Wheelchair-Bound Florida Homeowner Among Those Dragging Subprime Lenders Into Federal Court

In Broward County, Florida, a story in the Daily Business Review (appearing on Law.com) recently reported on a disabled woman who recently refinanced her home and subsequently discovered, much to her chagrin, that she might have been given a mortgage loan different from the one she thought she was getting.

• Confined to a wheelchair, she already is struggling to make her monthly payments. So instead of waiting for the sword of Damocles to fall in the form of foreclosure, [homeowner Denise] Bennett is fighting back. She sued her lender, Countrywide Home Loans, on June 26 alleging fraud in a case assigned to U.S. District Judge William Zloch in Fort Lauderdale. Bennett is a plaintiff in one of several suits filed against the troubled lender by the Affirmative Defense Group in Margate, Fla. Her attorney, Frank Ingrassia, said he has filed about 70 such suits against a variety of lenders.

• "It's an industrywide problem," Ingrassia said. "Some of the clients tried to do workouts and weren't able to do that, and when you are faced with foreclosure it's an issue of striking first or not." He said the litigation is a "new approach for dealing with unprecedented levels of foreclosures."

• Nearly all of the lawsuits involve adjustable rate subprime mortgages to high-risk customers. Ingrassia said some of his clients were offered "teaser rates" as low as 1.5 percent that adjusted up within 30 days. The lawsuits also allege Calabasas, Calif.-based Countrywide and the other lenders falsified paperwork that exaggerated the income of the customers to qualify for the loan.

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• Ingrassia's lawsuits seek rescission of his client's mortgages plus damages including the reimbursement of all mortgage payments, finance charges, interest, attorney fees and costs. The litigation alleges the lender violated Florida's Deceptive and Unfair Trade Practices Act and the federal Truth in Lending and Real Estate Settlement Procedures acts.

• The lawsuits were filed as state regulators ganged up on Countrywide. Florida Attorney General Bill McCollum sued the mortgage lender in Broward County last week for alleged predatory lending practices. California and Illinois also have filed lawsuits.

[Editor's Note: Washington State has also recently taken action against against Countrywide.]

For more, see Saying They Were Tricked, Borrowers Fight Back With Lawsuits.

For other posts on homeowners using Federal & state consumer protection statutes to try and undo bad mortgage loans, Go Here and Go Here. undo mortgage loans TILA batallion

SW Florida Task Force Sponsors Free Pro Bono Foreclosure Law Clinic

In Naples, Florida, the Marco Eagle reports:

• The [Collier County] Foreclosure Task Force is sponsoring a free pro bono foreclosure law clinic at the offices of Legal Aid Service of Collier County in Naples on Saturday.

• The clinic will feature over 20 pro bono attorneys and other volunteers, and will be conducted from 9 a.m. - 4 p.m. The event is open to the public, and will provide opportunities for individual advice and counsel sessions with a pro bono attorney to address foreclosure related legal issues.

For more, see Seminar to offer advice on handling foreclosure-related legal issues.

According to their website, the Collier County Foreclosure Task Force is a cooperative effort between the Legal Aid Service of Collier County and the Collier County Bar Association formed to promote foreclosure prevention.

FLASH - "Florida Attorneys Saving Homes" To Assist State Homeowners Facing Foreclosure

In Tallahasse, Florida, the Pensacola News Journal reports:

• Florida Agriculture and Consumer Services Commissioner Charles H. Bronson encourages homeowners who are threatened with foreclosure, or fearful that their lending institution may foreclose on their property, to contact The Florida Bar [...] to obtain free legal assistance.

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• Florida Legal Services and The Florida Bar [...] have partnered in establishing a toll-free hotline -- 1-866-607-2187 -- that consumers can call to answer a few initial questions about their situation to ensure accurate placement with a free attorney. The attorney will then negotiate with the lender on behalf of the client to keep the home from being foreclosed. "I applaud Florida Legal Services and the Florida Bar for offering this public service," Bronson said. [...] More than 10,000 Florida attorneys have volunteered their services in the program, according to Florida Legal Services Inc.

The hotline is for those Florida homeowners (1) who fear they may soon be unable to make their mortgage payments, or (2) who have already missed payments.

For more, see Free legal aid for troubled homeowners.

Go here for more on FLASH - Florida Attorneys Saving Homes, a collaborative effort of The Florida Bar, The Florida Bar Foundation, Florida Legal Services, and the Real Property Probate and Trust Law Section designed to provide pro bono assistance to distressed homeowers.

• “The concept for the project began with the announcement from the banking industry of their HOPE NOW and Project Lifeline Projects,” [executive director of Florida Legal Services, Inc. Kent] Spuhler said. “We felt homeowners having trouble with their mortgage would have better success negotiating with their lender if they had the assistance of an attorney.”

Go here for some of the materials for volunteer attorneys working on the FLASH program and go here for welcome letter (re: malpractice insurance, training & materials).

Legal Services Firm Helps Newark Man Succeed In Keeping Home After Being Snagged In Alleged Equity Stripping Scam

In Newark, New Jersey, The Star Ledger reports:

• [Aleem] Morris was the victim of a mortgage rescue scam that promised to help get him out of debt and keep the Newark home on North Munn Avenue out of foreclosure. Instead, the so-called foreclosure specialist stripped the home of equity, had someone take the deed and borrow as much as possible against the value of the home. [...] With the help of Abbott Gorin, an attorney with Essex-Newark Legal Services, a Superior Court judge stopped the foreclosure and Morris obtained a reverse mortgage.

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• He filed a complaint with Superior Court Judge Kenneth Levy, who stopped the foreclosure, rescinded the second mortgage and allowed Essex-Newark Legal Services to intervene and help Morris. [The foreclosure rescue operator] and the straw buyer were subpoenaed but never showed up in court.

For more, see One man's relentless fight for his home. foreclosure rescue

Homeowner's Initial Success At Fending Off Foreclosure Due To Missing Loan Docs, Lender Implosion

Consumer Affairs reports on a financially strapped Independence, Missouri homeowner who has reportedly been having success at fending off a foreclosing mortgage company by, according to the story, "[c]ontesting the foreclosure on the grounds that between the implosion of the lender, the lack of a paper trail, and the bad terms of the loan, they were essentially defrauded and couldn't be held liable." An excerpt from the story:

• "She [the homeowner] has been able to stop foreclosure three times, maybe four by demanding that the servicer attempting to foreclose show proof that they own the mortgage and they can't," [one consumer advocate] told ConsumerAffairs.com. "Because mortgages were sold again and again and then to Wall Street where they were securitized and sold all over the world, I wonder how many homeowners have been foreclosed by a company that couldn't even show proof that they owned the mortgage."

• [The homeowner] says that more homeowners should challenge foreclosures by lenders who can't prove they legitimately hold the loan, and that many innocent buyers are the victims of "very unscrupulous activity" propagated by lenders and investors who are motivated by "nothing but greed."

For more, see Fighting Foreclosure: One Family's Story (How fighting back enabled a family to keep its home).

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

Law Students Take Class Action On Behalf Of Inexperienced Investors Saddled With Inflated, Fraudulently Obtained Loans By Admitted Scammer

In Northern New Jersey, The Star Ledger reports:

• Investors who lost millions in a complex mortgage scam filed suit [Monday] against a real estate operation already the focus of an ongoing federal fraud investigation. The class-action lawsuit by Seton Hall Law School's Center for Social Justice charged that the scheme targeted minorities, the elderly and others with little experience in purchasing and financing real estate.

• Attorneys for the center said victims of the scheme were saddled with fraudulently obtained loans on investment properties worth far less than the purchase price. Unable to sell the residential properties, many fell into default less than a year after buying the multifamily houses, and subsequently into foreclosure.

• The suit named Maurice Bethea, 40, of Newark, who pleaded guilty earlier this month in federal court to conspiracy to commit mail fraud. He admitted orchestrating the sales of houses in need of serious repairs and major renovations to so-called "straw buyers," who quickly defaulted on their loans.(1)

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• The lawsuit yesterday was filed on behalf of at least 75 people who bought houses from Bethea over the past six years, said Seton Hall law professor Linda Fisher. "I have talked to dozens of people. I hear the exact same story each time," she said. "They were deceived and induced to buy properties they could not afford and would not have bought had they not been given false information."

• According to court documents, potential buyers were told that the properties they bought would have existing tenants, or they would have help finding tenants. The suit also charged that the buyers were misled with promises that they would receive rental income that would more than cover their monthly mortgage payments.

• Loan applications inflated purchasers' incomes, enabling buyers to qualify for mortgages that exceeded their ability to pay. In some cases, mortgage applications were used to obtain a second "piggyback" mortgage as well to finance the purchase of a property. Fisher said many have seen their credit ruined and may never be able to repair it. Others have filed for bankruptcy. Some have lost their live savings.

For more, see Poor investors' lawsuit alleges mortgage con.

(1) Also named in the civil lawsuit were several of Bethea's companies -- Blue Financial Group Inc., Born Asiatic, Greenfield Asset Holdings -- as well as Maplewood attorney Daniel Roy, who was reportedly accused of closing, in a hurried manner, on the vast majority of the real estate transactions.

Convicted South Jersey Foreclosure Rescue Operator Gets Eight Years For Ripping Off 77 Homeowners

In Burlington County, New Jersey, CBS-TV Channel 3 (Philadelphia) reports:

• A Mount Laurel, New Jersey man was sentenced to eight years in prison Tuesday after pleading guilty to stealing from homeowners who hired him to save their properties from foreclosure. Peter Rogers was paid thousands of dollars by people that hoped he could help them save their homes. After collecting over $105,000 in all, he left the homeowners to fend for themselves.

• The 65-year old Rogers appeared in a Burlington County court room Tuesday after pleading guilty to defrauding 77 people who hired him to help save their homes from foreclosure. Victim after victim testified before Superior Court Judge John Almeida, telling how Rogers and his company, Express Consolidation Refinance and Mortgage Consultation, ripped them off.

For more, see Mortgage Fraud Defendant Sentenced.

In a related story, see Victims of scam have their say.

Go here for earlier posts on Peter Rogers.