Ohio AG Targets Two Mortgage Brokers In Separate Suits For Alleged Violations Of Predatory Lending Laws

From the Ohio Attorney General's Office:

• The Ohio Attorney General's Office and the Ohio Department of Commerce [last month] filed two complaints against mortgage brokers for violating Ohio’s predatory lending laws. The lawsuits were filed against Columbus companies Magellan Mortgage Corporation and Highland Banc, Inc. along with an individual loan officer and appraiser, accusing them of engaging in unfair, deceptive and unconscionable acts and practices. The complaints were filed in the Franklin County Court of Common Pleas.

• The lawsuits against Highland Banc and Magellan Mortgage raise many violations of the Ohio Homebuyers Protection Act, in addition to multiple violations of the Ohio Mortgage Broker Act (OMBA), and the Real Estate Settlement Procedures Act (RESPA). The suit against Magellan also alleges that the company violated the Truth in Lending Act (TILA). Some of the allegations in the suits were that a mortgage broker arranged loans with undisclosed fees and loans that resulted in no net tangible benefit for homeowners who had no reasonable ability to repay the loans.

For the press release, and to view the lawsuits,(1) see Ohio Attorney General Accuses Mortgage Brokers Of Predatory Lending Practices.

(1) State of Ohio v. Highland Banc, Inc., et al. begins at p.3 of press release. State of Ohio v. Magellan Mortgage Corporation, et al. begins at p. 23 of press release.

Washington State Homeowners File Lawsuit Against Countrywide Alleging Violations Of State Consumer Protection Act, Seek Class Action Status

In Seattle, Washington, the Seattle Post Intelligencer blog recently reported:

• Add one more lawsuit to Countrywide's list of legal woes. Illinois and California have sued, accusing the lender of deceptive sales practices. Now borrowers, represented by the Seattle law firm of Hagens Berman Sobol Shapiro, have sued in U.S. District Court in Seattle, accusing the lender of knowingly steering customers into high-risk loans and not disclosing the risks associated with them.

• They allege in the complaint that the lender misrepresented the terms of ARMs (adjustable-rate mortgages), marketed risky complex loans by emphasizing low teaser rates while misrepresenting later steep monthly payments and routinely encouraged borrowers to refinance only months after an affiliated broker sold them a loan.

For more, see Homeowners sue Countrywide.

For the lawsuit, see Buckley v. Countrywide Home Loans, Inc.

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

Advocates: NYC's Growing Foreclosure Crisis Outstripping Pro Bono, Government-Subsidized Lawyers' Ability To Handle Problem

In New York City, the New York Daily News reports:

• [T]he city's growing foreclosure crisis has outstripped pro bono and government-subsidized lawyers' ability to handle the problem, advocates said. "There are thousands of people out there who might be in need of legal assistance, and we just don't have the capacity," said South Brooklyn Legal Services foreclosure unit director Jessica Attie.

• Legal Services had so many foreclosure cases last year it had to stop taking new ones, she said. The group has now expanded its foreclosure unit. But even with an enlarged foreclosure practice, they can only take a fraction of the cases, Attie said.

• There is one more complication to finding free legal assistance for homeowners in trouble. Pro bono lawyers from elite city law firms are also not much help to homeowners facing foreclosures: Many of the firms represent the banks that are trying to take their homes.

For the story, see Nonprofit 'Common Law' trains homeowners to be their own lawyers.

California Man Gets 120 Days In Case Involving Alleged Forgery Of Judgment Holder's Signature On Lien Satisfactions

The San Bernardino County District Attorney's Office announced last week:

• James Badalian, 45, of Fontana, was sentenced Wednesday, August 27, 2008, to felony charges connected to forged documents. Badalian appeared in San Bernardino County, Central Division, Superior Court, and was sentenced to 120 days county jail for the crime of accessory to a forgery, a felony, as part of a plea agreement. The issue of restitution has been reserved.

• On two separate occasions, in 2002 and 2004, Badalian allegedly forged the victim’s names on two different Acknowledgment of Satisfaction of Judgment documents and later recorded them at the San Bernardino County Recorder’s Office. The documents were notarized utilizing false notary stamps.

For the DA's press release, see Fontana Man Sentenced in Forgery Case.

Trial Of Central Florida Couple Charged With Duping Senior In Foreclosure Out Of Home Derailed As State Lawmaker Sends Judge Improper Communication

In New Port Richey, Florida, The Tampa Tribune reports:

• Under normal circumstances, State Sen. Mike Fasano's Thursday morning fax to Circuit Judge Jack Day might have amounted to nothing more than another person's opinion about an ongoing case. Judges get them all the time.

• But this was different. Day was presiding over the trial of a couple accused of cheating 91-year-old Eloise Mudway out of her house and assets. Unlike most criminal cases, which are decided by juries, the judge alone was to determine whether Joe and Cynthia Clancy were guilty and, in the event he did, what their sentences should be.

• That made Fasano's letter(1) condemning the Clancys and suggesting they receive the harshest possible sentences grounds for a recusal, defense attorneys argued. Day granted the request, prematurely ending a trial that has been on the docket since October 2005.

• Now the case must be assigned to another judge and retried from the beginning. The case must come to trial within 90 days, unless the Clancys waive their right to a speedy trial. "This is just a shame," said Assistant State Attorney Mary Handsel as she left the courtroom.

For the rest of the story, see:

• Judge Gets Fax From Fasano, And A Trial Is Derailed,
• Woman Testifies Against Pair.

Go here, here, here, here, here, and here for other posts on elder financial abuse.

(1) According to the story, Fasano wrote: "If Joseph and Cynthia Clancy have done even half of what they are alleged to have done, they should get the strongest possible sentence. Too often we read of deadbeat individuals in this state taking advantage of our elderly residents. Enough is enough!" FinancialAbuseOfElderlyAlpha

New NYC Non-Profit Legal Clinic Gives Homeowners Foreclosure Self-Defense Training

In New York City, WNYC Radio 93.9 FM (820 AM) reports:

• A new legal clinic is claiming great success in helping homeowners fight off foreclosure of their homes. [...] In July, [a] Brooklyn businesswoman was sued by her bank after missing payments. Now she's headed to court. [She's] been trained in foreclosure law by a new nonprofit called Common Law.(1) Co-founder Karen Gargamelli says it's a program born of necessity. "Because there are only a handful of people that even understand the foreclosure laws, people have to represent themselves against the bank," [she said.]

• A spokesman for the state Bar Association confirmed that very few attorneys in New York practice foreclosure law. Gargamelli says each of the 50 or so homeowners her group has advised have convinced the court to not foreclose on them.

For the story, see New Legal Clinic Helps Homeowners Fighting Foreclosure.

In a related story, see New York Daily News: Nonprofit 'Common Law' trains homeowners to be their own lawyers.

(1) According to this City University of New York (CUNY) Law School Alumni News report, Common Law Inc. is a non-profit consortium of three CUNY Law alums from the class of 2006, who created a clinic to help homeowners in foreclosure. At the clinic, homeowners listen to the situations faced by nearby residents. At a following meeting, they describe their own situations. Then, experts in foreclosure help them with paperwork so they can represent themselves in court.

Washington State AG Takes Page Out Of Scammer Playbook To Identify, Warn Potential Foreclosure Scam Targets

In Seattle, Washington, KOMO-TV Channel 4 reports:

• Pending foreclosure listings are a matter of public record. Anyone can get the information through your county property tax division. That's how scammers find vulnerable homeowners desperate for help.

• Now, the [Washington] State Attorney General is taking a cue from the scammers, using public records to reach homeowners before they become targets. Starting this month, homeowners facing foreclosure will get a letter warning about foreclosure rescue scams. The letters will highlight warning signs and share horror stories from people who've lost their homes through a foreclosure rescue scheme.

• Some 14,000 letters went out this week to homeowners who missed mortgage payments. Many county treasurers will start including scam warnings when they mail certified foreclosure notices to people who haven't paid property taxes.

For more, see State officials take cue from scammers to help protect those facing foreclosure (read story) (watch KOMO-TV video).

Go here for the Washington State AG's foreclosure rescue warning letter.