Saturday, December 27, 2008

Denver Pastor Charged In Flipping Scam; Used Two Unwitting Churchmembers As Straw Buyers On 8 Homes Ultimately Ending In Foreclosure, Say Authorities

In Denver, Colorado, KMGH-TV Channel 8 reports:

  • A Denver pastor, indicted for alleged mortgage fraud, turned himself into authorities late Thursday. The indictment alleges that Harold Joe Hicks used surrogates to purchase property and then falsified mortgage applications to get lower interest rates.

  • "He would bring nearly completed mortgage applications... and (would) have the surrogate buyer simply sign off without reading it," said Lynn Kimbrough of the Denver District Attorney's office.

  • Pastor Harold Joe Hicks, 64, of Mount Carmel Community Baptist Church was formally charged, Thursday, with eight counts of theft and eight counts of forgery.(1) The two surrogates listed in the indictment attended Mt. Carmel. According to court documents, Hicks told both Richard Martin and Sherri Wrightsil that he would rent the properties, pay the mortgages, taxes, insurance and other expenses.

For more, see Grand Jury Indicts Pastor In Alleged Mortgage Fraud Scheme (Eight Properties Purchased Through Surrogates End Up In Foreclosure).

See also:

  • Rocky Mountain News: Minister indicted on 16 counts (Harold Hicks accused of stealing $80,000 in mortgage scheme) - "It is one of the most heinous examples of real estate fraud I've ever seen," said Jim Spray, a mortgage fraud expert familiar with details of the Hicks case. "To use his level of trust and abuse it severely, and hurt people so deeply that it shatters their faith . . . heinous doesn't even describe it."

  • Rocky Mountain News (July 7, 2007): Signing on faith (Ex-church members say pastor misused trust to conduct shady real estate deals).

(1) It should be noted that the forgery charges relate to the signatures appearing on the allegedly fraudulent mortgage applications used to obtain the loans. According to the indictment, the signatures are alleged to be the authentic signatures of the unwitting straw buyers; Pastor Harold Joe Hicks, while accused of filling out the mortgage applications with fraudulent information, has not been accused of actually signing these documents. Notwithstanding, he is facing the forgery charges in connection with those signatures.

Regardless of whether forgery convictions are obtained against Hicks, this case should serve as a reminder that, in Colorado as well as in some other states, the act of forgery need not be done by the hand of the person being charged; fraudulently procuring the signature of another to an instrument which the signer either has no intention of, or is otherwise tricked into, signing constitutes forgery on the part of the procurer in some states. It is sufficient that the forgerer caused or procured it to be done. See also:

  • May 27, 2008 post (1): New York Court Decisions A Reminder That Viable Forgery Claim May Arise When Homeowner Is Tricked Into Signing Deed; and
  • May 27, 2008 post (2): California Appeals Court Says Genuine Homeowner Signature On Instruments In Foreclosure Rescue Scheme Not A Bar To Scammer's Forgery Conviction.

By the way, in the State of Ohio, the crime of tricking someone into signing any writing that either conveys an interest in property, or creates a monetary obligation, is called "Securing Writings by Deception" - see Sec. 2913.43, Ohio Rev. Code) ForgeryGenuineSignatureKappa

Little Known Defense In Foreclosures Of FHA-Insured Mortgages Highlighted In Florida Homeowner's 4-Year Fight To Save Home

In Jacksonville, Florida, reports on the story of Vickie Lewis, an area homeowner fighting a foreclosure action filed against her by Washington Mutual, and who has been living with the uncertainties of being in foreclosure limbo for the last four years.

  • [F]or the past four years, Lewis, 48, has seen her name on dozens of legal documents and spent hours in court as her mortgage holder, Washington Mutual Bank, pursued foreclosure on the only home she has ever owned. And she has no more idea now than when this began where or how it all might end.


  • Lewis is one of scores of clients represented by [April] Charney, an attorney with Jacksonville Area Legal Aid who has developed numerous foreclosure defenses that have kept many of the troubled borrowers she represents in their homes for years.

  • Charney’s defense of Lewis has been based largely on claims that Washington Mutual did not follow federal regulations by offering her a “reasonable opportunity to get current” and “a face-to-face meeting” before three monthly mortgage installments went unpaid, among other requirements.(1)

  • According to court filings, prior to foreclosure, WaMu never discussed any options with Lewis other than demanding all back mortgage payments in full.(2) The bank is now demanding the entire balance, which had since ballooned by thousands of dollars with the addition of “illegal and outrageous” charges for attorney’s fees, collection costs and insurance, the filings allege.

For more, see When foreclosure limbo becomes a lifestyle (Like millions in U.S., Florida woman lives with housing uncertainty). (For the entire story on one web page, try here).

(1) These requirements apply to FHA-insured mortgages. According to the story, the FHA program is intended to provide a chance at home ownership for low-income and credit-challenged buyers. There’s a built-in expectation that FHA borrowers may have more trouble staying current on their payments than so-called prime borrowers, and so the borrowers pay hefty insurance premiums that protect the lenders for the life of the loan. Because of this, the FHA demands that lenders follow its extensive rules about dealing with borrowers who are in default.

(2) According to the story, Charney said lenders’ disregard for federal loss mitigation procedures and default loan servicing rules is just one sign of a larger problem: a mortgage-lending industry that ran wild for years under scant government review, inflating appraisals, overstating borrowers’ credit and income and creating such a maze of trusts and securities that the ownership of millions of mortgages is now almost impossible to establish.

Illinois AG, Cook County SA Say Firm Filed Phony Mechanics Liens & Started Foreclosure On Homeowners Refusing To Be Squeezed

From the Office of the Illinois Attorney General:

  • Attorney General Lisa Madigan and Cook County State’s Attorney Anita Alvarez [Wednesday] both filed lawsuits against a Chicago mechanic’s lien filing service for filing invalid liens against property owners and for intimidating homeowners either to pay debts they don’t owe or to overpay for debts incurred with contractors.


  • According to the Attorney General’s complaint, Contractor’s Lien Services (CLS) and its founder, Steve Boucher, analyze, prepare and file mechanic’s liens on property on behalf of general contractors and subcontractors. CLS allegedly misrepresents to contractors that it has valid cause for filing mechanics liens against homeowners when, most often, those contractors do not actually have valid claims under state laws.

  • CLS also allegedly files liens without the knowledge of some contractors and, in other instances, CLS files liens against homeowners when contractors have not performed work at the properties in question.

  • After filing foreclosure liens, CLS allegedly files foreclosure actions against consumers who don’t pay off the debts. Some contractors claim that CLS collects money on behalf of contractors but then fails to redistribute the collected debts to them.

For the Illinois AG press release, see Attorney General Madigan, State's Attorney Alvarez Sue Chicago Lien Filing Service For Fraudulent Practices.

For what sounds like a similar matter recently resolved by the Massachusetts Attorney General's Office, see Mass AG: Firm Agrees To Remove Mechanics Liens On Houses (Resolves Complaints By Paid-In Full Homeowners Of Improper Squeezing By Contractor, Supplier).

Go here for other posts on suspected mechanics lien scams. StiffingContractorsTheta MechanicLienScamTheta

Friday, December 26, 2008

Arrest Warrant Issued For Unlicensed California Contractor Suspected Of Illegally Slapping Phony Mechanics Liens On Homes In Foreclosure

In Vallejo, California, the Vallejo Times Herald reports:

  • A $30,000 arrest warrant has been issued for a Benicia man who officials believe has been trying to profit illegally from Vallejo's foreclosure crisis. A team from the Solano County District Attorney's Office and Vallejo Police Department on Wednesday went to arrest James Paul Jones in the Vallejo home he's been occupying and found him gone, said Deputy District Attorney Laura Undlin.

  • Jones, 53, also known as James King and King James, is suspected of contracting without a license and filing false or forged documents, Undlin said. The false document charge is a felony, she said.

  • Jones has filed mechanic's liens against several foreclosed Vallejo homes he claims to have done work on for which he wasn't paid.(1) [...] Reached by phone Friday, Jones appeared surprised to hear about the warrant, and insists he's done nothing wrong.(2)

For the rest of the story, see Man trying to cash in on foreclosures, officials say.

Go here for other posts on suspected mechanics lien scams.

(1) If Jones actually did what he is suspected of doing, he possibly felt that having the mechanics liens would facilitate a claim on his part to all or part of any surplus funds generated by a subsequent foreclosure sale, in the event the home sold at auction for more than what was owed to the foreclosing lender.

(2) Reportedly, in one case, Jones seems to have contracted for $40,000 worth of water damage repairs with a relative of Jones's who owned the property before it was foreclosed on, according to Deputy DA Undlin. Jones is then said to have then filed a $75,000 mechanics lien six days later. "We don't believe that such extensive work could be done in six days, and, in fact, we have a witness that says he saw work being done for six to eight weeks after the lien was filed," Undlin said. StiffingContractorsTheta MechanicLienScamTheta

Texas Legal Aid Firm Files Suit Alleging Developer Tricked Seven Families Into Signing Over Deeds To Property They Just Agreed To Buy

In San Juan, Texas, The Monitor reports:

  • Seven families are suing a developer, saying he tricked them out of the property they had just agreed to purchase. The lawsuit against William Schwarz alleges he used deceptive practices to trick low-income, Spanish-speaking families into signing the titles to their property over to him the same day the families made down payments on the land.

  • None of the families mentioned in the suit have lost their homes at this point, but the developer is moving in that direction, said Corinna Spencer-Scheurich, an attorney for the South Texas Civil Rights Project who filed the suit on behalf of the families. She said the closing documents they signed could allow the developer to evict them from the property at any time.(1)


For more, see Lawsuit filed against developer alleges fraud.

(1) According to the story, area community organizers have been meeting with families in two local subdivisions to try to determine how widespread the practice may have been, Spencer-Scheurich said. She suspects hundreds of families were affected.

Fine Print Buried In Debt Relief Firm's Contract Leaves Orlando Couple Screwed Out Of Thousand$

A recent story in the Orlando Sentinel warning against phony debt relief companies and other scams targeting people with financial trouble contained this excerpt on how one area couple was left screwed over after dealing with one of these firms:

  • [Orlando bankruptcy lawyer Anne-Marie Bowen] recently worked with a young couple as clients who had paid a debt-relief company thousands of dollars to fend off creditors. But the company never paid their creditors a dime, Bowen said.

  • When Bowen looked at the deal her clients had signed, she found a clause tucked in the fine print stating that the first 11 payments would go directly to the company itself as the fee for its "service." The company didn't negotiate at all with the couple's creditors, who continued to charge them late fees and turned them over to bill collectors.

  • "They had gotten so many harassing phone calls and had been burned so badly," Bowen said. "By the time they came to me, they were at wits' end."

Source: Beware of bogus debt relief.

Thursday, December 25, 2008

Attorney Accused Of Pocketing Closing Funds Due To Lien Holders Seeks "Free Pass" From Prosecution As Psych Pros Contest Competence To Stand Trial

In Pittsburgh, Pennsylvania, the Tribune Review reports:

  • Two mental health experts had differing opinions Wednesday on whether a once-prominent Fayette County trial attorney is competent to stand trial on theft charges.

  • Adam Sedlock, a Uniontown psychologist, testified [...] that crippling physical ailments have reduced Mark F. Morrison of Hopwood to functioning at the level of a seventh-grader. He said Morrison's condition is permanent and he will never be able to assist in his own defense.


  • Morrison, 51, is accused of stealing about $99,000 in mortgage-settlement payments from two elderly Hopwood couples.(1) Instead of settling outstanding mortgages on the two properties, Morrison allegedly paid off smaller mortgages and diverted most of the money.

For more, see Ex-attorney Morrison's ability to face theft trial disputed.

(1) Reportedly, Morrison is charged with two counts each of:

  • theft by failure to make required disposition of funds received,
  • forgery,
  • tampering with records or identification, and
  • misapplication of entrusted property.

California Lawmaker Urges AGs For Probe Into Loan Modification Firms Targeting Distressed Homeowners Charging High Fees, Producing Low Results

In Riverside County, California, The Desert Sun reports:

  • [C]iting complaints from constituents about fraudulent and suspicious mortgage-reduction schemes, [California Congresswoman Mary] Bono Mack sent a letter to U.S. Attorney General Michael Mukasey and California Attorney General Jerry Brown, urging that comprehensive steps be taken to address the problem and ensure those who commit mortgage crimes be held accountable.


  • Bono Mack noted that local residents have contacted her office about fraudulent individuals and companies who continue to approach homeowners with promises of mortgage loan modifications or interest rate reductions. These individuals have been charging large up-front fees and offering little to no service to homeowners.

For the story, see Bono Mack presses for probe on homeowner scams.

Wednesday, December 24, 2008

Nothing Civil In Civil Court As Schoolyard Brawl Breaks Out Between Attorneys In Rival Class Actions; Colleagues Jump Into Fray To Bust Up Donnybrook

In New Orleans, Louisiana, The Times Picayune reports :

  • Two attorneys competing for clients, prestige and a bounty of legal fees opened a hearing at Orleans Parish Civil District Court [last week] with a schoolyard brawl that shocked the buttoned-up crowd and ended with one led away in handcuffs on charges of contempt.

  • The courtroom was filled with the early morning murmur of shuffled papers and crinkled newspaper when fisticuffs broke out between attorneys Madro Bandaries and J. Robert Ates, who were pushing rival class-action suits about the late handling of insurance claims.

For more, see Brawl erupts between two lawyers at civil court.

Let Courts Modify Bad Loans Says Consumer Bankruptcy Group; Quality, Sustainability Of Current Modifications Depends On The Individual Servicer

The Philadelphia Inquirer reports:

  • With fresh evidence that voluntary mortgage modifications aren't working, a national lawyers' group is urging the government to let the courts fix bad loans. "Court supervision of loan modification is needed, and unlike so many of the responses to the foreclosure crisis so far, there will be no cost to the taxpayer," Henry Sommer of Philadelphia, president of the National Association of Consumer Bankruptcy Attorneys, said Thursday.

  • Of the 21,000 of these delinquent loans modified, two-thirds saw an increase in principal, called "negative prepayment," which added an average of $11,000 to loans of $210,000, White said. [...] "There is a tremendous variation in the number and quality of modifications, and the chance of getting one depends on the servicer," White said, adding that the monthly payments on 45 percent the 21,000 loans modified actually increased.

For more, see Lawyers: Let courts fix bad loans.

In a recent related statement from the Center for Responsible Lending, see Repeat Failures on Home Loans Reveal Faulty Modifications. loan modification

New Los Angeles Ordinance Prohibits All Tenant Foreclosure Evictions Until Property Is Sold To New Owner

In Los Angeles, California, CBS2 reports:

  • Renters whose residences have gone into foreclosure cannot be evicted until the property is sold to a new owner under a city law signed Friday by [Los Angeles] Mayor Antonio Villaraigosa. The one-year ordinance, spearheaded by Council President Eric Garcetti, will impact 300,000 apartment buildings and single-family homes. [...] Renters [in Los Angeles] who are being evicted as a result of foreclosure were urged to contact the city's Housing Department at (866) 557-RENT.

For the story, see Mayor Passes New Rental Foreclosure Law. ThetaTenantRentSkimming

Tuesday, December 23, 2008

Another Foreclosure Screw-Up As Lender Approves Short Sale, Then Locks Out New Owner From Home A Week After Moving In

In Fort Wayne, Indiana, The Journal Gazette reports:

  • [First-time homebuyers Brian and A.J. Spitznaugle] had arranged what is known as a short sale, an increasingly common transaction these days. The owner of the house was in default on the mortgage, so the bank that held the mortgage, Chase, agreed to sell the house to the Spitznaugles for slightly less than was owed.


  • Slightly more than a week [after the closing], the couple got the shock of their lives. Brian Spitznaugle arrived at the house on a Saturday morning to find it cold and dark. The bank, it turned out, had contracted with a company named Safeguard Property Management, which in turn hired a company called B&CG Services to go to the home, turn off the water and electricity, drain the pipes, winterize the home and padlock it shut. Oh, and before workers left, they’d rifled through all the boxes in the garage.

For more, see Bank sells house, locks out buyers.

Go here for other posts on improper foreclosure lock-outs and other lender screw ups. ForeclosureLockOuts

Upstate NY Foreclosure Rescue Operator Files For Ch. 11 Bankruptcy Protection; Over 40 Current Sale Leaseback Deals Listed On Petition

In Albany, New York, the Daily Gazette reports:

  • Geoffrey Goldman over the past two years portrayed himself as a savior in the foreclosure crisis. He made a living by buying homes from cash-strapped owners who wouldn’t be kicked out after sales closed and could even buy the properties back under leaseback agreements. “We’re helping more people than ever,” Goldman said in an April 2007 press release.(1)

  • Now Goldman is in need of help. Two of his real estate leaseback businesses filed Tuesday for Chapter 11 reorganization in U.S. Bankruptcy Court. His Rivertown Investments and its real estate holding company, Momentum Properties, recently closed after falling victim to downturns in the housing and credit markets, according to documents filed with the Albany court.


  • The liquidation of those assets could cast into limbo the former homeowners who entered leaseback agreements with Rivertown. Rivertown lists in its Chapter 11 petition more than 40 leaseback agreements in New York, New Jersey and Pennsylvania.

For more, see Real estate leaseback company files for bankruptcy.

See also, Albany Times Union: Lease-back plan for homes fails (Owner of dozens of properties files for bankruptcy protection).

(1) The article reports that under Rivertown’s leaseback program, according to the 2007 press release, homeowners sold their homes because they were on the verge of foreclosure or too far behind on payments to reinstate their mortgages. Sellers used proceeds from the sale to pay off their mortgages, then made rental payments to Rivertown so they could continue living in their homes, which they ultimately hoped to buy back.

"No-Deficiency" Laws Give Homeowners "Get Out Of Jail Free" Card When Walking Away From Unaffordable Mortgages In Some States

The Associated Press reports:

  • Mortgage law experts say the incentive to walk away from a home loan is highest in states that have anti-deficiency statutes, which prohibit lenders from suing borrowers for additional funds after foreclosure.

  • "These anti-deficiency laws make a huge impact on foreclosure rates because they are basically 'get out of jail free' cards," said Todd Zywicki, a law professor at George Mason University [...].

  • This handful of non-recourse mortgage states includes the high-foreclosure states of California and Arizona, which not coincidentally also are leaders in the numbers of mortgage walkaways.

For the story, see Walkaways highest in 'non-recourse' states.

Monday, December 22, 2008

Florida Legal Aid Attorney Earning National Reputation For Foreclosure Defense Both As Advocate For Clients & Trainer For Other Lawyers

In Jacksonville, Florida, reports:

  • [April] Charney, a lawyer with the Jacksonville Area Legal Aid agency, is quickly developing a national reputation as a champion of homeowners facing foreclosure and a serious adversary for those attempting to take possession of those homes. Her encyclopedic knowledge of contract law, debt-collection practice, securitized mortgages, the trusts that hold them and the agreements that govern the trusts have put her at the forefront of the rapidly expanding specialty of foreclosure defense.

  • While carrying her own load of 70 to 100 foreclosure cases as a legal aid attorney, Charney, 51, also has become one of the nation’s top trainers of other lawyers eager to learn how to serve the growing clientele spawned by America’s mortgage meltdown.(1)

For more, see 'Angel' of foreclosure defense bedevils lenders (Florida attorney trains hundreds of others to help troubled borrowers).

(1) According to the story, about 1,500 lawyers have attended her daylong classes on foreclosure law so far, 80 to 200 at a time. She has taught in Ohio, California, Minnesota, South Carolina, Missouri and throughout Florida. She offers the classes at cost with the help of local bar associations and aid groups and requires that all students perform 20 hours of pro bono legal work in their communities.

"Money Store" Suspects In Sale Leaseback, Foreclosure Rescue Scam Continue To Fall

In Greenbelt, Maryland, The Associated Press reports:

  • A Fort Washington woman has pleaded guilty in a scheme to defraud homeowners facing foreclosure. Jennifer McCall, 47, pleaded guilty in federal court Thursday to conspiracy to commit mail and wire fraud.

  • McCall was the chief executive officer of Metropolitan Money Store, a company that claimed to provide help to people in danger of losing their homes. But prosecutors say the company left homeowners worse off by draining equity out of the properties and imposing exorbitant transaction fees. Prosecutors say McCall is responsible for a loss of more than $16 million dollars.

McCall is the fifth defendant in this case to cop a guilty plea.

Source: Md. Woman Pleads Guilty In Mortgage Fraud Scheme.

See also, U.S. Attorney (Maryland) press release: CEO Of Metropolitan Money Store Pleads Guilty In Mortgage Fraud Scheme (Conspirators Took Title of Homes from Financially Distressed Homeowners and Secretly Used Home Equity for Furs, Jewelry and Other Personal Benefits, Defendant Caused Over $16 Million in Losses).

Go here and Go here for other posts on the alleged Metropolitan Money Store foreclosure rescue scam. JoyJackson

Colorado Slaps Subpoenas On 13 Loan Modification Firms; Creating Fear To Squeeze Cash From Consumers Concerns State Regulator

In Denver, Colorado, The Denver Post reports:

  • The Colorado Division of Real Estate has issued subpoenas to 13 mortgage loan-modification companies in Colorado, California and Arizona.(1) "Our concern is that there appear to be fly-by-night operations that are soliciting Colorado consumers who appear to be in trouble," said Erin Toll, director of the division. [...] "This is a brand-new cottage industry. These loan-modification companies are springing up like wildfire."(2)


  • Toll said many solicitations are misleading. At the top of one company's solicitation is "Notice & Demand" in large type, making it appear to be an official document. Some solicitations appear to be from the U.S. Department of Housing and Urban Development until the small print at the bottom of the page. "What we're hearing from consumers is they feel threatened when they get these notices," Toll said.(3)

Toll added that it's illegal even to solicit Colorado residents for loan modifications without being a state-licensed mortgage broker.

For more, see Loan-modification firms subpoenaed.

For story update (12-19-08), see The Denver Post: 3 more loan-modification firms subpoenaed (All are based in California. Such companies may be preying on desperate homeowners).

(1) According to the story, among the paperwork the division wants are documents used for marketing to Colorado consumers; lists of borrowers who have attempted loan modifications and the status of their cases; bank statements; copies of checks; and lists of mortgage lenders or mortgage services the companies have worked with.

(2) Problems occur, Toll said, when the companies or individuals charge large up-front costs, usually one month's mortgage payment, plus a fee of several hundred dollars, then fail to return the borrowers' money when they are unable to renegotiate the loan.

(3) Using written communications that simulate either official court documents, or documents issued by a Federal or state government agency, for the purpose of extracting money from a consumer are the types of deceptive practices that have been declared illegal when done in the debt collection context. See Fair Debt Collection Practices Act, § 807(9), § 807(13). The false representation or implication that a company is vouched for, bonded by, or affiliated with the United States or any State has also been declared to be an illegal practice in the debt collection context. FDCPA, § 807(1). It sounds to me that some of the loan modification people using these types of deceptive practices may be grifters formerly in the debt collection industry who have simply "grifted" into a new line of work.

FTC, Pennsylvania Lender Settle Race Bias Charges; Borrowers' Credit Risk Didn't Warrant Higher Loan Costs, Say Feds

In Horsham, Pennsylvania, the Philadelphia Inquirer reports:

  • Gateway Funding Diversified Mortgage Services L.P., a Horsham mortgage lender, has settled federal allegations that it charged African Americans and Hispanics higher prices for loans than it did white borrowers, the government said yesterday.

  • "We are not admitting that we did it," said Bruno Pasceri, president and chief executive officer of Gateway. "I can tell you we certainly do not discriminate against anybody. I'm glad it's over."


  • The FTC found that Gateway loan officers charged several thousand African American and Hispanic consumers more - in higher interest rates and higher up-front charges - than was warranted, given the borrowers' credit risk.

  • The settlement payment was set at $200,000, even though the FTC had alleged $2.9 million in damages to consumers. The FTC said it allowed the lower payment because of Gateway's "inability to pay."


  • Irv Ackelsberg, a consumer attorney with Langer, Grogan & Diver P.C. in Center City, said millions of borrowers were paying more than they should be, feeding the nation's foreclosure problem.

For more, see Horsham lender settles discrimination case.

From the Federal Trade Commission in the matter of FTC v. Gateway Funding:

Go here, Go here, and go here for other posts on alleged race bias in real estate transactions. DiscriminationPredatoryLendingAlpha

Sunday, December 21, 2008

Foreclosure Rescue Scammer Convicted On State Charges Now Faces Federal Bankruptcy Fraud Allegations Involving Fractional Interest Deed Transfers

In Oakland, California, the San Francisco Chronicle reports:

  • A Livermore business owner is facing federal charges for allegedly taking advantage of the mortgage crisis by running an elaborate foreclosure rescue scam, court records show. Sonia Alburez, 37, [...] is accused of inducing homeowners desperate to avoid foreclosure to transfer an interest in their properties to what turned out to be sham companies. She was charged Friday with four counts of bankruptcy fraud in U.S. District Court in Oakland.(1)


  • She claimed that her company, Community Home Saver Program, could delay or stop foreclosure proceedings so long as homeowners transferred an interest in their properties as a gift to one of several companies and paid fees, authorities said.

  • But her customers didn't realize that the companies in question were fictitious and bankrupt, authorities said. Alburez is accused of filing fraudulent bankruptcy petitions for properties in Fremont, San Ramon, Vallejo and Modesto from January to March to delay foreclosure proceedings.

For more, see Livermore woman charged in foreclosure scam.

See also: this report on the use of abusive bankruptcy court filings in connection with foreclosure rescue scams.

Go here for other posts on fractional interest deed transfer, foreclosure rescue bankruptcy scams.

(1) According to the story, Alburez and Verena Silva pleaded no contest earlier this year in Alameda County Superior Court in a similar case. Prosecutors said the women bilked more than a dozen homeowners of $1,500 to $2,500 a month in exchange for a plan the two allegedly said would save homes from foreclosure. Instead, the victims still lost their homes, as well as the money they paid Alburez and Silva. According to an earlier story, they were found guilty of two felony counts each of foreclosure rescue fraud and grand theft. loan modification

Solicitors For Loan Modification Firms "Loitering" At Free Foreclosure Prevention Seminars Seeking New Business Get The Boot

Buried in a recent story on loan modification firms in The Sacramento Bee is this blurb on how some of the companies are reportedly attempting to drum up business:

  • [L]ast week, vendors passed out postcards for modification firms at a free Hope Now foreclosure-prevention workshop in Sacramento. State and Consumer Services Secretary Rosario Marin said solicitors always stalk such free events "and we boot them out."

For the story, see Beware of mortgage rescue solicitors.

Missouri "Contract For Deed" Operator Hit With C&D Order By Securities Regulator, Preliminary Injunction By State AG

In Springfield, Missouri, the Springfield News Leader reports:

  • The Missouri Securities Division [yesterday] issued a cease-and desist order against Greenleaf Companies of Springfield, its subsidiary and owners Eric Gagnepain and Scott Dasal prohibiting them from offering their real estate investment program, said Ryan Hobart, spokesman for the Missouri Secretary of State’s office.


  • Greenleaf came under public scrutiny after many of the houses the company brokered recently were lost — or threatened to be lost — to foreclosure.


  • Greenleaf commissioned the construction of hundreds of investment houses and solicited investors — both in Missouri and out of the state — to take out loans and purchase those homes. In exchange for the use of their good credit, Greenleaf promised the investors at least $10,000 in returns after three years.

  • Greenleaf hoped to sell the homes to those with blemished credit histories, letting them move in first on a contract for deed. Greenleaf would collect monthly payments and forward enough to investors to cover their monthly obligations, such as loan principle, interest, taxes and insurance.

  • Without enough buyers and adequate income, Greenleaf has been unable to pay its investors, who in turn are defaulting on their mortgages, triggering foreclosures not only in Greene County but Branson, northwest Arkansas and south of Kansas City.

For the story, see State orders Greenleaf to cease and desist operations.

See also:

Go here for other "contract for deed" problems involving Greenleaf Companies.

Legal Aid Effort In Connecticut Has Nationwide Effect As Fannie Persuaded To Reverse Course On Foreclosure Evictions; Freddie Expects To Follow Suit

In Hartford, Connecticut, The Hartford Courant reports:

  • What began with a single mother in Hartford fighting her eviction has led to a policy change by Fannie Mae allowing renters to remain in their homes after their landlords are foreclosed on, a switch that could help thousands of renters across the country.


  • Legal Aid lawyers in Hartford — and subsequently, New Haven — began fighting tenant evictions by Fannie Mae in Housing Court after Congress passed a financial market bailout bill containing provisions protecting tenants in good standing from eviction.


  • The [Emergency Economic Stabilization Act of 2008] applies to federal agencies that control mortgages. Legal Aid lawyers argued that provisions in the law(1) pertained to both Fannie Mae and Freddie Mac because they were taken over by the federal government. The policy change — Freddie Mac said Monday it expects to follow suit — will have vast implications for renters because Fannie Mae and Freddie Mac guarantee or own half of the country's residential mortgages, which apply to buildings that house one to four families.

For the story, see Hartford Renter's Fight Leads To Fannie Mae Policy Change (Renter Wins Fannie Mae Fight) (if link expires, try here).

See also:

(1) See Section 109(b) of the Emergency Economic Stabilization Act of 2008, which, they argue, requires Fannie Mae "to permit bona fide tenants who are current on their rent to remain in their homes under the terms of their lease." ThetaTenantRentSkimming