Saturday, April 11, 2009

Brooklyn Hotline For Victims Of Deed, Mortgage, Other Real Estate-Related Fraud

In Brooklyn, New York, the Kings County District Attorney announced:

  • Kings County District Attorney Charles J. Hynes [...] announced the creation of a telephone hotline victims can use to contact the District Attorney’s new Mortgage Fraud Unit. The 12-person unit will investigate deed fraud, mortgage fraud, predatory lending and other real estate-related fraud. The number is (718) 250-2311.

Source: Kings County District Attorney Announces Real Estate And Mortgage Fraud Hotline.

Go here, 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. DeedZetaTheft

Some Law Firms Begin Temporarily Farming Out High-Priced, Surplus Junior Attorneys By Placing Them On Loan With Public Interest Practices

The Associated Press reports:

  • [A]cross the country, the junior end of the law firm hierarchy has been taking the brunt of layoffs, pay freezes and furloughs as business shrinks and firms trim their payrolls. Summer associate programs are being scrapped or reduced, and many spring law school graduates who were promised positions for the fall are being asked to delay their start date for as long as a year.

  • But one silver lining is the altruistic use to which some firms are putting their surplus lawyers, seconding them to defend the poor, champion worthy causes or provide full-time pro bono lawyering.


  • Public-interest work fellowships are being offered to a handful of associates in Los Angeles and Chicago as the firm searches for productive ways of weathering the economic downturn, said Anne E. Rea, managing partner of the California offices of Sidley [Austin LLP], a global firm with 1,800 lawyers.

For more, see Law firms give associates a chance to build skills while doing good (Rather than lay off junior lawyers, some firms are lending them to public interest practices where they can handle weightier issues and gain courtroom experience).

Slow-To-Foreclose Mortgage Lenders Creating Havoc For Condo, Homeowner Association

In a column in the Naples Daily News, Florida attorney Rob Samouce writes:

  • Under the current real estate economic client in Florida, many banks and other financial institutions holding first mortgages are contributing to the delinquency of condominium and homeowners’ associations’ assessment funds by stalling to initiate foreclosure actions and then by failing to timely complete their foreclosures once their cases have been filed.


  • During this whole process, units or homes are either being trashed or run down by the delinquent owner or tenant, or are sitting empty with the possibility of being turned into mold factories because of utilities not being paid.

  • In addition, no assessments are being paid by anyone on these units. This puts a financial strain on associations operating the condominium or homeowner association as most of the associations’ expenses are constant; meaning the remainder of the unit owners will be forced to pick up the assessment delinquency slack.

For more, see Banks contributing to the delinquency of associations.

Tampa Foreclosure Defense Seminar Attracts Lawyers, Judges From All Over State

In Tampa, Florida, the St. Petersburg Times reports:

  • At the start of class, April Charney makes one thing clear. "This is very dense, complicated work,'' she warns. "If you don't get it, raise your hand and ask questions because the chances are others don't get it either.'' Charney pauses for emphasis. Casually dressed, dark hair streaming down her back, she could be a high school teacher introducing a bunch of kids to physics and calculus.

  • But these are lawyers and judges from all over Florida. And they've come to this seminar in Tampa to learn from the woman many consider the nation's foremost expert on fighting fore­closure.

For more, see Lawyer has strategy to fight foreclosures, and shares it.

Indiana Chief Justice Speaks On Statewide Training Effort For Lawyers, Judges Handling Foreclosure Cases

In Indianapolis, Indiana, WISH-TV Channel 8 reports:

  • More attorneys, judges and mediators are being trained on how to handle mortgage foreclosure cases. It's a statewide effort to help families who are on the brink of losing their homes. The Indiana Supreme Court has already co-sponsored two previous training sessions. Indiana Supreme Court Chief Justice Randall Shepard was on Daybreak Friday morning to talk about the need for more training.

For the story and link to the interview with Chief Justice Shepard, see Lawyers, judges trained on foreclosures (A statewide effort to help familiesin jeopardy).

Friday, April 10, 2009

Northern California DA's Office "Blown Away" After Meeting With Realtor Group On Mortgage Scams; Will Seek Approval For Real Estate Fraud Unit

In Shasta County, California, the Redding Record Searchlight reports:

  • [L]ast month, state Attorney General Jerry Brown reported mortgage fraudsters are using the forged letterhead of major lenders to con vulnerable individuals into paying thousands of dollars for bogus loan modification services. [...] On Tuesday, the Shasta County District Attorney's Office will ask supervisors to approve what would be the county's first-ever real estate fraud unit.

  • Shasta County District Attorney Jerry Benito realized the need for such a program after meeting with north state real estate agents. "We were blown away with the comments we heard," Benito said of his meeting with the Shasta Association of Realtors. "There was a large contingent of victims of frauds over the years, and they were extremely vocal about frauds occurring in Shasta County."

For more, see Mortgage scams on the rise.

San Diego DA Seeks Realtor Help In Fight Against Loan Modification Scams

In San Diego, California, the San Diego Union Tribune reports:

  • San Diego County District Attorney Bonnie Dumanis [last week] urged members of the San Diego Association of Realtors to help track down and prosecute cases of real estate fraud. Foreclosure consulting and loan modification scams are rising as distressed borrowers struggle to keep their homes, Dumanis said during the Realtor group's annual expo and trade show. About 1,500 people attended the one-day event at the Town and Country Resort and Convention Center. “We can't do it all,” Dumanis told a group of about 70 attendees during a 90-minute training session on real estate scams. “You are our eyes and ears. We have gotten many of our tips from real estate agents and escrow agents.”

For more, see Dumanis asks Realtor group to help her office fight fraud ('We can't do it all,' D.A. says at session).

Bay Area DA, Assessor Target Loan Modification Scams Pocketing Large Fees For Worthless Services

In San Francisco, California, the San Francisco Chronicle reports:

  • Hucksters and con men seeking to cheat beleaguered homeowners with fake mortgage refinance schemes face increased likelihood of prosecution, according to a new campaign announced Wednesday in San Francisco.

  • "Vulnerable residents desperate for relief should not be preyed upon," said District Attorney Kamala Harris, speaking to a room of seniors at the Bayview Multi-Purpose Senior Center. [...] Harris and assessor Phil Ting said they had put together a public education program to distribute leaflets and deliver lectures to community groups about the growing problem of door-t0-door hustlers who claim to be able to avert foreclosures but do nothing but pressure residents into large fees for worthless services.

For more, see S.F. moves to crack down on mortgage fraud.

Customer Complaints On Loan Modification Firms From Around The Country

The following links are to stories on financially strapped homeowners reporting problems with loan modification companies they hired to help resolve their mortgage problems:

  • Mansfield, Ohio: More foreclosures means more scams, experts warn. Anson and Michelle Hare were behind on their mortgage payments last spring. Organizations contacted them, vowing to save theme from foreclosure. The Hares responded to one.
    "We had to come up with $900 and had 30 days to do so," said Michelle, 40, of Butler. "Scraping our pennies, we didn't know it was a scam. Their having an attorney made it (seem) legit." Several months passed, and the Hares got the runaround from the mortgage specialist. Nothing was done, and their money was gone. Tracy Bond, a foreclosure prevention advocate with Empowering and Strengthening Ohio's People, said fraud is rampant -- by phone and by mail. She cited a recent example of a scammer claiming to be a staffer with Gov. Ted Strickland's Save the Dream program, who tries to charge homeowners $1,500 for its services.

  • Souderton, Pennsylvania: On the House: Home-loan modifier was no help. As the mortgage payment grew from $948 a month to more than $1,150, Morissa P. Wiley sought help on the Internet and contacted New Hope Modifications of Bellmawr, which promised to work to modify her loan and save her house. For $1,800 up front. "They kept telling me that everything was OK, that they were working with my lender, and not to worry," she said. "They never called me; I always had to call them, and I started getting suspicious." Shortly after the last reassurance from New Hope, she found a notice that her house was destined for sheriff's sale. "I got on the phone and called New Hope," Wiley said. "I wanted to know if they were really working with my lender or if I should start looking for an apartment for me and my children." Her contact "was always off or out on leave." A supervisor declined to return the money she had sent.

  • West Sacramento, California: BBB Says Loan Modification Company Is Scam (Roseville-Based Company Issued Desist & Refrain Order). The Better Business Bureau of Northern California is warning consumers about bogus loan modification companies that make empty promises about helping borrowers modify their mortgage loans. The BBB said one such company is ShortRefiNow.Com, based in Roseville. Fourteen people filed complaints with the BBB. They said they paid between $2,600 and $5,300 up front to to get their loan modified, but the company did not perform or refund their money. told KCRA 3 by phone it is looking for licensed attorneys to take on their existing clients and they are not taking on any new clients.

  • Kirkland, Washington: Investigators: Loan mod offers bring even more mortgage troubles. The interest on Della Lorenzen's adjustable rate mortgage was about to soar and her payment on her home in Roy was about to balloon by $500 a month. Then MCA Consulting of Kirkland called and offered to negotiate a loan modification with her bank. [...] "I don't believe they had any thoughts of helping me at all," Lorenzen said. Lorenzen says MCA refused to refund her $3,500 fee and says her home is now on the brink of foreclosure. [...] A state license is required to perform loan mods and regulators confirm MCA is under investigation for unlicensed work. Lorenzen was required to pay her fee up front, which authorities say is illegal and a big red flag.

  • Fresno, California: Foreclosure Fraud, Phony "Rescue Firms." After years of renting, the Mizer family bought a house in 2005 for nearly 88-thousand dollars. Two years later, Kari and her husband Roger saw the rate on their adjustable mortgage shoot up way beyond what they could afford. They looked for refinancing from more than 40 lenders with no success. Then they got a letter from a mortgage restructuring firm that claimed to have a "95-point-5 percent resolution success" rate in stopping foreclosures. The company charged more than 13-hundred dollars upfront and said it would handle everything. But the Mizers say that's the last they heard. A month later their bank started foreclosure proceedings, telling them it had never been contacted by the company.

Ohio Loan Modification Scam Purports To Be Part Of State's "Save The Dream" Program To Clip Homeowners Seeking Mortgage Help

In Cleveland, Ohio, The Plain Dealer reports:

  • ESOP, a Cleveland nonprofit that helps homeowners avoid foreclosure, says it has received word of a new foreclosure rescue scam. In this one, the scammer claims to be a staffer in Gov. Ted Strickland's Save The Dream program. The scammer tries to charge homeowners $1,500 for foreclosure rescue help.

Source: Foreclosure rescue scam steals Ohio's "Save the Dream" name.

Thursday, April 9, 2009

Sleazy Practices By Process Servers Wreak Havoc On Consumers In Debt Collection Lawsuits

A June, 2008 report by MFY Legal Services, Inc. of New York City shines some light on questionable practices engaged in by process servers when serving notices of debt collection lawsuits (many brought by "debt scavengers" on debts purchased for pennies on the dollar that are beyond the statute of limitations) on defendants that, arguably, are leaving them without the properly required notification of suits against them, and offers some recommendations with regard to improving the system. An excerpt from the summary of the report's findings:

  • In 2007, MFY Legal Services provided advice, counsel and representation to more than 350 clients who were being sued in debt collection cases. Of these, none had been served properly with a summons and complaint and most did not know that a lawsuit had been filed against them until their bank accounts had been restrained.

  • Default judgments due to improper service wreak havoc on the lives of many of MFY’s clients, most of whom have low-income wages or rely solely on Social Security, SSI, Veterans Benefits or pensions for support.

  • The civil justice system is based on the principle that defendants will have an opportunity to be heard in court before a judgment and action to collect on a purported debt is taken against them. It appears that nine out ten New Yorkers who are sued in the Civil Court of the City of New York are being denied their right to be heard because of possibly illegal process serving practices.(1)

For the entire report, see Justice Disserved (A Preliminary Analysis of the Exceptionally Low Appearance Rate by Defendants in Lawsuits Filed in the Civil Court of the City of New York).

Go here and go here for other posts on lawsuits involving faulty notifications to property owners; and here for posts on "sewer service" (a reference to the illegal process server practice of filing a sworn affidavit of proper service in court when none was actually made).

(1) According to the report, MFY staff examined a random sample of 91 consumer debt collection court files to determine the method of service. In a preliminary test, they reviewed court files of cases filed in Queens and Kings counties. Because collection companies tend to purchase a large number of index numbers at a time, they attempted to look at multiple cases handled by the same process serving company. MFY picked three process serving companies at random.

The files indicated that personal service was rarely made. Service to a person of suitable age and discretion accounted for 54 percent of the cases, while “nail and mail” service was the standard practice in 40 percent of the cases, and personal service comprised only 6 percent. Notably, process servers for two of the companies did not make personal service on any defendants, while one company managed to do so only in 18 percent of cases. Further, the type of service effected by one company in 93 percent of its cases was by “nail and mail,” while another process server company served defendants by leaving the summons and complaint with a person of suitable age and discretion in 83 percent of cases. foreclosure faulty notice SewerServiceAlpha

Lack Of "Hard Time" On Conviction Lures Some Street Gangs Away From Drug Trade; Into Deed & Refinance Scams

Buried in a recent story in The Journal Gazette (Fort Wayne, Indiana) is this excerpt on deed and refinancing scams where perpetrators use forged deeds, stolen I.D.s, crooked notaries (or an unwitting notary and a stooge) to swipe homes, borrow against them, pocket the proceeds, and walk away undetected:

  • [T]he scam is so lucrative in Chicago that street gangs found it preferable to dealing drugs, the Chicago Tribune reported. Those schemes became so sophisticated that the gangs would reportedly hire title researchers and notaries for their efforts and either invent identities for the mortgages, steal identities from others or con people into signing documents. They also found that while drug sales brought hard time if they were caught, white-collar crime such as mortgage fraud often does not.

  • Why get locked up for selling drugs when you can get involved in a mortgage, get your money and walk away?” asked Askia Abdullah, spokesman for Eugene Moor, Cook County recorder of deeds. “They had active teams doing this.”

For the story, see Mortgage fraud: It’s so simple, it’s scary.

Missouri AG Files Lawsuit Against California Firm Allegedly Peddling Bogus Loan Modification Services

The St. Louis Business Journal reports:

  • Missouri Attorney General Chris Koster filed a lawsuit Tuesday against an Anaheim, Calif., company that allegedly defrauded Missourians looking for help avoiding mortgage foreclosure. Koster said the company, U.S. Foreclosure Relief, took money from victims but did not provide any help.

  • The suit, filed in Kansas City, seeks an injunction to stop the company from continuing to defraud consumers as well as restitution and penalties. In most instances, U.S. Foreclosure Relief charged homeowners a fee of $1,850 for its services, along with a processing fee of $500. The company also demanded payment upfront, Koster said. He urged victims of fraudulent mortgage-relief companies to call the state consumer hotline at 800-392-8222.

Source: Koster sues company over alleged foreclosure scam.

Florida AG Continues Cranking Out Lawsuits Against Upfront Fee Loan Modification Firms

In Fort Lauderdale, Florida, the South Florida Sun Sentinel reports:

  • Attorney General Bill McCollum sued a South Florida loan modification firm and its affiliated companies this week, alleging they violated state law by charging fees for foreclosure rescue services. The civil lawsuit was filed in Broward County Circuit Court on Thursday, against Keep Your Property, its owners William R. Colon and Carlos A. Hernandez, and Centro de Prevencion y Educacion Corazones Unidos H.I. Visida Inc., a nonprofit organization, and Economic Alliance Group.

  • The suit alleges they violated state laws prohibiting deceptive and unfair trade. Colon and Hernandez couldn't be reached to comment. Consumers told state investigators that they paid an upfront fee of $2,200 and monthly fees of $550(1) after the company guaranteed to file all the paperwork required to prevent foreclosure action or lower mortgage payments.(2) But many consumers found later that the company failed to contact lenders and take any action on behalf of homeowners.

Source: State sues South Florida home loan modification firm over fees.

For more from the Florida Attorney General's Office, see:

(1) The lawsuit alleges that the fee was for “membership” with KEEP YOUR PROPERTY, INC. This “membership” fee is a device by which Defendants seek to evade the requirements of Florida Statute §501.1377, according to the suit. See Lawsuit - paragraph 27.

(2) The lawsuit also alleges that Defendants’ business in offering legal services to the public directly, or indirectly through Florida licensed attorneys which Defendants engage or otherwise involve and/or compensate, constitutes the unauthorized practice of law in accordance with the principles of the Florida Supreme Court pursuant to The Florida Bar v. Consolidated Business and Legal Forms, Inc., 386 So.2d 797 (1980); and that Defendants solicited, advertised or otherwise offered legal services to Florida homeowners for mortgage foreclosure defense and/or foreclosure-related rescue services, and made it a business to solicit or procure legal business for attorneys, in violation of Florida Statutes, §877.02(1). See Lawsuit - paragraphs 31-36. UnauthPractOfLawTheta

Florida AG Joins Illinois, Minnesota Counterparts In Tagging Jacksonville Upfront Fee Loan Modification Firm With Suit; Alleges Deceptive Practices

In Jacksonville, Florida, WJXT-TV Channel 4 reports:

  • Florida's attorney general has sued a Jacksonville company, claiming it's defrauding homeowners who are facing foreclosure. According to the lawsuit, National Foreclosure Counseling Services targeted homeowners and charged them up-front fees to modify their loans, in violation of Florida law.(1) The Attorney General's office said the company collected an average of $2,000 in up-front fees, and charged $125 an hour. The lawsuit also claimed that the company failed to perform the services following payment.

  • State investigators also said the company lured homeowners using mailings which implied they were coming from a government agency. The mailings claimed the consumers had been selected for special programs by "Government Insured Institutions," and stated the mailings were a last attempt to assist the homeowners before foreclosure.(2)

  • The Attorney General also requested the Duval County Circuit Court issue an injunction against the company, requiring it to immediately stop demanding up-front fees from customers before providing services. The company offers services nationwide and has already been sued by the attorneys general of Illinois and Minnesota.

Source: State Sues Foreclosure Rescue Company.

For more from the Florida AG's office, see:

(1) Also named as defendants in the lawsuit are: Raymond Paulk, Robert V. Dallavia, and American Foreclosure Counseling Center.

(2) In addition, the lawsuit alleges that, since October 1, 2008, the defendants "required homeowners who want their services to sign statements asserting that they are not "IN ANY WAY CONFUSED ABOUT ANY PART OF THE WORKING AGREEMENT," that they are not victims of the Defendants under the Florida Deceptive and Unfair Trade Practices Act, that they are "CONFIDENT THEY [ARE] NOT BEING VICTIMIZED ... IN ANY WAY WHAT-SO-EVER" and that the defendants are "NOT ATTEMPTING TO DUPE, MISLEAD, SWINDLE OR CHEAT" them." (Obviously, a not-so-subtle attempt to get the homeowners facing foreclosure to waive their legal rights under the statute.) The suit also alleges that the defendants "employ a sales force of approximately 140 persons and bringing in approximately $500,000 in fees each month." See Lawsuit - paragraph 26-27.

The lawsuit also alleges(at paragraphs 28-33) that the defendants' mailings:

  • give the impression they come from a government agency,
  • refer to the Defendants as "housing counseling community service[s],"
  • state that the homeowner's property "has been selected for special programs by the Government Insured Institutions,"
  • tell the recipients to contact an "Advisor for Duval County" or another Florida county, and that a representative for Duval [or other] County is available" to talk to the homeowner,"
  • state that they are an "urgent notification" and constitute a "last attempt to assist you,"
  • state that the property in question "qualifies" for loan modification.

Wednesday, April 8, 2009

Eight Down, Two To Go In Metropolitan Money Store Foreclosure Rescue Scam As Maryland Feds Get Another Guilty Plea

From the Office of the U.S. Attorney (Maryland):

  • Kurt Fordham, age 39, of Ft. Washington, Maryland, pleaded guilty [Friday] to conspiracy to commit mail and wire fraud in connection with a mortgage fraud scheme that falsely promised to help homeowners facing foreclosure keep their homes and repair their damaged credit, announced United States Attorney for the District of Maryland Rod J. Rosenstein.(1)

  • Kurt Fordham ripped off homeowners and mortgage lenders by submitting fraudulent paperwork to support over $13 million in loans that were never intended to be repaid,” said U.S. Attorney Rod J. Rosenstein. “Instead of helping financially distressed homeowners keep their homes as promised, he stole their home equity and used it to buy luxuries for himself, including art, cars, domestic and international trips, and to pay gambling expenses and over $800,000 on his luxury wedding.”

For the press release, see Eighth Metropolitan Money Store Conspirator Pleads Guilty in over $35 Million Mortgage Fraud Scheme (Fordham Personally Responsible for Over $13.5 Million in Losses to Mortgage Lenders and Used Over $800,000 of Fraudulently Obtained Proceeds to Pay for His Wedding).

For the indictment, see U.S. v. JoyJackson, et al.

(1) According to the press release, Kurt Fordham is the eighth defendant to plead guilty in the Metropolitan Money Store mortgage fraud scheme. Joy Jackson, age 41, and Jennifer McCall, age 47, both of Ft. Washington, Maryland, a chief executive officer of Metropolitan Money Store and owner of JC and JC Investments LLC; Katisha Fordham, age 35, of Washington, D.C., a loan processor at the Metropolitan Money Store; Richard Allison, age 37, of Camp Springs, Maryland, an attorney and employee of the U.S. Census Bureau; Clifford McCall, age 47, of Lanham, Maryland, president of Burroughs & Smythe Financial Services, Inc., based in Lanham and a director of the Fordham & Fordham Investment Group, Ltd., a foreclosure consulting and credit servicing business based in Lanham and Greenbelt, Maryland; Carlisha Dixon, age 31, of Hyattsville, Maryland, vice president and a director of Burroughs & Smythe Financial Services, Inc.; and Chandra Jones, age 31, of Lanham, Maryland, the daughter of co-defendants Jennifer and Clifford McCall, each pleaded guilty to the conspiracy and are facing a maximum sentencing of 30 years in prison. Two defendants remain scheduled for trial on July 7, 2009.

FTC Announces New Lawsuits Against Upfront Fee Loan Modification Firms

On the heels of Monday's "declaration of war" (see 'We Will Find You and We Will Punish You') by the Federal government against loan modification scams, the Federal Trade Commission announced the filing of three new lawsuits against firms it accuses of making false representations in conncetion with the improper clipping of homeowners for upfront fees, only to do little or nothing with regard to modifying their home loans. The new lawsuits involve:

  • Federal Loan Modification Law Center(1) (FedMod). FedMod markets mortgage loan modification and foreclosure relief services to homeowners who are in financial distress, delinquent on their mortgages, or in danger of losing their homes to foreclosure. In radio advertisements, the FTC alleges, FedMod induces homeowners to call its toll-free number by misrepresenting that it is part of or affiliated with the federal government, although it is not.

For the lawsuit, filed in Los Angeles, California, see FTC v. Federal Loan Modification Law Center LLP, et al.

  • According to the FTC’s complaint, defendant Thomas Ryan used a foreign Internet registrar to falsely register two sites – and The sites were used to entice financially strapped consumers to seek mortgage loan modification services under the guise that the services were associated with, or were actually, the U.S. government, including HUD and the Treasury Department.

For the lawsuit, filed in the District of Columbia, see FTC v. Ryan.

  • Home Assure d/b/a Expert Foreclosure.(2) In this case, the FTC alleges that the defendants promise consumers facing imminent home foreclosure that they can stop the foreclosure, regardless of the amount the consumer owes his or her lender. The defendants are charged with falsely claiming that they have special relationships with lenders, have helped thousands of consumers avoid foreclosure, and will provide a 100 percent satisfaction money-back guarantee. They typically charge consumers an up-front fee of $1,500 to $2,500 but, the FTC alleges, do little or nothing to help them avoid foreclosure and fail to give refunds when foreclosures are not stopped.

For the lawsuit, filed in Tampa, Florida, see FTC v. Home Assure, LLC, et al.

The FTC press release also contained a reminder of two additional lawsuits filed at the end of March against New Jersey outfits Hope Now Modifications LLC (go here for lawsuit) and New Hope Property LLC d/b/a New Hope Modifications LLC (go here for lawsuit), alleging that the defendants misled consumers about their ability to provide mortgage loan modification and foreclosure relief, and misrepresented that they were affiliated with or part of the HOPE NOW Alliance, the non-profit, HUD-endorsed organization that is a broad-based coalition of credit and home ownership counselors, lenders, and other mortgage market participants. These are the same two firms that were also recently sued by the New Jersey Attorney General for similar allegations.

The FTC notes:

  • This brings to 11 the number of loan modification and mortgage foreclosure rescue scams brought by the FTC in the last year. More than 20 state law enforcers also have taken actions against companies engaged in these types of deception, including 22 brought by Illinois Attorney General [Lisa] Madigan.

  • The FTC also announced [yesterday] that it has sent warning letters to 71 companies who may be deceptively marketing mortgage loan modification or foreclosure rescue services. The FTC identified these companies through a nationwide review of Internet and other advertisements and warned these companies that their ads may violate federal law. State law enforcers also have sent warning letters to companies that are potentially engaging in such illegal practices, including more than 60 warning letters sent by Attorney General Madigan.

For the entire FTC press release, see Federal and State Agencies Crack Down on Mortgage Modification and Foreclosure Rescue Scams (FTC, State Enforcers Sue Scammers, Warn Others; Announce Education Campaign Designed to Reach Borrowers Directly).

(1) The defendants in this case are: Federal Loan Modification Law Center LLP doing business as Federal Loan Modification Law Center and under other various other names; Anz & Associates, PLC; LegalTurn, Inc.; Federal Loan Modification LLC; Boaz Minitzer, Nabile "Bill" Anz, and Jeffrey Broughton.

(2) The defendants in this case are: Home Assure, LLC, B Home Associates, LLC, doing business as (dba) Expert Foreclosure, Michael Grieco, Michael Trimarco, Nicholas Molina, and Brian Blanchard. The defendants also have been the subject of law enforcement actions or investigations by the Minnesota, North Carolina, and Florida Attorneys General, according to the FTC press release.

Illinois AG Files Civil Charges Against Two More Loan Modification, Foreclosure Rescue Operators; Lawsuit Tally Now Up To 24

From the Office of the Illinois Attorney General:

  • Attorney General Lisa Madigan has filed two lawsuits in Cook County Circuit Court against Chicago-area mortgage rescue fraud schemes seeking temporary restraining orders to immediately stop the defendants from providing mortgage rescue services. Madigan made the announcement as part of a press conference [yesterday] in Washington, D.C., with U.S. Treasury Secretary Timothy Geithner, U.S. Attorney General Eric Holder, Federal Trade Commission Chairman Jon Leibowitz and U.S. Housing and Urban Development Director Secretary Sean Donovan, to discuss a coordinated effort by federal and state authorities to protect at-risk homeowners from mortgage foreclosure rescue fraud.


  • Madigan filed complaints against Centurion Loss Mitigation Group, a Chicago-based operation and its owner Carlos A. Gomez, and Cash VIP, a Melrose Park, Ill.,-based operation and its owner Fernando Rios, also known as Fernali Ferrice.(1) With these new filings, Madigan has brought lawsuits against 24 mortgage rescue fraud schemes. Of those, the Attorney General, to date, has received judgments in nine cases, including more than $1.8 million in restitution for homeowners.

For the entire Illinois AG press release, see Madigan Files Two Mortgage Rescue Fraud Lawsuits, Seeks Immediate Ban on Companies' Operations (Illinois Attorney General Joins U.S. Treasury Secretary, U.S. Attorney General, Federal Trade Commission and HUD Leaders in Coordinated Plan to Protect At-Risk Homeowners).

(1) In the Cash VIP lawsuit, Madigan alleges the defendants sell credit and foreclosure “orientation” services, which require consumers to enroll in a one-year “membership club” and pay an upfront $575 application fee, $50 enrollment fee and a monthly fee of $69-89, as well as a final “success fee” that ranges from one to two percent of the loan amount, according to the AG's press release.

Massachusetts AG Tags Four With Civil Charges In Alleged Loan Modification Scam

In Boston, Massachusetts, the Boston Business Journal reports:

  • Attorney General Martha Coakley’s Office filed a lawsuit and obtained a temporary restraining order against four defendants for their alleged involvement in a foreclosure scam.

  • The complaint, filed Monday in Suffolk Superior Court, alleges that Loan Modification Group Corp., Mitigation LLC, the company’s principal Daniel H. Fox and Web site operator Chris Fuelling sought to capitalize on the foreclosure crisis and prey upon Massachusetts residents facing the loss of their homes.

  • In the lawsuit, Coakley’s Office alleges that the defendants offered services to assist homeowners as “loss mitigation specialists” who are able to negotiate loan modifications to avoid foreclosure. The complaint further alleges that the defendants’ business practices were unfair and deceptive, in violation of the Massachusetts Consumer Protection Act, because they solicited fees in advance of services, failed to disclose the precise details of the services offered and how they would assist homeowners in avoiding foreclosure, and would guarantee a loan modification that would improve the homeowner’s financial situation dramatically and save the home from foreclosure.

For more, see AG files suit against foreclosure scams.

For the Massachusetts Attorney's press release, see AG Coakley Obtains Temporary Restraining Order against Perpetrators of Loan Modification Scam; Warns Public About Scams Targeting Homeowners:

  • [D]efendants would claim to be attorney-based, loan modification experts that could guarantee drastically reduced interest rates. In one telephone solicitation, a representative claimed that Fox’s firm was one of fourteen law firms recruited by the government to help people avoid foreclosure and help them stay in their home, when that was not the case.

Central Florida Loan Modification Firm Agrees To Fold After State AG Probe Into Complaints Of Alleged Deceptive Trade Practices

In Orlando, Florida, the Orlando Sentinel reports:

  • Organizers of Orlando-based Homestead Protection Services LLC have agreed to disband the operation and pay more than $25,000 to settle a state investigation into suspect "foreclosure-rescue" services, state authorities said Friday. Homestead's owners also agreed to refrain from future violations of the state's deceptive-trade-practices law, according to the Attorney General's Office. The company will pay $20,000 in restitution to consumers and $5,000 to cover the costs of the probe. State investigators said Homestead charged up-front fees ranging from $997 to $3,500 to help consumers try to get out of mortgage trouble. The state also found Homestead misled consumers about refund policies and the services that it would actually provide. Investigators fielded a number of complaints about false promises and refund denials by the company.

Source: Foreclosure-rescue firm disbands.

For the Florida Attorney General's press release, see Settlement Obtained in Orlando Mortgage Fraud Case.

Tuesday, April 7, 2009

Feds To Announce Joint Effort To Attack Loan Modification Scams

The Washington Post reports:

  • The Obama administration will announce [today] a multi-agency effort to combat loan modification scams. As the country's foreclosure rate rises, companies have popped up offering to help borrowers save their homes. But banks and consumer advocates complain that the fees, which can reach thousands of dollars, do not translate into results and many of the programs are scams.


  • According to a government statement, the effort will align responses from federal law enforcement agencies, state investigators and prosecutors, civil enforcement authorities and the private sector to protect homeowners.

For more, see Government to Offer Plan to Fight Home Loan Scams.

For story update, see Government Rolls Out Plan to Fight Loan Scams:

  • [S]ometimes, these scams use names similar to legitimate groups offering help. For example, many companies use the word "Hope" in their title, similar to Hope Now, an alliance of mortgage lenders, and Hope for Homeowners, a foreclosure prevention program run by the Department of Housing and Urban Development, according to federal officials.

Alleged Deed Theft Scammers Pocket Proceeds From Mortgage On Victim's House, Say Cops; Owner Loses Home To Foreclosure, Now Faces Eviction

In Oshawa, Ontario, The Toronto Star reports:

  • Police say imposters with a forged driver's licence stole Lana Morrison's home-ownership title to get a loan. Then the thieves defaulted on the loan.(1) Now, despite a pending fraud trial, a Toronto trust company wishing to recoup its money is trying to evict Morrison and take her house. The local sheriff has ordered Morrison out within two weeks, along with her 12-year-old boy, Tyrone, and their pet poodle, Peanut.


  • In April last year, in connection with the case, police laid fraud charges against two women and a man. On May 1, the Durham Region land titles department issued a notice saying "no dealings be had with the property" until the fraud case is settled.

  • Two months ago, Home Trust Company went to court to seize the property anyway and the judge granted the request, the company's lawyer, Amanda Jackson, said in an email. Morrison failed to appear, Jackson said. Morrison said she was given the wrong court address and arrived 20 minutes late.

  • Home Trust president Nick Kyprianou said he does not believe Morrison's hard-luck story and is not prepared to await the outcome of the fraud trial. "We can't put ourselves in a situation to lose money – interest is accruing," he said of the mortgage loan. "This could take five years."

For the story, see Oshawa mother faces eviction after alleged mortgage scam.

In other "north of the border" deed theft stories from The Toronto Star, see:

  • Man, 90, off hook for loan: Court (Landmark ruling lifts $300,000 burden) ("The decision is the first of its kind in the province since a landmark Court of Appeal ruling [...]. That decision found that even a bona fide purchaser can't legally buy property from a fraudster.");

  • Judge chides bank in mortgage fraud (Couple's identity stolen, home lost; TD not 'innocent victim,' judge says) ("Ontario is experiencing a "serious mortgage-fraud plague," says a judge who released a blistering decision [...] that chastised the Toronto-Dominion Bank for failing to detect a scam that left a North York couple without their home.").

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.

(1) Nadia Kelly, 27, Antonia Pasculli, 48, and Christopher Dewsbury, 29, face charges of fraud, conspiracy to commit an indictable offence and charges related to forging documents in connection with the case. Pasculli faces further charges including possession of a counterfeit mark. Dewsbury is also charged with forgery, intimidation and attempting to obstruct justice. DeedGammaTheft

Minnesota Title Agent Faces State Regulator's Embezzlement Charge; Accused Of Pocketing $230K+ In Real Estate Closing Proceeds

From the Minnesota Department of Commerce:

  • The Minnesota Department of Commerce has summarily suspended the real estate closing license, resident insurance producer license and notary public commission of Kuntee Singramdoo and charged her with embezzling over $230,000 in real estate closing proceeds and using the money to pay off her own creditors or her family members' creditors.


  • Singramdoo admitted under questioning from Commerce Department investigators that she embezzled the funds but at this time has only paid back $10,000 [...].

For the entire press release, see Lakeville woman charged with $230,000 embezzlement (Licensed real estate closer used proceeds from closing to pay her own debts).

Go here for the Department's administrative charges.

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

Undercover Probe Into Massive Repair Scheme Allegedly Overcharging Homeowners For Shoddy, Inadequate Work Yields Financial Settlement

From the Office of the California Attorney General:

  • Attorney General Edmund G. Brown Jr. and the Contractors State License Board (CSLB) have finalized an agreement that will stop a massive service and repair scheme that unfairly overcharged thousands of Californians for "shoddy and woefully inadequate" home repair work. [...] A months-long investigation by the Attorney General's Office and the Contractors State License Board found that SRVS Charge Inc. and its affiliated companies had been cheating some 6,000 customers each year for overpriced and substandard home repair work since 1989.(1)


Over several years, the Attorney General and the CSLB shut down affiliates of SRVS Charge, Inc. But instead of ending their scheme, the defendants continued to run their company under a labyrinth of business names and fraudulent contractor license numbers that were interchangeable. When CSLB either revoked a license or received an excessive number of complaints, the company would establish a new corporate identity and business would continue without interruption. As part of its investigation, CSLB conducted undercover stings against service

Monday, April 6, 2009

Second Mortgages A Major Sticking Point In Effort To Help Homeowners Avoid Foreclosure As Subordinate Lienholders Fight To Keep From Getting Stiffed

The Wall Street Journal reports:

  • The Obama administration's $75 billion effort to help troubled homeowners avoid foreclosure has hit a stumbling block: a fight over how to aid borrowers who have more than one home loan. The Treasury Department, scrambling to address the problem, is trying to persuade lenders to forgive or greatly reduce so-called second liens. But that effort has sparked a fight between investors who own securities backed by first mortgages and banks that hold second mortgages over how losses should be shared.

For more, see Homeowner-Aid Plan Caught in Second-Loan Spat.

State Orders Unlicensed/Unauthorized Loan Modification Firm To Stop Performing Services

In Sacramento, California, Central Valley Business Times reports:

  • A Fair Oaks-based company called 2nd Chance Negotiations Inc. has been ordered by the California Departments of Corporations and Real Estate to stop performing loan modification services. [...] The company solicited financially stressed borrowers, and, in exchange for an upfront fee, promised them they would negotiate with the borrower’s lender to modify the terms of the borrower’s loan. However, the joint investigation established that 2nd Chance Negotiations was not licensed and/or legally authorized to perform the promised services or collect advance fees, the state says.


  • In general, and with limited exceptions, only licensed real estate brokers and California attorneys operating as lawyers within the scope of their license, may collect advance fees. Real estate brokers must have their advance fee agreement reviewed and sanctioned by the DRE prior to its use.

For the story, see Central Valley firm ordered to stop loan modifications.

California Man Says "Prove It" To Multiple San Diego-Area Mansion-Stealing, Deed Theft Allegations; Local Authorities Notice Phony Deed Filing Trend

In San Diego, California, XETV Channel 6 reports:

  • A 43-year-old man pleaded not guilty [last week] to numerous counts in an alleged real estate fraud case in which the perpetrators allegedly filed deeds under the guise of a religious order. Terry Lee Herron, 43, was charged with conspiracy to file false documents and conspiracy to commit forgery, said Deputy District Attorney Marlene Coyne.

  • Herron also faces 12 counts of filing false documents and six of forging documents, Coyne said. The original defendant in the case, Maurice Antoine Simmons, 31, was also charged with two conspiracy counts, Coyne said. Simmons was accused last year of taking blank grant deeds and filling them out as if he owned the properties -- a condominium in San Diego and five homes in Chula Vista, according to Coyne. She said three properties were owned by banks and two by private individuals.

  • Authorities said they have noticed a trend in which people claim ownership of properties by filing bogus grant deeds. The fraudulent owners then move people into the vacant or distressed homes. Investigators said the perpetrators claim to be immune from prosecution because they file the deeds under the guise of a religious order known as the Sovereign Solomon Brothers Archbishop Corporation Sole.

  • Herron, who was ordered held on $40,000 bail by Judge David Szumowski, is also known as King Solomon II, according to Coyne. "He's part of the sovereign movement, which doesn't recognize government authority," Coyne said.

For more, see Plea Entered in Mansion Stealing Scheme.

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

Housing Advocates Caught Flat-Footed As Fannie, Freddie Fail To Extend Moratorium On Foreclosures, Evictions; Program Quietly Allowed To Expire

The Washington Independent reports:

  • A ban on foreclosure sales and evictions from houses owned by mortgage giants Fannie Mae and Freddie Mac, which began as a high-profile effort just before the holidays to keep people in their homes as the government tried to come up with homeowner rescue plans, is over.

  • Spokesmen for Fannie Mae and Freddie Mac confirmed the ban ended March 31, in a response to an inquiry from TWI. The agencies made a major announcement in November to roll out the ban, garnering headlines and extensive news coverage. Freddie Mac CEO David Moffett issued a statement at the time, saying the ban “provides a new measure of certainty” to families facing foreclosures during the holidays.

  • But its expiration didn’t seem to merit the same level of fanfare, with some housing advocates caught by surprise, scrambling for information today and Wednesday on listservs and in phone calls.

For more, see Fannie, Freddie Quietly Lift Moratorium on Foreclosures (Stopgap Plan Outlined With Fanfare Ends Without Announcement).

Sunday, April 5, 2009

California AG Declares War On Loan Modification Scams; Will Target Bogus TV, Other Mass Media Ads Offering Useless Deals

In Los Angeles, California, the Los Angeles Times reports:

  • State Atty. Gen. Jerry Brown pledged Saturday to investigate and prosecute businesses that charge struggling homeowners fees to help get more favorable terms for repayment of their mortgage loans. "We have lawyers, we have investigators, and we will go after those who break the law by falsely representing what they can do," Brown said at a congressional hearing in South Los Angeles.

  • Brown, a Democrat planning to run for governor next year, vowed to focus specifically on bogus television ads that lure homeowners into expensive mortgage consulting deals that are useless. "We will document the rip-offs that are over the mass media as best we can," he said.(1)

For more, see California attorney general promises to tackle homeowner scams (At a congressional hearing in South Los Angeles, Jerry Brown says his office will investigate and prosecute firms that charge fees for bogus mortgage consultant deals).

(1) Unlike his counterparts in some states who are prosecuting loan modification foreclosure rescue fraud with civil lawsuits, Attorney General Brown has recently been bringing criminal actions against the alleged perpetrators charging grand theft and criminal violations of the state's foreclosure consultant statute. See:

Pennsylvania Homeowner Uses "Produce The Note" Self-Help Strategy In Attempt To Fend Off Foreclosure

In Ellwood City, Pennsylvania, KDKA-TV Channel 2 reports:

  • A Lawrence County man is trying a new strategy to save his home. Mark Strohecker, of Ellwood City, is a former firefighter who is on disability. When his adjustable rate mortgage jumped, he was unable to make payments. Facing foreclosure, he used a strategy promoted by a Florida-based website called the Consumer Warning Network. He filed a motion asking the lender to "produce the note." "Provide to me the promissory note to show to me that they are indeed the rightful owner of my property here," Strohecker said.(1)


  • Strohecker tells KDKA his lender has told him they can't find the note. It's unclear what will happen next. He plans on filing more paperwork in court next week.

For the story, see Ellwood City Man Uses 'Note' Strategy To Save Home.

For the KDKA-TV Channel 2 video, see 'Note' Strategy Could Stop Home Foreclosure.

See also The Consumer Warning Network: Homeowner Stops Foreclosure after filing “Produce the Note”

  • [T]he fight for Strohecker’s home is not over yet. The Judge’s order delays the foreclosure sale until May 13th. The order gives the plaintiff, LaSalle Bank National Association, time to come up with the original note, or, if it was lost or destroyed, to prove that LaSalle is the rightful owner of the note. The Judge’s order cites a potential loan modification as a reason for stopping the Sheriff’s Sale. “Said sale is stayed until the next sale scheduled for May 13, 2009, as there is the strong possibility of federal relief for mortgage foreclosures,” Judge Cox wrote in his order.

Go here for more on Produce The Note “How-To”.

Go here for Sample Foreclosure Legal Documents.

For posts that reference the failure of mortgage lenders and their attorneys to file the proper paperwork when bringing foreclosure actions, Go Here, Go Here, Go Here, Go Here, Go Here, and Go Here.

(1) For those in Mr. Strohecker's position, it might be a good idea to request that the mortgage company prove, not only that it has the note, but that it also has the legal right to enforce the note through foreclosure by demanding that it produce, among other things:

  • a complete "chain of title" tracing assignment of the mortgage from the loan originator or other party named in the mortgage;
  • all necessary affidavits, powers of attorney, etc. that impact on the validity of the written assignments of mortgage;
  • the pooling and servicing agreement if a loan servicer is involved (see Max Gardner’s Top Resasons for Wanting a Pooling Servicing Agreement). ThetaMissingDocsMtg

Foreclosure Sale Called Off As KC Homeowner Files Suit Alleging Fraud In Lending Process

In Kansas City, Missouri, The Kansas City Star reports:

  • Sherrita Richardson’s home was to be taken in foreclosure on Monday, making her just one more American caught in the nation’s widening foreclosure crisis. Instead, Richardson became a rare statistic. She’s won a reprieve. The lender has stopped the foreclosure to investigate Richardson’s claims that she was the victim of an inflated appraisal and fraud.


  • Richardson has been assisted by retired attorney Sid Willens, who lobbied the lender to stop the foreclosure until her claims could be investigated. [...] What’s more, Willens has filed a lawsuit against the mortgage broker and seller. She said they misled Richardson and committed a fraud in the deal, using an inflated appraisal and misrepresenting how much money she would put into the deal.

For more, see Foreclosure halted while lender investigates claims that woman was victim of inflated appraisal and fraud.

See also, KMBC-TV Channel 12: Woman Successful In Fight To Stop Foreclosure (Attorney Tries To Get KC Home Reappraised).

Illinois Woman Charged With Felony Theft In Alleged Loan Modification Scam

In Sherman, Illinois, the The State Journal Register reports:

  • A Sherman woman has been arrested in connection with an alleged real estate fraud scheme, including trying to sell property she did not own and conducting a mortgage rescue scam, authorities said. Tamptha S. Hickman, 39, turned herself in to police after a warrant for her arrest on a charge of felony theft was issued Tuesday. She was released from jail after posting $1,000 bail.


  • Under her company name, police said, Hickman mailed out as many as 500 letters to homeowners who were in the foreclosure process and claimed she could help save their homes at no cost to them. One homeowner who got the letter contacted Hickman, who allegedly told the homeowner that she had contacted the victim’s mortgage company and that if she wrote Hickman a check right away for $3,800, the home would not be foreclosed upon. Hickman then would negotiate a payment plan for the rest of the debt, she allegedly told the woman. The victim gave the check to Hickman and a week later contacted the mortgage company to make sure the payment had been made. It hadn’t been, police said. Authorities believe Hickman pocketed the money.

  • The victim never went to authorities about Hickman’s alleged scam, but police found her after going through Hickman’s financial records. “The victim never came forward because she was embarrassed and didn’t know there was anything she could do about it,” Hill said.

For more, see Sherman woman arrested in alleged real estate fraud scheme.

Lenders Abandoning Foreclosure Actions In Some Markets; Dilapidated Collateral Not Worth Repossessing; Homeowners Left On The Hook For Code Violations

In South Bend, Indiana, The New York Times reports:

  • [C]ity officials and housing advocates here and in cities as varied as Buffalo,(1) Kansas City, Mo., and Jacksonville, Fla., say they are seeing an unsettling development: Banks are quietly declining to take possession of properties at the end of the foreclosure process, most often because the cost of the ordeal — from legal fees to maintenance — exceeds the diminishing value of the real estate.(2)

  • The so-called bank walkaways rarely mean relief for the property owners, caught unaware months after the fact, and often mean additional financial burdens and bureaucratic headaches. Technically, they still owe on the mortgage, but as a practicality, rarely would a mortgage holder receive any more payments on the loan.(3) The way mortgages are bundled and resold, it can be enormously time-consuming just trying to determine what company holds the loan on a property thought to be in foreclosure.(4)

For more, see Banks Starting to Walk Away on Foreclosures.

Go here for other posts on code violation & other problems associated with homes in legal limbo.

Thanks to Bill Collins of Crossroads Abstract, Rochester, NY for the heads-up on this story.

(1) According to the story, in Buffalo, where officials said the problem had reached “epidemic” proportions in recent months, the city sued 37 banks last year (see City of Buffalo v. ABN Amro Mortgage Group Inc., et al.), claiming they were responsible for the deterioration of at least 57 abandoned homes; the city chose a sampling of houses to include in the lawsuit, even though the banks had walked away from many more foreclosures. So far, five banks have settled.

(2) Reportedly, Chuck Leone, the South Bend city attorney, made this observation on the foreclosing lender walk-aways: “We see it one of two ways. One is that the bank will simply dismiss the foreclosure complaint. The other is that the mortgage holder will follow through and take a judgment of foreclosure, but then not schedule the property for sheriff’s sale.”

(3) The article highlights the story of one local property owner who though she lost a two-family rental home to foreclosure, which fell victim to looters after her tenants moved out. The City of South Bend contacted her recently, demanding that she resume maintenance on the property. The sheriff’s sale had been canceled at the last minute, leaving the property title — and a world of trouble — in her name. Reportedly, the home is now so worthless the city plans to demolish it — another bill for which she will be liable.

(4) One recent story (see National Public Radio: Banks Refusing To Take Back Foreclosed Properties) reported that Cleveland, Ohio Housing Court officials said they are now seeing homeowners take matters into their own hands when dealing with the abandonment of foreclosure lawsuits by lenders. One instance is cited involving a foreclosing lender that was reluctant to complete the foreclosure process and repossess a dilapidated property. In that case, the homeowner simply deeded back the property to the lender by preparing a deed, naming the lender as grantee, and recording it.

Such a conveyance may ultimately be found to be ineffective because the mortgage lender surely would assert that it never "accepted" the deed conveyed by the owner of the dilapidated wreck collateralizing its loan (ie. to be effective, a deed must be both "delivered" by the grantor-owner, and "accepted" by the grantee-lender; in other words, no acceptance = no conveyance). However, recording a deed in the name of the unwitting lender may, under state law, create a legal presumption that it has been "accepted" by the lender (see Janian v. Barnes, 284 A.D.2d 717, 718; 727 N.Y.S.2d 182 (N.Y. App. Div. 3d Dep't 2001)) until such time that it straightens out the mess by going into court, presenting evidence to a judge that there was no actual acceptance, and obtaining a judgment declaring the deed to be void. Unless and until it does so, it could arguably be treated as the legal owner of (and find itself legally responsible for the code violations on) its abandoned dilapidated loan collateral. Inasmuch as many mortgage holders, their loan servicers, and their assembly line foreclosure mill attorneys have proven themselves to be quite clumsy when handling the paperwork relating to their mortgages, it could be quite some time before they discover that title to the loan collateral has been put in their name - probably when they start getting tagged with the code violations - and possibly even longer before they figure out what to do. responsibility code violations foreclosure