Sentencing date is set for lawyer in alleged short-sale scheme
Sentencing is set for April 28 for a New York lawyer accused in an alleged short-sale scheme in which homes were sold to new owners without paying off existing mortgages.
The lawyer, Helene Stetch, pleaded guilty Jan. 9 to criminal possession of stolen property, according to Meris Campbell, a spokesperson for the Queens County, New York, District Attorney’s office. The plea agreement calls for a sentence of 16 months to four years in jail.
Stetch was accused of representing five homeowners in “short sale” negotiations on their properties, which typically had more than one mortgage lender. She then conducted the sales as if all of the lenders had approved payment of less than the full principal balance, even though not all of the lenders had given approval. No title insurance was purchased, prosecutors said. Home sellers thought their mortgages would be satisfied, and home buyers and new lenders believed they were buying properties free of encumbrances, according to the initial press release. Stetch then continued short sale negotiations after the closings, according to the press release.
Stetch worked with lawyer Kenneth Schwartz, who operated a law firm at Carle Place in New York. Schwartz was accused of signing some of the checks for attorney fees. He entered a conditional plea Jan. 13 to criminal facilitation in the fourth degree, a misdemeanor, and disorderly conduct, a violation. The misdemeanor charge will be dropped after completion of the agreement terms, according to Campbell.
Schwartz has said he wasn’t aware of the scheme when it was ongoing, and he reported Stetch to police when he discovered the issue.
The ABA Journal contacted Schwartz’s lawyer and Stetch, but neither immediately responded with a comment.