Saturday, August 16, 2008

Trump To Rescue McMahon Home In Foreclosure; Proposed Deal Involves Sale Leaseback

In Beverly Hills, California, the Los Angeles Times reports:

  • It's "The Donald" to the rescue. Mega-developer and TV personality Donald Trump has agreed to buy Ed McMahon's Beverly Hills house for an undisclosed amount and allow McMahon to continue living in it. Details of the deal are still being ironed out. [...] McMahon, 85, was facing foreclosure within two weeks on his Beverly Hills home of 18 years. The aging television icon, who was Johnny Carson's sidekick for three decades, defaulted on $4.8 million in mortgage loans with Countrywide Financial Corp. He said in interviews that he was unable to work because of a neck injury that occurred about 18 months ago. Trump said he stepped in because helping McMahon "would be an honor." His plan is to buy the home from the lender and lease it back to McMahon.

For more, see Donald Trump to buy Ed McMahon's house (Trump will allow McMahon, who was facing foreclosure, to continue living in the home).

Friday, August 15, 2008

Foreclosure Rescue Operator To Pay $50K In Restitution, Fines In Deal With Ohio AG; Accused Of Pocketing Upfront Fees, Failing To Deliver On Promises

WHIO-TV Channel 7 in Dayton, Ohio reports:

  • One company that offered mortgage help to people facing foreclosure, but didn’t deliver, is being forced to pay restitution by the Ohio Attorney General. The Ohio Attorney General's office said they filed a lawsuit that claimed the American Housing Financial companies promised to help Ohioans facing foreclosure by negotiating loan repayment plans. They routinely misled consumers and didn’t deliver promised services, according to the AG's office. The companies paid more than $50,000 in restitution and fines.(1)

For more, see Mortgage Company Must Pay Restitution.

To view the original lawsuit filed by the Ohio AG, see State of Ohio vs. American Housing Authority, American Housing Financial.

(1) To be eligible for restitution, consumers must have paid American Housing Authority Inc. and/or American Housing Financial Inc. for services on or before Aug. 8, 2005. Consumers also must file a complaint with the state attorney general's office before Oct. 3. Complaints can be filed online at or by phone at 1-877-244-6446.

Thursday, August 14, 2008

California Woman Charged With Clipping Homeowners For Upfront Fees For Foreclosure Rescue Services & Allegedly Doing Nothing

In Santa Cruz County, California, The Mercury News reports:

  • A Watsonville woman already accused of defrauding an elderly Salinas woman out of thousands of dollars now faces charges she scammed at least seven South County homeowners in a bogus refinancing scheme. Most lost their homes.

  • Melissa Dawn Garcia, 27, allegedly told homeowners nearing foreclosure that she could save their property if they paid her $2,500, according to prosecutor Kelly Walker with the Santa Cruz County District Attorney's Office. He called the alleged scams "keep your house out of foreclosure deals."


  • "Almost all of them have lost their homes," Walker said. As many as 40 Monterey County residents in danger of losing their homes also may have fallen victim to Garcia, Walker said. John Hubanks, a prosecutor in the Monterey County District Attorney's Office, said his office has not filed any charges against Garcia and declined to comment about their investigation.


  • The allegations against Garcia surfaced in May when a 76-year-old Salinas woman told police that Garcia had convinced her to invest $66,000 a year prior. Police there contacted authorities in Santa Cruz and they began probing the alleged phony investment. [...] District Attorney's offices across the region have started a real estate foreclosure task force to look into this type of crime.

For more, see Watsonville woman accused in foreclosure scam.

Wednesday, August 13, 2008

Connecticut AG The Latest To Jump On "Sue Countrywide" Bandwagon; Alleges Unfair, Deceptive Practices; Seeks To Rescind, Modify Mortgages

The Connecticut Attorney General's Office announced today:

  • Attorney General Richard Blumenthal today announced his office has sued mortgage giant Countrywide Financial Corp. and related companies for allegedly pushing consumers into deceptive, unaffordable loans and workouts, and charging homeowners in default unjustified and excessive legal fees. Blumenthal's lawsuit seeks restitution for consumers as well as fines and forfeitures to the state for alleged violations of Connecticut consumer protection and banking laws. The action also asks the court to rescind, reform or modify all mortgages that broke state laws.(1)


  • Blumenthal said, "Countrywide conned customers into loans that were clearly unaffordable and unsustainable, turning the American Dream of homeownership into a nightmare. When consumers defaulted, the company bullied them into workouts doomed to fail. Countrywide crammed unconscionable legal fees into renegotiated loans, digging consumers deeper into debt. The company broke promises that homeowners could refinance, condemning them to hopelessly unaffordable loans."

For more, see:

Go here and Go here for more on other Countrywide lawsuits & other problems.

(1) According to the AG's news release, the lawsuit seeks civil penalties of up to $100,000 per violation of state banking laws and up to $5,000 per violation of state consumer protection laws, disgorgement of all ill-gotten gains and an order compelling the company to cease its illegal practices, in addition to restitution for the consumer and invalidation or modification of the terms of all illegal mortgages. countrywide consumer problems

Tuesday, August 12, 2008

Kentucky Appeals Court Affirms Lower Court "Kibosh" On Arbitartion Clause In Mortgage; Homeowners Facing Foreclosure To Have TILA Claims Heard

In Richmond, Kentucky, The Richmond Register reports:

  • The Kentucky Court of Appeals has ruled in favor of a Waco couple who were the subject of a foreclosure action by Bank of New York Trust Company and Mortgage Electronic Registration Systems. The litigants, who lost their case against Donald Wayne and Roxane Abner in Madison Circuit Court, had sought to force the Abners into an arbitrated settlement over a $40,000 mortgage.


  • The Abners, represented by Addison Parker of the Appalachian Research and Defense Fund, a legal service group, filed a counterclaim, alleging that the mortgage’s 10.125 percent interest represented a “predatory high-cost loan” that violated the federal Home Ownership Equity Protection Act. The act provides for rescinding mortgages that violate the federal Truth In Lending Act as well as awarding both statutory and enhanced damages.

  • The Abner’s mortgage contract called for waiving any damages as well as for arbitration. On July 25, the appeals court affirmed the trial court’s finding that the arbitration clause was “unconscionable and unenforceable.”


  • The Abners’ allegations of predatory lending practices may be valid the appellate judges said, but the mortgage contract’s arbitration cause was the only issue on appeal.

For more, see Couple wins foreclosure appeal against N.Y. bank.

To view the appellate decision, see Mortgage Electronic Registration Systems v. Abner (Case #2007-CA-000574, Ky. Court of Appeals; July 25, 2008).

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

Monday, August 11, 2008

Massachusetts Couple In Foreclosure Sue Loan Servicer, Law Firm; Seeks Class Action Status Against WaMu; Accused Of Failing To Bargain In Good Faith

In Suffolk County, Massachusetts, The Boston Globe reports:

  • A Boston-area couple who are in foreclosure, despite their herculean attempts to prevent it, have filed a lawsuit against Washington Mutual, one of the nation's largest mortgage servicing firms.(1)

  • In the suit, filed in Suffolk Superior Court, Lori and Mark Pestana of Westford allege the loan servicer was unresponsive to their repeated phone calls and to their applications to negotiate an arrangement that would have allowed them keep their house out of foreclosure. The suit is seeking class-action status on behalf of thousands of Washington Mutual borrowers in Massachusetts.


  • The role of servicing firms in the rising tide of US foreclosures is a growing political issue as lawmakers realize the firms - and investors who purchased the mortgages in bundles - are logjams to resolving individual homeowners' situations and clearing up the housing crisis. WaMu is a lender as well as a servicing company.

For more, see Suit blames loan servicer for pending foreclosure.

For those Massachusetts homeowners who feel they might have been screwed over by their mortgage lender, loan servicer, or attorney representing them in foreclosure, the state Attorney General has a consumer hotline for complaints - (617) 727-8400. Go here to file a complaint with the Mass Attorney General.

(1) According to the story, Boston law firm Harmon Law was also named in the lawsuit but was not included in the class-action claims. WaMu and Harmon Law violated state law requiring them to bargain in good faith, homeowners' attorney Gary Klein, of the Boston law firm Roddy Klein & Ryan, alleged. undo mortgage loans TILA batallion

Sunday, August 10, 2008

Milwaukee Man May Lose Home Over $50 Parking Ticket; Case Points To The Need For Court-Appointed Lawyers For Defendants In Civil Actions, Says Judge

In Milwaukee, Wisconsin, the Journal Sentinel reports:

  • Peter Tubic ignored a $50 parking fine in 2004, and on Monday, it cost him his $245,000 house. In what city officials believe is the first case of its kind, the city foreclosed on Tubic's house on W. Verona Court after repeated attempts to collect the fine - which over the years had escalated to $2,600 - had failed.(1)


  • Milwaukee County Circuit Judge Richard Sankovitz technically stayed the judgment to give Tubic one last chance to explain why he hasn't paid or even responded, but Sankovitz ruled in favor of the city's foreclosure. [...] Judge Sankovitz called the case a shame and said it demonstrates the need for judges to have authority to appoint attorneys for people involved in civil litigation. "If you were a criminal, we'd take care of the whole problem for you, get you an attorney," he said.

  • "But if you're involved in civil litigation - in jeopardy of losing your house or your family . . . what we do is make you go out and find your own attorney. "If we gave people the help they needed near the beginning of their problem, their problems wouldn't snowball the way they do."

For more, see Milwaukee man faces foreclosure because he didn’t pay parking fine (The ticket went unpaid for four years, eventually amounting to $2,600 in fines).

Go here for story update.

(1) According to the story, Tubic first got the fine for parking his Ford E150 with no license plates in the driveway of the home, which belonged to his parents at the time . The radiator had broken and Tubic couldn't get his plates renewed unless the van passed an emissions test. He didn't have the money to make the repair and had more pressing worries, he said. His father was suffering from dementia. His mother was battling cancer, and he was their live-in caretaker. He needed to shop, cook, clean, maintain the house and tend to his parents' needs. The van repair could wait, he thought. MilwaukeeParkingTicket