Category Archives: Servicing

SEC accuses Texas mortgage lender of running massive Ponzi scheme

A North Texas man who raised nearly $23 million from investors under the guise of investing in the mortgage business actually used some of the money for his own personal use, while funneling money to a supposed concert promoter who claims to represent Taylor Swift and Drake, the Securities and Exchange Commission said this week.

According to the SEC, Thurman Bryant III (Trey) and his company, Bryant United Capital Funding, raised approximately $22.7 million from approximately 100 investors across the country by falsely promising “risk-free, guaranteed” returns on investments of at least 30% annually based on investments Bryant would make in the mortgage industry.

Included in that $22.7 million is approximately $1.4 million that Bryant raised this year after finding out in December 2016 that he was under an SEC investigation.

Specifically, the SEC alleges that Bryant told investors that Bryant United Capital Funding would fund mortgages, which would then be immediately sold to third parties in exchange for a fixed fee.

According to the SEC, Bryant allegedly told those investors that their money wouldn’t be used to fund the mortgages or in the operation of the company. Rather, Bryant allegedly told the investors that their money would placed in a “safe escrow account” to serve as proof of funds to acquire a line of credit, which would be used to fund the mortgages.

The SEC further alleges that Bryan and his company sent monthly account statements to the investors purportedly showing that their initial investment were still safe in that supposed escrow account.

But, the SEC states that Bryant’s representations to investors were false.

Instead of using the money for investment in the mortgage industry or any other legitimate means, the SEC states that Bryant was allegedly running a Ponzi scheme, using the money for himself and others and paying investors with other investors’ money.

According to the SEC’s complaint, Bryant combined the investor funds into a single deposit account over which he had sole control and intentionally misappropriated $4.8 million to cover personal expenses, including the following monthly expenses:

  • $9,750 (and then $18,000 per month beginning in April of 2016) to rent a house in Frisco, Texas
  • $3,500 in lease payments for luxury and other vehicles
  • $1,800 for a housekeeper
  • $3,000 for meals and groceries
  • $3,400 for private school tuition
  • $1,000 for horse riding expenses
  • $1,200 for an apartment

Bryant also spent more than $250,000 to furnish and decorate his rented home, the SEC complaint states.

In addition to the $4.8 million Bryant allegedly kept for himself, he also allegedly funneled approximately $16.1 million to Houston, Texas-based Wammel Group for “high-risk” securities trading and investments in various businesses.

Then, after learning that he was under SEC investigation, Bryant then allegedly sent $1.37 million to supposed concert promoter Carlos Goodspeed d/b/a Top Agent Entertainment for “no apparent legitimate or lawful reason,” the SEC stated.

According to the SEC complaint, the funds were to be used to promote concerts by Taylor Swift and Drake.

But the SEC complaint states that Goodspeed is not what he claims to be.

From the SEC complaint (emphasis is HousingWire’s):

Bryant intentionally or at least recklessly put BUCF investor funds at risk by transferring them to Goodspeed, not only because doing so violated his express promises to investors about how their money would be used, but also because even a rudimentary review of Goodspeed’s background online and in public records would have revealed relevant concerns about his track record and reputation. Goodspeed provided no services or consideration in exchange for these funds, and has no legitimate claim to monies which were misappropriated from unwitting investors who were promised a no-risk investment in the mortgage industry in which their principal would be protected against loss in secured escrow accounts.

The SEC complaint lists five separate civil or criminal issues that Goodspeed has been involved in over the last few years, including being found liable by default judgment for fraud and breach of contract in connection with a supposed promise to secure concerts by Drake and Ciara in 2011; as well as being found liable by default judgment for breach of contract in connection with an agreement to secure an event with Jay-Z.

Bryant also sent $140,000 to his father, who was Bryant’s first investor when he founded the company in 2011.

According to the SEC, to date, Bryant United has paid approximately $16.8 million to its investors in the form of purported investment returns and, for certain investors, significant referral fees for identifying new investors.

The SEC adds that the company “has never used investor monies as Bryant claimed it would, and monies paid out as referral fees and supposed profits on investments are, rather, misappropriated monies sourced from other investors, including Ponzi payments.”

The SEC charged Bryant and his company with various violations of the Securities Act of 1933 and the Securities Exchange Act of 1934. The SEC is seeking permanent injunctions, civil penalties, and disgorgement with prejudgment interest.

Additionally, a federal judge appointed a receiver over Bryant’s assets and entered a temporary restraining order, asset freeze, and other equitable relief.

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Fed minutes show June rate hike isn’t guaranteed

Despite common consensus that the Federal Reserve will raise interest rates in June, the latest Federal Open Market Committee meeting minutes created a seed of doubt.

According to an article in Reuters by Ana Swanson, the minutes, which were released Wednesday afternoon, showed a central bank that is divided on whether to raise rates as early as June, something that markets have generally been anticipating.

From the article:

Now investors will likely look to economic data released during the next three weeks, including the jobs report due next week, for clues as to whether the Fed will raise rates when it meets on June 13-14.

If economic data are strong, a rate hike could come “soon,” the minutes said.

The participants of the Fed’s Open Market Committee, which makes interest rate decisions, reiterated that it was important to gradually raise interest rates to a more normal level after holding them ultralow for years to help stimulate a struggling U.S. economy.

Yet a few participants cautioned that the Fed could raise interest rates more gradually than previous forecasts had suggested, noting that the economy has showed surprising weakness in recent months.

So far the Federal Reserve has only raised interest rates once this year in March. The last rate hike before this occurred in December 2016. Up until this to point, experts claim that there will be several rate hikes this year, which included June. 

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NAR: Existing homes are flying off the market, but sales fall back from record pace

Existing homes stayed on the market for less time in April than in any month since 2011, but tight inventory drove a decline in existing home sales over March’s record pace, a new report from the National Association of Realtors shows.

Total existing-home sales, which NAR categorizes as completed transactions that include single-family homes, townhomes, condominiums and co-ops, fell 2.3% to a seasonally adjusted annual rate of 5.57 million in April from a downwardly revised 5.7 million in March.

March’s pre-revision seasonally adjusted rate of 5.71 million made March the best month for existing home sales since February.

The newest report from NAR, covering April’s sales, shows that despite the decline in April, sales are still 1.6% above a year ago and at the fourth highest pace over the past year.

According to Lawrence Yun, NAR’s chief economist, demand from buyers is still far exceeding the available supply, leading to both the decline in existing home sales and the fact that homes are flying off the market.

NAR’s report shows that homes typically stayed on the market in April for a new record low of 29 days, down from 34 days in March and 39 days in April 2016.

April marks the first time since NAR began tracking time on market in 2011 that the time on market has been less than 30 days.

The previous shortest time on market before April’s 29 days was May 2016, when homes stayed on the market for an average of 32 days.

NAR’s report also showed that 52% of homes sold in April were on the market for less than a month, which is a new high.

According to NAR’s report, there were several markets that are far hotter than the national average, including San Jose-Sunnyvale-Santa Clara, Calif., where homes sold in an average of 23 days; San Francisco-Oakland-Hayward, Calif., where homes sold in an average of 25 days; Denver-Aurora-Lakewood, Colo., where homes sold in an average of 27 days; and Seattle-Tacoma-Bellevue, Wash., where homes sold in an average of 28 days. 

“Last month’s dip in closings was somewhat expected given that there was such a strong sales increase in March at 4.2%, and new and existing inventory is not keeping up with the fast pace homes are coming off the market,” Yun said. “Demand is easily outstripping supply in most of the country and it’s stymieing many prospective buyers from finding a home to purchase.”

According to Yun, every major region besides the Midwest saw a decline in existing sales in the month of April.

NAR’s report also showed that the median existing-home price for all housing types in April was $244,800, up 6% percent from April 2016 ($230,900).

April’s price increase marks the 62nd straight month of year-over-year gains, NAR’s report showed.

Additionally, NAR’s report showed that total housing inventory at the end of April climbed 7.2% to 1.93 million existing homes available for sale, but that figure is still 9% lower than one year ago (2.12 million). 

Total housing inventory has also fallen year-over-year for 23 consecutive months. Unsold inventory is at a 4.2-month supply at the current sales pace, which is down from 4.6 months a year ago, NAR’s report showed.

“Realtors continue to voice the frustration their clients are experiencing because of the insufficient number of homes for sale,” Yun said. “Homes in the lower- and mid-market price range are hard to find in most markets, and when one is listed for sale, interest is immediate and multiple offers are nudging the eventual sales prices higher.”

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