Saturday, December 19, 2009

SF To Consider Expanding Rent Regulation Coverage To All Residences; Renting Out House To Tenant Could Become Iffy Proposition For Homeowners

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

  • San Francisco's Board of Supervisors is getting ready to vote on a proposal that would make it difficult and costly - in some cases, impossible - for property owners who have rented out their homes to move back into them.

  • At issue is a proposal by Supervisor John Avalos that would extend certain eviction protections to tenants living in residences built after 1979. Avalos and tenants' rights advocates characterize the proposal, which is expected to come up for a key committee hearing today, as a matter of fairness for tenants living in relatively modern buildings, which are not covered by the city's most stringent rent regulations. They suggest it could be particularly helpful to tenants in condominiums that are facing foreclosure.

For more, see Landlords could be locked out.

For story update, see S.F. tenants' victory likely to be short-lived:

  • Tenant advocates got a win at the San Francisco Board of Supervisors Tuesday with initial approval of a plan to extend eviction protections to rental housing built within the past 30 years - but the victory is expected to be short-lived. Mayor Gavin Newsom plans to veto the legislation, according to spokesman Joe Arellano, and the board, which voted 7-4, was one vote shy of securing a veto-proof majority.

(1) According to the story, the city's sweeping rent control laws of 1979 included provisions that allowed evictions only when a landlord could establish "just cause," which includes nonpayment of rent, illegal activity in the residence and other breaches of lease. Owners who want to move into their own homes must pay relocation benefits of $5,000 per adult tenant - and an additional $3,300 to households with children, the story states. Even then, a challenge to the landlord's "just cause" can reportedly add thousands of dollars in legal fees or settlement costs - or, if the tenant is elderly, disabled or catastrophically ill, he or she might not be able to be evicted at all. "In San Francisco, it's easier for a camel to pass through the eye of a needle than for a homeowner to move into his home," said Bart Murphy, a rent board commissioner. But, reportedly, those rules only apply to units that existed when the 1979 rules were passed.

Long Island Man Charged In Vacant Home Hijacking Rental Scam; Suspect Pocketed Over $10K From Tenant On House He Didn't Own, DA Says

In Nassau County, New York, the Long Island Press reports:

  • Not only did Ozell Neely collect $2,200 a month in rent on a house Nassau prosecutors contend he didn’t own, but they say he also tried to evict a tenant when the woman stopped paying in a dispute over whether promised repairs had been made. [...] Neely, the 47-year-old operator of Welcome Home Realty in Queens, was arrested Tuesday on burglary, grand larceny and other charges after prosecutors say he rented out the abandoned home in Baldwin that he didn’t own. He faces a maximum of seven years in prison if convicted.(1)

For more, see DA: Baldwin Man Rented Out Home He Didn’t Own.

(1) According to the story, Nassau County District Attorney Kathleen Rice said that Neely took a prospective tenant to the boarded-up home in September 2008. Reportedly, despite the house having no refrigerator, no running water and warped doors, the tenant agreed to pay $2,200 a month in rent, as long as Neely repaired the damages, prosecutors said. Neely collected more than $10,000 over the next few months, but in April 2009, the tenant stopped paying rent, claiming Neely had reneged on the repairs, prosecutors said. KappaPhonyLandlordScam

Landlord Accused Of Hate Crime After Former Tenant Moves Out Of Apartment Upon Learning Unit Was In Foreclosure

In Palm Beach Gardens, Florida, WPTV-TV Channel 5 reports:

  • Palm Beach Gardens Police have arrested 32-year-old Anthony Schell on charges of stalking, criminal use of public record information and criminal mischief. In addition, there's sufficient evidence, say investigators, to show Schell "evidenced prejudice" while committing the crimes, to label them “hate crimes” based on the victim's religion.


  • The victim, Jodi Kahn, had discovered and reported that someone had spray painted an obscene message [on her front door] making reference to her Jewish religion. [...] Kahn believed that her former landlord, Schell, was responsible because the two were in the middle of a civil dispute.

  • Kahn, say police, had stopped paying rent and moved out of the apartment she was renting from Schell in the same complex after she'd learned the unit was in foreclosure. When initially interviewed, detectives say Schell denied any knowledge of the incidents, but did admit to the ongoing problems with Kahn regarding her lease.(1)

For more, see Hate-crime arrest made in PB Gardens case.

(1) The story goes on to report the police version of what followed that led up to the arrest of Schell:

Investigators say Kahn also described other events that had occurred, including the distribution to Kahn’s parents, neighbors, landlord, employer and others - material that painted her in a poor light. Kahn also reported that on November 11, 2009, her Mezuzah, an exterior door ornament used by some people of the Jewish faith, was removed, broken and the pieces were left in front of her apartment door. Then, on November 17, 2009, she reported a swastika was written with black marker on her front door.

During the investigation, detectives say they learned that an unknown person was passing out flyers with derogatory information about the Kahn and was doing so around the victim’s place of employment. They determined the person who admitted to handing out the flyers had also spray painted the words on Kahn’s door, and told police he did so at the request of Schell, who was his employer. Police say that person also told them Schell had driven him to the victim’s apartment and wrote on a piece of paper what to paint on the door, telling him that he was playing a joke on someone. Schell’s employee, say investigators, is a recent immigrant who does not read English well and so they believe he may not have understood the meaning of the words. The employee said he did what Schell asked because he was afraid of losing his job if he did not.

Friday, December 18, 2009

Maryland Loan Officers Charged In Alleged Foreclosure Rescue Scam; Used Bogus Sale Leasebacks To Pocket $650K In Equity Stripping Proceeds, Say Feds

In Annapolis, Maryland, The Capital reports:

  • James William Fox II, 39, of Crofton, and James Hooper Dan, 45, of Annapolis were indicted this week in a mortgage-fraud scheme, officials announced [last week]. The two could face 40 years in prison if they are found guilty. According to the indictment, the two were loan officers employed at Charm City Investment Group LLC in Annapolis. From April 2006 to February 2009, the two allegedly identified victims who were unable to make the mortgage payments on their homes. The two promised to help the victims avoid foreclosure, but instead allegedly obtained new mortgage loans in their own names or in the names of "straw purchasers."


  • Because of the fraud scheme, Fox and Dan allegedly caused lenders to lose more than $1.7 million in fraudulently obtained mortgage loans and caused the individual victims to lose more than $650,000 in equity in their homes. The indictment seeks the forfeiture of the total loss of $2,350,000.

For more, see 2 indicted in mortgage scheme (Local brokers allegedly target struggling homeowners).

See also U.S. Attorney press release: Maryland Mortgage Fraud Task Force Announces Progress And Plans (United States v. James Fox II and James Dan).

Eastern Pennsylvania Man Pocketed $655K+ In Sale Proceeds On Properties He Didn't Own & $168K Due To Investors, Feds Charge

In Doylestown, Pennsylvania, the Allentown Morning Call reports:

  • A 36-year-old Bucks County man is facing federal charges in a real estate investment scheme prosecutors say bilked investors of nearly $1 million. Roman R. Fitzmartin, former operator of the Doylestown Investment Group, was charged with mail fraud in a two-count information [...]. According to the U.S. Department of Justice, Fitzmartin sold interest in three properties -- two of which he did not own -- and diverted the money to his own accounts instead of paying investors, who lost a total of $872,719.(1)

  • Fitzmartin allegedly sold equity interest in a commercial property [...] in Doylestown and a piece of land in Douglassville, Berks County, but he did not have a stake in either property. Federal authorities say he received $655,000 for both properties. He also sold a property he owned at [...] in Doylestown and allegedly kept $168,763 that should have been paid to investors, authorities said.

For more, see Doylestown man charged with real estate fraud.

(1) For additional background on Fitzmartin's real estate operation, see this 4/11/2007 Pennsylvania Securities Commission press release: Commission Halts Unregistered ActivityBy Doylestown Investment Group, LLC and Roman Fitzmartin:

  • The Pennsylvania Securities Commission issued a Summary Order to Cease and Desist against Doylestown Investment Group, LLC (DIG) and Roman Fitzmartin (Fitzmartin) to halt the offer and sale of unregistered securities in Pennsylvania. MIG, an entity with an address in Doylestown, Pennsylvania, is purportedly in the business of purchasing, developing, and managing various real estate properties, and maintains a web site at (Web Site). Fitzmartin, an individual with an address in Doylestown, Pennsylvania, was the president of DIG.

KC Legal Aid Pushes To Fight Off Illegal Foreclosure Evictions As Lenders Continue Ignoring Federal Tenant Protection Law

In Kansas City, Missouri, The Pitch reports:

  • Word on the street [...] is that some lenders aren't complying with the new law [that requires lenders who foreclose on rental properties to give their tenants at least 90 days to move out -- or even longer, in some cases].(1) It was designed to protect renters, but lenders can still get away with unlawful evictions if renters aren't aware of their rights.

  • [Executive Director of Legal Aid of Western Missouri(2) Gregg] Lombardi sent out an e-mail this week to the heads of charitable organizations all over Kansas City, asking that they encourage people who think they may be unlawfully forced out of foreclosed rental properties to call Legal Aid for help. "We are eager to take on cases to stop these unlawful evictions," Lombardi wrote in the email.

For the story, see Legal Aid is looking for renters facing eviction from foreclosed properties.

(1) The new federal law requires lenders taking title to foreclosed homes respect any existing tenant leases, and provide at least 90 days notice when vacating month-to-month renters. See Section 702(a)(2) of the Protecting Tenants at Foreclosure Act of 2009.

(2) Legal Aid of Western Missouri is a non-profit law firm providing essential legal services to low-income citizens living below the poverty level in a 40 county area in western Missouri.

Thursday, December 17, 2009

State Regulator Issues C&D Order Against Northern Virginia-Based Loan Modification Group Targeting Maryland Homeowners

The Maryland Department of Labor, Licensing and Regulation's Office of the Commissioner of Financial Regulation recently announced enforcement actions against entities and individuals accused of illegal activities that victimized Maryland homeowners, including an outfit accused of violating state law in connection with providing loan modification services:

  • Issued a Summary Order to Cease and Desist against The Shmuckler Group, LLC, Nova Key, LLC, Howard R. Shmuckler, Alon Fisch, and Ted Dubin for allegedly engaging in illegal loan modification activities. They are accused of collecting up-front fees from Maryland homeowners in default on their residential mortgage loans, in exchange for promises to assist them in obtaining a loan modification from their mortgage lender.(1)

For the press release, see DLLR's Financial Regulation Division Targets More Mortgage Scams.

(1) According to the press release, by failing to obtain a Maryland credit services business license, and by collecting up-front fees prior to completing all promised services, the group's activities allegedly violated the Maryland Credit Services Businesses Act and the Protection of Homeowners in Foreclosure Act. These Respondents allegedly collected a total of over $1.2 million in up-front fees while promising to modify 372 different Maryland residential mortgage loans (charging an average of $3,440 in up-front fees to each Maryland resident, with amounts varying between $1,750 and $6,000). Respondents allegedly obtained loan modifications or analogous results in only a quarter of those cases, yet refused to provide any refunds to Maryland consumers. These Respondents operate primarily out of Northern Virginia.

Cops Seek Out More Victims After Charging Suspect In Metro Detroit Alleged Loan Modification Scam Probe

In Roseville, Michigan, WDIV-TV Channel 4 reports:

  • 48-year-old Grosse Pointe Woods man who had warrants for his arrest in four metro Detroit communities(1) in connection with a mortgage fraud investigation was charged Friday in a Roseville courtroom. The Roseville Police arrested Bryan Cervier early Thursday morning. Judge Matt Rumora charged Cervier [...] with one count of false pretenses.

  • Cervier is accused of running a fraudulent mortgage consulting business. Investigators said he would pose as a financial adviser and then he would meet with homeowners who were on the verge of losing their homes to foreclosure. Cervier told the victims that for a fee, he would renegotiate the terms of their mortgages in order to stave off foreclosure. The victims would pay the fee, and then they would never hear from Cervier again.

For more, see Man Charged In Mortgage Fraud Scheme (Police Looking For More Victims).

(1) According to the story, investigators said they believe Cervier may have scammed many other people. He's wanted in Redford, Saline and West Bloomfield on no bond felony warrants. Other victims of this mortgage scam are urged to call their local police department.

Struggling Homeowners Accuse Soon-To-Be Suspended & Recently Foreclosed Upon Attorney Of Fleeing With Fees After Promising Loan Modification Help

In Phoenix, Arizona, KPHO-TV Channel 5 reports:

  • Fernando Sanchez was one of the [dozens of people 5 Investigates reportedly found victimized by scam loan modification companies]. He was barely making ends meet when he heard about an opportunity to reduce his mortgage, from $2,300 per month to $900 per month. "They told me to go to this meeting to see what it was about … and these people allegedly have an attorney and a translator," he said. Sanchez paid $1,000 to sit in a garage in a residential neighborhood set up with tables and chairs for the meeting. The attorney charged $6,000 for the loan modification.

  • Dora Fuentes had already lost her home when she signed up to work with the same lawyer. "He never told us that we were in foreclosure or that the house was no longer ours," she said. According to documents Fuentes provided, the lawyer took her money anyway. She lost her house, and the lawyer disappeared.(1)(2)

For more, see Expert: Loan Mod Scams Common (Immigrants Seem Especially Vulnerable, Mortgage Broker Says).

(1) The story states that Robert Jung, the attorney who offered to modify Sanchez and Fuentes' loans, was working with a company known as "Stop Foreclosure Wizard." His law license is set to be suspended Jan. 2, according to the story [Jung's history available on the Arizona Bar website indicates the suspension date is January 4]. Jung did not return numerous phone calls, and when 5 Investigates tried to visit the address listed in its corporate records, they discovered Todd Carpenter's home. According to the story, Carpenter said he recently purchased the home at a foreclosure auction, and for weeks, he wondered why non-English-speaking families would show up looking for Jung. "Finally, I said, 'What are you looking for him for?'" Carpenter said. "And they said, 'Well, we paid him to modify our loan. And I told them I said I don't think you're going to get your loan modified because (Jung) lost this house."

(2) The victims in this story might want to check out the Client Protection Fund of the State Bar of Arizona to see if they can qualify to recover any of their losses from the Fund as a result of the alleged dishonest screwing over by this reportedly not-yet-suspended attorney.

For those victimized by dishonest attorneys in other states and Canada, see:

Financial Hole Becomes Bigger For Struggling Homeowner After Hiring Loan Modification Outfit That Pocketed $2.5K By Promising Help

In San Antonio, Texas, the San Antonio Express News reports:

  • When family medical bills soared, Norma Baker missed a mortgage payment. And when she decided to rectify that financial slip, she and her husband hired a San Antonio mortgage loan modification company to negotiate with Wells Fargo on their behalf. The firm, Xpert Loan Modifications, charged the Bakers $2,500 upfront for its services. But now the Bakers owe the bank around $9,000 and face foreclosure in January.


  • Miguel Gonzalez of Xpert Loan Modifications said he has successfully guided many other families through loan modifications, and that his company provides a valuable service to people who don't have the expertise or time to call the banks themselves. “I didn't just pop up and say, ‘I'm going to scam people,'” said Gonzalez. “They are going to be in the house if she would just let us do our job.” The fee compensates Gonzalez for his work and will be used to hire an attorney,(1) if needed, to try to stop the Baker's foreclosure, he said.


  • Baker said Wells Fargo recently told her there was no loan modification in the works for her property. She is concerned that her family could end up homeless next month.

For more, see Homeowners' woes unresolved.

(1) If the rules in Texas are anything like the rules in California, Florida, Ohio or other states, this character risks being accused of unlicensed practice of law for conduct as an intermediary in hiring out an attorney to represent the homeowner. An attorney taking a case on this basis also risks being slammed for aiding a non-lawyer in the unlicensed/unauthorized pratcice of law, among other things. See:

NC Shuts Down Purported "Non Profit" Loan Mod Outfit; Clipped Homeowners For Up To $1,500 Upfront, Failed To Honor Money Back Guarantee, Says State AG

In Raleigh, North Carolina, North Carolina News Network reports:

  • A judge has barred a Kannapolis-based foreclosure assistance firm from doing business. State Attorney General Roy Cooper had sought the action. Cooper accuses Geoffrey Lamb of Cabarrus County, doing business as The Lamb Group and US Business, of charging consumers up-front fees of as much as $1,500 but doing little to help them. “We’ve made it illegal to take money up-front for foreclosure or loan modification help, and we’re cracking down on violators,” said Cooper.

  • A complaint also alleges that Lamb stated on his website that his firm was a “non-profit foreclosure relief organization” with a “success rate of 97%.” Wake County Superior Court Judge Donald Stephens agreed with Cooper’s request to temporarily bar Lamb from offering foreclosure and loan modification services. Cooper contends that Lamb promised a full refund if a consumer’s lender did not offer to rework their loan. The complaint alleges that Lamb failed to get loans modified but still refused to give consumers their money back.(1)

Source: AG Cooper Cracking Down On Foreclosure Assistance Scams.

(1) According to the North Carolina Attorney General's Office (see AG Cooper stops Kannapolis foreclosure scam), a total of six consumers have filed complaints about Lamb with the Attorney General’s Consumer Protection Division. Nine consumers complained to the Better Business Bureau of the Southern Piedmont, which assisted in the investigation. The case against Lamb is part of a national crackdown on foreclosure rescue and loan modification scams brought by 26 federal and state agencies, the NC AG stated. Also included in the 118 case sweep was another case brought by Cooper last week against Campbell Law Firm and Rudolph C. Campbell of Florida, which is pending in Wake County Superior Court, according to the NC AG press release.

Maine AG Tags Three Out-Of-State Firms With Civil Suits Alleging Illegal Loan Modification Activity

From the Office of the Maine Attorney General:

  • The Maine Attorney General has filed three separate lawsuits in Kennebec County Superior Court against three out-of-state businesses and their principals. The defendants are: Elect Group, LLC, Anthony Ferlanti and Emmanuele Zuccarelli (Florida); Help Modify Now Debt Solutions, Inc., Help Modify Now, Inc. and Chas Bain (California and Nevada); and US Advocate Law Group, P.C. and Jeff Nemerofsky (California).

  • These lawsuits allege that the defendants used deceptive and unfair practices in marketing so-called “debt settlement” services, in the form of foreclosure rescues and mortgage modifications, and that they failed to register as debt management services under Maine law.(1) The suits seek the recovery of fees paid by Maine consumers to these defendants, as well as civil penalties and costs.

For the Maine AG press release, see Attorney General Sues Unlicensed Foreclosure Rescue/Mortgage Modification Companies.

(1) According to the press release, the State alleges that the defendants’ illegally high upfront charges ranged from $1,000.00 to $4,300.00. Maine law prohibits debt management service providers from charging more than a $75 set-up fee and for charging more than 15% of the amount by which the consumer’s debt is reduced as part of each settlement. The State also alleges that the defendants misrepresented the benefits of their programs to consumers and refused to provide refunds when consumers asked for them after the defendants failed to prevent foreclosure. As a result, many Maine consumers found themselves in more dire financial straits than they were before they engaged the defendants, the press release states.

Wednesday, December 16, 2009

Idaho Joins Nationwide Federal/State Effort To Slam Upfront Fee Loan Modification Rackets

From the Office of the Idaho Attorney General:

  • Attorney General Lawrence Wasden joined the Federal Trade Commission and 26 other state and federal regulatory agencies in Operation Stolen Hope, a nationwide enforcement and consumer education effort to combat foreclosure rescue fraud. [...] Wasden recently filed a lawsuit against a Kootenai County mortgage modification company, APS Northwest Idaho LLC, for numerous violations of the Idaho Consumer Protection Act. A similar lawsuit against Coeur d’Alene based Apply 2 Save is pending, although the now-closed company is in bankruptcy. The Attorney General also reached a separate settlement with a former Apply 2 Save executive.

For the Idaho AG press release, see Idaho Joins Operation Stolen Hope.

Missouri AG "Zero Tolerance Policy" Against Loan Modification Rackets Continues By Tagging Florida Firm With Civil Suit

From the Office of the Missouri Attorney General:

  • Attorney General Chris Koster said today he is suing a Florida company that took money from distressed Missouri homeowners without providing any meaningful mortgage-modification service. Koster joined the Federal Trade Commission and the state of Iowa in taking legal action against the company. This represents the eighth lawsuit against a fraudulent mortgage business since Koster began his campaign against mortgage fraud in April.

  • "This Attorney General's office has instituted a zero tolerance policy for any mortgage modification firm that preys on and cheats desperate homeowners," Koster said. "Our office will use all its powers to investigate and prosecute businesses involved in these foreclosure rescue schemes to defraud Missouri consumers."

  • Koster said First Universal Lending, LLC, is based in Palm Beach Gardens, Florida, but transacts business throughout Missouri.(1)

For the Missouri AG press release, see Attorney General Koster sues foreclosure consultant (Continues Zero Tolerance Campaign).

(1) He said the company markets its services to homeowners who are having difficulty paying their mortgages or facing foreclosure, promising them lower house payments or lower interest rates. In reality, the company appears to do little or nothing for most of its customers. In addition, company representatives told some clients to stop making mortgage payments while the modification process was proceeding, which harms consumers by injuring their credit rating and resulting in higher late fees, penalties, and interest payments, as well as increased likelihood of foreclosure. Koster said the business required people to pay up-front fees before they would provide any services, which is illegal for mortgage modification companies in Missouri.

Kansas AG Joins Nationwide "Operation Stolen Hope" - Tags Two Loan Modification Outfits With Suits Alleging Pocketing Upfront Fees, Breaking Promises

From the Office of the Kansas Attorney General:

  • [Kansas Attorney General Steve] Six recently filed two [...] lawsuits against [loan] modification companies. He alleges that these companies find consumers that are in trouble with their mortgage payments and contact them directly, either through internet advertisements or by phone. Despite promising to negotiate lower rates for the consumers, they either do nothing at all or provide services the consumers could obtain for no cost. The companies being sued are Home Loan Modification Advisors in California and Infinity Funding Group in New York.

For the Kansas AG press release, see AG Six continues fight to stop mortgage, foreclosure fraud.

Georgia Regulator Issues Cease & Desist Orders To Four Upfront Fee Loan Modification Companies

From the Georgia Department of Banking and Finance:

  • Georgia Banking Commissioner Robert Braswell [...] joined federal and state officials to crack down on loan modification and foreclosure relief scams, by the issuance of Cease and Desist Orders against individuals and companies who advertised unlicensed loan modification services to take hard-earned money from distressed Georgia homeowners.(1)

For the entire press release, see Georgia Cases Part of National 'Operation Stolen Hope'.

(1) The following firms were issued cease & desist orders, with links to the related press releases and C & D orders:

Illinois AG Lawsuits Targeting Alleged Loan Modification Fraud Operators Now Totals 31 With Three Recent Cases

From the Office of the Illinois Attorney General:

  • Attorney General Lisa Madigan [...] announced three lawsuits against mortgage rescue fraud schemes operating in Illinois as part of a national crackdown with the Federal Trade Commission (FTC) and the U.S. Department of Justice.(1) [...] With these new filings, Madigan has brought lawsuits against 31 mortgage rescue fraud schemes. To date, the Attorney General’s lawsuits have resulted in judgments in nine cases for more than $1.2 million in restitution for homeowners.

For the entire Illinois AG press release, see Madigan Continues To Crack Down On Mortgage Rescue Fraud (Illinois Attorney General Files Three New Lawsuits, Joins Federal Trade Commission, U.S. Department of Justice in Move to Protect At-Risk Homeowners Nationwide).

(1) Madigan filed complaints in Cook County Circuit Court against the following defendants:

  • Loan Mod One, LLC, which has offices in Las Vegas, Nev., and West Dundee, Ill.;
  • Freedom Mortgage Team, Inc., of Chicago, and Nevrus Mehmeti;
  • Living Modifications Corp., of Schaumburg, Ill., and its owner, Tomasz Tomczyk.

Tuesday, December 15, 2009

Kiboshed Lender Defies Court Order? Bills Homeowner For $474K+ Two Weeks After Long Island Judge Wipes Out Loan In Foreclosure For "Repugnant" Conduct

In Suffolk County, New York, Newsday reports:

  • The state Supreme Court justice who last month lashed out at a bank's dealings with an East Patchogue family facing foreclosure and canceled the mortgage on the home has ordered the bank and the homeowners back to court, records show.

  • Justice Jeffrey Spinner wants the parties to return to discuss a recent letter from IndyMac Mortgage Services that says $474,936.78 still is owed, according to legal documents obtained by Newsday. Spinner's unusual decision to cancel the mortgage generated much attention. His ruling said the lender - a division of OneWest Bank, FSB - was "harsh, repugnant, shocking and repulsive" in proceedings where the homeowners attempted to work out a loan modification.

  • This week, Spinner ordered that a conference be held Dec. 18 in Riverhead to explore "at length" the bank's letter, which was dated two weeks after his initial ruling. Homeowners Diana Yano-Horoski and husband Gregory Horoski could not be reached Thursday. After the first decision, Gregory Horoski told Newsday he was stunned that the decision essentially gave them the house outright, but that he worried the bank would appeal and prevail.

  • Spinner's latest order notes that the letter came after he "barred, prohibited and foreclosed" the bank from taking any action to enforce the mortgage and adjustable rate note on the Oakland Street house.

Source: Judge orders parties back to court in mortgage case (requires paid subscription to Newsday; if no subscription, try here).

Vegas Class Action Seeks To Stop BofA Foreclosures; Cites Lender's Lack Of Good Faith Negotiations In Loan Mods, Despite Grabbing Gov't TARP Cash

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

  • As more homeowners find they aren't having any luck trying to work with their lenders, one local attorney is filing suit against one of the largest lenders of all: Bank of America. [...] The suit was filed on behalf of homeowners facing foreclosure who say there has been no progress made with regard to negotiations with their lender. And, as the president has discussed, there are actual laws in the books requiring lenders to negotiate with homeowners.

  • However, throughout Southern Nevada, many insist it's simply not happening. "And that's why what we're calling for in this lawsuit," explains attorney Matthew Q. Callister. "(It) is an automatic stay of any further Bank of America foreclosures until such time as every Southern Nevadan avails himself of his right under federal law to have that fundamental 'good faith' negotiation."(1)

For more, see Local attorney files suit against Bank of America.

(1) According to the story, the class-action suit against Bank of America represents about 30 people so far; it alleges that the bank has failed to act in accordance with a section of the government's Making Home Affordable program, saying the lender has "refused to evaluate loans" and "failed to suspend foreclosure proceedings." Callister says Bank of America accepted TARP funds and now refuses to do what was required as part of the acceptance. loan modification

Full Speed Ahead For Zombie Debt Purchasers, Despite Lacking Proof Of Actual Debtor Or Debt, Significant Paperwork

Scripps Howard News Service reports:

  • For decades, credit-card companies and other firms would eventually give up after attempting to collect from deadbeat customers. Now, companies are packaging and selling many of those overdue accounts for pennies on the dollar to debt collectors. The collectors then aggressively pursue the debtors to repay, or they turn around and resell those same debts to other collection firms. This secondary debt market has mushroomed in recent years into a $60 billion industry. But the explosive growth has been accompanied by concerns over the business practices of the debt collectors.

  • Government officials and consumer watchdogs question the industry's often-shoddy recordkeeping, and say overly aggressive collectors sometimes break the law when going after old debts. "There are people who are attempting to get debt from consumers when they have no proof who the actual consumer is, no proof about the actual debt or the actual contract that incurred the debt, yet that has not stopped the debt-collection industry from going full steam ahead," says Ira Rheingold, executive director of the National Association of Consumer Advocates.

For more, see Bad Debts Have Become Big Business.

In a related story, see What Consumers Can Do When Debt Collectors Call.

NBA Owner "Clipped" For $2.7M+ In Settlement Of Race/Etnicity-Based Fair Housing Allegations; Discriminated Tenants To Share In $2.625M Pot

From the U.S. Department of Justice:

  • The Justice Department announced [last month] the largest monetary payment ever obtained by the department in the settlement of a case alleging housing discrimination in the rental of apartments. Los Angeles apartment owner Donald T. Sterling(1) has agreed to pay $2.725 million to settle allegations that he discriminated against African-Americans, Hispanics and families with children at apartment buildings he controls in Los Angeles.(2) [...] Among other things, the suit alleged that the defendants discriminated against non-Korean tenants and prospective tenants at buildings the defendants owned in the Koreatown area of Los Angeles.(3)


  • The settlement would also resolve two related lawsuits filed by former tenants at one of the properties. The two families, an African-American family and an interracial married couple with bi-racial children, alleged that the defendants demolished the private yards that had been part of their apartment and took other actions against them because of their race.

  • The settlement, which is memorialized in a proposed consent order that the parties have submitted to the court for approval, would require the defendants to pay a $100,000 civil penalty to the United States. Under the settlement, the defendants would also pay $2.625 million into a fund that would be used to pay monetary damages to persons who were harmed by the defendants’ discriminatory practices, including the tenants in the two related lawsuits discussed above. Any money left over would go to further fair housing education or enforcement in Los Angeles.

For the USDOJ press release, see Justice Department Obtains Record $2.725 Million Settlement of Housing Discrimination Lawsuit.

(1) Donald T. Sterling is the current owner of the National Basketball Association's Los Angeles Clippers. For more on Sterling, see:

(2) The defendants, who manage their apartments under the name Beverly Hills Properties, own and manage approximately 119 apartment buildings comprising over 5,000 apartments in Los Angeles County, according to the DOJ press release.

(3) According to the DOJ press release, the United States presented evidence that:

  • the defendants’ employees prepared internal reports that identified the race of tenants at properties the defendants purchased in Koreatown, and
  • the defendants made statements to employees at Koreatown buildings indicating that African-Americans and Hispanics were not desirable tenants.

The United States also presented expert analysis in court filings showing that the defendants rented to far fewer Hispanics and African-Americans in Koreatown which than would be expected based on income and other demographic characteristics, according to the press release.

Monday, December 14, 2009

Supremes To Decide Whether Attorney Screw-Up When Pursuing Foreclosure Action Is Defensible As "Bona Fide Error" Under FDCPA

Inside ARM reports:

  • In June 2009, the U.S. Supreme Court accepted a writ of certiorari to consider whether 15 U.S.C. Section 1692k(c) of the Fair Debt Collection Practices Act (FDCPA), otherwise known as the bona fide error defense, applies to mistakes of law. The Supreme Court accepted review of Jerman v. Carlisle, McNellie, Rini, Kramer & Ulrich LPA, in which the Sixth Circuit Court of Appeals concluded the bona fide error defense available under Section 1692k(c) of the FDCPA applies to mistakes of law. After setting the brief scheduling order, on Nov. 2, 2009, the Court scheduled oral arguments in the case for Jan. 13, 2010.(1)


  • In Jerman, the defendant law firm filed a complaint seeking foreclosure of real property owned by the consumer plaintiff. The complaint included a validation notice that provided the debt would be assumed valid unless the consumer disputed the debt in writing within 30 days. The plaintiff filed a complaint alleging the defendant violated the FDCPA because it compelled consumers to dispute the debt in writing when the FDCPA imposes no such requirement.

For more, see U.S. Supreme Court Oral Arguments Scheduled for FDCPA Case (The U.S. Supreme Court will hold oral arguments on Jan. 13, 2010, to decide whether the bona fide defense under the Fair Debt Collection Practices Act applies to mistakes of law).

(1) The case docket is available on the Supreme Court's Web site. The argument calendar states the case will be heard at 11 a.m.

All briefs are available here (from the homeowner, debt collector, as well as amici (ie. friends of the court)), courtesy of the American Bar Association. Friend of the court briefs in support of the homeowner's position have been filed by the U.S. Department of Justice and the Federal Trade Commission (go here), the Office of New York Attorney General Andrew M. Cuomo, as lead counsel for 21 state attorneys general (go here), and Public Citizen Litigation Group, as lead counsel for various consumer advocacy groups (go here). A number of credit and collection industry trade associations have also submitted amicus briefs supporting the debt collector's position.

Philly Feds: Two Lawyers Among Five Who Ran Bogus Sale Leaseback, Equity Stripping Racket Clipping 35 Homeowners Of $14.6M; Civil Suit Pending

In Philadelphia, Pennsylvania, The Intelligencer reports:

  • Doylestown Township Supervisor Jeffrey Bennett and his law partner, Stephen Doherty, were indicted in U.S. District Court Tuesday for reportedly skimming equity from the homes of owners facing foreclosure in a mortgage fraud scheme.(1) The 15-count indictment accuses the attorneys at Doylestown Township's Bennett & Doherty, P.C., plus three others of conspiring to obtain fraudulent mortgages totaling $14.6 million for at least 35 struggling homeowners. The mortgages funded a scheme that generated cash for the defendants but often cost victims their homes, according to the indictment.


  • Bennett, Doherty and the McCuskers were previously named in a Bucks County civil suit brought by 11 homeowners who claimed to have been swindled out of houses they owned in Haycock, Hilltown, Newtown Township, Plumstead, Richland, Solebury and other towns. The homeowners' attorney - Stuart Eisenberg of Warminster's McCullough & Eisenberg PC - said he hadn't read the indictment Tuesday afternoon, but he hopes his civil case will be able to continue in light of the criminal charges. "This has been going on for too long for my clients," Eisenberg said. "I need to push forward. My clients have been terribly hurt."(2)


  • The criminal indictment claims the scheme [...] included purchase and sales agreements with forged signatures, forged lease agreements, documents misstating the borrower's creditworthiness, and paperwork that failed to mention that the new owner was relying on the financially distressed former owners to pay part of the new mortgages.

For more, see Supervisor, law partner indicted in scheme (Fellow Doylestown Township supervisors called on Jeffrey Bennett to resign his post).

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

(1) Also indicted were: Ed McCusker, who ran the now-defunct Axxium Mortgage Inc. of Upper Makefield; his wife, Jacqueline McCusker; and Mount Laurel mortgage broker John Alford Bariana. All five are charged with mail fraud, wire fraud and conspiracy to commit money laundering, according to the indictment. Doherty also is charged with bankruptcy fraud. The defendants will be formally notified of the charges against them later this week, and U.S. Attorney Michael L. Levy said he expects them to voluntarily appear for processing, the story states.

(2) For an earlier Intelligencer story on the civil case filed against this alleged foreclosure rescue racket, see Suit claims 9 are victims of mortgage scheme. foreclosure rescue

MERS Takes Another Hit As Appellate Panel Affirms Bankruptcy Court Ruling That It Lacked Standing To Bring Foreclosure Action

In Las Vegas, Nevada, the Las Vegas Review Journal reports:

  • Homeowners struggling to avoid foreclosure got some good news [...]. U.S. District Judge Kent Dawson upheld a bankruptcy court ruling that makes it harder for lenders to foreclose on home mortgages. The case, heard by a panel of federal judges in November, concerned whether Mortgage Electronic Registration Systems Inc. could foreclose on residences on behalf of lenders.

  • The electronic system records the ownership of residential mortgages for the mortgage banking industry. Dawson said the company could not foreclose on a home, because it did not provide evidence that it held the note on the residence and didn’t show that it was an agent of the lender.(1)

For more, see Ruling may help homeowners trying to avoid foreclosure.

For Judge Dawson's ruling, see Mortgage Electronic Registration System, Inc. V. Chong, et al.

(1) According to the story, the case started in bankruptcy court two years ago. Mortgage Electronic Registration Systems Inc. was unable to show that it had possession of the note. On March 31, 2009, U.S. Bankruptcy Judge Linda B. Riegle ruled in bankruptcy trustee Lenard Schwartzer favor, saying the electronic system was not a “real party in interest” in the foreclosure action. The decision was appealed to federal court.

In his decision Tuesday affirming Riegle's ruling, U.S. District Judge Dawson (sitting in an appellate capacity) found that the Mortagage Electronic Registration must at least provide evidence that it was a representative of the mortgage loan holder, which it failed to do. “Since MERS provided no evidence that it was the agent or nominee for the current owner of the beneficial interest in the note, it has failed to meet its burden of establishing that it is a real party in interest with standing,” Dawson said, affirming the bankruptcy court ruling.

For a report on Judge Riegle's March 31 ruling in the bankruptcy court, see Las Vegas Business Press: Judge's ruling deals blow to national mortgage servicer. For Judge Riegle's ruling itself, see In re Mitchell. EpsilonMissingDocsMtg

Sentencing Wraps Up In "Money Store" Scam Prosecution; Bogus Sale Leasebacks Used To Strip Equity From Unwitting Homeowners Seeking Foreclosure Help

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

  • U.S. District Judge Roger W. Titus sentenced Jennifer McCall, age 48, the Chief Executive Officer of the Metropolitan Money Store, of Fort Washington, Maryland, to 135 months in prison, followed by five years of supervised release, for conspiracy to commit mail and wire fraud in connection with a mortgage fraud scheme that falsely promised to help homeowners facing foreclosure keep their homes and repair their damaged credit, [...].(1) Judge Titus also entered a judgement ordering McCall to pay restitution of $16,880,884.86. Judge Titus also sentenced co-conspirator Wilbur Ballesteros,(2) age 34, of Lanham, Maryland to 63 months in prison, followed by five years of supervised release and sentenced Ronald Aaron Chapman, Jr.,(3) age 35, of Washington, D.C., to seven days in prison, 10 months of home detention with electronic monitoring and five years of supervised release. Both men previously pleaded guilty to conspiracy to commit mail and wire fraud for their roles in the scheme. Judge Titus also entered judgements ordering that Ballesteros and Chapman pay restitution of $16,859,950 and $268,279.66, respectively.(4)

For the entire U.S. Attorney press release, see CEO of Metropolitan Money Store Sentenced to over 11 Years in Prison and Two Other Conspirators Sentenced in $37 Million Mortgage Fraud Scheme.

(1) McCall was originally scheduled for sentencing on November 16. That court date was marked by an incident in which her son, Raymond V. Jones, allegedly called federal prosecutor James Crowell a “coward” and “mother f*cker” and then threatened to kill him, before he jumped over the barrier dividing the gallery and the courtroom well and hit Crowell in the head, according to court documents. Crowell’s head was swollen after the alleged attack, the court records said. For a report on this incident, see MainJustice: Court Records: Man Punches, Threatens To Kill AUSA (requires free registration; alternatively, try here - then click link for the story). Read the criminal complaint against Jones here and a court motion, which describes his alleged attack on the federal prosecutor in greater detail, here.

(2) Ballesteros, a licensed real estate agent who served as a closing agent on more than 60 straw buyer properties, pocketed more than $100,000 in kickback payments to process real estate closings quickly, according to the U.S. Attorney's office.

(3) Chapman, hired to work as a loan officer, pocketed at least $66,000 in commissions that he was aware were probably the proceeds of fraud, but he deliberately avoided learning the truth as to the fraudulent nature of the funds, according to the U.S. Attorney's office.

(4) Ten defendants, including a lawyer, mortgage broker, real estate agent, loan processor and company officers have pleaded guilty in this scheme, according to the U.S. Attorney's office. In addition to the three defendants named above, the other seven are:

  • Joy Jackson, age 41, of Fort Washington, Maryland, and President of the Metropolitan Money Store - 151 months in prison;
  • Kurt Fordham (Jackson’s husband), age 39, of Fort Washington, Maryland - 10 years in prison;
  • Richard Allison, age 38, of Camp Springs, Maryland, an attorney - 18 months in prison;
  • Carlisha Dixon, age 32, of Hyattsville, Maryland - five months in prison and five months home detention;
  • Clifford McCall (Jennifer McCall’s husband), age 48, of Lanham, Maryland - four years in prison;
  • Chandra Jones (Jennifer McCall’s daughter), age 31, of Lanham, Maryland, - 33 months in prison;
  • Katisha Fordham (Kurt Fordham’s sister), 1 day in prison, followed by five months home detention and five months supervised release. foreclosure rescue equity stripping

NYC Judge Unfreezes Delinquent Homeowner's Bank Account Amidst "Sewer Service" Allegations Against Law Firm For Lender Holding Underwater 2nd Mortgage

In Staten Island, New York, the Staten Island Advance reports:

  • A new foreclosure tactic, whereby lenders or debt collectors holding second mortgages freeze bank accounts or garnish pay checks of already struggling homeowners, is emerging and making it even more difficult for people to hold onto their homes.(1)


  • George Apolinaris of Graniteville said his longtime companion, Maria Gil, got an unwelcome surprise when Ms. Gil tried to withdraw some money for groceries from two small bank accounts totaling $6,000 that the two maintained. The accounts were frozen and in the red for $250,000 -- twice the $126,000 owed on their second mortgage. Apolinaris said the couple never received any notice about the court action that froze the bank accounts. "They claim they handed a notice to somebody, but we don't know who it is," Apolinaris said.

  • Robert Brown, an attorney specializing in foreclosure and predatory lending cases, argued successfully in court that Ms. Gil had not been properly notified of judgment proceedings by attorneys for lender Citimortgage. In court papers, Brown noted that the lender's debt collection law firm, Forster and Garbus, had been cited by state Attorney General Andrew Cuomo for problems in serving legal papers to defendants in civil suits, also known as "sewer service."(2)

  • Last week, state Supreme Court Justice Judith McMahon sided with Brown and vacated the judgment, effectively unfreezing the couple's small bank accounts. Brown now plans to make a counterclaim under predatory lending laws. He said the couple had fallen behind on their first mortgage but foreclosure proceedings had not yet begun.

For the story, see Homeowners are getting hit a second time.

(1) According to the story, Josh Zinner of the Neighborhood Economic Development Advocacy Project in Manhattan said some lenders or trusts for banks that went out of business are selling off second mortgages today to debt collectors for pennies on the dollars. Those debt collectors are then going after the homeowners' bank accounts or pay checks to recoup whatever money they can. "The backdrop to that is there are real fundamental problems in the debt buyer industry," said Zinner. "The combination of the second mortgage problem with all the abuses in the debt collection industry is toxic, and could really create havoc for homeowners who are trying to avoid foreclosure on their primary mortgage."

(2) See 35 Law Firms Named In Suit Seeking To Void 100,000+ Money Judgments; 20+ Add'l Firms Currently In NY AG's Crosshairs In Ongoing "Sewer Service" Probe.

For more on New York's "sewer service" problem, see:

Sunday, December 13, 2009

Expired Statute Of Limitations Saves Homeowner $45K+; Stale Debt Too Old To Be Enforced, Says Judge About 30+ Year Old HOA Claim

In Ellicott City, Maryland, The Baltimore Sun reports:

  • Sometimes it pays to be stubborn. For more than 33 years, Joseph and Shirley Poteet ignored annual Columbia Association bills and later threats of possible foreclosure for not paying the community's unofficial property tax fees that accumulated to more than $45,000. Now, a Circuit Court judge has thrown out the homeowners' association claim as too old to be enforced.


  • Since the association lawsuit came 35 years after the first property fee notice, Circuit Judge Alfred L. Brennan agreed with the Poteets' lawyers in an Oct. 14 ruling that says the long-pending claim far exceeded the three-year statute of limitations. The homeowners association has appealed the case to the Court of Special Appeals.


  • "I just cannot understand why Columbia Association would have waited from '73 to '06 or whatever, to bring such an action," Brennan said during the hearing, according to a transcript. "I find that the [three-year] statute of limitations does apply in this case, very definitely," the judge said.

For the underlying facts in this story, see Statute of limitations saves couple from some $45,000 in fees (Columbia Association says it's appealing the ruling).

Arizona Resident Fights Back To Undo Mortgage Unwittingly Signed Shortly After Coming Out Of Coma

In Maricopa County, Arizona, reports:

  • Rancho El Dorado resident Nichole Italiano sits in her home surrounded by mountains of paperwork. For the past six months she has gathered data, collected testimony and spent hours at a downtown Phoenix law office preparing a mortgage fraud case revolving around a broker having her sign loan documents a few weeks after coming out of a coma. Her unusual story began several years ago, though even today, it’s no closer to being resolved.

For the rest of the story, see Maricopa resident fights to win back her life.

New Jersey Fair Housing Advocate Shakes $30K Out Of Landlord To Settle Housing Discrimination Allegations

From the Office of the New Jersey Attorney General:

  • The Division on Civil Rights announced [...] that the owners of a Somerset County apartment complex have paid $30,000 to the Fair Housing Council of Northern Jersey to settle charges the complex engaged in racial and other types of unlawful discrimination while dealing with testers it believed were prospective tenants.(1)

For the entire NJ AG press release, see Division on Civil Rights Announces Settlement of Discrimination Complaint Involving Treatment of Testers at Apartment Complex.

For the settlement agreement and Division on Civil Rights complaint, see Fair Housing Council of Northern New Jersey v. Kimberwyck Village.

(1) According to the press release, the Fair Housing Council sent a total of nine testers into Kimberwyck Village in 2007 and 2008. A subsequent complaint filed with the Division in October 2008 charged that Kimberwyck employees showed an obvious preference toward white testers they believed were prospective tenants. Specifically, the complaint charged, Kimberwyck staffers showed white testers cleaner, more ready-for-occupancy dwellings, presented the complex’s rental terms and income requirements in the most attractive light, and in one case offered to “hold” a rental unit for a white tester.

Meanwhile, the Complaint charged, Kimberwyck employees showed African-American testers less clean and well-maintained rental units, neglected to mention certain favorable rental terms that had been mentioned to white testers and did not offers to hold rental units for them. In addition, the complaint alleged that Kimberwyck employees made disparaging remarks to testers about other minorities, including Mexicans and Indians. Specifically, one Kimberwyck employee remarked about the financial unreliability of Mexican rental applicants, and used a slur to refer to Indian tenants.

In addition to charging race-based and national-origin-based discrimination, the Fair Housing Council complaint also charged Kimberwyck with unlawfully discriminating against families. For example, testers who inquired about rental options for families with children were told that tenants with children must rent two-bedroom apartments because children were prohibited from living in one-bedroom apartments or in upstairs units. Under the settlement agreement, there is no acknowledgment of wrongdoing by Kimberwyck or Kimberwyck Associates.

Recent DOJ Actions Involving Housing Rights Violations, Alleged Housing Discrimination

The U.S. Department of Justice has recently issued the following press releases in connection with its efforts in connection with housing rights violations and alleged housing discrimination:

  • Arkansas Man Sentenced on Civil Rights Charges in Cross Burning Conspiracy: Dustin Nix of Donaldson, Ark, was sentenced [...] in federal court in Fort Smith, Ark, on federal civil rights charges related to a conspiracy to drive a woman and her children from their home because they associated with African-Americans. [...] Specifically, on June 15, 2008, Nix and the others agreed to construct a cross and burn it in front of the victims’ home. Nix and the others erected the cross in front of the victims’ home and attempted to set it on fire. [...] Nix’s co-conspirators, Jacob A. Wingo, Richard W. Robins, Clayton D. Morrison and Darren E. McKim, pleaded guilty in September 2009, for their roles in the conspiracy. Sentencing for Wingo, Robins, Morrison and McKim has been scheduled for Dec. 7, 2009. (Go here for other DOJ actions involving cross burning incidents).

  • Justice Department Obtains $131,500 in Discrimination Settlement with Chattanooga, Tennessee, Apartment Complex: The United States has reached a settlement resolving a housing discrimination lawsuit in Tennessee concerning discrimination against families with children, the Justice Department announced. Under the consent decree, [... the] defendants [...] will pay $131,500 in monetary relief to 15 identified victims and the United States. The Department’s complaint alleged that the owners, property managers, and management company violated the Fair Housing Act by refusing to rent apartments to persons with children, discouraging persons with children from renting dwellings owned and managed by the defendants, steering persons with children to another apartment complex and making statements that discriminated on the basis of familial status. [...] The Department conducted its investigation using fair-housing testers – individuals who pose as renters for purposes of gathering information about possible discriminatory practices in the rental of apartments.

  • Justice Department Resolves Lawsuit Alleging Disability-Based Housing Discrimination at 11 Multifamily Housing Complexes in Tennessee, Louisiana, Alabama and Texas: The Justice Department [...] announced a settlement of its lawsuit alleging that those involved in the design and construction of 11 multifamily housing complexes discriminated on the basis of disability. The complexes are located in four states and contain more than 800 units covered by the Fair Housing Act’s accessibility provisions. Under the settlement, which must still be approved by the U.S. District Court for the Western District of Tennessee, 11 defendants will pay all costs related to making the complexes for which they were responsible accessible to persons with disabilities and pay up to $117,000 to compensate individuals harmed by the inaccessible housing. [...] The complaint was originally filed in Memphis, after the United States Attorney received a copy of a survey conducted by the Memphis Center for Independent Living of three of the Memphis properties indicating violations of the Fair Housing Act.

  • Justice Department Lawsuit Charges Atlanta Condominium with Discrimination Against Families with Children: The Justice Department [...] filed a lawsuit against an Atlanta condominium association, as well as the owner of a unit and the real estate agent who sold it, for violating the Fair Housing Act by discriminating against families with children. The lawsuit, [...] charges that the Georgian Manor Condominium Association maintained policies discouraging families with children from living in the Georgian Manor complex [...]. It also charges that the owner of a unit in the complex refused to sell to families with children and that the real estate agents hired to sell the unit, Jennifer Sherrouse and Harry Norman Realtors, publicized the restriction. [...] This lawsuit arose as a result of a complaint filed with the U.S. Department of Housing and Urban Development (HUD) by a fair housing group.

  • Justice Department Sues Chicago Area Landlord for Refusing to Rent to African Americans: The United States has filed a lawsuit against Terence Flanagan, a Chicago area property owner and rental agent, alleging that he refused to rent properties he owned or controlled to African-Americans, in violation of the federal Fair Housing Act, the Justice Department announced. The lawsuit, [...] alleges that Flanagan refused to rent a single-family house he owns in Orland Park, Ill., to Kamal Alex Majeid, who is African-American, because of his race. The lawsuit also alleges that Flanagan asked a white tester employed by the Justice Department whether her husband was African-American and admitted to her that he did not want to rent to African-Americans. The suit further alleges that Flanagan told this tester that he had numerous other rental properties in the Chicago area. This lawsuit resulted from a complaint submitted to the Justice Department by the South Suburban Housing Center, a private suburban Chicago fair housing organization, after it was contacted by Majeid.

Justice Department Scores Win Against Rogue Towing Outfit For Repossessing, Selling 20+ Vehicles Belonging To Servicemembers Without Court Orders

In Norfolk, Virginia, Air Force Times reports:

  • The Justice Department has scored a victory for service members against a Norfolk, Va., towing company that sold off more than 20 service members’ cars without court orders in recent years. The civil case is not over; it will go to trial next year to determine damages owed to the service members whose vehicles were towed by B.C. Enterprises Inc., doing business as Aristocrat Towing.

  • But the decision clarifies protections for troops under the Servicemembers’ Civil Relief Act and sends a clear message to industry, according to SCRA experts. The decision affirms that service members “have the right not to have their vehicles sold at auction without a court order ... even if they did not notify the towing company of their military status in advance,” said Justice Department spokesman Alejandro Miyar.

For more, see Towing company improperly sold off troops’ cars, court rules.

(1) According to the story, Section 537 of the Servicemembers’ Civil Relief Act states that without a court order, a person holding a lien on the property or effects of a service member cannot foreclose or enforce any lien during any period of military service by the member and for 90 days afterward. The U.S. District Court, Eastern District of Virginia, reportedly ruled that Section 537 is a “strict liability” provision, meaning service members do not need to take any action to be protected. “Even if the defendants exercised utmost care in investigating their victims’ military status, they face liability for their actions,” wrote District Judge Robert Doumar in his Nov. 6 order, the story states.

Go here for free legal assistance for military servicemembers and their families.