Break In Chain Of Title To Mortgage Loan Temporarily Stalls Foreclosure; Bankruptcy Judge Gives Lender Until Thursday To Prove It Owns The Debt

In Savannah, Georgia, The Augusta Chronicle reports:

• An Evans woman whose business dealings set off a series of foreclosures and bankruptcies fended off eviction from her own home Thursday -- at least for now. U.S. Bankruptcy Court Judge Susan D. Barrett gave the local counsel for American Home Mortgage Servicing until next Thursday to gather information to show that through a series of sales and transfers, it is the rightful owner of Regina Preetorious' $567,000 mortgage loan.

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• American Home Mortgage petitioned the bankruptcy court to allow it to proceed with foreclosure on the couple's Windmill Lane home. The company contends they haven't made a mortgage payment since October 2007 on the 3,540-square-feet home. The couple's bankruptcy attorney, Todd Boudreaux, contends American Home Mortgage should prove it holds the legal security deed on their home.

• Ms. Preetorious signed the original loan on Nov. 30, 2006, with Option One Mortgage Co. In January, the company's loans were placed in a trust with Wells Fargo as the trustee. On April 30, America Home acquired all the assets and interests of Option One, company attorney James Overstreet said Thursday. The contents of the trust overseen by Wells Fargo were included, he said.

• But that last step wasn't clear Thursday. There appeared to be a break in the chain of ownership, Judge Barrett said. Mr. Boudreaux said the couple is entitled to know exactly who owns their loan.

For the story, see Businesswoman avoids eviction.

$8.68 Billion Settlement In The Works In Countrywide Litigation With 11 State AGs; Loan Mods For Many Countrywide Borrowers On The Way

In Sacramento, California, Legal Newsline reports:

• With news of a billion-dollar settlement between financial giant Bank of America and attorneys general from 11 states, thousands of homeowners facing foreclosures could soon have a rebirth of opportunity to save their homes. News of the settlement leaked out of several state attorneys general offices Sunday night. Those close to the negotiations hailed the progress as a significant step toward stemming the tide of the foreclosure crisis that has caused an earthquake in the county's economic foundations.

• "This is definitely a home run," said San Diego City Attorney Mike Aguirre, one of the many city officials suing Countywide Financial Corp. over its alleged predatory lending practices. California Attorney General Jerry Brown, who led much of the negotiations with Bank of America, parent company of Countrywide, too hailed the victory of homeowners. "Unlike last week's congressional bailout," Brown said, "This loan-modification program provides real relief for borrowers at risk of losing their homes."

• Brown said the $8.68 billion settlement, with $3.5 billion going to his state, is the largest of its kind, far surpassing the $484 million settlement with Household Financial Corp. in 2002.

For more, see Countrywide clients find new life in settlement.

See also California AG press release: Attorney General Brown Announces Landmark $8.68 Billion Settlement with Countrywide:

• In addition to California, attorneys general in 10 states, including Arizona, Connecticut, Florida, Illinois, Iowa, Michigan, North Carolina, Ohio, Texas and Washington, are participating in the settlement. Attorney General Brown’s office, along with the Office of the Illinois Attorney General, led the negotiations for the states.

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• The settlement does not include Angelo Mozilo, the former Chairman and Chief Executive of Countrywide Financial Corporation or David Sambol, formerly the President of Countrywide Home Loans and the President and Chief Operating Officer of Countrywide Financial Corporation. Brown will continue to prosecute his case against Mozilo and Sambol.

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.

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• 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.

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• 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

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.

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.

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• 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:

• Arizona Daily Star: Tucson firm accused of 'deceptive tactics' in foreclosure rescues (free registration required),
• KPHO-TV Channel 5: 'Ugly Homes' Buyers Settle Fraud Suit ("Authorities got on the track of Harvest Properties after Goddard's office received a complaint from an elderly woman whose home had been sold out from under her by her son who is a drug addict, the attorney general said.").

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."

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• 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).