Saturday, July 10, 2010

Lake County Unleashes Full-Time Homestead Exemption Fraud Investigators To Bag Real Estate Tax Deadbeats

In Tavares, Florida, The Daily Commercial reports:

  • Simply having a home in Florida is not enough to qualify for a homestead exemption, as many Lake County residents will find out this week. On Wednesday, the county property appraiser's office will send out its exemption denial letters. Unlike past years, county officials are now more confident they know who's trying to get out of paying their fair share.

  • This is the first year the county has used full-time fraud investigators to actively evaluate homestead exemption claims, and it's put millions of dollars worth of property back on the county's books.

  • "I was thinking about how we could help the taxing authority and what I came up with was taking one of our experienced field men and having him go out and investigate these things." county Property Appraiser Ed Havill said. "Basically, we didn't have anybody doing that before." Now, fraud investigator Jim Kimpel and his chief deputy, Frank Royce, check out complaints reported through the county's fraud hotline, e-mail or by letter. [...] If the investigation reveals an intent to defraud the county, [Homestead Exemption Supervisor Ginger] Casburn said she can go back as far as 10 years to recoup back taxes, plus attach a 50 percent penalty on the amount that was supposed to be paid.

For more, see Lake County investigators cracking down on Homestead Exemption fraud.

Out-Of-Town Landlord Faces Criminal Charges Over Code Violations, Leaving Tenants Scrambling To Escape Collapsing Conditions

In Herkimer, New York, The Evening Telegram reports:

  • A property owner who faces criminal charges in Frankfort Village Court related to a building deemed unsafe by officials has been put on notice of code violations for an apartment he owns in Herkimer. Alan Patterson, of Westhampton Beach, has been notified by letter that a two-story apartment building at 219 Bellinger Ave. has multiple violations, according to David Kuehnle, Herkimer codes officer.

  • Patterson [...] appeared in Frankfort court to answer to four misdemeanor charges related to what officials believe to be the unlivable and unsafe condition of a vacant three-story apartment building at 202 S. Frankfort St.


  • Meanwhile, at least one tenant in the Bellinger Avenue duplex has moved out and the other family is planning to move out by the end of the week. Betty Santos said she has moved out of the apartment with her four children, ages 14 to 19, and fiancé. The family has been living at the apartment for over a year, according to Betty Santos, and everything from collapsed ceilings and mold to a broken hot water heater have gone unfixed. “And it seems like the house is just falling down around us,” she said. “I can’t live like this anymore.”

  • A family of four, with two children, lives in the other apartment and said they have many of the same problems. The adults did not want to give their names, saying they are trying to move out as soon as possible.


  • Codes officials in several area villages have expressed frustration with out-of-county landlords. Many of the parcels are purchased through foreclosure auctions, codes officers have said. The challenges of getting owners to appear in local courts often make it difficult to get action. Smaller municipalities also must face the realities of the cost of demolishing multiple properties, especially without the prospect of repayment due to bankruptcy filings or other delays, according to comments from codes officers. In instances of an imminent threat to the public, codes officers said villages will demolish a structure immediately.

For the story, see Landlord cited for violations in Frankfort, Herkimer.

Connecticut Court Strips Delinquent Developer Of Condo Association Control Amid Allegations Of Violations Of Unit Owners' Rights

In Hartford, Connecticut, Hartford Business reports:

  • A Hartford Superior Court judge has ordered a third party receiver to take possession of all accounts and records of the Bushnell on the Park Condominium Association, as the property's majority owners continue to face a host of legal and financial problems.

  • Superior Court Judge James T. Graham ordered June 25 that Trio Real Estate Services take immediate possession of all accounts and records of the association, according to Avon lawyer Jonathan Starble, who is representing nearly a dozen Bushnell on the Park condo owners who filed suit against the property's majority owners, alleging they have violated state condo laws.(1) Trio will report to the court and take actions to manage the affairs of the association, Starble said.

  • A key concern is whether Bushnell Regency, the company that owns 129 condominium units within the 180-unit complex at 100 Wells St. and is also facing foreclosure, has been paying its fees owed to the Bushnell on the Park Condominium Association. The suit alleges that the principals of Bushnell Regency have repeatedly refused to provide financial records to association members, and failed to collect dues or make necessary repairs to the building.

For more, see Bushnell on the Park Condominium Association placed in receivership.

(1) "It is the first time, to my knowledge, that a receiver has been appointed for a condo association in Connecticut," Starble reportedly said. "It is an extraordinary measure, but it was made necessary by extraordinary circumstances. My clients applaud the court's decision to provide an equitable temporary remedy for home owners who have been the victims of egregious breaches of fiduciary duty. As a result of the actions of Bushnell Regency, the Association finds itself in financial distress and with a building in disrepair. To be clear, this situation is not a result of the economy; it is a result of one company's actions."

Friday, July 9, 2010

15 Financially Struggling Texans File Lawsuit Alleging BofA Screwed Them Over When Seeking Loan Modifications To Avoid Foreclosure

In Austin, Texas, Texas RioGrande Legal Aid announces:

  • Fifteen low-income Texans are suing Bank of America for operating a home loan system that forces struggling homeowners into foreclosure by purposefully misleading them, preventing them from modifying their loans, and ignoring agreements for lower monthly payments.

  • Represented by Texas RioGrande Legal Aid (TRLA),(1) [...] the families allege that they tried to work with Bank of America on loan modifications and foreclosure prevention when tough economic times hit. Instead of providing them with the information necessary to save their homes, Bank of America provided inconsistent information, lost important paperwork, and failed to notify them of the status of their loans. In cases where forbearance and loan modification agreements were made, Bank of America ignored the arrangements and put homes up for foreclosure even though families made their payments.


  • According to the lawsuit, it is standard practice for Bank of America to ignore agreements made with homeowners in order to force them into foreclosure. In addition, Bank of America intentionally provides homeowners with misleading and inconsistent information about their loans, illegally ignores requests for information, and sets up unreasonable barriers to keep families from saving their homes.

For the TRLA press release, see Bank of America Practices Force Homeowners to Face Foreclosure.

(1) According to their website, Texas RioGrande Legal Aid is a nonprofit organization that provides free legal services to the residents of Southwest Texas in a 68-county service area who are unable to afford the fees of attorneys in private practice. In eight of the counties, TRLA also provides representation in criminal cases through its Public Defender Division. TRLA also serves migrant and seasonal farm workers throughout the states of Texas, Louisiana, Arkansas, Mississippi, Alabama, Tennessee and Kentucky.

Cops Warn Tenants, Unwitting Handymen Of Rent Swindles Using Vacant Homes As Bait, Requesting "Cash Only" Deposits, Touting Great Deals On Craigslist

In Fairfax County, Virginia, The Washington Post reports:

  • Hand the deposit to a cleaning guy. Cash only. No need to sign a lease. If the rental agreement sounds a little shady, that’s because it is, and you’ll never actually get a place to live, Fairfax County police said [].

  • Detectives are looking into a scam that could be linked to swindles in Alexandria, Richmond, Washington, New York and Miami. "Once you hand your cash over, the money is gone," said Officer Tawny Wright, a spokeswoman for the Fairfax County Police Department. Police have arrested two men in the case so far: Richard Armstrong, 29, of the 8500 block of Brooks Street NE, in Washington, and Christopher Stanley, 27, of the 100 block of West 3rd Street in Frederick.

  • According to Wright, the swindle unfolds when the suspect places an advertisement on Craigslist, touting a great deal on a rental property, with no credit check required. What the victims don’t know is that the property is actually in foreclosure, and isn't really a rental.(1)

Source: Police issue warning on rental scam.

(1) According to the story, Wright said the suspects first enlist an unsuspecting cleaning person or handyman to go do work at the property. When this person shows up and finds it locked, he or she calls back to the suspect, who convinces the person to force himself or herself inside. Then the victim shows up. Arraignments are made to give a cash deposit to the cleaner or handyman, who takes a small cut and sends the rest on to the schemer, Wright said. Police said they have found "multiple occurrences" of the scam, and in one case used an undercover officer to make an arrest. They are encouraging citizens to be on guard for cash-only, no-signed lease arrangements.

Foreclosed Homeowner Allowed To Stay Put Pending Litigation Accusing Wells Fargo Of Blindsiding Family With Home Sale During Loan Mod Negotiations

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

  • Tyree Brown, the homeowner who complained that Wells Fargo Bank blindsided him with a foreclosure during loan modification negotiations, has won the first round in court. District Court Judge Douglas Smith signed a preliminary injunction [], temporarily preventing the buyer from evicting Brown, his two sons and his fiancée from their northwest Las Vegas home.

  • JFS Management Group, which made the winning bid on the home at a February foreclosure sale, won't be allowed to take over the house at 1840 Spring Summit Lane and "flip it" for a profit while the case is pending. Brown and the buyer must negotiate a monthly payment amount or Smith will set the payment amount for them.

For more, see Homeowner gets foreclosure reprieve (Company barred from evicting tenant while case is pending).

BofA Screw-Up In Handling Automatic Withdrawls To Be Applied Toward Mortgage Payments Leads To Loss Of Home, Says Foreclosed Owner In Lawsuit

In Jefferson County, Texas, The Southeast Texas Record reports:

  • A Groves woman has filed suit against a bank that she says failed to automatically withdraw mortgage payments from her account, causing her to face foreclosure and eviction. Charlenee Renee Hardee claims she first learned of the foreclosure on her house when she received an eviction notice posted on her door.

  • According to the complaint filed June 17 in Jefferson County District Court, Hardee had set up automatic withdrawals with defendant Bank of America in December that were supposed to go toward paying off her mortgage. However, she alleges Bank of America had not been withdrawing payments as scheduled, which Hardee claims she was unaware of until she received the eviction notice, the suit states.(1)


  • On April 10, Bank of America executed an appointment of a substitute trustee, who then held a trustee's sale on May 4 and conveyed the property to defendant Estatepro, Hardee claims. However, before the sale, Estatepro failed to supply Hardee with the required 30-day notice of default or with the notice of foreclosure sale, although it asserts that the required notices were sent, according to the complaint.

For the story, see Groves woman claims bank mistake led to foreclosure.

(1) In her complaint, Hardee is asking the court to declare the foreclosure, sale of her property and deed invalid, and is also asking the court to enter an order declaring her to be the rightful owner of the property, the story states.

Thursday, July 8, 2010

Oregon AG Shakes Refunds Out Of Loan Modification Outfit In Settlement Of Claims Of Illegally Pocketing Upfront Fees From Homeowners Facing F'closure

From the Office of the Oregon Attorney General:

  • Attorney General John Kroger [] announced a settlement that prohibits a Los Angeles County company from doing loan modification work in Oregon. "This office will not tolerate companies that attempt to exploit Oregon homeowners who are facing foreclosure," said Deputy Attorney General Mary Williams.

  • The Oregon Department of Justice began investigating Bank Modification Experts of Woodland Hills, California, after receiving consumer complaints that suggested the company was violating Oregon's Mortgage Rescue Fraud Protection Act by collecting advance fees for loan modification work aimed at preventing foreclosure. The company refunded several Oregon consumers. Bank Modification Experts eventually began doing business from Agoura Hills, California as Premier Legal Advocates.

  • Under the settlement [...] Premier Legal Advocates paid $4,000 to the Oregon Department of Justice, refunded an Oregon consumer $2400 and must refund any other Oregon consumers who paid illegal advance fees. The company is also prohibited from doing any further foreclosure consulting or loan modification work in Oregon.

For the Oregon AG press release, see Oregon Bans Another Loan Modification Company (California-based Premier Legal Advocates charged illegal advance fees for loan modification services it subsequently failed to perform).

State Regulator Squeezes Loan Servicers For $240K+ In Refunds Of Prepayment Penalties Illegally Clipped From Maryland Homeowners

From the Office of the Maryland Department of Labor, Licensing & Regulation:

  • Sarah Bloom Raskin, Commissioner of Financial Regulation for the Department of Labor, Licensing and Regulation, [] announced refunds to Maryland consumers of approximately $246,000 related to a series of completed regulatory examinations of mortgage loan servicers.

  • Litton Loan Servicing and Saxon Mortgage Services have each refunded approximately $71,000 to a combined total of 160 Maryland consumers, while Bayview Loan Servicing has refunded approximately $104,000 to 40 Maryland consumers.

  • The refunds followed compliance examinations conducted by the Office of the Commissioner of Financial Regulation that uncovered previous violations of Maryland law, primarily related to restrictions on the imposition of prepayment penalties.

  • "Maryland has provided protections related to prepayment penalties, and we are committed to making sure Maryland consumers receive those protections. We appreciate the cooperation of these firms in resolving this matter," Commissioner Raskin said. "These refunds relate to violations of prepayment restrictions in effect prior to the 2008 Maryland mortgage and foreclosure regulatory reforms. In 2008, Governor O'Malley signed into law a blanket prohibition against prepayment penalties in connection with Maryland residential mortgage loans." Maryland is one of the few states that maintain licensing and examination authority over independent mortgage servicers. The state does not have authority over those servicers owned by federally chartered banks and thrifts.

Source: DLLR Obtains Refunds for Consumers Over Improper Charges.

Cancer Victim Loses Desperately Needed Cash, Home After Being Snagged By Loan Modification Ripoff; Suspect Charged By Feds In Other Scams

In Hintington Beach, California, KABC-TV Channel 7 reports:

  • Nadia Iskander is in a race against time. Iskander is fighting breast cancer. She lost her husband. Now, she may lose her home after falling victim to a foreclosure rescue scam.


  • Last year, Iskander and her family held a sale at their jewelry store in Huntington Beach to raise money to pay for her medical treatment. Her home was also facing foreclosure. She borrowed against it to cover her husband's medical bills. He has since passed away.

  • For two years, Iskander and her daughter, Sherine, have worked on modifying their home loan through Aurora Loan Services, making payments. They also turned to a long-time customer, George Eggleston, who operated under the company Nexxus, or Private Solutions Group. They paid the 63-year-old now calling himself Giordan $7,000 to rescue their home. "He did nothing," Sherine Iskander said.

  • Eggleston was arrested last week and now faces federal charges involving other victims. Authorities allege he was operating a foreclosure rescue scheme dating back to 2008. "It was money that could have been used for medical," said Sherine as she wept. "It was money that could have been used for the bank. He did not negotiate with the bank. He just took our money."

  • The Iskanders have contacted the FBI about Eggleston. The FBI said it continues to investigate him. Last week, the Iskanders received a notice telling them their home was no longer theirs.

For the story, see Woman with cancer loses husband, possibly home.

Ohio AG Brings Civil Charges Against Payment Servicing Firm For Allegedly Ripping Off Homeowners' Property Tax, Insurance Escrow

From the Office of the Ohio Attorney General:

  • An Illinois-based company defrauded Ohioans out of thousands of dollars and Ohio Attorney General Richard Cordray is seeking restitution and civil penalties in Franklin County Common Pleas Court. Cordray said that the company and its owners, Derek C. Lurie and Steven Lurie, claimed that they would provide “escrow” services for their customers to pay property taxes or homeowner insurance but collected the money from consumers and never made the payments on their behalf.

  • Ohioans who contracted with this company lost thousands of dollars that they had set aside to pay taxes and insurance premiums,” said Cordray. “In the end, not only were their taxes and premiums not paid, but they had to come up with additional money out-of-pocket.”

  • According to the lawsuit, American Escrow entered into contracts with consumers to provide escrow services and to pay for property taxes and/or homeowner’s insurance each year. They divided the approximate annual amount by 12 payments, which they then collected each month from consumers. Consumers were charged a one-time set up fee of up to $250 and a monthly service charge up to $6.50.

  • The lawsuit alleges that the company stopped making payments for some customers in the fall of 2008 but continued to collect money through March 2009. The Attorney General’s office has received 89 complaints to date against American Escrow from Ohioans who said they lost money.

For the Ohio AG press release, see Escrow Company Ripped Off Ohioans, Cordray Says.

For the lawsuit, see State of Ohio v. American Escrow LLC, et al.

AZ AG Tags City, Utilities w/ Fair Housing Suit Alleging Failure To Provide Service To Customer Due To His Religion, Failure To Accommodate Disability

From the Office of the Arizona Attorney General:

  • Attorney General Terry Goddard [] announced that his office has filed a lawsuit against the Town of Colorado City, Arizona, the City of Hildale, Utah, Hildale-Colorado City Utilities, Twin City Water Authority, and Twin City Power for alleged violations of the Arizona Fair Housing Act.

  • The suit follows an investigation by the Arizona Attorney General’s Civil Rights Division, which concluded that there is reasonable cause to believe that the Defendants discriminated against Colorado City resident Ronald Cooke by not providing water and other utility services because of his religion and by not accommodating his disability. Mr. Cooke is a former member of the Fundamentalist Church of Jesus Christ of Latter Day Saints (“FLDS”).

For the Arizona AG press release, see Goddard Files Fair Housing Lawsuit against Colorado City for Civil Rights Violations.

For the lawsuit, see State of Arizona v. Hildale-Colorado City Utilities, et al.

Wednesday, July 7, 2010

Homeowners Cautioned To "Look Before You Leap" When Dealing With Loan Modification Rackets Peddling Foreclosure Rescue Quick Fixes

In St. Paul, Minnesota, the Star Tribune reports:

  • Patricia Goff got taken not once, but twice, by shoddy loan modification companies promising to fix her mortgage woes for an upfront fee. Neither delivered and now Goff, 47, is facing foreclosure on the Rosemount home where she lives with her husband and 21-year-old son -- unless she comes up with $34,000 -- more than Goff earns in a year.


  • Hoping to prevent others from ending up like Goff, the Minnesota Home Ownership Center and dozens of partners are kicking off Look Before You Leap, a campaign designed to teach people how to spot foreclosure-related scams and let people know help is available for free from housing counselors around the state.(1)


  • [A]n event [was scheduled for last Tuesday] on the East Side of St. Paul, one of the areas hardest hit by foreclosure, featuring homeowners who have agreed to share their horror stories.

For the story, see Look Before You Leap: Out to quell foreclosure-related scam (The Look Before You Leap campaign warns of illegitimate loan modification companies. Event features homeowners who have agreed to share their horror stories).

(1) Reportedly, Look Before You Leap is part of a national public education effort called the "Loan Modification Scam Alert," which was started by the community development nonprofit NeighborWorks America with $1 million from Congress. According to the story, several cities around the country so far -- Los Angeles, Dallas, Miami, Atlanta, Las Vegas, Milwaukee and Kansas City, to name a few -- have created local versions of the campaign, NeighborWorks spokesman Steve Hermes said. Events are planned in Chicago, Des Moines and Omaha later this year, the story states.

NJ AG Scores $5M+ Consent Judgment Against Outfit Accused Of Upfront Fee Loan Modification Ripoffs

From the Office of the New Jersey Attorney General:

  • Attorney General Paula T. Dow announced [] that a New Jersey loan modification company and its owners have agreed to a judgment of $5,051,253 to settle civil charges they defrauded homeowners who sought help in avoiding mortgage foreclosure.

  • In addition to civil penalties of $5 million, corporate defendants Hope Now Financial Services Corp. and Hope Now Modifications LLC, of Cherry Hill, along with individual defendants Salvatore A. Puglia Sr. and Nicholas F. Puglia Jr., principals in the business, have agreed to pay the State $51,253 in attorney fees and investigative costs.


  • The lawsuit accused Hope Now Financial and the other defendants of charging already-distressed consumers thousands of dollars in upfront fees for loan modification services, but failing to provide any such services. [...] The complaint also charged that Hope Now Financial and the other defendants placed content on a Web site designed to deceive consumers into believing the company was affiliated with the non-profit Hope Now Alliance, which provides credit counseling and free foreclosure prevention.

For the entire NJ AG press release, see Attorney General Announces Settlement in Mortgage Fraud Case; Loan Modification Company, Individuals Agree to $5 Million Judgment.

Go here for Final Consent Judgment - Dow v. Hope Now Financial Services Corp., et al.

Go here for the original NJ AG lawsuit: Milgram v. Hope Now Financial Services.

Indiana AG Tags Another Loan Mod Outfit w/ Civil Suit; Alleges Retired Cop Seeking To Lower Payments Was Screwed Out Of $1K By Out-Of-State Operation

In Corydon, Indiana, the Louisville Courier Journal reports:

  • Larry Green thought he found the solution to his mortgage problem when he heard a radio ad. Green, a retired state trooper who has lived in his Harrison County home since 1983, wanted to lower his 9 percent interest rate to something more manageable. In April 2009, he heard the ad from California-based PFS Financial Corp. offering solutions for homeowners facing foreclosure. Although Green wasn't worried about foreclosure, he contacted the company and paid $1,000 up front, hoping they could help find a lower rate. "They seemed legit, but they weren't," he said.

  • On Tuesday, Indiana Attorney General Greg Zoeller filed a lawsuit on behalf of Green against PFS Financial for alleged violations of the Credit Services Organizations Act, the Mortgage Rescue Protection Fraud Act, the Deceptive Consumer Sales Act, and for lacking proper certification from the Indiana secretary of state.

  • Zoeller, who announced the lawsuit at a news conference in Corydon, said the company also failed to file a $25,000 surety bond that serves as insurance for clients when it doesn't perform services or provide a refund, something that Green has been seeking.

For more, see Indiana AG sues California mortgage consultant.

Cuomo Tacks On 31 Outfits To Calling Card List Of Loan Modification Rackets Around The Country Being Reminded To Observe NY Law

From the Office of the New York Attorney General:

  • Attorney General Andrew M. Cuomo [] expanded his investigation into mortgage rescue companies that abuse New York homeowners. As a part of his ongoing investigation, Cuomo is sending over 30 additional cease and desist letters to mortgage rescue companies warning them to immediately end all misleading and illegal conduct. A total of 213 companies have now been put on notice.(1)

For the NY AG press release, see Attorney General Cuomo Expands Investigation Into Mortgage Rescue Companies That Abuse Homeowners (Cuomo Orders Over 30 Additional Mortgage Rescue Companies to Cease Fraudulent Practices; 213 Companies Have Now Been Put on Notice).

(1) Mr. Cuomo is reportedly the leading candidate for governor of New York in the state's upcoming election this November. Despite that, I'm quite confident that the timing of the recent 200+ friendly admonitions sent by his office to operators of loan modification rackets that may be screwing New York homeowners out of their hard-earned cash (especially those who plan to vote for governor but are undecided on who to support) is purely coincidental...

Tuesday, July 6, 2010

Minnesota Regulator Takes Enforcement Action Against Alleged Out-Of-State Loan Modification Rackets, Forensic Audit Peddler

The Minneapolis Star Tribune reports:

  • On the heels of a statewide campaign alerting the public to foreclosure-related scams, the Minnesota Commerce Department took action against unlicensed, California-based loan modification companies Thursday.

  • The department sent cease-and-desist orders to Ronald LeClair of Bank Modifications and Ernest J. Bartlett of Both promised homeowners loan modifications and charged upfront fees of $1,000 to $3,000. It's illegal to offer loan modifications without a residential mortgage originator license and to charge an upfront fee for such modifications.

  • Steven Fattorusso of USA Loan Auditors, also known as Relief Law Center, allegedly offered a Minnesota resident a loan modification, claiming the homeowner's current mortgage company was being investigated for predatory lending and offering assistance, the Commerce Department said. The company sent ads to consumers that made it look as though it was somehow affiliated with the government. The company has caught the attention of regulators in several states. A hearing to show cause has been scheduled for Fattorusso on Aug. 12.

Source: State regulators crack down on loan modification firms.

For the Minnesota Department of Commerce press release, see Minnesota Department of Commerce takes action against unlicensed loan modification companies for deceptive business practices.

San Jose Man To Get Seven Years For Pocketing $1.6M From Investors While Purporting To Operate Foreclosure Rescue Business

In Santa Clara County, California, the San Jose Mercury News reports:

  • A 34-year-old San Jose man pleaded guilty to nine felony charges for running an illegal investment scheme from 2006 to 2009, according to the Santa Clara County District Attorney's Office. Reyes Alcaraz operated Safe Recovery, which promised high rates of return for investing money to rescue residential properties from foreclosure. Many of the investors were Spanish-speaking immigrants.

  • He defaulted on many of the contracts, but continued to solicit new investors, writing bad checks to some of them. Prosecutors say 40 investors lost a total of about $1.6 million in the scheme. Alcaraz pleaded guilty Thursday to one count of grant theft, one count of selling an unqualified security, one county of misrepresentation or omission of a material fact in the sale of a security, five counts of insufficient fund checks, and one count of money laundering. Alcaraz is scheduled to be sentenced Aug. 3 to seven years in state prison.

Source: San Jose man pleads guilty in foreclosure-rescue scam.

Vacant Home Hijacker Dodges Hard Time; Scraps "Adverse Possession" Defense, Cops Misdemeanor Trespassing Plea After Spending 13 Months In County Jail

In West Palm Beach, Florida, the South Florida Sun Sentinel reports:

  • A Palm Beach County man who rented out homes he did not own will not spend any time in prison. Prosecutors dropped felony burglary and theft charges against Carl Heflin in return for him pleading guilty to trespassing, a misdemeanor. Heflin, 52, was released last week from the Palm Beach County Jail, where he had been since his arrest in June 2009.

  • Heflin, of West Palm Beach, tried to take over more than two dozen homes through adverse possession, a centuries-old concept that allowed people to lay claim to abandoned farmland and cottages if they lived there and paid the taxes for a period of years. In recent times, authorities say, the legal doctrine has been misused by squatters and swindlers claiming ownership of vacant and foreclosed homes.


  • In Heflin's case, prosecutors agreed to a plea deal because he had already spent 13 months in jail and "the victims/owners of the foreclosed properties were either unavailable or unwilling to appear for trial,'' Angela Miller, chief of white collar crimes for the State Attorney's Office, said in an email. "The resolution was appropriate under the circumstances.''

  • Heflin filed adverse possession notices with the Palm Beach Property Appraiser and even submitted deeds declaring ownership of 27 properties, records show. Heflin went into several of the homes, changed the locks, opened utility accounts and rented them to tenants.(1)

For the story, see Palm Beach County man spared prison time for renting out homes he did not own.

(1) Reportedly, the owner of one of the homes, Edward Pamplona, told the Sun Sentinel last month that his house was in foreclosure in December 2008, when he returned from a weekend away to find his front door had been removed. Pamplona said Heflin told him he had bought the house. Pamplona said he was skeptical since he had not been notified of any sale but took Heflin's word and temporarily lived in his car before moving in with a relative. The house had not been sold and is still in Pamplona's name, records show.

Texas Judge Gets Five Years Probation For Using Forged Signatures To Obtain Mortgage On Home Owned By Another

In Edinburg, Texas, The Monitor reports:

  • Elsa Municipal Judge Hilda Caceres was sentenced Wednesday to five years of probation for faking required signatures on a $227,000 loan application. An Hidalgo County jury took three hours Tuesday night to convict the suspended magistrate on four counts of forgery after a trial in which she maintained the charges amounted to nothing more than a personal dispute between her and a woman to whom she had sold an Elsa home.


  • The charges against her stemmed from a loan she and her ex-husband, Elsa City Commissioner Cain Caceres, took out in September 2009 to stave off foreclosure on another property they owned. Because the couple was already $700,000 in debt, they used an Elsa home they were in the process of selling to Elsa resident Nora Delgado as collateral.(1)

  • But prosecutors alleged throughout the six-day trial that Hilda Caceres never obtained Delgado’s consent and instead forged the woman’s signature on loan paperwork. She had an employee at the county judge’s office — where she also worked at the time — notarize the documents as if Delgado had signed them in her presence.

For the story, see Judge sentenced for forged signatures on loan documents.

For an earlier report on this story, see Grand jury indicts justice of the peace candidate on forgery charges:

  • Hidalgo County Sheriff Lupe Treviño has said his office’s investigation centers on a piece of real estate that Caceres shares with Nora Delgado and used as collateral for the loan. [...] The seven-count indictment filed Dec. 23 alleges Caceres forged Delgado’s signature on three documents on May 14: a deed of trust, an assignment of leases and rents, and an affidavit of identity.

(1) Presumably, ownership rights to the home in question had already been conveyed by the judge to the victim pursuant to some form of a deferred payment arrangement (ie. contract for deed, owner-financed sale, lease-purchase, or some other similar deal) at the time of the alleged forgeries.

California AG Starts Probe In Effort To Ensure That Tenants In Foreclosed Houses "Aren't Rousted From Their Homes In Violation Of The Law!"

From the Office of the California Attorney General:

  • Attorney General Edmund G. Brown Jr. [] launched an investigation aimed at protecting the rights of the "forgotten victims" of the housing market collapse -- the tens of thousands of tenants facing eviction from buildings that have been foreclosed by banks.

  • "Tenants who live in properties in foreclosure are the forgotten victims of the collapse of the housing market," Brown said. "We'll fight every step of the way to ensure they aren't rousted from their homes in violation of the law." As a part of his investigation, Brown [] sent letters to 24 banks, loan servicers, private investors, and law firms demanding information about whether they are complying with federal, state, and local laws regarding foreclosed properties and their treatment of tenants.

  • More than 20 housing rights and public interest groups from across California have petitioned the Attorney General to take action, citing a "pattern of illegal conduct" and tenant harassment by banks, real estate agents and lawyers attempting to speed up evictions so that foreclosed properties can be sold.


  • In his letter, Brown requires banks, loan servicers, private investors and law firms to provide information by July 19 about their policies and procedures when dealing with foreclosed properties and current tenants. It specifically asks the recipients to outline how they "promote or preserve tenancies after foreclosure".

  • In May 2009, the federal government enacted the "Protecting Tenants at Foreclosure Act" giving tenants new protections, such as the right to stay in their homes for at least 90 days after receiving an eviction notice. While state and local laws also contain strong protections, unlawful evictions and harassment of tenants continue.(1)

For the California AG press release, and the text of his letter to the 24 alleged evil-doers, see Brown Investigates Whether Tenants' Rights Are Violated in Foreclosures.

For more on foreclosures and the rights of tenants, see National Law Center on Homelessness & Poverty: Staying Home: The Rights of Renters Living in Foreclosed Properties.

(1) According to the California AG, the rights of tenants in foreclosed homes and apartments include:

  • Tenants cannot be required to move out of their homes for at least 90 days following an eviction notice.
  • Tenants can insist on staying until the end of their leases. The only exception occurs when the new owner of a single-family home wants to move in.
  • Tenants can require banks and their agents to put all communication in writing.
  • Tenants are not obliged to accept "cash for keys" money to move out sooner than the law prescribes.
  • Harassment, such as improper entry into a person's home, shutting off water and lights, or changing the locks without a court order is illegal.
  • The above rights extend to tenants living in government-subsidized Section 8 housing, who may also have additional protections under state and local laws.

In addition, the state Attorney General points out that if a California city has a "just cause for eviction" law, a landlord must have a specific reason to evict a tenant, and foreclosure may not be recognized as a legitimate basis for eviction. Tenants should check local ordinances.

According to the California Attorney General's office, sixteen cities in California have just cause for eviction ordinances: Berkeley, Beverly Hills, East Palo Alto, Glendale, Hayward, Los Angeles, Maywood, Oakland, Palm Springs, Richmond, Ridgecrest, San Diego, San Francisco, Santa Monica, Thousand Oaks, and West Hollywood.

Monday, July 5, 2010

Current & Former Local Cops, FBI Agent, Two Title/Closing Attorneys Among 13 Bagged by South Florida Feds In Alleged Mortgage Fraud Racket

In Fort Lauderdale, Florida, the South Florida Sun Sentinel reports:

  • When the former chief of the Plantation Police Department got a tip that some in his blue-uniformed ranks were involved in their off-hours in a suspicious real estate scheme, he turned the matter over to a state police agency. The Florida Department of Law Enforcement eventually brought in the feds, and Wednesday, six current and former Plantation police officers, along with an FBI agent, a Lauderhill police officer and others, were indicted by a federal grand jury, accused of being part of a $16 million-plus mortgage investment fraud ring that bought and sold homes with phony documents.(1)

For more, see Plantation police officers, FBI agent indicted in federal mortgage fraud ring.

For the U.S. Attorney press release, see Broward Mortgage Investment Scheme Indicted.

(1) Reportedly, Federal officials said a total of 13 people – including Plantation police officers Daryl Radziwon, 39, of Plantation; Casey Mittauer, 37, of Cooper City; and Joseph DeRosa, 35, of Coral Springs – were actors in the scheme. FBI agent Robert DePriest, 41, of Plantation, who was assigned to the Miami field office, was also named in the indictment, as was Joseph LaGrasta, 32, of Tamarac, a police officer with the city of Lauderhill. Also indicted were two brothers who had served as Plantation police officers but were fired years ago: Joseph Guaracino, 32, and Dennis Guaracino Jr., 34, both of Plantation. A third former Plantation cop, John Velez, 37, of Plantation, who left Plantation in 2007 and joined Hallandale Beach police in 2008, was indicted as well. Hallandale Beach police officials said Velez resigned several months ago. Steven Stoll, a licensed mortgage broker and a licensed attorney, and Stephen Orchard, also a licensed attorney, were also charged in the indictment with participating in the scheme by handling the closings of the fraudulently obtained loans, along with licensed mortgage brokers Matthew Gulla and Rene Rodriguez Jr.

MD Feds: Sticky-Fingered Closing Agent Looted $3.4M In Escrow Cash, Failed To Pay Off Existing Loans In R/E Deals, Leaving Clients Facing Foreclosure

In Baltimore, Maryland, WBAL-TV Channel 11 reports:

  • The target of an 11 News I-Team investigation is currently facing federal charges on accusations that he was part of a mortgage fraud scheme. The federal grand jury's 16-count indictment charged the president of Towson-based Maple Leaf Title, Anthony Weis, with wrongfully using $3.4 million from an escrow account set up by the firm in which the money was supposed to pay off his clients' mortgage loans. The indictment said he used the money for his own benefit.(1)

  • When the I-Team tried to get answers from Weis in January, he said his attorney would not allow him to discuss the allegations against him or his company. Maple Leaf Title was once located at 11 E. Chesapeake Ave. The business left that location, moving to 606 E. Joppa Road before shutting down, I-Team reporter Barry Simms said. The grand jury said Weis took the funds intended for real estate closings and used the money for himself.(2)

For more, see Title Co. President Indicted In Mortgage Fraud Scheme (Anthony Weis Charged With Taking $3.4M From Escrow Account).

See also, The Baltimore Sun: Title agency head indicted on fraud charges (Homeowners were bilked of $3.4 million, federal authorities say):

  • The Maryland Insurance Administration has revoked the licenses or penalized more than three dozen title and settlement companies since 2008, according to The Baltimore Sun's economic columnist, Jay Hancock. He wrote two weeks ago that complaints have jumped from 90 in 2005 to more than 600 last year.(3)

  • In September, the owner of a Severna Park title company was sentenced to seven years in federal prison for bilking homeowners of $3.4 million. And in February, the owner of a Parkville title company was arrested in Palm Beach, Fla., after having been a fugitive for a year while facing federal charges that he defrauded lenders of half a million dollars. His case is pending.(3)

(1) For the U.S. Attorney press release, see Towson Title Agency Operator Indicted In $3.4 Million Mortgage Fraud Scheme.

(2) "This man affected my life and a lot of other victims' lives in so many ways -- financially, emotionally, physically. Stealing our money, not paying off our mortgages and putting us through having to hire attorneys to have to represent us as victims, to getting our homes out of foreclosure because we were put in foreclosure," one victim reportedly said.

(3) See:

(3) Apparently, state lawmakers have been made aware of the closing agent problem in Maryland. See Report of the Commission to Study the Title Insurance Industry in Maryland (February, 2010 - 240 pages).

Racket Recorded Forged Deeds To Steal Homes From Unwitting Owners For Use In Mortgage Fraud Scam, Say Florida Authorities

In Miami, Florida, the South Florida Business Journal reports:

  • Ten South Floridians have been arrested in what authorities say was a criminal mortgage fraud and identity theft operation. It is alleged they defrauded banks out of more than $8 million by using stolen identities to obtain mortgages, according to a news release from Florida Attorney General Bill McCollum’s office. The arrests are the result of a four-year probe. Investigators said straw buyers used the stolen IDs of Florida and New Jersey residents to purchase and flip properties.

  • As part of the scheme, the straw buyers are alleged to have stolen property from legitimate owners by forging a quit claim deed or warranty deed, and then transferring ownership of the property to one of the co-conspirators. A total of 14 properties in Miami-Dade and Broward counties were involved, with most falling into foreclosure as a result.

For the story, see Ten arrested in mortgage fraud scam.

For the Florida Attorney general press release, see Ten Arrested in Multi-Million Dollar Mortgage Fraud and Identity Theft Enterprise.

Feds Indict Trio In Alleged $1.24 Trillion Bogus Lien Extortion Racket Targeting Government Officials, Bank Executives

In Kingston, New York, the Times Record Herald reports:

  • A federal grand jury has indicted three anti-government zealots in connection with an alleged scheme to extort money from Ulster County, three towns and a handful of public employees. The accused men also targeted executives of Mid-Hudson Valley Federal Credit Union, court papers said.

  • The bizarre plot came to light in April, when Ulster County and public workers brought a racketeering case against the alleged conspirators. The suit accused six people of intimidating government employees by sending them fraudulent bills and filing liens against their personal property, totaling $143 billion. Feds pegged the extortion plot at $1.24 trillion.(1)


  • According to the court papers, the stream of phony invoices and fraudulent liens started in 2009, after Ulloa and Parenteau were ticketed in separate incidents for driving without licenses. Ulloa later claimed he had an international driving permit.

  • But rather than hire lawyers and plead their cases in courts, the men and their alleged accomplices unleashed a barrage of fake paperwork, court documents said. Ulloa sent phony criminal invoices totaling $700 million to Rosendale Town Justice Robert Vosper. Parenteau filed a $62 billion federal lien against the Town of Lloyd and its police chief. And when Mid-Hudson Valley Federal Credit Union began foreclosure proceedings on a property Ulloa owned on Van Keuren Highway in Kingston, he filed a $2.82 billion lien against a top bank executive.

For more, see Ulster County men indicted in bizarre anti-government extortion plot (Feds say men sent fake bills, filed liens in $1.24T scheme).

For an earlier story, see Courthouse News Service: Towns, Judges Say They're Being Extorted.

For the civil lawsuit filed earlier this year, see County of Ulster, New York, et al. v. Ulloa, et al.

(1) According to the story, federal authorities arrested two of the men: Richard Enrique Ulloa, 41, of Stone Ridge, faces four counts of mail fraud. Ed George Parenteau, 53, of Chenango County, was charged with mail fraud and conspiracy to commit mail fraud. Ulloa was released on $10,000 bail, but Parenteau remains jailed in Albany County. The third man, Jeffrey Charles Burfeindt, 47, of Highland, is still missing. He faces the same charges as Parenteau. The men were charged with mail fraud because their fake documents were sent through the mail. No charges were filed against the remaining three, who were named in the civil suit.

Countrywide Illegally Steered & Overcharged Blacks, Latinos In Home Financing Transactions, Says Illinois AG In Reverse Redlining Lawsuit

From the Office of the Illinois Attorney General:

  • Attorney General Lisa Madigan announced [] that she has filed a lawsuit against Countrywide, a subsidiary of Bank of America, for unlawfully discriminating against African American and Latino borrowers in home mortgage sales, in violation of the Illinois Human Rights Act and the Illinois Fairness in Lending Act. The Attorney General filed her complaint in Cook County Circuit Court against Countrywide Financial Corporation; Countrywide Home Loans, Inc.; and Full Spectrum Lending, Inc., an arm of Countrywide that mostly sold subprime loans.

  • Madigan’s complaint alleges that the former mortgage giant steered African American and Latino borrowers into risky subprime mortgages more often than similarly-situated white borrowers. The complaint also alleges that minority borrowers paid more for mortgages across Countrywide’s product line, including its prime loans. Significantly, Madigan’s analysis of Countrywide loan data found that the racial disparities could not be explained by objective factors, such as borrowers’ credit scores or debt-to-income ratios.

For the rest of the Illinois AG press release, see Madigan Sues Countrywide For Discrimination Against African American And Latino Borrowers (Alleges African American and Latino Homeowners Paid More for Their Mortgages than They Should Have).

For the lawsuit, see People v. Countrywide Financial Corporation, et al.

Sunday, July 4, 2010

NY AG's Recent Calling Card To Loan Modification Operators Around The Country Warns Of Personal Financial Liability For Officers Of These Outfits

In a cease and desist letter recently sent out to over 180 loan modification outfits, the Office of New York Attorney General Andrew Cuomo offered this friendly admonition to the firms, as well as to the individuals operating these rackets who mistakenly believe they can hide behind their corporate veils to shield themselves of personal financial liability for their actions:

  • Recently, the New York Supreme Court issued a favorable decision in one case filed by this Office, finding that one of the largest foreclosure rescue companies and its president had violated Section 265-b as well as General Business Law §§ 349 and 350.

  • Specifically, the Court found that the company violated Section 265-b by charging illegal, upfront fees for its loan modification services, failing to provide contracts in the language of its customers, especially Spanish, and failing to provide homeowners with the legally required notice of their right to cancel within five business days. The Court also ruled that the company made numerous false claims in its advertisements, including misrepresenting the number of homes it had saved, falsely claiming to have a 90% to 100% success rate, falsely claiming to be "licensed" by a government agency, and falsely claiming that it was affiliated with "legal experts."

  • The decision holds the company's president personally liable for engaging in fraudulent and illegal acts, and permanently prohibits the respondents from engaging in the illegal, fraudulent and deceptive business practices and false advertising described in OAG's lawsuit.

  • I encourage you to review your company’s practices and, where applicable, to cease and desist engaging in any unlawful, fraudulent, or deceptive practices. If you have any questions, please do not hesitate to contact our office at 212-416-8300 or 212-416-8250.

Go here for the NY AG's cease and desist letter.

Cleveland Housing Judge Hands Out $13M In Fines To Pair Of Out Of State Owners Of Dilapidated Real Estate

In Cleveland, Ohio, The Cleveland Plain Dealer reports:

  • Cleveland Housing Judge Raymond Pianka has fined two out-of-state real estate companies about $13 million -- the largest collective fines the court has imposed -- for their persistent failure to fix derelict property conditions. In a pair of blistering decisions, Pianka fined Interstate Investment Group, LLC $11.9 million and Paramount Land Holdings, LLC more than $1 million. The two are sister companies in Gilbert, S.C.

  • He gave the companies until July 19 to pay up. Unpaid fines will be ordered converted to civil judgment so that dollars can be collected and sent to the city's general fund. The decisions covered 13 properties, some that had houses so dilapidated that the city demolished them. Both Paramount and Interstate pleaded no contest. Company officials could not be reached for comment [].

  • In the Interstate ruling, Pianka criticized not just the companies for their offer to contribute no more than $100,000 toward resolving their property violations -- but Cleveland for recommending vastly lower fines than the maximum allowed by law. "Defendant's (and the City's) proposed sentences would allow Defendant to treat its neglect of its properties and the laws of the City as a mere cost of doing business and send the message to others that they too may benefit from wholesale disregard for the laws of the City," he wrote.

For more, see Cleveland Housing Court Judge fines 2 real estate firms about $13 million for neglect.

Struggling HOAs Use "Reverse Foreclosure" To Mitigate Problems Due To Foot-Dragging Lenders Reluctant To Foreclose On Underwater Condos

Lexology reports on a court ruling that came out earlier this year in Florida on the use of so-called "reverse foreclosures" by condominium and homeowners' associations to stick foot-dragging, foreclosing lending institutions with the title to unwanted underwater units. By doing so, the HOAs put those lenders on the hook for the periodic maintenance payments due to the HOAs that they (the lenders) were looking to avoid paying by failing to vigorously prosecute their foreclosure actions in court:

  • In a recent ground-breaking state court decision in Florida, a state particularly hard hit by residential mortgage foreclosures, one court has upheld the HOA’s right to recoup these past due assessments and costs from the lender, despite the fact that the lender has yet to take back title to the delinquent property. In HSBC Bank USA, et al. vs. Keys Gate Community Association, Inc., A Florida Non Profit Corporation, et al., the homeowners’ association successfully introduced a new procedure, dubbed areverse foreclosure.”

  • In Keys Gate Community Association, the homeowners’ association filed and foreclosed its own claim of lien on the delinquent property and acquired title to the property through its own foreclosure sale in April 2007. However, the home-owners’ association could not sell the property because of the lender’s senior priority mortgage. In June 2007, the lender filed its foreclosure against the delinquent property. Yet, two and a half years later, the lender had not completed the foreclosure process. As a last resort to move the case forward, the homeowners’ association set for hearing a summary judgment motion against itself, and asked the court to issue partial summary judgment in favor of the lender and to immediately grant the lender’s request to take title to the unit as stated in the lender’s foreclosure complaint. As part of this procedure, the association waived its rights to the property, and as the current unit owner, waived its rights to a public sale.

  • The court granted the homeowners’ association’s motion, and directed the Clerk of Court to issue a certificate of title immediately transferring ownership of the property to the lender, thus triggering the lender’s requirement to pay its share of past due assessments, legal fees, court costs and all assessments going forward.

  • It is important to point out that the reverse foreclosure procedure can only be filed after a home-owner is out of the picture and the home is legally the property of the homeowner’s association.

  • The use of this new legal strategy saved the Keys Gate Community Association a minimum of eight months or more of bad debt write-offs. Furthermore, given the current logjam of foreclosure cases pending in many state courts. clerks of court have enthusiastically endorsed this new procedure as an effective means of reducing their backlogs. Until the financial crisis subsides and the housing market regains steam, undoubtedly many homeowners’ associations will increasingly use this procedure in their quest to force lenders to take title to financially upside down properties much faster than the lender may have anticipated.

Source: Some lenders may soon be forced to follow through with residential foreclosures. (subscription required; for non-subscribers, TRY HERE - then click link for the story).

For another post on attacking foot-dragging lenders reluctant to foreclose on underwater condos and homes in a homeowners' association, where they are challenged to either take title to the financially upside down unit or release their mortgage, see Foot-Dragging Mortgage Lender Yields To HOA Demand; Abandons Foreclosure On Unwanted Collateral, Releases Security Interest In Condo Unit.