Saturday, September 11, 2010

Lender's Continued Efforts In Foreclosure Eviction Forces Renter File Lawsuit To Enforce Federal Tenant Protection Law

In Roseville, California, KXTV-TV Channel 10 reports:

  • A tenant living in a bank-owned home says the bank is trying to force her family to leave despite a federal law protecting renters in foreclosed homes. Christine Pierce, 29, said OneWest Bank has made multiple attempts through its real estate agent and law firm to get her and her husband and their three-year-old son to move out even though they had a two-year lease with the former owner through July 2011.


  • Pierce sought help from California Sen. Barbara Boxer, whose staff appeared to have stopped eviction proceedings. Boxer's office forwarded Pierce a letter dated July 8 from the U.S. Treasury's Office of Thrift Supervision. "OneWest advised us that after commencing the eviction proceedings, it obtained a copy of the lease between Ms. Pierce and the former landlord. In compliance with the Protecting Tenants at Foreclosure Act, OneWest will comply with the lease and terminate the current eviction attempts," the letter from OTS said.(1)

  • But three weeks later, on July 30, an eviction notice appeared on the front door signed by an attorney from the Endres Law Firm in Davis. News10 attempted to speak to a representative from the law firm by telephone. "We have no comment. Thank you," an unidentified woman said before hanging up.

  • A spokeswoman for OneWest Bank told News10 she would research the case. [...] Pierce hired Sacramento attorney Carla Johansen to block the eviction. Johansen said the Pierce case is not uncommon. "Lenders have been actively lying to tenants about what their rights are as far as being evicted after a foreclosure," she said.(2)

For the story, see Roseville tenant: Bank ignoring foreclosure law.

(1) The Federal Protecting Tenants at Foreclosure Act of 2009 provides important federal protections for tenants in foreclosed properties, including the right to receive 90 days' notice before being required to leave the property and, in many cases, the right to remain for the length of the tenant's existing lease term. The law's expiration date has been extended and is now set to expire on December 31, 2014.

See also:

(2) Reportedly, Pierce said she was threatened with eviction by the bank's real estate agent unless she accepted a $5,000 "cash for keys" offer to move out after the house was repossessed in May. Pierce said they were given 15 days to move, which she found unacceptable, the story states. Pierce provided News10 with a copy of the agent's email. "As of right now you do not have an eviction on your record. If you agree to move ... then the eviction would be put on hold," the agent said. "It's threatening," Pierce reportedly said. "They wanted us out of the house and that was that. I called them and said I had a lease that was good until next year and they said it didn't matter."

Renter In Foreclosed Home Threatened With Eviction Uses Federal Tenant-Protection Law To Stand His Ground & Tell New Owner To Take A Hike

In Lemon Grove, California, KUSI-TV Channel 9 reports:

  • When real estate speculators bought a foreclosure and tried to force the tenant to move out, he called KUSI's Michael Turko. Turko says lots of innocent tenants are now becoming victims of the mortgage crisis, because they don't know their rights.(1)

  • After a foreclosure, big banks and real estate speculators are famous for telling tenants to get out. What they don't tell you is you have a legal right to stay as long as you have a lease. Here's a case where the tenant turned the tables and stood his ground ... and told the new owners to back off!

For more, see Know Your Rights, Stand Your Ground!

(1) The Federal Protecting Tenants at Foreclosure Act of 2009 provides important federal protections for tenants in foreclosed properties, including the right to receive 90 days' notice before being required to leave the property and, in many cases, the right to remain for the length of the tenant's existing lease term. The law's expiration date has been extended and is now set to expire on December 31, 2014.

See also:

"Good Deal" On Recently "Rehabbed" Foreclosure Leaves Novice Homebuying Couple Unpleasantly Surprised, Holding The Bag

In Cincinnati, Ohio, WKRC-TV Channel 12 reports:

  • Many of the homes now on the market got there through foreclosure. Some have been rehabbed before going back up for sale. But, if you're looking at such a home, Troubleshooter Howard Ain is here to show why you have to be very careful.

  • Some rehabbed homes can come with lots of problems. That's what Erin Bohannon-Chenault of Fairfield learned. She and her husband say they thought they were getting a good deal. "All we know is it was a rehab and they had fixed it up. And from what we knew everything was new. They said they had put in new appliances, new water heater, that's what they had told us."


  • Erin says she's now contacting an attorney to see if she can get out of the purchase because she says there were so many problems that were not disclosed. And repairs on the house will run into the thousands of dollars.(1)

For a rundown on the unpleasant surprises that Erin and her husband discovered after moving into their home, see Fairfield Couple's Dream Home Purchase Becomes Nightmare.

(1) If the potential title trouble arising from sloppy and fraudulent paperwork-handling during the foreclosure process isn't enough to scare away those homebuyers looking for a good deal by buying recently foreclosed homes, then certaintly the sloppy and fraudulent "facelifts" masquerading as "rehabs" that some real estate investor-flippers (and possibly some lenders and loan servicers as well) are giving to some of these wrecks might.

And, to the extent that the homes being flipped were built before 1978, you can bet that these flippers, lenders and loan servicers are probably not complying with new Federal rules regulating the repair and maintenance of these homes (effective as of April 22, 2010, and which impose certain training, certification and work practice requirements on activities that disturb lead-based painted surfaces). See EPA's New Lead-Based Paint Renovation, Repair and Painting Requirements Take Effect, which provides one law firm's overview of the new Federal rules, which generally apply to those pre-1978 homes where repair or maintenance activities will disturb 6 square feet or more of interior paint per room or 20 square feet or more of exterior paint. Note that the renovation activities subject to this rule could include electrical work, plumbing, carpentry, and other work that disturbs painted surfaces.

Homes In Foreclosure Limbo Create Health, Safety Concerns For Panhandle Town; Banks Reluctant To Take Title To Unwanted, Critter-Infested Collateral

On the Florida Panhandle, WJHG-TV Channel 7 reports:

  • Some Springfield residents say they've had it with the owners of an abandoned home in their neighborhood. "From what I understand it's been in foreclosure for years. It's been empty for years,” said next door neighbor Cleveland Drayton. Drayton's well-manicured Springfield home sits directly next to the eyesore at the end of the cul-de-sac that nobody wants to take responsibility for.


  • Code Enforcement officials have written “Notice of Responsibility” orders to the owners and contacted the bank holding the mortgage. "The bank gives me the excuse, ‘Well it's not totally theirs until that foreclosure is finalized,’ and up to the day that the judge awards their title back to them, or deed back to the bank, that person can come up and get the money. So they're not willing to spend the money to clean it up. So that leaves it on us to go over there and clean it up,” said Lee Penton of Springfield Code Compliance.

  • Neighbors say they are worried about their health and safety. “We've been seeing a lot of critters now, snakes, rats. I had to take a dead rat out of my neighbor's yard. I got an exterminator to come out here and he said well your big problem is right here,” Drayton said pointing next door.

  • City officials filed another clean up work-order Thursday morning. But officials say they are very short-staffed and it may take a couple weeks before anything gets done. If no one pays the maintenance fee, the city will clean up, and then place a lien on the property. Springfield officials say they have about 30 vacant houses in the same foreclosure limbo.

For the story, see Neighbors Say Abandoned Springfield Home Is Infested With Rats And Snakes (Springfield residents want someone to take responsibility for an abandoned home that is making them worry about their health and safety).

Town To Pursue Criminal Charges Against Developer/Landlord Facing Imminent Foreclosure For Egregious State Sanitary Code Violations At Rental Property

In Framingham, Massachusetts, The MetroWest Daily News reports:

  • Investors interested in bidding on pieces of the failed downtown Arcade redevelopment project gathered [] on Frederick Street, but the bank holding the mortgage postponed a planned auction. As part of foreclosure proceedings, Framingham Co-operative Bank has moved to sell five triple-deckers on Frederick Street and a vacant lot at 80 Kendall St.

  • The town, meanwhile, is pursuing criminal charges against Wellesley project developer Michael Perry for egregious state sanitary code violations at one of those multi-family homes.

  • Inspectors found cockroaches, rodents and safety issues in one apartment Perry has refused to correct, according to an application for a criminal complaint on file in Framingham District Court. The Board of Health said it has found bedbugs and other serious problems in others of Perry's Frederick Street apartments that are on the auction block.


  • The paperwork Board of Health Director Ethan Mascoop filed in district court on July 27 charges Framingham Acquisition with numerous violations of the state sanitary code at 39 Frederick St., Apt. 3. Among them: shock hazards, the rodent and cockroach infestation, improper installations and maintenance, emergency exit issues, general disrepair, inadequate weathertightness, improper lighting and other problems. "It was particularly egregious," Mascoop said. He said Perry was "recalcitrant in complying with our order" to correct the violations.

Source: Framingham auction postponed; landlord faces criminal charge.

Prospective Tenants Now Entitled To "Bedbug Disclosure" From NYC Landlords

In New York City, the New York Post reports:

  • New York City landlords will now have to tell prospective tenants if there's been a history of bedbugs in their building, thanks to a new law that Gov. Paterson signed []. The legislation requires that landlords give all tenant wannabes a disclosure form saying whether or not the building has had any of the bloodsuckers in the last year, said Manhattan Assemblywoman Linda Rosenthal, who sponsored the initial legislation.

  • Even if the apartment that the tenant is going to occupy never had bedbugs, the landlord will be compelled to tell him or her about other infestations in the building, according to the new law. "Nothing is more horrifying than signing a lease after a lengthy apartment search only to discover that your new apartment is bedbug infested," Rosenthal said in a statement.

  • The law applies only to New York [City], which the pest-control company Terminix last week named the most bedbug-infested city in the country.

Source: Sweet dreams: Landlords must disclose bedbugs.

Friday, September 10, 2010

Oregon AG, State Represntative Squeeze Refund Out Of Loan Modification Racket For Elderly Couple Hoodwinked Into Defaulting On Mortgage

In Medford, Oregon, the Mail Tribune reports:

  • A Gold Hill couple may lose their home because of the illegal acts of a Florida-based mortgage consultant now being sanctioned by the Oregon attorney general. 1st Call Consultants, of Boca Raton, Fla., must stop doing business in Oregon and was required to repay $1,500 that Eva and Vern Patterson paid the consulting firm for help modifying their mortgage.


  • Attorney General John Kroger and [state representative Dennis] Richardson were in Medford [] to present a check from 1st Call reimbursing the Pattersons for the illegally collected fee. [... T]he Pattersons plan to meet with ACCESS Inc., which provides foreclosure prevention help through federally approved programs. Richardson said he plans to contact the Pattersons' lender to help explain that the aging couple was "hoodwinked into defaulting" by 1st Call's bad advice.

For the story, see Retirees might lose home in land scam (Oregon attorney general bars Florida firm from doing business in the state).

7 Bagged In Mtg Fraud Scam That Lured Straw Buyers w/ Phony "No Management" Investment Program, Sham Rent-To-Own Offers To Credit-Impaired Tenants

In Northern Ohio, WYTV-TV Channel 33 reports:

  • The Youngstown Mortgage Fraud Task Force and the U.S. Attorney for the Northern District of Ohio are investigating a $7.5 million mortgage fraud scheme involving 48 properties in Mahoning and Trumbull counties. The U.S. Attorney's office indicted seven people, five of whom are from the Valley, Tuesday in connection with the scheme.


  • The indictment alleges that Romero Minor, 51, of Georgia, was the person who spearheaded the scheme along with Wendell Kerr, 62, of Mississippi. They had local loan officers, appraisers and title companies help them commit the mortgage fraud.(1)

  • The indictment alleges that Minor operated a religious organization and investment group known as BFB Investments. Between July 2003 and January 2006, state court documents, Minor recruited investors to purchase several properties, telling them he wanted to help those in the community with bad credit who could not buy homes themselves.

  • The investors were told that after they bought the homes, Minor would enter one-year rent-to-own agreements with tenants so the tenants could improve their credit scores. After a year, he told them, the tenants would buy the homes.

  • "(He said that) during that year period he would make the mortgage payment, he would keep the houses up, he would pay the taxes, all of that," said Assistant U.S. Attorney Mark Bennett. "In reality, Minor did none of that. He didn't pay the mortgages, but for a limited instance, he did not keep the houses up, he did not mow the lawns, etc., etc." [...] "He just takes the extra money and walks away from the properties," said Bennett.

For the story, see 7 Indicted in Valley Mortgage Fraud Conspiracy.

(1) The others indicted were:

  • Title attorney William Helbley, 57, of Poland,
  • Appriaser Timothy Corey, 49, of Youngstown,
  • Loan officer Robert Lunsford, 54, of Hubbard,
  • Appraiser Damon Petrich, 39, of Boardman,
  • Title attorney Michael Wagner, 54, of Canfield.

Title Insurance Unavailability For Would-Be Buyers In Bankrupt HOAs May Make It Nearly Impossible For Unit Owners To Unload Homes & Bail Out

In Phoenix, Arizona, The Arizona Republic reports:

  • Thousands of vacant properties and millions of dollars in unpaid dues are taking their toll on Arizona homeowners associations, and homeowners are paying the price.(1) [...] In the most troubled master-planned communities, generally those in recent high-growth areas [...], delinquencies have reached alarming proportions, placing some HOAs under serious threat of bankruptcy.

  • Should an HOA go bankrupt, prospective homebuyers would not be able to obtain title insurance on the community's homes, making them nearly impossible to buy or sell.


  • Although there are no recorded instances of Arizona HOAs declaring bankruptcy thus far, the home-vacancy problem is widespread enough to cause serious concern, said Steve DeLaveaga, vice president of sales and marketing at Fidelity National Title in Tempe. "There are over 25,000 homes in our state that are just empty, vacant," DeLaveaga said.

  • If an HOA did go bankrupt, the most serious consequence would be the inability of prospective homebuyers to obtain title insurance, required for any home purchased with a mortgage loan, he said. "Title insurers cannot insure a home in an HOA that is bankrupt," DeLaveaga said.

Source: HOA groups in Arizona cutting services, raising fees (Homeowners associations facing own crisis amid foreclosures).

(1) See Chicago Sun-Times: A cure for crumbling condos for the kind of horror stories that have resulted in Chicago, Illinois as a result of financially strapped associations going under.

Homeowners Accuse HOA Of Using Lien Notices To Retaliate For Earlier Suit Charging Association w/ Illegally Amending Rules To Increase Their Control

In Charlotte County, Florida, the Sarasota Herald Tribune reports:

  • Residents in a retirement community here say they are being threatened with lien and foreclosure notices because of a legal battle with their homeowners association. About 50 residents of the Gardens of Gulf Cove, [...] are suing the association that manages the community, and the local board of directors. Their attorney, Barbara Stage, said the board illegally amended association rules to gain greater control over the budget and dues assessments.


  • [R]esidents say that since the suit was filed in March, perhaps 90 homeowners have received "intent to lien" letters over late dues, without receiving bills or late-payment notices.


  • The lawsuit was filed around the time quarterly payments were due, so the timing of the letters may be a coincidence. But Stage said it is common for HOAs to "play dirty" when they are sued, and the lien process is a moneymaker. Resident and plaintiff James McMahon noted that he was charged $256 in attorney's fees. Multiplied by 90 residents, that is about $23,000.

For more, see Homeowners association battle threatens homes.

Nevada AG: Trio Stiffed Strapped Homeowners Seeking Loan Mods After Clipping Them Out Of Thousand$ In Upfront Fees, Filed Liens Based On Bogus Notes

In Las Vegas, Nevada, KLAS-TV Channel 8 reports:

  • The Nevada Attorney General has announced that three people have been indicted for allegedly operating a foreclosure rescue scam in Las Vegas. The AG's office says Doninador Palalay, a.k.a. Dominador Palalay, Marie Tejada Medina and Benjamin Aquino Moraleda III operated a foreclosure rescue business named PDM Financial Group, Inc.

  • The AG says PDM charged around $3,000 for loan modification services and misled customers. They say PDM told customers they could prevent foreclosure and customers could obtain loan modifications. But according to the AG, those services were not performed.

  • Moreover, the state alleges the suspects had their customers sign deeds of trust that gave PDM liens on their customer's homes based on false promissory notes. The AG believes this was done to cloud the home's title to prevent the lenders from foreclosing.

For the story, see Three Indicted in Foreclosure Scam.

For the Nevada AG press release, see Three Indicted In Foreclosure Rescue Scam.

Wisconsin AG Scores $110K+ Default Judgment Against Forensic Loan Audit Outfit That Pocketed Upfront Fees From Consumers

From the Office of the Wisconsin Attorney General:

  • Attorney General J.B. VanHollen announced [] that the Wisconsin Department of Justice has obtained a default judgment of $111,861 against Relief Law Center, Inc., (d/b/a USA Loan Auditors), for violating Wisconsin's consumer protection laws in soliciting purported loan modification services.


  • The lawsuit charged USA Loan Auditors, a California company, with using deceptive and misleading representations in its mail solicitations. The solicitations were designed to appear as though the company was a “loan auditor” investigating the homeowner's lender but it in fact was soliciting purported loan modification services. The judgment was obtained following the failure of the company to file an answer to the complaint. The judgment enjoins the company from further violations and orders $118,861 in forfeitures, penalties, and costs to the State for prosecution.

For the Wisconsin AG press release, see Van Hollen Announces Judgment Against USA Loan Auditors.

Thursday, September 9, 2010

Wells Fargo Cancels Suit, Modifies Military-Related Mortgage Loan For Strapped Navy Vet After Failing To Follow Gov't Rules On VA Foreclosures

In Jacksonville, Florida, First Coast News reports:

  • [Nancy] Gemmill lived in the home 17 years and never missed a single payment. She owed $49,000 on the home when she lost her job because of health problems. Gemmill used her 401(k) at first to keep up the house but then that ran out, then she called Wells Fargo, asking for help to restructure her payments.

  • "I did everything they said by the book. You need to fill this out, fill that out. I was getting absolutely no response from them. I was at my wits end, didn't know what to do."

  • Gemmill is a retired Navy veteran whose home was purchased with a military loan, which is set up differently than regular loans. "There's special protection put in place to protect the veteran. There's specific rules a mortgage company must follow before they can foreclose on that loan and they didn't follow those rules," said Cronin.

  • So Gemmill and her attorney started to fight back. Recently, a letter came in the mail for Gemmill from Wells Fargo, which notified her it was volunteering to dismiss the case. Gemmill was in shock and was also relieved. She said Wells Fargo also has restructured her payments so she can get back on track. "There will be another 17 years in that house," said Gemmill. Who is already unpacking boxes and settling back in to her home.

For the story, see Jacksonville Woman Fights Wells Fargo on Foreclosure - and Wins.

Cops: Man Used Sheriff's F'closure List To Target Homes In Appliance Thefts; May Have Needed Cash To "Buy Down" Jail Time In Prior Escrow Funds Ripoff

According to various Indiana media reports:

  • Former I[ndiana] U[university] basketball player Todd Leary was arrested [] for allegedly stealing appliances from foreclosed homes in Hamilton County. [...] Leary, 39, Carmel, is accused of stealing appliances from foreclosed homes with the help of two cohorts and selling the appliances to Big Al's Superstore in Indianapolis, said Jeff Wehmueller, administrative chief deputy for the Hamilton County prosecutor's office. Leary used the sheriff's foreclosure listings to target homes he thought were unoccupied, but on at least one occasion, a home was still occupied, Wehmueller said.


  • Warrants were issued for Leary and the other two men identified by police. Leary turned himself in on Wednesday. The others, Gregg Campbell, 50, and Eric Campbell, 44, both of Indianapolis, are already incarcerated in the Marion County Jail on unrelated charges.


  • In July, Leary pleaded guilty to a felony charge of misappropriating title insurance escrow funds in Fort Wayne.


  • His agreement with Allen County prosecutors [in the title insurance escrow ripoff case] called for him to face up to three years in prison, with that cut in half if he pays nearly $295,000 in restitution before a sentencing hearing in October. Prosecutors said Leary worked for a title insurance broker who pleaded guilty in a $2.7 million fraud case.(1)

  • Leary played for Indiana during 1989-94 and was an analyst for IU's radio broadcasts when he was arrested [in the title insurance escrow ripoff case] in February, right before a game against Purdue.

For the stories, see:

(1) See Judge Unsympathetic To "Poor Business Decisions" Defense As Title Agent Gets 11+ Yrs For Looting Escrow Cash; 15 Refin'cing Homeowners Left w/ 2 Loans.

Southern California Prosecutors Refile Charges In Foreclosed "Monster House" Fixture Stripping Case

In Encinitas, California, North County Times reports:

  • Prosecutors have refiled charges against the woman accused of stripping $1 million worth of lavish fixtures from the foreclosed home her Encinitas neighbors dubbed the "monster house," according to a deputy district attorney. Suzy Brown is scheduled to be arraigned on grand theft and felony vandalism charges in Vista on Sept. 23, Deputy District Attorney Robert Eacret said. [...] Authorities said Brown built the 15-bedroom, 16,000-square-foot home in 2004 to be a rehab center. The city nixed the plan and the home fell into foreclosure.

For the story, see Charges refiled in "Monster House" case.

Go here for earlier posts on the "Monster House" fixture stripping case.

Family Gets 1-Day Notice Of Pending Foreclosure Sale After Being Stiffed By Suspected Out-Of-State Loan Modification Racket

In Lewisburg, Tennessee, WSMV-TV Channel 4 reports:

  • The Vetter family in Lewisburg first learned their house was being auctioned on the courthouse steps when they read it in the newspaper the day before. They’d paid a home loan modification company to help them avoid foreclosure, but later discovered the company had hundreds of complaints against it for doing nothing to help the consumers who had paid them.


  • They turned to a company called Premier Legal Advocates and paid it a fee of $998 upfront to negotiate a lower mortgage payment for them. They found out too late it isn't a real law firm.(1) Hundreds of former clients have posted comments on consumer websites claiming they lost their houses to foreclosure because Premier never contacted their mortgage companies.

  • [Kathrynne] Vetter said her mortgage company had never heard from Premier Legal Advocates. The company, which is based in California, has an F rating with the Better Business Bureau. The owner is listed as Brian Pascal, a man who the Better Business Bureau said has owned several similar companies in the past.

For the story, see Family Loses Home With 1 Day's Notice (Couple Blames Loan Modification Company).

(1) By using the word "legal" in the name of their business, Premier Legal Advocates arguably misrepresented that consumers would receive professional services associated with legal counsel. The Ohio Attorney General has recently taken this position in an unrelated lawsuit involving an outfit allegedly running a racket targeting the infirm elderly. See Cordray Sues Duo who Targeted Seniors with Medicaid Ploy.

BofA's "Deed-In-Lieu" Mail Solicitation After Approving Loan Modification Leaves Couple Confused, Upset; Bank Speechless When Asked To Explain Letter

In Thornton, Colorado, KUSA-TV Channel 9 reports:

  • Chris Carpenter says he has paid his mortgage on-time for the nearly seven years he has owned his home. [...] But Friday, Carpenter said his wife brought a letter from the mailbox from his mortgage lender, Bank of America, that baffled the couple. "She was crying," he said. "She was upset."

  • The letter was "deed-in-lieu of a foreclosure" solicitation from Bank of America, saying the family needed to take immediate action to prevent foreclosure. If the Carpenters would sign over the deed to their home, the letter stated, Bank of America would give the couple $3,000 relocation assistance, and save them from the credit nightmare of a foreclosure. Carpenter would also lose any equity built up in his home.

  • "She couldn't understand why we were being singled out like this," Carpenter said. Carpenter and his wife were approved through a loan modification with Bank of America after her layoff, but he said they paid their mortgage on-time, every month, and sent in all the necessary paperwork the bank required. "We have paid," he said. "We have done exactly what they wanted." Monday, no one at Bank of America could explain why Carpenter received the letter.(1)

For more, see Couple confused about bank's request for deed to home.

(1) Bank of America has stepped up its solicitation for "deed-in-lieus" this year, according to its quarterly impact report, the story states. Citibank also reportedly is doing the same. See Citibank Says If Borrowers Return the Deed of Their Property, They May Stay on For 6 Months.

Cops: Developer Pocketed $410K From Buyer For Condo In Project That Was Never Built; Faces Grand Theft Charges After Allegedly Refusing To Refund Cash

In Flagler Beach, Florida, WJXT-TV Channel 4 reports:

  • A Flagler Beach developer was arrested [...] on a charge of grand theft in excess of $100,000 in connection with a fraudulent real estate purchase. John Boback Sr., 51, is accused of taking $410,000 from a Marco Island man in the sale of a condominium on North Oceanshore Boulevard. Investigators said although Boback received the money, the man who purchased the condo received only a deed for the unit, and the structure was never built.


  • In October 2009, South Florida resident Patrick Lyons, 55, told investigators that between August and December 2006, he paid Boback for a condominium unit that was to be part of a professional complex on State Road A1A. Lyons said when he realized the property had not been developed, Boback would not refund his money, investigators said. The property is presently in foreclosure. [...] "He never turned a shovel of dirt," said Cpl. Nate Flach, a detective with the Flagler County Sheriff's Office, in a news release.

For the story, see Developer Charged With Grand Theft (Man Accused Of Taking $410,000 In Condo Sale).

Wednesday, September 8, 2010

Minnesota Lawmakers Create Notice Requirements In Effort To Reduce Rescue Scams, Foreclosure Sale Surplus Swindles, Redemption Rights Ripoffs

Lexology reports:

  • The Minnesota Legislature has implemented new notice requirements to ensure that owners or borrowers of properties subject to foreclosure are properly informed of their rights. These requirements apply to properties with one to four dwelling units, one of which is owner occupied at the beginning of a foreclosure.

  • Foreclosure Advice Notice. Whenever a property is to be foreclosed, Minnesota law requires a foreclosure advice notice to be included with a notice of foreclosure. The template for the foreclosure advice notice has been modified to include the contact information for the U.S. Department of Housing and Urban Development. A template of the foreclosure advice notice can be found in Minn. Stat. §580.041(2).

  • Notice of Redemption Rights. In addition to the foreclosure advice notice, Minnesota law now requires a notice of redemption rights to be delivered with a notice of foreclosure. The purpose of this new law is to avoid abuse based on ignorance of redemption rights. Specific requirements for typeface and printing, as well as a template of the notice of redemption rights, are provided in Minn. Stat. §580.041.

  • Notice of Results of Sale. Minnesota law now requires a notice of results of sale to be provided to an owner or borrower of a property subject to foreclosure. The law applies to any party attempting to purchase the property after it has been auctioned at a foreclosure sale, but before the end of the redemption period. Minn. Stat. §580.06(2). This notice is required for all foreclosure sales conducted between August 1, 2010, and December 31, 2012.

For more, see Notice requirements (subscription required; if no subscription, TRY HERE - then click for the story).

California Lawmakers Move To Squelch Deed Service Ripoff; Bill Awaits Schwarzenegger Sign Off

In Los Angeles, California, KABC-TV Channel 7 reports:

  • A few weeks ago Eyewitness News warned you about a new scam. That report caught the eye of one [California] state legislator who introduced a bill to stop the scam. That bill is now about to be signed into law.


  • "We had homeowners being scammed out of hundreds of dollars for getting a document that they really don't need, because they probably already have it in their files, and two, that they can get it for about $10 instead of paying $200 for it," said [California State Assemblyman Ted] Lieu.

  • The letter from the Title Compliance Office, which doesn't exist officially, is trying to get you to use their services to get a grant deed for your home. The letter makes it sound like your home could go into foreclosure without the deed. But by signing up you'll have to pay $157 or more, and they want you to act right away.


  • The bill is expected to be signed into law by Governor Arnold Schwarzenegger in the next week or two. If you think you need a copy of your grant deed, you can get one through one your county's website.

For more, see Avoid deed scams - go straight to county site.

Foreclosing Lender Agrees To Last Minute Sale Cancellation As Media Exposure Leads To Questions Regarding Bank's Lack Of Standing To Bring Suit

In Norfolk, Virginia, The Virginian-Pilot reports:

  • Hope was beginning to fade last week that Michele McBeth could save her Bayview home from foreclosure. The Norfolk elementary school teacher had been working for weeks with a foreclosure-prevention counselor, and spent hours going through financial documents, filling out paperwork and pleading with her mortgage company to cancel the auction. But Wells Fargo Home Mortgage offered no help, and the Aug. 27 sale date loomed.


  • McBeth contacted Newport News attorney and state Del. Robin Abbott, who had offered to help for no charge after reading [about her story in an Aug. 16 Virginian-Pilot] article. Abbott, who specializes in consumer and mortgage law, scheduled an emergency hearing with a judge to stop the foreclosure. She also called the Richmond attorney hired to handle the foreclosure to point out what Abbott believed were several missteps in the process.

  • "We had some conversations - that I didn't believe he had standing to bring the foreclosure," Abbott said. Among the problems, she said, was that the attorneys had not been hired by McBeth's current mortgage company, Wells Fargo. The attorneys, instead, had been hired by EverHome Mortgage Co., which had transferred the servicing of the loan to Wells Fargo before foreclosure proceedings began.

  • On Aug. 25, the attorney handling the foreclosure agreed to postpone the sale. A new date has not been set. In the meantime, Abbott is preparing to file a lawsuit alleging mishandling of McBeth's case.

For the story, see Norfolk homeowner narrowly averts foreclosure.

Novice Homebuyers Left Facing Foreclosure Despite Having Made All Their Payments As Builder Allegedly Fails To Pay Off Construction Loan

In Brownsville, Texas, KGBT-TV Channel 4 reports:

  • Nearly 30 families in Brownsville may soon be homeless. Their entire subdivision will be auctioned off is less than two weeks. Residents at the Northeast Estates subdivision in Brownsville received a letter letting them know their properties will be auctioned off by Cameron County [...].

  • "Out of 180 about 80 one going to be auctioned off it appears," Francisco Gonzales told Action 4 News. "This section was never notified of any type of pending land issues or anything of that sort we found out by mere chance."

  • According to court documents, developer Landmark Valley Homes did not pay Inter National Bank in McAllen for dozens of lots at the subdivision and in total they owe a little more than $4 million dollars.(1)

For the story, see Nearly 30 Brownsville families to lose their homes.

See also KRGV-TV Channel 5: Some Brownsville Families Fighting for Their Homes.

For story follow-up, see KRGV-TV Channel 5: Brownsville Neighborhood Saved:

  • Folks who live in a Brownsville neighborhood say a sale to auction off their properties was canceled. Attorney Alex Begum stepped in to help. He spoke with the manager of Inter National Bank in McAllen and came to an agreement. The bank will take over the balances owed by Landmark Valley Homes.

  • The home building company put dozens of families in a bind, by not paying a $4 million debt. The majority of homes will be re-financed. About 50 homes in the North East Estate subdivision were set to be auctioned off [...]. However, the foreclosure sale has been stopped. Begum says he represented 26 people free of charge. He worked to get a global agreement that would keep everyone's home safe.

(1) My surmise is that the builder used a land contract/contract for deed arrangement with each of the unwitting homebuyers where they agree to make a downpayment and subsequent monthly payments directly to the builder. The builder, in turn, transfers possession of the homes to each of them subject to his gigantic construction (or possibly, acquisition) mortgage that's owed to the bank and agrees (either explicitly or implicitly) to apply the payments collected from the buyers to said loan until fully paid, at which point each homebuyer gets the home title. They, in all likelihood, were unfamiliar with real estate transactions, presumably failed to obtain a title search and title insurance protection, and were all caught flat-footed when the builder decided to pocket their payments, stiff the bank, and allow the lender to foreclose on the land out from under everyone.

Federal Judge Ruling Favorably For BofA In Utah Foreclosure Challenge May Have Conflict Of Interest: Report

In Salt Lake City, Utah, KTVX-TV Channel 4 reports:

  • "They're foreclosing illegally here in Utah.” Those were the words of St. George Attorney John Christian Barlow spoken in early June. Barlow at the time had appeared before a Federal Judge arguing that the banking giant, Bank of America, was foreclosing illegally in the State of Utah. The Southern Utah Attorney believed that because B.O.A. was not a registered business or corporation in the state, they lacked authority to do business here. Barlow had succeeded in getting a 5th Circuit Court Judge to agree with him. As a result, the judge imposed an injunction on all Bank of America foreclosures.

  • Weeks later, the case went before a Federal Judge where B.O.A. argued that they were regulated by federal, not state laws. Federal Judge Clark Waddoups heard the case, and threw out the injunction therefore Bank of America’s foreclosure company (ReConTrust) was allowed to foreclose once again.

  • After the decision, ABC4 got a tip about the case and started digging. Our tipster said that Judge Waddoups may have a conflict of interest in hearing the B.O.A. cases. Why? Because Judge Waddoups' old law firm represents Bank of America. We checked into Waddoups background, and found that the Federal Judge did work for Parr, Brown, Gee & Loveless for nearly 30 years. ABC 4 also found that Waddoups, as of 2008, drew a pension from the law firm. ABC 4 placed a call to the firm, but they wouldn’t comment if the former firm partner had ever handled B.O.A. cases.

For more, see Conflict of Interest? ABC 4 investigates judges' ties to Bank of America.

Tuesday, September 7, 2010

Fla. Rocket Dockets' Use Of Retired Judges To Steamroll Homeowners In Foreclosure Leave Advocates Crying Foul As "Standing" Issues Are Often Ignored

The New York Times reports:

  • No one disputes that foreclosures dominate Florida’s dockets and that something needs to be done to streamline a complex and emotionally wrenching process. But lawyers representing troubled borrowers contend that many of the retired judges called in from the sidelines to oversee these matters are so focused on cutting the caseload that they are unfairly favoring financial institutions at the expense of homeowners.

  • Lawyers say judges are simply ignoring problematic or contradictory evidence and awarding the right to foreclose to institutions that have yet to prove they own the properties in question. “Now you show up and you get whatever judge is on the schedule and they have not looked at the file — they don’t even look at the motions,” says April Charney, a lawyer who represents imperiled borrowers at Jacksonville Area Legal Aid. “You get a five-minute hearing. It’s a factory.”


  • The [Rodney] Waters case offers an example of how wrong things can go in complex foreclosure cases. While AmTrust, a failed Ohio bank that is now a division of New York Community Bank, said it owned the note and could foreclose, Mr. Waters’s lawyer produced documents showing that Fannie Mae, the taxpayer-owned mortgage finance giant, was really the owner. In spite of the conflicting evidence, Aaron Bowden, the retired judge overseeing the case, made a summary judgment on Aug. 3, ruling that the property should go back to AmTrust. Mr. Bowden did not return phone calls seeking comment.

  • Chip Parker, managing partner at Parker & DuFresne in Jacksonville, which represents Mr. Waters, said: “The threshold issue in any foreclosure case is who has the right to foreclose. We presented evidence to the judge that Fannie Mae owns the note and mortgage, and yet the judge ignored this crucial evidence.”

  • Mr. Parker is concerned that some homeowners are victimized by the system. “What we are talking about is railroading homeowners through the rocket docket,” he added. When contacted by a reporter on Thursday, a spokeswoman for Fannie Mae confirmed that it owned the note. David Tong, the lawyer representing AmTrust in the case, declined to comment on the matter. But on Friday, he did an about-face, filing papers with the court acknowledging that Fannie Mae owns the note.


  • Setting up discrete foreclosure courts statewide was seen as a way to help deal with the issue; consumer law experts say they aren’t aware of any other state that has set up a temporary court to work down such a backlog.

  • But it is paradoxical, say lawyers representing homeowners in the cases, that Florida’s attorney general acknowledges problems in the cases while retired judges, intent on reducing caseloads, seem unconcerned about those same problems — like flaws in the banks’ documentation of ownership.

For more, see Florida’s High-Speed Answer to a Foreclosure Mess.

Convicted Foreclosure Rescue Scammer Could Face Life Sentence On New Charges In Alleged Sale Leaseback, Equity Stripping Ripoff That Fleeced 5 Victims

In Los Angeles, California, The Los Angeles Times reports:

  • Timothy Barnett spent nearly five years in state prison for a 1990s foreclosure rescue scam in which he conned homeowners out of tens of thousands of dollars. Now, prosecutors say, he has been at it again, targeting residents in the same South Los Angeles neighborhood he fleeced before.

  • But this time, the state is unleashing one of its more powerful weapons against him. The Los Angeles County district attorney's office has charged Barnett under California's much-debated three-strikes law. Usually aimed at offenders with a history of violent crime, it is rarely used for white-collar offenses such as fraud.

  • Arrested in April, the 47-year-old Barnett is charged with 23 felonies — including theft from the elderly, identity theft and real estate fraud — for allegedly tricking five people into unknowingly granting him title to their homes.(1) He has pleaded not guilty. Some experts said the case would be one of the first times a person charged with a white-collar crime was prosecuted under the state's three-strikes law. If convicted, Barnett could face life in prison.


  • He is charged with tricking victims — who said they thought they were refinancing their delinquent mortgages — into selling him their homes for a fraction of their value.(2) By the time prosecutors began looking at Barnett again, he had bought a $3.1-million home in Orange County and three Mercedes-Benz vehicles.


  • In addition to the five cases that are the subject of the criminal case, several others are described in civil lawsuits filed against Barnett. [...] "He'd look for homes that had a lot of equity and people that were vulnerable," said Patrick Dunlevy of the Los Angeles-based Public Counsel Law Center,(3) which has filed lawsuits on behalf of several people who said they had lost their homes to Barnett. "He would bill himself as a Christian, say he was doing God's work. That resonated very well with the people he was approaching.... It was all a con, just a way to get them to trust him."

For more, see Man accused of fraud may get life in prison under California's three-strikes law (The stiff penalty is rarely used against white-collar criminals. Timothy Barnett is charged with 23 felonies for allegedly tricking five people into unknowingly granting him title to their homes).

(1) According to the story, prosecutors also charged him with burglary because he met with his victims in their homes. Under California law, a person can be convicted of residential burglary for entering someone's house with the intent to commit a felony, even if he or she enters with the homeowner's permission, the story states.

(2) California case law appears to clearly support the proposition that, at least in the context of a criminal prosecution, tricking people into unknowingly signing over the title to their homes constitutes the crime of forgery. See:

Buck v. Superior Court, (1965) 232 Cal.App.2d 153 (case law links may require free registration at

  • Where a person who has no intention of selling or encumbering his property is induced by some trick or device to sign a paper having such effect, believing that paper to be a substantially different instrument, the paper so signed is just as much a forgery as it would have been had the signature been forged. (Conklin v. Benson, 159 Cal. 785, 791 [116 P. 34, 36 L.R.A. N.S. 537]; Wright v. Rogers, 172 Cal.App.2d 349, 362 [342 P.2d 447].) An encumbrance may be the subject of forgery. (Conklin v. Benson, supra, page 792.) The crime of forgery is complete when one makes or passes an incorrectly named instrument with intent to defraud, prejudice, or damage, and proof of loss or detriment is immaterial. (People v. McAffery, 182 Cal.App.2d 486, 493 [6 Cal.Rptr. 333]; People v. Morgan, 140 Cal.App.2d 796, 800 [296 P.2d 75].) Whether the instrument forged has independent value is unimportant; the crime is complete when the act is done with the requisite intent.

People v. Martinez, (2008) 161 Cal. App. 4th 754; 74 Cal. Rptr. 3d 409:

  • [A] a forgery conviction can be based on a document with a genuine signature.

See More On Property Owners Being Tricked Or Deceived By Scammers Into Signing Documents for a sampling of additional California case law in this regard.

Further, California case law has clearly addressed the notion some scammers appear to operate under in that they can insulate themselves from criminal prosecution when targeting their victims simply by entering into legitimate-looking business contracts when screwing them over. See (bold text is my emphasis, not in the original text; case law links are found at - may require free registration):

People v. Frankfort, (1952) 114 Cal.App.2d 680, 700; 251 P.2d 401:

  • The simple answer to this argument is that "The People prosecuting for a crime committed in relation to a contract are not parties to the contract and are not bound by it. They are at liberty in such a prosecution to show the true nature of the transaction." (People v. Chait, 69 Cal.App.2d 503, 519 [159 P.2d 445]; People v. McEntyre, 32 Cal.App.2d Supp. 752, 760 [84 P.2d 560]; People v. Jones, 61 Cal.App.2d 608, 620 [143 P.2d 726]; People v. Pierce, supra, p. 605.)

People v. Jones, 61 Cal.App.2d 608, 620 [143 P.2d 726]:

  • Defendant argues that the deal with each "seller" was a civil transaction; [...] Cloaked in the draperies of his corporation and pretending to act in its behalf, he boldly approached his unsuspecting victims.


  • Although each deal in its incipiency bore the color and trappings of a normal, civil contract, yet when subjected to a postmortem it exhaled the stench and disclosed the carcass of a fraud. (People v. Epstein, 118 Cal.App. 7, 10 [4 P.2d 555].) There appears no sign of good faith at any turn. Each taking and appropriation was a grand theft.

  • The use of the corporate name and the promises made in accomplishing his purpose were a camouflage of such common variety that no excess of genius was required to discern the fraud. Parol evidence of all that occurred was admissible to show the intention of defendant. (People v. Robinson, 107 Cal.App. 211, 221 [290 P. 470].)

(3) Public Counsel is a Los Angeles-based, pro bono public interest law firm that, according to their website, delivers free legal and social services to the most vulnerable members of our community, including abused and abandoned children, homeless families and veterans, senior citizens, victims of consumer fraud and nonprofit organizations serving low-income communities. They are the public interest law office of the Los Angeles County and Beverly Hills Bar Associations and the Southern California affiliate of the Lawyers' Committee for Civil Rights Under Law.

F'closure Rescue Operator At It Again As DC AG Slams Sale Leaseback Peddler w/ Suit Seeking To Void Title Transfers Violating Consumer Protection Law

From the Office of the District of Columbia Attorney General:

  • Attorney General Peter Nickles announced [] that the District has filed a Superior Court enforcement action against Vincent L. Abell, charging that he engaged in foreclosure rescue transactions that violated the District’s consumer protection law. The District’s complaint asks the Court to rescind the unlawful transactions.

  • According to the District’s complaint, Abell misled homeowners into believing that they were being offered loans that would prevent them from losing their homes to foreclosure. Instead, Abell had the homeowners sign documents that transferred the homes’ titles to him and converted the homeowners into Abell’s tenants.

  • Through these transactions, Abell obtained all of the equity in the homes for only a small fraction of its value. The homeowners victimized by Abell’s practices have typically been financially unsophisticated and desperate to save their homes from foreclosure. “We will not allow District homeowners to be preyed upon in this way,” Attorney General Nickles said.(1)(2)

  • The District has also alleged that Abell sold condominium apartments in DC without posting the bonds or letters of credit required by District law.

For the DC AG press release, see Attorney General’s Office Files Action Against Foreclosure Rescue Scam.

See also WTTG-TV Channel 5: DC Files Enforcement Action Against Foreclosure Rescue Scam, which also includes the story of DC resident Maria-Theresa Wilson, who was screwed over by Abell a couple of years back. She ended up suing him and scored a $3.3 million judgment against him, his company and a confederate named Calvin Baltimore. The judgment was upheld on appeal in a recent ruling. See Modern Mgmt Co. v. Wilson, 997 A.2d 37; 2010 D.C. App. LEXIS 283 (D.C. June 3, 2010).

(1) A 1988 ruling of the District of Columbia Court of Appeals lends support to the proposition that a home equity ripoff involving a sale of real estate with a contemporaneous leaseback of the premises to the seller, coupled with a right to buy back the property may be nothing more than a disguised usurious equitable mortgage masquerading as a true sale. See Browner v. Dist. of Columbia, 549 A.2d 1107 (D.C. 1988)(bold text is my emphasis, not in the original text; [alterations] added:

  • Moreover, if the transactions were in fact sales, as [the foreclosure rescue operators] contend, they were surely most extraordinary ones. When a homeowner sells his home, which is usually his most valuable possession, one would expect at least some measure of bargaining over the sales price. Here, there was none. In each instance, what the [foreclosure rescue operators] characterize as the "sales" price bore no relation whatever to the value of the equity. It is absurd to suggest that Mrs. Carroll would knowingly sell her home, in which she had an equity of more than $36,500.00, for $8,100.00. None of the "sellers" had placed his or her home on the market or expressed the slightest interest in selling it. Each "seller" remained in possession after the purported sale, and [the foreclosure rescue operators] were indeed depicting their service as one that would enable their clients to "save" their homes from foreclosure. Although the transaction also lacked one of the common characteristics of a loan -- an evaluation of the borrower's credit -- no such investigation was needed because the home itself, which in each case was worth far more than the amount expended by the [foreclosure rescue operators], served as their security.

  • It was therefore altogether reasonable for the trial judge to find that the depiction of each of these transactions as a sale and lease back was a transparent sham which masked an unlawful loan.

(2) For other stories on Vincent Abell and his foreclosure rescue racket, see:

Sentencing Postponed For Head Of Southern California Land Patent Foreclosure Rescue Scam

In San Diego, California, KGTV-TV Channel 10 reports:

  • Sentencing was delayed Thursday for a man convicted of defrauding homeowners by falsely telling them that for a price, he could provide them with "land patents" that would protect their properties from foreclosure. Larry Smith, 62, was found guilty in June of 21 felony counts, including grand theft and unlawful practices by a foreclosure consultant.

  • After the trial, Smith fired his attorney and hired another to consider seeking a new trial, according to Deputy District Attorney Marlene Coyne. [...] Smith -- who has prior convictions for second-degree murder, robbery and burglary -- faces a "very lengthy" prison term when he is ultimately sentenced, the prosecutor said. Smith and others tricked homeowners into paying them thousands of dollars for land patents that in fact did not stop their homes from being foreclosed on.

Source: Sentencing Delayed For Foreclosure Protection Scammer (Larry Smith Was Convicted Of 21 Felony Counts).

Florida Court Clobbers Foreclosure Mill With $49K Contempt Citation; Continuous Failure To Appear At Hearings w/out Giving Notice Raises Judge's Ire

In Manatee County, Florida, the Sarasota Herald Tribune reports:

  • A circuit judge singled out a Fort Lauderdale foreclosure firm on Monday, finding its business model violates legal ethics and leveling a $49,000 fine for scheduling hearings and then not showing up in court.

  • In a judicial district that has taken a hard line on fraudulent or messy foreclosure filings, the judge's ruling is the first time a court officer has openly attacked the methods of one of the firms responsible for thousands of foreclosures statewide.

  • Circuit Judge Janette Dunnigan scolded five lawyers from the Smith, Hiatt and Diaz firm in connection with a Manatee County foreclosure case filed in 2007. The firm is one of several "foreclosure mills" filing thousands of foreclosure cases monthly. The firm's attorneys filed what amounted to "sham" paperwork setting seven hearings over two years, and then failed to appear in court or tell the judge or other parties when they were canceled. The case is still unresolved.


  • Dunnigan brought the contempt of court herself, and threatened to push forward on a criminal contempt of court against the attorneys. [...] The firm will be fined $7,000 a day until [the firm] provides Dunnigan with a description of a new policy that attorneys cannot set hearings without having all documents ready. Also, every lawyer in the firm must sign documentation that they understand the new policies. The firm must also review all cases scheduled in Manatee County and have the attorney that will appear at that hearing sign a paper that they will do so.


  • The case turned out well for the homeowner. The law firm voluntarily dismissed the case, and must pay the owner $450 in lost wages for showing up at the last hearing.(1)(2)

For more, see Judge fines major legal firm for foreclosure conduct (Lawyers to pay $49,000 for not showing up at scheduled hearings).

(1) The homeowner may also be able to recover any legal fees paid or due to his/her attorney by asking the judge to order the foreclosing lender to cough up the cash. See Landry v. Countrywide Home Loans, Inc., 731 So. 2d 137 (Fla. 1st DCA 1999):

  • The general rule is that "when a plaintiff voluntarily dismisses an action, the defendant is the prevailing party." See Thornber v. City of Ft. Walton Beach, 568 So. 2d 914, 919 (Fla. 1990). Further, "it is well established that attorney's fees are properly awarded after a voluntary dismissal where such award is provided for by statute or agreement of the parties." See Century Construction Corp. v. Koss, 559 So. 2d 611, 612 (Fla. 1st DCA 1990), review denied, 574 So. 2d 141 (Fla. 1990). See also Boca Airport, Inc. v. Roll-N-Roaster of Boca, Inc., 690 So. 2d 640, 641 (Fla. 4th DCA 1997), review dism'd, 698 So. 2d 543 (Fla. 1997)("for purposes of a prevailing party attorney's fees statute, a voluntary dismissal by the claimant makes the opposing party a 'prevailing party' as to the issue of entitlement to fees").

In Florida, where an agreement allows for an attorney fee award to one of the contracting parties, state statute mandates an award of prevailing party attorney's fees to the other party under the reciprocity provisions of section 57.105(7), Florida Statutes; Landry, supra. (Mortgages almost always contain a provision that allow a lender to tack on its legal fees to the amount owed by the borrower when bringing litigation to enforce its rights. Accordingly, by reason of section 57.105(7), the homeowner likewise would be entitled to a recovery of his/her attorney's fees from the losing lender).

See also Attorney Fee Awards For Successful Foreclosure Defense In Florida.

In addition, in this case, the law firm possibly may also be ordered to ante up part of the homeowner's legal fees by reason of section 57.105(1), Florida Statutes:

  • Upon the court’s initiative or motion of any party, the court shall award a reasonable attorney’s fee, including prejudgment interest, to be paid to the prevailing party in equal amounts by the losing party and the losing party’s attorney on any claim or defense at any time during a civil proceeding or action in which the court finds that the losing party or the losing party’s attorney knew or should have known that a claim or defense when initially presented to the court or at any time before trial:

    (a) Was not supported by the material facts necessary to establish the claim or defense; or

    (b) Would not be supported by the application of then-existing law to those material facts.

In a peripherally related article (added 9-22-10), see The Florida Bar Journal: Pleading Requirements for a Claim for Attorneys' Fees.

(2) The Court reportedly awarded Barrington Ridge Homeowners Association, Inc., the association in which the property in foreclosure is a part of and which presumably holds a lien (subordinate to the foreclosing lender's mortgage) for unpaid HOA fees, its attorneys' fees from the filing of its Motion to Compel the Bank to Proceed with Foreclosure to the present, according to a press release issued by the association's law firm. See Becker & Poliakoff Applauds Manatee County Circuit Court Judge's Order Imposing Fines Against Bank's Foreclosure Law Firm.

Monday, September 6, 2010

Mortgage, Consumer Fraud Litigation To Skyrocket With Passage Of Wall Street Reform Act? reports:

  • Homeowners gained leverage for litigation against mortgage lenders through the financial reform law Congress passed this summer. The Dodd-Frank Wall Street Reform and Consumer Protection Act not only tightened mortgage rules, but it also multiplied potential damages against rule breakers.


  • Along with mortgage litigation, the bill invites consumer fraud litigation. Any state attorney general can enforce the state's consumer fraud law against a national bank or a federal thrift, the authors wrote. "This will subject national banks to state law requirements they otherwise would not be subject to," Taft said. "If they do not comply, there would be penalties under state and possibly federal law." [...] Whether a private citizen can pursue a cause of action for consumer fraud could depend on state or federal law, he said.

For more, see Dodd-Frank reform law invites new litigation opportunities against mortgage lenders.

See also Lexology: Mortgage Reform and Anti-Predatory Lending Act for an overview of this new consumer protection law (requires subscription; if no subscription GO HERE; or TRY HERE - then click link for the story).

Labor Day "Greetings" To The Clerks Toiling In Anonymity At The Various Document-Manufacturing, Foreclosure Mill Factories

Sarasota Herald Tribune's Tom Lyons sends a "friendly" Labor Day greeting to all the overworked clerks at Florida's foreclosure mills in a column this weekend. He also comments on the mill bosses, and highlights his column with observations on one recent case where a judge hammered a law mill with a $49,000 fine with a promise to tack on an additional $7,000/day if the law firm/paperwork factory doesn't come up with a plan to clean up its sloppy practices.

For the column, see Lyons: Overworked clerks of foreclosure mills.

S. Florida Lawyer Gets Jail Time For Hijacking $1.6M In Real Estate Closing Funds Earmarked For Mortgage Loan Payoffs; Title Insurer Left Holding Bag

In Miami, Florida, the South Florida Sun Sentinel reports:

  • Hollywood title attorney Peter N. Price has been sentenced to almost four years in jail, and ordered to pay $1.7 million to Stewart Title Guarantee Inc. regarding allegations that he embezzled $1.6 million in loan proceeds.

  • Federal and state investigators said Price took the money, earmarked for paying off mortgage loans for clients, from his Intracoastal Title Services Inc. escrow account for real estate closings he was handling. Instead of doing the payoffs, Price prepared and sent false federal real estate forms, stating the loans had been paid, according to court documents.

  • Price was charged with making false statements to the U.S. Department of Housing and Urban Development, and sentenced by U.S. District Judge James Cohn in Miami.

Source: Hollywood title attorney gets four years after embezzling $1.6 million.

Media Probe Spurs Texas AG Lawsuit Alleging That Unlawful Servicer Collection Tactics Squeezed Late Fees From Homeowners, Driving Them Into F'closure

In Dallas, Texas, KDFW-TV Channel 4 reports:

  • Just two weeks after a FOX 4 investigation, the Texas Attorney General is cracking down on a local mortgage servicing company. In our investigation, FOX 4 showed how the AG's office told complaining consumers it was too busy and they should hire their own attorneys to fight American Home Mortgage Servicing, Inc.

  • But that has suddenly changed. Now, the Texas Attorney General has sued the Coppell-based company, accusing AHMSI of aggressive and unlawful tactics to collect mortgage payments from Texas homeowners and has filed suit.

For more, see Texas Attorney General Sues Mortgage Servicing Company.


From the Office of the Texas Attorney General:

  • Texas Attorney General Greg Abbott [] charged Coppell-based American Home Mortgage Servicing Inc. (AHMS) with using illegal debt collection tactics and improperly misleading struggling homeowners.

  • According to state investigators, AHMS collections agents used aggressive and unlawful tactics to collect payments from Texas homeowners who had difficulty meeting their payment obligations. The defendant also failed to credit homeowners who properly submitted their payments on time.


  • In other cases, AHMS agents falsely claimed that homeowners did not make payments so the agents could justify profitable late fees or escrow accounts. The defendant also failed to properly credit homeowners after AHMS agents withdrew funds from the homeowners’ checking accounts. Because of the defendant’s unlawful conduct, homeowners defaulted on their loans, leading to foreclosure proceedings.

For the Texas AG press release, see Attorney General Abbott Charges Home Loan Servicer With Violating State Debt Collection Laws (American Home Mortgage Servicing Inc. failed to properly process requests).

For the lawsuit, see State of Texas v. American Home Mortgage Servicing Inc.

Cops: "Owner-Finance" Home Seller Pocketed Buyer's Monthly Payments & Stiffed Bank Holding Existing Mtg After Screwing Earlier Victim In Similar Scam

In West Palm Beach, Florida, The Palm Beach Post reports:

  • Michael Chinloy, detectives allege, bought an Acreage home, sold it to someone, waited for her to move out, sold it to another couple, and then let it foreclose. And, in the process, pocketed at least $86,000.

  • Now Chinloy, 46, booked into the Palm Beach County Jail [...], is charged with grand theft more than $20,000 and organized scheme to defraud more than $50,000. He's being held in lieu of $20,000 bail.

  • According to a Palm Beach County Sheriff's report, the couple believed they'd bought the home from Chinloy in June 2007. The deal: $30,000 down plus a monthly mortgage payment of $3,290.42. Over two years, the couple claimed, they paid Chinloy more than $120,000 before they started getting foreclosure notices.

  • It turned out Chinloy had bought the Acreage home in July 2006 for $360,905. Three months later, he sold it for $384,000 to a woman in Palm Beach Gardens. The woman, who had just gone through a divorce and had credit problems, said Chinloy kept jacking up her mortgage payments until she could no longer pay and she moved out in May 2007.

  • A month after that, Chinloy sold the house to the couple for $354,983. Then he stopped paying the mortgage and the home was foreclosed on in January 2008.

For more, see West Palm Beach man charged with grand theft, real estate fraud; allegedly sold same house twice.

Sunday, September 5, 2010

Bank Returns Possession Of Prematurely Padlocked Home In Foreclosure To Ailing Senior Who Spent Winter In Homeless Shelters; Slept In Parked Car Since

In Schaumburg, Illinois, the Daily Herald reports:

  • A Schaumburg man who was living in his own yard after being padlocked out of his house during foreclosure proceedings was able to move back inside [last week]. John Wuerffel, 62, [...] was returned access to his home by representatives of HSBC Mortgage Corp., which is handling the foreclosure case on behalf of Freddie Mac.

  • HSBC spokesman Neil Brazil said the house was padlocked last fall to protect its value after it appeared to have been abandoned by Wuerffel, who couldn't be found. Wuerffel said he was living out of state when the house was padlocked, and he returned to find it in that way. He spent the winter living in homeless shelters and took to sleeping in one of his several vehicles parked in the driveway when the shelters closed in the spring.


  • Wuerffel said he is supposed to be on medication for bipolar disorder and a heart condition, but that his financial situation has sometimes kept him from affording either one. In fact, Wuerffel said medical bills are to blame for the threatened foreclosure of the home he's owned since 1971.

For more, see Schaumburg man regains access to padlocked home.

Chicago Man Guilty Of Creating Phony Land Documents To Sell Homes Out From Under Real Owners To Unwitting Buyers While Posing As Federal Official

From the Office of the U.S. Attorney (Chicago, Illinois):

  • A Chicago man was convicted of federal charges for posing as a federal government official in a scheme to sell properties he did not own out from underneath the real owners. The defendant, John Hemphill, was found guilty [] of mail fraud and false impersonation of a federal official following a week-long trial in U.S. District Court, [...].


  • According to the evidence at trial, since 2008, Hemphill engaged in a scheme to defraud property owners and prospective purchasers of property by creating and recording fictitious deeds with the Cook County Recorder of Deeds, posing as the property owner selling the property in question.

  • Hemphill typically filed a fictitious deed with the county recorder that purported to convey title to a parcel of property from its lawful holder to one of Hemphill’s businesses, and then filed a second fictitious deed purporting to convey title to the same property from his business entity (the new purported owner) to a third party. Hemphill also falsely represented to prospective purchasers of properties that he and his business entities held title to these properties in their capacity as a "federal receiver" or had other lawful authority to convey the properties to third parties. Under these false pretenses, Hemphill purported to sell these properties to third parties, usually for cash payments.


  • Two witnesses at trial — a La Grange police officer and a victim who bought a home Hemphill did not own — testified that when they challenged Hemphill over his fraudulent representations, he produced a bogus badge indicating that he was a federal agent.

For the U.S. Attorney press release, see Chicago Man Convicted of Posing As Federal Official in Scheme to Obtain and Sell Area Properties he Did Not Own.

Rogue Public Official Gets 17 Years In Prison For Assorted Corruption; Bad Acts Include Sales Of Land He Didn't Own To Church, Elderly Woman

In New Orleans, Louisiana, The Times Picayune reports:

  • Jonathan Bolar upset an incumbent in 2001 to gain a seat on the Gretna City Council, in great part because voters believed his promises to work hard and to put their interests first. Mr. Bolar worked hard all right -- but to put his office up for sale.

  • He extorted thousands of dollars from constituents who needed city permits. He twice sold land he did not own, to a church and to an elderly woman. He evaded paying taxes for a decade. In April, a jury convicted Mr. Bolar on 13 charges. The heavy price for such a resume of corruption came [last week], as U.S. District Judge Lance Africk sentenced Mr. Bolar to 17 years in prison. He also will have to pay $174,000 in restitution to his victims, in addition to $85,700 he already was ordered to forfeit.

For the story, see Former Gretna Councilman Jonathan Bolar, rogue public official, goes to jail.

Seattle Feds Bag Woman In Alleged Scam That Placed Title To Homes Bought By Novice Homebuyers Into Other Clients' Names & Pocketed Their Loan Payments

From the Office of the U.S. Attorney (Seattle, Washington):

  • LIZA BAUTISTA, 50, of Tukwila, Washington, was arraigned [] in U.S. District Court in Seattle on charges of mail fraud, wire fraud and misuse of a Social Security Number, in connection with a scheme to defraud lenders and line her own pocket.


  • According to the indictment, BAUTISTA held herself out as someone who could help first time buyers with bad credit purchase their first home. According to the indictment, she took advantage of these purchasers naivete—they trusted BAUTISTA when she told them the paperwork was all in order, and that they had purchased their first home.

  • In reality, BAUTISTA had obtained the home loans and placed title to the properties in the names of past clients who had better credit. These past clients were shocked when lenders started contacting them about homes they had never purchased. The naive buyers could not understand why lenders kept mailing information to their home in the names of other people.

  • Some of these new purchasers made their mortgage payments to BAUTISTA who pocketed the payments instead of passing them on to the lending institutions. When the young purchasers learned they had not really purchased their dream home, they had to move out, and the lending institutions lost thousands as the homes were foreclosed and sold at a loss. BAUTISTA pocketed about $20,000 on six loans worth over $800,000.

For the U.S. Attorney press release, see Former Mortgage Originator Indicted for Scheme Misusing Former Clients’ Personal Information (Woman Allegedly Obtained Loans in the Names of Past Clients for New Novice Purchasers).