Tenant Left Scrambling After Unwittingly Renting Vacant House In Foreclosure From Home Hijacker

In Jacksonville, Florida, WTLV-TV Channel 12 reports:

• Pamela Lewis has few words to describe what happened. "These last few days (have been) hell, excuse my language, because I am scared to leave," she said. Her nightmare began in August when she rented a house - which was not actually authorized by the owner to be rented. Now she is afraid to leave her home because she doesn't know what she'd return to find.
• After searching Craigslist, she found a two-story house near Morse Avenue on Jacksonville's Westside. "They were here on the property working," said Lewis. After making contact with the person she thought was the property owner, Lewis said a week later she signed a lease with James Loen to rent the property for $950 a month. She said that Loen told her he was the landlord. September 2010, Lewis moved in.
• But in May, eight months later, a man showed up at her front door, and told her he was the owner, he didn't know who she was and that she needed to move out. "He gave me a 24-hour notice, stuck it on my door. The cops seen it and said this is illegal he can't do this, he typed it up and signed it," said Lewis.

***

• On Your Side put her in contact with Erica Shaffor, an attorney with Three Rivers Legal Services.(1) Shaffor said even if a tenant signs a fake lease with a phony landlord, the tenant has rights. "The tenant cannot just be thrown out by the alleged owner," said Shaffor. Shaffor said the property owner has to file for an 'ejectment.' She said Lewis had every reason to believe her lease was legal.

***

• Lewis said now that she knows she was scammed, she's in the process of finding a new home, but said she can't move as quickly as the property owner wants her to move.

For the story, see Beware of Rental Scam Using Foreclosures.

(1) Three Rivers Legal Services is a local, non-profit law firm which provides free civil legal services to low-income, eligible clients in seventeen counties throughout North Florida.

Abandoned Buildings In 'Foreclosure No-Man's Land' Leave Poor Tenants In Dangerous Digs As Lawyers Look To Lienholders To Fork Over Fix-Up Funds

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

• There's a major legal push to help tenants living in deplorable conditions. The tenants are living in apartment buildings now in foreclosure and essentially neglected because of the dire financial situation. It has become a nationwide problem.
• Without landlords, no one is fixing these rent controlled buildings. There are crumbling ceilings and floors, and there was little heat or hot water over the winter and the roof has holes in it. "When it comes in, it's all over the floors," said Yolanda Jimenez, a tenant.
• There is black mold, the vents have not worked in years, and in this building at 294 5th Avenue, five of the six tenants are more than 70 years old. The average monthly rent runs about $200. Downstairs, a 98-year-old woman in a hospital bed and her son deal with all of these problems. He showed Eyewitness News a list of the people he has called for help.
• "This is New York City, America! This is not supposed to happen," said Congresswoman Nydia Velazquez, (D) Brooklyn. How were these tenants left in foreclosure no man's land?
• So, advocates and lawyers with South Brooklyn Legal Services(1) are taking banks and intermediaries to court to fix buildings, in foreclosure now around the city, buildings that are full of people. "I hope they fix it, I'm not going nowhere," Jimenez said. There's no comment from the bank involved.

Source: Brooklyn rent controlled apartment in foreclosure.

See also, South Brooklyn Legal Services Files Lawsuit to Hold Mortgage-Holders Accountable for Foreclosed Properties (The advocates seek to draw attention to a major housing crisis across the borough— a rapid increase in overleveraged multi-family buildings going into foreclosure).

(1) South Brooklyn Legal Services is a non-profit law firm that provides legal services and information to low-income people in Brooklyn, NY.

Ineffective Code Enforcement An Incentive For Continued Rentals Of Shoddy, Substandard Housing Endangering Poor

In Houston, Texas, the Houston Chronicle reports:

• Just weeks before 19-year-old Jamesha Floyd was pulled from her burning home, her aunt and uncle complained to their landlord about faulty electrical wiring in the four-room house they shared with Floyd on Sayers Street. Five days after the fire, Floyd died from her injuries. The fire, which started while she slept, was attributed to an electrical problem.
• The home is one of more than 200 properties in low-income neighborhoods owned by a Houston investment company whose other properties have been cited repeatedly for being dangerous or posing a public nuisance, a Houston Chronicle analysis shows.

***

• The burned house on Sayers Street still stands, a charred shell, although the fire occurred nearly two years ago. Joe and Earnestine Brown were renting from Barbara Markman and her investment company, BMI Investment Inc. The Browns had complained of troubles with electrical outlets, and an electrician determined the wiring was faulty, records claim. Their niece had graduated from Kashmere High School just before the fire that took her life.
• Markman bought the house in a tax foreclosure resale for $12,000. The annual median income in the northeast Houston neighborhood is about $17,000. The Browns filed suit and reached an undisclosed settlement with Markman — who told the Chronicle the fire was not electrical, even though fire inspectors said it was. The house was never repaired or demolished, Markman said, because of the civil lawsuit brought by the Browns.
• Nearly 500 correction orders were issued to Barbara Markman and her husband Jack Markman's 100 properties going back to 2008 - for everything from holes in walls and floors to unsafe building parts. Five properties were cited for failure to provide and maintain electrical circuits and outlets in good operating condition. "Many of the properties were damaged by the tenants, when they move out; they trash the properties," said Markman.
• Together, Markman and another property owner, Richard Pfirman, are among those with the greatest number of troubled properties, according to the data examined by the Chronicle. Pfirman was cited for more than 800 violations for 100 houses he has owned since 2008. More than half of the orders haven't been corrected.
• The city legal department has sued Pfirman and ordered him to demolish 12 houses, though some of them still display "For lease or sale" signs noting that "No credit is no problem". The Chronicle called All American Properties, one of Pfirman's companies. The office manager declined to comment. Pfirman did not return calls for comment.

For more, see Owners prey on poor with dangerous rentals (Thousands of properties remain on the market despite repeated citations).

North Carolina Mobile Home Residents Face The Boot Over Park Owner's Delinquent $50K Water Bill

In Salisbury, North Carolina, WCNC-TV Channel 36 reports:

• Neighbors in two Salisbury mobile home parks could have their water turned off and face possible eviction because their landlord isn’t paying his bills. "We got to cook, shower, wash our clothes, water our dogs, and we've got a little garden we've got to water,” said “Cowboy” Childress, explaining how much he relies upon water. All the water Cowboy and his wife Mona Childress use is included in their rent at Circle Drive mobile home park on Highway 29.
• The other mobile home park facing the same problem is Matika Villa on Airport Road. Still, landlord Tim Smith says he's $50,000 behind on his water bill to Salisbury-Rowan Utilities. That's why warning signs are on doors letting residents know disconnection is coming at the end of June and that neighbors should take whatever precautions are necessary.

***

• Smith says the reason he's 50 grand behind is because he's an embezzlement victim. He says his former property manager cut rent deals that he didn't know about, then pocketed the money and took off. $150,000 and six months worth of rent were gone. Smith says police told him there's not enough evidence to prosecute.

For more, see Landlord's bills piling up; residents fear losing water.

Hundred$ Of Thousand$ In Deferred Maintenance Leads To Quick, Court-Ordered, Pre-Foreclosure Boot For 100+ Residents Of Deteriorating Low-Income Motel

In Colorado Springs, Colorado, The Gazette reports:

• Few people would have mistaken Lynn Burke’s tiny room at the Express Inn for a luxury apartment, but to her, it was Eden. She could walk to her job at the Eighth Street. Walmart, a blessing for someone who has never owned a car. She could pay a little extra each month so she could keep her cat with her. And she could afford the $569-a-month rent. “Such as it is, it was home,” said Burke, who has lived at the motel for four years.
• Now, she doesn’t know where home will be. [S]he and more than 100 other tenants at the motel-cum-low-income-rental complex received notice that they must move out [...] in advance of a [] court-ordered shutdown tied to an impending foreclosure sale.
• A nonprofit that sublet rooms at the Express Inn for some tenants found accommodations for about 20 of them, and others found places on their own or went to stay with friends or family. But Burke and another half dozen tenants who remained [] were scrambling to find another place to live, and were upset that they weren’t given more time to move, considering that the foreclosure was filed on March 7.

***

• The Express Inn, on Cimarron Street at 8th Street, has had a range of tenants: families, young people and the elderly, the working poor and the homeless. Many of those who have jobs, like Burke, were able to afford the rent, especially if they had roommates.
• Others became clients of C-C Boarding Home Annex, a nonprofit created in 2008 to sublet rooms from the Express Inn to house homeless and low-income people. Their rent — as low as $15 per day or $60 per week per person — was paid through donations and sponsorships from individuals and nearly two dozen churches.
• But Ray Castillo, co-founder of C-C- Boarding Home Annex, said [] that expenses outstripped income, and the management company couldn’t keep up with the bills.

***

• The property is scheduled to be auctioned on July 6, but [court-appointed receiver Dave] Mersman said the court ordered it to close before [] because of crumbling sidewalks, unsafe electrical connections and other problems that posed a hazard to tenants. “It amounts to hundreds of thousands of dollars in deferred maintenance that’s been ignored on this property,” Mersman said.(1)

For the story, see Residents booted from low-income rentals at Express Inn (Court cites hazards in ordering closure).

(1) For a Gazette editorial on this story, see They're trampling the rights of our homeless ('Get out,' without much warning):

• “They may be trying to get rid of them before the tenants have an opportunity to exercise their rights,” said Steve Flynn, a staff attorney with Colorado Legal Services. “A person occupying a foreclosed upon property is entitled to a court process of eviction.” Exercising the eviction process, Flynn said, can buy a tenant weeks of valuable time to transition into a suitable living arrangement.
  
  Theresa Kilgore, managing attorney of Colorado Legal Services, said a federal law enacted in 2009, titled the “Protecting Tenants and Foreclosure Act,” should protect the motel’s residents from having to obey an order to leave on inadequate notice.
  
  In general, the law gives tenants of foreclosure properties the right to a 90-day notice of eviction. Kilgore said the motel dilemma is complicated, involving a tenant who sublets to the poor, and she will research whether the law may protect any who remain in the motel.

Colorado Legal Services is a non-profit corporation that provides access to civil legal services for as many low-income persons and members of vulnerable populations throughout Colorado as possible.

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

NYC Condo Developer Liable For Raiding Reserve Fund Out Of $7.4M; Used Account "As His Personal ATM" While Allowing Building Conditions To Deteriorate

From the Office of the New York Attorney General:

• Attorney General Eric T. Schneiderman [] announced a favorable decision in his case against YL Rector Street, LLC and Yair Levy. The Supreme Court in New York County ruled that the developer of the Rector Square Condominium in Battery Park City defrauded purchasers of approximately $7.4 million by failing to finance and maintain a legally-required reserve fund to ensure the health and safety of residents.
• “Yair Levy treated the Rector Square Condominium as his personal ATM, using the millions of dollars intended for residents for his own purposes, even while the building conditions deteriorated,” Attorney General Schneiderman said. “This kind of misconduct will not be tolerated and I will continue to hold those who defraud tenants and owners accountable.”
• The case was initiated in June 2010 after an investigation by then-Attorney General Cuomo’s office revealed that Levy promised Rector Square Condominium tenants and owners that the legally-required reserve fund would be set aside to make repairs, improvements and other work to maintain their health and safety. Instead, Levy depleted the fund and left residents with just $70.
• The decision was handed down by the Honorable Joan B. Lobis in the Supreme Court in New York County. It paves the way to recover $7.4 million in restitution for the residents at the Rector Square Condominium and a permanent bar prohibiting Levy from offering securities for sale in New York State under the Martin Act and Executive Law §63(12).

For the NY AG press release, see A.G. Schneiderman Wins Landmark Case Against NYC Developer Yair Levy, Opening Door To Millions Of Dollars For Defrauded Residents.

For the court ruling, see People v. Levy, 2011 NY Slip Op 31391 (NY Sup. Ct. New York County, May 25, 2011).

Woman Gets Probation Over Attempt To Persuade Hubby To Sign Over Home Deed, Divorce Papers By Putting Steak Knife To His Throat & Slashing His Fingers

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

• A Tamarac woman who held a steak knife to her husband's throat and demanded he sign divorce papers and the deed to their house was sentenced to three years probation Wednesday.
• Prosecutors dropped an attempted murder charge, and Tamara Strulovici, 53, pleaded no contest to aggravated battery with a deadly weapon. In May 2009, Strulovici approached her husband from behind, put the steak knife to his throat, made her demands and slashed the fingers on his left hand, the Broward Sheriff's Office said.
• In court Wednesday, Strulovici said through a Russian interpreter that she is "not sure" if she and her husband, James Little, are still legally married. "I heard the rumors that he did apply for divorce," Strulovici said. "I don't do that because I don't have any money."
• Married or not, Broward Circuit Judge Sandra Perlman ordered that Strulovici have no contact with Little. Strulovici's lawyer said she has no problem with that aspect of her sentence. "He lives out of state and she has no interest of ever having contact with him," Strulovici's defense attorney, Frank Prieto, said.

Source: Tamarac woman gets three years probation for demanding divorce with knife.

Lawsuit, Media Intervention Force Loan Servicer To Backpeddle On Home Foreclosure Of Elderly Widow Who Was Current On Loan Modification Payment Plan

In Apache Junction, Arizona, KNXV-TV Channel 15 reports:

• Eighty-three-year old Harriet Black has owned a rural home in Apache Junction since 1976, but in March she was served an eviction notice. "I don't have anywhere to go," she said. The problems all stem from mistakes with a mortgage modification.

***

• She worked with a mortgage service provider to get a modified mortgage agreement that was finalized in January. Or so she thought. Black's son made payments on her behalf for $822, the reduced amount agreed upon in the modification. Before that her payments werer near $1,800 per month. Despite the payments, the bank foreclosed on the property in February and an eviction hearing was set in the courts.
• The Consumer Law Group filed a suit on her behalf Wednesday alleging the bank Deutsche Bank and mortgage servicer Ocwen wrongfully and unlawfully foreclosed. The suit filed in Pinal County included exhibits showing on-time payments since January.
• We contacted Paul Koches, the Executive Vice President of Ocwen to get some answers. In less than a day, Koches was able to find the problem. He explained that Harriet was actually making payments on the wrong modification agreement. Therefore the valid one was going unpaid which paved the way for foreclosure.
• He acknowledged the problem as a mistake by all parties and said that steps will be taken to rescind the foreclosure and reinstate the agreement so Harriet can remain in her home.

For the story, see Apache Junction woman nearly evicted over mortgage confusion.

Massachusetts Man Receives BofA Foreclosure Notice Accusing Him Of Stiffing Lender Out Of 'Zero Dollars & Zero Cents'

In Northampton, Massachusetts, WWLP-TV Channel 22 reports:

• A man from Northampton got a letter from his bank stating his house would be foreclosed on if he didn't pay them a total of zero dollars and zero cents. Not wanting to lose his home, he called the 22News I-team to get some answers. We did some digging, and found out that a glitch in the bank's electronic system caused the error.(1)

For more, see 22News I-Team: $0 Foreclosure Notice (A bank error almost cost one man his home).

For Bank of America's foreclosure notice demanding the unpaid $0, see Notice of Intention to Foreclose.

(1) Reportedly, the consumer requested payment for expenses incurred fixing the matter and was told he would receive compensation. That never came, but the homeowner has noted that Bank of America has sent him a form letter requesting he sign up for their paid credit watch report service.

California Foreclosures & The 'One Action Rule' - Violators Could Lose Their Lien On Real Estate

A recent story from Lexology addresses the so-called "one action rule" that applies to foreclosures in California. An excerpt:

• The one action rule places limits on the ability of lenders to enforce and collect debt that is secured by real property located in California. While most states permit secured creditors to freely pursue the foreclosure of real property as well as the underlying debt simultaneously, California essentially requires creditors to exhaust the entirety of their real property security before suing on the underlying debt or before taking other action to collect against any of the debtor’s unpledged assets.


• Violation of the one action rule leaves lenders vulnerable to sanctions, including the potential loss of their lien on the real property. Certain conduct, including setoff against a debtor’s unpledged accounts, may run afoul of the one action rule. Lenders who have extended credit secured by California real property should carefully plan their enforcement and collection strategies in order to avoid violation of the one action rule.

Among the issues addressed in the article are:

• The One Action Rule and its Ramifications,
• What Constitutes Judicial Action and How to Avoid Tripping Over the One Action Rule,
• Why Non-Judicial Foreclosure over Judicial Foreclosure?,
• Preserving a Right to Judgment on the Debt,
• Completing Non-judicial Foreclosures in California,
• Some Practical Tips for Lenders.

For more, see Revisiting the one action rule for secured lenders: forget about California real property at your peril! (requires paid subscription; if no subscription, TRY HERE; or GO HERE - then click the appropriate link for the story).
Go here for links to several dozen California cases addressing the state's "one form of action" rule (which can be found at Section 726 of the Code of Civil Procedure of California).

Rent Skimming Allegations At Center Of Indiana AG Action Seeking Real Estate License Suspensions For Property Management Pair

From the Office of the Indiana Attorney General:

• The real estate licenses of two central Indiana property managers are facing emergency suspension, Indiana Attorney General Greg Zoeller announced [].
• The Attorney General filed petitions for summary suspension with the Indiana Real Estate Commission on May 16 seeking to suspend the real estate licenses of Craig Bartels and Derek Crager, principal operators of Crager-Bartels, LLC.
• The petitions allege Bartels and Crager failed to pay property owners more than $13,000 in rent payments they had collected from tenants. Crager-Bartels, LLC is located in Plainfield, Ind. and entered into contracts with property owners in several states including Indiana, California, Nevada and North Carolina to manage rental properties in central Indiana.
• "By seeking an emergency license suspension we hope to prevent these individuals from continuing to operate as we attempt to resolve the issues stemming from the mismanagement of these rental properties," Zoeller said. "The actions of these two licensed real estate agents harmed both the property owners and the families who are tenants."

For the Indiana Attorney General press release, see Attorney General seeks to suspend licenses of two central Indiana property managers.

Foreclosure Scam 'Hunter': "We're Going To Make Them All Run!" After One Target Dashes Out Of Office & Slithers Away Through Emergency Exit

In Los Angeles, California, New America Media reports:

• Juana Castillo Quintanila paid $3,500 to a real estate broker who promised to help her strike a deal with her bank to lower her monthly payments. The Latina, who faces imminent eviction, says he didn’t deliver. He refused to return her money, so last Thursday she went to his office with about a dozen other angry homeowners to demand a refund.
• “Christopher Lim, shame on you,” the homeowners yelled, as they poured onto the 27th floor of a high-rise in the mid-Wilshire district of Los Angeles, where the agent rents an office.
• Hearing their shouts, Lim, dressed in a tidy gray suit, emerged from the conference room. Upon seeing video cameras, he shielded his face with a stack of papers, and turned and bolted down a corridor of identical office doors. The homeowners continued to shout, “refund now,” as they chased after him. They lost sight of him, and believed that Lim hid in his office, before slipping out through the emergency exit when the hallway was clear.
• “He’s not done a thing to this day,” Quintanila said through a translator, adding she’s disappointed he “got away.” The Latina says she hired Lim after hearing an ad for his company, Neighborhood Credit Solutions, on Spanish-language radio. [...] Quintanila says Lim promised to “fight” for her to stave off foreclosure, but that only involved submitting one loan modification application, which resulted in slightly lower payments that didn’t improve her situation.

***

• The homeowners say Lim broke a California law that bans real estate agents and attorneys from collecting up front fees in negotiating a loan modification. Lim denies doing that, and says he was contracted to perform “documentation preparation” to help Quintanila make her case to her bank. The bank could have offered a number of options, including modification, he said.
• Lim told New America Media that he will offer Quintanila a refund. “I guess I just want to be a bigger person. Sometimes you lose, you don’t always win,” he said.
• He may win or lose, but members of the Home Defenders League (HDL), a 2,500-strong homeowners group in California that is fighting foreclosures, are determined to make scammers pay.
• “We had him on the run. It’s an action of guilt,” said HDL member Peggy Mears. “That’s why he ran. We’re going to make all of them run.”
• The league, a part of the Alliance of Californians for Community Empowerment, has organized similar showdowns with individuals and companies that they say defrauded homeowners, many of whom have joined the statewide network. As a result of the group’s actions, several homeowners have recouped their money – a feat that representatives with the district attorney’s offices in Los Angeles and Alameda counties say is rare to achieve.

For the story, see Homeowners Determined to Make Scammers Pay.

Group Suspected Of Running Loan Modification Racket Agree To $18M+ Settlement With Feds

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

• Three Palm Beach County men, including a Palm Beach Gardens attorney, have agreed to an $18.8 million settlement with the Federal Trade Commission following charges the trio preyed on struggling homeowners seeking loan modifications.
• The FTC, which filed suit against First Universal Lending in 2009, believes 13,500 people nationwide suffered losses because of company practices that included charging upfront fees as high as $7,000 and failing to contact lenders to negotiate lower mortgage payments.
• Named in the suit filed in the U.S. District Court for the Southern District of Florida are Palm Beach Gardens attorney David J. Feingold, 44, Delray Beach resident Sean Zausner, 39, and his brother David Zausner, 43, most recently of Wellington. The agreement has yet to receive a judge's approval, but FTC attorney Gideon Sinasohn, said he's not expecting a problem with receiving the final sign-off.

***

• A 2008 Florida law prohibits businesses from collecting upfront fees for foreclosure rescue or loan modification services.

For more, see Palm Beach Gardens mortgage mod firm to pay $18.8 million to help distressed homeowners.

Attorneys Offer A "Dizzying Variety Of Payment Plans" When Handling Foreclosure Defense Cases

The St. Petersburg Times reports:

• With 466,500 Florida mortgages in default, more and more lawyers are vowing to "help you fight foreclosure.'' But help often comes at confusing cost, with cash-strapped homeowners forced to choose between a dizzying variety of payment plans.
• Some foreclosure defense lawyers charge by the month or by the year. Others require an up-front retainer, sometimes several thousand dollars, plus more money as the case proceeds. And controversially, some even require the homeowner to pay a big bonus or contingency fee if the lawyer wins the case.

***

• [Attorney Mark] Stopa says he generally charges $1,500 a year, which enables clients to "get off really inexpensively'' if the case is resolved within 12 months (If not, they can re-up for another year for another $1,500.) Handling a large volume of cases, many of which have similar legal issues, helps keep the fee relatively low, he says. Stopa says he has had several clients who first went to other lawyers and were quoted fees reportedly as much as $18,000 or even $35,000.

***

• Kaufman Englett Lynd or KEL, a multistate firm with offices in Tampa and St. Petersburg, also charges by the year, although its annual fee is around $2,500. [...] Kaufman is highly critical of the practice at some firms of charging a monthly fee, typically $500. "It's the biggest scam,'' he says. "It's really in their benefit to make (the case) keep going and going. These cases on average, if you contest them, run from 12 to 24 months and that means $6,000 to $12,000. And the minute the guy stops paying, they're off the case.''
• But other lawyers argue that monthly fees make sense, especially for borrowers who want to move the case along quickly.
• "Suppose the property is vacant and the client is an out-of-town investor and the objective is a waiver of deficiency,'' says lawyer Richard Shuster, who has offices in Miami, Fort Lauderdale and Melbourne. "We've had some cases resolve in under 90 days.''
• Shuster's firm, which charges a monthly fee of $495, says many clients like paying the same amount each month instead of being socked with huge bills during periods when a case requires a lot of the lawyer's time. "In a month when a case goes to trial, we may do $10,000 worth of work and it would be very difficult for the client to afford that,'' Shuster says. "A monthly arrangement means that in some months we may be slightly overpaid and in others slightly underpaid, but we believe it balances out.''
• For lawyers doing foreclosure defense, the ultimate victory is getting the buyer a "free'' house. But it might not be as free as the client thinks. Shuster's firm charges a bonus if a foreclosure suit is dismissed with prejudice, meaning the bank cannot refile the case, and the firm is able to remove all liens and other encumbrances on the property. So far, judges have dismissed three cases with prejudice but "we have not finished quieting title in those cases,'' Shuster says. "We wait for the time for appeal to expire or there may be a second mortgage to be settled or property taxes that need to be taken care of. The bonus when we get someone a free house, it's generally $10,000 or $20,000.''
• But how would the homeowner pay that much? Shuster says he would trust clients to pay whatever they could each month or else pay the full amount if they sell the house. But he says his firm would never put a lien against the house "because we don't want to be a creditor of the client.''
• That's not the case at the Ticktin Law Group, a Deerfield Beach firm with a Tampa office. When it wins a foreclosure case and quiets title, it charges a contingency fee of up to 40 percent, based on the property's value and payable via a new mortgage held by Ticktin. That means the client still makes mortgage payments, only this time to the lawyers instead of to the bank.
• "If we are able to defeat the bank's mortgage, then we will have won the equity in the house,'' says Peter Ticktin, the firm's founder. "Our clients that have given us mortgages are very happy with us because they've won their houses.'' Ticktin says his firm is "in it to win it'' though he acknowledges that most of its 3,000 foreclosure cases have yet to result in a free house. Apart from the contingency, the Ticktin group charges a $100 "set-up'' fee plus monthly fees ranging from $330 to $600.
• The Florida Bar offers little guidance on attorneys' fees other than that they should not be "excessive.'' "Generally, lawyers should be able to correlate between the services they actually provide and the fees that they charge,'' says Elizabeth Tarbert, the Bar's ethics counsel.(1) "Whether or not you can do that when just charging a flat monthly fee, I don't know.''
• Matthew Weidner, a St. Petersburg lawyer who represents borrowers, typically charges $1,500 to $2,500 up-front, but says he bills against those amounts. "Ethically, I want to be able to show what I've done for my money through time records, e-mail, phone calls,'' he says. "The key is records — being able to defend your records in front of a judge.''

For the story, see Confusing lawyer fees complicate foreclosure battles.

Editor's Note: I'm surprised none of the attorneys interviewed for the story raised the point that, in Florida, where their homeowner/client is the winning party in one of these cases against an institutional lender, an entitlement to recover 'prevailing party' legal fees from the losing bankster typically arises. Further, where a contingency fee is involved, a court may also approve the recovery of an additional 'bonus' amount from the losing bankster. See:

• Fla. Appeals Court: Homeowner Entitled To Nail Bank For Prevailing Party Legal Fees After Lender Voluntarily Dismissed F'closure Case w/out Prejudice,
• Defending A Foreclosure Defense Case Pro Bono? Don't Forget The Contingency Risk Factor When Sticking Losing Lender With Tab.

While I'm quite confident that at least a couple of the attorneys interviewed for the story know about it, I'm also equally confident that there are many foreclosure defense attorneys who are completely clueless of this fact, in which case, it's up to their client to educate them on their legal/ethical obligation to seek recovery of these fees from the lender.

(1) See footnote 1 of this post, and go here for approximately 100 or so links to Florida court decisions, for guidance as to what constitutes excessive legal fees in the State of Florida. multiplier

Connecticut Attorney Gets Nine Years After $804K Escrow Cash Ripoff From 11 Clients, Leaving At Least One Victim Facing Foreclosure

In Bridgeport, Connecticut, the Connecticut Post reports:

• A Stratford lawyer was sentenced Friday to nine years in prison for stealing more than $800,000 from nearly a dozen clients. "I just want to apologize. I know I've hurt a lot of people, but I just totally underestimated how sick I was," John M. Rodia told state Superior Court Judge George Thim, contending that an addiction to OxyContin led to his crime.
• Moments later, Debra Turner, of Prospect, walked slowly up to the front of the courtroom after meekly raising her hand for attention. She had hired Rodia to pay off her $125,000 mortgage, but instead he stole the money. "My life is still upside down," she told the judge, crying. "The bank says they were victims too and they want their money." In addition to the original mortgage amount, she said she is also being billed thousands of dollars in late fees that she can not pay.
• Thim lamented there is nothing he can do for her since Rodia claims he has no money.(1) Then facing the defendant, he continued: "Taking addictive drugs is not an excuse for illegal conduct. Our legal system gave you a license to practice law and protect clients and you violated that trust." He then sentenced Rodia, a former state trooper who previously pleaded guilty to six counts of first-degree larceny and five counts of third-degree larceny, to 15 years, suspended after he serves nine years in prison and followed by five years probation.
• Senior Assistant State's Attorney Robert Brennan said the 47-year-old Rodia stole a total of $804,640 from 11 clients.(2) He has not paid any restitution and is not expected to. "We just don't know where the money went because his records disappeared," Brennan told the judge. "He may have gone into the practice of law to help people, but all he did was help himself."

For more, see Lawyer sentenced 9 years for stealing $800,000.

(1) If he wasn't half-asleep, Judge Thim (or the court's crime victim's advocate, for that matter) could have referred Ms. Turner and the other victims to the Connecticut Client Security Fund, which is a fund established by the rules of the Connecticut Superior Court to provide reimbursement to individuals who have lost money or property as a result of the dishonest conduct of an attorney practicing law in the State of Connecticut, in the course of the attorney-client relationship. The fund provides a remedy for clients who are unable to obtain reimbursement for their loss from any other source.

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

• Directory Of Lawyers' Funds For Client Protection (courtesy of the American Bar Association);
• Check the USA Client Protection Funds Map;
• Check the Canada Client Protection Funds Map.

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

(2) Reportedly, another victim claimed that after he hired Rodia to handle the sale of his parents' home, Rodia kept $186,000 from the sale and stuck the victim with the closing costs; a third victim hired Rodia to handle the refinancing of the mortgage on his condominium, but Rodia kept the $360,000 that was to pay off the old mortgage, leaving the condo currently in foreclosure, according to police. In addition, a 63-year-old woman, who was injured in a car crash in Fairfield, reportedly hired Rodia in 2006 to represent her in a lawsuit against the other driver, but police said the woman later learned that Rodia had settled the suit for $2,500 and kept the money, the story reports.

BofA's Refusal To Pay Court-Ordered Attorney Fees In Failed Foreclosure Leads To Bank Branch 'Raid' By Cops Seeking Asset Seizure To Satisfy Judgment

In Naples, Florida, the Naples Daily News reports:

• Warren and Maureen Nyerges know how difficult it can be to get Bank of America’s attention. When the lending giant mistakenly attempted to foreclose on the couple’s cash-purchased Golden Gate Estates home in 2010, they spent weeks on the phone and in court before the case was dismissed.
• A judge ordered the bank to pay $2,500 in attorney fees for the couple’s troubles. Yet after five months and even more phone calls, neither the bank nor its local counsel had paid.
• Friday morning, the couple opted for a different tactic. Media in tow, their attorney arrived outside a Davis Boulevard branch of the bank with deputies, a moving company and the court’s permission to seize branch assets. “I’m either leaving the building with a whole bunch of furniture, or a check or cash or something,” the attorney, Todd Allen, vowed.(1)
• It was a scene that turned the foreclosure crisis on its head, if briefly. Collier County sheriff’s deputies entered the bank shortly after 9 a.m., located the bank manager and presented him with a court writ and a familiar choice: Pay the money or prepare to lose possessions.

***

• Shortly after 10 a.m., the movers drove away from the parking lot. Allen entered the bank, was told that a check had been cut to deputies and watched as officers exited the bank soon after. He wasn’t immediately told the amount of the check, but an agency spokeswoman later said it was for $5,772.88. Of the total, $685 is slated for Sheriff’s Office fees, including the movers. The purpose of the amount remaining after the judgment, some $2,587.88, was not immediately clear.

***

• Allen said that after leaving the bank on Friday, he was contacted by the bank’s new counsel, Florida Default Law Group. The case isn’t over, Allen indicated. He said he’ll seek for the bank to cover his own attorney fees. “If Bank of America doesn’t pay it, we’ll be back doing this again,” he said.

For more, see Tables turned: Bank pays up in mistaken foreclosure case.

For the video, see WINK News: Tables Turn: Deputies and movers show up at bank to seize property for homeowner.

(1) Allen is associated with The Law Office of Conrad Willkomm, P.A., Naples, Florida.

Closing Agency Owner Gets 57 Months For Illegally Dipping Into Escrow Account; Title Insurance Underwriter Left Holding The Bag On $258K Damages Tab

From the Office of the U.S. Attorney (Harrisburg, Pennsylvania):

• Peter J. Smith, United States Attorney for the Middle District of Pennsylvania, announced a Lancaster County woman was sentenced [] to 57 months incarceration following her conviction last September on charges she defrauded a local real estate settlement firm and a national real estate title insurance company out of more than $258,894.
• Following a three-day jury trial before U.S. District Court Judge William W. Caldwell in Harrisburg, Shawn Chambers-Galis, age 48, of Mt. Joy, Pennsylvania, was convicted of wire fraud.
• Testimony at the trial revealed that between 2005 and 2007 Chambers-Galis diverted more than $273,000 from the escrow accounts of Donegal Settlement Services, a real estate closing firm Chambers-Galis co-owned and operated in Jacobus, Pennsylvania, and Mt. Joy, and converted the funds to her own use. As a result, mortgages that should have been paid off by Donegal at real estate closings were not, in fact, paid off and the Commonwealth Land Title Company (“Land America”) had to eventually pay $258,894 to clear the titles to the properties.

For the U.S. Attorney press release, see Lancaster County woman sentenced for wire fraud related to local real estate settlement firm and national real estate title insurance company.

Title/Settlement Agency Owner Slammed w/ 55 Months, Restitution Order After $2.3M Closing Cash Proceeds Swindle From R/E Deals That Screwed 33 Victims

From the Office of the U.S. Attorney (Harrisburg, Pennsylvania):

• The United States Attorney’s Office for the Middle District of Pennsylvania announced that the owner of a settlement company was sentenced [] by United States District Court Senior Judge William J. Nealon to a 55-month term of imprisonment and ordered to pay restitution to 33 victims totaling $2,318,829.99.
• According to United States Attorney Peter J. Smith, Elizabeth Sichler, age 58, of Harvey’s Lake, Pennsylvania, owned Priority Search, Inc, a real estate settlement company. From July 2005 until 2008, Sichler failed in her fiduciary duty to pay certain obligations associated with real estate transactions her company handled as a title agent.
• According to court documents, Sichler failed to pay sellers’ first and second mortgages, seller’s cash proceeds, utility bills, real property taxes, real estate transfer taxes, recording/filing fees, and title insurance premiums. Instead, Sichler misappropriated dedicated funds for personal gain and to cover operating expenses of her business, including employee salaries and benefits.

For the U.S. Attorney press release, see Owner of settlement company sentenced to prison term for federal wire fraud charges.

NYC Judge Voids Foreclosure Sale Over Use Of 'Sewer Service', Homeowner To Move Back In After Being Booted Two Years Ago

In East Elmhurst, Queens, the New York Daily News reports:

• Johnny Ferreira may be the luckiest guy in Queens. Ninety-nine times out of a hundred, a struggling homeowner who loses his home to foreclosure will never see it again. Last month, a judge vacated a bank's foreclosure sale of Ferreira's home, effectively handing him back his keys.
• As a result, Ferreira is preparing to move back into the same brick two-family with postage stamp front lawn, snug backyard and tidy driveway he'd been evicted from two years ago. "He loves that house," his lawyer, Pankaj Malik, said. "He doesn't want to move" again.
• The extremely unusual ruling appears to be a one-of-a-kind victory in New York for a homeowner in a battle that banks almost always win. The problems started in 2009 when Ferreira was evicted after his home in East Elmhurst a few blocks from LaGuardia Airport was sold at auction. He fought back in court.

***

• "When he came to me I said his chances of winning were slim to none because judges are loath to do something this drastic," the lawyer said. Then Queens Supreme Court Justice Allan Weiss suddenly set aside the auction sale and ordered Ferreira "restored to possession."

***

• Weiss ruled that Ferreira was never served with the foreclosure papers, depriving him of due process. The judge said the bank's document was filled with errors, including an incorrect docket number, and was never filed in court. "It was just shoddy paperwork," Malik said.(1)

For more, see Home sweet foreclosed home: Queens man returns to home after judge overrules bank's foreclosure.

For Justice Weiss' ruling, see Deutsche Bank Natl. Trust Co. v Quinones, 2011 NY Slip Op 31284(U) (NY Sup Ct., Queens County May 16, 2011).

(1) Justice Weiss offered these observations on the facts of the case and the application of New York law thereto (bold text is my emphasis):

• A party moving to vacate his default pursuant to CPLR 5015(a)(1) must demonstrate a reasonable excuse for the default and a potentially meritorious defense (see Eugene DiLorenzo, Inc. v. A.C. Dutton Lbr. Co., 67 NY2d 138, 143 [1968]).
  
  The defendant is relieved of that obligation when the basis for vacature is lack of personal jurisdiction (Harkless v. Reid, 23 AD3d 622 [2005]; Steele v. Hempstead Pub Taxi, 305 AD2d 401 [2003]).
  
  In the absence of personal jurisdiction, all subsequent proceedings are rendered null and void (see Feinstein v. Bergner, 48 NY2d 234, 241 [1979]; Muslusky v. Lehigh Val. Coal Co., 225 NY 584, 587 [1919]) and subject to vacature at any time without any conditions (see McMullen v. Arnone, 79 AD2d 496, 499 [1981] and cases cited therein).
  
  It is, at all times, the plaintiff’s burden to prove that jurisdiction over the defendant was obtained by proper service of process (see Pearson v. 1296 Pacific Street Associates, Inc., 67 AD3d 659 [2009] lv denied 14 NY3d 705 [2010]; Munoz v. Reyes, 40 AD3d 1059 [2007]). A process server's affidavit of service ordinarily constitutes prima facie evidence of the facts contained therein and proper service (see Deutsche Bank Nat. Trust Co. v. Pestano, 71 AD3d 1074 [2010]; Frankel v. Schilling, 149 AD2d 657, 659 [1989]).
  
  Here, the plaintiff has failed to submit any proof of service upon the defendant in this action. The affidavit of service plaintiff submitted has a Supreme Court, Kings County caption with Index Number 74150/08 (not the index number of the instant action) and was filed in the office of the County Clerk of Kings County.
  
  In addition, the affidavit of service asserts that service was made at 17-24 Curtis Rd, East Elmhurst, N.Y. which is not the foreclosed premises nor the premises which was the subject of the holdover proceeding nor defendant’s actual dwelling place when the action was commenced.
  
  The affidavit of service produced by the plaintiff, on its face, demonstrates lack of personal jurisdiction, and a traverse hearing is unnecessary. Plaintiff’s attorney’s assertion that regardless of the defective affidavit of service, the defendant was properly served is without probative value since he has no personal knowledge of the facts (see JMD Holding Corp. v. Congress Fin. Corp., 4 NY3d 373, 384-385 [2005]; Warrington v. Ryder Truck Rental, Inc., 35 AD3d 455 [2006]).
  
  With respect to plaintiff's claim of waiver, there was no waiver in this case. In appropriate circumstances, a defendant may be deemed to have waived his jurisdictional defense (see e.g. Lomando v. Duncan, 257 AD2d 649 [1999]; Biener v. Hystron Fibers, Inc., 78 AD2d 162 [1980]).
  
  A valid waiver "requires no more than the voluntary and intentional abandonment of a known right which, but for the waiver would have been enforceable" (Nassau Trust Co. v. Montrose Concrete Prods. Corp., 56 NY2d 175, 184). It may arise by an express agreement or by such conduct or a failure to act that will evince an intent not to claim the purported advantage (Hadden v. Consolidated Edison Co. of N.Y., 45 NY2d 466, 469 [1978]).
  
  A waiver "is not created by negligence, oversight, or thoughtlessness, and cannot be inferred from mere silence" (Peck v. Peck, 232 AD2d 540, 540 [1996]; see Golfo v. Kycia Associates, Inc., 45 AD3d 531 [2007]. Intent is an essential element of a waiver, and requires that the person against whom the waiver is asserted had, at the time or the waiver, actual or constructive knowledge of the existence of his rights or of the relevant facts to support such right and chose not to take advantage of it (S. & E. Motor Hire Corporation v. New York Indemnity Co., 255 NY 69 [1930]; see also Savasta v. 470 Newport Associates, 180 AD2d 624 [1992] Airco Alloys Division, Airco Inc. v. Niagara Mohawk Power Corp., 76 AD2d 68 [1980]).
  
  In this case, there is no evidence from which the defendant’s knowing and intelligent waiver may be inferred. [...]

The Heat Continues For One Bankster; Is It Time Yet To Take A 'Short' Position In BofA Stock?

Fortune Magazine reports:

• Are Countrywide mortgage-backed securities really mortgage-backed? Do banks even have the legal right to foreclose on certain homes?
• These are just a few of the questions raised since the foreclosure crisis revealed shoddy mortgage servicing practices at many of the big banks – practices that have led to countless investigations and lawsuits. Court testimony by a former Countrywide employee added to the intrigue last fall, because she confessed that many loans there weren't properly handled, bringing into doubt the validity of Countrywide's securitization process. Bank of America, which owns Countrywide, quickly silenced the discussion with firm denials.
• But Fortune has examined dozens of court records that corroborate the employee's testimony. And if Countrywide's mortgage securitizations systematically failed as it appears they did, Bank of America's potential liability dwarfs its shareholder equity, as the Congressional Oversight Panel points out.
• Last November, a decision in a New Jersey bankruptcy case brought to light the testimony of Linda DeMartini, operational team leader for the litigation management department for Bank of America, which intended to prove the bank had the right to foreclose on a debtor's mortgage. Instead, her testimony was key to the judge's ruling that Bank of America couldn't foreclose, and along the way DeMartini made two statements that called into question the securitization of Countrywide loans.
• She testified that Countrywide didn't deliver the notes to the securitization trustee, and that Countrywide notes weren't endorsed except on a case-by-case basis generally long after securitization ostensibly occurred. Both steps are required, in one form or another, under all securitization contracts.
• Only the delivery issue was really scrutinized at the time, because without a doubt the failure to deliver the notes would invalidate the securitization.
• The other issue, failure to endorse the notes, sparked a debate: the American Securitization Forum argues the notes would still have been securitized without endorsement, while Adam Levitin, associate professor of law at Georgetown Law, convincingly argues that they would not have been.
• If the securitization failed, a variety of securities fraud charges could follow. Indeed, one investor lawsuit based in part on DeMartini's testimony about endorsements and delivery has already been filed. And investors aren't the only possible pursuers of securities fraud -- New York Attorney General Eric Schneiderman is investigating mortgage securitizations by three banks, including Bank of America.

For more, see At Bank of America, more incomplete mortgage docs raise more questions (Fortune examined hundreds of foreclosure documents to determine the validity of mortgage securitizations after Bank of America debunked testimony about them last fall. The results raise more questions than they answer).

Bankster Attempt To Score 'Get Out Of Jail Free' Card Over MERS Mess Falls Flat; Pitchfork-Wielding Public To OR Lawmakers: Don't Even Think About It!

The Oregonian reports:

• A late attempt by the finance industry to waive Oregon mortgage recording laws in most foreclosures is dead. The Oregon House Judiciary Committee voted [] to approve Senate Bill 519 without an amendment sought last week by loan servicers, title companies and credit unions. The amendment would have relieved lenders of ensuring a property's ownership history is properly recorded in public records before foreclosing outside a courtroom.
• The committee voted with no debate to send the bill to a floor vote without the amendment. Afterward, co-chair Jeff Barker cited a public outcry over the amendment as reason for its failure and described an intense back-room negotiations to do so."There was a lot of opposition," said Barker, D-Aloha. "I probably got more emails about this than anything all session."(1)
• Document recording and signing issues have hung up foreclosures across the nation, and many of them have involved the Mortgage Electronic Registration System, or MERS.
• Federal judges in Oregon have blocked such foreclosures, saying MERS failed to record underlying documents properly as required by Oregon law in out-of-court foreclosures.(2)

For more, see MERS foreclosure amendment dies in Oregon House committee.

(1) No doubt the incensed public was driven to their pitchforks (metaphorically speaking, of course) in expressing their sentiments to state lawmakers on this issue, as evidenced by this photo of an obviously-outraged couple.

(2) For more on MERS' role in foreclosure actions:

• Mortgage Electronic Registration Systems, Inc.: A Survey of Cases Discussing MERS’ Authority to Act,
• The Case Against Allowing Mortgage Electronic Registration Systems, Inc. (MERS) to Initiate Foreclosure Proceedings,
• Two Faces: Demystifying the Mortgage Electronic Registration System's Land Title Theory,
• The Murky Mess of MERS: The Complications of Collecting on Promissory Notes When MERS is Around,
• Foreclosure, Subprime Mortgage Lending, and the Mortgage Electronic Registration System.

Inflated Fees, Force-Placed Insurance, Robosigning Among MBS Investor Concerns In Suit Demanding Bankster Accounting Over Loan Servicing Costs

In New York City, Reuters reports:

• The Knights of Columbus, a 129-year-old Catholic charitable organization, is suing Bank of New York Mellon to obtain information about residential mortgage loans the former lending giant Countrywide funneled into some of the Knights' investments.
• The Knights, who have a $17-billion investment portfolio, invested in two residential-mortgage-backed security trusts. The organization is questioning how Countrywide handled foreclosures as the "master servicer" of the loans, according to the complaint filed Thursday in New York Supreme Court in Manhattan. BNY Mellon is the trustee.
• The complaint pointed to "recent revelations" that Countrywide may have been "acting for its own benefit rather than for the benefit of investors," and thereby "damaging the borrowers" whose loans make up the trusts.
• Kevin Heine, a spokesman for BNY Mellon, said, "The complaint does not assert any claims against BNY Mellon or seek damages. The complaint merely seeks an accounting."

***

• The complaint says courts around the country have responded to the loan servicers' "notoriously flawed paperwork" by instituting new procedures, such as allowing the courts to pass on the cost of scrutinizing the documentation to the foreclosing firms.
• The Knights are requesting an accounting of the "extra fees and costs associated with robo-signing," to assure that those costs are borne by the loan servicers and not passed on to the beneficiaries of the trusts.
• The complaint also cites problems with Bank of America failing to promptly pursue valid foreclosures or dispose of real-estate-owned properties, practices that can increase the severity of losses associated with defaulted loans, according to the Knights' complaint. The complaint requests an accounting of these losses as well.(1)

For the story, see Knights of Columbus sue for Countrywide loan information.

For the lawsuit, see Knights of Columbus v. The Bank of New York Mellon, New York Supreme Court, New York County, No. 651442-2011.

Go here for links to other filed court documents.

(1) Paragraph 1 of the lawsuit summarizes the complaint:

• This action requests the Court to order an immediate accounting of two trusts known as CWALT 2005-6CB and CWALT 2006-6CB (the “Trusts”). The Trusts hold residential mortgage loans for the benefit of investors such as Plaintiff.
  
  An accounting is required because one or more of the Trust administrators have:
  
  (1) been examined by the Office of Comptroller of the Currency, the Office of Thrift Supervision, the Federal Deposit Insurance Corporation, and the Federal Reserve Board, which “found critical deficiencies and shortcomings in foreclosure governance processes, foreclosure document preparation processes, and oversight and monitoring of third party law firms and vendors”;
  
  (2) been accused by the City of Buffalo, among others, for failing to properly care for and dispose of unoccupied properties, contributing to the deterioration of neighborhoods and increasing losses to the Trusts’ beneficiaries;
  
  (3) been found by the Office of the Comptroller of the Currency to have “engaged in unsafe or unsound banking practices” “[i]n connection with certain foreclosures of loans in its residential mortgage servicing portfolio”, which is subjecting each Trust to unknown costs and expenses;
  
  (4) been accused by the Federal Trade Commission of engaging in a deliberate strategy to “mark up” the actual cost of services that are ultimately paid by each Trust;
  
  (5) been exposed by the AMERICAN BANKER for using affiliates to place on homes insurance costing up to ten times the price of regular policies, which premiums are ultimately charged to the beneficiaries of each Trust; and
  
  (6) had a court find that a practice that an employee of a Trust administrator testified under oath was “customary” precluded a similar trust from enforcing its rights under a mortgage.

For the City of Buffalo accusations, see City of Buffalo v. ABN Amro Mortgage Group Inc., et al.

For the American Banker stories, see

• Ties to Insurers Could Land Mortgage Servicers in More Trouble (Force-placed policies impose costs on both homeowner, investor),
• Losses from Force-Placed Insurance Are Beginning to Rankle Investors,
• New Questions about Banks' Force-Placed Insurance Deals (QBE, carrier used by Wells Fargo and SunTrust, avoids oversight through 'surplus lines' structure).

Florida Bar Clears Foreclosure Defense Attorney In Probe Into Billing Practices

The Palm Beach Post reports:

• Foreclosure defense attorney Peter Ticktin was cleared of wrongdoing by the Florida Bar following a complaint about his firm placing second mortgages on clients' homes to pay for services. Ticktin, who is based in Deerfield Beach but has offices throughout Florida, uses the unique payment plan in cases where homeowners wouldn't otherwise be able to afford an attorney.
• The Bar opened an investigation following media reports about how struggling homeowners were paying court costs. In addition to paying a monthly stipend - a common practice in foreclosure defense - Ticktin said he came up with the second mortgage as a type of contingency fee. If Ticktin's firm gets a case dismissed or a mortgage reduced, the client must take out a new mortgage that awards the firm 40 percent of whatever the homeowner saved.
• A letter from the Bar dated Monday says a grievance committee found "insufficient evidence to determine probable cause for disciplinary proceedings." "We knew we didn't do anything wrong," Ticktin said. "There is no logical reason why it wouldn't be appropriate or ethical."(1)

Source: Florida Bar clears foreclosure lawyer Ticktin over plan.

(1) However, there could be a problem if, once the case is over and the client's overall liability for attorney fees is determined, the amount of the contingent fee, coupled with the fixed monthly stipend paid, is found to be "clearly excessive." See (bold text is my emphasis):

• Rule 4-1.5, Florida Rules of Professional Conduct:
  
  (a) Illegal, Prohibited, or Clearly Excessive Fees and Costs
  
  An attorney shall not enter into an agreement for, charge, or collect an illegal, prohibited, or clearly excessive fee or cost, or a fee generated by employment that was obtained through advertising or solicitation not in compliance with the Rules Regulating The Florida Bar.
  
  A fee or cost is clearly excessive when: [go here for more of Rule 4-1.5, Florida Rules of Professional Conduct].
• The Florida Bar v. Richardson, 574 So. 2d 60 (Fla. 1990):
  
  This Court recognizes that a lawyer's fee will vary in accordance with many factors; however, we fully concur with the expert witness's statement in this case that all of the time a lawyer spends on a case is not necessarily the amount of time for which he can properly charge his client.
  
  As explained by the expert witness, "[I]t's the time that reasonably should be devoted to accomplish a particular task." This statement is consistent with the principles we set forth in Standard Guaranty Insurance Co. v. Quanstrom, 555 So.2d 828 (Fla. 1990), and Florida Patient's Compensation Fund v. Rowe, 472 So.2d 1145 (Fla. 1985), neither of which allows billing clients solely on billable hours or charging clients without determining what is the reasonable time to accomplish a particular task.
• The Florida Bar v. Moriber, 314 So. 2d 145 (Fla. 1975):
  
  Few, if any, areas of attorney discipline are as subject to differing interpretations as the matter of what constitutes an excessive attorney's fee. See The Florida Bar v. Winn, 208 So.2d 809 (Fla. 1968), cert. den., 393 U.S. 914, 89 S.Ct. 236, 21 L.Ed.2d 199. The answer turns upon multiple factors including the difficulty of the case; the contingencies, if any, upon which the fee is based; the novelty of the legal issues presented; the experience of the attorney; the quality of his work product; and the amount of time spent in preparation and litigation.
• Franklin & Marbin, PA v. Mascola, 711 So. 2d 46 (Fla. App. 4th DCA 1998): Commenting on attorneys fee contracts with clients and their enforceabilty, generally, the court observed:
  
  Of course, the supreme court has also long held that attorney's fee contracts are infused with the public interest and that attorneys are not free to negotiate just any fee. In Baruch v. Giblin, 122 Fla. 59, 164 So. 831 (1935), the court said:
  
  "Lawyers are officers of the court. The court is an instrument of society for the administration of justice. Justice should be administered economically, efficiently, and expeditiously. The attorney's fee is, therefore, a very important factor in the administration of justice, and if it is not determined with proper relation to that fact it results in a species of social malpractice that undermines the confidence of the public in the bench and bar. It does more than that; it brings the court into disrepute and destroys its power to perform adequately the function of its creation."
  
  164 So. at 833. To meet this public interest, the supreme court has adopted specific rules regulating attorney's fees.[7],[8] The issue of enforceability of lawyer fee contracts is set out in a specific rule that states:
  
  "Contracts or agreements for attorney's fees between an attorney and client will ordinarily be enforceable according to the terms of such contracts or agreements, unless found to be illegal, obtained through advertising or solicitation not in compliance with the Rules Regulating The Florida Bar, prohibited by this rule, or clearly excessive as defined by this rule."[9]
• Chandris, S.A. v. Yanakakis, 668 So.2d 180 (Fla.1995), where the Florida Supreme Court held that fee contracts that do not comply with the lawyer disciplinary rules are subject to being held void as against public policy. See also American Casualty Co. v. Coastal Caisson Drill Co., 542 So.2d 957, 958 (Fla.1989); City of Miami v. Benson, 63 So.2d 916 (Fla. 1953); City of Leesburg v. Ware, 113 Fla. 760, 767, 153 So. 87, 90 (1934).

Go here for approximately 100 or so links to Florida cases addressing the issue of attorneys' fees that are 'clearly excessive.' (It may be that, given the Bar's seemingly slumbering approach recently in probing complaints against attorneys in connection with home foreclosures (see The Palm Beach Post: Foreclosure fraud complaints flood Florida Bar but no lawyer reprimands so far), a homeowner may have to file a civil lawsuit to seek redress rather than simply file a complaint with The Florida Bar in a case where one believes they've been clipped with legal fees that are 'clearly excessive'). In this regard, one needs to remember that, just because The Florida Bar says there is no ethical violation of the rules, it doesn't necessarily mean they are right. A court of law (probably an appellate level court) has the final say.

Go here for some links to cases from other jusrisdictions addessing 'clearly excessive' attorneys' fees (or GO HERE to refine a search for the jursidiction of your interest).

(On a side note, it is not unheard of for a court, in determining what constitutes a reasonable attorney fee, to disregard applying a percentage of value approach and, instead, use the lodestar method to calculate the amount of the fee an attorney is entitled to. See Nager v. Teachers' Retirement System of The City of New York, 57 A.D.3d 389, 869 N.Y.S.2d 492 (NY App. Div. 1st Dept. 2008):

• Supreme Court properly used the lodestar method in determining the reasonable value of plaintiffs' attorneys' services in instituting and settling this class action, rather than applying a percentage of the value of the settlement, in view of the enormous disparity in result between the two methods (see Goldberger v Integrated Resources, Inc., 209 F3d 43, 50 [2d Cir 2000]; In re Washington Pub. Power Supply Sys. Sec. Litig., 19 F3d 1291, 1297-1298 [9th Cir 1994]), [...].

Something for litigants to keep in mind when they think their attorney may be taking advantage of their vulnerable situation in getting them to agree to an unfavorable attorney fee agreement.)

-----------------------------------

Further, there could also be a 'negligence' problem for any foreclosure defense attorney in Florida (and possibly in other states) who, after gaining a favorable ruling in court on behalf of a client facing foreclosure:

• fails to then file a motion with the court requesting prevailing party attorneys fees to be awarded (the liability for payment to be imposed by the court upon the losing party; ie. the foreclosing bankster), and,
• where a contingency fee is involved, fails to request that a contingency fee multiplier be applied when calculating the attorney fee award.

See:

• Fla. Appeals Court: Homeowner Entitled To Nail Bank For Prevailing Party Legal Fees After Lender Voluntarily Dismissed F'closure Case w/out Prejudice,
• Defending A Foreclosure Defense Case Pro Bono? Don't Forget The Contingency Risk Factor When Sticking Losing Lender With Tab.

Top Secret Video Of Banksters Discussing MERS' Problem?

What may be a video of a top secret meeting of banksters discussing the current foreclosure problems they face as a result of the MERS mess has been found floating around online on YouTube.

The meeting could have taken place somewhere in Germany, since the participants all spoke in German, but English subtitles have been added.

Those who don't mind more than a few "f-bombs" can go here for what could be a 'MERS bankster video.'

Thanks to Deontos for the heads-up on this video.

HUD: Underwriters' Refusal To Insure Titles Due To MERS' Michigan Mess Requires Reforeclosure Of Crappy Deeds

National Mortgage News reports:

• The Department of Housing and Urban Development will re-foreclose on all its REO properties in Michigan where the original foreclosure was conducted in the name of MERS using the state’s nonjudicial process.
• In late April, the Michigan Court of Appeals ruled that Mortgage Electronic Registration Systems Inc. is ineligible to use the state’s nonjudicial foreclosure process because MERS does not meet the requirements to foreclose by advertisement and should have filed the foreclosures through the state’s judicial process. That ruling vacated the 2009 foreclosures of two borrowers.(1)
• In an email to HUD mortgagees that was obtained by National Mortgage News, the agency said most of the major title insurance company underwriters have ceased issuing title insurance for any properties where MERS foreclosed by advertisement.
• “As a result, any Michigan REO properties in HUD’s inventory that cannot close due to an inability to obtain title insurance must be re-foreclosed in accordance with the Michigan Court of Appeals opinion,” the email reads.(2)

For more, see MERS Ruling Forces HUD to Reforeclose on Mich. REO.

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

• Daily Finance: Why the Foreclosure Mess Settlement Proposal Can't Fix the Damage,
• Naked Capitalism: On the Clouded Title Mess and the Difficulties of Cleaning It Up.

(2) For earlier posts on the colossal "home title" mess created by MERS' non-judicial foreclosures in Michigan, 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,
• Grandson: MERS Illegal Foreclosure Forced Sale Of Dying Gandmother's Home; Hope Still Alive In Attempt To Recover Title,
• MI Suit Seeks Hundred$ Of Million$ From MERS Over Allegedly "Illegally Prosecuted" F'closures; Points To Recent State Appeals Court Ruling For Support,
• Michigan To Join Massachusetts As Real Estate Resale Market Quagmire After Recent State Appeals Court 'Anti-MERS' Ruling?,
• MI Appeals Court: MERS' Screw-Up Makes F'closure Proceedings Void Ab Initio (Does State Now Have 'Ibanez' Problem w/ Respect To Future Titleholders?).