Saturday, April 18, 2009

Feds Begin "Lampoon" Attack On Firm Offering Free Credit Reports With Parody Advertising

The Washington Post reports:

  • If you watch television, chances are you've seen the jingles where the young guy sings a campy song about his troubles with identity theft, in a bid to pitch a site called

  • Well, now the Federal Trade Commission is getting in on the act, running a series of hilarious public service announcements to point out that such services often are not free at all, and instead pointing consumers to, a site mandated by Uncle Sam and probably the only place online consumers can truly go to get a free copy of their credit reports from each of the three major credit reporting bureaus.

Source: FTC Takes on

For the videos, see:

Homeowner Faces Foreclosure For Continued Refusal To Use Leash When Walking Dog

In Tarpon Springs, Florida, the St. Petersburg Times reports:

  • Robert Wirth Jr. may lose his house — all because of walking his dog in a deed-restricted community without a leash. What seems like a relatively minor infraction has snowballed into a protracted court battle that he claims has cost him more than $100,000 in legal fees.


  • It all started more than seven years ago because Wirth insisted on walking his black Labrador, Cole, regularly without a leash. In January 2003, the River Watch Homeowners Association fined Wirth and his wife, Sandra L. Blaker, $1,000 for doing so. The couple didn't pay. So the association filed a lien and in April of that year foreclosed on their home to collect the debt. The case has dragged on for years. Last year, a circuit judge ordered Wirth and his wife to pay the fine, plus interest, attorney fees and other costs or the house would be sold. Wirth now owes more than $40,000, he said.


  • Wirth remains adamant about his case and is not backing down. [...] Wirth admits he still walks Cole without a leash. [...] Meanwhile, Wirth's frustration has escalated. He said that he would shoot and kill one of the board members if things don't go his way.


  • Foreclosure cases like Wirth's are "unusual, but not unheard of, " said Gary W. Lyons, a Clearwater attorney whose specialties include real estate law. Lyons is also aware of foreclosure proceedings that stemmed from painting homes the wrong colors or improper shingles on roofs.

For more, see Foreclosure looms over Tarpon Springs man who walked dog off leash.

See also, Tarpon Springs dog owners knew the leash rules and defied them.

More Homeowner 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:

  • Port St. Lucie, Florida: Treasure Coast homeowners should be wary of mortgage modification scams. Mateo Avila was watching a Spanish language network when he saw a commercial for Miami-based Lincoln Lending Services, which claimed to specialize in loan modifications for homeowners. He called the toll-free number in January and did exactly what the company asked. "They told me, don't pay for the house," said Avila, who stopped paying his two home loans with Aurora Bank and Countrywide in October. "They (Lincoln Lending) took $3,000, two checks for $1,500 to do a modification." After handing over the money, Avila couldn't get any straight answers from Lincoln Lending. When his lenders foreclosed on the home last month, he soon realized he'd been scammed and contacted the Mortgage Fraud Task Force of Florida Attorney General Bill McCollum. [...] Gifford resident Elizabeth McGriff got a pamphlet in the mail from The Foreclosure Relief Group and called the company after her husband's work hours were cut. State records show the company is owned by Brian Nierenberg in Fort Lauderdale. McGriff said the company told her to pay $1,995 to start a loan modification and also asked her to pay them $550 a month until the loan was modified. Nierenberg claims his business is simply a lawyer referral service and collected fees go to attorneys.

  • Orlando, Florida: Warning About Foreclosure Rescue Companies. Jackie Day is struggling to pay the mortgage on her Orlando condo so she wanted to lower her monthly mortgage payments. Jackie saw an ad for "The Home Savers," a California company that by phone told her it would cut her payments. But she says Home Savers wanted her to stop making mortgage payments to qualify. "What I would have to do---is not pay my mortgage for three months. I was to send $1,500 payments." A Home Savers spokesman said the upfront fee is an attorney's retainer and is a legal charge.

  • Jacksonville, Florida: Southside Foreclosure Firm Accused of Scamming Homeowners. "I thought these folks had more knowledge and different avenues to approach our mortgage company," Royce Belle, a Jacksonville homeowner who enlisted the help of National Foreclosure Counseling Services, said. "They did not." Belle's story is one state investigators say is being told and re-told all over the country by homeowners contacted by NFCS. "We recieved a letter from National Foreclosure Services stating that they were able to help us lower our payments," he tells WOKV. "The said they'd charge us $2,044 to get our mortgage modified." Belle admits he took the bait; paying the fee and hoping to clear up rising mortgage payments and keep his home. But weeks turned into months, and Belle says he never heard from NFCS. Eventually, he says, NFCS presented a re-financing plan that actually raised his monthly mortgage payment a dollar. "We told them that doesn't make any sense," he said. "Nothing changed. We told them they didn't actually do anything for us." When Belle decided to cut ties with the company and demand a refund, he claims NFCS threatened to bankrupt him. He's now suing the company in small-claims court.

  • Lake Ronkonkoma, New York: Mortgage modification mess. Back in January, homeowner Jim Gentile paid $3000 to Hope Now Modifications and a south Jersey law firm to get his mortgage modified. Jim says they told him, "We can get you a fixed rate for 5 years. (And reduce it) down to 5.25% (interest rate) which is great, cuts my mortgage in half." But Jim says all Hope Now Modifications did was tell him to stop paying his mortgage. He fell three months behind on his payments. Jim says his current mortgage company said it had never even heard of Hope Now Modifications. Jim says Hope Now Modifications led him to believe they were a non-profit agency.

  • Omaha, Nebraska: Mortgage Middleman Almost Costs Couple Their Home (Attempt to refinance leads to foreclosure). An Omaha couple decided to pay a middleman to help them negotiate a better rate. What they got instead was a mortgage mess. When their variable house payment jumped, the hardworking Booker family didn't think the big mortgage company would listen to them so they paid a middleman, but the first piece of advice was ill-advised. After making five payments totaling $3,000 to First Universal of Florida, which was supposed to negotiate a fixed rate with their mortgage company, the Bookers instead received notice of default from an attorney. Their house was on the brink of foreclosure.

  • Indianapolis, Indiana: State targets foreclosure consultants. Homeowners are hiring foreclosure consultants to prevent banks from seizing their homes, only to find themselves swindled. Vivienne Daniels paid $392 to a company called Capitol Foreclosure (for the Indiana AG's lawsuit, see State of Indiana v. Capitol Foreclosure). "I was behind. My mother died," she said. But according to Daniels, "they did nothing." Last year, the attorney general's office took four foreclosure consultants to court. The attorney general's office won judgments against three of the companies. A fourth is awaiting trial. Vivienne Daniels got an attorney, lost some money, but kept her home. "I was real lucky. I lost about $400. It would have been bad to lose your home," Daniels said.

  • Long Island, New York: Housing advocates question loan modification firms. At a recent ACORN protest of AmeriMod loan modification company in Uniondale, homeowner Claudette Broderick said the firm got her only a forbearance from her lender. Usually under forbearance, the loan is taken off the delinquency rolls and the late payments are added on top of the regular monthly ones. Broderick, laid off as a nursing assistant, said she couldn’t afford the regular $3,100 monthly bill and the forbearance would have pushed the monthly bill to about $3,600.

Friday, April 17, 2009

L.A. Bar To Train Volunteers For Foreclosure Defense Effort

In Los Angeles, California, Metropolitan News Enterprise reports:

  • The Los Angeles County Bar Association Barristers are seeking volunteers to counsel homeowners facing foreclosure at one-day clinics to be held May 2. The organization said yesterday it has partnered with the Legal Aid Foundation of Los Angeles, Neighborhood Legal Services, Public Counsel and Bet Tzedek to provide the clinic, at which attorney volunteers “will assist homeowners in evaluating their loan documents to see if they qualify for the newly available loan modifications or if other forms of relief are available.”

  • No experience is necessary, the group said, because all volunteers will be trained at one of three sessions that have been scheduled beginning Monday.

For more, see Barristers Seeking Volunteers for Law Day Counseling.

Some Loan Modification Firms Have Their Own Financial Baggage

In Hampton Roads, Virginia, The Virginian Pilot recently did a story on some of the upfront fee loan modification firms that have recently sprouted up locally. The owner of one firm who was interviewed for the story reportedly described her business model as one where she charges from $500 to $1,500 upfront, collects basic information from the homeowner, and then passes along the file to an attorney who then tacks on an additional fee for handling the actual negotiation. When asked how many homeowners she has helped obtain successful loan modifications, she told the reporter that because her buisness was new, she hadn't helped any yet (which reportedly contradicts the testimonials from satisfied customers that appear on the firm's website).

Before she opened her loan modification firm, she owned a now-defunct subprime mortgage business that currently is a defendant in a civil mortgage fraud lawsuit, according to the story. She claimed that the suit was due to the actions of an employee and that she had no knowledge of those actions. In addition, she apparently was unable to reach successful loan modifications on her own distressed real estate, as the story reports that her recent bankruptcy filing indicates that three houses she owned were repossessed by banks, and that she offered to give up three additional properties as she liquidated her assets in a Chapter 7 bankruptcy.

For the story, see As mortgage services pop up, regulators warn of scams.

Evicted Homeowner Claims Loan Modification Firm Collected Loan Payments, Let Mortgage Go Into Default, Bought House At Foreclosure Sale

In Ogden, Utah, KTVX-TV Channel 4 reports:

  • [Ron Chavez] was evicted from his home after twenty two years. Last year he fell behind on his mortgage. [...] He turned to a loan modification specialist. [...] "I talked to an attorney who was supposed to help us out and I got offered a brochure to contact these people,” Chavez said. Chavez entered into an agreement with the company. He was told to continue paying the mortgage, but the company put the money into an escrow account. He said the company let the house go into foreclosure and then bought it below market value. For a small fee, the company [would resell] it to Chavez at a reduced price. And Chavez was supposed to get a lower mortgage payment, but he never got a chance to buy it back. He was evicted.

For the story, see Homeowners facing foreclosure duped.

Chinese Drywall Problem A "Sleeping Beast" In Thousands Of Bank-Owned Condos, Houses?

The Associated Press reports:

  • At the height of the U.S. housing boom, when building materials were in short supply, American construction companies used millions of pounds of Chinese-made drywall because it was abundant and cheap. Now that decision is haunting hundreds of homeowners and apartment dwellers who are concerned that the wallboard gives off fumes that can corrode copper pipes, blacken jewelry and silverware, and possibly sicken people.


  • Dozens of homeowners in the Southeast have sued builders, suppliers and manufacturers, claiming the very walls around them are emitting smelly sulfur compounds that are poisoning their families and rendering their homes uninhabitable. "It's like your hopes and dreams are just gone," said Mary Ann Schultheis, who has suffered burning eyes, sinus headaches, and a general heaviness in her chest since moving into her brand-new, 4,000-square foot house in this tidy South Florida suburb a few years ago. She has few options. Her builder is in bankruptcy, the government is not helping and her lender will not give her a break. "I'm just going to cry," she said. "We don't know what we're going to do."


  • In another cruel twist, some of the very communities that have been hit hardest by the collapse of the housing market and skyrocketing foreclosure rates are now at the epicenter of the drywall problem. [Construction consultant Michael] Foreman warns of a "sleeping beast" in the thousands of bank-owned condos and houses across the country, with no one in them to complain.

For more, see AP IMPACT: Chinese drywall poses potential risks (Chinese drywall imported during housing boom causes corrosion, possible health risk).

See also, ABC News: Some China-Made Drywall Causing a Stink (Homeowners Have Complained of Sulfur Smells and Corroding Metals).

Go here for other posts on Chinese drywall.

Go here for links to recent media reports on the problems with "Chinese drywall."

Thursday, April 16, 2009

Basic Training In Wisconsin Foreclosure Defense

From the State Bar of Wisconsin:

  • Attend an upcoming presentation of the Representing Homeowners in Default and Foreclosure seminar. This program is designed to give you the basic training and skills you need to join attorneys around the state who are working to help Wisconsin homeowners in financial distress. This full-day course will cover vital topics such as negotiating loan modifications or other foreclosure prevention solutions, using the new federal “Making Home Affordable” program to refinance, taking advantage of lender-initiated programs, mounting legal defenses and counterclaims, and understanding bankruptcy and foreclosure.


For more, see Free training to fight the flood of foreclosures – help homeowners; strengthen communities.

Live seminars:

  1. April 20, 2009 – Milwaukee,
  2. April 27, 2009 – Green Bay,
  3. April 30, 2009 – Madison,
  4. May 4, 2009 – Eau Claire.

Live webcast:

Arizona Feds Indict Pair In Alleged Scheme Using Homeowners Facing Foreclosure, Abusing HUD "Short Sale" Program To Pocket Illegal Profits

From the Office of the United States Attorney (Arizona):

  • A federal grand jury in Phoenix returned a 19-count indictment [Wednesday] against Kenneth D. Perkins, 51, and Robert Lee Burdiak, 66, both of Gilbert, Ariz. , alleging wire fraud and false statements to the government and to financial institutions. The indictment alleges that from May 2003 through June 4, 2004, Perkins and Burdiak defrauded the Department of Housing and Urban Development (HUD).


  • Perkins, operating through Virtual Realty Funding Corporation and Virtual Realty Company, found homeowners in default and arranged for their participation in the [HUD Pre-Foreclosure Sale Program] as their realtor. But instead of marketing their properties, he purchased them at a discount of as much as 82% of their appraised value utilizing Burdiak as a straw-buyer. The homes were then sold for a profit, sometimes on the same day. Perkins and Burdiak concealed from the lending institutions, and thus HUD, the fact that the properties had not been marketed by submitting false documents to them. Perkins acquired approximately 20 properties at a discount which resulted in HUD paying an additional sum of a substantial amount to lenders in order to cover the shortfall in the mortgage balances.

For the entire U.S. Attorney press release, see Foreclosure-Rescue Schemers Indicted.


In an unrelated story from the U.S. Attorney's Office in Arizona:

  • On April 8, 2009, Dustin Michael Thompson, 30, and Sean Paul McLaughlin, 29, were indicted on four counts of Wire Fraud and one count of Conspiracy to Commit Wire Fraud as a result of their involvement in a cash back mortgage fraud scheme. Thompson and McLaughlin submitted mortgage loan applications on behalf of buyers, that included friends and family members, containing false information. Following the funding of the loans, Thompson and McLaughlin received cash back that they used for personal expenses and to perpetuate the scheme. Most of the homes purchased during the conspiracy have foreclosed.

For the entire press release, see Real Estate Investor And Loan Officer Indicted For Mortgage Fraud.

Owner Of Now-Defunct Title Company Admits Swiping Closing Proceeds Intended To Pay Off Existing Mortgages, Leaving Homeowners Facing Foreclosure

In Louisville, Kentucky, WHAS-TV Channel 11 reports:

  • In an exclusive interview with WHAS11 News, the former owner of a Louisville title company admits to misappropriating mortgage money. His actions could cost a number of people their homes.

  • Wavy Curtis Shain appeared in federal court Tuesday, but the court did not accept his guilty plea, pending a better explanation of the charges by the U.S. Attorney’s Office. Shain, 26, operated Derby City Title first as a title search company from 2001 to 2003, then as a closing agent from 2003 to 2007. Shain tells WHAS11’s Joe Arnold that the “money was misappropriated to keep the business open.”


  • When Nancy Mitchem refinanced her home through Shain, she says he kept that payout for his own use -- failing to pay off her first mortgage -- setting her up for foreclosure. [...] Homeowner Joe West adds, “We can’t even go rent an apartment because our credit scores are demolished and it’s all because of what he did.”

For the story, see Former owner of Louisville title company admits misappropriating money.

Go here for interview with Wavy Curtis Shain.

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

Mobile Home Park In Foreclosure Shut Down By Authorities As Unpaid Bill Results In Water Shutoff Leaving Premises Uninhabitable; Residents Get Boot

In Southport, New York, the Elmira Star Gazette reports:

  • Chemung County and multiple agencies [Tuesday] are assisting displaced residents of a Southport mobile home park on Sherman Avenue after their park became uninhabitable. The town of Southport code enforcement officer and the Chemung County Environmental Health Department said the property was uninhabitable [Tuesday] after the Elmira Water Board shut off its water, according to a news release from Chemung County.

  • The property, managed by White Tigers LLC of Poughkeepsie, failed to make payments to the Elmira Water Board for several months and has indicated it will be unable to pay and is facing bankruptcy and foreclosure, the news release said. The park is unlikely to reopen, the news release said. The park has 28 units with approximately 25 homes occupied, the release said.

Source: Officials scramble to help residents of Southport mobile home park.

Wednesday, April 15, 2009

Obama Administration Big Shots On The War On Foreclosure Rescue, Loan Modification Scams

U.S. Treasury Secretary Timothy F. Geithner, Attorney General Eric Holder, and Secretary of Housing and Urban Development Shaun Donovan issued a joint press release last week on combatting foreclosure rescue and loan modification scams:

  • [I]n a major step [last] week, the Department of the Treasury, the Department of Justice, the Department of Housing and Urban Development and the Federal Trade Commission announced a new joint effort that cuts across federal and state governments and the private sector to combat foreclosure rescue scams. Led by the Treasury's Financial Crimes Enforcement Network, this effort creates an advanced targeting process to streamline investigations and prosecutions and provides financial institutions with a new advisory to spot and report questionable loan modification schemes.

  • For American homeowners, this means that fraudulent companies will be shut down more quickly; companies that otherwise would have gone unnoticed will be identified and investigated; and the government's ability to identify and prosecute anyone involved in mortgage rescue scams will be bolstered.

For more, see Crackdown on fraud.

See also, The Washington Post: 'We Will Find You and We Will Punish You':

  • There was tough talk out of Washington [last week] aimed at loan-modification scammers. Attorney General Eric Holder had this message for people and companies ripping off homeowners on the verge of foreclosure: "If you prey on vulnerable homeowners with fraudulent mortgage schemes, or discriminate against borrowers, we will find you and we will punish you."

B.C. Appellate Court Sides With Victims Who Lost Homes In Deed/Refinance Scams Involving Use Of Forged Documents; Duped Lenders End Up Holding The Bag

In Vancouver, British Columbia, The Canadian Press reports:

  • The B.C. Court of Appeal wants the province to come up with stricter laws forcing lenders to do a better job of vetting mortgage applicants to ensure they aren't securing property that's been stolen. In a ruling issued [last] Monday, the Court of Appeal concluded that it shouldn't be good enough for anyone lending money for a mortgage to rely only on a title search to show who is the rightful owner of a property.

  • But under the B.C. Land Title Act as it is currently written, the court found that lenders have only to do a search. A lower court judge concluded that if the property shows no liens and a lender gives out a mortgage based on that search, the lender has a valid mortgage and is entitled to be repaid. In other words, even if the rightful property owners get their property back, they are still stuck paying for mortgages they didn't take out, according to the lower court ruling.

  • The Court of Appeal disagreed and instead concluded that the lender — not the rightful property owner — is the one out of luck in a fraudulent mortgage scheme.


  • The Court of Appeal was examining two cases(1) where people fraudulently had their property transferred to someone else without their knowledge. Mortgages were obtained on the properties after the fraudster went to some people for a loan based on the equity in the property. The lenders advanced the money after doing a titles search and finding no liens on the properties.(2)

  • But then the fraudster disappeared and the crime was discovered after the lenders began foreclosure proceedings. The victims of the frauds went to court(3) to have the mortgages declared void, but the lower court ruled the lenders followed the rules and the owners were out of luck. However, the Court of Appeal concluded lenders must ensure their mortgages are valid by taking steps to ensure that the registered owner obtained title to the property legally.(4)

For the story, see B.C. Court of Appeal overturns ruling on mortgage fraud.

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.

(1) Gill v. Bucholtz, 2009 BCCA 137 (April 6, 2009); Re Oehlerking Estate, 2009 BCCA 138 (April 6, 2009).

(2) The story and the cases are silent as to whether the lender obtained a title insurance policy to insure its interest in the property. (Could it may be that no such insurance is available in British Columbia? Is it possible that the burden is on the homeowner to obtain insurance covering against the risk of having the title to his/her home stolen?) In the United States, the risk that title was obtained by forged documents is generally referred to as an "off-record risk" or "hidden hazard" that is typically covered by a title insurance policy. In the case of a mortgage company that lends money on a title acquired by forgery, having acquired a title policy to insure its interest would generally entitle it to indemnification for its loss, leaving the title insurer holding the bag. For a list of 35 off-record risks, or hidden hazards, that a title insurance policy generally protects a homeowner and mortgage lender against, see Title Insurance: What Risks Does It Protect A Property Owner Against? (footnote 1).

(3) It is important to note that the victimized homeowner has the burden in these types of cases to go to court (preferably with a real estate attorney who knows what he/she is doing) and file a civil lawsuit seeking to void the forged deed and mortgage. Failure to do so will likely result in a loss of the home. For an example of what could happen when the victim fails to go to court to void the forged deed and mortgage, see Oshawa mother faces eviction after alleged mortgage scam.

(4) A little over a year ago, an Ontario Superior Court addressed a similar situation - one where a then-88 year old man had his home stolen from out from under him through the use of a forged power of attorney. The scammer subsequently pocketed the proceeds from a fraudulently obtained mortgage. The Superior Court decided the case in his favor, ruling that the mortgage lender should rightfully be left stuck holding the bag. For more on this story, see:

Feds Take Closer Look At Tax Resolution Companies As Complaints Parallel Those Leveled Against Loan Modification Firms

WebCPA reports:

  • The Internal Revenue Service has suspended an enrolled agent from practicing before the agency after his clients complained that he did little to help them settle their tax disputes. The IRS’s Office of Professional Responsibility suspended Richard Hargus, who worked in California for two separate, now defunct companies that specialized in tax resolution services, including the submission of offers in compromises ["OIC"] to the IRS.(1)

  • Multiple taxpayers paid the companies for Hargus to resolve their income tax liabilities through the OIC program. An OIC is an agreement between a taxpayer and the IRS that settles the taxpayer’s tax liabilities for less than the full amount owed. In many instances, however, Hargus’s clients either did not receive the services for which they paid him or received very little assistance with resolving their tax issues, the IRS said. [...] After an IRS investigation, Hargus admitted a lack of due diligence in these taxpayers’ situations. The IRS suspended Hargus on Monday from practice for at least 18 months.(2)

  • The IRS said that it is taking a closer look at tax resolution companies, and is also litigating known OIC abuses to ensure that tax professionals fulfill their legal and ethical obligations to their clients in dealing with IRS tax matters. The IRS’s parent agency, the Treasury Department, also announced on Monday an initiative to crack down on companies that claim to help people with foreclosure prevention services, but instead charge them up front while performing few services on their behalf.

For the story, see Practitioner Suspended for Bilking Taxpayers.

For a related post on dealing with unpaid federal tax problems, see IRS To Ease Up On Squeezing Financially Stressed Taxpayers Owing Back Taxes.

(1) According to the story, Tax practitioners are subject to the regulations issued under Treasury Department Circular 230, the IRS pointed out. Circular 230 provides that a practitioner must exercise due diligence in preparing or assisting in the preparation, approval and filing of tax returns, documents, affidavits and other papers relating to IRS matters.

(2) For an IRS advisory warning taxpayers to beware of promoters’ claims that tax debts can be settled for “pennies on the dollar,” see IR-2004-17: Check Carefully Before Applying for Offers in Compromise.

Grand Theft Probe Triggered By Report Of $1M In Missing Fixtures, Appliances Stripped From Foreclosed Mansion

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

  • After a high-profile foreclosure, the county's largest and possibly most luxurious bank-owned home is missing an estimated $1 million worth of fixtures, from antique doors to top-of-the-line toilets. So far, no suspects have been named in a grand theft probe the Sheriff's Department launched in March.

  • It's like a car up on blocks,” sheriff's Detective Steven Ashkar said. “It's been stripped.” The 16,000-square-foot Spanish hacienda-style house on 1.24 acres in rural east Encinitas cost $13 million to build and furnish. In February, it failed to sell at a bank foreclosure auction with a starting bid of $2.3 million. [...] On March 26, the bank's real estate agent [...] filed a police report citing missing “doors, windows, fixtures, toilets, cabinets and appliances,” Ashkar said.

For more, see $1 million worth of fixtures vanish from foreclosed home.

See also, ABC Good Morning America: Million-Dollar Foreclosure Theft (Recession Victim: A Vacant California Mansion Stripped of $1 Million in Fixtures).

For the Good Morning America video, see Foreclosed Homes Attract Thieves.

Go here for other posts on pre-foreclosure homeowner fixture stripping. foreclosure fixture stripping apple

Tuesday, April 14, 2009

Manhattan DA Charges Brooklyn Man Of Using Forged POA Revocation, Bogus Deed & Mortgage In Attempt To Swipe Harlem Brownstone From Deceased Owner

From the Office of the New York County District Attorney:

  • Manhattan District Attorney Robert M. Morgenthau announced [Monday] the indictment of a Brooklyn man for filing a forged deed and other fraudulent documents in an attempt to steal a Harlem brownstone. The defendant, ENRIQUE CASTILLO, also known as ENRIQUE FERNANDEZ, 52, was indicted on charges of attempted grand larceny, offering a false instrument for filing, and criminal possession of a forged instrument.


  • [Carolyn] Todd, who died at age 57 in March 2005, was the lifelong owner of the Harlem brownstone. In January 2005, her health failing, Ms. Todd gave power of attorney to [her cousin, James] Bryant, who was then caring for her at his home in Ohio. A short time later, she conveyed the brownstone to him and his wife Debbie as joint tenants with right of survivorship. Mr. Bryant subsequently filed the deed conveying the property to him with the City Register.

  • The investigation began when Mr. Bryant contacted the District Attorney’s Office in June 2008 after learning of [a] false mortgage and “Revocation of Power of Attorney.” When he was arrested in December 2008, CASTILLO was in possession of a forged social security identification card.

Go here for the Manhattan DA's entire press release.

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

State Regulator Orders Loan Modification Firm To Cease Business Activities In Idaho

From the Idaho Department of Finance:

  • The Idaho Department of Finance has issued a cease and desist order against a Nevada-based business, Your Credit Angel, LLC, which purports to assist distressed homeowners in avoiding foreclosure by offering mortgage loan modification services.

  • "A person engaged as a third party in mortgage loan modification activities in Idaho must be licensed as a credit counselor," said Gavin Gee, director of the Idaho Department of Finance. Gee said the unlicensed activities of "Your Credit Angel" were brought to the department’s attention by an Idaho customer who reported paying an upfront fee of $1,495 to that company. The customer could not obtain a refund and reported that he got nothing for his money. In the cease and desist order, the director ordered "Your Credit Angel" to immediately stop offering mortgage modification services in Idaho without a license.

For the entire press release, see Las Vegas Mortgage Modification Company Ordered To Cease And Desist (Address is Nothing More Than a Mail Drop Box).

For the cease and desisit order, see State of Idaho v. Your Credit Angel LLC, a division of Coronwa Investments, LLC.

Oregon AG Fielding More Complaints Against Loan Modification, Foreclosure Rescue Operators

In Portland, Oregon, The Oregonian reports:

  • Complaints in Oregon about [mortgage and foreclosure repair] operations are way up, according to Attorney General John Kroger's office. [...] So far this year, Kroger's office has received 209 contacts from consumers -- most of them complaints -- about mortgage repair services, department spokeswoman Jan Margosian said on Monday. That's on pace to easily surpass last year's total of 277.

  • "It is mostly lack of proper disclosures, practicing law without a license and just taking folks money and not producing anything," Margosian said about the complaints. In September 2008, the office was given jurisdiction over "foreclosure consultants" and "foreclosure equity purchasers" and has opened the following investigations under that new authority: Smith & Jordan, Inc., National Homeowners Assistance Services, Turning Point Equity Group, Oregon Home Savers, LLC, and Capital Securities Mortgage, Inc.

Source: Mortgage and foreclosure repair scams in Oregon.

Monday, April 13, 2009

Indiana AG Files Civil Charges Against Five Loan Modification / Foreclosure Rescue Firms

From the Office of the Indiana Attorney General:

  • Indiana Attorney General Greg Zoeller today filed lawsuits in Boone, Clark, Delaware, Grant and Marion counties against five foreclosure consultant companies alleging violations of state laws. [...] Foreclosure consultants target homeowners threatened with default and foreclosure and receive payment for services to allegedly stop or postpone the foreclosure.

  • The lawsuits filed today cite violations of three laws including the Deceptive Consumer Sales Act, Credit Services Organizations Act and the Mortgage Rescue Protection Fraud Act.

The five lawsuits filed today targeted the following companies:

  1. Foreclosure Assistance, LLC, Scottsdale, AZ,
  2. Homeownership Preservation Group, LLC (also known as Stop Foreclosure Save My Home), Melbourne, FL,
  3. You Walk Away, LLC, Carlsbad, CA,
  4. American Mitigation Group, Inc., Del Mar, CA,
  5. Foreclosure Relief Agency, LLC, Monarch Beach, CA.

For the Indiana AG's press release, see Indiana Attorney General Greg Zoeller files suit against Foreclosure Consultant Companies.

See also:

24 Suspects In Alleged Street Gang Member-Led Mortgage Fraud Scam Could Face Hard Time As California Feds Bring RICO Charges Against Group

In San Diego, California, voice of san reports:

  • Federal prosecutors on Tuesday announced unprecedented charges against individuals involved in an alleged mortgage fraud ring involving 220 properties in San Diego County, with total purchase prices topping $100 million. The 24 defendants were all charged with participating in a "corrupt enterprise" under a federal law created by the Racketeer Influenced and Corrupt Organizations (RICO) Act, which allows for charging multiple defendants with extended penalties for their participation in an ongoing crime ring.


  • The indictment describes a network of individuals allegedly masterminded by defendant Darnell Bell, or D-Bell.(1) Bell is a documented member of the Lincoln Park street gang and had already been serving time for about a year for narcotics charges when he was arraigned on the racketeering charges in federal court [Tuesday] morning, [U.S. Attorney Karen] Hewitt said.(2)


  • By recruiting members of their organization to cover every piece of the real estate transaction -- from appraiser to escrow to real estate agent to buyer -- the organization allegedly obtained millions of dollars in cash back and fraudulently obtained commissions and fees, according to the indictment.


  • Because prosecutors decided to fuse the alleged actions of all 24 defendants into the overarching racketeering charge, the individuals could each face up to 20 years in prison and fines of $250,000. The alleged racketeering activity includes charges of bank fraud, money laundering and wire fraud.

For more, see Mafia-Esque Charges Brought Against Alleged Mortgage Fraud Ring.

For the Federal indictment, see U.S. v. Bell, et al.

See also, San Diego Union Tribune: 24 people indicted in mortgage fraud plot ($11 million netted in S.D.-area scheme).

(1) Besides Bell, the lead defendants in the case reportedly are:

  • Michael Ivy, 43, of San Diego, who prosecutors say negotiated the property transactions;
  • Stanley Gentry, a 49-year-old licensed local real estate broker, who allegedly allowed the organization to use his broker's license to facilitate the purchases, in exchange for $10,000 a month and a cut of the commissions and fees on each deal; and
  • Billie Bishop, 49, of La Mesa, an escrow officer who allegedly enabled the organization to purchase more than 100 properties.

The other defendants include several real estate professionals: Diana Jaime, 33, a public notary; Jorge Cortez, 39, a licensed real estate agent; Esteban Valenzuela, 28, a licensed real estate appraiser; Anton Ewing, 38, a CPA; and Randolph Hirsch, 43, and Dennis Tapia, 49, both registered tax preparers. Prosecutors said defendants Latashia McKinney, 35, and Marcus Dozzell, 34, rounded up some of the straw buyers. Lorena Callu, 52, worked for the organization and allegedly helped to prepare and submit loan applications. Prosecutors also name several straw buyers as participants in the corrupt enterprise: Desiree Holiday, Dexter Holiday, Keith Holiday, Gerard Holiday, Ray Logan aka Jack Nasty, David Lewis, David Lewis, Joseph Lewis, Stevie Frazier, Jorge Magana, Nicoele Watson and Daniel Williams. All of them fraudulently obtained mortgages and purchases properties on behalf of the organization, according to the indictment.

(2) According to the indictment (beginning at page 6, line 26), Bell "used his status as a long-standing member of the Lincoln Park street gang to recruit some of the "straw buyers" and to maintain discipline within the enterprise."

Honolulu Feds Raid Four Houses, Seize Evidence In Probe Into Alleged "Royal Hawaiian Treasury Bond" Foreclosure Rescue Scam

In Honolulu, Hawaii, the Honolulu Advertiser reports:

  • The FBI [Tuesday] raided four Maui homes as part of its investigation into allegations that several local companies bilked homeowners out of more than $300,000 on O'ahu, the Big Island and Maui with false promises to help them avoid foreclosure. The FBI executed search warrants yesterday at a home [...] in Wailuku, another [...] in Waikapu and two other locations on Maui. Agents seized computer records, boxes of files and other evidence.


  • Officials said the homeowners, many of whom are Native Hawaiian, were charged between $2,500 and $10,000 to attend seminars or counseling sessions on avoiding foreclosure, and were told they would receive bonds worth $1 million that could be used to pay off the outstanding balance of their mortgage.


  • After attending the seminars, homeowners are told that a $1 million "Royal Hawaiian Treasury Bond" will be sent to their bank with a letter explaining that it will cover the outstanding balance of their mortgage.

For more, see Homes raided in bond probe (FBI gathering evidence in scheme that targeted folks facing foreclosure).

IRS To Take Careful Look At Loan Modification Outfits Filing Bogus Applications For Non-Profit, Tax-Exempt Status

The Chronicle of Philanthropy reports:

  • The Internal Revenue Service is working to help “protect the trust and confidence” in nonprofit organizations during the current economic crisis and will be watchful of possible abuse, says Lois G. Lerner, who oversees the IRS office that monitors charities and foundations. [...] “We are trying to stay ahead of the curve to curtail predatory abuse of tax-exempt organizations,” she said.

  • For example, Ms. Lerner said, the IRS is seeing “a number of” applications for tax-exempt status from organizations that offer mortgage-foreclosure counseling and assistance. Ms. Lerner noted that the revenue service in the past has cracked down on many organizations that counsel people who amass big credit-card debts.

  • Based on our experience with abusive credit-counseling organizations, we are concerned that some of these [mortgage counseling] applicants may be using the guise of an exempt organization to profit from individuals who have been harmed by financial upheaval,” said Ms. Lerner. “Consequently, we are looking very closely at applications from new organizations, and at activity being conducted by established organizations.”

For more, see IRS Watches for Potential Abuses as Charities Grapple With a Bad Economy, Agency Official Says.

Sunday, April 12, 2009

Another Mortgage Servicer Screw-Up Throws Tennessee Woman's Home In Foreclosure, Despite Proof Of Payments

In Wilson County, Tennessee, WSMV-TV Channel 4 reports on another case of a mortgage lender/servicer screw-up that resulted in a homeowner being thrown into foreclosure, despite the fact that she was current on her payments and had her bank statements to prove it. Channel 4 tried to intervene in the case; however, phone calls to the lender, Saxon Mortgage, and the attorneys handling the case, Johnson and Freedman, were not returned.

For the story, see Woman's Home Foreclosed, Sold By Mistake (Mortgage Statements Show Payments Current). (read story) (watch video).

Go here and go here for other posts on foreclosure screw ups involving improperly changed locks, removal of belongings, etc. ScrewUpsLockOutsInForeclosure

Deed, Refinancing Scams By Forgery Has County Recorders Seeking Help To Protect Property Owners

In Fort Wayne, Indiana, The Journal Gazette reports:

  • It took The Journal Gazette less than an hour to “steal” the 300-foot-tall Lincoln Tower. With a little research, a typewriter and an $8.99 form from a local office supply store, the newspaper was able to prepare a deed transferring ownership of the city’s most iconic building from its current owners to the city’s most iconic citizen, John Chapman, better known as “Johnny Appleseed.”

  • The deed was not recorded, so ownership of the building was never in jeopardy. But Allen County Chief Deputy Recorder Anita Mather examined the notarized deed and said her staff would have no choice but to accept and record it, even though the reporter who signed the document had no right to transfer ownership in the 79-year-old art deco building and no money changed hands.


  • Why would someone want to steal a building? Experts say thieves are not interested in the property at all – they’re interested in showing ownership so they can get a fraudulent loan and disappear with the money. That can leave the true property owner holding the bag, and it has county recorders asking for help to prevent the practice.(1)

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

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) Reportedly, local officials fear a wave of scams where senior citizens lose their homes before anyone knows what happened. It could be possible for someone to never know what had taken place until the house they had paid off years ago is threatened with foreclosure. Technically, the bank that made the loan would be the victim, but the homeowner would first have to prove that the “sale” was fraudulent and have it voided. For a story where a homeowner claimed to have her home equity ripped off from out from under her through forged documents, and then still lost her home to foreclosure when the payments on the allegedly forged mortgage went unpaid, see Oshawa mother faces eviction after alleged mortgage scam. DeedGammaTheft

Now-Defunct Title Company Accused Of Failing To Pay Off Existing Mortgage On Refinance; Owner Now Left Facing Foreclosure With Two Home Loans

In Cincinnati, Ohio, WKRC-TV Channel 12 reports:

  • A local homeowner who refinanced his mortgage two years ago appears to be the victim of fraud and is now facing foreclosure. The man afraid he'll lose his home even though he's been faithfully paying his new mortgage company. Rodney Everson is afraid he'll lose his Forest Park house because someone stole the money that was supposed to pay off his first mortgage company when he refinanced. This happened in October 2007, after he contacted a local mortgage broker to get a new loan.


  • The title company, Preferred Choice Title, was to have paid off that loan. But a month later the lender called to say it never got the money. [...] Local 12 has learned the title company that was supposed to pay off the mortgage, Preferred Choice Title, was closed down late last year after it took the money but failed to pay off another $100,000 mortgage.


  • Unfortunately, although the new lender required Everson to buy title insurance to protect it, he failed to buy his own policy to protect him. And now, as a result, he may end up losing the house.

For the story, see Forest Park Man Believes He Is Victim of Mortgage Fraud.

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