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Former SLO broker charged with federal bank fraud

March 4, 2014
Tim Barnes

Tim Barnes

A former San Luis Obispo real estate broker is facing federal prison time for illegally flipping houses that he purchased in short sales.

Timothy William Barnes, 37, pleaded guilty Monday to committing bank fraud. Barnes, a San Francisco resident, owned and operated Apex Properties Real Estate Brokerage in San Luis Obispo. Barnes is accused of orchestrating a property-flipping scheme in San Luis Obispo, Paso Robles, Pismo Beach and other Central Coast cities that netted him more than $500,000 in profits between January 2010 and September 2012.

Barnes understated the value of homes in documents he submitted to banks that he was asking to approve short sales. He then sold the houses at higher prices. Often Barnes concealed higher offers he had already received and simultaneously negotiated the short sale and resale of the houses.

Short sales can occur when the value of a property drops below the amount of money owed on the mortgage. In that instance, a bank can agree to a short sale, in which it accepts less than the total owed on the loan.

The FBI and the Federal Housing Finance Agency’s Office of Inspector General investigated the Barnes’s property-flipping scheme. FBI agents raided his downtown San Luis Obispo office in September 2012.

Barnes is scheduled for sentencing on June 16. He faces a maximum of 30 years in federal prison.

 


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If the bank didn’t independent verify the value of a house before agreeing to a short sale, then that is their problem. When a house flipper gets to a point where they are upside down on their loans, it only makes sense that they are going to try and net more out of the sale. If the bank takes your house as the result of defaulting on the loan, and the market shot up and they were able to sell the house for more than you owed on the loan, are you going to get the difference? Not likely.


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Shelworth,

In a short sale the banks contract out with a local real estate broker who performs what is called a “broker’s price opinion” or BPO. The bank relies on the broker for an accurate

opinion of the value of the property. The banks were so swamped with short sales back

then that they were unfortunately unable to ferret out people like this.

It would be very shocking if a few more people don’t get in how water in this case.

It would be very difficult to pull this off by yourself.


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So the bank hired him for his expertise and he lied to them? I misunderstood the problem, I couldn’t understand how he got the properties if he was low balling them.


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Lots to be proud of in SLO… and our City Council has their hand out again


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Wow, Al Moriarity, Scott Peterson, Limon and Pierce – a proud group.


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Don’t forget Dan McDow, Lisa Solomon, Kelly Gearhart (A-town citizen of the year), Grigger Jones, the list goes on and on.


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Wait, so he negotiated a low price from the bank and then sold them for a profit? If the houses were worth more, why didn’t the bank sell them to someone else? Something seems amiss here.


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So, this guy is facing 30 years in a federal prison for skimming up to $500,000 from a bank. Guess that’s a bigger crime than destroying peoples lives and the lives of their future generations by the Ponzi scheme Kelly Gearhart, Jay Miller, AND his daughter Courtney, and David Graves pulled off?? When does justice catch up with THESE crooks? I’d rather see a bank get ripped off than all the people they scammed!


And I agree, shelworth, something DOES seem amiss here!


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“Something seems amiss here.”


Yep. It’s called greed. Banks do it all the time, but they seldom are prosecuted or ever are incarcerated.


The whole system is corrupt, and as usual, only the low man on the totem pole is prosecuted.


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Very true. If you have been paying attention, you will notice that nothing is “amiss” as this is business as usual. The big banks can pull the wool over your eyes and sell you financial instruments that they know are worthless, while betting against you. But as soon as you screw them back, you get the shaft.


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