing what they want,” Swanson said.
He said Radabaugh did exactly what others were doing at the time, but now that millions of loans across the country are going bad, they are being called illegal.
“Obviously, what he was doing was not right because the transactions were misrepresented to the lender,” Swanson said.
“But he just followed the lead of several other people and got called on it.”
The Indiana Attorney General’s office alleges in its complaint against Radabaugh that in 12 home sales in 1999, Radabaugh manipulated the price to help the buyer obtain financing.
Radabaugh, representing the buyer, would write an offer higher than the asking price. That made it appear the bank was funding a conventional loan for 80 percent of the value of the house, when the loan actually covered more than 100 percent of the price, according to the complaint.
Misrepresenting the funding terms to lenders is a violation of federal law.Because the buyer did not have a down payment for the rest of the inflated price, Radabaugh would include terms in the offer that the seller would loan the buyer the rest of the money for the house, a loan that was fictitious and only used to mislead the bank, the complaint alleges.
The state has also filed complaints against 11 agents who represented the sellers in the 12 transactions because they agreed to the allegedly fraudulent terms. In one transaction, Radabaugh represented both the buyer and the seller.
Complaints were filed by the attorney general’s office in September against Mary A. Sherer, Sherry K. Quinn, Judy Pierson, Lisa E. Coy, Douglas Laughlin, John Clegg, Arthur Carmichael, Curtis Rainey, David Sankovich, Timothy Ware and Wayne E. Beer. None of them has ever had another disciplinary action taken against him or her, according to state records.
Several of the 11 were represented in their cases by attorney Joseph Christoff, who said he could not speak to specifics but noted that any case that drags out nine years becomes frustrating. He said his clients had “an honest-to-goodness belief” that they were doing nothing wrong in the deals.
In June, appraiser Jon Olinger’s license was suspended indefinitely, and he cannot apply for reinstatement for one year and only after he has completed 75 hours of training. The complaint against Olinger detailed problems with the appraisal of 11 houses, eight of which were transactions involving Radabaugh. Olinger is also a Fort Wayne Community Schools board member.
Olinger said Radabaugh was one of many people he worked with back then.
Olinger said he had only about a year’s experience when the transactions took place. Because he was naïve, what would raise red flags now were not questioned then, he said.
“It’s a case of if I did it today, there are things I wouldn’t do,” he said.
Original records of the transactions in question were signed electronically and stored on a computer, he said. They were routinely destroyed after five years. Turned over years later to the Real Estate Appraiser Licensure and Certification Board in what would eventually lead to his suspension were unsigned paper copies, Olinger said. Because they were draft copies, he said he could not vouch for their accuracy.
“Looking back on it, I should have shredded them,” he said.Olinger said he is unsure whether he will get back into appraising. He said he currently is a human resources consultant
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