After more than half a century practicing law in New Haven, Morris Olmer is fighting to regain his license. Meanwhile, Victoria Swain (pictured) wonders where all the government money goes at the house she rents on Emerson Street. Are those two facts related?
A judge this week extended a suspension of Olmer’s license to practice law, as allegations mount that he worked with a West Haven appraiser to cheat mortgage lenders by inflating values of home sales throughout the region.
The allegations, detailed in court filings, shine a light on one form of mortgage fraud that not only cheats lenders but can hurt city neighborhoods by supporting speculative purchases by absentee owners who may be more interested in pocketing fast money than in investing in their properties.
The case also brings trouble to the New Haven office of a man who has practiced law since 1953 and once served on the Board of Aldermen and in the state legislature.
In a conversation Monday Olmer called the case against him full of “unproven allegations.”
“I’m not saying anybody is out to get me,” said Olmer (who asked not to be photographed). “There are problems in my office. I’m not running away from the problems. I just want a chance to explain what occurred.”
2 Forms, 2 Stories
That case — and Olmer’s troubles — began on Dec. 8.
That’s when the state Judicial Department’s disciplinary counsel filed papers in Superior Court on Church Street seeking an interim suspension of Olmer’s license.
At first the request was based on a single real-estate transaction, in which Olmer represented a West Havener named Thomas Gallagher who was buying 626 Savin Ave. in West Haven.
Here’s what happened, according to the state’s filing:
Olmer prepared a routine government form called a “HUD‑1” stating that Gallagher bought the house for $505,000. Based on that document, a company called the Mortgage Lender Network gave Thomas Gallagher a $378,750 mortgage.
Meanwhile, Olmer filed a warranty deed stating the true price of the transaction: just $285,000.
And here’s the kicker, according to the state: Olmer’s HUD‑1 form used an appraisal of the property prepared by a company called Autumn Appraisal — a company owned by none other than Thomas Gallagher.
Olmer filed a response with the court denying the allegations. The filing noted further that he had been “remorseful” and “cooperative” with investigating authorities. Olmer’s wife was ill, “which has caused some distraction and lack of attention [to Olmer’s] law practice, which has now been rectified,” the filing read.
Judge Jonathan E. Silbert found that Olmer had violated Rule 4.1(s) of the Rules of Professional Conduct because of the discrepancy between the information on the HUD‑1 form and the actual sales price. Olmer also violated Rule 1.1 because he failed to include on the form that there was a second mortgage on the property, and he failed to pay off that second mortgage at the closing, Silbert found.
The judge suspended Olmer’s license for six months, starting on Feb. 15. He appointed an attorney as trustee to “protect the interests” of Olmer’s other clients. The judge stated that the suspension could end early, by May 15, if Olmer met certain conditions.
A Pattern Reaches Into New Haven
Olmer said he fully expected to be back in business by May 15. Then the state returned to court asking the judge to continue the suspension based on damning new allegations.
The allegations came from Mortgage Lending Network. The state put in the court file a letter from MLN stating the Olmer handled five other transactions in a similar way — filing HUD‑1 forms showing far higher sales prices than homes actually sold for. MLN gave Olmer’s clients mortgages based on those allegedly inflated appraisals.
All those five new transactions included the same appraiser as the original transaction, Thomas Gallagher’s Autumn Appraisal, according to the court filing.
Two of those transactions took place in New Haven. Olmer’s client purchased 11 White St. in the Hill for $190,000; MLN claimed it gave a $225,000 mortgage based on a HUD‑1 filing showing a $250,000 sales price.
In the second transaction, MLN claimed it offered a $310,000 loan to purchase 88 Emerson St. (between Whalley Avenue and Valley Street) based on a filing showing a $330,000 sales price. The real price was $297,000. In addition, the government stated, Olmer failed to disclose the existence of a $46,500 second mortgage on the property.
The state also disclosed that a separate complaint pending against Olmer. The complaint was filed by a Hartford woman named Louella H. Tate. Tate accused Olmer of “fraud, misrepresentation and deceit,” making “unauthorized disbursements” of her money, issuing “a false statement of material fact” to a lender, and failing to pay a judgment lien and taxes, in connection with a home purchase.
Olmer’s Side
“Here’s the situation,” Olmer said Monday. “I’ve been a lawyer for 55 years. Up until December I think I’ve had one reprimand. It was failure to bring suit; it had nothing to do with real estate.
“I got involved in a situation. They [Gallagher and another figure involved in the West Haven transaction] had a deal with the themselves to carve up some money.”
Olmer said he had no knowledge of it. “I didn’t make any money on it,” he said.
Gallagher tells a different story. He said Wednesday that he has filed suit against Olmer. He also claimed that he doesn’t own Autumn Appraisal, contrary to the documents filed by the state in Olmer’s case. Gallagher referred further questions to his attorney, who couldn’t be reached for comment at press time.
Olmer denied the allegations put forward in the Tate case (All her claims were settled” two years ago, “then she comes forward and says now she’s entitled to more money”) as well as the five new transactions cited by Mortgage Lender Network.
“Claiming fraud is one thing,” Olmer said. “Actually proving fraud is another.”
After meeting on Monday with Olmer’s lawyer as well as Pat King, who’s handling the case on behalf of the State Judicial Branch, Judge Silbert extended Olmer’s suspension until at least Aug. 28. He has scheduled a court hearing on that day.
Olmer said he should have his license back now. He called a three-month suspension a “severe” penalty for an oversight on which he never profited.
“From a disciplinary point of view, whether Morris [Olmer] made any [extra] money on this is irrelevant,” responded Pat King Wednesday. “He was paid, and he lied” to the lender.
If a lender gives a loan based on an inflated appraisal — then the borrower defaults — the lender can’t recoup all the money, King noted. That’s because the house is worth less than what the inflated appraisal claimed. She called the problem widespread. Click here to read a filing by her office in a similar, unrelated case.
The Street-Level View
Sometimes the mortgage companies aren’t the only ones who get hurt. A wave of mortgage fraud committed by out-of-town investors, aided by inflated appraisals, swept New Haven’s poorer neighborhoods over the past decade. The buyers would pocket the money from inflated mortgages and resell their neglected properties for a quick profit based on falsely reported purchase prices. Or, protected by limited liability corporations they’d created for the home purchases, they would simply walk away from the rotting houses. (The U.S. Attorney’s office successfully prosecuted some of these speculators, known as “flippers,” in landmark cases.)
There’s no evidence that such extended swindles have taken place in the Olmert-aided transactions. Although Victoria Swain (pictured) does have some questions.
Swain rents the second-floor apartment at 88 Emerson, one of the six properties listed in the state’s filing against Olmer. Members of the family who bought and run 88 Emerson were also involved in four of the other transactions.
“I think they could take more pride in the property,” Swain said of her house. At the periphery of the West Rock neighborhood, the house has the potential of strengthening or helping to bring down a block that could go either way.
“The wiring is really messed up,” Swain said. The bill for hallway lights, from common areas in the four-family house that are customarily paid for by the landlord, keeps showing up on her bill, she said. The basement lights were on her meter, too, she said.
“Water leaks through very easily” into her apartment, she said. “The people they hire to fix stuff just do a surface job.”
Swain’s $850 monthly rent is largely subsidized by the state’s Rental Assistance Program (aka RAP).
A “family member” answering the phone number listed for the landlord gave a different story. “Her lease is not being renewed” because of disturbances involving her family, he claimed. “She’s angry.”
“I don’t even known who [Morris Olmer] is,” the man said. Then he hung up the phone.
The stae needs to question if mass valuation is fair. Th reval companies do not check on the validity of sales. They just plug thme into a model. Every town loses or settles an appeal when an actual appraisal is done. Large departments do nothing for years then let an out of state software company establish values. Whic are t ypically off by thousands. I again point peole to 628 Winchester Ave. Blightened, and destroyed Vision place a $200,000 value on it. Th eresults of the 2001 reval was a lose. The 2006 reval will be the same. They had no verification process in place and the stste needs to address this systemic problem. I ask again show one person in the New Haven assesor's office that is from New Haven. The only one I know resigned because he bucked the system. A new administration might take a clean look. Hell, we speant over $80,000 to delay a reval because of the gov. run. The concern was not about valid data, it was about timing. The same goes for ID cards. The mayor lost the State Hispanic gruop endorsement. He only got one one vote. Who i s now a CAO or CEO or whatever. The city will lose all appeals, beacuse a fair market value will kill the iinfalted values referred o in the articl about what happened in West Haven. It was rampant in Fair Haven, Newhallville and the Hill. If you have five year to build a valuation table, and get paid thousands of dollars per year, why do we need to spend a half million for garbage in garbage out.