Saturday, March 28, 2009

Virginia Feds Turn Up Heat On Foreclosure Rescue Scams

In Newport News, Virginia, the Daily Press reports:

  • [A]lex J. Turner, the FBI's special agent in charge of the Hampton Roads region, said the bureau was shifting resources to fight foreclosure scammers. [FBI special agent Tom] Tierney wouldn't provide details of how many cases the FBI is actively investigating in Hampton Roads, saying only that the number is "substantially" higher than a year or two ago. Few of the FBI investigations have gone to court so far, though that could change, given the increased focus.

  • Some private lawyers have also become involved, representing the scammed clients in civil proceedings. Robin Abbott is an attorney with Consumer Litigation Associates, a Newport News law firm. She said she's handled at least 20 foreclosure scam cases so far. "A day does not go by that I do not get calls" from people who've been swindled, Abbott said. The types of scams, she said, are many, varied and "getting more and more complex."

  • But there's one common theme, she said: a rush to get you to sign documents that you don't understand and an effort to ensure you don't consult other experts. "It's usually late in the afternoon when they send you the documents, and they tell you to get them back to them right away," Abbott said. "You don't have time to read them, and you don't get a copy. They'll tell you they'll get you a copy later."'

For more, see Scams on the rise with increased foreclosures.

Feds Caution Against "Fake" HUD Website

The Buffalo News reports:

  • An Internet Web site that looks like a federal Housing and Urban Development operation providing financial help for homeowners facing foreclosure actually is a “phishing scam” seeking personal information, HUD officials said Friday. Stephen T. Banko III, HUD’s Buffalo field office director, said the site,, has no legitimate connection with HUD or a federal program known as “Home Affordable Modification Program.”

  • The scent of stimulus money is in the air, and the devious are circling like vultures,” Banko said. “People are going to have to be more vigilant than ever in separating the legitimate companies from the fly-by-nights.”

  • Banko said the official looking site — which features a look-alike federal emblem and the American flag with a tiny word stating “advertisement” — illustrates the extraordinary measures scammers are willing to take to confuse the public.

For more, see Property owners warned about fake Web site (if link expires, try here).

Northern Florida Bar, Law Students, Legal Aid Team Up To Train Local Lawyers In Foreclosure Defense

In Jacksonville, Florida, The Financial News & Daily Record reports:

  • An upcoming class being offered by the Jacksonville Bar Association, Florida Coastal School of Law and Jacksonville Area Legal Aid is aiming to help local attorneys meet the needs of one of the groups hit hardest by the down economy: foreclosure defendants who have turned to JALA for assistance in saving their homes.


  • It’s a tutorial on foreclosures with an obvious goal of providing information to Jacksonville lawyers and Florida Coastal students so they can assist JALA’s efforts in defending foreclosures,” said [JBA President-elect Dan] Bean.


  • Right now, JALA has a model that works to stop foreclosures,” said [JALA Executive Director Michael] Figgins. “What we need is a community response to help JALA get the resources it needs so that we can help more and turn away less.”

For more, see Upcoming class to assist in local foreclosure problem.

Friday, March 27, 2009

Illinois Attorney Disbarred For Actions In Alleged Equity Stripping Foreclosure Rescue Scam

In Aurora, Illinois, The Beacon News reports:

  • [A]urora attorney Edward Varga was disbarred for neglecting 18 bankruptcy cases and failing to refund the clients' fees in those cases. He failed to appear for his disciplinary hearing, according to the Illinois Attorney Registration & Disciplinary Commission. According to IARDC documents, Varga took between $300 and $2,760 from several clients, then failed to return calls or make court appearances for them.

  • In 2006, federal prosecutors charged Varga with defrauding clients, trustees and creditors of $500,000. According to the U.S. Department of Justice, Varga and a woman, under the guise of assisting individuals facing foreclosure, convinced these homeowners to sell their homes to "investors" while in bankruptcy or just before entering bankruptcy.

  • Varga, through the use of false statements and documents, ensured that the closings took place, the Justice Department said. Then the sale proceeds were signed over to the woman and not the sellers, prosecutors said. The sale and existence of the proceeds were concealed from the Bankruptcy Court, the trustees and creditors, prosecutors said.

For the story, see Attorney is disbarred after cheating bankruptcy clients.

For earlier reports on the criminal indictment, see:

Feds Charge Title Agent With $900K+ Heist From House Closings; Homeowners Left In Foreclosure; Underwriter Says Suspect Unauthorized To Issue Policies

In Louisville, Kentucky, The Courier Journal reports:

  • [A] former lawyer, Wavy Curtis Shain, 26, was charged [last week] with carrying out various schemes to defraud banks and mortgage companies. He is accused of using businesses he owned and operated, Derby City Title and Capital Distribution LLC, to carry out the schemes.

  • He also is charged with misappropriating substantial amounts of money received on behalf of borrowers using Derby City Title to obtain loans to purchase homes. In doing so, he allegedly failed to pay off existing loans and mortgage held by the sellers of those houses. Shain also is charged in the indictment with perpetrating a check-kiting scheme using business and personal accounts maintained with US Bank and BB&T bank.

For the story, see Suspended, former lawyers charged.

In a related story, WAVE-TV Channel 3 reports:

  • Seven families could lose their homes any day now, even though they did nothing wrong. They made their house payments on time, but their homes are still going into foreclosure. They say it happened after a Louisville man scammed them out of almost a million dollars during a re-finance of their mortgage.


  • Federal investigators believe [Wavy Curtis] Shain pocketed more than $900,000 from seven families. The FBI has charged him with theft.

According to the WAVE-TV Channel 3 story, Shain, through his company, Derby City Title, purportedly wrote insurance policies for underwriter Investors Title Insurance Company. Officials from Investors Title reportedly told Channel 3 that Derby City Title was never authorized to issue policies for them.

For more, see Title company's failure to make loan payments means families could lose homes.

Go here, Go here, Go here, and Go here for other stories of trust account / escrow account theft of funds. EscrowRipOffAlpha

Investigative Report: Firm Uses Quit Claim Deed Home Transfers Into Trusts As Part Of Loan Modification Efforts

In San Diego, California, an investigative report by the San Diego Union Tribune attempts to shine light on one area loan modification firm:

  • [E]dmundo Rubi now does business under the names Apocalypse Trust and Amerisian Trust. Since July, he and a pair of real estate brokers have persuaded more than a dozen desperate families in San Diego County to transfer ownership of their homes to the trusts as a way of saving them, a San Diego Union-Tribune investigation has found. So far, at least 23 individuals in California, Nevada and Arizona have signed over 35 properties, using a simple document called a quitclaim deed. No one contacted by the Union-Tribune has received a modified mortgage. Two have lost their homes to foreclosure.


  • The operation has similarities with Rubi's past businesses in that all focused on Filipinos in National City and Chula Vista. Federal prosecutors characterized Rubi's previous activities as a Ponzi scheme. Investors were told his companies would purchase U.S. government obligations at a discount and investors would get 6 percent returns monthly.

  • Rubi pleaded guilty in 2005 to money laundering and conspiracy to commit mail fraud after swindling $25 million from about 425 people. He was sentenced to five years and 10 months in prison, and three years' supervised release. Rubi was let out in July, which is when many of the San Diego quitclaims to Amerisian and Apocalypse were filed.

  • Officials with the state attorney general and San Diego district attorney would not comment on Amerisian or Apocalypse trusts, nor whether they are investigating them.

For more, see Empty promises (To avoid foreclosure, families put home ownership in felon-run trusts; not one loan has been modified).

NJ Couple Duped Out Of $2,800 By Loan Modification Firm Promoting "HOPE" - Thought Company Was Associated With Gov't

In Ocean County, New Jersey, The Press of Atlantic City reports:

  • [I]n a statement describing [loan modification firm] Hope Now's offenses, the [New Jersey Attorney General's] office mentioned a couple in Eagleswood Township, Ocean County, "who had more than $2,800 billed to their credit card by the defendants, received no loan-modification services and ultimately confronted foreclosure after they stopped paying their mortgage on the advice of a company representative."

  • On Thursday evening, that couple, Jessie and Wayne Corliss, were still in their Forge Road home. They bought it for $159,000 about 10 years ago, and in three months, they might have to move again. The Corlisses first found Hope Now in November when they started looking for a way to decrease their monthly mortgage payments. Wayne Corliss searched the Web for "loan modification," and he said Hope Now Financial Services' Web site - - was the first to appear.

  • "We saw something about it on TV," he said. "I just figured it was through the government." What the Corlisses were probably thinking of was Hope Now Alliance, a legitimate mortgage counseling and support nonprofit approved by the U.S. Department of Housing and Urban Development. Its Web site is

  • The Attorney General's Office said Hope Now Financial Services and other similarly named companies posed as Hope Now Alliance, violating the Consumer Fraud Act. The office has documentation of representatives telling consumers that it was in fact the only legitimate service, set up by the federal government, and that all other services were imposters.

For more, see Eagleswood Township couple named in suit against company.

For the NJ AG lawsuit, see Milgram v. Hope Now Financial Services.

Thursday, March 26, 2009

More Mortgage Lending Insiders Blow The Whistle On Shady Subprime Loan Practices

Dateline NBC ran a story last week in which it:

  • [G]ets to the bottom of how bad loans and greed wrecked the U.S. economy in this hour-long investigation. Hear from Countrywide insiders and whistleblowers who have never spoken publicly before.

For the story, see 'If you had a pulse, we give you a loan' (Inside the fiasco that led to the mortgage mess and Countrywide's collapse) (read story) (watch video).

Go here for Dateline NBC home page.

In a related story, see Forbes: Follow The Mortgage (How the American taxpayer and a swanky Manhattan hedge fund ended up with a Liberian immigrant's busted mortgage).

NY Feds Indict Two In Equity Stripping, Straw Buyer Scam

In The Bronx, New York, the Daily News reports:

  • A Bronx real estate broker who hosted a radio show on WBLS and WLIB inviting distressed homeowners to contact her for help was charged Thursday with ripping them off instead. Lavette Bills, head of MTC Real Estate, was charged along with Kirk Lacey, a Jamaican who lives in Florida, in a brazen $800,000 mortgage fraud scheme that allegedly preyed on people fearful of foreclosure.

  • In one case, Bills, 36, persuaded a Bronx homeowner who had called the show for help to put Bills' name on the deed to her house on Tinton Ave. by promising to get the homeowner a loan to pay off the $38,000 mortgage. Bills sold the home to a straw buyer, according to the U.S. attorney's office and the FBI. Bills allegedly made $150,000 on the crooked deal, including taking a $50,000 broker's fee for the bogus sale.

  • The homeowner, who just wanted to pay off the small mortgage, is now in foreclosure. Thanks to Bills, the new mortgage on the house totals $337,500, prosecutors said.

For the story, see Radio 'foreclosure specialist' Lavette Bills held in $800G mortgage con.

See also, The Journal News: Broker from Briarcliff faces charge.

  • [T]he papers detail another transaction in which the pair allegedly used another straw buyer to get a $495,000 loan to buy a Bronx property. The defendants paid $300,000 for the property, the complaint says. The FBI interviewed the straw buyers involved in the transactions but the criminal complaint does not name them. The loan application contained a number of false statements, including misinformation about the straw buyer's job, income and residence, authorities said.

From the U.S Attorney's Office (Southern District, New York):

California AG Bags Two In Alleged Loan Mod Scam Involving 160+ Victims; Suspects Charged With Grand Theft, State Foreclosure Consultant Law Violations

From the Office of the California Attorney General:

  • Attorney General Edmund G. Brown Jr. [Thursday] announced the arrest of two scam artists -- Mary Alice Yraceburu and Marianne Curtis -- who "coldly and heartlessly" conned over one hundred and sixty victims out of thousands of dollars for non-existent loan modification services.


  • Yraceburu was arrested [Thursday] in Fresno County and Curtis was arrested [Thursday] in Orange County on the following charges: - 24-counts of grand theft; - 25-counts of violations of California's foreclosure consultant statutes; - One special allegation that the total value of theft was over $65,000; - One special allegation that the total value of theft was over $100,000; Both women are convicted felons who have served time in state and federal prisons.

  • The two women operated a company called Foreclosure Freedom, which sent hundreds of fliers to Californians promising help in stopping the foreclosure of their homes. The fliers read: "FINAL NOTICE - Respond only to this notice immediately."

  • This is similar to First Gov scam, which the Attorney General stopped late last year. When homeowners called the number on the flyer, they were told their mortgages could be renegotiated to a lower monthly payment. Victims, however, were required to pay thousands of dollars in up-front fees and were instructed not to contact their lenders. Victims were assured the company had "private lenders and specialists exclusive to their company who are very experienced in the options and methods used to renegotiate home loans," yet neither of the women who operated the company had real estate licenses, legal training, or any experience in the home mortgage market. Investigators found no evidence of any successful loan modifications and most of the victims were either forced into bankruptcy or lost their homes to foreclosure.

For the California AG press release, see Brown Announces Arrest of Two Scam Artists Who Committed Loan Modification Fraud.

For the California AG's charging documents, see:

California Feds, State Law Enforcement Agencies Form Task Force Targeting Foreclosure Scams

Buried in a recent story by KFSN-TV Channel 30 in Fresno, California is this excerpt on the initiative led by the Feds in central California to combat foreclosure rescue scams:

  • [U.S. Attorney's office representative Kirk] Sheriff believes it's impossible to know how many homeowners have fallen victim to foreclosure rescue offers because some are too ashamed to report it. But people who do come forward with foreclosure rescue problems have a powerful new task force going after the scam artists.

  • FBI Special Agent in Charge Harriet Dugal said, "It's outrageous that things like that happen to others, it's extremely sad that's why we decided to join forces." The FBI and the US Attorney's office are working with local, state and other federal agencies from Stockton to Bakersfield specifically going after foreclosure con artists.

For the story, see Foreclosure Victims Fight Back.

Daughter Steals Deed To Dead Mom's Home, Then Attempts To Evict Siblings, Say Cops

In Livermore, California, the Contra Costa Times reports:

  • A woman who investigators say fraudulently changed the deed to her dead mother's house was arrested after she tried to evict several other family members who lived there, police said [last week]. Donna May Dennis, 47, of Livermore, and 56-year-old Mariefe San Juan Bago, of Fresno, have been in custody at Santa Rita Jail in Dublin since their arrests Feb. 27, Livermore police Lt. Matthew Sarsfield said. "They both conspired to commit these crimes," he said.


  • Dennis forged her mother's signature on the "quit claim" deed and Bago notarized it, authorities have said. After she became the owner of the home, she tried to evict several siblings, who immediately suspected her of forging the documents, police said.

For more, see Altered deed leads to 2 arrests, police say.

Go here, Go here, Go here, Go here, Go here, and Go here for other posts related to deed or refinancing scams by forgery, swindle, power of attorney abuse, etc. DeedGammaTheft

Wednesday, March 25, 2009

Maine Chief Justice: Task Force To Develop Foreclosure Diversion Program

The Maine Public Broadcasting Network reports:

  • [C]hief Justice [Leigh] Saufley told a joint session of the House and Senate that that the court system will create a task force to develop what she calls a foreclosure diversion program "aimed at helping Maine people who are facing the loss of their homes. I'm pleased to report that the Justice Action Group and Maine banks and credit unions are working with us in this effort, giving us reason to hope for real effective solutions." The project will be led by Supreme Court Justice John Levy. Levy chairs the Justice Action Group, a coalition that includes the judicial branch, the bar association, the University of Maine Law School, and legal aid providers, including Pine Tree Legal Assistance.

For more, see State Supreme Court Backs Program to Reduce Foreclosures.

State AGs Opting For Civil Lawsuits In Lieu Of Criminal Prosecutions In Combatting Foreclosure Scams

A recent Associated Press story reports on how some state attorneys general are pursuing loan modification scams:

  • [W]hile some states have recently toughened penalties for perpetrating the booming business of foreclosure scams, and some prosecutors have used existing fraud statutes to bring criminal charges, the reaction of many state prosecutors are civil actions designed to recover a victim's money.


  • Florida Attorney General Bill McCollum has filed several civil lawsuits, including one against a company with an estimated 600 clients. So have attorneys general in at least a dozen states.

  • In Maryland, state criminal prosecutors have filed no charges under that state's new foreclosure-rescue statute. Ditto in Massachusetts, which recently barred for-profit mortgage-foreclosure rescues entirely. "We found these cases are more appropriately brought in civil court, where we can get better remedies for the victims,"' said Amie Breton, a spokeswoman for Massachusetts Attorney General Martha Coakley.

  • In Alabama, the attorney general's office usually reaches out to the foreclosure-relief firms first to find out if there is any money to recover before seeking criminal charges, said Rushing Payne, chief of the office's Consumer Protection Division. "It depends on the nature (of the allegations) and what we're able to prove," Payne said, adding there had been no convictions for foreclosure rescue scams in the past year.

  • In several states, attorneys general can only bring a criminal case when asked by a local district attorney. In others, they lack the jurisdiction entirely. There are some attorneys general making criminal cases.

  • In Arizona, Attorney General Terry Goddard has brought three cases this year on felony theft, fraud or money-laundering charges. Two defendants pleaded guilty, and the third case is pending. In California, the attorney general's office busted a fraud ring last November that had collected upfront fees ranging from $1,500 to $5,000, stealing more than $700,000 from homeowners in all. Three people have pleaded guilty to grand theft charges and received sentences ranging from probation to 6 years in prison.

  • Lawmakers in Nevada, which has one of the highest rates of foreclosure rates in the country, took steps last fall to make foreclosure fraud a criminal offense. So far, five people have been charged under the new statute, none have yet gone to trial. The new law there makes defrauding a homeowner in foreclosure a felony punishable by up to 20 years in prison and a $50,000 fine.

For the story, see It's boom time for foreclosure scam artists (Only in a few states are attorneys general offices willing and able to seek criminal charges and jail time against foreclosure con artists) (if link expires, try here).

Chico Homeowner's Foreclosure Eviction Stopped; Files Suit Requesting Cancellation Of Alleged Predatory Loan

In Chico, California, the Chico Enterprise Record reports:

  • To prevent a Chico woman from losing her home, several lawyers filed suit against three firms they accused of engaging in a "predatory lending scheme." "We're hoping this is going to help this woman out. She certainly deserves it after what she's been through," said Evanne O'Donnell, managing attorney of Legal Services of Northern California.

  • Jan Poythress, 53, was within days of being evicted from her northeast Chico home last month when the attorneys intervened. The eviction was put on hold, and Poythress remains in the house while a new trial is scheduled to decide the legality of requiring her to move.

  • In a separate case, the lawyers, on March 5, sued Instant Mortgage Lending Corp. of San Diego, ForeclosureLink of Fair Oaks and Expedia Home Loan of San Diego, demanding, among other things, that Poythress' loan and the foreclosure on her home be canceled. "When you read this complaint, you see how sinister this is," O'Donnell said in a phone interview.


  • O'Donnell said she was grateful for the help of several attorneys — experts on foreclosures and evictions — who donated their time free of charge. They include Doug Jacobs of Chico, Wayne Silver of Sunnyvale and Maeve Elise Brown of Oakland.

For more, see Lawsuit filed to save disabled Chicoan's home.

For earlier Chico Enterprise Record articles on this story, see:

For other posts on homeowners using state & federal law to try and undo bad mortgage loans, Go Here, Go Here, and Go Here. UndoMortgageLoans TILAdelta

Scammer Convicted Of Elder Expoitation Now Accused Of Swiping Mom's Home Equity, Resulting In Foreclosure; Other Victims Come Forward

In Great Falls, Montana, the Great Falls Tribune reports:

  • When Tina Palagi was sentenced in court on charges of elder exploitation in December, she got a suspended sentence and a strong warning to stay out of trouble.(1) Now the Great Falls woman is accused of stealing from her own mother while her mother was ill, causing the elderly woman to lose her home to foreclosure just months before it should have been paid off.(2)


  • According to charging documents, [a Great Falls Police] detective learned Palagi had been trusted to manage her mother's finances while her mother was seriously ill. The older woman bought her house in 1973 and should have made the last payment in 2003. Instead, she learned her home was in foreclosure when sheriff's deputies told her she was being evicted and had 30 minutes to vacate the house, according to court documents.

  • The charges say Palagi took out a loan against the house in 2000 and failed to pay back the loan, causing the house to go into foreclosure. Palagi had been authorized to govern her mother's affairs, but her mother did not know about the loan, according to the charges. Palagi also is accused of stealing her mother's retirement benefits while her mother was sick.

For more, see Woman convicted of elder exploitation now charged with bilking mom.

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

(1) According to the story, Palagi was given an eight-year suspended sentence in December for borrowing $54,000 from a 78-year-old family friend and failing to repay the money. District Judge Dirk Sandefur said he only let Palagi stay out of prison so she could pay the woman back. "I want you to understand very, very clearly that this is the end of the line for you," Sandefur said at the time. Palagi also reportedly has a previous conviction for a scam involving phony money orders.

(2) Palagi, 42, made her initial appearance Monday in Cascade County District Court on the newest charge of elder exploitation. That charge comes on the heels of a host of other new charges filed last week, accusing Palagi of other counts of elder exploitation and felony theft, according to the story. DeedGammaTheft FinancialAbuseOfElderlyAlpha

Tuesday, March 24, 2009

Advanced Consumer Rights Litigation Boot Camp

From The Ultimate Litigation Boot Camp website:

  • The Advanced Consumer Rights Litigation Boot Camp is an intensive two and one-half day learning experience that teaches you all you need to know about the litigation experience. You will learn the art of drafting a complaint, taking depositions with an actual court reporter and continue all the way through the litigation experience ending in a real life courtroom with a real trial judge for an actual trial experience.

For more, see Advanced Consumer Rights Litigation Boot Camp.

Loan Modification Firms Masquerading As Non-Profits?

In a story on loan modification scams, Minnesota Public Radio describes one way that some firms are using to circumvent state law prohibitions on collecting upfront fees:

  • [I]n Minnesota, it's illegal for so-called foreclosure consultants to demand money in advance for a loan modification. But a loophole allows nonprofits to charge fees upfront. Officials say that loophole has allowed scammers to masquerade as nonprofits, and take money from unsuspecting homeowners.

For the story, see New scam threatens struggling homeowners.

Scores Of Consumer Lawsuits Flowing Thru Court Systems Throughout Country

Inter Press Service reports:

  • Many of the biggest mortgage lenders in the U.S. have engaged in widespread, systematic schemes that ripped off hundreds of thousands of families seeking to buy a home, refinance or foreclose, according to lawsuits filed on behalf of consumers. Scores of class-action lawsuits, from the 1990s and up to today, detail the illegal and questionable practices used by mortgage-lending companies that pushed millions into bad mortgages, then into bad refinancing loans and then into foreclosures with unfair fees. The lawsuits have been filed by private attorneys and state attorneys general, and on behalf of NGOs.

For more, see Homeowner Rip-Offs Spark Scores of Lawsuits.

Massachusetts Loan Modification Firm Accused Of Scamming Homeowner Out Of $995

In Boston, Massachusetts, WCVB-TV Channel 5 reports:

  • As the foreclosure crisis grows so does a cottage industry of loan modification companies that promise to work with lenders and lower monthly mortgage rates. But Team 5 Investigates found the practices of many of these companies are not only unethical, they are illegal.

  • Donna Warren's back injury forced her to stop working. Before too long, she fell behind on her mortgage payments. She went online and found Oceanview Investments. "Oceanview did nothing. They took my money and did nothing," said Warren. Donna paid Oceanview $995 to work with her lender on her behalf. "They promised that I wouldn't have to deal with my mortgage company at all, and to ignore any calls I got from them," said Warren.


  • The company's Web site says they are no longer accepting clients. Florida's attorney general has launched an investigation after getting 40 complaints in less than a year. [...] Glenn Russell is a mortgage attorney who has seen loan modification companies popping up more frequently. "They promise we'll cut your mortgage in half, or we'll knock that interest rate down," said Russell. "They are targeting people that are the most vulnerable."

For more, see Mortgage Predators Take Money and Run (Many Companies Charge Up-Front Fees Illegally).

In a related story, see The Associated Press: It's boom time for foreclosure scam artists (Only in a few states are attorneys general offices willing and able to seek criminal charges and jail time against foreclosure con artists) (If link expires, try here).

Florida Attorney General vs. Outreach Housing - A Different View

Regarding the pending lawsuit by the Florida Attorney General's Office against loan modification firm Outreach Housing, the company has one or more supporters who have started blogs in which they paint a picture that is much different than the one described in the AG's lawsuit.

For those blogs, go here and go here.

Monday, March 23, 2009

Florida AG Files Civil Charges Against Orlando-Area Loan Modification Firm; Accused Of Taking Upront Fees, Deceptive & Unfair Advertising Practices

From the Office of the Florida Attorney General:

  • Attorney General Bill McCollum [Tuesday] announced that his office has filed a lawsuit against a Central Florida company for allegedly charging up-front fees for loan modification services to homeowners facing foreclosure. According to the lawsuit, Winberg, Lopez, & Rodriguez Company, also known as Wineberg, Lopez & Rodriguez, P.A., and its owners are in violation of Florida’s new Foreclosure Rescue Fraud Prevention law.(1) The company has offices in Orlando, Winter Garden and St Petersburg and advertises using numerous websites.

  • An investigation conducted by the Attorney General’s Economic Crimes Division revealed that Winberg, Lopez, & Rodriguez allegedly charged as much as $1,995 up-front to homeowners seeking loan modification services related to foreclosures. The lawsuit also alleges other deceptive and unfair trade practices including issues relating to the company’s advertising practices.

For the Florida AG's press release, see Orlando Company Sued for Violations of Foreclosure Rescue Fraud Prevention Law.

For the Florida AG's lawsuit, see State of Florida v. Winberg, Lopez, & Rodriguez Company, et al.

(1) Other defendants named are Freddy W. Lopez, Sr., and William R. Rodriguez, Jr. They face civil charges of violating:

  • Chapter 501, Part II, Florida Deceptive and Unfair Trade Practices Act, Fla. Statutes (2008),
  • §501.1377(3)(b), Florida Statutes, (2008), Violations Involving Homeowners during the Course of Residential Foreclosure Proceedings; and
  • §865.09(3), Florida Statutes (2008), Fictitious Name Act.

More On Forensic Loan Audits In Connection With Loan Modifications

A recent story in the San Francisco Chronicle contained the following excerpt describing how one company involved in the loan modification process operates:

  • Nasim Pakmanesh, production manager at Help-U-Mod in Walnut Creek, said his company's business model is to provide "forensic loan audits" for $1,500, then to refer clients to affiliated attorneys who charge about $1,000 to pursue a loan modification. He said the audit looks through the original loan documents to discover errors made when the loan was originated.

  • With the audit, "the attorney has more ammo to work with to negotiate for their clients," he said. "Instead of going in and saying, 'My clients can't afford the home and have a hardship,' they're saying, 'You guys approved a loan you shouldn't have - so what can you do for my clients?' Our audit will definitely increase the chances" of getting a loan modification.

For the story, see Desperate homeowners easy prey for scammers.


It may be a good idea for The State Bar of California (as well as state bar associations in other states) to issue an advisory that specifically addresses whether the marketing and performing of a forensic loan audit by a non-attorney directly to and for a consumer-homeowner constitutes the unauthorized practice of law.(1)

Currently, the Florida Attorney General has a civil lawsuit pending against a loan modification firm alleging, among other things, that this precise conduct constitutes the unauthorized practice of law under Florida law. See Florida AG lawsuit (paragraphs 27-28).

Likewise, the Tennessee Attorney General filed a civil suit in November against a loan modification firm in which he alleges, among other things, that the firm engaged in the unauthorized practice of law. See Tennessee AG lawsuit (paragraphs 78-81).(2)


(1) However, The State Bar's professional responsibility committee has recently issued an alert offering guidance to California lawyers thinking about signing up and working with loan modification firms.

(2) Last week, a Nevada couple filed a class action lawsuit against a loan modification firm in which they assert that the firm engaged in the unauthorized practice of law in violation of Section 7.285, Nevada Revised Statutes. See class action lawsuit (paragraph 23).

Loan Officer Wins Race To Prosecutor's Office In Equity Stripping Foreclosure Rescue Case; Cuts Deal w/ Feds, Will Sing Against Now-Former Associates

In Honolulu, Hawaii, the Honolulu Star Bulletin reports:

  • A former loan officer with a local mortgage brokerage company is cooperating with the government in its prosecution of his former boss. Vance Yukio Inouye, 31, pleaded guilty yesterday in federal court to one count each of wire fraud and conspiring to make false statements on loan applications and commit wire and mail fraud.


  • Inouye pleaded guilty as part of a plea deal with the government. The agreement requires him to pay restitution and testify for the prosecution against other defendants. In exchange, the government promises not to prosecute him for various other crimes and to recommend a sentence lighter than what he would qualify for. In U.S. District Court, in front of U.S. Magistrate Judge Barry Kurren, Inouye said, "John Dimitrion approached me with a foreclosure bailout deal I thought was legitimate."

  • Dimitrion is the owner and principal broker of Mortgage Alliance. A federal grand jury returned an indictment last month charging him, his wife, Julie Ann Baldueza Dimitrion, and employees Rick Kealoha Pa Jr. and Benjamin Yoshito Thompson with mortgage fraud crimes involving three homes. Their trial is scheduled for next month.

For more, see Former mortgage officer pleads guilty, makes deal.

To view the indictment, see U.S. v. Dimitrion, et al.

Go here for other posts on this case.

Clipping Homeowners For Improper, Unexplained Fees A Common Practice For Some In Mortgage Servicing Industry

In St. Cloud, Minnesota, the St. Cloud Times reports:

  • Charging improper or unexplained fees is a common practice for some mortgage servicing companies and is a larger part of the national foreclosure crisis than most people realize, experts say. Questionable property inspections, late fees when payments aren’t late, forcing homeowners to buy insurance even when they already have it — all occur nationwide and often go unchallenged by consumers, they say.

  • A mortgage servicer is responsible for collecting monthly loan payments and crediting the homeowner’s account. The servicer also handles escrow accounts for taxes and insurance. The servicing companies don’t actually own the loan, so they may not have a strong interest in providing good customer service. In fact, they may have an incentive to force a homeowner into foreclosure. “The more defaults they have, the more fees they collect, the more money they make,” said David P. Leibowitz, a Chicago-based foreclosure defense attorney.

For more, see Experts: Improper fees play part in crisis (Servicers may benefit from loans in default).

In a related story, see Couple blames fees in loss of home (Residents say dream of raising a family in their first home drowned in a flood of questionable mortgage charges).

For earlier posts on the alleged mortgage servicing practice of padding fees with phony charges, see:

Go here, go here, go here, and go here for posts on questionable mortgage servicing practices. QuestionableServicingTacticsSigma

Sunday, March 22, 2009

Fighting Foreclosure & Winning In Miami

The Today Show on NBC ran a story Thursday on homeowners in foreclosure in Miami, Florida who are fighting back against their mortgage lenders. Among the highlights of the story was coverage of a recent seminar conducted in Miami in which 50 local attorneys volunteered their advice to some 300 homeowners who showed up for the gathering. Also, one homeowner who was interviewed reportedly not only fought back and beat the bank, but she got back her home free of the mortgage loan.

For more (video only, approx 3 minutes), see Fighting Foreclosure.

Jacksonville Foreclosure Rescue Operator Dodges Another Bullet As Prosecutors Drop Criminal Charges

In Jacksonville, Florida, The Florida Times Union reports:

  • Prosecutors have dropped mortgage fraud charges against a man accused of skimming home equity from distressed homeowners. The case against Thomas Cuomo could not stand in the wake of an e-mail and paper trail showing the mortgage company he was working with wasn't the victim of fraud - but instead the possible cause of it.

  • Cuomo, who once was a housing counselor for the Jacksonville Urban League, bought homes from people in foreclosure. At one time, he was suspected of skimming out what equity had been built up and renting them back to the original owners, promising them a chance to buy the houses back.(1)


  • April Charney, an attorney at Jacksonville Area Legal Aid and one of the nation's experts in foreclosure law, is defending one of the foreclosures on behalf of the tenant, Lester Thomas, who sold his house to Cuomo. Thomas still lives there because the bank has not been able to prove it has the right to foreclose on it.

For more, see Charges against man accused of fraud dismissed (He was suspected of skimming equity from distressed homeowners).

(1) Reportedly, he was first charged in 2007 with money laundering and mortgage fraud after state investigators found similar stories from nearly a dozen people in Duval and Clay counties. That case was dismissed on a technicality. In 2008, he was charged again, this time accused of taking out fraudulent loans.

Kansas AG Probes Firm's Activities For Possible Deception In Buying Up Redemption Rights From Foreclosed Homeowners

In Witchita, Kansas, The Witchita Eagle reports:

  • The Kansas Attorney General's Office is investigating complaints alleging "unconscionable business practices" by a Wichita company that buys and sells homes in foreclosure. Attorney general spokeswoman Ashley Anstaett said she couldn't say more about the complaints against Liberty Asset Management. But Liberty's critics, including some of its competitors, accuse it of taking advantage of people in foreclosure.

  • One instance they cite involves Liberty buying property rights for $10, allowing it to claim almost $20,000 in equity that would have gone to a deceased resident's heirs. The issue centers on Liberty's methods in getting people to sell so-called redemption rights to their property.

For more, see Kansas attorney general investigates home buyer-seller's foreclosure practices.

Watch Out For Loan Modification Scams Using Forged Documents Simulating The Letterhead Of Lenders, Government Agencies

From the Office of the California Attorney General:

  • California Attorney General Edmund G. Brown Jr. [Thursday] warned that scam artists have "sunk to a new low" and have used the forged letterhead of major lenders to con worried Californians into paying thousands of dollars for non-existent loan modification services.

  • "Scam artists have sunk to a new low and are using the forged letterhead of lenders to con worried Californians into handing over their hard-earned money," Attorney General Brown said. "Californians should be deeply skeptical of anyone who demands money up front and makes extravagant promises that they can save their home."


  • [Thursday]'s warning comes on the heels of the arrest Wednesday of Anna Santos, 22, of North Hills - a key player in a loan modification scam using forged letterhead - on charges of money-laundering, conspiracy, and four-counts of grand theft. Ms. Santos joined with members of the defunct First Gov loan modification ring in a separate criminal enterprise with a disturbing twist. They used forged mail and envelopes that appeared to be from victims' lenders.

  • Ms. Santos obtained a fictitious business permit through the City of Los Angeles for "Payment Processing Department." She opened several bank accounts and two post office boxes under that name. She and other members of the ring mailed flyers that appeared to be from victims' lenders or a government entity. The flyer used a large, bold header that read "Final Notice" and advised homeowners that they qualified for a special program to save their home from foreclosure.

For more, see Brown Warns Homeowners that Scam Artists are Using Forged Letterhead of Lenders to Con Californians.

Go here for more on the alleged First Gov loan modification scam.

For more from the California AG on its criminal action against the First Gov group, see: