Saturday, October 4, 2008

Bankruptcy Judge Orders Victim To Pay Back Thief; Convicted Builder Entitled To Recover Restitution Paid To Ripped Off Customer

In New Haven, Connecticut, The Associated Press reports:

  • Mark Poveromo feels ripped off twice over. A judge ordered him to repay money he collected from a builder convicted of stealing from him - and told him to kick in the thief's attorney fees and court costs, too.


  • The case began in 2006, when Poveromo hired Mark R. Koch of Illinois for an $80,000 project to construct a building for his pet food business in Thomaston, Conn. Poveromo paid $39,500 up front, but Koch never did any work, according to court documents.

  • Poveromo filed a criminal complaint, and Koch was convicted in Connecticut of first-degree larceny in April 2007 and ordered to pay restitution. Koch paid $25,000 and began monthly payments to Poveromo on the balance, but that's when the law turned on Poveromo.

  • Two months before his conviction, Koch filed for bankruptcy protection in St. Louis, halting any monetary claims against him. [...] Koch then filed a complaint to the bankruptcy court accusing Poveromo of intentionally violating the stay on claims by having him arrested to collect on his debt. Judge Charles Rendlen III agreed with the builder. In a ruling filed in December, and without hearing from Poveromo, Rendlen noted "the highly suspect timing" of Koch's arrest and conviction after filing for bankruptcy.


  • Poveromo said he reluctantly accepted a settlement reached a few weeks ago in which he was able to keep the nearly $28,000 Koch had given him but did not collect on the balance he was owed based on what the Connecticut court had ordered.

For more, see Bankruptcy judge orders victim to pay back thief. contractors stiff subs customers yelbow

Friday, October 3, 2008

Chicago Homeowner, Local Non-Profit Fight To Save Home Allegedly Stolen In Equity Stripping, Foreclosure Rescue Ripoff

MSNBC's The Red Tape Chronicles recently ran a story on foreclosure fraud and short sale fraud. Included in the report is the story of Chicago, Illinois homeowner Angela Carter, 55, who alleges in a lawsuit that she was ripped off of close to $100,000 in an equity stripping, foreclosure rescue scam by a company named Second Chance Program and is fighting to keep her home:

  • Here is Carter’s version of events: After signing a flurry of paperwork, she signed title of the house over to Second Chance, selling her house for $140,000 with the understanding that she would pay the firm rent and could repurchase the house a year later for $180,000. But almost immediately after signing the deal, Carter said, Second Chance took out a second loan on the property based on her untapped equity and pocketed close to $100,000 -- a common scheme called "equity skimming."

  • I had no idea what the building was worth,” she said. “And I had no idea they were buying my house. All along I thought they were giving me a loan.” Two years later, Second Chance sent Carter an eviction notice.

  • With the help of Chicago's nonprofit Home Ownership Preservation Project [of the Legal Assistance Foundation of Metropolitan Chicago], she was able to temporarily block the eviction. Now, the two parties are fighting in state court about who holds the rights to the home. Earlier this month, Carter spent a week in court pleading her case. Now she faces a long wait to find out if she'll get to keep her house and what will happen to the $100,000 in equity her family earned from living there for nearly five decades. "I have no idea how it's going to turn out," she said. "It's like living with a question mark over your head.”

For more, see Millions At Risk Of Foreclosure Fraud.

Thursday, October 2, 2008

Arizona AG, HomeVestors Franchisee Settle Charges Of Alleged Foreclosure Rescue Fraud; Operator To Fork Over $350K To Approximately 100 Consumers

From the Arizona Attorney General's office:

  • Attorney General Terry Goddard [Tuesday] announced a settlement with Harvest Properties Inc. of Tucson, resolving a consumer fraud lawsuit that alleged foreclosure rescue fraud and mortgage fraud by the company and its owners. [...] The settlement, which comes in the form of a consent judgment and does not constitute an admission of wrongdoing, requires Harvest and its owners and managers to pay $350,000 in restitution to approximately 100 consumers.


  • Friday’s settlement with Harvest Properties, Inc., along with its owners and managers, Colin Sterling Reilly, Robert Harrington Reilly and Jill Lynae Reilly, resolves allegations that Harvest engaged in a foreclosure and credit rescue scheme that employed deceptive practices to buy foreclosed homes at discounted prices.

For more, including the allegations set forth in the Arizona AG's complaint, as well as additional terms contained in the setlement, see Terry Goddard Announces Foreclosure Rescue Fraud Settlement.

See also:

Wednesday, October 1, 2008

Indiana AG Targets Foreclosure Rescue Operator For Allegedly Taking Upfront Fee, Not Solving Mortgage Problem

In Indianapolis, Indiana, WIBC-FM Radio 93.1 reports:

  • The state says an Indianapolis company which offers to help you stave off foreclosure should be put out of business. Attorney General Steve Carter has asked for a court order barring Nationwide Foreclosure Consultants from contacting customers until it posts a required [$10,000] bond with the state. He's also suing the company for taking a [$495] payment from a Charlestown woman and allegedly doing nothing on her behalf. The suit accuses NFC of promising a money-back guarantee if the company failed to "solve (a client's) mortgage problems."


  • Carter wants a court to fine the company [$5,500] for what he contends are violations of three Indiana consumer-protection laws.

Source: State Seeks Injunction Against Foreclosure Consultant (Suit claims firm failed to deliver on services which other agencies offer for free).

Tuesday, September 30, 2008

Foreclosure Fraud Getting Attention Fron San Bernardino DA

In San Bernardino, California, the San Bernardino County Sun contains this blurb on the work of the local district attorney's office in its fight against foreclosure fraud:

  • Foreclosure fraud is the [real estate fraud] unit's latest buzz, [lead deputy district attorney of the unit Larry] Roberts said. Foreclosed homeowners are claiming they paid $2,000, $3,000 or more to companies promising debtor relief, only to find they were stabbed in the back. From July 2007 to July 2008, the 10-person district attorney's unit received almost 460 formal complaints from residents across the county claiming they were burned by mortgage or foreclosure fraud. The suspects are based all over Southern California. That number could grow by leaps and bounds over the next year, but there's a fair chance Roberts' staff size will remain the same.

  • A bill that would provide more funding to county real-estate fraud units statewide made it to Gov. Schwarzenegger's desk, but the state's budget impasse is getting the spotlight right now. Still, Roberts presses onward. "We're here to hurt offenders," he said. "We represent the interests of the people of the state of California."

For the story, see Fraud monsters.

Monday, September 29, 2008

Nevada High Court OKs Damage Award To Homeowner Due To Mortgage Company Misidentification Of Home In Foreclosure

In Las Vegas, Nevada, the Las Vegas Review Journal reports:

  • Gerald and Katrina Thitchener lost nearly all their material possessions thanks to an arrogant error by Countrywide Home Loans officials. They weren't just stripped of their furniture and clothing when a mistake by Countrywide in 2002 set in motion a foreclosure procedure that resulted in their condominium being "trashed out."


  • The Thitcheners lost a lot back in 2002, including some of their faith in the system; but on Thursday the Nevada Supreme Court determined that their losses, and the actions of the mortgage giant, deserved compensation in the approximate amount of $2 million.(1)

For more, see Sometimes little people come out on top against arrogant big shots.

For the Nevada high court decision, see Countrywide Home Loans v. Thitchener.

Go here for other posts on foreclosure screw ups involving improperly changed locks, removal of belongings, etc.

(1) A somewhat conflicting report in the Las Vegas Sun says the total compensation was only $1.29 million, which includes $968,070 in punitive damages. For more, see Court reduces $3 million judgment in wrongful foreclosure case. ForeclosureLockOuts

Sunday, September 28, 2008

Michigan Man Accuses Florida Firm Of Foreclosure Rescue Ripoff

In Trinity, Florida, Tampa Bay's 10 News reports:

  • Richard Taylor found United Home Savers on the Internet to help him with his foreclosure in Wyandotte, Michigan. "For a fee, they would work with my mortgage and bank to help me get a lower rate and a lower payment for a certain amount of years," said Taylor. In April Taylor paid United Home Savers more than $1,100. He heard back from the company about a month later. "They couldn't do nothing," said Taylor. "So I says, 'If you can't do nothing for me, then I want my money back.'" But he still hasn't gotten his money back. Taylor even traveled to United Home Savers office in Largo.


  • The Federal Trade Commission filed a federal lawsuit against United Home Savers and officers Stephanie and Darin Dietschy earlier this month. A sign on the company's office in Largo says it is currently under court order by the FTC that all information in this building is frozen. Illinois Attorney General Lisa Madigan has also filed a lawsuit against United Home Savers. [...] Florida legislators recently passed a new law regulating mortgage rescue companies. Starting October 1st, they cannot accept any payment, until they provide you with a service.

For more, see Viewer wants refund from mortgage rescue company (read story) (watch Channel 10 video).

For story update, see Viewer's brother with mortgage rescue problem gets money back (Richard Taylor tells 10 News he has received $1,000 cash back from Brian Mehle, one of the directors of the mortgage relief company that took over from United Home Savers.).

From the Federal Trade Commision: