New York AG Files Suit Against Two Out-Of-State Debt Settlement Businesses; Accused Of Pocketing Fees, Failing To Fulfill Promises

From the Office of the New York Attorney General:

• Attorney General Andrew M. Cuomo [...] announced a new development in his nationwide investigation into the debt settlement industry, filing suit against two debt settlement companies for fraudulent business practices and false advertising. Cuomo filed suit against CSA-Credit Solutions of America, Inc. (“CSA”),(1) based in Richardson, Texas, which is one of the largest debt settlement companies in the country. He has also filed suit against Nationwide Asset Services, Inc. (“NAS”),(2) based in Phoenix, Arizona, along with its affiliates - ServiceStar LLP and Universal Debt Reduction, LLC - and its marketer, FGL Clearwater, Inc. d/b/a American Debt Arbitration, based in Florida.

For more, see Attorney General Cuomo Sues Debt Settlement Companies For Deceiving And Harming Consumers (Cuomo Files Suit against Credit Solutions of America, One of the Nation’s Largest Debt Settlement Companies, and Nationwide Asset Services for Fraud and Deceptive Advertising; Launches Website - www.NYDebtHelp.com - that Explains Consumer Rights and Outlines the Attorney General’s Investigation).

(1) According to the NY AG, approximately 18,000 New Yorkers signed up as customers of Credit Solutions of America between its inception in January 2003 and September 2008. CSA promised a sixty percent reduction in its consumers’ outstanding debt, but an average of one percent of consumers received that savings. Many consumers have faced continued harassment and lawsuits by their creditors, despite CSA’s promise to intervene on their behalf. CSA has collected approximately $17 million in fees from New York-based consumers, AG Cuomo said.

(2) According to the NY AG, approximately 2,000 New Yorkers became customers of Nationwide Asset Services, Inc. between January 2005 and May 2008. NAS promised a twenty-five to forty percent reduction in its consumers’ outstanding debt, but only one-third of one percent of consumers received that savings. Customers suffered continued harassment and lawsuits by creditors and had their credit ratings destroyed, AG Cuomo said.

California Foreclosure Consultants Now Required To Register With State AG, Post $100K Bond

From the Office of the California Attorney General:

• Continuing his fight against scam artists who "prey on" vulnerable Californians, Attorney General Edmund G. Brown Jr. [Monday] issued a directive forcing foreclosure consultants to register with his office and post a $100,000 bond by July 1, 2009.(1) Those who fail to do so will be in violation of state law, subject to criminal penalties of up to a year in jail and fines ranging from $1,000 to $25,000 per violation. "California is awash with con artists who prey on vulnerable families facing foreclosure," Brown said. "By forcing foreclosure consultants to submit detailed information to my office and post a $100,000 bond, this registry will help bring long-overdue transparency to this shadowy world."

***

• If the company violates the law, a court may order restitution to victims out of proceeds from the $100,000 bond. In order to obtain a Certificate of Registration by July 1, 2009, foreclosure consultants should send in their registration application and materials as soon as possible so they can be reviewed prior to July 1.

Go here for a copy of the registration forms.

For the entire press release, see Brown Directs Foreclosure Consultants to Register with his Office and Post $100,000.

(1) All foreclosure consultants operating in California must post a $100,000 bond and register with Brown's office by July 1, 2009 and submit the following information:

• Name, address, and telephone number;
• All names, addresses, telephone numbers, websites, and e-mail addresses used or proposed to be used in connection with their business;
• Copies of all advertising;
• Copies of each different contract the consultant will use with consumers; and
• A copy of its $100,000 bond. loan modification

Alabama Family Settles With Feds Over Mold Infestation Caused By Roof Leak In Adjoining Foreclosed Townhome Owned By HUD

In Trussville, Alabama, WVTM-TV Channel 13 reports:

• A Trussville family ousted from their home because of a mold problem has resolved their case with the Federal Government. Leslieanne Johannsen, her husband and two young children had to move out of their townhome on New Year’s Day when they discovered a roof leak in the adjoining unit had caused mold to spread like wildfire into their walls, floors as well as the heating and cooling vents.

• That adjoining unit had become the property of the Federal Department of Housing and Urban Development after the home went into foreclosure in the fall of 2008. Local contractors had been handling the situation for HUD. But the Johannsens were not able to get a satisfactory response. Once NBC13HD became involved, officials from the Birmingham HUD office took made their first visit to the home to get a first-hand look at the damage. The Johannsens have now settled with the government.

For more, see Trussville family settles with HUD over mold infestation.

Harvard Law Class Of 2009 Sets School Pro Bono Record

In Cambridge, Massachusetts, Harvard Law School News reports:

• Demonstrating a strong commitment to public service, the class of 2009 put in a record total of 308,605 pro bono hours, more than any previous class. This year’s graduates achieved an average of 542 hours of pro bono work per student, 502 hours more than the 40 required for graduation. Ninety-six students provided more than 1,000 hours of free legal services during their years at HLS.

For more, see Class of 2009 Racks up Record 308,605 Hours of Pro Bono Service.

NYC Pro Bono Recruiting Effort Continues

In The Bronx, New York, the New York Law Journal reports:

• NYC Legal Outreach will hold its second meeting [Monday, June 8] to recruit attorneys to provide pro bono representation for the growing number of unrepresented consumers with financial and immigration problems. The campaign is a joint effort by the judicial and executive branches to expand pro bono legal assistance. In a May 12 letter to bar groups, law schools and the 100 largest law firms, Mayor Michael R. Bloomberg and Chief Judge Jonathan Lippman said NYC Legal Outreach will target four key areas: foreclosure, eviction, immigration and consumer credit. In particular, the project seeks lawyers who will "direct their energies outside of Manhattan to residents of neighborhoods where the problems are the most pressing, and the needs the greatest," said Corporation Counsel Michael A. Cardozo.

• At a press conference in April, Judge Fern A. Fisher, deputy chief administrative judge for courts in New York City, said there were some 600,000 filings last year in consumer credit and housing cases. Up to 90 percent to 95 percent of litigants in housing cases are unrepresented, and as many as 99 percent of litigants in consumer credit cases appear pro se. [Monday night's] meeting begins at 6 p.m. at the Bronx Supreme Court, 851 Grand Concourse, Courtroom 711. Additional meetings will be held on June 17 on Staten Island, June 22 in Manhattan and June 25 in Queens. For more information, e-mail probonosvp@law.nyc.gov or call 212-442-9031.

Source: Attorney Volunteer Effort Meets in Bronx.

More Problems With Loan Modification Firms

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

• Oceanside, California: Couple brings loan modification fees into question. Warnings cautioning homeowners about paying upfront consultant fees in last-ditch efforts to avoid foreclosure may have been too little, too late for homeowners Ryan Walker and Kelly Hart. “She told us we were perfect candidates,” Hart said. “We met all the qualifications for a modification. They said it would be 30 to 45 days.” That guarantee was never made in writing, however. “Their attorney supposedly had a 99 percent success rate when working with candidates like us,” Walker said. “She sold us a good story.” In October 2008, they paid the $3,495 service fee with a cashier’s check hoping to have some financial relief by the end of the year. In the nearly seven months since, Walker and [Hart] have received about 30 e-mails from Mary Moi, the Better Life modification specialist assigned to their case after they paid the fee, but there has been no change in the status of either of their mortgages.

• Indianapolis, Indiana: Hoosiers falling victim to foreclosure scams. Laura Bailey and her husband lost their jobs and missed mortgage payments. The bank foreclosed and a sheriff's sale notice arrived. Desperate, they called a mortgage foreclosure consultant. "When someone tells you 'for this amount of money we can stop all this,' you think 'great,'" said Bailey. New Hope Modifications took $1,250 of the couple's money, then shut down. The Federal Trade Commission charged the New Jersey company with false advertising. It claimed it was part of the non-profit, government-endorsed mortgage assistance network. New Hope is one of many suspected fraudulent businesses authorities are trying to close. "They are like vultures. They go after people who are down on their luck," said Bailey.

• Phoenix, Arizona: Loan modification scam leaves Phoenix woman facing foreclosure. Not one but two Valley families fell for the same promise, come up with some cash and we'll save your home from foreclosure. Weeks and then months went by and the families still found themselves facing foreclosure. Their mortgages were not modified. That’s when law enforcement got involved and so did 3 On Your Side. In one particular neighborhood alone, two houses back to back both signed up with Jose Chavez. In total, Chavez reportedly collected $8,000 in cashier’s checks. Phoenix police and the FBI got involved and they are now looking in to theft allegations against Jose Chavez.

• Middletown, Pennsylvania: Couple lose home despite ability to pay (One payment was returned, and mortgage service firm refused to negotiate after they got behind). After inadvertently failing to mail a mortgage payment, Richard & Patricia Meredith's mortgage company, Wells Fargo, threatened foreclosure. About the same time, the Merediths got a postcard from a foreclosure rescue company called American Housing Authority in California offering to help. It seemed to be just what they were looking for, Patricia said. American Housing Authority told them to send $4,500 to Wells Fargo, but the money was returned for reasons the Merediths can't explain. American Housing Authority started demanding payments to continue negotiating on behalf of the couple, the Merediths said. They sent the company $1,200 in 2007 but balked when it asked for more, because they hadn't seen results. In February 2008, the Merediths' home was foreclosed on by Litton Loan Servicing in Houston, which services Wells Fargo loans. As for the money and time the couple spent with American Housing Authority, it's not clear what, if anything, the company did for the Merediths. Though the Pennsylvania attorney general's office has had no dealings with American Housing Authority, the company has been sued by the attorneys general in several other states, including Illinois, Ohio and Minnesota. A contact number for American Housing Authority could not be found.

Watch Out For Mail Solicitations Simulating Official Forms & Letters From Government Agencies Offering Mortgage Help

The New York Times reports:

• The letter may look like a government form. The logo may seem official. The Web site address may sound like an agency that can help. But there's a good chance it may all be a scam.

***

• ''With people losing homes, you're at your most vulnerable,'' said Roscoe Howard, a Treasury Department spokesman. ''It's a lot like being a poor swimmer and being thrown into a lake, you're going to reach for whatever you can.'' Even for wary consumers, it may be hard to tell if the line being thrown by a company will sink you.

• A letter sent out earlier this month by Bridgewater, N.J.-based Financial Solutions Today LLC is a good example of the difficulty assessing a company. The letter is designed to resemble a W-2 or other form from the Internal Revenue Service, with boxes across the top and a similar typeface. It suggests the recipient ''may be eligible for a special modification program according to guidelines created in conjunction with the Government Stimulus Program HR 1106: Helping Families Save Their Home Act.'' The bill that bore that number in the House of Representatives actually used the plural ''Homes'' in its title, a subtle misspelling that consumer advocates say is the type of thing that should be a red flag for recipients.

For more, see Mortgage Relief Scams Mushroom as Crisis Winds On. loan modification

It's Standing Room Only At Sarasota Foreclosure Court's "Rocket Docket"

In Sarasota, Florida, the Tampa Tribune reports:

• Lawyers and frantic homeowners cram together, creating a standing-room-only crowd before Judge Harry Rapkin's foreclosure court. [...] Rapkin, now retired, comes in on a part-time basis to oversee what's become known as the "Rocket Docket." And he gave everyone the same advice: "You need a lawyer." [...] The court, aimed at moving foreclosures through the judicial system at a quicker pace, stems from an effort to unclog dockets and still give the little guy a voice.

For more, see It's fast, furious at Sarasota's 'Rocket Docket' court.

South Carolina Homeowner Loses Home In Sale Leaseback Foreclosure Rescue Deal

In Myrtle Beach, South Carolina, WMBF-TV reports:

• The home is the centerpiece of the American dream. A dream that for Larry Revels has turned into an unimaginable nightmare. "They said that they would stop the foreclosure and keep me in my house," he said. As his home was nearing foreclosure two years ago, he got a flier in the mail offering him a way out. He would sell his house then pay rent to continue living in it. The company paid $80,000 for it. But now they want him to pay $127,000 to get it back, he said. Plus, he's now paying $1,000 in rent instead of making his old $700 mortgage payment.(1)

For more, see Homeowners lose houses to scams.

(1) This deal appears to have some of the earmarks of an equitable mortgage (and, perhaps, a usurious equitable mortgage).

Missouri AG Files Suit Against Two Mortgage Refinancing Firms Accused Of Calling Consumers Having Phone Numbers On State's "Do Not Call" Registry

In Jefferson City, Missouri, the St. Louis Post Dispatch reports:

• Missouri Attorney General Chris Koster announced today suits against two area mortgage-refinancing companies that allegedly called consumers who have placed their telephone numbers on the state’s Do-Not-Call registry. Koster’s office says in a press release that the suit is part of a “zero-tolerance stance against illegal mortgage operations.”

• Last month, Koster sued two other refinance companies, arguing that they misled consumers with deceptive mailers, and a third firm for allegedly bilking consumers with a useless and expensive foreclosure-consulting service. The latest suit is against SJS Investments and A & J Mortgage Brokers, which does business as Equity One Mortgage. The companies are based in St. Peters and Hillsboro, Missouri.

For more, see Koster: Mortgage-refinance firms called consumers on no-call list.

For the Missouri AG press release, see Attorney General Koster sues to stop mortgage-refinancing telemarketer from calling Missourians on the no-call list.

Las Vegas Family Loses Home to Foreclosure Over $39 Fee, Despite Being Otherwise Current On Loan Modification Agreement With Lender

In Las Vegas, Nevada, KVBC-TV Channel 3 reports:

• "Your house has been sold based on the fact you failed to send a $39 contribution. We figured by you not sending that, you didn't want to stay in the house."

• That's what American Servicing Company, a division of Wells Fargo, told David Zepeda earlier this month. That conversation came after a notice of new ownership was taped to his door telling him, his wife, and his two children that their home had been sold May 8.

In April, the Zepedas reportedly signed a loan modification agreement that called for:

• The bank lowered the interest rate on the loan, which totaled $280,000,
• It gave them a fixed rate of five percent for 30 years,
• To get the modification, they had to make five payments of $1,500, which was done,
• The new, lower mortgage payment - according to the signed agreement - wasn't due until June 1.

However, the house was sold May 8. According to the homeowner, Wells Fargo reportedly told him its trying to rescind the foreclosure sale of his home to Deutsche Bank.

For more, see Did family lose house over $39?

Treasury Department Issues Alert On Scammers Using Fraudulent Promissory Notes & Bonds In Attempt To Buy Real Estate, Vehicles

The U.S. Treasury Department has informed the National Association of Realtors ("NAR") by letter of a new fraud that is making the rounds:

• The Department of Treasury, Office of Inspector General (OIG) is investigating incidences whereby individuals are using fraudulent promissory notes and bonds to attempt to purchase vehicles and real estate. The OIG has been notified of numerous occurrences throughout the United States where fraudulent documents were used to attempt to purchase vehicles. Treasury OIG has also been made aware of incidents in Arizona and Colorado where similar fraudulent documents were used to attempt to purchase homes and an office building.

According to a related Treasury department press release:

• Fraudulent seminars are being held throughout the United States, which teach attendees how to create the aforementioned fictitious documents and how to use federal routing numbers.

Go here for the entire NAR letter, here for the related Treasury department press release, and here for:

• Sample Fraudulent Promissory Note,
• Sample Fraudulent Private Bond.

Elk Grove Cop Charged With Lying On Mortgage Applications; Brother, Sister-In-Law Accused Of Pocketing $200K In Separate Refinancing Scheme

In Elk Grove, California, KXTV Channel 10 reports:

• An Elk Grove police officer has been charged by federal authorities for allegedly lying on mortgage loan applications to buy two homes that later went into foreclosure. Hidayatullah Ali Khalil, 29, was arrested Thursday by the FBI on a three-count complaint and made an initial appearance in Sacramento federal court before being released on a $75,000 unsecured bond.

***

• According to the complaint, Khalil pulled more than $100,000 in cash out of the Elk Grove house in two separate transactions. Property records show both homes were sold at auction last year. [...] The FBI said its investigation into Khalil was continuing, with possibly more searches and arrests to come.

• Khalil's brother and sister-in-law also made an intial federal court appearance Thursday for their role in an alleged equity-stripping scheme involving a house in El Dorado Hills that later went into foreclosure. They, too, were released on bond. IRS criminal investigator Christopher Fitzpatrick said Amanullah and Muzdha Khalil lied on a refinancing application to pull nearly $200,000 in cash out of the house [...].

For the story, see Elk Grove Cop Charged with Mortgage Fraud.

Thanks to Tim McDaniel for the heads-up on this story.

Manhattan Feds Bust Alleged Equity Stripping, Mortgage Fraud Scam; 13 Suspects Charged

In Islip, New York, the New York Daily News reports:

• The feds busted up a $10 million mortgage scam that had left city and Long Island homeowners facing eviction. The scheme, run out of Bridgewater Funding in Islip, L.I., targeted dozens of residential properties in the $200,000 to $500,000 range, Manhattan prosecutors said [Thursday].(1)

• The mortgage brokerage firm would approach homeowners who were facing foreclosure and convince them to sell their homes to straw buyers they had recruited, prosecutors said. The fraudsters then told the homeowners they could stay in their houses and that they would make the mortgage payments until they could resell the home at a profit. Using the names of the straw buyers, the ring then took out mortgages that were for more than what they had paid for the houses.

• After pocketing the difference, Bridgewater never made any mortgage payments, leaving the straw buyers on the hook - and the homeowners facing eviction.

For more, see Feds bust ring in $10M mortgage scam.

For the U.S. Attorney (New York - Southern District) press release, see: THIRTEEN CHARGED WITH MORTGAGE FRAUD RUN OUT OF ISLIP, NEW YORK, MORTGAGE BROKERAGE FIRM BRIDGEWATER FUNDING, LLP.

(1) Those charged are loan officers Micah Meyers, Jakob Gearwar and a man known as Eddie Garcia; office manager Brian Urraro; loan processor Michael Didio; attorneys Stephen Caputo and Dawn Hughes; alleged straw buyers Jennifer Moschitta, Victor Avendano, Adrian Avendano, Janet McGuinness and Liam Leavey; and Daniel Hampton, charged with falsely verifying their employment information to lenders.

Minnesota Feds Convict Mortgage Broker In Equity Stripping, Foreclosure Rescue Scam; Victims Duped Into Believing Deals Were Mere Refinancings

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

• A federal [trial] jury [...] convicted a 41-year-old Prior Lake man on seven criminal counts in connection with an equity-skimming scheme that targeted vulnerable homeowners. After more than six hours of deliberation, on May 20 in St. Paul, a jury found Michael Fiorito guilty on all counts against him, including one count of conspiracy to commit mail fraud and six counts of mail fraud.

• According to the indictment and evidence presented during the nearly three-week trial, Fiorito was a mortgage broker at three different Minnesota mortgage companies from 2003 through January 2007. Working with his assistant, Kristin Louise Jerde, he devised a scheme to defraud homeowners who were in foreclosure or behind on their mortgage payments.

• Specifically, Fiorito and Jerde caused homeowners to refinance their homes. They then stole some or all of the equity checks produced through the refinancing process. They also induced homeowners to sell their homes to Fiorito and then stole the checks paid to the victims out of the closing of the sale. Many of the victims who sold their homes to Fiorito did not know they were actually selling their homes because Fiorito misled them into believing that they were only refinancing their homes.

***

• Fiorito sought out and contacted homeowners and encouraged them to hire him to arrange a refinancing or sale. In some cases, Fiorito promised homeowners that they would receive checks in the amount of the equity in their homes, but he then either intercepted the checks or else used physical intimidation to force homeowners to endorse the checks over to him. In most cases, Fiorito caused the homeowners to execute powers-of-attorney appointing him as attorney-in-fact for the homeowners, which facilitated Fiorito’s theft of checks issued to homeowners when the transactions closed. The homeowners testified at trial that they did not know they had signed documents granting Fiorito permission to take their money. [...] Between January 2005 and March 2007, Fiorito fraudulently converted to his own use more than $400,000 in equity from at least 17 victims, [...].

For the U.S. Attorney press release, see Jury convicts former mortgage broker of defrauding vulnerable homeowners in equity-skimming scheme.

NY Judge Gives Go-Ahead To Tax Foreclosure Sale Despite Property Owner's Failure To Receive Notice Of Action While In County Jail On Unrelated Matter

In Canandaigua, New York, the Daily Messenger reports:

• A property that was slated to be sold at Ontario County’s foreclosure auction May 6 escaped the initial sale. But now it will be sold, following a judge’s decision. The owner of 4530 Blossom Road in Gorham sued the county “over notice issues,” county Assistant Attorney Gary Curtiss said after a meeting Wednesday, [...]. Representing the property owner was attorney David Whitcomb.(1) [...] The outcome of the recent case is “unfortunate,” said Whitcomb, [...].

• In the case of the Gorham property, the owner maintained she never received the notices from Ontario County warning her about the back taxes owed, said Whitcomb. The woman was in Ontario County Jail, serving time for driving while intoxicated, he said. The county’s certified letters sent to her address came back unclaimed and letters sent by regular mail never came back, he said. The woman was in a county facility and the county should have known she didn’t get the notices, said Whitcomb. Within days of hearing arguments in the case earlier this month, state Supreme Court Judge Craig Doran ruled the county could auction off the property. The lot with ranch home at the corner of Blossom Road and Summit Parkway, assessed at $61,500, will go for its highest bid of $32,000.

For more, see Property to be sold by county after lawsuit.

Go here and go here for other posts on foreclosures involving faulty notifications to property owners.

(1) Whitcomb also represented a property owner last year who sued the county over a foreclosure. But in that case, the owner won and was able to keep his parcel. A panel of judges with the state Appellate Division’s Fourth Department overturned a previous ruling that would have allowed the county to auction the parcel over $24 in interest owed by the property owner. foreclosure faulty notice

New FHA Program Allowing Use Of Reverse Mortgages To Purchase Home Prohibited In Texas; OK Everywhere Else

The San Antonio Express News reports:

• Imagine being able to buy a new home with a 40 percent down payment and not ever having to make a mortgage payment for the rest of your life. The Federal Housing Administration early this year approved such a deal as a form of reverse mortgage for home buyers who are 62 or older. But in Texas, the only thing anyone can do is imagine. The home-equity-for-purchase deal is available in 49 states, but not Texas.

***

• [The available] options would be popular with many Texans as they reach retirement age. They won’t be able to do so, however, until the Texas Constitution is amended. Texas lagged [behind] the rest of the nation in offering home-equity and reverse mortgage loans by more than a decade because of the state constitution’s homestead protections.

• Home-equity lending finally was approved in 1997 by a constitutional amendment, followed by reverse mortgages in 1999. One of the Texas consumer safeguards requires owning equity in a house before anyone could apply for a reverse mortgage, which is a form of home-equity lending. No one could foresee the new home-equity-for-purchase option. Take that restriction away, and the home-equity-for-purchase deal becomes available in Texas, allowing lenders to apply reverse mortgage loans to the purchase price of the house.

For more, see Law blocks new reverse mortgage.

Missouri AG Tags Loan Modification Firm With Allegations Of Clipping Homeowners For Illegal Upfront Fees; Seeks Restitution & Civil Penalties

The St. Louis Business Journal reports:

• Missouri Attorney General Chris Koster on Tuesday sued a St. Louis company that allegedly failed to offer the foreclosure relief and mortgage modifications it promised to Missourians. Koster said the company, Gateway Mortgage Modification, charged “large sums of money and promised it would negotiate a new, workable solution on the client’s existing mortgage, including a change in the terms of a loan in order to help the borrower stay in the home and avoid foreclosure.” But a state investigation found that the company took customers’ money and didn’t provide the services, Koster said.

***

• Koster said Gateway has about 200 current clients and continues to solicit more business. [...] The company also requires upfront payments before services, which is illegal in Missouri. The lawsuit seeks restitution for customers and civil penalties.

Source: Koster sues Gateway Mortgage Modification.

For the Missouri AG's press release, see Attorney General Koster continues 'zero tolerance' stance on mortgage scams (Koster files suit to stop company from cheating people seeking foreclosure assistance and mortgage modification).

Parents Testify Against Son Accused & Subsequently Convicted Of Using Forged Documents To Refinance Family Home, Pocketing £55,000

In Gloucestershire, UK, the Daily Mail reports:

• A couple were horrified to discover that their son had remortgaged their home to raise £55,000 which he spent on luxury living, a court was told. Darrell Keen, 26, forged his father's signature to remortgage the family home in the Cotswolds - then blew the surplus cash in four months on restaurants and clothes. Keen did not turn up for his trial at Gloucester Crown Court, but his parents Graham and Rachel Keen were both there to give evidence against him and he was convicted in his absence. Judge Martin Picton issued a warrant for the callous fraudster's arrest and said he would pass sentence on him on June 1st whether he has been found by then or not.

• The jury of seven men and five women had taken just 25 minutes to convict Keen of forging the morgtage application and using a false instrument with intent. Prosecutor Lisa Hennessy said Keen was living with his parents and a lodger in Field Lane, Willersey, Gloucestershire. Darrell switched his father's mortgage from the Kensington Mortgage company to GE Money, raising an extra £55,000 in the process. In June last year, Mr Keen started to realise what had happened when he got a letter from the new mortgage company stating that the repayments were not being made. The next day he was shocked to receive a notice of summons to attend court about the arrears.

For more, see Son secretly remortgaged parents' house to splurge £55,000 on a flat, car, clothes and restaurants.

Loan Modification Outfit Sued By Idaho AG Abruptly Shuts Down; Homeowners, Employees Left High & Dry As Feds, State Slap $700K+ In Tax Liens On Firm

In Coeur d'Alene, Idaho, The Spokesman Review reports:

• Apply 2 Save Inc. in Coeur d’Alene has closed its doors, shutting out hundreds of frustrated customers who did not receive the mortgage help they paid for and employees who are owed wages. The Internal Revenue Service on Monday filed four tax liens totaling more than $663,000 for unpaid 2008 federal unemployment and income taxes. The state of Idaho has filed a nearly $52,000 lien for unpaid withholding tax.

For more, see Tax liens filed against Apply 2 Save (Coeur d’Alene company closes doors).

See also Apply 2 Save leaves clients and workers bewildered:

• The Coeur d’Alene company was sued last month by the state of Idaho for promising mortgage relief it did not deliver. That was April 20. On April 21, employees were issued paychecks that bounced around North Idaho banks like ping-pong balls. Then dozens were laid off or, as the company calls it, “furloughed.”

Virginia Feds Get 3 Guilty Pleas In Scam That Ripped Off $600K+ From Unwitting Homeowners' HELOC Accounts; One Suspect Remains A Fugitive

From the Office of the U.S. Attorney (Eastern District - Virginia):

• Chad Antoine Vieux, age 27, of Central Islip, New York, pled guilty today to Conspiracy to Commit Bank Fraud, [...] and one count of Bank Fraud, [...]. On April 2, 2009, Happie Harris, age 27 of Chester, Virginia, and on May 4, 2009, Sandra Caiby-Ramkissoon, age 37, of Glen Allen, Virginia also pled guilty to the same charges.

***

• According to court documents, beginning in 2007, Caiby, Vieux, and Harris conspired with individuals who targeted victims with large amounts of available credit on their Home Equity Line of Credit (HELOC) and credit card accounts. These other individuals obtained personal and financial information for various victims. They then obtained accounts with companies that provide what is commonly called a “caller-ID spoofing” service. This allowed the individuals to make a call appear as though they were coming from the victims’ homes. Armed with the victims’ financial and personal information, these individuals then called the victims’ financial institution, answered security questions, changed account passwords, obtained account balances, and transferred funds from the victims’ accounts. The funds were ultimately transferred into bank accounts under the control of the defendants.

• Once the defendants received the money, they provided the funds to the individuals who had collected the financial information of the victims and called their financial institutions, keeping a percentage of the funds as payment for allowing their bank accounts to be used to facilitate the fraud. The total fraud and intended fraud perpetrated by the defendants exceeds $600,000.

• Shannon Lamont Greene, a/k/a/ Devonte Carr, Devonte Green, and Shannon Israel, age 32, of New York, was also charged. He remains a fugitive.

For the press release, see Three Defendants Plead Guilty to Conspiracy and $600,000 Bank Fraud Scheme. TheftOfDeedMeta

Pennsylvania Regulator Issues Cease & Desist Orders Against Six Loan Modification Firms

From the Pennsylvania Department of Banking:

• The Department of Banking has ordered six out-of-state mortgage modification companies to end their unlicensed business activities in Pennsylvania. The companies advertise on their Web sites to refinance mortgages in Pennsylvania as part of the loan modification process when they are not licensed to do so. The companies must comply with the orders or file appeals.

The following cease & desist orders have been issued:

• ApplyLoanMod.com, California
• ClearHomeRelief, California
• HomeForeclosureFighter, California
• U.S. Loan Assistance Center, California
• Mortgage Solutions Clearing House, Florida
• American Foreclosure Specialists, Oklahoma

For the press release, see BANKING DEPARTMENT CONTINUES CRACKDOWN ON UNLICENSED MORTGAGE MODIFICATION COMPANIES (Cease and Desist Orders Issued to Companies in CA, FL and OK).

***********

The Department has also suspended the mortgage brokerage license of, and issued a cease and desist order against, U.S. Mortgage Group, Inc. of Philadelphia, for refusing to answer questions and provide documentation about its activities as well as the activities of its affiliate, U.S. Mortgage Mod, LLC, according to a press release. The department had been unaware of the existence of U.S. Mortgage Mod, LLC, which engages in loan modification and debt settlement activities. Both companies are owned by Marc Dambrosio and located at 1617 John F. Kennedy Boulevard.

For more, see:

• Press Release: BANKING DEPARTMENT SUSPENDS LICENSE OF PHILADELPHIA MORTGAGE BROKER,
• Cease & Desist Order.