Saturday, July 4, 2009

DOJ Alleges Race Discrimination In Civil Suit Against Owners, Managers Of Mobile Home Park

The U.S. Department of Justice recently announced:

  • The Department [...] filed a lawsuit against the former owner and managers of Homestead Mobile Home Village, a mobile home park in Gulfport, Miss., for violating the Fair Housing Act by discriminating against black tenants on the basis of race or color.

  • The lawsuit filed in U.S. District Court for the Southern District of Mississippi charges that Edward and Barbara Hamilton, the former managers of the mobile home park, unjustly sought to evict a black couple and their five minor children who had moved there after being displaced by Hurricane Katrina. According to the complaint, the Hamiltons attempted to evict the family and other black residents for allegedly violating the rules of the park, but did not attempt to evict white residents for as many or more violations. The complaint also alleges the Hamiltons harassed and intimidated black tenants. The suit names as a defendant Indigo Investments LLC, the owner of Homestead Mobile Home Park at the time the Hamiltons managed the park.

For more, see Justice Department Files Lawsuit Alleging Racial Discrimination at Mobile Home Park in Gulfport, Mississippi (Federal Civil Rights Complaint Filed on Behalf of a Family Displaced by Hurricane Katrina).

State AG Shuts Down Western NY Debt Collection Operation; Arrest Owner/Convicted Felon For Unrelated Gun Possession

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

  • New York authorities say they've shut down a debt collection company that was falsely telling people they'd be thrown in jail if they didn't pay immediately. State Attorney General Andrew Cuomo says the Buffalo firm routinely broke the law by having its collectors impersonate law enforcement officials. In reality, the company was run by ex-convicts.

  • Owner Tobias Boyland was arrested Tuesday after investigators serving a search warrant discovered a loaded pistol. A judge issued a temporary order closing the company's doors. Boyland's firm did nationwide business under several names. It was the subject of an expose on Dateline NBC in March. Messages left with the company and Boyland's lawyer weren't immediately returned.

Source: Authorities Shut Down False Debt Collectors.

For the New York AG's press release, see Attorney General Cuomo Shuts Down New York Debt Collection Operation That Used Illegal Scare Tactics To Threaten Consumers Across The Country (Employees Posed as Law Enforcement Officials and Threatened to Throw Consumers in Jail if They Didn't Immediately Pay Debts; Latest Action in Cuomo's Ongoing Probe into Unlawful Debt Collection Practices ).

For the Dateline NBC expose on the debt epidemic and the sleazy tactics used by some bill collection agencies and "debt scavengers" in hounding consumers into making payments on delinquent credit accounts, see Inside The Financial Fiasco: Debt Trap.

(1) According to the NY AG press release, the operation consisted of at least nine debt collection companies across Western New York. They operated under several names, including: Central Resource Management, Final Claims Asset Locators, Final Control Asset Locators, Interchange Payment Solutions, Next Step Services, Portfolio Asset Assurance, Silverbay Services, and Teleport.

Friday, July 3, 2009

Long Island Lawyer Accused Of Pocketing $80K+ In Real Estate Sale Proceeds Due To Seller, $20K+ In Alleged Debt Consolidation Scam

From the Office of the Nassau County, New York District Attorney:

  • Nassau County District Attorney Kathleen Rice announced [...] that an East Meadow attorney has been arrested and charged with three felonies after three victims accused him of stealing more than $100,000 of their money. Craig Heller, 49, has been charged with for Grand Larceny in the Second Degree, Grand Larceny in the Third Degree, and Scheme to Defraud in the First Degree. He faces up to 15 years in prison if convicted. [...].

  • Rice said that in June 2007, Heller was hired by a divorced couple to manage their debt consolidation. The ex-husband, of Bethpage, and ex-wife, of Seaford, each put $10,000 into an escrow account for Heller to pay their bills. Each party also agreed to pay Heller a $2,500 fee for his services. Heller soon received complaints from the ex-wife after she realized he was not paying off their debts. Heller agreed to repay both the $20,000 with interest and a portion of the attorney’s fee on Dec. 31, 2008. The money, however, was never repaid.

  • In a separate incident, Heller, acting as escrow agent, was hired in November 2007 to remit a settlement check for more than $82,000 to the partial owner of a piece of Brooklyn property that was sold. The closing took place on April 18, 2008, but Heller never gave the victim, of Brooklyn, a check. He was ordered to pay the amount on Dec. 18, 2008, but failed to do so. As in the other case, Heller promised numerous times to pay his victim.(1)

For the entire Nassau County DA press release, see East Meadow Attorney Charged With Stealing More Than $100K from Three Victims (Heller faces 15 years in prison for thefts).

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

(1) If a New York attorney, in the course of representing clients, screws them out of money or property through dishonest conduct, go to the The Lawyers’ Fund For Client Protection Of the State of New York for more information. For other states and Canada, see:

Mortgage Broker Gets 3 Years For Illegally Pocketing $16K By Filing Phony Mechanics Lien On Home Shortly Before Title Closing

In Jacksonville, Florida, The Florida Times Union reports:

  • A Jacksonville mortgage broker faces three years in prison for pocketing thousands of dollars at a real estate closing by pretending she did home repairs. Katina Mickens, 30, was sentenced [...] for grand theft, filing a false construction lien claim and acting as an unlicensed real estate agent at a 2005 home sale where she arranged the mortgage.


  • The day before the house went to closing, Mickens filed a document called a claim of lien. Under a fictitious name, J&J Properties, Mickens reported she had done work on the house and was owed $16,000. That represented about 18 percent of the $85,000 mortgage on the home, putting an unnecessary added burden on the buyer, [Assistant State Attorney Stephen] Siegel said.(1)

Source: Mortgage broker faces 3 years on theft charges (4th story from the top).

Go here for other posts on suspected mechanics lien scams.

(1) Reportedly, J&J Properties filed lien claims at six Jacksonville homes in 2004 and 2005, claiming to be owed a total of $117,835. Former owners of five of those properties said they never hired Mickens or J&J to do any repairs, and none was done, according to the story. A hearing is scheduled in July about other charges involving some of those homes, Siegel said. MechanicLienScamTheta

NYC Woman Faces Charges Of Allegedly Pocketing $11K+ By Renting Out Apartment She Didn't Own; Used Craigslist To Reel In Seven Victims, Says DA

In Richmond Hill, Queens, the New York Post reports:

  • Elizabeth Mosh was so excited when she rented a Queens apartment for $650 a month last September, that she even ordered a bed and a flat-screen TV online so they would be there when she moved in. But the 23-year-old preschool teacher was never able to make the move into the two-bedroom apartment in Richmond Hill because the woman who rented it to her via Craigslist doesn't own it, authorities said [...].

  • Mosh and six others were victims of Tonja Fenton, 35, who allegedly rented the same apartment to seven people and pocketed $11,735 in deposit fees, a spokeswoman for the Queens District Attorney's Office said. The apartment is in the basement of a two-family home where Fenton lives.

  • Fenton has been charged with grand larceny and scheming to defraud. Mosh said she gave Fenton $1,300 in cash for the first month's rent and the security deposit after finding the apartment listing on Craigslist. But at 6 a.m. on the day she was supposed to move in, Fenton allegedly called and said she couldn't do so because a pipe had burst and there was a flood in the apartment.


Go here, go here, go here, and go here for posts on phony landlord rent scams. KappaPhonyLandlordScam

Thursday, July 2, 2009

Arizona AG Has 50+ Firms In The Crosshairs In Ongoing Probes Into Loan Modification, Refinancing Rackets

In Phoenix, Arizona, the Phoenix Business Journal reports:

  • Arizona Attorney General Terry Goddard said the state is investigating more than 50 mortgage modification and refinancing firms his office has received complaints about for ripping off consumers. Though Goddard would not disclose which companies are under investigation, he said the biggest problems in the industry right now are third-party advocates that charge up-front fees of sometimes thousands of dollars and promise distressed homeowners reworked mortgages that lower payments to help forestall foreclosures.(1)

For more, see Arizona investigating mortgage firms for fraud.

(1) Reportedly, homeowners are getting solicitations from all sorts of mortgage and refinancing firms. Some of the solicitations come in the form of letters, e-mails and automated telephone calls that can lead homeowners to believe they are from their lenders or from government agencies related to the federal “Making Home Affordable” program. Sometimes mortgage firms will create logos that look like government agencies or use the non-copyrighted federal fair housing and other logos, according to the story.

Law Students Spending Their Summer Vacation Helping Renters Beat Back Foreclosure Evictions

In Fall River, Massachusetts, The Herald News reports:

  • A small group of area law students is circulating throughout this city and elsewhere in the SouthCoast to help tenants learn their rights and avoid evicted under harsh terms because landlords didn’t pay the bills and the banks came knocking at their doors. “Only the court can evict you after a foreclosure,” said Kelly Rafferty, one of six Roger Williams University School of Law students involved in a new summer program organized through South Coastal Counties Legal Services, headquartered on Bedford Street.(1)


  • The law students have been combing legal ads and housing court records to determine where foreclosures are happening in Fall River, Taunton, Brockton and New Bedford to notify residents. [...] With the dreaded foreclosure increasingly swallowing up landlords, tenants and entire neighborhoods alike throughout the country, South Coastal lawyers, student interns and volunteers are using tools and skills to battle back.


  • In additional to canvassing neighborhoods hard hit by foreclosures in the target cities each Monday, they hold free clinics in the city legal service offices each Thursday and Friday from 10 a.m. to noon. Their advice includes turning down the “keys for cash” program that banks use to offer token money and empty their foreclosed buildings. “We always ask the tenant what they want,” Rafferty said. For some, it’s more time, for others it’s funds to pay the next rent and deposit.

For more, see KNOW YOUR RIGHTS: Law students help tenants protect themselves.

(1) See the "No One Leaves" campaign conducted by another group of Massachusetts law students helping renters beat back foreclosure evictions.

House OKs Bill Allowing LSC-Affiliated Non-Profit Law Firms To Pocket Prevailing Party Legal Fees From Losing Litigant; Senate To Address Measure

The Washington Post reports:

  • [Last week] the House [of Representatives] approved a budget of $440 million for the LSC [Legal Services Corporation](1) -- up $50 million from 2009 funding and $5 million more than the amount requested by the Obama administration. Lawmakers also lifted a restriction that kept legal aid lawyers who prevail in cases from recovering attorney's fees from the losing party -- a benefit available to winning lawyers in many civil rights or consumer protection cases. This move was important because those fees could be used to further supplement the LSC's budget. The Senate, which is scheduled to take up the funding measure [...], should go even further in freeing legal aid lawyers from federal restrictions.

For more, see Helping Lawyers Help the Poor (Congress should free legal aid lawyers from burdensome restrictions).

(1) Created by Congress in 1974, the LSC provides grants to civil legal aid organizations that in turn help represent the poor in civil cases.

Wednesday, July 1, 2009

Cops: Forged Docs Used To Steal Home In Foreclosure, "Satisfy" Unpaid Loan, Pocket $167K+ From Subsequent Refi, Swipe Add'l $6K In Rent To Own Scam

In Newington, Connecticut, The New Britain Herald reports:

  • A Glastonbury real estate investor is accused of forging documents to take out more than $167,000 in mortgages on a Newington property in foreclosure, police said. Thomas “Steve” Moynihan, 48, [...], was charged by warrant Friday with larceny and forgery after a several-month investigation revealed he allegedly forged documents, including a quit claim deed signing a Newington home over to his company, court papers said.

  • The scheme began to unravel in September 2008, when a Newington resident was notified that his foreclosure hadn’t gone through because he had filed for bankruptcy. The man hadn’t filed for bankruptcy and noticed that people were living in the Hartford Avenue home he had left while the foreclosure proceedings were taking place, a warrant for Moynihan’s arrest said.

  • The man discovered that Moynihan had filed a quit claim deed with his signature at Town Hall, essentially giving the [...] property to Moynihan free of charge, the warrant said. The man brought the document to Newington police, who discovered a chain of forged papers that allowed Moynihan to take out two mortgages totaling $167,000 on the [...] property.

  • Police also learned that Moynihan had told a Hartford man he could live in the home with an option to buy the property if he used his own money to make repairs. That man allegedly gave Moynihan a $6,000 deposit toward the purchase of the home and used his own money to make thousands of dollars in repairs, the warrant said.

  • Moynihan was charged with first-degree larceny, third-degree larceny, two counts of second-degree forgery, identity theft and criminal impersonation. He was released after posting $50,000 bond and is scheduled to be arraigned on the charges July 6.

Source: Man charged with forging real estate documents.

Go here, 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.

Go here and go here for stories on how easy some tenants found it in getting screwed over in these lease/option, "rent to own" and contract for deed real estate deals. rent to own lease purchase option scams yellowstone DeedContraTheft

California DRE Posts List Of Alleged Loan Modification Scofflaws

The California Department of Real Estate has posted a list of persons and entities that have been served with a Desist and Refrain Order and/or Accusation by the Department resulting from a loan modification and/or foreclosure rescue transaction. In some instances, the person or entity has been ordered to stop providing loan modification and/or foreclosure rescue services because the person or entity is not licensed by the Department of Real Estate. In other instances, the person or entity has been ordered to stop collecting advance fees.

For the list of alleged loan modification rules violators, and links to the orders issued by the Department, see Desist and Refrain Orders and/or Accusations for Loan Modification Activities.

Go here for a non-inclusive list of State Foreclosure Rescue Enforcement Actions, compiled by the Federal Trade Commission.

Lender "Hijacks" House In Foreclosure Despite Court Order To The Contrary; Judge Orders BofA To Turn Over Keys To Homeowner & Pay Her Legal Fees

In Kissimmee, Florida, WFTV Channel 9 reports:

  • Eyewitness News found an Osceola County homeowner won her battle in court to save her home from foreclosure, but the bank wouldn't listen. Ana Chavez used to live on Killamanjaro Drive until the Bank of America changed her door locks in violation of a court ruling.

  • A judge told the bank that if Chavez does not get her keys by noon Thursday, he's is dismissing the foreclosure lawsuit and the bank will face more penalties. In the meantime, the bank couldn't explain why it took over a house it did not own.

  • Homeowner Ana Chavez is fighting to save her home from going into foreclosure. She is hoping to modify her loan and Chavez thought she was one step closer when a judge ruled in her favor last month. Bank of America asked the judge to set a foreclosure sale date on her Kissimmee home, but the judge denied the request. Despite the judge's ruling, the bank decided to take over Chavez's home. [...] Ana Chavez had been away from her home for a couple of days. When she came home she tried to get into her house, but all the locks had been changed. The bank hired a locksmith, changed the locks and refused to give Chavez access to her home. The bank's attorney even called the bank and said there was a mistake, but those calls were ignored too.


  • Attorney Adam Sudbury says he hopes the punishment sends a message to the banks. "These banks and these attorneys they steam roll over people like there is no tomorrow and unfortunately for them sometimes they run into a road block," said Sudbury. Judge James Stroker wasn't happy with the bank's actions and has now ordered Bank of America to turn over the keys to her within 24 hours, pay for Chavez's attorney's fees and the bank may also have to pay for her living expenses.

Source: Bank Locks Woman Out Of Her Own Home.

For story update, see Bank Gives Woman Keys Back To Home (Bank of America has complied with an Osceola County judge's orders and has given a homeowner her keys back).

Go here for other posts on foreclosure & eviction screw ups.

(1) Last year, the Nevada Supreme Court approved a jury award of over $1 million, including punitive damages of $968,000, against a foreclosing lender for improperly booting a couple from their home and trashing its contents. See Nevada High Court OKs Damage Award To Homeowner Due To Mortgage Company Misidentification Of Home In Foreclosure.

For the Nevada high court decision, see Countrywide Home Loans v. Thitchener, 192 P.3d 243; 2008 Nev. LEXIS 79; 124 Nev. Adv. Rep. 64 (September 11, 2008), or go here for a summary of the Thitchener ruling from the Nevada Law Journal. ForeclosureLockOuts

Tuesday, June 30, 2009

Improper Service Of Process In Foreclosure Cases Becoming A Concern With Some Defense Attorneys Representing Homeowners

In Miami, Florida, the Daily Business Review reported recently that a Miami-Dade Circuit Court Civil Division Administrative Judge Jennifer D. Bailey discovered more than 15,000 foreclosure cases filed this year have yet to be served on the property owners who have become delinquent in their mortgage payments. However, some feel the problem facing the courts could be worse, as this excerpt explains:

  • [T]he scope of the foreclosure service problems could be much worse than the 15,000 cases without service that Bailey discovered. Some foreclosure lawyers question whether there are more cases where service hasn’t been done, but court records show the defendants have been served.

  • Take a foreclosure case filed by Indymac Federal Bank against Ahron and Amitza Benvenisti, who bought a North Miami Beach condo for $177,938 in January 2006. Indymac attempted to serve the husband through constructive service — or service by publication without actual notice — and the wife through a relative in Massapequa, N.Y.

  • The lender moved for a default judgment against the couple. [Fort Lauderdale foreclosure defense attorney Morton] Antman, who represented the couple, argued the process server contradicted himself by checking boxes stating he successfully served the wife through the relative, though Amitza Benvenisti doesn’t live at the relative’s address. The relative, Gilan Benvenisti, swore in an affidavit that she doesn’t live with him. A docket entry dated Monday said the clerk’s office was not authorized to enter a default because of a lack of service.

  • I don’t know if this was intentional or not, but this isn’t the first time we’ve had situations where process servers do stuff like this,” Antman said.(1)I think it’s a mistake.”

For the story, see Judge grapples with her discovery of 15,000 unserved foreclosure cases.

(1) Go here for other posts on "sewer service" (a reference to the practice by process servers of filing sworn affidavits in court asserting that proper service was made when, in fact, it wasn't). SloppyForeclosuresAlpha SewerServiceAlpha

Ohio AG Tags Three Loan Modification Firms With Civil Suits As Part Of Statewide Foreclosure Rescue Scam Eradication Sweep

From the Office of the Ohio Attorney General:

  • Ohio Attorney General Richard Cordray [Thursday] filed three lawsuits in a continuing effort to rid the state of foreclosure rescue scams operations. The lawsuits, filed against 21st Century Legal Services (Franklin County), Foreclosure Home Assistance, LLC (Cuyahoga County), and Michael Brotherton, who does business as Financial Emergency, Inc. (Greene County) seek to shut down the companies' ongoing operations in Ohio.(1)


  • Attorney General Cordray's lawsuits charge each company with violations of Ohio's Consumer Sales Practices Act and Debt Adjusters Act. Cordray asks the court to hold the companies responsible for reimbursing consumers and to assess a $25,000 civil penalty for each violation.

  • "In all three of these cases, we believe more victims are out there," said Cordray. "If you or someone you know has fallen victim to these operations I strongly urge you to contact my office." [Thursday's] lawsuits against 21st Century Legal Services and Foreclosure Home Assistance, LLC are the result of a first wave of 13 cease and desist notices issued by Cordray in May.

  • This month, Cordray issued 10 more cease and desist notices and subpoenas to foreclosure rescue operations targeting Ohioans. The cease and desists demand that the companies halt all predatory practices and the accompanying subpoenas require information to substantiate current practices. For more information or to file a consumer complaint, contact Attorney General Cordray's Office at or (800) 282-0515.

For the Ohio AG's press release, see Cordray Issues Statewide Foreclosure Rescue Scam Sweep (Seeks to shut down operations throughout Ohio).

(1) According to Cordray's lawsuit, Cleveland-based Foreclosure Home Assistance, LLC (which also does business as Global Home Rescuers, Homesavers USA, AW Gordon and Associates and Gordon and Associates.) charged consumers $1,500 for loan modifications, forbearance plans and other foreclosure prevention services. In some cases, the company offered foreclosure protection to tenants, claiming it could transfer the property deed from the landlord to the tenant. Despite its promises, the company failed to deliver.

Michael Brotherton, operating as Financial Emergency, Inc., offered similar foreclosure prevention services in Greene County. According to Cordray's lawsuit, Brotherton advertised his services on the Internet and through the mail. Brotherton charged consumers up to $1,269, saying he could work with lenders and creditors to negotiate debt settlements or workout agreements with mortgage holders. Brotherton failed to deliver.

Also failing to deliver was 21st Century Legal Services, which promised to help homeowners restructure their home loans, a promised service for which they charged $1,500 to $2,600. According to the lawsuit, the company instructed consumers to stop making payments on their home loans and to stop contacting their lenders. Consumers were instructed to make out several post-dated checks, each approximately equal to their monthly mortgage payment, and believed 21st Century would take care of the rest.

Lenders' Legal Standing To Foreclose Gets Attention At Arizona State Bar Convention

In Phoenix, Arizona, The Arizona Republic reports:

  • A growing number of home-mortgage holders in foreclosure are taking their lenders to court, where they are posing fundamental questions about the banks' legal right to repossess their homes, said an attorney addressing a packed crowd of lawyers Thursday at the State Bar of Arizona 2009 Convention in Phoenix.

  • "I'm actually going to raise more issues than I have answers for, because that's what's happening here in Arizona," Tucson attorney Beverly Parker, of Southern Arizona Legal Aid, told an audience of about 200 inside a meeting room at the Arizona Biltmore Resort and Spa. Lenders have sought to avoid expensive litigation in their efforts to foreclose on thousands of mortgage holders who have fallen behind on their payments, Parker said, opting for the non-judicial trustee's-sale process.


  • Courts rarely grant injunctions to stop pending foreclosures before they happen, she said, so most borrowers looking to fight off the bank have chosen Bankruptcy Court as their battleground. Filing for personal-bankruptcy protection automatically postpones any scheduled foreclosure, giving the borrowers time to identify all parties with a financial stake in the loan and to mount an effective defense.


  • She said she views legal challenges such as the lender's right to foreclose as tools to pressure banks to work harder on loan modifications. In many cases, those tools have been effective, she said. "The burden of proof is on them (the lenders)," Parker said. "Once you've raised the issue, they have to address it."

For more, see Banks' foreclosure rights questioned (More homeowners seeking day in court, attorney says).

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

Oregon Lawmakers Close To Eliminating Loophole Allowing Lenders To Sue Homeowners With Two-Note Mortgages After Home Is Lost To Foreclosure

In Salem, Oregon, The Oregonian reports:

  • The Oregon Senate unanimously voted on Wednesday to close the loophole in Oregon law that allows people with two-note mortgages to be sued for money even after they lose their home to foreclosure. House Bill 3004 prevents lenders from suing borrowers who had a 80/20 mortgage or another combined mortgage. These riskier kinds of mortgages are usually offered to people with poor credit ratings or little money to put down.

  • The bill will return to the House for a concurring vote. The Senate amended some of the bill's language, but retained its substance, according to co-sponsor Rep. Brian Clem, D-Salem. "I am looking forward to the day this bill is signed into law so families can get relief from these predators," he said. A spokeswoman from Gov. Ted Kulongoski's office said he will sign the bill into law.

Source: Mortgage holder protection bill clears Senate (if link expires, try here).

Florida Attorney Group Formed To Spread Accurate Foreclosure Information On Legal Rights For Homeowners, Effective Litigation Defenses For Advocates

The Florida Bar News reports:

  • A group of Florida bankruptcy and foreclosure attorneys have founded The Florida Foreclosure Defense Bar Association to help families facing foreclosure find accurate information about their legal rights and to provide lawyers engaged in helping Floridians fight for their homes with access to up-to-date information about the most effective legal defenses being used statewide.

  • The number of Florida residents — and other people who own property in Florida — facing foreclosure is staggering,” said Michael Wasylik, a partner with Ricardo, Wasylik & Kaniuk and the president of the fledgling FFDBA. “We created the FFDBA to provide homeowners and others facing foreclosure with the information they need to fight back and protect their homes, and to help the attorneys who represent them provide the best possible legal counsel.”

  • Wasylik said the FFDBA will organize seminars and town hall meetings about how to cope with the threat of foreclosure, such as the one hosted by U.S. Rep. Robert Wexler, D-FL, in April. The FFDBA also plans to provide property owners and the legal community with advice online and in print. [...] For more information about the FFDBA, visit

Source: Foreclosure Defense Bar launched.

(1) Along with Wasylik, other founding members of the FFDBA include Jason Ricardo and Ron Kaniuk of Ricardo, Wasylik & Kaniuk; Jeffrey H. Tromberg of Florida Debt Relief Center; Lori Patton of Law Office of Lori Patton, P.A.; Todd Budgen of Budgen Law Group; Dawn Rapoport of Rapoport Law Group; Shannon Stankiewicz of Hutchison Mamele & Coover; and Kevin Hoyes of Kevin M. Hoyes, P.A. President Wasylik also holds the office of treasurer, while Tromberg serves as vice president and Budgen as secretary.

Monday, June 29, 2009

Miami Judge Discovers 15,000+ Unserved Foreclosure Cases; Could Lead To Title Disputes Down The Road If Courthouse Sales Are Allowed To Go Forward

In Miami, Florida, the Daily Business Review reports:

  • A Miami-Dade Circuit Court judge discovered more than 15,000 foreclosure cases filed this year haven’t been served. It’s the latest shoe to drop in a foreclosure crisis garnering nationwide attention, and an unwelcome discovery in the face of state budget cuts that produced layoffs for courts and clerks. The backlog is critical because cases where homeowners haven’t been served [with foreclosure papers] within four months are subject to dismissal.

  • Civil Division Administrative Judge Jennifer D. Bailey made the discovery last month as she was taking stock of the circuit’s foreclosure load. She noticed 15,219 cases with no letters of correspondence, no answers and no motions to dismiss. “In other words, no service,” she said.

  • The circuit is scrambling to find the root of the problem, which could jeopardize most of this year’s 17,000 foreclosure filings. Most of the cases still fall within the four-month window, but no program is in place to speed things up. If a foreclosure proceeds to a default judgment with no service on the defendants, it could lead to a title dispute down the road. Bailey said there is no sign that has happened so far but recognizes the potential for problems.


  • Bailey said she still is trying to interpret the data to determine the source of the problem and chart a new course. But whoever is at fault, Bailey quickly notes the problem threatens to overwhelm a court system that already is strapped. “The question I now face is what do I do with this?” she asked. The cases “would potentially be subject to dismissal,” but she noted many cases are recent enough that service within the four-month window is still possible. “Let’s assume a third of these are subject to dismissal. In my spare time, I’ve got to figure out ways to generate orders in 5,000 cases and pay for 5,000 stamps and serve everyone,” Bailey said. “Are we going to do that? Yes. Am I trying to figure it out? Yes.”


  • "It all starts with service [of foreclosure papers to initiate the lawsuit]. If people don’t get served, all we’re doing is buying ourselves a bunch of title cases in six years,” the judge said.(1)

For the rest of the story, see Judge grapples with her discovery of 15,000 unserved foreclosure cases.

(1) To the extent courts are allowing mortgage companies to bring foreclosure actions where the foreclosing entities either fail to produce the promissory notes and other required paperwork, or otherwise lack standing to bring these lawsuits, the courts may already be buying themselves a bunch of title cases. SloppyForeclosuresAlpha SewerServiceAlpha

Attorney Hired By Homeowner To Fight Back Against Foreclosure Rescue Scammers Found Guilty Of Taking Fees, Doing Nothing

From the Office Of The State's Attorney For Prince George's County, Maryland:

  • Prince George's County State’s Attorney Glenn F. Ivey [...] announced that a Prince George’s County grand jury found David Alexander, 37, of North Bethesda, MD guilty of Theft over $500 and Unauthorized Practice of Law in representing Renata Brevard, 45, of Prince Georges County, MD, who hired him to help her recover her home from a mortgage scam.


  • Doubly victimized, Ms. Brevard fell prey to foreclosure fraud when she was first mistreated by foreclosure scammers who took her home and then by the attorney that she hired to fight back against the scammers.

  • On November 11, 2007, Ms. Brevard hired Defendant, David Alexander, an attorney to help get back her home and to sue the scammers. Alexander charged her $13,000 to file suit against the scammers, get back her home and stop the subsequent foreclosure on her home. [... H]e assured her that he was performing his duties. However, Ms. Brevard learned that Alexander failed to keep his promises when she came home in April 2009, and all of her family’s belongings had been evicted and thrown on the street. On the day of the eviction, she contacted Alexander who assured her that he was handling her legal matters and that the eviction was an error. She had made her last payment to Alexander in January 2009.

  • After the eviction day, he never called her back. She later learned that he had been disbarred from the practice of law in August 2008. As a result of his disbarment, he was not allowed to practice law in the State of Maryland. Not only did he fail to notify the victim of his disbarment, but he continued to hold himself out as her lawyer and continued to take her money. In April 2009, the victim learned that the defendant never filed suit against the scammers and did nothing to stop the foreclosure sale on her home. She lost 905 of her and her families belongings including her two-year old granddaughter’s leg braces.(1)

Source: Prince Georges County Woman Victimized by Scammers And by Attorney Hired to Fight Scammers.

(1) If a Maryland attorney, in the course of representing clients, screws them out of money or property through dishonest conduct, go to the Client Protection Fund of the Bar of Maryland for more information. For other states and Canada, see:

Loan Modification, Foreclosure Rescue Firm Changes Name After Being Hit With Complaints, Tagged With Lawsuits

In Charlotte, North Carolina, WCNC-TV Channel 36 reports:

  • The Better Business Bureau wants to warn you about a Charlotte mortgage consultant.
    A formal complaint has been filed against Michael Grieco, previous owner of Home Assure, a mortgage foreclosure rescue business. In the past 13 months the BBB has received 19 complaints from 14 states about Greico's Home Assure business.(1)

  • He's now operating under a new name -- Assurance Consulting Group. The BBB says there are ways for homeowners to identify companies that can really offer them some assistance. "The big difference in what Mr Grieco was offering and what legitimate companies offer is how they collect their fees," said Tom Bartholomy with the BBB. "Mr Grieco was requiring monies up front anywhere between $1,500 and $2,500 up front before he does any work at all. And then what the complaints are saying is they paid him that money and then nothing happens. They still lose that house."

Source: BBB: 19 complaints against Charlotte mortgage consultant.

(1) Home Assure has also been hit with lawsuits from the Federal Trade Commission ( see FTC v. Home Assure, LLC, et al. - the other defendants in this case are B Home Associates, LLC, doing business as Expert Foreclosure, Michael Grieco, Michael Trimarco, Nicholas Molina, and Brian Blanchard), and the North Carolina Attorney General (see AG Cooper goes after Charlotte foreclosure rescue scams).

Arizona Firms Selling Allegedly Bogus Loan Modification Services & "Loss Mitigation Consultant" Business Opportunities Faces Federal Civil Charges

The Federal Trade Commission recently announced:

  • At the request of the Federal Trade Commission, a federal court has halted a bogus mortgage foreclosure prevention operation that misrepresented both the “loss mitigation” services it offered and the earnings potential of the business opportunity it sold. The FTC seeks to end this deceptive scheme and make the defendants give up their ill-gotten gains.

  • According to the FTC’s complaint, the defendants(1) sold “loss mitigation” services to homeowners at risk of foreclosure, falsely claiming they could prevent foreclosure in 97 percent of cases and misrepresenting that they would make a full refund if they failed. Before performing any loss mitigation services, the defendants required homeowners to pay the equivalent of one month’s mortgage payment. Their contracts instructed homeowners not to contact lenders or their contract and its money-back guarantee would be voided. In some cases the defendants’ consultants told homeowners to stop making their mortgage payments while the defendants were working on their cases.

  • The FTC alleged that, contrary to the defendants’ claims, they completed loan modification in only about 6 percent of cases and routinely failed to return consumers’ repeated telephone calls. In numerous instances, the defendants had not contacted the consumers’ lenders or had made only non-substantive contacts with them, resulting in late fees, penalties, and other costs for the homeowners. After failing to secure loan modifications, the defendants also failed to honor their refund policies.

  • The FTC’s complaint also alleges that the defendants sold a “loss mitigation consultant” business opportunity for up to $1,500, falsely claiming that purchasers (“consultants”) could earn various amounts, including up to $6,000 per week, by referring homeowners to them and by recruiting new consultants. In fact, throughout the defendants’ entire operation, no consultant has earned that much money.

For the entire press release, see FTC Stops Foreclosure Prevention Marketers Who Misrepresented Their Services and Misled Business Opportunity Buyers.

For the relevant court documents in this case, see:

(1) According to the civil lawsuit, the defendants are:

  • Freedom Foreclosure Prevention Services, LLC, 1234 S. Power Road, Mesa, Arizona 85206. Freedom Foreclosure also used a maildrop located at 70 S. Val Vista Drive, Suite 3, #420, Gilbert, Arizona 85296,
  • Loss Mitigation Training Center of America, LLC, - uses a maildrop located at 70 S. Val Vista Drive, Suite 3, #420, Gilbert, Arizona 85296 as its registered office address. In addition, it directs correspondence to the physical address of 1234 S. Power Road, Mesa, Arizona 85206. It also does business as Mastermind Consulting Group.
  • Jeffrey C. Segal, and
  • Michael R. Workman.

State AG Probe Focuses On Central Florida Man With Involvement In Dubious Sale Leaseback, Foreclosure Rescue Deals

In Central Florida, the St. Petersburg Times reports:

  • For scores of desperate Tampa Bay homeowners, it seemed like a lifeline — Gideon Rechnitz would help bring their mortgage payments up to date and save their homes from foreclosure. But now the Florida Attorney General's Office is investigating whether Rechnitz misrepresented himself and his St. Petersburg-based companies in a foreclosure rescue scheme that enabled him to acquire dozens of houses at below-market value.(1)(2)


  • As the St. Petersburg Times reported last year, Rechnitz, 62, told homeowners that investors would buy their houses, make the payments and stop the foreclosure proceedings. The sellers could then rent back their homes with an option to repurchase them in two years. In an interview for that story, Rechnitz said that he explained all facets of the "program" and even videotaped closings to make sure the sellers understood. But many homeowners were confused by the documents he asked them to sign and could not meet the stringent rental and buyback conditions.


  • Rechnitz said in the fall that his foreclosure rescue business had slowed considerably in 2008 because it was harder to find people [...] with substantial [home] equity. But as home­owners who got 100 percent financing now struggle to renegotiate their mortgage terms, state records show he recently started a new company — Loan Modification Enterprises.

For more, see Attorney general investigating fraud in foreclosure 'rescue' operation.

(1) According to the story, the current investigation is not the first involving Rechnitz. The Florida Bar conducted a probe involving conduct that could constitute the unauthorized practice of law in connection with an alleged "rescue" of a Bradenton home. Rechnitz admitted no wrongdoing, but later signed a cease-and-desist affidavit. In the 1980s, the Federal Trade Commission sued Rechnitz for deceptive trade practices in connection with timeshare marketing program. He admitted no wrongdoing, but agreed to refund $1.25 million to customers. He reportedly also lost his Florida real estate license. He also reportedly faces two lawsuits in Sarasota County, including one by 71-year-old Yolanda Rodriguez, who claims that in 2006 Rechnitz improperly evicted her and her deaf brother from their home, which he acknowledged in a deposition was worth far more than the $150,000 Rodriguez owed on her mortgage, according to the report.

(2) In May, a Washington State jury hammered a foreclosure rescue operator similarly suspected of ripping off the home equity of financially strapped homeowners in a civil lawsuit brought by the Washington Attorney General's office (see Pay time for notorious foreclosure rescue scammer - Attorney General announces major victory in state’s case with Washington man who promised help but took homes). The jury found that the business practices engaged in by the operator violated the state Consumer Protection Act. See Washington AG Scores Big Win In Bogus Equity Stripping, Land Trust/Sale Leasebacks & Surplus Ripoffs; Foreclosure Rescue Operator Tagged For $4.2M.

Sunday, June 28, 2009

Phones Start Ringing At Brooklyn DA's Deed Scam, Mortgage Fraud Unit

In Brooklyn, New York, WNYC Radio 93.9 FM reports:

  • [Brooklyn District Attorney] Charles Hynes says his new mortgage and real estate fraud unit has opened more than 80 investigations since March, leading to the indictment of eight people. [...] Hynes says the new unit was created with $875,000 of federal funding, and is investigating cases of mortgage fraud, refinancing fraud, predatory lending, deed theft and foreclosure rescue scams. The unit has received hundreds of calls since establishing a hot-line earlier this year.

Source: New Unit in Brooklyn DA's Office Cracks Down on Real Estate Fraud.

See also, Brooklyn Daily Eagle: The Senator and the Prosecutor: Fighting Mortgage Fraud in Brooklyn.

Hawaii Feds Accuse Three Of Arranging For Fraudulent Financing In Foreclosure Rescue Schemes

In Honolulu, Hawaii, the Honolulu Advertiser reports:

  • Another mortgage fraud criminal case has been filed in federal court, this one accusing more people affiliated with Accel Mortgage LLC with conspiracy to commit mail, wire and loan fraud. Charged in the case are Carla Dutro, identified by the U.S. attorney's office as the regional manager of Accel, Maria "Gerlie" Guillermo, Maui branch manager of the company, and Alfred Ulat, a tax return preparer. Accel owner Welton Kalani and Audra Palomares, a loan processor with the company, were charged in an earlier fraud case filed here in April. The government alleges in the new case that Dutro, working with Kalani and others, "facilitated fraudulent real estate transactions involving homes facing foreclosure."

Source: Another mortgage fraud case in court (More people linked to Accel Mortgage face federal charges).

(1) According to the story, Dutro processed loan applications and "submitted materially false supporting documentation to lending institutions," the government charged. Dutro allegedly submitted bank statements on behalf of borrowers "that she had materially altered" to inflate the net worth of the borrowers, the government alleged. Guillermo and Kalani allegedly "structured fraudulent loan transactions" and helped prepare false documents from accountants and tax return preparers, according to the U.S. attorney's office. Ulat allegedly was paid $100 to $150 for submitting "false statements concerning the employment and tax returns of loan applicants."

City Judge Orders Wells Fargo To Clean Up Its Mess Of Foreclosed Homes Throughout Cleveland; Bans Sales Of Homes Under $40K That Violate Local Codes

In Cleveland, Ohio, The Washington Independent reports:

  • For neighborhoods fighting the blight and deteriorating property values caused by foreclosed properties that banks abandon or unload on speculators, this is big news: A housing court judge in Cleveland has ordered Wells Fargo to clean up the foreclosed houses it owns in Cleveland. In the preliminary injunction he issued Thursday, Judge Raymond Pianka also required Wells Fargo to prove its foreclosed properties are up to city building and housing codes before the bank can sell any of them for less than $40,000, reports. Pianka will decide at some point whether to make the injunction permanent.

For more, see Cleveland Neighborhoods Win a Round in Fight Against Banks Over Foreclosures.

See also, The Cleveland Plain Dealer: Judge Raymond Pianka orders Wells Fargo Bank to bring foreclosed properties up to code in Cleveland. BetaVacantForeclosure

Cook County Sits On $18M In Foreclosure Sale Surplus Funds Owing To Approx. 1,900 Ex-Homeowners; $460K In Unclaimed Cash Awaits One Former Owner

In Chicago, Illinois, the Chicago Sun Times reports:

  • Call it a green lining on the cloud of the mortgage foreclosure crisis. Homeowners who handed the keys over to the bank may actually have some money coming their way, and in Cook County, a new online system may help nearly 2,000 property owners get their due. The Cook County Clerk of the Circuit Court is holding approximately $18 million in mortgage foreclosure surplus funds -- profits generated when the bank sells a property for more than what the original owner owed the lending institution.

  • The county has identified about 1,900 onetime owners who are owed money as a result of foreclosure sales in the last decade, and Circuit Court Clerk Dorothy Brown has launched a campaign to get the word out. In one case, a property owner could collect $460,000, she said. So many people turn the keys over to the bank and don't look back -- and that's why the money has accumulated, Brown said.


  • Go to www.cookcountyclerkof and head to the mortgage surplus search engine, which will allow you to put in your name. If there's a match, begin the process of petitioning the court for your money. Cook County residents can also visit the clerk's accounting office for more information.

For more, see Homeowners who gave up might get foreclosure refund.