Saturday, May 21, 2011

Foreclosure 'Happy Hour' A Forum For Exchange Of War Stories For Homeowners Screwed Over By Illegal Bankster Take-Back Attempts

In West Palm Beach, Florida, TC Palm reports:

  • Several Treasure Coast residents scribbled the name “Linda Green” in black permanent marker on their temporary name tags at a recent happy hour gathering in West Palm Beach.
  • That name and others have become synonymous with the nationwide foreclosure robo-signing crisis that’s rocked the foundation of several major banks and mortgage lending institutions. Several foreclosure law firms and lenders have been accused of improperly preparing and filing foreclosure documents by allegedly bulk-signing names of bank employees on court documents, questioning the validity of past foreclosures and cases that are still in active litigation.
  • It’s one of the bonds shared by the half dozen Treasure Coast residents and 30 others from South Florida who meet monthly at what they call the Foreclosure Hamlet Happy Hour. Almost all attendees claim their foreclosure documents were robo-signed.
  • The banks created this fabricated propaganda that framed us like deadbeats. Irresponsible Americans that scammed the banks out of trillions of dollars by signing on loans we knew we couldn’t pay, ” said West Palm Beach activist and founder Lisa Epstein.
  • She and Michael Redman, founder of started the group that plans to expand north and hopes to organize a Treasure Coast meeting soon.

For more, see Treasure Coast residents exchange sad stories at foreclosure happy hour.

Lawsuit: Current Philly Sheriff Not Legal, Void All Foreclosures Conducted By Her

In Philadelphia, Pennsylvania, the Philadelphia Daily News reports:

  • A candidate in next week's primary election for sheriff filed a lawsuit in U.S. District Court last week seeking to void all mortgage-foreclosure sales conducted under acting Sheriff Barbara Deeley.
  • The suit, which names as its plaintiffs Democratic candidate Jacque Whaumbush and former West Philadelphia homeowner Glenda Sanders, seeks an order from the court declaring that Deeley "is not, and never was, the Sheriff or 'Acting Sheriff' " of Philadelphia and overturning the sheriff sale held April 5.
  • The suit claims that the sale shouldn't be recognized because Deeley was never confirmed by the state Senate after she took over the office on an interim basis to fill in for Sheriff John Green, who retired in December.

For more, see Suit seeks to void sheriff sale; says current sheriff not legal.

DeKalb County Declares War On Roadside 'Bandit' Signs Peddling Foreclosure Rescue, Junk Car Buyers, Etc.

In DeKalb County, Georgia, The Atlanta Journal Constitution reports:

  • The brightly colored signs shoved into the ground next to DeKalb County roads have a new enemy: all county workers. Any county employee assigned a vehicle – including sanitation workers and animal control officers -- soon will be authorized to remove illegal signs and placards along roadsides countywide under a law approved Tuesday by the Board of County Commissioners.
  • I’m seeing a whole lot of ‘We Buy Junk Cars” out there," said Commissioner Larry Johnson, who pushed for the law. “Removing these kinds of signs helps keep DeKalb beautiful.”
  • The county’s code enforcement division is charged with handling the nuisance signs, which also appear tacked to utility poles and slathered on buildings. That office, though, is overwhelmed with keeping an eye on properties, officials say. DeKalb is among top three counties in the state for foreclosures, with more than 13,000 in its borders.
  • Empowering other county workers to yank out illicit signs will give those enforcement officers a hand in battling the problem. Johnson said he also plans a crackdown on violators, who faces civil fines when caught.
  • The county will spend the next few months training workers on how to spot illegal signs, such as the ones advertising ways to avoid foreclosure, versus proper ones such those for real estate. County workers will be allowed to start removing signs in the fall. "The truth is, these illegal signs are a lot like graffiti,” said Commissioner Jeff Rader. “The quicker you can get them down, the more you deny them any benefit of being up.”

Source: DeKalb enlists county workers to police signs.

Friday, May 20, 2011

Trump 'Name-Renting' Scheme Used To Jack-Up Prices On Beach Condos Leaves Investors Headed For The Courts

In Fort Lauderdale, Florida, The Miami Herald reports:

  • Another vacant season winds to an end for the grand hotel formerly known as Trump. The yellow and blue tower, one of the few modern structures in Broward County designed by a world renown architect, should have been the throbbing heart of the renaissance on Fort Lauderdale Beach.
  • It’s empty. As empty, perhaps, as the Trump brand that was used to lure investors into a condominium-hotel scheme that would collapse before a single guest signed the register. The architectural flourishes of the 24-story building, with great portholes looking out over A1A, were meant to evoke the old fashioned “elegance and grace of the luxury ocean cruise liners.” In retrospect, maybe the Titanic.
  • More than 100 investors bought into the 248-room project in 2005 and early 2006, putting 20 percent down for units priced between $500,000 to $3 million.
  • Lawyer Joseph E. Altschul, who represents purchasers holding stakes in some 50 units, said his clients had bought into that Donald Trump allure. The Trump name. The Trump luxury hotel network. And they paid, he said, about $200 more per square foot over comparable condo-hotel projects along the beach for that magical Trump name.
  • Preconstruction brochures assured buyers that “Mr. Trump is committed to personal and direct involvement in everything that this name represents.”
  • Not so much, as it turned out. Two years ago, when the project fell into foreclosure, Trump told the Sun-Sentinel, “We have nothing to do with the building. We had a licensing deal, and we terminated the licensing deal a long time ago.”
  • Altschul said his clients were shocked to learn that the famous name used to jack up the prices on investment packages for a luxury hotel project was just another cheesy Trump marketing deal. “Trump International” carried no more meaning then the logo fixed on Trump shirts, Trump suits, Trump ties, Trump chocolate bars (“Each bar is packaged in a beautiful and luxurious gold, silver, or copper casing”) Trump crystal, steaks, vodka, lamps, bottled water, mattresses. And, of course, “Donald Trump by Donald Trump,” which turns out to be a fragrance. Spray it on for “citrus notes with hints of mint, cucumber and black basil.” And the subtle whisper of mendacity.
  • The New York Times reported Friday that would-be condo buyers who lost hefty deposits in two other Trump buildings, condos in Tampa and Baja California, were similarly stunned to learn that the failed projects were “Trump” in name only. Trump’s lawyers pointed out that if the buyers had closely examined the sales contracts, they would have found the obtuse language indicating that The Donald was only the front man in someone else’s real estate deal.
  • He rented his name to the Tampa project for $4 million and a cut of the never-to-be profits. (The Times also reported that consumer complaints and lawsuits were piling up against the unaccredited but very expensive Trump University, with its courses in get-rich-like-me real estate and deal making.)
  • So the Trump International on Fort Lauderdale Beach was no more authentic than the would-be presidential candidate’s descent into the birther conspiracy. Just a famous name attached to an empty lie.

For more, see Trump hotel just another lie.

In related stories. see:

Media Spotlight Causes Foreclosure Rescue Operators To Cough Up Refunds On Failed Loan Modification

In New York City, WABC-TV Channel 7 reports:

  • The foreclosure crisis has left many homeowners desperate for lifelines to stay in their homes. Many mortgage modification companies offer help to lower payments. A Staten Island woman invested her trust and her money in a firm promising guaranteed solutions.
  • When they didn't fix the loan then closed, she asked Nina Pineda and 7 on Your Side to track them down. With the kind of reaction Eyewitness News received, it's easy to see why customers of Home Safe America are left upset.


  • Within weeks of our visits she got three bank checks from Home Safe's former partners.(1)

For the rest of the story, see Battle with mortgage modification company.

(1) According to the story, Home Safe America never got the homeowner's modification and then went out of business. When Eyewitness News went to Home Safe's offices, the company's president was peddling mortgage modifications under a new name, United Solutions Corp. At first he didn't want to talk but finally, he agreed to refund the homeowner. Off camera he placed the blame for clients not getting refunds on his former Home Safe partner. Eyewitness News went looking for the partner and tracked him down peddling mortgage modifications for another company. The partner also refused to be interviewed but promised to pony up part of the refund for the homeowner. Shortly thereafter, they forked over three bank checks to her.

Indiana Attorney Cuffed & 'Frog-Marched' To Prison For 5+ Years After Ripping Off 100+ Victims In Client Trust Account Swindle

In Fort Wayne, Indiana, The Journal Gazette reports:

  • After a two-hour hearing that clearly aggravated the judge, the prosecutor and nearly every other attorney in the room, former attorney Daniel Serban was handcuffed and led off to begin a 5 1/2 -year prison sentence.


  • Serban’s sentence, which includes 5 1/2 years of probation and a restitution order of more than $280,000, came after an April admission that he had been stealing money from his clients’ trust fund accounts.


  • According to court documents, there were more than 100 victims in the case and more than 600 instances of “racketeering activity.”
  • In one instance, according to testimony and court documents, a woman was seen crying in the hallway outside his office because she had paid her utility bill, which had been turned over to collection with Serban. Because he did not pass the money on to the utility, the woman’s water had been shut off.
  • In another situation, Serban forged the name of the personal representative of an estate to take money from the estate to pay back some of the other money he had taken. Two attorneys testified to having used Serban’s firm to handle collection work for them, only to have the cases mishandled and left in a state of disarray.

For more, see Lawyer’s thefts lead to prison.

(1) The Clients’ Financial Assistance Fund ["CFAF"] of the Indiana State Bar Association provides compensation, as a matter of grace, and not as a right, to qualified applicants who have suffered a monetary loss as a result of dishonest acts of an Indiana lawyer, acting either as a lawyer or as a fiduciary. No client or member of the public shall have any right in the Fund as a third-party beneficiary or otherwise; instead any award from the Fund depends upon the sole discretion of the ISBA, according to its rules and regulations. This Fund, which exists because of the voluntary contributions of the members of ISBA, recognizes that the lawyers of Indiana as a whole desire to help those who fall victim to the few lawyers who are dishonest.

Please review the Rules of Procedure prior to filling out the application. There are certain guidelines that must be adhered to. The Rules of Procedure should help you determine if you qualify for CFAF assistance.

For similar "attorney ripoff reimbursement funds" that sometimes help cover the financial mess created by the dishonest conduct of lawyers licensed in other states and Canada, see:

Maps available courtesy of The National Client Protection Organization, Inc.

New Mexico AG Accuses Purported Mobile Home Peddler Of Targeting Immigrants With Downpayment Ripoffs

From the Office of the New Mexico Attorney General:

  • Attorney General Gary King says an apparent scam is being perpetrated against mobile home buyers in Albuquerque who never take delivery or get their deposit money back.
  • "We filed a civil lawsuit today against Fernando Chavez-Guillen, who we believe is targeting immigrant consumers," says AG King. "He is charged with misrepresenting mobile homes he is selling; failing to deliver; taking cash deposits and failing to return them when delivery is not made; all without a proper state license."

For more, see AG Alleges Misrepresentation in Mobile Home Sales... Lawsuit Filed Seeks Restitution & Civil Penalties.

Thursday, May 19, 2011

Empire State Timeline For Foreclosure Actions Leads To 7-Year Backlog Of Cases

Housing Wire reports:

  • At the rate the New York court systems are currently working through the backlog of foreclosure cases, it will take more than seven years to clear, according to RealtyTrac.
  • New York is a judicial state, whereby foreclosures are completed through the court system. But as cases mounted, the state developed the largest foreclosure timeline in the country. It currently takes an average of 900 days for a foreclosure to wind through the New York system, according to RealtyTrac, which maintains a count of filings at the county level.

For more, see New York foreclosure courts face seven-year backlog: RealtyTrac.

Thanks to Bill Collins of Frontier Abstract, Rochester, NY for the heads-up on the story.

Victim Of Home Refinance Gone Haywire Who Never Missed Any Mortgage Payments Gets 6-Month Hold On F'closure Eviction As Parties Work Toward Resolution

In Milwaukee, Wisconsin, the Milwaukee Journal Sentinel reports:

  • A six-month reprieve has been issued to Keon Williams, the north side man whose home was sold at a sheriff's sale in January even though he was current on the only mortgage he knew he had.


  • The delay provides time to try to resolve the mortgage issues swirling around Williams either through negotiations or court action.
  • Williams, whose dilemma was the subject of a Journal Sentinel report last month, has been teetering on the edge of eviction for months because he is caught in a vise created by the national mortgage meltdown and some fast dealings by the now-defunct Central States Mortgage Co. and an affiliated company.
  • In 2008, Williams, a single father of three, refinanced his home through Central States, which had been the state's largest mortgage broker. However, unknown to Williams, the proceeds from that 2008 refinancing were not used to pay off his previous lender, Amcore Bank. Amcore was bought by Harris last year.
  • Instead, Interim Funding LLC - an affiliate of Central States - used the money to pay off a different lender, said Stephen Kravit, an attorney for Richard Jungen, an owner of Interim and the founder and former chief executive of Central States. The FBI has been investigating Central States and some of its former executives since 2009.

For more, see Eviction postponed for six months (Caught up in mortgage mess, Milwaukee man gets a reprieve).

Another Bankster Jumps Gun With Premature Lockout - Another Homeowner Left On Outside Looking In

In Oakdale, Minnesota, the Oakdale Patch reports:

  • An Oakdale homeowner whose home was is in the foreclosure/short sale process called police Wednesday, May 5, to report that someone had changed the locks on her home, according to an Oakdale police report.
  • The resident, whose home is in the 6300 block of 11th Street said she still had legal rights to the property until at least July 5. However, when she went to the house, there was a notice on the door from Mortgage Contracting Services that said the property was determined abandoned/vacant and so the locks were changed, the report says.
  • The complainant had last been to the home about two weeks ago, the report says. Police called a representative from the company, but because it was after-hours, limited information was available, according to the report.

Source: Mortgage Company Locks Out Homeowner.

Tennessee Banksters Finance Major Campaign To Make Easy Foreclosures Even Easier Throughout State

The Knoxville News Sentinel reports:

  • Legislation to cut back on the number and length of home foreclosure legal notices now required in Tennessee is being pushed by bankers who stand to save money if the bill passes and opposed by newspapers that stand to lose money.
  • While that is clear, the two sides - both aided by a contingent of lobbyists - clashed sharply over whether the proposed change would benefit financially strapped homeowners and the general public as the bill advanced in the House last week.
  • As drafted and introduced at the behest of the Tennessee Bankers Association, HB1920 would require that just one notice of a pending foreclosure be published in a newspaper based in the county where the property is located.
  • Current law requires three notices. That has been the case for more than 125 years in Tennessee, according to Steve Baker, a Nashville foreclosure attorney who testified before committee in support of sticking with the "tried and true" three-time publication rule.


  • Indeed, others say that, politically speaking, legislators may have more to fear from the bankers who collectively gave more than $200,000 to state political candidates last year, according to a review of records by The Tennessean. That includes $184,750 donated by the Tennessee Bankers Association political action committee to candidates for the Legislature.


  • [H]enry Hildebrand, a bankruptcy trustee in Middle Tennessee, told legislators that he has seen "hundreds" of cases over the past 20 years of legally defective foreclosure moves by banks that were never detected until they reached U.S. Bankruptcy Court. He opposed the bill for reducing one of the few safeguards now benefiting homeowners in Tennessee.
  • "Tennessee already has one of easiest foreclosure processes in the country for banks," said Mary Mancini, executive director of Tennessee Citizen Action, a consumer advocacy group. "To remove a notice or two in the newspaper, which is still the only source of information from the outside world for some people, is a very bad idea."

For more, see Foreclosure bill fight rages (Publishing info in newspapers costly, bankers group says).

Wednesday, May 18, 2011

Ex-NH Sale Leaseback Peddler Cops Plea In Equity Stripping Scam After Fleeing State; Undicted Co-Conspirator Remains On The Loose

In Concord, New Hampshire, The Nashua Telegraph reports:

  • A second man accused of operating an elaborate mortgage scheme that fleeced banks out of millions of dollars and people out of their homes pleaded guilty in U.S. District Court this week. Former Nashua resident Walter Bressler, 42, now of Frisco, Texas, admitted this week in U.S. District Court to participating in the scheme and violating federal mail fraud laws, according to the U.S. Attorney’s Office.
  • Prosecutors charge that Bressler helped persuade financially troubled home-owners to sign over the deed to their property with the promise that the homeowners could stay on as tenants, pay rent for two years and then buy the property back at a prearranged price.
  • Instead, the scheme participants resold the homes to “straw buyers,” often in amounts that exceeded the original owner’s loans, according to the U.S. Attorney. Some of the rent money was used to pay off the new mortgages, but the loans eventually went unpaid and the homes fell into foreclosure.
  • The original owners had no “realistic opportunities” to buy their homes back because they had been stripped of equity and encumbered with large, defaulted loans, according to the U.S. Attorney.
  • The first to admit to the scheme was Richard Winefield, of Nashua, a former Re/Max real-estate agent (See Sale Leaseback Peddler Starts "Singing" To NH Feds After Copping Guilty Plea In Equity Stripping, Foreclosure Rescue Conspiracy). Winefield has pleaded guilty to mail fraud and is due to be sentenced June 1.(1)
  • Michael Prieto has been identified by prosecutors as a partner of Bressler’s and Winefield’s, but he hasn’t been charged. Prieto said it was no scheme; rather, a refinancing program that was intended to help struggling homeowners, which would have worked if they had paid their agreed-upon rent.
  • The agreement and the program … was not a scam,” Prieto previously told The Telegraph. “It was designed for its purpose, which was helping people pay off their debts, giving them breathing room, giving them an opportunity to stay in their homes for two years.” Prieto couldn’t be reached by phone or e-mail for this story.(2)

For more, see Former Nashua man admits to mortgage scheme.

Go here for Bressler's plea agreement filed in U.S. District Court.

(1) Congratulations goes to Winefield, who has proven himself to be the clear winner of the "race to the prosecutor's office", "bellying-up" to investigators and spilling his guts in an attempt to take down as many of his co-conspirators and "buy-out" of as much prison time as possible. See United States v. Moody, 206 F.3d 609, 617 (6th Cir. 2000) (Wiseman, J., concurring) for one Federal judge's observation, made in the context of drug conspiracy cases, involving the so-called "race to the courthouse/prosecutor's office" which seems equally suited to other types of major, multi-defendant felony cases:

  • In practical terms, drug conspiracy cases have become a race to the courthouse. When a conspiracy is exposed by an arrest or execution of search warrants, soon-to-be defendants know that the first one to "belly up" and tell what he knows receives the best deal. The pressure is to bargain and bargain early, even if an indictment has not been filed.

Winefield's cooperation has presumably been of help to the Feds in taking down two other co-conspirators - there is apparently one left on the loose.

(2) Prieto may simply be trying to enjoy his remaining days of freedom. Presumably, now that Winfield and Bressler, as well as a 3rd co-conspirator, Sadie Stanhope Ng, have copped guilty pleas, they have become very cooperative with prosecutors in helping them bag Prieto - especially if it results in a 'downward adjustment' in their expected prison sentences.

Sadie Stanhope Ng, 34, of Quincy, Mass., and formerly of Milford and Bedford, was part of the same conspiracy. See 2nd Suspect Agrees To Go Down In Granite State Sale Leaseback, Equity Stripping Foreclosure Rescue Scam.

Stanhope, Prieto and Bressler were previously sanctioned by state Banking Commissioner Peter Hildreth by a "cease and desist" order in 2007. The trio were fined $10,000, and they and their various limited liability companies were ordered to repay eight homeowners around the state (including two in Nashua) money gleaned from the sale of their properties. They also were ordered to stop being involved in mortgage brokerage or debt adjustment services in the state.

See Criminal Prosecutions Of Sale Leaseback Peddlers In Equity Stripping Foreclosure Rescue Deals for other incidents that led to criminal prosecutions in sale leaseback deals.

No Protection Under Title Insurance Policy For Pre-Existing Environmental Contamination; Pre-Purchase Failure To Inspect Leaves Buyer Holding The Bag

Lexology reports:

  • [A]ccording to a recent US case in Louisville, Kentucky, a title insurer cannot be held liable to its insured for pre-existing environmental contamination (Pavilion Park LLC v First American Title Insurance Co.).
  • In that case, the insured sued its insurer under its title insurance policy claiming that a restrictive covenant documenting the property’s former use as a solid waste disposal site was an “encumbrance” under the title insurance.


  • The court was not particularly motivated to assist the insured purchaser because the purchaser had negotiated a contractual right to inspect the property during the due diligence period but apparently chose not to. One would think that such searches are commonplace. In the end, the court held that since the restrictive covenant did not create any legal impediment to title to the property, the insurer had no coverage responsibility.
  • While it may have affected development, use, valuation and marketability, title insurance is not intended to address these issues.
  • At its essence, it insures the prior chain of title; not an intended use. Challenges to marketability due to a regulatory restriction for a future clean up does not equal “title marketability”.
  • The insured purchaser’s argument in this case was not the first attempt at such an argument in the US and not the only context in which it has been made: asbestos, lead paint and former tanks have all been determined not to affect marketability of title under title insurance.
  • Not all title insurance policies are drafted equally, but the moral of the story is: due diligence is called due diligence for a reason. Read the policy, do the due diligence.

For more, see Can title insurance protect you from environmental defects? (requires paid subscription; if no subscription, TRY HERE, or GO HERE - then click appropriate link for the story).

Texas Man Bagged For Allegedly Pocketing Cash, Passing Himself Off As Lawyer Providing Foreclosure Rescue Services

In Williamson County, Texas, KXAN-TV Channel 36 reports:

  • A Williamson County man is arrested after allegedly fraudulently posing as an attorney. The Williamson County Sheriffs office was contacted after Ray Echavez filed several documents with the Williamson County Clerk’s Office. Clerks in the office did not believe that Echavez was a lawyer.
  • Deputies contacted the man named in the document. According to the affidavit, the victim said that he met Echavez through a realtor and agreed to pay $2,500 for help in stopping the foreclosure of his Cedar Park home. The victim said he received legal advice and even appeared in court with Echavez, where a judge refused to grant an application for a restraining order against the foreclosure company.
  • The victim also said there was paperwork where his signature was forged. Investigators also believe that Echavez at one point called deputies attempting to impersonate the victim. Echavez is charged with falsely holding oneself out as a lawyer, a third degree felony.

Source: Man posing as attorney arrested (Man allegedly paid $2500 for legal advice).

Elderly, Infirm Foreclosure Rescue Scammer Dodges Prison Time After Guilty Plea In Fractional Interest Deed Transfer Bankruptcy Ripoff

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

  • 75-year-old Van Nuys man was ordered [] to spend a total of eight months in a halfway house and under home confinement for his role in a scheme that used phony bankruptcy filings to stall foreclosures of nearly 1,500 homes. Darwin Bowman pleaded guilty in February in Los Angeles federal court to bankruptcy fraud.
  • U.S. District Judge Stephen V. Wilson, noting Bowman's age and ill health, sentenced him to four months in a halfway house and four months in home confinement, followed by three years under supervised release.
  • "I don't think you ought to give him gold stars ... to my way of thinking he's a crook," Wilson said, but added that he would have a hard time sending Bowman to prison when the defendant's condition was taken into consideration. Bowman was the third person to plead guilty in the case.
  • According to Assistant U.S. Attorney Evan J. Davis, the perpetrators of the scheme improperly postponed foreclosures on $725 million worth of mortgages and caused banks and lenders to lose out on loan payments from homeowners.
  • Bowman -- and co-defendants Irving Cohen and Robin Phillips-- advertised a foreclosure rescue service that promised at-risk homeowners their properties could be saved in exchange for monthly payments of about $1,500, Davis said.
  • After collecting the first fee installment, the defendants had the property owner sign a deed that granted a one-eighth interest in the home to a fictitious person. They would then file a bankruptcy petition in the name of the non-existent individual without the homeowner's knowledge, Davis said. The fraudulent bankruptcy filing triggered an automatic stay of the foreclosure proceedings in each instance.
  • When a lender would succeed in having the bankruptcy case dismissed, the defendants would have their client sign another deed that granted another interest in the home to a different fictitious person. They would then file another bankruptcy case in the new fictitious person's name, according to the U.S. Attorney's Office.
  • The fraudulent deeds and bankruptcy filings allowed the defendants to repeatedly postpone foreclosures while collecting $550,000 in fees from homeowners, prosecutors said.

For the story, see Van Nuys man sentenced to probation in foreclosure-rescue scam.

See Final Report Of The Bankruptcy Foreclosure Scam Task Force for a discussion of fractional interest deed transfer scams and other foreclosure rescue rackets involving the abuse of the bankruptcy courts.

Go here for other posts on fractional interest deed transfer, foreclosure rescue bankruptcy scams.

Georgia Woman Faces Heat For Allegedly Recording Bogus Land Documents Claiming Ownership To One Vacant Home, Cancelling Mortgage On Another

In DeKalb, County, Georgia, WSB-TV Channel 2 reports:

  • A Channel 2 Action News investigation has put a north Georgia woman under the spotlight for allegations that she tried to steal a $1 million Decatur home. The woman now faces a criminal investigation by the DeKalb County District Attorney.
  • Channel 2 investigative reporter Jodie Fleischer uncovered paperwork the woman filed, claiming ownership of the home, but the home is actually owned by a bank. [... A] document filed at the DeKalb County courthouse showed a woman named Susan Weidman claimed possession of the house because of its “apparent abandonment.”


  • In March, prosecutors indicted twelve people for racketeering after Channel 2 exposed their scheme to steal houses last summer. Records show the same district attorney has now opened a criminal case against Weidman for her actions.
  • He said the case could also include her cancelling her own mortgage in Cobb County. The mortgage company has since filed paperwork declaring the cancellation invalid.

For more, see Woman Accused Of Trying To Rent Foreclosed Home.

Tuesday, May 17, 2011

FDIC Head: Bankster Robosigner Screw-Ups "Infected Millions Of Foreclosures"; "Damages ... Could Be Significant & Take Years To Materialize!"

The Wall Street Journal reports:

  • The head of the Federal Deposit Insurance Corp. is warning that flaws may have “infected millions of foreclosures” and questioned whether other regulators’ inquiries into problems at the nation’s mortgage-servicing companies have been thorough enough.
  • We do not yet really know the full extent of the problem,” FDIC Chairman Sheila Bair said Thursday in written remarks submitted to a hearing of the Senate Banking Committee. “Flawed mortgage-banking processes have potentially infected millions of foreclosures, and the damages to be assessed against these operations could be significant and take years to materialize.”
  • Federal and state officials launched numerous investigations last autumn after revelations that, to process foreclosures, banks used “robo-signers” who didn’t review documents prepared by their colleagues. Banking regulators’ have said their reviews of a sample of 2,800 foreclosure cases have found a small number of improper foreclosures.

For more, see FDIC’s Bair: Millions of Foreclosures Could Be ‘Infected’.

In related stories, see:

Unwitting Homebuyer Of MERS-Related REO Told "Don't Move In, There's A Problem!" As 'Crappy-Title Clouds' Darken Over F'closd Houses Thru-Out Michigan

In Three Rivers, Michigan, WWMT-TV Channel 3 reports:

  • A foreclosure mess is putting people's status as homeowners in question. It has to do with a recent Michigan Appeals Court ruling that calls into question thousands of foreclosures. The court says a company called Mortgage Electronic Registration Systems didn't have the right to initiate foreclosures. That company keeps mortgage records.
  • Now, some people who bought foreclosed homes, or homes in the process of foreclosure, are finding themselves in limbo.
  • It's hard to find a replacement for the perfect house,” said Bob Van Zalen. Van Zalen says he'd found the perfect home, a foreclosed home near Three Rivers. Van Zalen closed on it a few weeks ago. “It was typical closing, flawless,” said Van Zalen. “Title company was there, bank was there, realtor was there.” Van Zalen got the keys and an hour later his moving crew and rental truck were ready to go.
  • Standing in line at the rental place, phone rang,” said Van Zalen. “Realtor said 'don't move in there, there is a problem.'” Van Zalen had already gotten the utilities turned on, and even had to rush to the house to stop the cable company from installing service.
  • Three weeks later, and Van Zalen still can't move in. Big questions are being raised about the sale of foreclosed homes related to MERS, the mortgage record company accused of fraudulent practices. Until the mess is sorted out, Van Zalen is in limbo even though he has the keys and is packed and ready to move in. “I have signed documents saying I am the owner,” said Van Zalen.
  • What if I find another house, then this gets straightened out, then I have two homes.” The foreclosure mess is something that the registrar of deeds offices across the State of Michigan and the rest of the country are dealing with.(1)

Source: Foreclosure mess puts homeowners in limbo.

In a related story, see The Battle Creek Inquirer: Michigan appeals court ruling could erase thousands of foreclosures:

  • Debbie Barnett, the owner of the East Lansing real estate company Tomie Raines Inc., said the company already has halted one sale of a MERS-foreclosed home.
  • Not only have people lost their homes under a process the Court of Appeals declared illegal, said Curtis Hertel Jr., the county register of deeds, but "we also have people who have legitimately bought those homes and now are going to have problems insuring the title in the future when they go to sell the property."

In a related post, see Michigan To Join Massachusetts As Real Estate Resale Market Quagmire After Recent State Appeals Court 'Anti-MERS' Ruling?

(1) For more on the crappy title problem in connection with improperly foreclosed homes, see

Grandson: MERS Illegal Foreclosure Forced Sale Of Dying Gandmother's Home; Hope Still Alive In Attempt To Recover Title

In Ingham County, Michigan, WILX-TV Channel 10 reports:

  • Nick Reeser's love for his grandma is written all over him. "Grandma was a huge tigers fan, this is a tribute to her," he said, pointing to a still-healing "D" tattoo on his leg. When she died just weeks ago, she left him her house. So he went to the Register of Deeds' office to get a copy of the deed and mortgage.
  • "He finds out when he got here there had been a foreclosure on his grandmother's house the last few months before she passed away," said Curtis Hertel, Ingham County Register of Deeds. "Nobody was notified, my grandma was in no mental or physical state to make decisions on it," said Reeser.
  • To make matters worse, it was a MERS foreclosure, one of 469 just in Ingham County deemed illegal by the Court of Appeals.
  • "MERS did not own the note, they were in the chain of title but you need to have both to foreclose by advertisement," said Attorney Brian Dailey.
  • Dailey has filed a class action law suit against the Mortgage Electronic Registration Systems company (MERS), saying its crimes are many.(1) "Violating people's rights, trespassing on their property, taking their property when they shouldn't be," he said.

For more, see Illegal Foreclosures Prompt Class Action Suit (Hundreds of homeowners, just in Ingham County, have been illegally foreclosed upon, according to the Court of Appeals).

(1) For the lawsuit, see Depauw v. Mortgage Electronic Registration Systems Inc.

$5 Billion A Paltry Offer In View Of Mounting Evidence Of Abusive Mortgage Servicing Practices

A recent column in The New York Times offers commentary on the paltry $5 billion offer made by the mortgage industry to settle any claims in connection with the 50-state attorney General foreclosure fraud probe, particularly in light of the fact that evidence of extensive and abusive servicing practices keeps piling up:

  • That figure is a fraction of the $20 billion that state attorneys general had apparently floated. If regulators accept the lowball offer, perhaps that would be because they haven’t dug deep enough.
  • Because evidence of extensive and abusive servicing practices does in fact exist. It is piling up at the offices of the United States Trustee Program, the arm of the Justice Department that monitors the bankruptcy system. Over the past six months, the trustee has drawn material from 95 field offices covering 88 judicial districts. The findings should dispel any notion that toxic servicing practices were atypical or have done no harm.
  • Clifford J. White III, director of the executive office of the United States Trustee, discussed some of the findings in an interview last week. But before we recount the ugly details, it’s worth noting the immense pushback the banks have mounted against the trustee office.
  • Banks have repeatedly tried to thwart the program’s actions, filing lawsuits and court motions to prevent officials from compiling evidence. Never mind that part of a trustee’s job is to investigate possible improprieties in foreclosures to determine if they are poisoning the bankruptcy system.
  • We have faced consistent opposition by all of the major servicers,” Mr. White said. “We are currently facing 200 motions to quash our discovery requests. We also are facing upwards of 20 appeals either in district courts or in circuit courts.”
  • Those pushing back include Bank of America, Citigroup, G.M.A.C., JPMorgan Chase and Wells Fargo, he said.

For more, see A Low Bid for Fixing a Big Mess.

Judge Stalls 300-Day Sentence For Loan Modification Scammer To Allow Time For Add'l Restitution Payments In Possible 'Jail Time Buy Down' Deal

From the Office of the Tulare County, California District Attorney:

  • On Wednesday, May 11th, 2011, Albert J. Carazolez, 43 of Porterville, was sentenced in the Tulare County Superior Court by the Honorable James Hollman for 21 charges relating to Foreclosure and Loan Modification Fraud. The charges consisted of four felony counts of CCC 2945.4(a) (foreclosure rescue fraud), four misdemeanor counts of CCC 2945.4(a), (foreclosure rescue fraud), nine counts of CCC 2944.7 (demanding up front payments for loan modification services), two counts of BP 6126 (practicing law without a license), one count of CCC 2944.6 (violating loan modification contract disclosure laws, and one count of BP 6402. (failure to register as a legal document assistant).
  • The defendant was sentenced to 300 days in county jail, five years felony probation, and ordered to repay $20,630.00 to 15 named victims for illegally obtained fees. The defendant pled no contest to the 4 felony charges and 17 misdemeanor charges on October 10, 2010.(1)
  • The Honorable Judge Hollman delayed sentencing over the People’s objection to allow time for the defendant to pay restitution. At the time of sentencing, the defendant had only paid $5,000.00 of the $20,630.00 owed.(2)
  • The case began in July of 2009. District Attorney Investigator Dwayne Johnson began looking into complaints against Carazolez’s company, Quick Action Services. The investigation revealed that Carazolez was claiming to be able to effect loan modifications. District Attorney Investigators and an Investigator from the California Department of Real Estate conducted undercover operations which established that Carazolez was illegally offering to provide loan modification services.
  • A search warrant was served and Carazolez’s files revealed an ongoing operation in which he claimed to negotiate loan modifications for an up-front fee, usually around $1,500.00.
  • Although not an attorney, Carazolez filed bankruptcies for several of the victims as well.(3) Because of Carazolez’s actions, most of the loan modifications did not work out and some of the victims ultimately lost their homes.


  • This case was prosecuted through the Real Estate Fraud Program of the Tulare County District Attorney’s Office.

For the Tulare County DA press release, see Porterville Man Sentenced for Foreclosure and Loan Modification Fraud.

(1) According to this story, Carazolez pled no contest to:

  • four felony counts of foreclosure rescue fraud,
  • four misdemeanor counts of foreclosure rescue fraud,
  • nine counts of demanding up front payments for loan modification services,
  • two counts of practicing without a license,
  • one count of violation of loan modification contract disclosure laws, and
  • one count of failure to register as a legal document assistant.

(2) I suspect that the prosecutor's objection to delay the sentencing has to do with:

  • the likelihood that if Carazolez coughs up all the cash before going to jail, he will immediately ask the judge for consideration of a 'buy down' (reduction) in his 300-day jail sentence; and
  • the possibility that Carazolez, as a convicted scammer, may consider raising the loot by going out and scamming more people before the next sentencing hearing.

(3) Carazolez should consider himself lucky that he has apparently dodged scrutiny from federal criminal investigators for possible fraud involving the bankruptcy filings.

See Final Report Of The Bankruptcy Foreclosure Scam Task Force for a discussion of the various foreclosure rescue rackets involving the use of abusive bankruptcy court filings.

Ohio AG Tags Foreclosure Rescue Operator With Civil Suit Alleging Upfront Fee Ripoffs

In Cleveland, Ohio, WEWS-TV Channel 5 reports:

  • An exclusive 5 On Your Side investigation has uncovered rising complaints against an Ohio company offering mortgage relief for struggling homeowners. A review of complaints contained filed with the Ohio Attorney General's Office found at least 71 homeowners alleging they paid thousands for loan modifications that never happened.
  • Consumers identified "The Modification Group" or "TMG" as offering to lower their monthly payments through a process called home loan modification.
  • Bob Miller and his wife said they gave the company $4,000 to obtain a home loan modification that never happened. The Millers said they signed a contract that they said offered to refund 80 percent of their up-front payment if the loan was not approved. But after waiting 14 months, the Millers said they have no loan and no refund. "And then, the end of April, I come and there's a foreclosure notice on our door," said Paula Miller. "Now what?"
  • Lynn Franks is another homeowner who withdrew $2,000 from her retirement account to pay for a loan modification she says she never received. "They told me I would be a perfect candidate," said Franks.
  • Three homeowners took "TMG" to small claims court and won. In one case, a judge wrote, "They (TMG) accomplished nothing...nor does it appear they exerted any effort to try to do so."
  • Tracie Lee is another homeowner who won her court case as well. In her case, Lee said she spoke on several occassion to Gregory D. Lewis about her loan modification. It turns out that Lewis has a criminal background. A mortgage fraud task force in Cuyahoga County convicted Lewis and six others in 2009 for obtaining $3 million worth of fraudulent loans. He was sentenced to five years probation.

For the story, see Homeowners complain Ohio loan company took thousands in cash (Loans preventing foreclosure never happened).

For the Ohio Attorney General press release, see Attorney General DeWine Files Suit Against Cleveland Foreclosure Rescue Company.

For the Ohio AG lawsuit, see State of Ohio v. The Modification Group, LLC, et ano.

Monday, May 16, 2011

Possible Retaliation In Play As Bankster Names Homeowner's Son In Refiled Foreclosure Against Fraud Expert Who Recently 'Blew Whistle' On '60 Minutes'

In Palm Beach Gardens, Florida, The Huffington Post reports:

  • Deutsche Bank appears to have retaliated against a high-profile foreclosure fraud expert, whose years-long battle against her own foreclosure helped reveal a wave of apparent malfeasance, by suing her son.
  • The expert, Lynn Szymoniak, an attorney who specializes in white-collar crime, is widely considered on Capitol Hill to be one of the nation's top experts on foreclosure law. When Deutsche Bank attempted to jack up the interest rate on the mortgage for her Palm Beach Gardens, Fla., home in May 2008, she contested the move, setting off an investigation which unveiled mountains of forged signatures and fraudulent bank paperwork associated with the foreclosure process.
  • Szymoniak alerted other attorneys, neighborhood advocates, lawmakers and the media about the apparent rampant fraud. She appeared on "60 Minutes" in April to discuss the broader foreclosure scandal.


  • Shortly after appearing on "60 Minutes" Szymoniak won a major victory in her own foreclosure case. The court found that Deutsche Bank was unable to demonstrate ownership of her mortgage, which had originally been issued by the defunct subprime mortgage lender Option One, and threw the case out.
  • Deutsche Bank was permitted to refile their case if they could obtain proper documentation, however. And on Friday, May 6, Szymoniak received a notification from the bank's lawyers that she was again being sued for foreclosure.
  • But Deutsche Bank wasn't just going after her. The bank was also attempting to sue her son, Mark Cullen, who is currently pursuing a graduate degree in poetry at the New School in New York. Cullen hasn't lived in Szymoniak's house for seven years and is not a party to any aspect of her mortgage -- he has no interest in either the property or the loan, and never has had any such interest, according to Szymoniak.
  • "It is just absolute harassment," Szymoniak said. "He doesn't own anything, for god's sake! He's getting a masters in poetry. He not only doesn't have any money, he's never going to have any money."
  • And other Florida foreclosure experts say it's difficult to interpret Deutsche Bank's move as anything other than retaliation for Szymoniak's media presence. If it is not, in fact, retaliation, they argue, then Deutsche Bank's lawyers have demonstrated rank incompetence.
  • "It sounds crazy," said Margery Golant, a principal with the foreclosure defense law firm of Golant & Golant PA in Florida. "I can think of no legitimate reason, if he doesn't have some connection to the property or to the mortgage, to include him in an action to foreclosure."
  • "It's an intimidation tool," said Matt Englett, a partner at the Florida law firm Kaufman Englett Lynd PLLC. "Most people, they get scared and they get nervous and I think that's the effect that they're trying to have on him and his mother."
  • "If he's not an owner of the house, it's pretty clearly just vindictive," said Joshua Rosner, the managing director of Graham Fisher & Co., a mortgage investment firm. "If they're doing it intentionally, that's one hell of a statement. If they're doing it randomly, that's still pretty incredible."
  • The experts said the lawsuit against Szymoniak's son could also have negative implications for him beyond the immediate costs of fighting the foreclosure case, even though he has no financial interest in anything related to it. "He's going to have a lawsuit out there against him," Englett said, "so if someone were to do some kind of background check against him, that would come up."

For more, see Deutsche Bank Sues Foreclosure Fraud Expert's Son With No Financial Interest In Her Case.

Thanks to Deontos for the heads-up on the story.

NC Appeals Court: Insufficient Proof Of Promissory Note Ownership Sinks Foreclosure; "Stephan" Affidavit At Center Of Crappy Paperwork

In Raleigh, North Carolina, The Charlotte Observer reports:

  • Lenders statewide may have to work harder to get their paperwork right in foreclosure cases after an N.C. Court of Appeals decision. The court has ruled against a lender in a 2009 Hyde County foreclosure, saying the documents presented did not prove the lender was the legal holder of the homeowners' promissory note to repay. The court's decision stopped the foreclosure, at least for now.
  • The $525,000 home loan to Rex and Daniela Gilbert - like many mortgages in the nation in recent years - was passed among several lenders. N.C. law requires "that the party seeking to foreclose on a promissory note is the holder of said note....and the debtor is entitled to demand strict proof," according to the 3-0 opinion written by Judge Robert Hunter.
  • The court found that two affidavits by GMAC Mortgage employees did not explain how the signers had knowledge of some testimony. One affidavit was signed by Jeffrey Stephan. The appeals court opinion noted GMAC "recently was found to have submitted a false affidavit ... by signing officer Stephan" in U.S. District Court in Maine. His name also has been cited in reports about lenders whose workers robo-signed hundreds of documents without knowing what they contained.


  • Katherine Parker-Lowe of Ocracoke, the Gilberts' attorney, said of the court opinion filed last week: "I think it's a great day for homeowners." [...] Jerry Hartzell, a Raleigh lawyer who consulted with the Gilberts' attorney, applauded the appeals court "about how picky they're getting with affidavits. That seems to be a consequence of the robo-signing stuff - about how mortgage servicers are swearing to things they don't really know about. Who knows how many foreclosures that could affect?"


  • [Mecklenburg Clerk of Superior Court Martha Curran] sees the ruling as a strict application of existing law, a message from the courts to "get it right, get it right." The N.C. attorney general's office "is carefully reviewing" the Gilbert case, said a spokesman. "It's a significant issue."

For more, see Homeowners favored in court ruling (N.C. appeals court: Lenders must have solid foreclosure documents).

For the court ruling, see In re Foreclosure of Gilbert, NO. COA10-361 (NC App. May 3, 2011).

(1) The appeals court made this observation on the importance of establishing, by sufficient evidence, the ownership of the promissory note before proceeding with a foreclosure (except where noted, bold text is my emphasis):
  • Respondents also argue the trial court erred in ordering the foreclosure to proceed, as Petitioner did not prove that it was the holder of the Note with the right to foreclose under the instrument as required by section 45-21.16(d)(i) and (iii). We agree.

    A “foreclosure under a power of sale is not favored in the law and its exercise will be watched with jealousy.” In re Foreclosure of Goforth Props., Inc., 334 N.C. 369, 375, 432 S.E.2d 855, 859 (1993) (citations and internal quotation marks omitted). That the party seeking to foreclose on a promissory note is the holder of said note is an essential element of the action and the debtor is “entitled to demand strict proof of this element.” Liles v. Myers, 38 N.C. App. 525, 528, 248 S.E.2d 385, 388 (1978).

    For the trial court to find sufficient evidence that Petitioner is the holder of a valid debt in accordance with section 45-21.16(d), “this Court has determined that the following two questions must be answered in the affirmative: (1) ―is there sufficient competent evidence of a valid debt?'; and (2) ―is there sufficient competent evidence that [the party seeking to foreclose is] the holder[ ] of the notes [that evidence that debt]?'” Adams, __ N.C. App. at __, 693 S.E.2d at 709 (quoting In re Cooke, 37 N.C. App. 575, 579, 246 S.E.2d 801, 804–05 (1978)); see N.C. Gen. Stat. § 45-21.16(d) (2009) (in order for the foreclosure to proceed, the clerk of court must find, inter alia, the existence of a “valid debt of which the party seeking to foreclose is the holder,” and a “right to foreclose under the instrument” securing the debt) (emphasis added).

    Establishing that a party is the holder of the note is essential to protect the debtor from the threat of multiple judgments on the same note.

    If such proof were not required, the plaintiff could negotiate the instrument to a third party who would become a holder in due course, bring a suit upon the note in her own name and obtain a judgment in her favor. . . . Requiring proof that the plaintiff is the holder of the note at the time of her suit reduces the possibility of such an inequitable occurrence. Liles, 38 N.C. App. at 527, 248 S.E.2d at 387.

MI Suit Seeks Hundred$ Of Million$ From MERS Over Allegedly "Illegally Prosecuted" F'closures; Points To Recent State Appeals Court Ruling For Support

In Detroit, Michigan, Bloomberg reports:

  • Mortgage Electronic Registration Systems Inc. "illegally prosecuted" non-judicial foreclosures in Michigan and owes more than $100 million to people who lost their homes, lawyers for three homeowners said in a lawsuit.
  • The homeowners said Merscorp Inc.'s MERS, which runs an electronic registry of mortgages, used Michigan's so-called foreclosure by advertisement process illegally and "misappropriated" their homes. Any foreclosures by MERS using this process in Michigan should be voided, they said in their complaint filed in federal court in Detroit.
  • Michigan is one of 27 states where banks don't have to get a court's permission to seize a property, meaning homeowners have to bring their own lawsuit to halt a foreclosure. Michigan law lets mortgage lenders or servicers foreclose after advertising a default in a newspaper for four consecutive weeks.
  • MERS "lacked the authority to foreclose by advertisement" because it didn't own or have any interest in the underlying debt and "was not the servicing agent of the mortgage," Maryla Depauw and Sharon and Terrance Lafrance, the homeowners said, in their complaint filed yesterday. MERS "knowingly, fraudulently and illegally" foreclosed on homes for years using a law it "had no authority or right to utilize," they claim.
  • MERS is required to take foreclosures to court, their lawyers said, citing an April 21 decision by Michigan's Court of Appeals.(1) The decision, which voided two property seizures, said state law requires a foreclosing party to own the legal title to the debt.


  • Depauw and the Lafrances filed their suit as a class action, seeking to represent all other Michigan property owners "whose property was illegally foreclosed upon by MERS." They're asking for more than $100 million in actual damages on multiple counts including fraud and wrongful foreclosure, as well as more than $300 million in punitive damages.

For the story, see Merscorp Mortgage Registry Sued Over Michigan Foreclosures.

For the lawsuit, see Depauw v. Mortgage Electronic Registration Systems Inc.

(1) For the Michigan appeals court 2-1 majority ruling, see Residential Funding Co, LLC v Saurman, ___ Mich App ___, ___ NW2d ___ (April 21, 2011) (for publication).

Go here for the dissenting opinion.

Computer Keystroke Error Costs Foreclosing Lender $400K As Winning Bidder Snags Home Out From Under Citibank For Pennies On The Dollar

The following facts have been taken from a recent Washington State Court of Appeals ruling:

  1. Citibank moves to carry out a non-judicial foreclosure sale in which it is owed $487,000+.

  2. Citibank intends to post an opening bid to be $442,837.50.

  3. Through the magic of a computer keystroke error, a Citibank employee dropped the "2" and miscommunicated an opening bid in the amount of $44,837.50 to the trustee, which it posted on its website.

  4. An employee of a foreclosure research company contacted the trustee to confirm the opening bid amount. The employee pointed out to the person with whom she spoke that she thought the bid seemed low, but the trustee confirmed that the bid was correct.
  5. The next day, the foreclosure research company employee contacted the trustee again, who again confirmed that the bid amount was $44,837.50.

  6. On the day of the foreclosure sale and upon the trustee's announcement of the beginning of the sale, an interested bidder asked that the trustee confirm the opening bid. The trustee confirmed the bid again to be $44,837.50.

  7. But as the trustee began the recitation for the sale, he suspended the sale, stating he was going to make a phone call to confirm the opening bid. The trustee went into an adjacent building and, when he returned, confirmed the opening bid.

  8. The interested bidder bid $45,000, which was the only, and winning, bid.

  9. Upon discovery of the error, the presumably horrified Citibank instructed the trustee not to deliver the deed to the winning bidder.

  10. The trustee notified the winning bidder, stating that the bidding was defective and "the sale would be deemed a nullity."

  11. The winning bidder's counsel sent a letter to the trustee demanding the issuance of the deed.

  12. The trustee advised the winning bidder that it would not deliver the deed due to defective bidding and it attempted to refund the bid amount to the winning bidder.

  13. The same day, the winning bidder filed a complaint seeking to quiet title to the property in himself and damages.

  14. After litigation of the issues, the lower court ruled in Citibank's favor, possibly telling the winning bidder "Nice try, but take a hike!"

  15. Heeding the judge's advice, the winning bidder took a hike - directly to the appeals court for a review of the ruling.

On appeal, the three-judge panel saw the case differently from the trial judge, finding that the lender's

  • "unilateral mistake in the bid price and relaying the erroneous bid price to the trustee does not constitute "defective" bidding under the deed of trust act's consumer protection provision."

Accordingly, the appeals court reversed the trial court's order granting summary judgment in Citibank's favor and remanded with instructions to enter summary judgment quieting title in favor of the winning bidder.

Congratulations to Citibank for another screw-up well done.

For the ruling, see Breiwick v. First American Title Insurance Company, No. 65004-1-I (Wn. App., Div. 1, May 9, 2011) (unpublished).

Sunday, May 15, 2011

Baltimore Judge Questions Foreclosure Mill Over Robosigned Paperwork As Voided Maryland Foreclosure Sales Over False Affidavits Begin To Hit Fan

In Baltimore, Maryland, The Baltimore Sun reports:

  • A Baltimore judge summoned attorneys from a large foreclosure law firm Monday to explain whether signatures on key documents were genuine, part of the fallout from revelations last year that foreclosures nationwide were being processed based on deficient — or fraudulent — paperwork.
  • Virginia-based Shapiro & Burson was the third law firm called this year before Baltimore Circuit Judge W. Michel Pierson. He has heard admissions from several attorneys — at Shapiro & Burson and elsewhere — that their signatures on affidavits required to foreclose on homeowners were sometimes made by other people.


  • Some cases have been dismissed, voluntarily or by order of a judge. Last week a Kent County judge threw out a case — after the home was auctioned and that sale was ratified — because an affidavit misrepresented the nature of the borrower's debt, though the amount itself was likely correct. The mortgage servicer can file a new foreclosure case but will have to start from square one.
  • Attorney Mike Morin, who represented the Kent County homeowner pro bono, said it's the first such Maryland foreclosure he knows of that was dismissed after a ratified sale because of a "false or fraudulent affidavit." "It may seem like a minor victory, but to say I was tickled is an understatement," he said Monday.
  • Attorney Phillip Robinson of Civil Justice, a Baltimore nonprofit that has challenged mortgage servicers to get them to drop foreclosure cases with improper documentation, fears the true ownership of homes that go to foreclosure auction on the basis of false affidavits could be called into question later.(1)

For more, see Foreclosure attorneys called in to answer to judge (In Baltimore and elsewhere, questions arise about which signatures are genuine and which aren't).

See also, The Daily Record: Attorneys, notaries on the hot seat over foreclosure filings (requires paid subscription) (if no subscription, GO HERE).

See also, Lawyers questioned in Baltimore City Circuit Court on foreclosure.

(1) It's only a matter of time before the 'quagmire' infection that's been reported hitting the Massachusetts and Michigan real estate resale markets begins hitting the newspapers in Maryland (and elsewhere), See Michigan To Join Massachusetts As Real Estate Resale Market Quagmire After Recent State Appeals Court 'Anti-MERS' Ruling?

Banksters Continue Burying Lawsuit Waiver Clauses In Fine Print Of Loan Modification Agreements

Pro Publica and Slate report:

  • A few months ago, Bank of America offered Sergio Cortez of Staten Island, N.Y., the help he desperately needed to stay in his home: a break on his mortgage. Like millions of others, he was facing foreclosure. But there was a catch buried in the fine print. Cortez had to waive any possibility of ever suing the bank for anything relating to the loan.
  • Cortez isn't alone. While regulators have banned the practice, some banks and others who handle mortgages have still been forcing homeowners into a corner: You want a chance at saving your home? Then you'll have to waive your rights.


  • We identified eight banks and other mortgage servicers who offer help that limits homeowners' ability to sue or fight foreclosure. When we contacted them, they offered a variety of responses. Some said the inclusion of the waivers had been a mistake and would stop. Some argued that language that seemed to waive the homeowner's rights didn't actually do so. One argued that a loophole in a rule barring the practice meant their inclusion in certain agreements was proper.

For more, see In Fine Print, Banks Require Struggling Homeowners to Waive Rights.

Go here for a few examples of the clauses banksters bury deep in the fine print of loan modification agreements.

'Lien Stripping' In Bankruptcy Proceedings A Quick, Easy Way For Homeowners To Void Completely Underwater 2nd Mortgages; Helps Avoid Foreclosure

The San Jose Merury News reports:

  • Stung by the crash of the housing market, some struggling homeowners are using a little known but increasingly popular provision of the bankruptcy code to eliminate second mortgages and avoid foreclosure.
  • Statistics are hard to come by, but bankruptcy lawyers say the provision has been used effectively on hundreds, if not thousands, of cases in the [San Francisco] Bay Area during the past two years.
  • "It's a big thing in our valley," said James "Ike" Shulman, a San Jose bankruptcy lawyer. "But it's not widely known." Shulman, co-founder of the National Association of Consumer Bankruptcy Attorneys, said he has helped a number of clients who have filed for personal bankruptcy use the law to hold on to their houses -- including three last week.
  • Cathy Moran, a Mountain View bankruptcy lawyer, said one of her clients had a $132,000 second mortgage voided by the court. "This is a really big-ticket issue that allows people to keep a home and conform the mortgage to something closer to real value," Moran said.
  • Bankruptcy laws prevent homeowners from eliminating the debt of a first mortgage if they plan to stay in their home. But second mortgages are treated differently. They can be declared unsecured debt when there is no equity to cover them, as is the case for millions of houses that are now worth far less than a few years ago.
  • When that happens in a personal bankruptcy proceeding, the second mortgage is put on hold and no payments are required while the homeowner completes a repayment plan for other debts -- which typically takes three to five years. At that point, the second mortgage is eliminated.


  • One of Shulman's clients, [...] was struggling to keep the San Jose house she bought in 2005 for $612,000. Her home's value has dropped to about $367,000 -- less than her first mortgage of $489,000 -- which allowed her to petition the bankruptcy court to set aside her $122,000 second mortgage. The court granted her motion. She successfully completed her payment plan for other debts two months ago, and her second mortgage is now eliminated.


  • The law has been like this for years, bankruptcy lawyers say. It's just never been used as much because in the past there was usually enough equity in a home to cover the second mortgage.
  • "We're having great results" using the rule, said Brette Evans, a San Jose bankruptcy lawyer. In one recent case, a small-business owner was able to hang on to her home by setting aside a $240,000 second mortgage, she said. That put the borrower in "a safe zone" where she could work out a modification of her first mortgage, Evans said.

For the story, see Bankrupt Bay Area homeowners shed second mortgages.

Go here for more on 2nd mortgage lien stripping in bankruptcy proceedings.

Bagged Again: State Appeals Court Reverses Another Rubber-Stamped Ruling From C. Florida Judge; Judgment Obtained Thru 'Sewer Service' Gets The Boot

In a straightforward, two-paragraph ruling, a three-judge panel of Florida's Fifth District Court of Appeal recently reversed another foreclosure judgment from an Orange County Circuit Court issued by Senior Judge Emerson R. Thompson, Jr.

As was the case in an earlier ruling from this rubber-stamper,(1) the dearth of extensive legal analysis in this case in which the three-judge appeals panel needed only two paragraphs to dispose of, coupled with the fact that no attorney bothered to appear on appeal on behalf of the foreclosing bankster, is an indicator that the foreclosure judgment was so obviously flawed on its face that it shouldn't have required the effort and expense to seek an appeals court correction to arrive at the proper result in the first place.(2)

Again representing another screwed-over homeowner was Kaufman, Englett & Lynd, PLLC, of Orlando, Florida.

For the ruling, see Silva v. BAC Home Loans Servicing, L.P., 5D10-3511 (Fla. 5th DCA, May 6, 2011).

(1) See Florida Appeals Court Reverses Foreclosure Judgment, Boots Case Back To Lower Court As 'Senior' Judge Gets 'Nabbed' For Empty-Headed, Rubber-Stamping.

(2) The court ruling follows:

  • Abner Silva, the defendant below, seeks review of an order denying his motion to set aside a default final judgment entered against him. We reverse.

    In this foreclosure case, substituted service of process was secured on Silva under section 48.031, Florida Statutes (2010), by serving a “Luz Rodriguez”, who purportedly lived at the mortgaged property. However, the affidavits and other information submitted in support of Silva’s motion below established that the mortgaged property had been vacant for some time prior to the purported service, that he did not know anyone by the name of Luz Rodriguez, and that his usual place of abode was, and had been for eighteen months prior to the purported service, in Miami.

    The party seeking to invoke the court’s jurisdiction has the burden to prove the validity of service of process. See Torres v. Arnco Constr., Inc., 867 So. 2d 583, 587 (Fla. 5th DCA 2004). This record does not reflect competent evidence that BAC Home Loans Servicing L.P., the plaintiff below, met that burden. The default judgment was, therefore, void and must be set aside. See Alvarez v. State Farm Mut. Auto. Ins. Co., 635 So. 2d 131 (Fla. 3d DCA 1994).