Saturday, November 6, 2010

Foreclosing Lender Actions In Robosigner Scam Targeted By Kentucky County Court Order; Other Bluegrass State Jurisdictions Expected To Follow Suit

In Kenton County, Kentucky, reports:

  • Kenton County, Kentucky, which has the third highest volume of foreclosures in the state, has enacted a general order impacting the filing of all foreclosure complaints in its courts.


  • Kenton County’s order(1) will have a wide ranging impact on mortgage servicing clients, including timelines relating to the filing of first legal action in Kenton County, with many other counties throughout the Commonwealth expected to follow suit.

For the story, see Kentucky County Court Order Impacts Foreclosure Complaint Filings.

(1) Reportedly, the Kenton County court order requires all foreclosure complaints filed in that county to be accompanied by:

  • an affidavit certifying that the plaintiff is the owner and holder of the note and mortgage and identifying the plaintiff as the original holder or an assignee, trustee, or successor in interest of the original holder,

  • a copy of the note and recorded mortgage with copies of all allonges, endorsements, and assignments necessary to document the chain of title to both the note and the mortgage,

  • documents establishing the plaintiff as the successor in interest if any merger, change of trustee, or other transfer issue has taken place.

"Somebody Tried To Steal My House" Says Mortgage Servicing Fraud Watchdog As Campaign Continues Against "Predatory Schemes", "Sleight Of Accounting"

In Manchester, New Hampshire, reports:

  • How long will it take before the American nightmare of home foreclosures is over? Ask Mike Dillon, who’s been fighting to keep his New Hampshire home for most of the past decade. Though he missed two payments in 2002, Dillon then caught up and was current on his loan by later that year, he said. That’s when his mortgage problems began.

  • After the company servicing his mortgage failed to properly credit monthly payments to his account, it placed the loan in default. As he worked to straighten out the bookkeeping, with canceled checks in hand, the servicer began adding additional fees for property inspections, insurance and other charges.

  • In 2005, a New Hampshire judge agreed that the servicer’ssleight of accounting resulted in improper assessments” against Dillon and, citing a “predatory scheme of penalties,” barred the foreclosure and ordered that the loan be reinstated without penalties as of August 2005.

  • Five years later, Dillon is still in court trying to resolve the dispute. While he is no longer under threat of foreclosure, he is still fighting to get clear title to his home. “I’ve got nine years of my life tied up in this case, and it’s done a lot of financial and emotional damage to me,” said Dillon. “This isn’t about money in the long run. This is about the principle of the issue -- somebody tried to steal my house.”

For the story, see Foreclosure mess will take years to clean up (Borrowers, lenders, investors face years of red tape, legal challenges).

See 'Playing the Odds' for the transcript of an ABC News Nighline interview with national mortgage servicing fraud watchdog and victim advocate Mike Dillon of on how some mortgage servicers go about giving homeowners a real screwing over in the handling of their house payments.

S. Florida Family Recovers Home Lost In Foreclosure; Court Grants BofA's Request To Vacate Sale After Media Shines Light On Another Loan Mod Screw-Up

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

  • A Miramar homeowner who was facing foreclosure, despite securing a loan modification, will be allowed to stay in his house, according to a court ruling made public Wednesday by Bank of America. With less than a week to go before he was to lose his house, Kamberali Shamji learned from bank officials that the foreclosure sale of the home has been vacated by court order.

  • "We are so thankful," said Shamji, whose case was the focus of a Sun Sentinel article on Sunday about homeowners who thought they had saved their homes by modifying their mortgages only to lose them because the foreclosure process never stopped. He had battled the bank, but he was unable to convince the lender to take action until he contacted the newspaper.

  • Bank of America said it had tried to stop the sale before it took place. In the wake of the story, the lender asked the investor who owned the loan for consent to get the sale vacated. That took place Monday, said Bank of America spokeswoman Jumana Bauwens. [... Shamji] said he intends to make his next payment and as long as he is current on the loan, Bank of America's Bauwens said the modification will continue to be in force.

For more, see Miramar man gets home back after nearly losing it to foreclosure (Foreclosure sale reversed).

For the initial Sun Sentinel report on this story, see Those with loan modifications still lose to foreclosure.

S. Florida Attorney Probed For Allegations Of Forging Judges' Signatures; Once Linked To Now-Shuttered Loan Modification Outfit Also Under Microscope

In South Florida, The Miami Herald reports:

  • State authorities are investigating allegations that a Coral Springs lawyer forged the signatures of Broward County judges while working with a disgraced foreclosure assistance company, court documents show.

  • The lawyer, Frank J. Ingrassia, worked with Outreach Housing,(1) which is accused of siphoning more than $2 million from desperate homeowners, according to a search warrant filed in Miami-Dade court this month. The probe is being spearheaded by the Florida Department of Law Enforcement. Also investigating is the Florida Attorney General's Office and the Office of Financial Regulation, which last year sued the company and its officers. Ingrassia, a former Florida assistant attorney general, did not return calls for comment. He has not been charged.


  • [T]he lawyer made headlines in June 2008 when he filed dozens of lawsuits against financial lenders alleging they fraudulently inflated the incomes of borrowers so that they could qualify for loans. Ingrassia worked for Affirmative Defense Group, which was refered most of its cases by Outreach, a now-shuttered Margate company that purportedly assisted homeowners facing foreclosures in getting legal settlements with lenders.

  • State authorities allege the company induced 961 people to fork over their mortgage payments. The "illegal revenue'' amounted to more than $2 million, and employees were paid from the money that was supposed to be held until homeowners settled with lenders, the warrant said.

  • The companies did virtually nothing to help clients stave off foreclosure, FDLE said in the warrant. Agents raided Ingrassia's Coral Springs office in July "due to allegations that Ingrassia forged the signatures of some 17th Judicial Circuit [Broward County] judges.'' He is under investigation for forgery.

  • Agents are also looking into the practices of Outreach and its founder, Blair Wright. Wright, in an interview Wednesday, insisted his company was legitimately trying to help homeowners reach foreclosure settlements with lenders. He says lawyers such as Ingrassia and Kirsten Franklin -- both of whom he is suing in Miami-Dade court -- mismanaged the cases, ignored clients and pilfered hundreds of thousands of dollars.


  • The Florida Supreme Court, in January, ordered Franklin barred from practicing law for three years because she abandoned hundreds of clients and allowed Wright to unduly influence her. The state's lawsuits against Ingrassia, Franklin and Wright are still ongoing.

For the story, see Foreclosure lawyer accused of forgery (A Coral Springs lawyer who worked for a troubled foreclosure rescue company is facing a criminal probe for allegedly forging court documents).

(1) Go here for earlier posts on now-shuttered loan modification outfit Outreach Housing.

Pennsylvania Couple Falls Victim In Unwitting Purchase Of Home Once Used As Meth Lab

In Bristol, Pennsylvania, Wallet Pop reports:

  • A few days after moving into a 109-year-old twin home in the blue collar Philadelphia suburb of Bristol. Pa., Robert Quigley got the shock of his life when he finally met one of his next-door neighbors when he was taking out the trash. The neighbor was happy to learn that Quigley and his girlfriend, Jennifer Friberg, were in the house instead of the previous resident -- a known hoodlum who had been arrested for making crystal methamphetamine.

  • Suddenly, the $190,000, 4-bedroom home with the nice hardwood floors that the young couple had wanted to fix up and one day start a family in, had become an an albatross around their necks that still weighs them down. It still leaves the 31-year-old graphics designer dumbfounded, but did explain some strange things he experienced.

  • "As soon as we moved in, we started to get headaches immediately," he told WalletPop in an interview, adding that he and Friberg attributed their health issues to the stress of moving into their first house. "Our symptoms kept getting worse the longer we stayed there."

For more, see Young couple's dream house turns into a meth nightmare.

For other stories relating to the unwitting purchase of homes once used as meth labs, see:

Friday, November 5, 2010

"They Will Suffer The Consequences" Says South Carolina Chief Justice Of 'Corner-Cutting' Foreclosing Lenders Involved In Robosigner Scandal

In South Carolina, The State reports:

  • Across courts in South Carolina, judges say they are halting more foreclosures — as many as one in four —because lawyers for banks have incomplete documents or missing paperwork. They also are starting to see the challenges to the authenticity of signatures on foreclosure documents that have made headlines in recent weeks. “Everything happening in the paper is happening across the state,” said James Spence, the Lexington County master-in-equity, the judge who oversees foreclosure cases in that county.


  • If enough cases get delayed for too long, S.C. Supreme Court Chief Justice Jean Toal warned in a court order that she could allow judges to dismiss them. If more cases are delayed because of challenges to so-called robo-signing of foreclosure documents and other paperwork problems, “that’s just part of the process,” Toal said in an interview.

  • This just shows the financial foolishness of all this,” the chief justice said. “To the extent that they (lenders) might have cut corners, they will suffer the consequences.”[...] Just as legal documents need to be in order when people buy homes, they need to be in order when banks foreclose on them, S.C. Chief Justice Toal said. “The same rules apply to everybody,” she said.

For more, see Paperwork woes plague S.C. foreclosures (Judges delay proceedings because of problems with documents).

Four Face Real Estate Fraud Charges Alleging Use Of Forged Deeds, Foreclosure Scams Throughout S. California Victimizing Hundreds, Including Two Cops

From the Office of the San Bernardino County, California District Attorney:

  • On Thursday, October 20, 2010, the San Bernardino County District Attorney’s Real Estate Fraud Prosecution Unit filed numerous felony real estate fraud charges against Carlos Mendez Torres, 29, his father, Manuel Patlan Torres, 60, associates Oscar Alvarez Macias, 35, and John Anthony Zepeda, 59, all of San Bernardino.

  • The suspects were involved in a multiple-jurisdictional foreclosure scheme known as the David Zepeda Trustee Foreclosure Scam,(1) which claimed hundreds of victims in San Bernardino County.


  • Investigators from the San Bernardino County District Attorney’s Real Estate Fraud Prosecution Unit first became aware of the foreclosure scam in late August 2010, after receiving a call from a local realtor. During the criminal investigation, the San Bernardino County District Attorney’s Office was contacted by the San Diego District Attorney Office, as well as the Los Angeles Police Department, Commercial Crimes, Real Estate Fraud Unit regarding the scam.

  • The San Bernardino County Recorder's Office assisted investigators with the criminal investigation by identifying those quitclaim deeds that had fraudulently recorded at their office by the suspects. The investigation disclosed that two of the San Bernardino County properties belonged to law enforcement officers, who were unaware that their names had been forged on quitclaim deeds, or their properties had been rented out.

For the San Bernardino County DA press release, see Numerous Felony Charges Filed in Real Estate Scam.

For a related post on the David Zepeda Trustee Foreclosure Scam, see San Diego DA Bags Pair In Alleged Forged Deed, Bogus Bankruptcy Filing, Rent Skimming Ripoff Affecting 300+ Victims Throughout Five Counties.

Iowa Feds Indict Closing Agent For Illegally Pocketing Escrow Money From Real Estate Transactions

In Sioux City, Iowa, KMEG-TV Channel 14 reports:

  • An Emmetsburg, Iowa real estate broker is charged with fraud, identity theft, and money laundering. She allegedly committed the crimes while working as a real estate settlement agent from 2005 to 2008. Fifty-nine-year-old Jean Teresa Hoffert faces 25 counts in the case.

  • According to the U.S. Attorney's office she fraudulently kept portions of sale or mortgage loan proceeds. If convicted on all counts she could face a fine of over $6 million and over 475 years in prison followed by 81 years of supervised release.

Source: Real Estate Broker Charged with Theft, Money Laundering.

Massachusetts Foreclosure Mill Attorney Resigns Post With Outfit Linked To South Florida Mill's David Stern

Buried in a recent story in The Boston Globe is the following excerpt on the connection between a Massachusetts foreclosure mill law firm and a notorious foreclosure mill in South Florida:

  • DJSP Enterprises Inc., a troubled firm that provides foreclosure-related services nationwide, said Mark P. Harmon, president of Harmon Law, has resigned from its board of directors.

  • DJSP Enterprises, which is registered in the British Virgin Islands but headquartered in Florida, is one of the largest mortgage-servicing companies in the United States, according to documents filed with the Securities and Exchange Commission. Its president, David J. Stern, owns one of four law firms that are widely known as “foreclosure mills’’ and are being investigated by Florida’s attorney general for allegedly fabricating documents to speed up foreclosures and evict tenants.

  • Harmon declined to comment on his relationship with DJSP.

Source: AG seeks data on evictions (Newton law firm faces query over rules protecting tenants).

Go here for more on Harmon Law Offices from

Newlyweds Need Media Intervention To Dodge Foreclosure Despite No Missed House Payments; Inquiries Lead To Discovery Of Chase Bank Payment Screw Up

In San Francisco, California, KGO-TV Channel 7 reports:

  • Mark and Brooke Barnum were married last year, bought their first home this year, and recently made their very first home mortgage payment. "I was exceptionally careful about making sure I had the account number right, the P.O. box number right," said Mark. Things were going along smoothly -- or so it seemed -- until a few weeks later. Mark received a shocking call from the collections department of his mortgage lender, Wells Fargo Bank. "That we hadn't made our first payment and they were concerned," said Mark.

  • But how could that be? Mark did pay, using his Chase Bank online bill-pay account. So right away Mark printed out a "proof of payment" sheet and marched down to Wells Fargo, but the bank insisted it never received that payment. So Mark went to Chase, and Chase said indeed, the payment was sent to Wells Fargo. "'What do you mean?' Chase doesn't have the money, they can't even draw back the funds because they say 'you've got it,' and Wells Fargo says 'nope,'" said Mark.

  • Mark's money had disappeared and neither bank could say where it went. Even worse, Wells Fargo said the Barnums in default on their loan and the bank could foreclose on their new home, if they didn't pay up. "I was receiving text messages from collections, phone calls from collections at first they were talking about big late fees, and of course ultimately there's you know taking back the house," said Mark.

  • This all happened on the very first payment of his very first home, which didn't make a very good impression on Mark's new in-laws. His father-in-law had co-signed on the loan and he was getting collection calls too.

  • "So here I am thinking OK, I've just married his daughter, I'm the one at this point who's supposed to be taking care of this mortgage payment and obviously it looks like I can't do it," said Mark.

  • Mark couldn't get answers and another payment was due. That's when he called 7 On Your Side. We contacted the two banks. Within hours, Chase tracked down Mark's missing payment. It turns out, it was sent to the wrong company. An insurance firm called Agia, which has nothing to do with Barnums. "From that point on, all the notices and everything stopped," said Mark.

  • Immediately, Wells Fargo Bank stopped all proceedings against the Barnums. Chase bank put $2,400 into Mark's account and he used it to pay his mortgage. Chase said the loan payment was sent to the wrong company because Mark had entered incorrect information on his bill pay account. However Chase would not say what he had typed in error. Mark says he checked his payment many times and still can't find any mistake, but for now he is relieved his house is safe.(1)

For the story, see Computer mishap shoves newlyweds into foreclosure.

(1) And hopefully Mark's father-in-law is off his back.

Thursday, November 4, 2010

Ohio Foreclosures Continue Moving Forward, Despite Obviously Problematic Paperwork

In Franklin County, Ohio, The Columbus Dispatch:

  • [A]t least 55 Franklin County homeowners will lose their houses at an auction Friday despite the fact that their foreclosure cases appear to contain mistakes, omissions of critical evidence or questionable affidavits, The Dispatch found in a review of court documents.

  • The newspaper examined the files of more than 130 homeowners whose houses are slated for auction Friday. Half of the cases had issues that consumer advocates call troubling and should have raised red flags before a judge ordered the homes sold.

  • In 13 of the 50 questionable cases, the lenders failed to produce the promissory note, as required by law. The note is the legal agreement that spells out how much is owed, how the loan will be repaid and to whom it is owed.

  • The default judgments in 19 other cases were built upon sworn affidavits by people who appear to be “robo-signers,” lending-industry employees who aren’t verifying the amounts owed or the ownership of the mortgage and note, as required by law.


  • Issuing a default judgment without reviewing the original note is a clear-cut error, said Douglas Whaley, an Ohio State University law professor and expert on the Uniform Commercial Code, the law that governs promissory notes. “You cannot foreclose unless you have the original promissory note,” he said. “The law is clear.”

  • For at least a dozen foreclosed homeowners whose lenders did not produce the note, it’s too late. On Friday, they will be former homeowners.

For more, see Lenders skirt foreclosure rules (Local homes going on sheriff’s auction block despite problems).

Kentucky Judge Chucks Foreclosure Judgment After Review Reveals That Named Mortgage Note Holder Does Not Exist

Buried at the end of a New York Times story on the ongoing frenzy attributable to faulty foreclosures is this gem:

  • Charlotte and Thomas Sexton, of Carlisle, Ky., fell behind on their mortgage payments because the payments on their adjustable-rate mortgage spiked upward and Charlotte Sexton lost her job. They tried unsuccessfully to sell the home, to refinance it and to modify their mortgage payment.

  • When the Bank of New York Mellon filed a foreclosure notice last summer, they went to a local lawyer, Brian Canupp, who, with the help of a forensic accountant, found a problem in the foreclosure filing.

  • Last month, a judge tossed out a foreclosure judgment after Canupp argued that the mortgage trust that claimed to own the Sextons' promissory note did not exist.

Source: Facing Foreclosure, Homeowners Want Legal Recourse (Lenders To Answer For Errors).

County Real Estate Fraud Unit Bags Calif. Man Allegedly Running Upfront Fee Loan Modification Racket; Victims Urged To Step Up, File Complaints

In Tulare County, California, The Fresno Bee reports:

  • In a crackdown on foreclosure fraud, the Tulare County District Attorney's Office has filed charges against three men, leading to a Visalia man's arrest [last] week. Julio Garcia Cedillo, 33, of Visalia, was arrested Wednesday and made $25,000 bail Thursday. He is the manager of Blue Pacific Financial, a business that provides loan modification services, according to a statement by the Tulare County District Attorney's Office.

  • An arrest warrant was issued for Cedillo last month after prosecutors filed charges against three people in Tulare County Superior Court.(1) Prosecutions for foreclosure fraud are a growing trend in an era of mounting home foreclosures. [...] Five years ago, the Tulare County District Attorney's Office started a real estate fraud unit.

For more, see Visalian arrested, accused of foreclosure fraud (Two others charged in Tulare County crackdown).

See also: Tulare Advance Register: Suspected foreclosure fraud victims sought:

  • The District Attorney's Office is asking that anyone who believes they have been a victim of a foreclosure fraud to contact investigator Dwayne Johnson. Information: 733-6411.

(1) Reportedly, Cedillo is charged with two felony counts of foreclosure fraud and is accused of taking money from clients whose homes were in foreclosure and who were seeking loan modifications, the Tulare County District Attorney's Office said. Also named in the complaint were Cesar Martinez, 28, and David Martinez, 30, both of Visalia, the story states.

State AG, AZ Feds: Pair Ran Rent-To-Own Racket Victimizing 31 Would-Be Home Buyers, Leaving Multiple Unwitting Investors/Straw Buyers Holding The Bag

From the Office of the Arizona Attorney General:

  • Zandonatti and Silverstein owned and operated AZI Rent2Own L.L.C (also known as Arizona Investments and AZI), a company claiming to “specialize” in mortgage investment and rent-to-own programs.

  • The indictment alleges that between 2006 and 2008, 25 homes were involved in either straw-buyer or investor schemes perpetuated by AZI Rent2Own, where approximately 45 lending institutions were defrauded and 31 renters were victimized. Approximately $2.9 million in foreclosure losses occurred because of the alleged result these schemes. FBI agents began investigating both Zandonatti and Silverstein approximately one year ago when numerous consumer complaints were filed against both suspects.

  • The FBI determined that the suspects were orchestrating an elaborate scheme which defrauded both investors and the renters of numerous homes in Pima County using straw-buyers or investors to flip the properties, many of which had been rented to tenants under a rent-to-own agreement.

  • This case was investigated by the Arizona Division of the FBI, and is being prosecuted by Assistant Attorney General Michael Jette.

For the Arizona AG press release, see Terry Goddard Announces Indictment in Home Investment Fraud Case.

For the indictment, see State of Arizona v. Zandonatti, et ano.

Fla. County Property Apprasier's Office OKs Tax Exemption For Family Of Maine Gubernatorial Candidate In 'Double Homestead' Case

The Associated Press reports:

  • A Florida county has closed its investigation into a tax exemption claimed by the family of Maine Republican gubernatorial candidate Paul LePage on a Florida home, concluding that the $1,400 tax break was allowed under state law, a tax official ruled [].

  • In a letter to LePage's lawyer, the property appraiser in Volusia County, Fla., said the homestead exemption in 2008 and 2009 was OK because of an exception allowing the tax break on a Florida home maintained for a dependent.


  • According to the LePages' attorney, Ann LePage went to Florida after her father died in the fall of 2007 to care for her mother, who suffers from scleroderma, an autoimmune disorder, as well as pulmonary hypertension. Ann LePage rented a home before buying a home in December 2008.

  • After the purchase, Ann LePage listed the home as her primary residence, but she failed to change the status of the home in Waterville that she'd previously claimed as primary residence. In September, the LePages corrected the Waterville home's status and paid the $227.93 in taxes owed, the LePage campaign said.

  • Morgan Gilreath Jr., property appraiser in Volusia County, noted that the Florida situation was unusual - so unusual that there's no place on the homestead exemption form or statement of gross income to make note of the exception to Florida's law. There's also no notation on the county website, he said.(1)

  • Because of the exception, Ann LePage can list Maine as her primary residence while continuing to claim the homestead exemption in Florida as long her mother lives in the home and the LePages maintain it and provide for her, making her "naturally dependent," said her attorney, William A. Lee III of Waterville, who is licensed in Maine and Florida.(2)

For the story, see Official: LePage tax exemption allowed in Fla.

(1) Of course there's no reference to the availability of the tax exemption in 'double homestead' cases on the government forms or on the Property Appraiser's office website. They clearly want to avoid the potential havoc that may break out in their offices attributable to the additional exemption claims that will result in these permissible 'double' tax exemptions cases.

(2) The relevant applicable statute can be found at Sec. 196.031(1)(a), Florida Statutes, which states in part (bold text is my emphasis of the relevant portion of the provision, not in the original text):

  • Every person who, on January 1, has the legal title or beneficial title in equity to real property in this state and who resides thereon and in good faith makes the same his or her permanent residence, or the permanent residence of another or others legally or naturally dependent upon such person, is entitled to an exemption from all taxation, except for assessments for special benefits, [...] up to the assessed valuation of $25,000 on the residence and contiguous real property, as defined in s. 6, Art. VII of the State Constitution.

For more on the availability of 'double homestead' tax exemptions in certain cases, see:

  • Florida Administrative Code Rule 12D-7.007(7):

    "A married woman and her husband may establish separate permanent residences without showing “impelling reasons” or “just ground” for doing so. If it is determined by the property appraiser that separate permanent residences and separate “family units” have been established by the husband and wife, and they are otherwise qualified, each may be granted homestead exemption from ad valorem taxation under Article VII, Section 6, 1968 State Constitution. The fact that both residences may be owned by both husband and wife as tenants by the entireties will not defeat the grant of homestead ad valorem tax exemption to the permanent residence of each."

Fla. Appeals Court Nixes County Official's Attempt To Strip Homeowner Of Tax Exemption In 'Double Homestead' Case As Legal Non-Profit Scores Big Win

A Florida appeals court has recently affirmed longstanding state law that (contrary to popular belief), in certain circumstances, the mere fact that two people are married will not, in and of itself, preclude them from each claiming a real estate tax exemption for their Florida homesteads allowed under Article VII, Section 6 of the Florida Constitution,(1) when living in separate residences.

After receiving an unfavorable trial court ruling and despite the plain language of the applicable rules and existing Florida case law in support thereof, hard-headed Pasco County Property Appraiser Mike Wells took the improvident step of submitting Pasco County Circuit Judge Stanley R. Mills ruling to an appeals court for review, which the latter unanimously upheld.(2)

For the county property appraisers throughout the state of Florida, whose job includes the determination of qualified tax exemption claims filed by homeowners and who probably don't want word to leak out that 'double homesteads' are, in fact, warranted in certain cases, this ruling surely represents an unwelcome defeat.

Conversely, it represents good news for, among others, married people in Florida who can't stand living with each other and who split up, establish their own separate homesteads, and for whatever reason (ie. financial, religious, children, convenience, hatred for divorce attorneys, etc.) never bother to formally get a divorce.

Representing the homeowner who, with the help of a local non-profit law firm, stood up against the property appraiser for improperly stripping an apparently not well-heeled homeowner of his homestead exemption and possibly thinking he could get away with it because the homeowner might lack the savvy and financial wherewithal to get an attorney and put up a fight before the appeals court in this case was Maurice M. Feller and Richard A. Motley, of Bay Area Legal Services, Inc., New Port Richey, Florida.(3)

For the court ruling, see Wells v. Haldeos, Case No. 2D09-4250 (Fla. App. 2d DCA, October 22, 2010).

(1) Not to be confused with Article X, Section 4 of the Florida Constitution, which grants an exemption against forced sale of a state resident's Florida homestead to satisfy most, non-mortgage, debts.

(2) In affirming the lower court ruling in favor of the homeowner, the Florida appeals court made these observations (bold text is my emphasis, not in the original text):

  • Mr. Haldeos and his wife have established two separate permanent residences in good faith. Mr. Haldeos has no financial connection with his wife and they do not provide benefits, income, or support to each other. He has a Florida driver’s license and his vehicle is registered in Pasco County. At the hearing, the attorney for the Property Appraiser stated that

    "we agree in this case that if there isn't an absolute [prohibition on married couples from receiving two homestead exemptions], this case would be the outlier that would surely be entitled to a homestead. We’re not trying to say that they’re trying to disprove factually a family unit, that there’s any financial aspects involved, or that there is any relationship on-going because we have nothing to surmise that or nothing has been developed."

  • The trial court found that it would defy logic for two people "who have no contact with one another, who don’t have any connections of a financial, emotional or any other way to call them a family unit.” Based on this reasoning, the trial court ruled that Mr. Haldeos and his wife constitute separate "family units" and may obtain two separate homestead exemptions.

  • The Property Appraiser argues on appeal that this interpretation of the term "family unit" is contrary to the intent of section 196.031(5), Florida Statutes (2009), which provides as follows:

    A person who is receiving or claiming the benefit of an ad valorem tax exemption or a tax credit in another state where permanent residency is required as a basis for the granting of that ad valorem tax exemption or tax credit is not entitled to the homestead exemption provided by this section.

  • We do not agree that the trial court's ruling is at odds with section 196.031(5), as the statute clearly prohibits an individual from receiving two residency-based tax credits. If the legislature had intended, as the Property Appraiser suggests, to prohibit a married couple from receiving two such tax exemptions, it could have included married couples in the above language.

  • The Property Appraiser further argues that the statute must be strictly construed against the taxpayer where "the homestead exemption provides relief from an ad valorem tax." DeQuervain v. Desguin, 927 So. 2d 232, 236 (Fla. 2d DCA 2006). While we agree with this premise, we note that "[w]here the statute's language is clear or unambiguous, courts need not employ principles of statutory construction to determine and effectuate legislative intent." See Fla. Dep't of Children & Family Servs. v. P.E., 14 So. 3d 228, 234 (Fla. 2009). Section 196.031(5) clearly and unambiguously refers to a "person" and not a married couple or family unit.

  • Although there is no constitutional or statutory guidance on the issue at bar, the Florida Department of Revenue has enacted a rule instructing property appraisers that married couples may be considered separate "family units" in certain circumstances. Florida Administrative Code Rule 12D-7.007(7), provides as follows:

    If it is determined by the property appraiser that separate permanent residences and separate “family units” have been established by the husband and wife, and they are otherwise qualified, each may be granted homestead exemption from ad valorem taxation under Article VII, Section 6, 1968 State Constitution. The fact that both residences may be owned by both husband and wife as tenants by the entireties will not defeat the grant of homestead ad valorem tax exemption to the permanent residence of each.

  • In determining whether Mr. Haldeos was entitled to a homestead exemption, the Property Appraiser was required to follow rule 12D-7.007(7): "The Department of Revenue shall prescribe reasonable rules and regulations for the assessing and collecting of taxes, and such rules and regulations shall be followed by the property appraisers, tax collectors, clerks of the circuit court, and value adjustment boards." § 195.027(1), Fla. Stat. (2009).

  • In a case involving the protection of a homestead from a judgment, the Fourth District held that when a married couple is separated, the husband can claim a homestead exemption for a residence in which he resides and owns, even though he still owns a home with his estranged wife for which they claim a homestead tax exemption. Law v. Law, 738 So. 2d 522, 524 (Fla. 4th DCA 1999). In that case, the argument was made that the husband's home could not be homestead because the home he owned with his wife was, as a matter of law, his homestead, and a person cannot have two homesteads. Id. The Fourth District held:

    We see nothing inconsistent with our public policy if we extend a homestead exemption to each of two people who are married, but legitimately live apart in separate residences, if they otherwise meet the requirements of the exemption. When we say “legitimately” we mean that there is no “fraudulent or otherwise egregious act” by the beneficiary of the homestead exemption.

  • Id. at 525. The court agreed that the husband could not have two homesteads and that a husband and wife in an intact marriage could not have two homesteads. However, the court held that the husband's homestead could be different from the wife's homestead "where their separation was bonafide," and it was the intent of the husband to live in his separate home. Id.; see generally Judd v. Schooley, 158 So. 2d 514, 517 (Fla. 1963) (holding that the wife could claim a permanent home in Florida and receive a homestead exemption even though her husband was legally domiciled in another state).

  • Although opinions of the Florida Attorney General are not binding on this court, we note that they have favored the granting of two separate homestead exemptions to a husband and wife where they establish separate permanent residences. 75 Op. Att'y Gen. 146 (1975); 05 Op. Att'y Gen. 60 (2005).

  • The Property Appraiser urges that if married couples can be considered separate “family units” in these circumstances, such a result would make his job in reviewing homestead exemptions virtually administratively unworkable, because no property appraiser will have the staff and available resources to verify whether a married couple is, in fact, maintaining two separate permanent residences. While we recognize that property appraisers will be required to review the financial information of separated couples in these unique circumstances, we note that the person claiming the homestead exemption has the burden of proving that he or she qualifies for such. Schooley v. Judd, 149 So. 2d 587, 590 (Fla. 2d DCA 1963), reversed on other grounds, 158 So. 2d 514 (Fla. 1963).


Note that, in its ruling, the Florida appeals court fails to quote, in its entirety, the applicable Florida Administrative Code Rule 12D-7.007(7), which follows below (bold text is the portion of the Florida Administrative Code Rule 12D-7.007(7) which was inexplicably omitted by the appeals court):

  • (7) A married woman and her husband may establish separate permanent residences without showing “impelling reasons” or “just ground” for doing so. If it is determined by the property appraiser that separate permanent residences and separate “family units” have been established by the husband and wife, and they are otherwise qualified, each may be granted homestead exemption from ad valorem taxation under Article VII, Section 6, 1968 State Constitution. The fact that both residences may be owned by both husband and wife as tenants by the entireties will not defeat the grant of homestead ad valorem tax exemption to the permanent residence of each.

The point here simply (and obviously) is that as long as a husband and wife can demonstrate that they have, in good faith, established separate homesteads, no other reason or grounds for doing so (ie. marital instability or incompatibility, family illness/other health issues, high profile or other working professionals who work in different regions of the state or country, other uncommon circumstances, etc.) is necessary.

(3) Bay Area Legal Services is a regional, non-profit public interest law firm that provides a full range of civil legal services to individuals and non-profit groups that have limited access to legal services, with offices throughout the Tampa Bay region (operating offices in Hillsborough, Pasco, and Pinellas counties).

Inasmuch as this law firm's representation of individuals, like most non-profit law firms, is typically limited to those of low income, it's not too hard to read between the lines in this case and surmise that the Pasco County Property Appraiser may have thought he could get away with screwing over this homeowner by stripping him of his homestead real estate tax exemption, possibly figuring the homeowner didn't have the resources or savvy to challenge him. This, notwithstanding the fact that the Property Appraiser's actions flew in the face of the existing Florida case law, Florida Department of Revenue regulations, and past published opinions of the state attorney general's office, as this ruling clearly articulates.

By the way, contrast this story with the recently reported story (Miami Herald: Official: LePage tax exemption allowed in Fla.) where the Volusia County, Florida Tax Appraiser approved a homestead exemption claimed by the [presumably well-heeled] family of Maine Republican gubernatorial candidate Paul LePage on a Florida home without resorting to the kind of protracted legal battle the Pasco County Property Appraiser engaged in with a less-well-heeled homeowner:

  • Morgan Gilreath Jr., property appraiser in Volusia County, noted that the Florida situation was unusual - so unusual that there's no place on the homestead exemption form or statement of gross income to make note of the exception to Florida's law. There's also no notation on the county website, he said.

  • Because of the exception, Ann LePage can list Maine as her primary residence while continuing to claim the homestead exemption in Florida as long her mother lives in the home and the LePages maintain it and provide for her, making her "naturally dependent," said her attorney, William A. Lee III of Waterville, who is licensed in Maine and Florida.

The Lepage story was also reported by The Maine Public Broadcasting Network and the Bangor Daily News, among other media outlets.

Wednesday, November 3, 2010

Consumer Bankruptcy Litigator Trains Attorneys In The Art Of Foreclosure Defense

In Shelby, North Carolina, reports:

  • In a stately 19th century mansion in the middle of this former textile mill town, a local political scion has formed a mortgage foreclosure resistance movement.

  • O. Max Gardner III, 65, pioneered techniques in preventing big banks from foreclosing on loans and has taught his methods to 559 other lawyers in the last four years. He teaches a sort of legal jiu jitsu: how to exploit opponents' large size and disorganization for the benefit of consumers who do not want to give up their homes.(1)

  • Once lawyers exit his training program, they stay on his expanding e-mail list, and are allowed access to an online document repository to share information. They work together to come up with new ways to slow down foreclosures and share strategies on other bankruptcy issues, communicating at a rate of 350 messages a day.

  • In the fragmented world of consumer bankruptcy law, where lawyers that represent consumers often work at small firms, Gardner, from his one-person law firm, is creating a sort of virtual law firm with hundreds of partners.


  • To his admirers, Gardner is a sort of a folk hero. "He's Atticus Finch," said April Charney, an attorney with Jacksonville Legal Aid in Florida,(2) referring to the lawyer in the novel "To Kill a Mockingbird" who is seen as a model for lawyers protecting the disadvantaged. Charney attended one of Gardner's boot camps in 2007, and she has known him since 2004.

  • Gardner has been thrust in the limelight recently thanks to what his techniques have uncovered: banks have been taking shortcuts in their efforts to foreclose on homes quickly. Banks and their lawyers have been cranking out paperwork faster than anyone could properly review it, and they are often making mistakes.

  • "He's been on top of this from the beginning. He's on the bleeding edge," said David Treywick, a Mount Pleasant, South Carolina-bankruptcy attorney who views Gardner as a leader in the field.

For more, see He’s the ‘Atticus Finch’ of home foreclosures (Lawyer trains others in techniques; demands banks show paperwork).

See also, Bloomberg News: Boot camp turns lawyers into lawyers (Litigator charges $7,775 for 4 days on foreclosure law) (if link expires, try here):

  • During days that run 10 to 12 hours, Gardner lectures on topics including “Max’s Favorite Discovery Devices,” “Strategy to Trap Opponents in Their Own Mistakes,” “Mortgage Servicing Litigation: How the Legal Network for Creditors is Organized” and “The Alphabet Problem, A to D Unlawful Transfer of Mortgages and Notes.”


  • The heart of Gardner’s strategy is to uncover omissions and errors in mortgage securitizations, the process in which thousands of loans are bundled into bonds and sold to investors. Securitizations are plagued by lost promissory notes and missing or inconsistent tracking of changes in loan ownership, Gardner said. Servicers processing default actions papered over the errors with improperly prepared affidavits and after-the-fact assignments of mortgages, he said.

  • One of my primary objectives is to give you enough knowledge so that you can understand more about the business structure and organization of the creditors than their own lawyers know,” he told the boot-camp class.(3)

(1) Describing the subject matter taught as a way "to exploit opponents' large size and disorganization for the benefit of consumers who do not want to give up their homes" falls woefully short in recognizing the fundamental fact that repsect for process is what gives the judicial process its integrity. It's not the consumer advocate's fault that the foreclosing lenders have somehow come up with the idea that they can conveniently rewrite the rules of court procedure on an as-needed basis.

(2) Jacksonville Area Legal Aid, a 501(c)(3) corporation, is a Florida non-profit law firm specializing in providing civil legal assistance to low-income persons.

(3) According to the story, Linda Tirelli, a consumer-bankruptcy attorney in New York and Connecticut and one of the 599 people who have gone through the program, said she feels as if she’s now part of a big law firm. Tirelli, a sole practitioner who works on contingency, said she now makes four times more from a case than she did before changing her business model. Gardner, who devotes one wall in the boot-camp classroom to framed settlement checks, tells students they can be more profitable by concentrating on a smaller number of cases. Tirelli, who accepts no more than 20 clients a month, said she has the confidence to go up against what Gardner calls “tall building law firms” because the community of graduates in 47 states functions as a unit, exchanging documents and discovering patterns of misconduct, she said. “It’s a fraternity,” Tirelli said. “We don’t see each other as competition. We want more attorneys to join because the more we have the better.”

Florida Appeals Court Reverses Another Rubber Stamped Foreclosure As It Reminds Trial Judge That Evidence Is Required Before Granting Judgment!

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

  • Banks need to show evidence they own and hold the mortgage on a home when asking judges to foreclose on a property, according to a ruling issued in the 4th District Court of Appeal In West Palm Beach on Wednesday.

  • A three-judge appellate panel overturned an earlier summary judgment by Palm Beach Circuit Court Judge Thomas Barkdull III, that allowed US Bank National Association to repossess a Boca Raton couple's home. The foreclosure went through even though the lender did not show the original note or other acceptable proof of ownership.

  • "Some judges have been lax about the rules of evidence," said Peter Snyder, the Boca Raton lawyer representing homeowner Guiseppe Servedio. "I think that what this case says is you better have the original note."


  • Although the Servedios' house was sold after foreclosure, Snyder won court approval for them to continue living there during their appeal. The appellate decision is not final for 15 days, giving the lender time to respond.

  • [Foreclosure mill law firm] Shapiro & Fishman, one of four large Florida foreclosure law practices being investigated by the Florida attorney general for alleged inaccurate or false documents, is handling the Servedio case for US Bank. The firm could not be reached for comment Wednesday despite several attempts by phone and e-mail, but in the past has denied any wrongdoing.

  • In the appellate opinion, the judges said that even though US Bank later gave the courts a copy of the original note, it was insufficient because it was submitted after Barkdull finalized the foreclosure. "Without evidence demonstrating [the bank's] status as holder and owner of the note, genuine issues of material fact remain," the judges wrote.(1)

For the story, see Banks must prove they own the mortgage before foreclosing.

For the court ruling, see Servedio v. US Bank National Association, 4D10-1898 (Fla. App. 4th DCA October 27, 2010).

(1) The court made these observations with regard to a lender's obligations when bringing an action to foreclose a mortgage:

  • “The party seeking foreclosure must present evidence that it owns and holds the note and mortgage in question in order to proceed with a foreclosure action.” Lizio v. McCullom, 36 So. 3d 927, 929 (Fla. 4th DCA 2010).

  • A plaintiff must tender the original promissory note to the trial court or seek to reestablish the lost note under section 673.3091, Florida Statutes. State St. Bank & Trust Co. v. Lord, 851 So. 2d 790, 791 (Fla. 4th DCA 2003). Moreover, if the note does not name the plaintiff as the payee, the note must bear a special indorsement in favor of the plaintiff or a blank indorsement. Riggs v. Aurora Loan Servs., LLC, 36 So. 3d 932, 933 (Fla. 4th DCA 2010).

  • Alternatively, the plaintiff may submit evidence of an assignment from the payee to the plaintiff or an affidavit of ownership to prove its status as a holder of the note. Verizzo v. Bank of N.Y., 28 So. 3d 976 (Fla. 2d DCA 2010); Stanley v. Wells Fargo Bank, 937 So. 2d 708 (Fla. 5th DCA 2006).

  • The record on appeal does not contain the original note, evidence of an assignment of the mortgage and note to appellee, or an affidavit of ownership by appellee. Appellee filed no other admissible “pleadings, depositions, answers to interrogatories, admissions, affidavits, and other materials” to support its contention that it owns and holds the note and mortgage. Fla. R. Civ. P. 1.510(c). “[I]t is apodictic that summary judgments may not be granted . . . absent the existenceof admissible evidence in the record. TRG-Brickell Point NE, Ltd v. Wajsblat, 34 So. 3d 53, 55 (Fla. 3d DCA 2010).

  • Without evidence demonstrating appellee’s status as holder and owner of the note and mortgage, genuine issues of material fact remain, and summary judgment was improper.

  • Appellee argues on appeal that it presented to the trial court a copy of the original note and an affidavit of ownership at the summary judgment hearing. Appellee concedes, however, that the documents were not filed with the clerk of the court until several days after the entry of summary judgment. The documents were not part of the record at the time the motion for summary judgment was granted, so we cannot determine whether the trial court considered those documents in rendering its decision. See Poteat v. Guardianship of Poteat, 771 So. 2d 569 (Fla. 4th DCA 2000) (noting that an appellate court may review only items considered by the trial court).

  • Because appellant does not stipulate that the documents were considered at the hearing, and because appellee has not sought relief in the trial court to recreate the record, we must reverse the order granting summary judgment. We cannot rely on the representations of counsel alone. Wright v. Emory, 41 So. 3d 290, 292 (Fla. 4th DCA 2010) (“[An] attorney’s unsworn, unverified statements do not establish competent evidence.”).

  • Even if the trial court considered the note and mortgage at the hearing, the documents were not authenticated, filed, and served more than twenty days before the hearing as required by Rules 1.510(c) and 1.510(e). Appellee’s failure to abide by these rules also necessitates reversing the order granting summary judgment. Verizzo, 28 So. 3d at 977-78; Mack v. Commercial Indus. Park, Inc., 541 So. 2d 800 (Fla. 4th DCA 1989).

F'closure Mill Dodges Appellate Court Reversal On Merits; Opts To 'Confess Error' Instead In Agreeing To Reversal Of Rubber-Stamped Lower Court Ruling

Florida's 4th District Court of Appeal recently rejected another foreclosure judgment - this time from a Broward County trial court. The guilty rubber stamper in this case - Circuit Court Judge Peter M. Weinstein.

The appellate court issued this one sentence reversal of the lower court ruling (bold text is my emphasis, not in the original text):

  • Based on appellee’s confession of error, we reverse the circuit court’s final summary judgment of foreclosure and remand for further proceedings.

While this case certainly represents a victory for the homeowner involved, it arguably represents something of a loss for foreclosure defense advocates in the bigger picture in that, by confessing error, the lender and its foreclosure mill law firm, arguably, skillfully dodged(1) the:

  • potentially unfavorable precedent that may have been created had the appeals court based its ruling on the merits of the case, and

  • addressing, by the court, of potentially damning facts that allegedly surrounded this foreclosure action.(2)

All of which was ably laid out by the homeowner's attorney in this appellate brief (made available online courtesy of Ice Legal). In effect, the foreclosure mill law firm may have thrown the case to avoid even more negative precedent and publicity that these faulty foreclosure cases have been generating.(3)

Representing the homeowner was foreclosure defense attorney Michael Wrubel of Michael Jay Wrubel, P.A., Davie, Florida.

The bank was represented by the notorious Florida foreclosure mill, Shapiro & Fishman, LLP, Boca Raton Florida.

For the ruling, see Frost v. LaSalle Bank, No. 4D09-2668 (Fla. App. 4th DCA October 27, 2010).

(1) Not all attempts by lenders and foreclosure mills to skillfully dodge having to answer the tough questions in court succeed. See, for example, Ohio Judge Nixes GMAC F'closure Action Withdrawl; Orders Lender To Fork Over “Proof Of Integrity Of All Docs Submitted" As State AG Files Amicus Brief, where a Cleveland, Ohio trial court judge refused to allow a lender and its attorney to withdraw a foreclosure action, and instead, ordered the attorney to provide proof that its earlier court filings are legitimate.

(2) See Appellate Brief (bold text is my emphasis, not in the original text):

  • Part IV - The Original Note with a Blank Endorsement Produced for the First Time at the Summary Judgment Hearing Was Materially Altered from the Note Attached to the Complaint and Was Provided in an Untimely Manner Precluding its Use (begins at page 21),

  • Part V - Reasonable Inferences Within the Record Support the Conclusion that the Endorsement Signature on the Original Note is an Unauthorized Forgery and that Robert T. Frost Was denied his Constitutional Right to a Trial on the Merits (begins at page 25).

(3) Note that on the very same day this ruling was issued, a different 3-judge panel of Florida's 4th District Court of Appeal issued a more extensive ruling in another faulty foreclosure case in favor of the homeowner, and in which the plaintiff-lender there (different from the one in this case) was represented by the same foreclosure mill law firm. See Servedio v. US Bank National Association, 4D10-1898 (Fla. App. 4th DCA October 27, 2010).

Suit Seeking Class Action Status Wants Foreclosure Sales Voided, Title To Homes Lost Based On Bogus Affidavits Restored To Homeowners

In Miami, Florida, a press release from The Ferraro Law Firm:

  • The Ferraro Law Firm, Daniels Kashtan and The Burton Firm filed a Class Action lawsuit yesterday against BAC Home Loans Servicing, LP, a Texas Limited Partnership, a subsidiary of Bank of America Corporation, and successor in interest to Countrywide Home Loans Servicing, LP, a Texas limited partnership; Deutsche Bank National Trust Company, a New York corporation; and U.S. Bank National Association, a Minnesota association, on behalf of all those property owners who lost title to their property in foreclosure proceedings based on false and perjurious affidavits filed by the Banks and their servicing companies. They seek to restore title to the property owners.

  • The Complaint alleges that the Defendants obtained wrongful foreclosures by abusing the court process and submitting affidavits that were false, even though sworn to under penalty of perjury, as the basis for obtaining foreclosure judgments. The property owners' due process rights were violated and the Banks used and abused the court rules and process to obtain judgments against all of the Class Members.

  • "The rule of law and due process are the cornerstone of our judicial system and we must be able to rely on the integrity of the judicial system before property rights can be taken away," said Juan Bauta, II, of The Ferraro Law Firm. The courts relied on the Banks to provide true and accurate affidavits before granting judgments and taking the property away from the property owners. "In essence, the courts were lied to and the property owners' due process rights were blatantly violated," stated Mr. Bauta, II, of The Ferraro Law Firm, one of the attorneys representing the property owners.

  • The Complaint seeks to have the judgments that the Banks obtained with fraudulent affidavits vacated and title restored to the property owners.

Source: Class Action Filed Against Banks in Foreclosure Proceedings.

Mom-Daughter Duo Dodge Major Prison Time For Running Rent-To-Own Racket After Agreeing To Take Over Payments From Distressed Home Sellers

In Bakersfield, California, The Bakersfield Californian reports:

  • A mother and daughter were sent to prison Monday for their part in a real estate scam that cheated dozens of people out of at least 24 homes, leaving a loss of at least $4.4 million. Two of the victims said the two years imposed on Alice Kantin, also known as Meyer, 69, and the five years for her daughter, Dawn Kantin, 38, were "a slap on the wrist" considering how much devastation they caused in people's lives. The daughter will be referred to the California Rehabilitation Center for drug treatment.


  • The probation report in the case listed 59 victims including 32 with losses ranging from $20,000 to $900,000 each and 26 whose loses have not been calculated. The known losses totaled $4.4 million. [...] Each had been charged with 44 felonies stemming from transactions between 2007 and 2009.

  • Both women reportedly agreed to take over payments for distressed homeowners by using rents from people who had an option to buy the homes, investigation reports say.

  • But in most cases, the homes went into foreclosure during a time the mother poured at least $290,000 into her bank account, the reports say. Alice Kantin operated a firm called Desert Air Real Estate Investments Inc. in Bakersfield, according to court reports. The Secretary of State's office has no record of the corporation.

For the story, see Mother, daughter sentenced in real estate scam.

Cops: Home Health Aide, 4 Others Kidnapped 80-Year Old Dementia Victim In Effort To Strong-Arm Him Into Signing Over $500K Home, Cash

In New York City, the New York Post reports

  • A home-health aide and four relatives kidnapped and nearly killed an 80-year-old Brooklyn widower in an effort to trick him into handing over his legal rights, his money and his $500,000 home, authorities said [].

  • Cops on Thursday rescued decorated Army veteran Frank Maiorana, of Borough Park, from the Queens home of Saint Michael "Stacy" McKenzie, 26, sources said. "When we got to him, he was in pretty frail shape," a source said. "We don't know how much longer he'd have lived."

  • Cops believe the crew persuaded Maiorana, who suffers from dementia, to sign over his power of attorney and fleeced him of up to $100,000 in cash. Borough Park neighbors said they saw Maiorana, who earned a Bronze star in Korea for saving the lives of five men, walking with McKenzie over the summer. After a suspicious relative called cops Thursday morning, a neighbor told investigators they had not seen Maiorana for a week, sources said.

  • Cops found him dazed at McKenzie's 135th Street home. He was treated at Long Island Jewish Hospital for dehydration. The victim's former daughter-in-law, Virginia Maiorana, said some of the Borough Park neighbors called to say they were concerned about a parade of people entering and leaving the home. One neighbor said Frank "thought they were drugging him" and begged for help. But when Virginia checked in on him, he insisted "everything is fine," she said.

  • McKenzie, Carlina Lino, 17, Carmelo Lino, 22, Diane Lino, 42, and Cheryl Richard, 29, are charged with felony kidnapping, grand larceny and unlawful imprisonment.

Source: Widower rescued from aide 'kidnap'.

Massachusetts AG Initiates Probe Into F'closure Mill Suspected Of Possible Illegal Practices In Booting Tenants When Carrying Out F'closure Evictions

In Boston, Massachusetts, The Boston Globe reports:

  • Harmon Law Offices, a Newton firm that specializes in foreclosures, is being investigated by the state attorney general’s office for allegedly unlawfully sending eviction notices to residents of bank-owned properties. State officials want to determine whether Harmon Law failed to comply with a new Massachusetts law that protects tenants living in foreclosed homes from eviction, a spokesman for Attorney General Martha Coakley said yesterday.

  • Coakley said her office also is looking into allegations that Harmon Law disregarded a court order requiring it to notify the state before foreclosing on homes with mortgages originated by subprime lender Fremont Investment & Loan.


  • Paul Collier, a Cambridge lawyer who represents many clients facing foreclosure, said a group of local lawyers has been monitoring the procedures Harmon Law uses to evict tenants living in foreclosed homes.

  • The new state law is intended to keep tenants from being forced out of a property regardless of when a foreclosure occurred, Collier said. “The purpose of the provisions of this statute is to protect anyone who is still in their homes,’’ he said.

For the story, see AG seeks data on evictions (Newton law firm faces query over rules protecting tenants).

Tuesday, November 2, 2010

"Pick Up The Phone & Call Me Now!" Says DC AG To Local Residents Hit With Deceptive Foreclosure Notices As Non-Judicial Process Requires Quick Action

In Washington, D.C., The Washington Post reports:

  • D.C. Attorney General Peter Nickles this week created an opening for potentially tens of thousands of homeowners to challenge their foreclosures. He issued an enforcement statement emphasizing that District law requires that the assignment of a mortgage from one party to another be recorded within 30 days of the transfer.

  • This is a problem because many of the country's biggest mortgage companies list MERS, or the Mortgage Electronic Registration System, as the mortgage holder -- rather than the actual owner of the mortgage -- in local deed offices.


  • Nickles explicitly stated that, in the District, the requirement for recording every transfer of mortgage "is not satisfied by private tracking of mortgage interests through the Mortgage Electronic Registration Systems."


  • Nickles said such violations may provide a "good basis for challenging the foreclosure in court" and encouraged homeowners and advocates to contact the attorney general's office so that it "may consider bringing enforcement actions to stop foreclosure proceedings and seek restitution for consumers."(1)

For more, see An opening for D.C. foreclosure challenges.

(1) According to his enforcement statement, the DC AG is expecting homeowners who have been targeted with the use of deceptive foreclosure sale notices by foreclosing lenders to immediately call his consumer hotline at 202-442-9828. He states that when a foreclosure sale notice misrepresents to a homeowner that the foreclosing noteholder has a recorded security interest, such misrepresentation may violate the District’s Consumer Protection Procedures Act, which is enforced by him.

More On Allegations That Foreclosure Mill Used 'Process Service' Racket To Run Up Charges When Serving Legal Papers

The Tampa Tribune reports:

  • Internal files from a company used by Florida's largest foreclosure law firm provide more detail about recent allegations that lenders were overbilled and lawsuits were served to people who don't exist. In some cases, thousands of dollars in process fees were billed on a single property to multiple people, according to documents obtained by The Tampa Tribune.

  • Such fees for service represent the first step in the foreclosure procedure employed by the law offices of David J. Stern, one of four "foreclosure mills" under investigation by the state. Florida's attorney general is investigating the company for allegedly "fabricating" or "presenting false and misleading" documents.

  • The firm delegates the chore of serving notice to homeowners that a lender is foreclosing on their property to two companies. Miami-based Gissen & Zawyer Process Service, known as G&Z, is one of those companies.

  • Internal documents and billing records at G&Z back up sworn statements by former employees at the company and at Stern's firm that accounts were charged for notice of service to people who don't exist. Typical service fees in a foreclosure suit range from $45 to $300, industry experts say, but in some cases, G&Z's bills for service on a single property reached $1,200 to $5,000.


  • Internal company invoices from three days last fall show G&Z served 60 to 80 people a day for more than $30,000 each day for service for Stern's files. "There's no way they could have that many legitimate papers," said Liz Mills, a former process server for G&Z. "There were only three of us who worked the county I worked in."

For more, see Foreclosure documents back allegations of overcharging.

Lawsuit Filings Seeking Class Action Status Against Loan Servicers Continue To Pick Up Steam

Bloomberg News reports:

  • Billionaire Wilbur Ross’s American Home Mortgage Servicing Inc., facing lawsuits by attorneys general in two states, was sued by a homeowner who accused the firm of using tactics that lead to improper foreclosures.

  • The lawsuit, filed Oct. 25 in federal court in Dallas, seeks class-action status on behalf of homeowners with mortgages serviced by American Home going back to 2006. American Home’s “illegal, unfair and deceptive business practices victimize borrowers” across the U.S., according to the complaint. American Home “routinely and systematically assesses unwarranted fees against consumers, resulting in premature default that often gives rise to unfair and improper foreclosure proceedings,” according to the complaint.(1)


In another story in the same media report:

  • Bank of America Corp., the largest U.S. bank by assets, was sued by a Florida borrower who accused the bank of violating the federal government’s home-loan modification program to boost its earnings.

  • The bank told customer-service representatives to mislead homeowners who ask about loan modifications, ignored completed modifications and failed to credit payments, Shari Goldman said Oct. 27 in a complaint filed in U.S. District Court in West Palm Beach, Florida. Goldman, who cited unidentified former bank employees in the complaint as the source of her information, asked the court to grant her suit class-action, or group, status.

Source: Lions Gate, American Home, Clarient, GE, Wells Fargo, BHP in Court News.

For another recent filing, see Class Action Filed Against Banks in Foreclosure Proceedings.

(1) Reportedly, American Home is facing similar allegations in other lawsuits.

  • Kay VanHauen v. American Home Mortgage Servicing Inc., 10-02146, U.S. District Court, Northern District of Texas (Dallas);
  • State of Texas v. American Home Mortgage Servicing Inc., 2010-3307, District Court of El Paso County, Texas;
  • State of Ohio v. American Home Mortgage Servicing Inc., 09-708888, Court of Common Pleas, Cuyahoga County, Ohio;
  • Michael Landi v. American Home Mortgage Servicing Inc., 10-00921, U.S. District Court, District of Maryland (Baltimore);
  • Kenneth Coplin v. American Home Mortgage Servicing Inc., 3:10-cv-01096, U.S. District Court, Southern District of California (San Diego).

NJ Appeals Court Slams Shut 'Loophole' Allowing Judgment Creditors To Obtain 'Double Recoveries' When Enforcing Liens Thru Forced Property Sales

Lexology reports:

  • On August 4, 2010, the New Jersey Superior Court, Appellate Division extended equitable principles previously applied in mortgage foreclosure cases to how far an unsecured judgment creditor could go to satisfy its lien against a debtor, deciding to follow a line of cases standing for the principal that “even in the absence of express statutory authorization, a court has inherent equitable authority to allow a fair market value credit in order to prevent a double recovery by a creditor against a debtor.”

  • Moreover, in the case, MMU of New York, Inc. v. Grieser, the Appellate Division even went so far as to hold that if the unsecured judgment creditor has been compensated beyond the value of its lien, it could owe a money judgment to the debtor, in order to prevent a windfall to the creditor.

For more, see How far is too far - judgment creditors that sell a debtor’s real estate told to account for the fair market value of that property and must reimburse the debtor if they go too far (requires subscription; if no subscription, TRY HERE, then click appropriate link for the story).

For the ruling, see MMU of New York, Inc. v. Grieser, No. A-2484-08T3, 2010 BL 180436 (N.J. Super. Ct. App. Div. Aug. 04, 2010).

Homeowner Attorney Describing Mortgage Servicers' Loan Modification Practices: "It Was Like They Had The Fax Machine Hooked Up To A Shredder"

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

  • Financially strapped homeowners struggling to obtain mortgage modifications are taking their frustrations to court, accusing banks and loan servicers of misleading them or breaking promises to help them hold on to their homes. The lawsuits go to what U.S. Housing and Urban Development Secretary Shaun Donovan has described as the heart of the government's anti-foreclosure efforts: ensuring that banks work in good faith from the start to help borrowers.


  • A theme of the lawsuits filed by homeowners is that banks have denied permanent modifications to borrowers who make their payments on time and otherwise hold up their end of the agreements. [...] "It was just 'extend and pretend,'" said [one homeowner's] lawyer, Anthony Lanza of Irvine. "And it was like they had the fax machine hooked up to a shredder."

  • Anaheim lawyer Damian Nassiri said his firm had filed about 100 lawsuits against mortgage lenders since 2007. Earlier suits alleged that lenders misrepresented terms of mortgages or engaged in other shady practices to foist abusive loans on borrowers. Most of his firm's suits now accuse lenders of dealing in bad faith with borrowers(1) who have become delinquent on loans. Worse, Nassiri said, in cases where foreclosure was inevitable, banks misled borrowers into accepting trial loan modifications. The intent, he claimed, was "to get some kind of money out of them" while stalling actions to seize the homes.


  • Boston consumer lawyer Gary Klein, a longtime antagonist of mortgage lenders, has filed suits seeking class-action status against the top three loan servicers — Bank of America Corp., Wells Fargo & Co. and JPMorgan Chase & Co. — and others. A multidistrict panel of federal judges on Oct. 8 consolidated eight such suits, including two from California, for pretrial proceedings in federal court in Boston.

For more, see Lawsuits accuse lenders of sabotaging mortgage modifications (More borrowers are taking banks and loan servicers to court, alleging they were misled when they tried to renegotiate the terms of their loans).

(1) A California appeals court recently ruled that a foreclosing lender can be held to its loan modification promises in certain cases, even absent a contractual obligation to do so. See Court: "Promissory Estoppel" Could Make Lender’s Verbal Agreement To Halt F'closure Sale Enforceable, Even Absent Consideration For Promise To Stall.

Central Florida Homeowner Fights Off Two Banks Foreclosing On Same Loan; Notorious Law Mill Representing Lender In One Suit Fails To Return Calls

In Central Florida, CNN's AC 360 reports:

  • Tony Louzado is facing foreclosure. He's not alone -- in central Florida, where Louzado lives and works, one in every 56 homes is in foreclosure. That simple number, from foreclosure data firm RealtyTrac, doesn't tell the whole story, especially in Louzado's case.

  • Two different law firms are pushing the foreclosure -- on the same mortgage. "I see now that there's two people that are coming after me, that maybe [the bank] hired in this way," he said. "I don't know all the specifics, but there's two people that are coming after me on the same loan number."


  • "In my opinion, these are hired guns. Banks want these non-performing loans off their bottom line. And what do they do? They go out and hire a foreclosure mill who's trying to push it through as fast as possible," said Louzado's attorney, Jose Funica. [...] Funica's Palm Beach law firm, Ice Legal, has taken numerous depositions where banking officials have admitted under oath they signed thousands of foreclosure-related documents every month without personally verifying them.


  • One of the firms foreclosing on Louzado is the law office of David Stern in Plantation, Florida. Florida's attorney general says Stern's foreclosure business is the largest in the state and accuses the firm of submitting false documents, even making some up, just to speed up the foreclosure process. The state has opened a civil investigation against several firms, including Stern's. Repeated calls to Stern's office have not been returned.

For more, see Are some law firms cutting corners on foreclosures?