Saturday, May 30, 2009

Closing Agent Gets 24 Months After Copping Plea To Pocketing Proceeds Of Real Estate Transactions; Insurance Underwriter Forced To Cough Up $1.2M+

From the Office of the U.S. Attorney (Rhode Island):

  • A federal judge [last week] sentenced Angela Raposa, age 33, a resident of Riverside, Rhode Island, to 24 months in federal prison for Wire Fraud. Raposa pleaded guilty to that offense, admitting that between February 2006 and February 2007 she operated a title insurance company, Title America Closing Services, and used mortgage proceeds that were supposed to be paid to mortgage companies for her own personal benefit.


  • Raposa directed that funds which were deposited into the company escrow account not be used to pay off the corresponding existing mortgage. Instead, these funds were used to pay for various personal expenses of the defendant. Escrow funds were also used to pay off existing mortgages that were already delinquent, since they were originally not paid off in a timely fashion.


  • In February, 2007, Stewart Title uncovered the fraudulent scheme, at which time it terminated Title America as its representative. As a result of the fraudulent scheme, mortgages were not paid off by Title America with respect to five (5) real estate transactions. As a result, Stewart Title was required to pay off these amounts, which totaled approximately $1,254,324.85.

For the entire press release, see Defendant sentenced to 24 months imprisonment for Mortgage Fraud.

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

Cincinnati Man Charged With Stealing Bar Claims He's The True Owner; Accuses Alleged Victim Of Forging His Name On Papers To Illegally Transfer Title

In Cincinnati, Ohio, The Cincinnati Enquirer reports:

  • A 40-year-old man was charged Tuesday with deceiving the owner of the East End Café to sign the deed over to him, Cincinnati police said. John Yeager of Sycamore Township was booked into the Hamilton County jail on charges of theft, breaking and entering, and securing writings by deception, court records show. The property, located in the 4000 block of Eastern Avenue, is worth $310,000, court records state.


  • Yeager says none of the allegations are true. He says that he bought the café in 2002 and was working out a deal to rent it to the alleged victim. Instead, that man created a false deed with Yeager’s forged signature and stole the property, he said. “I’m still the owner,” he said. “I’m not a con artist; the property was taken from me. I have all this paperwork showing that the numbers don’t add up.”


  • On Wednesday, Yeager was released early in lieu of $7,000 bond. He is now working with attorneys to bring the matter to rest, he said. “They have two options: they can pay me what they owe me or they can give me the bar back,” he said.

For the story, see Man charged: 'I am not a con artist.' TheftOfDeedMeta

Tennessee Feds Charge Mortgage Broker With Ripping Off Refinancing Proceeds From Customers

From the Office of the U.S. Attorney (Eastern District, Tennessee):

  • Thomas Duane Roderick, age 42, of Wesley Chapel, Florida, has been indicted by a federal grand jury in Greeneville, Tennessee, charged with one (1) count of wire fraud, three (3) counts of bank fraud, and three (3) counts of money laundering.


  • The indictment states that Roderick worked with Premier Mortgage [...] in Greeneville, Tennessee, and used various real estate closing agencies in Greene County. At the closings, Roderick would provide legal documents for the signature of the clients seeking loans, and the closing agency would disburse funds as required by the lending institution. Roderick allegedly set up a sham investment company entitled MSI and set up a checking account used to capture money from clients.

  • The indictment charges that Roderick caused one client to wire $20,000 to MSI, falsely telling this client that she would owe taxes on the $20,000 equity she received from the refinancing of her home mortgage. Roderick convinced her that if she turned the funds over to him, he would invest the money to avoid taxes. The indictment states that Roderick never invested the funds and immediately withdrew them within two days of the wire transfer.

  • Additionally, the indictment charges that Roderick persuaded another client to authorize $119,000 to be wired into his bank account by representing to her that he would use the funds to pay off her mortgage, pay her and her daughter’s outstanding bills, and to assist her granddaughter in obtaining a mobile home. Instead, the indictment states, Roderick spent the $119,000 within three weeks for his personal living expenses.


Friday, May 29, 2009

Cleveland Housing Court Judge Slams Brakes On All Wells Fargo Foreclosure Sales Within City; Lender Accused Of Dumping Blighted Homes

In Cleveland, Ohio, The Plain Dealer reports:

  • Cleveland Housing Court Judge Raymond Pianka on Thursday ordered Wells Fargo Bank to temporarily stop selling any foreclosed homes it owns in the city. A housing-advocacy group sought the temporary restraining order, saying that Wells Fargo has expanded its practice of dumping vacant and deteriorated homes for paltry sums without first doing repairs. Wells Fargo and Cleveland Housing Renewal Project Inc., a subsidiary of Neighborhood Progress Inc., are to be in Pianka's court [this] week for a hearing to consider whether Wells Fargo properties should be declared public nuisances and be repaired or demolished before they can be sold. The group estimates the order could cover as many as 183 properties.

For more, see Wells Fargo Bank blocked from selling foreclosed homes in Cleveland by Housing Court Judge Raymond Pianka (if link expires, try here).

Tennessee Couple Loses Home In Phony Foreclosure Rescue Scam; Operators Turn Out To Be Convicted Felons

In Hardemon County, Tennessee, WREG-TV Channel 3 reports on a local couple facing foreclosure who was offered and accepted assistance from Freedom Property Investment, a foreclosure rescue company that turned out to be a scam.

  • WREG News Channel 3 Investigators spent weeks trying to track down the company's president, William Boxley. It turns out, Boxley was was cited for driving with a revoked license in Memphis back in March. Records show Boxley never showed up for court. The address he gave police is really a Hickory Hill office complex. Workers there tell us Boxley, and Thomas Frank Montgomery, wanted to open up shop there.

  • Court records show Montgomery was just released from federal prison in December. He was serving time after getting caught with nearly 73 pounds of marijuana. A check of arrest records shows Boxley is an ex-con too. He was convicted, and sentenced to 8 years in prison on cocaine charges. In addition, the man who promises to "stop the stranglehold on your financial well-being", in his letter to [the homeowners], has filed bankruptcy.

  • So how can someone with Boxley's history run a company promising foreclosure relief? State Senator Roy Herron explains it this way. "It's like the wild wild west," Herron said of the foreclosure rescue industry. "There's no regulation. There's not good statutory protection for people." Herron sponsored a bill that would ban foreclosure rescue companies from charging anything upfront.

For the story, see Homeowners Warned Of Foreclosure Relief Rip-Offs.

Go here to read recent FTC Warning Letter to loan modification firms, and here for the FTC Foreclosure Warning List.

NY Feds Indict Four In Alleged Short Sale, Flipping Fraud Targeting Homeowners In Foreclosure; Unwitting Straw Buyers Left Holding The Bag

From the Office of the U.S. Attorney (Southern District - New York):

  • LEV L. DASSIN, the Acting United States Attorney for the Southern District of New York, [and other officials] announced the filing yesterday of a six-count Indictment against LAVETTE M. BILLS, KIRK LACEY, OMAR HENRY, and PETER CHEVERE, charging them with perpetrating a mortgage fraud scheme involving loans totaling over $3 million on at least six different residences.(1)

  • BILLS targeted homeowners who had fallen behind on their mortgage payments and whose homes were facing foreclosure by running radio advertisements and appearing on radio programs representing that she was a foreclosure specialist and had the ability to keep a home from going into foreclosure. BILLS and LACEY were then able to convince some of these homeowners to sell or transfer their homes to BILLS or to a company BILLS controlled, NNI, LLC. This was usually done via a "short sale," in which the lender agreed to sell the property for less than the balance owed on the loan and to discharge the remainder of the loan.


  • However, without the knowledge of either the lenders who approved the short sales, or of the selling homeowners, BILLS and LACEY or their co-conspirators "flipped" the properties to third-party straw buyers at a higher price, usually on the same day or within a short period of time. The sales price in the second transactions–the "flips" -- was often significantly higher–typically by $150,000 or more -- than the short sale price, yet the homeowners typically received little or no money from the sale of their homes. To accomplish this, BILLS and LACEY deceived both the straw buyers and the lenders who were providing the mortgages to finance the purchases.


  • As a result of their fraud, the defendants profited from their "flips" of the properties; the homeowners lost title to their homes; the straw buyers became liable on hundreds of thousands of dollars they were unable to repay; and the lenders suffered losses from those loans, which eventually went into default.


For the Indictment, see U.S. v. Bills, et al.

(1) BILLS, 36, of Briarcliff Manor, New York, and LACEY, 36, of Pembroke Pines, Florida, were previously charged in a criminal Complaint filed in Manhattan federal court on March 17, 2009.

(2) In at least one case, involving a residence on Tinton Avenue in the Bronx, BILLS convinced the homeowner to place BILLS' name on the deed to the house and to "gift" the equity in the house to BILLS, in return for BILLS' fraudulent promise to transfer the house back to a relative of the homeowner.

Thursday, May 28, 2009

Court Says Foreclosure Sales Were Invalid As Banks Didn't Acquire Interest In Delinquent Loans Until After Legal Action Was Completed

In a recent ruling by the Massachusetts Land Court, two foreclosure sales were held to be invalid because, at the time of the publication of the notices of foreclosure sale, neither foreclosing lender owned an interest in the mortgage (either recorded or unrecorded) each was attempting to foreclose.

The facts of the cases in a nutshell are as follows:

  • Wells Fargo and U.S. Bank each foreclosed on mortgages it purportedly held and acquired title to the homes securing said loans at foreclosure sales.

  • When each lender attempted to unload the homes onto a subsequent purchaser, they were unable to obtain title insurance policies on the homes until a couple of legal issues affecting the property were resolved in the lenders' favor.(1) One of the issues was whether the lenders were the holders of their respective mortgages at the time the notices of foreclosure sale were published.

  • The lenders then each commenced legal actions to "remove a cloud from the title" to the homes.

  • The court found that the applicable law for this case is found in G.L. c. 244, § 14, Bottomly v. Kabachnick, 13 Mass. App. Ct. 480, 484 (1982), and the cases cited therein, which among other things, requires that notice of a foreclosure sale identify "the holder of the mortgage," (See Bottomly, at 483) and that failure to do so renders the "sale void as a matter of law." (Id. at 484.)

  • According to the court, the evidence showed that, while Wells Fargo and U.S. Bank were each identified in the published notice of foreclosure sale as "the holder of the mortgage," each acquired its interest in their respective mortgages after the foreclosure sale (in Wells Fargo's case, it acquired its mortgage by assignment ten months after the sale, with the assignment declaring an effective date prior to foreclosure; in U.S. Bank's case, it acquired its interest in the mortgage by assignment nearly fourteen months after the auction took place). Additionally, the court's ruling pointed out that there also was nothing to indicate that each was acting (or purporting to act) as someone else's agent, much less the agent of the principal.

  • Because they were incorrectly identified as the mortgage holders in the notice of foreclosure sale when, in fact, each did not acquire its interest until after the foreclosure sale, the court found a lack of compliance with G.L. c. 244, § 14, and therefore, ruled that the foreclosure sales were invalid.(2)(3)

Go here for the consolidated court ruling (U.S. Bank v. Ibanez; LaSalle Bank v. Rosario; and Wells Fargo v. Larace).

In a related story, see Thousands Of Foreclosures Are Void, Says Massachusetts Class Action Demanding Lenders & Their Lawyers Prove Note Ownership.

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, Go Here, and Go Here.

Thanks to Glenn Russell, of the Law Office of Glenn F. Russell, Jr., Fall River, Massachusetts for the heads up on this case, and for providing a copy of the court ruling.

(1) For the kinds of title problems one can encounter in buying real estate in a transaction, see:
(2) In a third case, the court found in favor of a foreclosing lender, ruling that possession of an unrecorded assignment of mortgage at the time of the publication of the notice of sale was sufficient to establish its status as a holder of the mortgage. Failure to record the assignment of mortgage was not fatal to its position as holder.

(3) In the following excerpt from the court ruling, the trial judge makes an observation that may be of some interest to those in the title insurance industry who are asked to insure the potentially crappy titles to foreclosed homes that may contain title defects as a result of errors made by assembly-line, foreclosure mill lawyers bringing lawsuits on behalf of lenders who lack standing to foreclose. Real estate purchasers buying foreclosed homes, either at a foreclosure auction, or from the bank directly after it acquires title to the foreclosed home, may also have some interest in the following (footnotes omitted):
  • As even a cursory glance at the current caseload of this court reveals, titles arising from mortgage foreclosures can have many problems. These include the most fundamental: Did the party conducting the foreclosure have the authority to do so and, if challenged, can it prove that it had such authority? In short, will a purchaser at the foreclosure sale get good title and will get it in prompt fashion? These are increasingly important questions in the current deteriorating real estate market and are not small concerns. It is increasingly rare for a mortgage to remain with its originating lender. Often, as here, mortgages are assigned to other entities, and then assigned yet again into large securitized pools. Often, as here, the paperwork lags far behind. Sometimes mistakes are made. Mistakes can only be corrected, if at all, through confirmatory documents (which the borrower may not so easily agree to) or litigation. With so many foreclosed properties available for purchase, why bid on a property with even the possibility for such trouble? Why bid on a property when the foreclosing party cannot produce all the documents (including proper mortgage assignments in recordable form) that would give good title? Why take the risk that the foreclosing party will be able to produce the documents promptly after the auction takes place, that those documents will be complete and in proper form, or even (in this era of failed and failing institutions) that the foreclosing party will still be in existence, with intact files and knowledgeable employees able to find those files so that the proper paperwork can be completed? Since these concerns affect the ability to obtain clear, marketable title, why bid a reasonable market value instead of a discount price to account for that risk?

  • None of this is the fault of the mortgagor, yet the mortgagor suffers due to fewer (or no) bids in competition with the foreclosing institution. Only the foreclosing party is advantaged by the clouded title at the time of auction. It can bid a lower price, hold the property in inventory, and put together the proper documents at any time it chooses. And who can say that problems won't be encountered during this process? It is interesting that it took the plaintiff (the foreclosing party and successful bidder) almost fourteen months after the auction to obtain its assignment in Ibanez and ten months after the auction in Larace. Would any reasonable third-party bidder have been willing to wait that long, trusting that no other issues would arise? Only in Rosario was the assignment (showing that the foreclosing party held the mortgage and could convey title as a result of the sale) in hand and ready for recording at the time of the auction sale. EpsilonMissingDocsMtg title insurance legal issues

FTC Files Civil Suit Against Loan Modification Firm Accused Of Deceptive Practices While Clipping Homeowners For $3.3M+ In Upfont Fees

From the Federal Trade Commision:

  • The Federal Trade Commission has charged a mortgage foreclosure “rescue” operation with falsely promising Spanish-speaking consumers who are behind on their mortgage payments that it would stop foreclosure.(1) Many people who paid the defendants ultimately lost their homes, and others avoided foreclosure only through their own efforts. At the FTC’s request, a federal court temporarily halted the defendants’ practices and froze their assets. The FTC seeks to stop the deceptive claims and obtain consumer redress from the defendants, whom consumers have paid at least $3.3 million.

For the entire press release, see FTC Sues Mortgage Foreclosure 'Rescue' Operation That Targeted Spanish-Speaking Consumers.

For copies of the lawsuit and the temporary restraining order, see FTC v. Dinamica Financiera LLC.

(1) The Commission charged the defendants with violating the FTC Act by falsely representing that they would obtain mortgage loan modifications or stop foreclosure in all or virtually all instances. The defendants are Dinamica Financiera LLC, Soluciones Dinamicas Inc., Jose Mario Esquer, and Valentin Benitez. The complaint was filed in the U.S. District Court for the Central District of California on May 19, 2009. The court entered a temporary restraining order on May 20, 2009, halting the defendants’ practices and freezing their assets pending a hearing on whether a preliminary injunction should be entered against the defendants.

New Housing Law Protects Tenants Nationwide Against Being Blindsided By Surprise Foreclosure Evictions

The Associated Press reports:

  • Buried in a housing law signed [last] week by President Barack Obama are protections that will help thousands of renters stay in their homes — at least for awhile — after their landlord has been foreclosed on.

  • The law allows tenants to remain in their foreclosed rentals through the end of their lease and then 90 days after that before being forced to vacate by the lender. Renters without leases will have 90 days, a significant improvement over what most received before: almost no notice at all. "Until this law was enacted, there had been no national protections for any of these households," said Linda Couch, deputy director at the National Low Income Housing Coalition. "This gives renters time to adjust their lives."

For more, see Law protects renters from foreclosure evictions.

NY Title Agent Charged With Misappropriating Escrow Funds From Real Estate Deals; Uses "Ponzi" Approach In Attempt To Conceal Earlier Thefts, Say Feds

From the Office of the U.S. Attorney (Southern District - New York):

  • LEV L. DASSIN, the Acting United States Attorney for the Southern District of New York, [and other officials] announced that BRIAN H. MADDEN, who controlled and operated three title insurance agencies in New York and Suffolk counties, was arrested today for misappropriating millions of dollars of escrow and other client funds and embezzling a portion of those funds for his own benefit.

The Feds allege that:

  • Commencing around early 2008, MADDEN misappropriated escrow and other client funds from Liberty Title, Skyline Title, and GNY Liberty Abstract in order to sustain operations at Liberty Title, and to support the significant cash draws he was taking from the company. In particular, between January 2008 and April 2009, MADDEN took approximately $2.2 million in cash draws from Liberty Title. Those cash draws, which at times amounted to $300,000 or more in a single month, far exceeded MADDEN's draws in prior years, and were taken despite the deterioration in the real estate market throughout 2008. To sustain Liberty Title's operations in the face of such draws, and to pay current client debts, MADDEN misappropriated escrow and client funds of other clients, essentially using new funds from clients to pay off older debts on behalf of other clients.


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

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

Wednesday, May 27, 2009

Florida Courts Continue Efforts To Establish Loan Workout Procedures In Foreclosure Actions

In South Florida, the Daily Business Review reports:

  • As a state task force labors to develop a uniform statewide approach to the onslaught of foreclosure cases, Broward and Palm Beach counties are rolling out new programs of their own.

  • Palm Beach Chief Circuit Judge Kathleen Kroll will launch a pilot program next month allowing homeowners to confer with law clerks and court interns to get help understanding the paperwork and see if they’re eligible to rework their loan. [...] Broward Chief Circuit Judge Victor Tobin plans to require lenders to make a good-faith effort to meet with all homeowners interested in settling their foreclosure cases. Both are trying to solve complaints by mortgage holders who say they can’t find anyone in a position of authority at their lender to work with them.

  • The Miami-Dade Circuit Court created a mandatory mediation program last month for cases involving owner-occupied homes. [...] Others counties around the state are pursuing different options for bringing their foreclosures caseloads under control. A task force formed by the Florida Supreme Court issued an interim report last week suggesting it would recommend uniform case management procedures and a model mediation program.

For more, see Courts initiate programs to assist homeowners in resolving cases.

Scammers Putting Bogus Chinese Drywall Notices On Vacant Homes In Foreclosure To Drive Down Prices At SW Florida Courthouse Sales?

In Cape Coral, Florida, WINK News reports:

  • A mystery in Cape Coral. Notices, warning of Chinese drywall, are popping up on vacant homes in the city. The catch: The warnings are fake! The yellow notices claim to be from the Department of Health, and say the home has been inspected and contains Chinese drywall. Many of the homes are in foreclosure.

  • The Lee County Health Department first learned of the fraud from a home inspector and a realtor. They say no health agency within the county or state does these types of inspections.

  • Why would someone post fake notices? Local realtor Ron Martin with Sun Realty has a theory. He's seen several of the notices on properties over the past few days. "There seems to be a common theme to the ones I've seen and that is that they're all scheduled to be auctioned at the courthouse within 48 hours," said Martin. "One would have to suspect that someone is trying to discourage competition."

  • Posting these fake notices is a crime, and anyone with information is asked to contact the Cape Coral Police Department or call 1-866-9-NO SCAM.

Source: Fake Chinese drywall notices! (Fake Chinese drywall notices on homes in Cape Coral).

Go here for other posts on Chinese drywall.

List Of Homeowners Being Forced From Homes By Chinese Drywall Continues To Grow

In Parkland, Florida, CNN reports:

  • Sherri and Ira Rojhani stopped paying the mortgage on their 2-year-old South Florida home in April, victims not of a troubled economy, but, they say, of drywall from China that they believe is making them sick. They join a growing list of homeowners in 13 states who face foreclosure or the prospect of paying both their mortgage and rent on alternate housing as they seek relief from what they describe as corrosive gasses emitted from the Chinese drywall(1). The drywall is now the subject of several scientific studies. [...] Espinal made a 40 percent down payment on his home. He's concerned and angry about what's happened to his investment.

For more, see Chinese drywall hits health, wallets, homeowners say.

In a related story, see Get out of house, doctor tells family.

Go here for other posts on Chinese drywall.

(1) According to the story, the U.S. Consumer Product Safety Commission says Florida leads the nation in complaints about Chinese drywall. Other complaints from homeowners are coming from Louisiana, Virginia, Wisconsin, Ohio, Alabama, Mississippi, Missouri, California, Washington, Wyoming, Arizona, Tennessee and Washington D.C. Many homeowner's have turned to their home insurance companies for help, only to find that any problems would not be covered by homeowner's policies.

Tuesday, May 26, 2009

MERS Jammed In Attempt To Foreclose In 27 Cases; Not A Real Party In Interest, Lacked Standing, Failed To Produce Note, Says Nevada Bankruptcy Judge

In Las Vegas, Nevada, Las Vegas Business Press reports:

  • A Las Vegas bankruptcy judge has dealt a blow to an obscure but critical piece of the mortgage enforcement machinery that could slow foreclosures. After a rare hearing in front of three judges last year that initially encompassed 27 cases, U.S. Bankruptcy Court Judge Linda Riegle has ruled that the Mortgage Electronic Registration System (MERS) could not represent lenders seeking to foreclose on delinquent homeowners already in bankruptcy unless it could produce the actual loan note. This goes to the heart of how home lending has evolved over the past two decades, with a loan rarely staying on the books of the originator but often being sold several times to other institutions or investment groups. As a result, producing a loan document is far more complex than opening a drawer in a filing cabinet.


  • Riegle's ruling not only parsed federal and state law but at least implicitly rapped MERS on the knuckles for its practices. For example, she noted that MERS acted as the attorney on several loans in Las Vegas even after they were transferred to non-MERS members. She also rejected the argument that lenders who belong to MERS and designated it to be their legal representative should be good enough for the court. Without the loan papers, she concluded, MERS' terms and conditions for its members do not give it any rights to foreclose under Nevada law." To reverse an old adage," she wrote, "if it doesn't walk like a duck, talk like a duck and quack like a duck, then it's not a duck."

For more, see Judge's ruling deals blow to national mortgage servicer.

For the judge's ruling, see In re Mitchell.

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, Go Here, and Go Here. EpsilonMissingDocsMtg

Ohio Appeals Court Affirms Theft Convictions, Reverses Others In Cleveland-Area Equity Stripping, Foreclosure Rescue Sale Leaseback Scam

An Ohio appellate court this month issued rulings, affirming in part and reversing in part, the convictions of two criminal defendants in connection with an equity stripping, foreclosure rescue scam.(1)

Defendant Sammy Quick appealed his convictions for two counts of theft, securing writings by deception, mortgage broker prohibition, and receiving stolen property. Defendant Brian Cicerchi appealed convictions for theft, securing records by deception, and telecommunications fraud.

After considering the matter, the appeals court reversed the convictions of securing writings by deception as to both defendants, and the conviction relating to mortgage broker prohibition as to Quick. All other convictions were affirmed.

For the entire rulings of the Ohio appeals court, see:

(1) The victims in this case were an elderly woman suffering from Alzheimer's and her adult daughter who was struggling with drug dependency problems. According to the court decisions, the daughter, who was facing foreclosure, called Sammy Quick and asked him for assistance. He proposed a scheme whereby she could save her home and continue to live there, while at the same time working toward reestablishing her credit. He told her they would “take the house out of my name” for a period of one year to 18 months and at the end of that time, the house would “go back into my name and that I would begin to make payments.” During the time that she did not have title to the house, she would pay rent to the person who did own title. The homeowner testified that at no point did she understand Quick to be proposing that she would sell her house, and she believed that she would get her house back after she rehabilitated her credit. Quick soon asked the homeowner to “sign[] some papers,” but she did not know what those papers were. She thought that she would be receiving $10,000 to pay off her credit cards as a result of transferring the house, but received nothing.

Federal Judge Dismisses Cleveland Public Nuisance Suit Against Big Banks Over Subprime Mess That Left Neighborhoods In Ruins

In Cleveland, Ohio, The Plain Dealer reports:

  • U.S. District Judge Sara Lioi has dismissed Cleveland's lawsuit against large investment banks that Mayor Frank Jackson believes enabled the subprime lending and foreclosure crisis here. In a 36-page decision (download PDF file), Lioi ruled that the city's public nuisance complaint was "pre-empted" by a section of Ohio Revised Code that does not allow municipalities to regulate lending. She also wrote that the city failed to demonstrate an unreasonable interference with a public right and that the city did not prove that the banks named in the suit caused the damages.


  • Jackson filed the suit in January 2008, contending that Wall Street giants such as Deutsche Bank and Goldman Sachs irresponsibly bought and sold high-interest home loans. These practices, the mayor argued, depleted the city's tax base and left neighborhoods in ruins.
    The city has appealed Lioi's ruling.

For more, see Lawsuit blaming banks for foreclosure mess in Cleveland is dismissed by federal judge.

Go here for the federal court's ruling.

For the original lawsuit, initially filed in state court and subsequently moved to federal court, see City of Cleveland v. Deutsche Bank Trust Company, et al.

Monday, May 25, 2009

FTC Obtains Court Order Halting Scammers' Use Of "" Link To Deceptively Divert Comsumers Seeking Free Mortgage Assistance

From the Federal Trade Commision:

  • At the Federal Trade Commission’s request, a federal district court issued an order to stop an Internet-based operation that pretends to operate “,” the official Web site of the federal Making Home Affordable program for free mortgage loan assistance. The FTC alleged that the defendants deceptively diverted consumers who searched online for the free government assistance program to commercial Web sites that offer loan modification services for a fee.

For the entire press release, see FTC Obtains Court Order Halting Deceptive Mortgage Relief Internet Ads; Marketers Falsely Claimed to Operate

For the court order, see FTC v. One or More Unknown Parties Misrepresenting Their Affiliation With the Making Home Affordable Program.

(1) According to the FTC’s complaint, the defendants purchased “sponsored links” for their advertising on the results pages of Internet search engines, including,, and When consumers searched for “making home affordable” or similar search terms, the defendants’ ads prominently and conspicuously displayed the Web site address “” Consumers who clicked on this advertised hyperlink were not directed to the official Web site for the Making Home Affordable program, but were diverted to Web sites that solicit applicants for paid loan modification services. These commercial Web sites, which are not part of or affiliated with the U.S. government, require consumers to enter personally identifying and confidential financial information. The operators of these Web sites either purport to offer loan modification services themselves or sell consumers’ personally identifying information to persons who sell such services.

Another Foreclosing Lender Screw Up Puts Homeowner Out Onto Street, Belongings Dumped On Front Lawn

In Gwinnett County, Georgia, WSB-TV Channel 2 reports:

  • A Gwinnett County woman is trying to put her life back together after an alleged foreclosure mistake left her home a wreck. Eviction crews dumped all of her belongings in her front yard. But, she said it was the bank that failed to process her loan modification paperwork. Judi Moser said her life is as shattered as her precious crystal. "It's about 150 years old and it's gone," she said, talking about her now-broken crystal bowl. "Who would let people come in and just destroy a lifetime of things," asked Moser.

  • She showed Channel 2 Action News reporter Richard Elliot what's left of her life after deputies and crews evicted her from her home of 29 years -- only to put it all back when they learned the bank made a mistake. "And then they said, 'Oops, wrong, we made a mistake. Let's put everything back,'" said Moser.

For more, see Woman Blames Bank For Eviction Mistake.

Go here for Slideshow of Lender Screw Up.

Go here for other posts on lender screw ups. ForeclosureLockOuts

Scammer Cops Plea To Illegally Pocketing $140K From Elderly Clients Promoting Phony Foreclosure Flipping Business

In Oshkosh, Wisconsin, the Appleton Post Crescent reports:

  • An Oshkosh man faces prison after he was convicted Monday of two counts of security fraud and one count of selling an unregistered security in a scam that netted nearly $140,000 from elderly clients. Mark H. Brenner, 50, was found guilty of the charges [...] after entering guilty pleas to the felony charges.


  • The criminal complaint said the charges stem from a series of transactions that Brenner had with an elderly husband and wife. Brenner told the couple that his real estate business, Valley Home Buyers, purchased distressed properties, repaired and refurbished them, and then resold the properties for a profit.

  • The couple invested nearly $97,000 between November 2001 and November 2002, with promises of annual interest of 10 to 15 percent. Brenner owed the couple $105,000 by November 2004, entered into another agreement with the couple, and stopped all payments in April 2005. [...] The complaint said Brenner and Valley Home Buyers never purchased a single property and that Brenner used these investment funds to pay his living expenses and interest payments. The investigation also revealed that from 1990 to 1994, Brenner was sued numerous times, resulting in money judgments against him and one foreclosure. The complaint said that Brenner never told investors of his legal woes.

For the story, see Oshkosh man convicted in security fraud scam on elderly.

10th Defendant In Maryland-Based Foreclosure Rescue Scam Takes Guilty Plea

In Greenbelt, Maryland, WJZ-TV Channel 13 reports:

  • A 10th person has pleaded guilty in a $35 million mortgage foreclosure rescue scam. Federal prosecutors say 34-year-old Ronald Chapman Jr. of Washington faces up to 30 years in prison and a $1 million fine for conspiracy to commit mail and wire fraud. He pleaded guilty on Monday.

  • Authorities say Chapman and others, through the Lanham-based Metropolitan Money Store, targeted homeowners who risked losing their homes. The scheme took advantage of homeowners and lenders by using straw buyers, fraudulently obtained loans and inflated real estate appraisals to strip equity from more than 100 homes from 2004 to 2007. Losses attributable to Chapman's role are between $200,000 to $400,000. As part of his plea, Chapman has agreed to pay restitution for the full amount of victims' losses.

Source: 10th Defendant Pleads Guilty To Mortgage Fraud.

For the press release from the U.S. Attorney's office, see Loan Officer Pleads Guilty in over $35 Million Mortgage Fraud Scheme (Ten Defendants Have Pleaded Guilty in the Metropolitan Money Store Conspiracy, Including Mortgage Brokers, Real Estate Agents, Loan Processors and Officers, an Attorney and U.S. Census Bureau Employee, and Family Members).

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

Sunday, May 24, 2009

Failed Attempt To Take Out Mortgage On Mom's Home Among Criminal Charges Facing Louisiana Woman

In Alexandria, Louisiana, The Town Talk reports:

  • An Alexandria woman faces several charges after she reportedly forged several checks from her mother's account, attempted to take out a second mortgage on her mother's home and stole and pawned the woman's jewelry. Angela Fay Koelling, 39, of [...] Alexandria, was charged with five counts of forgery, theft of more than $500 and identity theft.

For the story, see Alexandria woman accused of ID theft. TheftOfDeedMeta

Former Spouse Used Bogus POA To Secretly Take Out Mortgage On Long Island Mansion Now In Foreclosure, Says Ex-Wife

In Brooklyn, New York, the New York Post reports:

  • With all the defiance of a spoiled mob princess -- and the dramatic acting chops of an Oscar diva -- foreclosure victim Victoria Gotti vowed yesterday that no one will be kicking her out of her Long Island estate, insisting, "This is by no means over!"

  • "I'm never going to lose the house -- trust me," Gotti, 46, the daughter of late Mafia boss John Gotti, said outside court, where she attended a hearing on the dispute. "The only way I'm leaving is selling it."

  • [This month], an appeals court allowed lender JPMorganChase to foreclose on the Old Westbury estate because Gotti hasn't made payments on a mortgage with a $650,000 balance in the past two years. To keep the property, which is now on the market for $3.2 million, Gotti is banking on help from the same man she blames for her financial mess: ex-husband Carmine Agnello.

  • Gotti said her shifty former spouse secretly took out the mortgage on the mansion in 1996 by falsely claiming she had given him power of attorney -- and then left her holding the bag for the debt when he transferred his share of the estate to her in 2005.


Hubby Forged Signature on Loan Application, Pocketed £48,000 In Mortgage Proceeds, Says Estranged Wife

In Wales, United Kingdom, the South Wales Echo reports:

  • A CAR dealer accused of forging his wife’s signature on a £48,000 loan application after she left him owned a Porsche, two Spanish villas and a £1m house at the time, a court has heard. Businessman Nigel Bowen, 52, admitted he had since been declared bankrupt, but said he had plenty of money options in 2006 when the mortgage advance – which needed to be signed by both of them – was taken out with Northern Rock.


  • Melanie Underwood, who married him in 2003, last week told the jury that the first she knew about the £48,477 added to the existing mortgage was when she asked the company for a redemption figure because she intended to get a divorce. A handwriting expert said her signature on the application form was a forgery.

For more, see Forge accused had plenty of cash, trial told. TheftOfDeedMeta

Now-Bankrupt Husband Accused Of Forging Spouse's Name On $13M+ In Mortgages Secured By Family Home; Wife, Three Kids Now Face Foreclosure

In Brisbane, Australia, The Sunday Telegraph reports:

  • THE wife of declared bankrupt and former Billabong surfwear boss Matthew Perrin has made startling allegations of identity fraud and forgery in a Supreme Court bid to protect her luxury Gold Coast mansion from the circling Commonwealth Bank.

  • Nicole Perrin claims her signature was forged on two mortgage documents and on a guarantee against loans worth more than $13 million extended to her husband by the bank, court documents show. The Commonwealth Bank claims Mrs Perrin last year took out two mortgages against her $15 million Surfers Paradise mansion, where she lives with the couple's three children. The bank has applied for a court order to repossess the two-storey Cronin Island home after Mr Perrin declared himself bankrupt in March. [...] Mrs Perrin has applied to the Supreme Court in Brisbane for a restraining order to stop the bank taking the home. In her claim, Mrs Perrin says she did not authorise or consent to the mortgages and says it is not her signature on a loan guarantee.
For more, see Wife of bankrupt surfwear mogul claims fraud.

See also, The Sydney Morning Herald: Forgery claims sent to police.

Go here, 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. TheftOfDeedMeta

Foreclosed Homeowner Accused Of Leaving Behind Suspicious Devices Faces Felony Charges As Cops Evacuate Area Residents

In Riverside, California, KABC-TV Channel 7 reports:

  • Bomb disposal experts [were] at a foreclosed home in Riverside [last week] that was apparently booby-trapped. Several suspicious devices were also located on the property. Realtor Ken Kelley was on the property inspecting the house [...] when he saw what appeared to be pipe bombs [...].

  • Officers arrested the former homeowner, identified as 42-year-old Daniel Gherman from Riverside. Bomb squads detonated one of several devices found on the property. The device was apparently a fake bomb, but they also found what appeared to be a booby trap.

  • Residents in the area were evacuated for a short time. Experts are still working to make sure there are no more dangerous devices in or around the house, and they are concerned the house may be booby-trapped inside. Kelley said there were tripwires inside the home. [...] Even though the pipe bombs outside the home turned out to be fake, Gherman is still facing felony charges, and more charges may be added, depending on what authorities find inside.

For the story, see Foreclosed home apparently booby-trapped.