Saturday, June 28, 2008

Another Maryland Foreclosure Rescue Operator Tagged With Federal Indictment

In Greenbelt, Maryland, The Baltimore Sun reports:

  • A widespread probe of mortgage fraud resulted yesterday in grand jury indictments against four Maryland residents, less than a week after federal prosecutors here accused eight other people of bilking homeowners and banks of more than $35 million in an unrelated mortgage scheme.

  • In the latest indictments, Cheryl Brooke, 51, and Michael K. Lewis, 56, of Upper Marlboro; his brother, Earnest Lewis, 59, of Takoma Park; and Winston Thomas, 42, of New Carrollton, are accused of conspiracy to commit wire fraud and wire fraud in connection with a scheme in which they offered to help homeowners stave off foreclosure. Instead, they defrauded mortgage lenders and the homeowners, the 12-count indictment says.

For more, see Jury indicts four more in mortgage fraud probe.

See also, WBAL-TV Channel 11: Businessman Indicted On Mortgage Fraud Charges (I-Team Investigation Uncovered Lewis's Alleged Scheme).

  • A Prince George's County businessman was indicted on charges of bilking his customers out of their homes and their equity while they thought he was saving them from foreclosure. The WBAL TV 11 News I-Team first began investigating Michael K. Lewis last year. He was indicted Wednesday on mortgage fraud charges and he could face millions of dollars in fines and the possibility of spending the rest of his life in prison.

See also, U.S. Attorney press release: Michael K. Lewis and Three Others Indicted in Mortgage Fraud Scheme - Allegedly Targeted Victims Through Local TV Ads.

Go here for other posts on Maryland foreclosure rescue operator Michael K. Lewis.

Friday, June 27, 2008

Step By Step "Produce The Note" Strategy In Fighting Foreclosures

The Consumer Warning Network website has recently posted a "How-To" that may be helpful to homeowners facing foreclosure who are not represented by an attorney but who want to force their foreclosing mortgage lender to produce the actual, physical promissory note (not a copy, reproduction, nor any other reasonable or unreasonable facsimile thereof) that the homeowner signed at the closing/settlement of the transaction in which he/she originally took out the home loan.

Included in the "How-To" are links to templates that they have created for a legal request, a letter to your lender and a motion to compel to help the homeowner through the process.

Homeowners are given this tip to determine whether the foreclosing mortgage company might have a problem producing the promissory note, and what problem homeowers may face if they allow the mortgage company to proceed without having to produce the note:

  • When you get a copy of the foreclosure suit, many lenders now automatically include a count to re-establish the note. It often reads like this: “…the Mortgage note has either been lost or destroyed and the Plaintiff is unable to state the manner in which this occurred.” In other words, they are admitting they don’t have the note that proves they have a right to foreclose.

  • If the lender is allowed to proceed without that proof, there is a possibility another institution, which may have bought your note along the way, will also try to collect the same debt from you again.

The post provides steps to follow in situations where the lender (1) has already filed suit to foreclose on the home, and (2) has not yet filed suit against the homeowner where the homeowner has already missed one or more payments.

For more, see Produce The Note “How-To”.

Go here for the accompanying video, Fight Foreclosure: Produce The Note "How-To", featuring Tampa, Florida attorney John Yanchunis, with the law firm James, Hoyer, Newcomer & Smiljanich PA.

Go here for a recent CNN video on the "Produce The Note" strategy.

For other posts that reference the failure of some mortgage lenders and their attorneys to file the required loan documents when starting foreclosures, Go Here, Go Here, and Go Here. missing mortgage foreclosure docs beta

Thursday, June 26, 2008

CNN Reports On "Produce The Note" Strategy In Fighting Foreclosures

CNN recently ran a story on what apparently is now being referred to by some as the "Produce The Note" strategy in fighting foreclosures. Among those interviewed for the story are:

  • Homeowner Jacqueline O'Brien, who currently faces foreclosure on her Central Florida home and is battling mortgage lender Wachovia who, the homeowner says, is clipping her left and right with fees and won't re-work the payments on her home loan,

  • Professor Katherine M. Porter, of the University of Iowa - College of Law (author of Misbehavior and Mistake in Bankruptcy Mortgage Claims, a study that concluded, among other things, that a significant number of mortgage lenders and loan servicers - and their attorneys - have been screwing up in the Federal bankruptcy courts in their attempts at improperly clipping homeowners facing foreclosure who have filed for bankruptcy protection),

For the story (video only), see Produce The Note.

For some self-help information on approaching the "Produce The Note" strategy for homeowners facing foreclosure who are not represented by an attorney, see Produce The Note “How-To”.


Reportedly, at a court hearing last week, a Pinellas County, Florida judge denied Wachovia the right to proceed with its foreclosure against borrower Jacqueline O’Brien (profiled in the CNN story). Instead, O’Brien was granted a continuance, as she pursues the "produce the note" strategy. Wachovia expressed interest in renegotiating the terms of the loan, rather than continuing the court battle.

For other posts that reference the failure of some mortgage lenders and their attorneys to file the required loan documents when starting foreclosures, Go Here, Go Here, and Go Here.

Tuesday, June 24, 2008

Most NJ Home Foreclosures Are Illegal, Say Some Attorneys As Lenders May Be Fumbling Ball On Proving Debt Ownership

In New Jersey, The Star Ledger reports:

  • Most home foreclosures being processed in New Jersey are illegal, a growing group of attorneys contends, because lending institutions cannot prove they own the debt they are trying to collect.

  • Judges in at least four New Jersey counties already have halted foreclosures, using a federal court ruling in Ohio as precedent. And with 48,000 foreclosures expected to be filed this year -- twice the number filed in 2006 -- some attorneys believe challenging foreclosures can become a large and potentially lucrative area of practice.

  • "This is starting to creep up all over the state and all over the country as people start to realize these banks don't really know who owns the (promissory) note," said Peggy Jurow, a senior attorney at Legal Services of New Jersey, which is teaching lawyers how to represent pro bono clients in these cases. "It's scary to think how many people are losing their homes who shouldn't be."


  • There were 34,457 foreclosures filed in New Jersey in 2007. The vast majority, 96 percent, were processed by the State Office of Foreclosure with no answer from the defendants, resulting in the loss of their homes. Lawyers say 75 percent or more of those cases could have been successfully challenged.

  • "The rules have been there all along," said Rob Napolitano of Community Financial Services in Keyport, which provides information to attorneys on how to help clients avoid foreclosure. "What's changed is that people are finally making the banks follow the rules, and they can't do it."


  • Lawyers say in the midst of all that packaging and slicing, banks got careless with their paperwork. In some cases, they lost track of who owned the original promissory note or couldn't prove how they came to possess it. In other cases, lawyers say, the formation of the mortgage-backed security created a situation in which the banks failed to maintain ownership of the promissory notes.

  • "These transactions have become so complex, the banks can't even keep track of what they own and don't own," said Linda Fisher, director of the Center for Social Justice at Seton Hall Law School, which succeeded in getting a foreclosure dismissed in Essex County last month.


  • The State Office of Foreclosure has attempted to provide some guidance, informing attorneys for lending institutions that as of May 1, it no longer would process foreclosures unless the attorneys could prove their clients were the owners of the loan and had the right to collect on the debt at the time the foreclosure was filed.

For the story, see New tactic slows rate of forfeited houses in NJ.

For other posts that reference the failure of some mortgage lenders and their attorneys to file the required loan documents when starting foreclosures, Go Here, Go Here, and Go Here.

Monday, June 23, 2008

Tax Foreclosure Sale Voided By California High Court; Assessor's Error, Faulty Correspondence Failed To Put Property Owners On Notice Of Delinquency

In California, Metropolitan News Enterprise reports:

  • Purported notice of a tax sale did not put the property owners on actual or constructive notice of the delinquency where the notice was sent to the correct address but misnamed the owners, who reasonably believed the notice was sent to them in error, the state Supreme Court ruled [last week]. The justices unanimously overturned a Court of Appeal ruling in favor of L&B Real Estate—described by opposing counsel as “the king of the foreclosure market in California”—which purchased a Los Angeles parcel belonging to Frank and Josie Mayer for $24,000 at the 2001 sale.

For more, see State Supreme Court Overturns Tax Sale Based on Flawed Notice (Justices Say Letter That Misnamed Owners Did Not Trigger Limitations Period).

For the decision of the California Supreme Court, see Mayer v. L&B Real Estate (June 16, 2008) (available online courtesy of; free registration may be required).

For another story involving questionable or improper notification to homeowners in the context of a mortgage foreclosure, see Homeowners Facing Mortgage Foreclosures Denied Constitutional Right to Proper Notification.

Go here for other posts on foreclosures involving faulty notifications to property owners.