Saturday, December 6, 2008

Phoenix Man Found Guilty For Filing Fraudulent Lien Releases On Home, Then Pocketing $850K In Subsequent Refinance

From the Office of the Arizona Attorney General:

  • Attorney General Terry Goddard [last week] announced that Delanie Belfield Ross, 39, of Phoenix, has been found guilty by a Maricopa County Superior Court jury on three counts of felony fraudulent schemes and practices and one count of theft.

  • According to court documents, Ross, along with his wife, Veronica Cooper Ross, and his brother-in-law, Willard Cooper, fraudulently obtained mortgage loans for the purchase of a $3.2 million Paradise Valley home in 1994.

  • After taking possession of the house, Delanie Ross recorded fraudulent releases of the liens on the loans with the Maricopa County Recorder. He then represented the house as being owned free and clear to potential investors and obtained an $850,000 line of credit from a private family of investors, using the house as collateral.

For the Arizona AG's press release, see Phoenix Man Found Guilty of Felony Fraud and Theft.

For the original indictment in this matter, see State of Arizona v. Ross.

Traveling Real Estate Investment Seminar Teaches Sale Leaseback, Foreclosure Rescue Deals: Media Report

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

  • A newspaper ad for the Robert Allen Institute's free seminar promised to teach participants how to become millionaires. "Banks are desperate to unload foreclosed properties," the ad's copy read. So KOMO News attended the free seminar in Bellevue, undercover camera in tow.

Reportedly, participants were told they could learn how to knock on a homeowners' door and convince them to surrender the title, then offer to broker a deal to allow the homeowner to rent back their home with an option to buy back the house.

For the video report, see The truth behind 'the best investment ever'.

Go here to read the text of the story.

Friday, December 5, 2008

Partnership Deal Results In 78 Year Old Connecticut Man's Eviction From Home, Losing Farm & 50% Interest In Property; Now Living Out Of Car

In Greenwich, Connecticut, the Greenwich Citizen reports:

  • After 43 years of operating Purdy's Farm on King Street, Delmo Zanette effectively became a farmer without a farm at midnight Oct. 31. Not by choice -- at least by his account.

  • The 78-year-old Zanette was ordered to vacate the property by court order resulting from a legal battle that began four years ago and ended on Oct. 7 when the court finally ruled against him and in favor of Ronald Pecunies and Arthur K. Watson Jr. - his business partners and now adversaries in the case.


  • "I was 100 percent owner of the farm and somehow they got hold of 50 percent of my real estate," said Zanette in a phone interview this past week with the Greenwich Citizen. "I was too trusting, I did not have a lawyer I trusted them implicitly ... but somewhere things didn't go right."


  • Zanette says with the closing of the farm, he is now surviving on income from his monthly Social Security check of $574 and hopes to raise additional money by having tag sales of antiques and a collection of some farm artifacts and books he owns. Despite having some family in the area, Zanette says he is living out of his Suburban and periodically on the couches of family and friends. [...] Currently, Zanette is still 50 percent owner in the properties, which are now on the market with Weichert Realty, listed for $2.6 million.

For more, see A Farmer Without a Farm: What to Do?

Florida Pastor, Wife Charged With Swindling Elderly Couple Out Of $100K+ In Alleged Real Estate Sale, Refinance Scam

From the Florida Department of Financial Services:

  • Florida Chief Financial Officer Alex Sink announced [Wednesday] that additional charges have been filed against a Jensen Beach pastor and his wife in an ongoing investigation by the Department of Financial Services, Division of Insurance Fraud (DFS), into allegations the couple bilked investors throughout central and south Florida out of more than $8 million in fraudulent real estate schemes.(1)

  • In the newest charges, Rodney and Shalonda McGill are accused of duping an elderly couple out of more than $100,000 worth of property and cash.

For the rest of the press release, see CFO Sink's Call For Additional Information Results In New Charges For Jensen Beach Pastor, $500,000 Additional Bond.

(1) According to the press release, the McGills already face charges of Racketeering, first degree; Conspiracy to Commit Racketeering, first degree; Grand Theft, first degree; Grand Theft, third degree; and Obtaining a Mortgage by False Representation, third degree, for saddling investors with more than $1.15 million in mortgage loans by “flipping” properties in Martin and St. Lucie counties that the McGills sold using fraudulent loan applications. The additional charges announced Wednesday, two counts of grand theft in the first degree, mean the McGills face up to 30 years each in prison as well as penalty enhancements provided by Florida law for theft from persons over the age of 65, the press release states.

Deed Thief Strikes S. Florida Couple; Regain Title After Year & A Half Of Aggravation

In West Palm Beach, Florida WPTV Channel 5 reports:

  • You've heard of horse thieves, well how about house thieves? It's a wild west kind of scam that can lead to the loss of what's probably your most valuable asset. Your house. And it turned out to be a nightmare situation for a Loxahatchee couple.

Reportedly, it took extensive investigative work on the part of the police and the homeowners to get the home back, but not after a year and a half, almost $4000 dollars in court costs, time from work, the aggravation and the stressful nights. The homeowners also reportedly lost their homestead exemption and their homeowner's insurance as a result of their home's title being taken out of their name.

For the story, see House thieves, who can steal your home.

Go here, go here, go here, and go here for other posts related to deed or refinancing scams by forgery, swindle, etc. DeedTheftAlpha

Thursday, December 4, 2008

Equitable Mortgage Defense Invoked In Lease-Purchase Agreement; Judge Denies Tenant Eviction, Says Foreclosure Is Required To Boot Renter

In Sarasota, Florida, local real estate attorney Jefferson F. Riddell writes in the Bradenton Herald on the fear (for a landlord) that a court will not allow a property owner to evict a tenant under a lease-purchase arrangement:

  • [T]he fear was realized recently when the seller under a lease purchase type document went to county court in Sarasota to evict the tenant for failure to make monthly payments. The judge scrutinized the document, concluded that it was an agreement for deed and required the seller to foreclose it in circuit court like a mortgage.

  • Cost to the seller for the foreclosure was about $2,000 instead of the nominal cost of a tenant eviction, and the buyer was able to stay in the property rent free for months while the foreclosure was being completed.

Source: Watch out for lease purchase agreements.

More Failed "Contract For Deed" Deals, More Homebuyers, 3rd Party Investors Left Holding The Bag

In Centerton, Arkansas, The Morning News reports:

  • James and Patricia Leach of Bentonville couldn't believe their luck in September 2006 when they were approved to buy a home. [...] But two years, two months, and $51,000 later, they are packing their belongings and moving across town to a home they are renting.

  • The Leaches are one of at least two dozen local families who recently discovered the homes they thought they purchased through the Real Estate Co. of Arkansas actually belong to someone else.


  • Financing was arranged through Greenleaf Companies of Springfield, Mo. Greenleaf, through its contractor Bentonville-based Real Estate Co., was a third party that arranged for real estate investors across the nation to purchase homes, which were then resold to local families through a contract for deed.

For more, see Home Deal Fails For Centerton Families.

Go here for other posts on Greenleaf Companies and The Real Estate Co.

For more on problems with "Contract for Deed," "Rent To Own", and "Lease / Option" real estate deals, go here and go here. rent to own lease purchase option scams yellowstone

Las Vegas Family Of Four Gets Screwed Over In Lease-Purchase Of Home In Foreclosure

In Las Vegas, Nevada, the Las Vegas Review Journal recently reported the story of a family of four who had relocated from Hawaii, and who had entered into a lease-purchase agreement for the purchase of the family home. Unbeknownst to the family, the home was in foreclosure.

For the rest of the story, see THE FACES OF HARD TIMES: 'We put our trust in people' (Alleged scam involving lease-purchase of foreclosed home sends family back to Hawaii). ThetaTenantRentSkimming

Wednesday, December 3, 2008

Ratings Agencies Face Charges Of Civil Rights Violations In Complaint Filed With HUD; Actions Allegedly Facilitated Discriminatory Subprime Lending

Syndicated real estate columnist Kenneth Harney recently reported:

  • In what is apparently the first legal action of its kind, an association of community-based organizations has filed a federal civil rights complaint against two of the three largest Wall Street ratings agencies,(1) charging that their inflated ratings on subprime mortgage bonds disproportionately caused financial harm to African-American and Latino home buyers across the country.

  • The complaint,(2) filed by the National Community Reinvestment Coalition, alleges that Moody's Investor Services and Fitch Ratings Ltd. enriched themselves by assigning high ratings to bonds backed by mortgages "that were designed to fail" because of "unfair payment terms and insufficient borrower income levels."

For more, see Civil rights complaint filed against rating agencies.

See also, NCRC press release: NCRC Files Civil Rights Complaint Against Fitch and Moody’s (Civil penalties and equitable relief sought for consumers and communities injured by rating agencies’ role in foreclosure crisis).

(1) According to the column, a third rating agency with heavy involvement in the subprime boom, Standard & Poor's Corp., was not named in the complaint, but has been "in discussions" with the coalition, according to David Berenbaum, the group's executive vice president. If the discussions with S&P prove "unsatisfactory," he said, the company could be the subject of a separate action, the column states.

(2) The coalition reportedly filed its complaint with the Department of Housing and Urban Development's fair housing and equal opportunity unit. After a review, the department could either dismiss the allegations or refer the case to the Justice Department of the incoming Obama administration for litigation next year. If HUD fails to respond adequately, the coalition says it may file a federal civil lawsuit.

Plaintiffs In WaMu Suits May Be Left Holding The Bag; "Almost Nothing" Says FDIC Rep Referring To Assets Left In Receivership For Aggrieved Homeowners

In Seattle, Washington, a recent column in Seattle Weekly describes the problems homeowners suing Washington Mutual for violations of lending and consumer laws may face now that WaMu has been seized and put into receivership by the FDIC.

  • [The search for redress is made even tougher by the amount of money left in the receivership—"almost nothing," according to Andrew Gray, [an] FDIC spokesperson.

  • Some lawyers [...] are pushing on regardless, waiting to see what happens. Others are dropping their claims. "We're probably not going to go ahead in light of how treacherous and difficult that's going to be," says [a local attorney who filed a class-action suit against WaMu over what he claims were hidden and excessive fees].

For more, see Wronged by WaMu (After the crash, there’s little recourse).

Felonious Rent Skimming, Foreclosure Fraud Charges In Alleged Land Grant "Rescue" Scam Ruled Constitutional, Says California Judge

In San Diego, California, CW Channel 6 reports:

  • Felony civil code violations alleging rent skimming and foreclosure fraud against five people accused of victimizing hundreds of San Diego County homeowners are constitutional, a judge ruled Friday.(1) [...] The defendants face a total of 172 charges, including conspiracy and grand theft.


  • At a hearing in May, Deputy District Attorney Stephen Robinson alleged that the defendants offered to help homeowners keep their property by placing them in "land grants," when in fact the transactions were bogus and left them even worse off than they were before.

For more, see Foreclosure Fraud Charges.

Go here for more on this alleged Southern California land grant, foreclosure rescue scam.

(1) According to the story, Superior Court Judge Charles Rogers denied a legal challenge to the charges against William Hutchings, 62, and his wife Xiaoke Li, 45; Shawna Landis, 36; Diego Gil, age unknown, and Edgar Martinez, 30.

Are Lenders Proactively Offering Borrowers Cash In Exchange For Waiving TILA Violations?

An "Ask The Lawyer" Q & A article appearing last month in the Atlanta Journal Constitution posed the following question:

  • I received a letter from my lender stating that a Truth in Lending Disclosure Statement was not prepared and provided to me prior to closing my loan. I was sent forms to sign and was told that I would be sent $250, for my inconvenience when the forms were completed and returned. Is my lender buying me off for a measly $250? Can I get more? Isn’t it a pretty big offense to not provide the Truth in Lending Disclosure?

For more, see Settle for $250, or go for a possible $1,000 (Latter payoff for lender’s failure to provide form less likely, bigger hassle). missing mortgage foreclosure docs gamma

Tuesday, December 2, 2008

Loan Modification Firms Drawing Attention From NY Feds, State AG

In New York City, Crain's New York Business reports:

  • [W]ith citywide foreclosures up 50% over a year ago, some of the same bankers and brokers who sold unaffordable, subprime loans are now joining the rapidly growing ranks of mortgage modification consultants.

  • While some members of what an online ad called one of the “fastest-growing job markets in the country” run legitimate businesses, housing advocates say many are taking people's money and doing little or nothing in return. The burgeoning industry has caught the attention of the FBI's New York office and the state attorney general.(1)


  • Frequently, they ask homeowners for thousands of dollars up front, which is illegal in 12 states, including New York, unless the fee is made to a lawyer or nonprofit. As part of the sales pitch, homeowners are often advised to stop making mortgage payments,(2) putting their homes in further jeopardy of foreclosure.

For more, see Mortgage holders are marks (Loan modification specialists take money, do little in return).

(1) Other law enforcement agencies are zeroing in. The Illinois attorney general last month filed seven lawsuits against modification firms that failed to negotiate workouts for clients. The Colorado attorney general has filed 15 cease-and-desist orders against such companies. State AGs in Tennessee and Florida have also targeted loan modification firms in lawsuits alleging, among other things, that their activities constitute the unauthorized practice of law.

(2) For whatever its worth, advising homeowners to violate the terms of their loan (by advising them to stiff their mortgage lenders) may give rise to a claim of tortious interference with a contract (or a tortious interference with a business relationship) by the mortgage lender and/or mortgage servicer being stiffed, and subjecting the loan modification firm to potential liability for dispensing the "sage" advice. See generally, White Plains Coat & Apron Co., Inc. v. Cintas Corp., 2007 NY Slip Op 3591; 8 N.Y.3d 422; 867 N.E.2d 381; 835 N.Y.S.2d 530; 2007 N.Y. LEXIS 847 (2007):

  • It is a familiar proposition that one "who intentionally and improperly interferes with the performance of a contract (except a contract to marry) between another and a third person by inducing or otherwise causing the third person not to perform the contract, is subject to liability to the other for the pecuniary loss resulting to the other from the failure of the third person to perform the contract." Restatement (Second) of Torts § 766.

Loan Modification Firms Swarm Courthouses To Find Leads; Cash-Strapped Homeowners Find Mailboxes Stuffed With Junk Mail, Salespeople On Doorstep

A recent editorial in The New York Times makes this observation:

  • The demise of the subprime mortgage industry has been hard on predatory brokers, too. They feasted for years on bad loans until reality crashed down and the money ran out, and there they were: sharks without a frenzy.

  • Now they are circling again. Predators of every sort have regrouped and returned to their old ways, this time as loan-modification companies, inserting themselves between hard-strapped homeowners and banks, offering to work deals — for cash up front.


  • Troubled homeowners know all about the relentlessness of the loan-rescue racket: it fills their mailboxes and sends salespeople to lurk on their doorsteps. Foreclosure filings are public records, and loan modifiers routinely swarm courthouses to find leads.

  • Loan counselors at the Long Island Housing Partnership, a respected nonprofit in Hauppauge, N.Y., tell of scammers crashing its housing workshops, posing as troubled borrowers, then working the crowd with sales pitches.(1)

For more, see Return of the Predators.

(1) Some state attorneys general have already started going after these loan modification firms. For example, there are ongoing efforts by the state AGs in Illinois, Tennessee, Colorado, and Florida. Further, state AGs in Tennessee and Florida have reportedly also included allegations of unauthorized practice of law in their actions against loan modification firms.

Foreclosure Rescuers, Loan Modifiers Circle San Joaquin Valley Homeowners In Financial Trouble

In the San Joaquin Valley region of California, the Merced Sun Star reports:

  • The foreclosure sharks are circling the San Joaquin Valley. [...] With Stockton, Modesto, Merced and Fresno all ranking among the nation's leading cities for foreclosures, the market invites commercial exploitation. Hundreds if not thousands of San Joaquin Valley homeowners are being besieged by letters, phone calls and even door-to-door visits that purportedly offer escape from financial harm.

  • Barbara Galvan, for instance, resides in southeast Fresno and said she has never missed a mortgage payment. Nonetheless, as her adjustable rate keeps rising, she's been getting the hard sell from purported rescuers. "I'm getting lots of calls," Galvan said. "They want me to pay $3,000 or $4,000 up front. I tell them, where will I get $3,000 if I can't pay my mortgage? They say, I could put it on my credit card."

For more, see Housing crisis: Foreclosure scams abound in Valley (Organizations promise help but homeowners need to read fine print).

See also, Beware of 'vultures' as foreclosures grow:

  • [San Joaquin] Valley officials report that homeowners are getting pounded by letters, phone calls and personal visits from individuals and businesses claiming they have an easy answer to financial problems. For fees of $3,000 or $4,000, they'll unlock the key to saving your home. loan modification

Pittsburgh Homeowner Out $2,800 Paid To Upfront Fee Foreclosure Rescue Firm In Exchange For Failed Loan Modification Promise

In Pittsburgh, Pennsylvania, KDKA-TV Channel 2 reports:

  • [S]tephanie and her husband have been unable to keep current on their mortgage payment which carries a 12 percent interest rate. Three months ago, they gave a Florida foreclosure help company $2,800 in hopes the company could convince their lender to modify their loan.


  • Stephanie says the company assured her of a 90 percent chance of a modified loan, but three months later her lender told them that wasn't in the cards. Now the company won't return her calls and has reneged on their money-back guarantee. "I can't even get a call back, much less money back," Stephanie said.

For more, see Couple Facing Foreclosure Fleeced By Company (read story) (watch KDKA video).

Monday, December 1, 2008

Lack Of Legal Standing Apparently Not A Concern To Some Foreclosing Lenders; Would Rather Play The Odds That Homeowners Won't Contest Legal Actions

Buried in a recent article in the Connecticut Law Tribune is this excerpt, which may reflect the arrogance of some mortgage lenders and their general contempt for the legal system when bringing foreclosure actions against homeowners even though they lack the legal standing to do so:

  • [Attorney Patrick] Begos’ firm [Begos, Horgan & Brown] has attempted to carve out a niche with banks to review their troubled loans and to ensure that the banks had standing to file foreclosure proceedings.

  • Earlier this year, firm member Christopher Brown got a case against his homeowner client dismissed in New Haven Superior Court because Brown showed that the plaintiff mortgage company couldn’t prove it held the mortgage at the time it filed suit.(1)

  • Despite that outcome, banks didn’t bite on Begos’s pitch, telling him that they would rather play the odds that most homeowners won’t contest foreclosures in court.(2)

Source: Adapting On The Fly (Solos, small firms make quick changes in bad economy).

For posts that reference the failure of some mortgage lenders and their attorneys to prove ownership of the promissory note when starting foreclosure actions, Go Here, Go Here, Go Here, and Go Here.

(1) See Connecticut Law Tribune: Shaky Standing (Foreclosure cases identify shoddy record-keeping in mortgage industry).

(2) Even if the homeowners fail to contest foreclosures, a lender's lack of legal standing in bringing an action leaves open a possible future attack that the foreclosure judgment obtained in a court that lacked jurisdiction is void, thereby raising the possibility that judgments obtained and foreclosure sales that have already taken place could be voided or otherwise set aside. Reportedly, the issue of void foreclosures where lenders allegedly lacked legal standing has recently been raised in a Massachusetts lawsuit. The suit seeks to set aside past foreclosures involving two lenders, halt any actions they currently have in the pipeline, and seeks class action status. See Thousands Of Foreclosures Are Void, Says Massachusetts Class Action Demanding Lenders & Their Lawyers Prove Note Ownership. missing mortgage foreclosure docs gamma

The Best Defense Is A Good Offense, Says Homeowner's Foreclosure Attorney

In Orlando, Florida, Central Florida News Channel 13 reports:

  • Matt Englett, the lawyer of a Longwood man who lost his job and is in foreclosure, is working to modify his client's loan and do whatever it takes to make sure his client has a place to live. "I can take a 90-day uncontested foreclosure, and I can drag it out for two or three years if we have to," Englett said.


  • Englett warned just because lenders contact you and make you think they are working with you to modify your loan, look into taking action anyway. If not, the lender may go ahead and take your home before you know it.

For more, see Take Action Against Your Lender During Foreclosure. missing mortgage foreclosure docs gamma

Prince George's State's Attorney Nearing Indictment On 20 Mortgage, Foreclosure Fraud Cases; Lawyers, Loan Officers, Others In The Cross Hairs

In Upper Marlboro, Maryland, The Maryland Daily Record reports:

  • The Prince George’s County State’s Attorney’s Office hopes to send a message to potential perpetrators of mortgage fraud: “Not in this county.” Operating since September, the office’s new Mortgage and Foreclosure Division is hoping to bring 20 cases to indictment soon, said Assistant State’s Attorney April Richardson.

  • Richardson said the division is moving forward against loan officers, title companies, lawyers and brokerages thought to have participated in mortgage scams.

For more, see Mortgage fraud unit targets lawyers, loan officers.

The Call For Home Loan Modification Rights In Bankruptcy Proceedings Continues

The Honorable J. Rich Leonard, a jurist who currently toils in the U.S. Bankruptcy Court for the Eastern District of North Carolina, recently wrote in The Washington Post advocating for a change in the cuurrent bankruptcy law to allow for the modification of troubled home mortgages in bankruptcy proceedings. In his article, Judge Leonard reminds us of the following:

  • [H]omeowners are the only ones who cannot modify the terms of their secured debts in bankruptcy. Corporate America flocks to bankruptcy courts to do precisely this -- to restructure and reamortize loans whose conditions they find onerous or can no longer meet. Airlines are still flying and auto parts makers still operating because they have used this powerful tool of the bankruptcy process. Lehman Brothers will surely invoke it.

  • But when the bankruptcy code was adopted in 1979, the mortgage industry persuaded Congress that its market was so tightly regulated and conservatively run that it should be exempted from the general bankruptcy rules permitting modification.

For more, see Give bankruptcy judges the power to alter mortgages.

For a similar position espoused by the Honorable Keith M. Lundin, a judge in the U.S. Bankruptcy Court in the Middle District of Tennessee, see:

Sunday, November 30, 2008

Central Florida Foreclosure Conciliation Program Begins In December

In Central Florida, the Bradenton Herald reports:

  • With foreclosure cases swamping local courts, the area’s top judge is planning a novel approach: Forcing lenders to talk with borrowers. Saying he wants to break “the wall of silence” between lenders and homeowners, 12th Circuit Chief Judge Lee Haworth soon will require them to discuss possible ways of avoiding foreclosure before it actually happens.

  • Forcing the parties to slow down and discuss possible solutions is a good thing,” he said Monday. The new Homestead Foreclosure Conciliation Program likely is the first of its kind in Florida, Haworth said. The program applies to foreclosure suits filed on or after Dec. 1 against homesteaded residential properties in Manatee, Sarasota and DeSoto counties.

For more, see Local judge says borrowers, lenders must see eye to eye.

Go here for more on Florida's 12th Circuit Homestead Foreclosure Conciliation Program: