Saturday, June 18, 2011

Booted Foreclosed Homeowner Attempts To Fight Off Multiple Jail Threats Over Now-Dilapidated Former Home That Bank No Longer Wants

In Paulding County, Georgia, WXIA-TV Channel 11 reports:

  • It is 95 degrees in the shade, but 46-year-old Curtis Neeley, with high blood pressure and heart trouble, doesn't have time to rest. His old yard had to be cut by the close of business Wednesday or he could have gone to jail. Even now that it's done, he could still end up behind bars.
  • "Cutting the grass today is keeping me out of jail," he said, sweating in the oppressive heat. "But if the house doesn't get demolished in 14 days, I'm going anyway."
  • It's all part of an apparent snafu with the bank that Curtis and his attorney say took possession of the property during a foreclosure and bankruptcy two years ago. "I left the house two years ago," Neeley said. "The mortgage company came in and changed all the locks on the door so I couldn't get in."
  • After taking the Paulding County house -- and maintaining it -- the bank is now trying to foist it back on him, Neeley claimed, saddling him with the cost to tear it down; something he doesn't have the money to do.


  • The county says its goal is simply to get the property cleaned up, and unfortunately for Neeley, marshals consider him to be the owner. After trying to track him down for months, they finally located him on Facebook.
  • However, officials will likely now hold off on any further threat of arrest, at least until their lawyers can cut through the blur of the bank's role with Neeley's property.

For the story, see Facing arrest, man cleans up home he says isn't his.

War Against BofA Bank Branches Continues As Court Threatens To Throw Local Manager In Jail Over Lender's Refusal To Demolish Vacant Foreclosure

In Riverdale, Georgia, The Atlanta Journal Constitution reports:

  • A Bank of America branch manager in Riverdale faces jail time if the banking giant continues to ignore city orders to demolish a vacant, fire-damaged home. The bank, however, says it can’t comply because it doesn’t own the home.
  • Riverdale city officials have tried for more than six months to get the bank to tear down the dilapidated property, and the bank has ignored requests to appear in court, city attorney Deana Johnson said. “We’ve cited and served them with legal process and they’ve not come,” Johnson said.


  • On Wednesday, the bank hired the Atlanta law firm of McGuire Woods to handle the case. Meanwhile, the bank has racked up nearly $20,000 in fines, including a $500-a-day fine imposed several months ago.
  • A Riverdale City Court judge earlier this week ordered a June 28 hearing for the bank to show cause why the local branch manager should not be arrested for contempt, Johnson said, adding that the bank failed to appear in court in May despite city efforts to keep the branch manager apprised of the situation. [...] The house at 6878 Cedar Hill Court in Riverdale caught fire in December 2008, forcing the homeowners to move. The house ended up in foreclosure and was eventually taken over by Bank of America. (1)

For the story, see Vacant Riverdale home spurs court threats.

(1) Earlier this month, a branch manager in Naples, Florida was reportedly visibly shaken when local cops showed up to execute an asset seizure over the bank's failure to comply with a court order awarding a homeowner/couple payment of legal fees paid in connection with a failed BofA foreclosure action. See 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.

Political Pamphlets Disguised As Eviction Notices Create Chaos Among Some Detroit Residents

In Detroit, Michigan, CBS News reports:

  • Residents in a Detroit neighborhood received a scare this week when they found what appeared to be eviction notices on their doors. The flyers, however, turned out to be political pamphlets in opposition to the construction of a controversial new bridge.
  • The fake eviction notices were posted by a local chapter of Americans for Prosperity, the conservative political advocacy group backed by Charles and David Koch, the billionaire brothers who run Koch Industries and are longtime libertarians. Local political leaders and columnists are condemning the group for scaring residents -- whose homes sit in the epicenter of the nation's foreclosure crisis -- while refusing to disclose which of its corporate backers are funding the flyers.
  • At the center of the flyer in question, in large print, reads: "Eviction Notice." In medium print, the top of the flyer reads, "This property is subject to seizure by the Michigan Department of Transportation."
  • Only in small print does the flyer say the property in question could be seized if legislation approving the bridge is passed.


  • Still, fake eviction notices had residents on edge. Resident Steve Toth told the Free Press his elderly mother saw the flyer and "damn near keeled over," while one of his neighbors was "beside himself." Scott Hagerstrom, American for Prosperity's Michigan state director, told the Free Press the group had no apologies for the flyer.

For more, see Koch-backed group's fake eviction notices rile up Detroit.

Go here for the fake eviction notice.

Tragedy Involving Deadly Bronx Firetrap That Lingered For Years In Foreclosure Spurs Crackdown On Illegally Converted Rooming Houses Throughout City

In New York City, Bronx News Network reports:

  • Mayor Bloomberg and the City Council announced yesterday that the city will be taking a new, more aggressive approach in identifying and inspecting apartment buildings suspected of being divided illegally.
  • At the end of April, a fire tore through an apartment building in Belmont and killed three family members who had been living there--Christina Garcia, 43, Juan Lopez, 36, and their 12-year-old son Christian Garcia.(1)
  • The early morning blaze broke out on the top floor of a multi-family building at 2321 Prospect Ave., a space that had been subdivided into several rooms using partitions, according to FDNY spokesman Frank Dwyer.
  • The tragedy has shined a spotlight on the proliferation of dangerous housing conditions in the Bronx, and across the city. Experts and elected officials say practices like illegal divisions, erected by both tenants and landlords alike, are frighteningly common and growing in number.


  • Sally Dunford, of the West Bronx Housing and Neighborhood Resource Center, called the problem “endemic.” She described some of what she’s seen in the community in recent years:

    1- already small apartments portioned off into even smaller ones, blocking access to the fire escape or stationed dangerously close to the building’s heating source;

    2- five people living in a basement with no bathroom or kitchen;

    3- an elderly couple living in a closet;

    4- tenants moving back into a property immediately after the city ordered them to vacate.

  • "People are more willing to do than to go to a shelter,” she said.
  • Landlords, meanwhile, who are struggling to make mortgage payments on the city’s ever-growing number of financially unstable properties can collect more rents if they can fit more tenants into a given space—even if it’s a fire hazard. People who are going under are much more likely to do stupid things,” Dunford explained.
  • The last known owner of the Prospect Avenue building where the fire took place, a used car salesman named Domingo Cedano, told the New York Times that he’d lost the building to foreclosure years ago.

For more, see Deadly Belmont Fire Points to Illegal Housing Dangers; City Launches Crackdown.

For the City press release, see Mayor Bloomberg And Speaker Quinn Announce New Approach To Target Most Dangerous Illegally Converted Apartments (Task Force Developed New Method Using Risk Analysis Model to Identify Properties Most at Risk for FireIn Pilot Test, 40 Percent of Targeted Properties Required Vacate Orders, Compared to Typical Rate of Three Percent).

(1) See Early Morning Bronx Fire In Illegally Converted Rooming House Leaves 3 Dead, 8 Injured; Firetrap Lingered In Foreclosure Since 2008.

Dubious Dealings Leave Nursing Home Chain Under Threat Of Collapse; 31,000 Elderly Residents Could Face The Boot

The New York Post reports:

  • Don't tell Blackstone Group chief executive Stephen Schwarzman that lightning doesn't strike twice. The New York billionaire private-equity kingpin has become the subject of a blistering attack in the British media after the country's No. 1 nursing home chain, formerly owned by Blackstone, has run into a financial iceberg -- possibly putting its 31,000 residents in danger of being booted from their homes.
  • The reports have blamed Blackstone for putting the chain, the 750-unit Southern Cross, in financial straits. "Former Southern Cross tycoon owns five houses worth $125.9M while 31,000 residents may have to leave their care homes," trumpeted a headline on the Daily Mail site on Sunday, referring to Schwarzman.


  • Private-equity firms that invested in Southern Cross split off the company's real estate from its actual nursing homes. This doomed the company as landlords increased rents and said they will not give the chain, which is losing money, a break.
  • This comes after the British government cut reimbursement for nursing home services, leading to the Southern Cross cash crunch. If the landlord and Southern Cross do not reach a compromise in about one month, there is a danger that the chain could collapse.

For more, see Don't kill granny (Schwarzman under fire in UK over retirees).

Extended Trips Away From Home Could Kill Property Insurance Coverage

In Tacoma, Washington, The News Tribune reports:

  • You’re a snowbird who spends six months in the Arizona sun and six months at your home here in the South Sound. Or you’re a homeowner with a mortgage that has gone underwater, and you’ve walked away from your loan expecting to face foreclosure. You’ve got homeowner’s insurance, and you think you’re covered.
  • Well, maybe not. Karl Newman, president of the Northwest Insurance Council, said this week that homeowners who fail to occupy their homes for 30 days or more could face significant insurance implications and serious financial risk.” Some policies, he said, “exclude losses caused by abandonment of a home or neglect when the home is left unoccupied for a specified number of consecutive days.”
  • Only recently – especially with an increase of foreclosures – has this facet of coverage become widely known, he said.
  • As long as people continue to own that home, they have liability,” Newman said. “We’re sounding the alarm. People may be without coverage and not know it. This could be a problem for people. We just don’t want them to be unaware.”

For more, see Little-known insurance clause can mean liability when leaving home.

Double Hit & Run Killer Gets Ultimate Prison Buy Out Deal; Dodges 20-45 Year Sentence, Gets 24 Months House Arrest At Luxury Hi-Rise Oceanfront Condo

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

  • A privileged Illinois man who fled after running down two British businessmen in his speeding Porsche avoided prison [] and will instead serve out a 2-year sentence at a luxury oceanfront condo.
  • Ryan LeVin, 36, will be on house arrest at one of his parents' two condos at the Point of Americas on Fort Lauderdale Beach(1) – less than two miles from where he careened into the British visitors as they walked to their hotel two years ago. The house confinement will be followed by 10 years of probation. LeVin, who hails from a prominent Chicago family, worked out a deal to pay the victims' families an undisclosed sum.
  • The widows supported the sentence, and their attorneys collected checks from LeVin immediately after the [...] hearing, where he pleaded guilty to leaving the scene of a fatal accident and two counts of vehicular homicide.


  • Sentencing guidelines called for 20 to 45 years in prison, and prosecutor Stefanie Newman asked for 10 years. "He needs to go to prison,'' Newman said in court. "He needs to be penalized for his actions."
  • In imposing the lighter sentence, Broward Circuit Judge Barbara McCarthy said, "The need for restitution does outweigh the need for prison."
  • Both widows wrote letters to the judge, describing the "financial hardship" they've suffered since losing their husbands, who were the sole earners of their families. Watkinson left behind a wife, Kirsty, two sons, 5 and 21, and an 18-year-old daughter. Elford and his wife, Claire, had two young daughters.
  • The widows agreed to LeVin staying out of prison with certain conditions, including immediate payment to settle a civil wrongful death lawsuit they filed against him.


  • At the time of the hit-and-run, LeVin was on probation in Illinois for a 2006 high-speed chase in Chicago that injured a police officer and two motorists. He had multiple convictions in Florida, Illinois and Texas for speeding, disobeying traffic lights, improper lane passing, fleeing and eluding police officers, and cocaine possession.
  • Illinois officials will work with Florida authorities to have LeVin brought back to his home state, where he faces a parole violation stemming from the 2006 incident, an Illinois corrections spokeswoman said. Illinois will seek to have LeVin's parole revoked and have him sent back to prison.

For more, see Porsche hit-and-run killer gets house arrest in Fort Lauderdale oceanfront condo.

See also:

(1) Located on Port Everglades Inlet, Point of Americas boasts a "spectacular private beach,'' three fitness centers and luxury condos where residents can watch cruise ships from their terraces, the story reports.

Friday, June 17, 2011

Disbarred Lawyer Gets 5 Years In $600K Client Ripoff; Bar Examiner: Attorney Used Trust Account As His "Piggy Bank"

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

  • A lawyer who was raised by one of Palm Beach County's most respected attorneys but is the biological son of one of its most notorious murderers was sentenced Tuesday to five years in prison for bilking clients out of more than $600,000.
  • Without any show of emotion, A. Clark Cone, 56, pleaded guilty to grand theft and organized scheme to defraud. He was fingerprinted and taken into custody immediately.


  • While Cone's wife left the courtroom in tears, one of his victims said he had no sympathy. "We put all our trust in Mr. Cone," said Anthony DePrizio, who flew in from Boston to tell Circuit Judge Stephen Rapp how Cone's dishonesty prolonged the agony of a Riviera Beach car accident that nearly cost his wife her life. Instead of helping him and his wife recover money they needed for her care, he stole it. Cone's prison sentence offered him little comfort.
  • "I don't care if he serves one day. I just want my money," DePrizio said. Although ordered to make restitution, Cone appears to have no means to repay his clients.(1) He has been disbarred. His $540,000 home is in foreclosure. He was represented by a public defender.
  • He took a $500,000 settlement he negotiated for the DePrizios in 2005, prosecutors said. He kept $100,000 he received in 2006 to settle a lawsuit on behalf of a Miramar man who lost his wife in a plane crash. He also kept $38,940 awarded a Boca Raton woman he represented in a slip-and-fall case.
  • But the extent of his misdeeds are unknown. A paralegal who worked for him said many people, including a couple who claimed their son suffered neurological damage because he was misdiagnosed at two local medical centers, lost their ability to recover money because Cone failed to file court papers on time.
  • Further, an examiner for the Florida Bar, who audited Cone's books, reported that he didn't keep records to show whose money he kept in his trust accounts. It was clear that Cone used the accounts as a piggy bank, the examiner said.

For the story, see Attorney A. Clark Cone sentenced to 5 years for bilking law clients (Son of a notorious murderer is sentenced to five years in prison for bilking clients out of more than $600,000).

(1) The Florida Bar's Clients' Security Fund compensates people who have been victims of of misappropriation or embezzlement of cash or property by a Florida-licensed attorney. For those ripped off by dishonest attorneys in other states and Canada, see:

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

Add One More F'closed Homeowner To List Of Those BofA Told To Miss Payments To Qualify For Loan Mod; Woman Was Current On Reworked Plan When Home Sold

In Santa Clara, California, the St. George News reports:

  • Bank of America foreclosed on a Santa Clara woman’s home, despite her doing everything she was instructed to do in order to prevent it. Annette Lake resided in her house in Santa Clara from 1986 until May 24, 2011, when Bank of America foreclosed on her home.
  • Just after her divorce from her husband was finalized in 2008, Lake was diagnosed with breast cancer. She was laid off from her job during chemotherapy treatments. She began having a hard time paying her mortgage, though she never missed a mortgage payment.
  • In 2009 Lake learned that the government had given banks money to assist people experiencing hardships. She called Bank of America, the holder of her home loan, to learn if she could refinance her loan so that her payments would be more affordable.
  • They told me they couldn’t assist me because I was paid up to date,” Lake said. “I had to be behind on my payments before they would give me assistance.” Bank of America representatives told Lake she needed to miss three mortgage payments in order to be eligible for assistance. Lake then missed three mortgage payments, as Bank of America instructed her to do.
  • After missing three payments, Lake’s home loan was remodified and her mortgage payments were lowered to $728.50 per month, which she paid on time each month. But in late June 2010, the day after her mother died, Lake came home to find a foreclosure notice posted on her house.


  • Though Lake continued paying her mortgage payments, Bank of America attempted to foreclose on Lake’s house again, and on May 24, the efforts were successful. Lake and her 19-year-old daughter moved out of her house, which has now been sold by Bank of America. Lake and her daughter moved into Lake’s father’s basement, where they share a bedroom.


  • The entire experience has given Lake a different outlook on life. “I honestly understand how people become homeless and how they give up and say they don’t care,” Lake said. “You get to the point where you don’t care. I get it. You just feel like saying, ‘Fine, you win.’”
  • Though she’s already lost her home, Lake is hoping to participate in a class action lawsuit against Bank of America.(1)I know I’ll never get my home back,” Lake said. “But hopefully there’ll be some repercussions, some reciprocation.”

For more, see Bank of America Forecloses on Santa Clara Woman After Telling Her to Miss Her Payments (Annette Lake lost her home after Bank of America told her to miss three payments so she would qualify for a remodification. Lake needed to remodify her loan after being diagnosed with breast cancer).

(1) Beware of "class action lawsuits bearing gifts." See Class Action Horror For Wells Fargo Pick-A-Payment Borrowers As $50M Settlement With Bankster Yields $96 Per Victim, $25M For Attorneys.

Northern California 'Hard Money' Racket Sinks Claws Into Local DA

In Nevada City, California, The Sacramento Bee reports:

  • His personal finances in disarray and his ability to do his job compromised, Nevada County District Attorney Clifford Newell sat in a local cafe, eyes welling, as he described how he became beholden to a loan broker who is under investigation for bilking investors.
  • A few years ago, Newell and his wife assumed crushing debts to keep their summer camp business solvent. Unable to get a conventional loan – "Neither of us were qualified," Newell said – they borrowed from what is called a "hard money" broker, the equivalent, some say, of a legal loan shark who uses others' money to make high-priced loans.
  • That decision inextricably linked Newell, the county's top law enforcement officer, to Philip Lester. That hard money broker has since been accused by investors of cheating them, leading to investigations by police, and now the state attorney general's office, for securities fraud.
  • A yearlong Bee investigation found that Newell, 54, received favorable treatment on his own loans from two hard money brokers. Documents show that one of them, Lester, tried to help the Newells avoid foreclosure and possible bankruptcy by raising money for a loan and misleading investors who contributed.

For more, see Nevada County DA Took Special 'Hard Money' loan favors.

Short Sale Fraud: Quick Way To Big Profits?

Syndicated columnist Kenneth R. Harney writes:

  • Are banks and distressed home sellers getting rooked on a massive scale in the booming short-sale arena — leaving hundreds of millions of dollars on the table for white-collar criminals?
  • A comprehensive new study estimates they will lose more than $375 million this year alone when they sell undervalued houses to tag teams consisting of real-estate agents and investors. Worse yet, the trend appears to be growing at the rate of 25 percent a year.

For more, see Quick profits, a 'short' way to fraud.

Thursday, June 16, 2011

Phoenix Cops Sound Alert On Scammers Hijacking Possession Of Vacant Homes In Foreclosure, Then Pocketing Cash From Duped Renters

In Phoenix, Arizona, The Arizona Republic reports:

  • Phoenix police are investigating a scam that has people pay a deposit on a rental home that turns out to be in foreclosure and not available for renting, Phoenix police said Thursday. The scammers are targeting people throughout the Valley, Phoenix police Sgt. Trent Crump said at a Thursday news conference.
  • One arrest has already been made in connection to four of these scams in Phoenix, Glendale and Avondale. Raul Juarez, 35, was arrested on April 16 in connection with the case.
  • Crump said the scam works like this: After breaking into foreclosed homes and switching the locks on the doors, scammers use the Internet to target potential home renters. They place ads on websites such as Craigslist and mostly involve month-to-month rentals with no credit checks. These scams also target people who have recently had homes foreclosed, Crump said.


  • There have been six known scams of this sort in Phoenix, Crump said. Other victims have reportedly lost between $800 to $1,900 per incident. Like the scammers, police used the Internet to track down Juarez. "If you put (ads) up there, it might be police that are responding to check or to verify now," Crump said.
  • Crump also warned renters to be aware of "red flags," [...]. These include supposed proprietors only accepting cash, not wanting a contract or having abnormally small deposits. Some scammers also might not have a vehicle around in case someone takes note of the license plate, Crump said.

For the story, see Phoenix police warn about foreclosure rental scam.

Go here for other posts on real estate-related hijacking scams. hijack

Foreclosure Defense Attorney Shakes Another $3K Out Of BofA For Add'l Legal Fees & Costs Over Attempted Bogus Foreclosure On Home Without Mortgage

In Naples, Florida, The News Press reports:

  • Bank of America is caught up at last on its account with a Golden Gate couple who were sued by the bank for foreclosure even though they never had a mortgage, the couple’s attorney said today.
  • The bank cut a check [last week] for $5,772.88 to cover Naples-based attorney Todd Allen’s(1) $2,534 fee for defending retired Bay Village, Ohio, police Sgt. Warren Nyerges and his wife, Maureen, who were being foreclosed on by the bank.
  • That check also covers the expenses of the Collier County Sheriff’s Office. Two deputies showed up Friday at the bank’s Davis Boulevard branch in Naples with Allen and a court order authorizing them to remove property such as furniture from the bank for public auction if the debt wasn’t paid.
  • On Wednesday, Allen said the bank agreed to pay him $3,000 more for the expenses he incurred collecting the original attorney’s fees. “So BOA spent approximately $9,000 to solve a $2,500 problem,” he said in an e-mail.
  • Warren and Maureen Nyerges bought a house from Bank of America for $165,000 in 2009, paid cash and never had a mortgage. Somehow, the bank and its former attorney in the case, the David J. Stern law firm, believed the couple had a mortgage and was behind in the payments, Allen said.

Source: Bank of America settles up with Golden Gate couple's attorney, Collier sheriff's office.

See also, Naples Daily News: Attorney gets another $3,000 from Bank of America for bad foreclosure.

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

F'closure Rescue Operator Gets 6+ Yrs For Running Racket Purporting To File Legitimate Lawsuits Pitting Borrowers & Banks Over Lending Law Violations

From the Office of the U.S. Attorney (Sacramento, California):

  • United States Attorney Benjamin B. Wagner announced that [] United States District Judge Lawrence J. O'Neill sentenced George Eggleston, 65, of Las Vegas, to six years and nine months in prison, to be followed by three years of supervised release.
  • Eggleston had previously pleaded guilty to charges he committed mortgage fraud and had operated a mortgage foreclosure rescue scheme to defraud homeowners facing foreclosure. The court also ordered Eggleston to forfeit $364,899, and to pay restitution to the victims of his offense. The actual amount of restitution has yet to be determined.
  • According to court documents, Eggleston, who did business as Nexxus and Global Legal Associates, admitted he told homeowners in California and elsewhere that he could save homes nearing foreclosure.
  • Through his websites, he falsely and fraudulently represented that his companies used and managed attorneys to file lawsuits against foreclosing lenders for violations of state and federal laws. Eggleston claimed that Nexxus could stop and reverse any pending or completed foreclosure. Victims each paid Eggleston $1,000 per month for his services, and in total Eggleston received more than $100,000 for his fraudulent scheme. Eggleston used the money for his own personal expenditures and not for the benefit of his clients.

For the U.S. Attorney press release, see Las Vegas Man Sentenced For A Foreclosure-Rescue Scheme And Mortgage Fraud.

Watch Out For Financially Strapped Home Builders Nearing Foreclosure Using Lease-Purchase Deals To Unload Unsold Inventory Onto Unwitting Homebuyers

In Bartlett, Tennessee, WMC-TV Channel 5 reports:

  • [V]iviana and Alex Cifuentes of Bartlett, TN, negotiated a lease-purchase agreement with John Porter of Precision Equity Homes in Collierville, TN. The Cifuentes agreed to pay $8,000 down on the home Porter's company built [...] in Bartlett's Brunswick Village, a development of Precision Equity Homes.
  • Agreeing to reasonable monthly lease terms as well as a furniture purchase from Porter, the Cifuentes moved into the home in January to start the lease, which officially began Feb. 1, according to the agreement.
  • March 10, the Cifuentes received the first foreclosure notice from the bank that Porter and Precision Equity Homes had defaulted on the mortgage. "Definitely, his intention was to be able to get this money, and then the house was going to go into foreclosure," said Viviana. "We were played and totally used by Precision Equity Homes," added Alex.
  • Court records revealed Precision Equity Homes defaulted on three of its homes, all in the Brunswick Village development, since last summer. At least three banks - First Citizens National Bank, First Capital Bank and Community Bank, North Mississippi - have sued Porter and Precision Equity Homes for breach of contract. Porter denied the allegations in responses to the suits filed by his attorneys.


  • After Action News 5's inquiry into the case, Porter paid the Cifuentes an undisclosed cash settlement. The family will attempt to use that money to negotiate a new agreement with the property's current owner, Regions Bank.

For more, see The Investigators: Lease-Purchase Agreement: Don't Do It! rent to own rent skimming

Broke C. Fla Man Unable To Mount Defense To Charges Of Hijacking, Renting Out 100+ Vacant F'closures Under Claim Of Adverse Possession Commits Suicide

In Sarasota, Florida, the Sarasota Herald Tribune reports:

  • When Joel McNair committed suicide last week, he left behind a broken management company and a string of legal issues that threatened to land him in prison. For some time, McNair found vacant homes, many of them in foreclosure, and rented them out — even though he did not own the homes. McNair moved more than 100 people into foreclosed homes along Florida's Gulf Coast.
  • He was arrested in November on charges of fraud and grand theft and was awaiting trial. McNair contended that renting empty properties was legal under Florida's adverse possession statute, which was created in 1869. The law allows someone to occupy an abandoned property as long as that person takes care of the property and pays the taxes, said Bob Hurt, an Internet blogger who had become fascinated with McNair's program of occupying foreclosed homes. And McNair was doing just that.
  • But law enforcement officials and legal experts say McNair was simply a con man stealing money from people down on their luck.


  • [A]cquaintances said the thought of going back to prison and having no money to mount a defense also was difficult for McNair to deal with. He spent seven years in Sumter County and Zephyrhills prisons from 1987 through 1993 after being convicted of racketeering and 52 counts of grand theft for collecting millions in commissions on more than 100 bogus time-share sales.
  • "He saw himself spending the rest of his life and dying in prison," said Hurt, the Internet blogger. "He was broke," he said. "It cost him $12,000 to get out of jail in November and he had to pay an attorney on to of that. His trial was coming up and he saw his life disappearing."(1)

For more, see Landlord left messy legal issues behind in suicide.

(1) See The Lord of Squat: Mark Guerette Got Busted for Putting Families in Foreclosed Homes for another example of an individual who got into the vacant home hijacking business and who, when faced with criminal charges, pleaded "no contest" to organized fraud, a felony. According to that story, "His lawyer was willing to fight the charges, but Mark said he didn't want to risk ending up in jail and leaving his wife and kids stranded without a husband and father."

Wednesday, June 15, 2011

Palin May Face The Boot From AZ Home After Probe Reveals Ex-Alaska Guv May Be Holding The Bag w/ Robosigner-Created Crappy Title On Recent F'closure

In Salem, Massachusetts, reports:

  • In the three years since the U.S. real-estate bubble burst, something we've learned is what a mess investment banks and mega-banks made as they took millions of shoddily documented mortgages and sliced and diced them into arcane Wall Street mortgage-backed securities in the 2000s.
  • Among the millions now apparently caught in the fallout: Republican icon Sarah Palin, the former Alaska governor and 2008 vice-presidential candidate turned media celebrity.
  • "The worst thing that could happen to Sarah Palin is she has a cloud on her title. She's going to have to go out, retain an attorney, and try to clean up the mess that the banks caused,'' John L. O'Brien Jr., the Salem-based Register of Deeds for Southern Essex County, sand in an interview with NECN Thursday.
  • In a worst-case scenario, a prior owner could challenge whether Palin now legally holds title to the property -- or Palin could be stuck with a legal headache trying to resell the house years down the road.
  • Working with forensic investigator Marie McDonnell, president of McDonnell Property Analytics Inc., O'Brien has found abundant evidence that the home a Palin trust bought in Scottsdale, Ariz., suffers from the same wretched Wall Street paper trail as millions of other U.S. homes where mortgages were converted into collateralized debt obligations and sold worldwide.
  • As Wells Fargo and JPMorgan Chase processed the mortgages, foreclosed on a previous lender, and resold the house to an investor who sold it to the Palin family, McDonnell said, at least two critical documents didn't get signed and three did get signed by "robo-signers" -- people apparently using fake names who churned out thousands of purported affidavits every day vouching for the bank that all the realty and mortgage paperwork was in order.
  • Two names that showed up on several documents connected to the Palin Arizona home were "Linda Green" and "Deborah Brignac," names used by multiple robo-signers purporting to be officials at multiple bank subsidiaries or business partners at Wells and Chase, O'Brien and McDonnell said.
  • In the case of Brignac signatures on Chase documents, "This is a shell game where Brignac purports to be vice president of three different entities so that she can manufacture the paperwork necessary for JPMorgan Chase Bank to hijack the mortgage and then foreclose on the property,'' McDonnell said.
  • "Linda Green," meanwhile, is a name O'Brien said he has found on over 6,000 documents in his registry signed in what appear to be at least 22 different hands, almost all of them easily recognizable by an average person as clearly forgeries.
  • O'Brien said, "If fundamental property principles still matter in this country, Sarah Palin may have legal issues that could affect the ownership of her home. Through no fault of her own, Sarah Palin has become a victim like thousands of others across the country that have the same problem with their chain of title. I feel bad for Governor Palin and all the homeowners who have been victimized by this scheme, it just goes to show you that no one is immune from this type of fraud and irresponsible behavior that these banks participated in."
  • "These banks have participated in a national epidemic of fraud that has clouded or damaged the chain of title of hundreds of thousands of American homeowners all across the country. Sadly, Sarah Palin's misfortune will however, hopefully shine the national spotlight on this issue. Given her position in the country, I am sure that she will use her influence to stand up for homeowners and their property rights".
  • JPMorgan spokesman Mike Fusco said the bank would decline to comment. Wells Fargo didn't respond to requests for comment. Wells and several other banks have faced lawsuits from people facing foreclosure who argue the banks can't solidly prove they held legal possession to a mortgage when the bank moved to seize the home from delinquent borrowers.
  • The big point O'Brien is trying to make is that while Sarah Palin may be among the biggest-name victims of shoddy bank paperwork, there are thousands -- if not tens of thousands -- of other people around New England facing the exact same problem as the former Alaska governor proving legal ownership of their homes. "She's experiencing the same problem that thousands of homeowners in my district are,'' O'Brien said of Palin.
  • Meanwhile, as of this week O'Brien has begun refusing to record documents from banks with "the names of notorious robo signers" like Linda Green. "When I see something that I know is fraudulent, I am no longer recording it,'' O'Brien said, and he hopes more deeds officials around the country will follow suit and crank up pressure on banks -- and prosecutors -- to finally clean out hundreds of thousands of bogus realty documents infecting the nation's real-estate industry.
  • Thursday afternoon, I couldn't reach an aide to Palin to see if she wanted to comment on this situation, or if she even knew about it. What's important to make perfectly clear: She hasn't done anything wrong or been accused of doing anything wrong with the Scottsdale home purchase. She's just bought a house that -- like all too many U.S. homes in 2011 -- official say has a very messed-up legal paper trail, thanks to a pair of the nation's very biggest banks and their Wall Street partners.(1)

Source: Mortgage mess victim: Sarah Palin?

Go here for a flowchart that maps out the origin of the crappy title on Palin's recent home purchase.

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

Unsophisticated Lender Not a "Foreclosure Consultant", Dodges Liability On '11th Hour' Usurious Loan Made To Save Homeowner Facing Foreclosure

In a recent court ruling, a California Court of Appeals recently let an unsophisticated lender off the hook for liability on a usurious loan made to save a financially strapped homeowner about to lose her home at a foreclosure sale, agreeing with the trial judge that the lender lacked a usurious intent.

The appeals court also affirmed the trial court ruling that the unsophisticated lender did not fall within the definition of a "foreclosure consultant" under the California Mortgage Foreclosure Consultant Act (Civ. Code, § 2945 et seq.) and, accordingly, that statute was inapplicable to the subject transaction.

In each case, the issue centered primarily on the fact that the lender, one Richard T. Homem, was an individual unsophisticated in real estate matters, and was unfamiliar with the formal process of making a secured loan when entering into the loan agreement with one, Lisa Charter, the homeowner facing foreclosure.

The appeals court provides this description of what happened (the reference to one, Hjerpe, is a reference to the homeowner's attorney) (bold text is my emphasis):

  • At the time Homem made the loan to Charter, he was unaware of the terms of the promissory note. Those terms, including the length of the loan, the $15,000 fee, and the 8 percent interest rate, were supplied by Charter as approved terms from previous loan negotiations. Homem was unaware his loan would cover liens on Charter's property until after payment of the USDA mortgage and execution of a deed of trust in his name. Homem was told, and at all times believed, that the terms of the note were fair.

    Homem was not knowledgeable or experienced in loaning money. He had never loaned money for a promissory note, and was previously uninformed about the process. Homem paid Charter's defaulting mortgage before obtaining a promissory note or deed of trust to secure repayment.

    He is not an attorney or real estate broker, and holds no professional licenses of any kind. The promissory note was drafted by Hjerpe. Homem considered Hjerpe to serve as both his and Charter's attorney throughout the entire process, relied on his advice, and expected to be protected by him. These circumstances support the conclusion that Homem lacked a usurious intent.

Further, Homem's involvement in this matter appeared to occur innocently enough. His relationship with the homeowner that led to the transaction in question began by the latter's grandmother hiring Homem to do yard work around the house.

Upon finding out the house was in foreclosure, Homem asked the homeowner if she was interesting in selling it, to which she replied in the negative, and Homem initiated no further discussion on his inquiry. Eventually, it was the homeowner who began bugging Homem for a loan, which he was reluctant to make, after her attempts to refinance failed while the scheduled foreclosure date continued closing in on her.

According to the appeals court:

  • The trial court correctly found that Homem does not qualify as a foreclosure consultant. In so concluding, the trial court cited its finding that he did not intend to enter into a usurious transaction. We have already rejected Charter's challenge to this finding. (See pt. II.B., ante).

    Additionally, at the time of the June 2007 loan, no agreement required Homem to perform any of the listed services for compensation for Charter. Indeed, Homem had never made a loan or obtained a deed of trust before and was unaware how to conduct secured real estate transactions. The only agreements signed between Charter and Homem were the deed of trust and the promissory note, both of which were signed after the June 2007 foreclosure sale had been halted.

    Further, Charter's three calls to Homem for help the day before the USDA foreclosure sale and his reluctance to make the loan supports an inference that Charter solicited his help, and not vice-versa. The record satisfies us that Homem did not act or perform in a manner consistent with the statutory definition of a foreclosure consultant.

Further, in footnote 4 of the opinion, the appeals court made this observation on the trial court's ruling:

  • It also noted Homem could have denied Charter's requests for a loan and proceeded as a bidder at the June 2007 foreclosure sale. Instead, he tendered a cashier's check for the full amount of Charter's defaulted mortgage prior to the execution of documents to protect himself.

What triggered this litigation was that the homeowner ultimately went into default on the mortgage payments to Homem, at which point he foreclosed on the home and took title to it at a foreclosure sale.

For the ruling, see Charter v. Homem, No. A129519 (Cal. App. 1st Dist., Div. 4, June 8, 2011) (unpublished).

Accused Loan Modification Scammer Flees Town As Cops Tag Fugitive With 27 Felony Counts

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

  • Law enforcement is currently seeking the owner of a Costa Mesa-based mortgage refinance company and escrow business who is charged in a large fraudulent rate-lock loan modification scheme targeting mostly out-of-state and some elderly victims.
  • To date, known victims are residents of California, Maryland, Minnesota, Florida, and Washington. The case was jointly investigated by the Orange County District Attorney’s Office (OCDA) and California Franchise Tax Board (CFTB).
  • James Toufic Assali, 36, Irvine, is charged with 18 felony counts of grand theft, three felony counts of grand theft of an adult over 65, four felony counts of money laundering, and two felony counts of filing a false tax return with sentencing enhancements for money laundering exceeding $50,000.
  • If convicted, he faces a maximum sentence of 23 years in state prison. An arrest warrant was issued May 26, 2011, for Assali, who is believed to be either in California or Vermont.
  • Assali is accused of owning and being responsible for the daily operations of Meredian Financial Corporation (Meredian) and an escrow business, Fortis Title Solutions. The two businesses operated out of an office in Costa Mesa, despite having a Florida billing address.

  • He is accused of targeting out-of-state victims, some elderly, by calling and soliciting Meredian’s home loan rate-lock and modification services for a fee ranging from $750 up to $10,000. [...] The defendant is accused of failing to complete a majority of home loan modifications or refinancing services retained by victims and refusing to issue refunds promised of the initial fees collected. [...]

For the Orange County DA press release, see Law Enforcement Seeks Fugitive Costa Mesa Business Owner Charged In Large Rate-Lock Loan Modification Fraud Scheme (Victims include residents of California, Maryland, Minnesota, Florida, and Washington).

Class Action Horror For Wells Fargo Pick-A-Payment Borrowers As $50M Settlement With Bankster Yields $96 Per Victim, $25M For Attorneys

The Reno Gazette Journal reports:

  • Ninety-six dollars. That's the compensation borrowers nationwide are set to receive for giving up their right to sue a leading lender for a controversial mortgage program critics call "deceptive" and "toxic."
  • The amount comes from a class-action lawsuit settlement that was granted final approval by a California district court in May. The lawsuit targeted a loan product known as "Pick-a-Payment," an adjustable rate mortgage (ARM) that allowed borrowers to make minimum payments for a limited time.


  • A closer look at the terms of the settlement, however, raises questions about just how fair the deal is for borrowers. High on the list is the amount of the financial compensation borrowers are set to receive.
  • "Wells Fargo is taking Pick-a-Payment customers buried in toxic mortgages and giving them less than $100," said Wayne Moon, a spokesperson for The Public Interest Law Firm (TPI), a Reno 501 (c)(3) nonprofit that also operates in Utah and California. "And they're getting away with it."


  • The firm [TPI] believes that [class action lead counsel] Arbogast & Berns and Wells Fargo purposefully withheld key information from class members to prevent any objections to the settlement prior to final approval. The firm also accused Wells Fargo of purposefully approving a large number of less favorable modifications while knowing full well that a settlement was in the works.
  • "Wells Fargo wants this thing to go through because they're getting away with a $50 million settlement for all the garbage they've done," Moon said. "Meanwhile, people are getting less than 100 freaking dollars while lead counsel is getting $25 million. It certainly shows you which parties stood to benefit from this settlement. It's certainly not the class members."


  • Now TPI is working to file an appeal against the class action settlement at the U.S. District Court for the Northern District of California, San Jose Division. The firm also filed a separate objection against the settlement.


  • "It's bad enough that homeowners can't get help when they need it," Moon said. "Now you have this crappy settlement that sets a precedent. Banks nationwide are watching to see if they can do this. They know they can mitigate their losses through civil litigation. It's criminal what they're doing and they're getting away with it. And our courts and complicit government is allowing them do so."

For more, see RGJ Investigates: Fraud case could give borrowers only $96.

Mom Sues To Stop Abusive Ex-Son-In-Law From Inheriting Deceased Daughter's Share Of Home; Suit Says Domestic Violence Incident Led To Woman's Death

In Kanawha County, West Virginia, The West Virginia Record reports:

  • The mother of a St. Albans woman whose case of domestic violence set a national precedent is now seeking to prohibit her former son-in-law from deriving any benefit from her daughter's estate.
  • Elena Campbell filed suit against Christopher J. Bailey on May 4 in Kanawha Circuit Court. In her complaint, Campbell, 74, of South Charleston, asks that a court order be entered against Bailey, 50, barring his ability to inherit anything from his wife Sonya Bailey's estate since torturing her in 1994 ultimately resulted in her recent death. According to the suit, Sonya on Feb. 25, 1993, purchased a home at 6716 MacCorkle Ave. in St. Albans. Later on Nov. 7, 1994, she conveyed title of the home to both she, and Chris.
  • A quarrel between the two on Nov. 26, lead Chris to abduct Sonya, and place her in the trunk of his car. During the next five days, he kept her bound in the trunk all the while assaulting and beating her. Eventually, Chris took Sonya to Baptist Regional Hospital in Corbin, Kentucky. After she was initially treated there, Sonya, who was near death, was later airlifted to Morgantown for additional treatment.
  • Though initially arrested and charged in Kentucky, Chris was later extradited back to West Virginia to face kidnapping, and, for the first time in U.S. history, interstate domestic violence charges. The later was enabled by the then-recently enacted Violence Against Women Act.
  • Following a trial, Bailey was found guilty on both charges. On Sept. 11, 1995, U.S. District Judge Charles Haden II sentenced Bailey to 20 years on the interstate domestic violence, and life on the kidnapping charge. Also, Haden fined Bailey $100, and ordered him to pay $40,000 in restitution to Sonya. Currently, he is incarcerated at the Gilmer Federal Corrections Institution in Glenville.
  • Due to being deprived of oxygen while in the trunk of Chris' car, Sonya lapsed into a permanent vegetative state. After a long stay in a nursing home, she died on Dec. 19 at age 49.
  • After posting a $10,000 bond, records show the Kanawha County Commission appointed Campbell the administratrix of Sonya's estate on Feb. 10. Since she died intestate, or without a will, Chris, by law, is entitled to inherit from Sonya's estate, including the house.
  • However, Campbell wants to deny him that right on the grounds "his felonious criminal acts caused the death of his wife...Sonya Bailey."(1) Along with an order barring Chris' intestate succession interest in Sonya's estate, Campbell seeks another lifting the liens the federal government and Equifax placed on the house for $100, and $40,000, respectively.
  • In her suit, Campbell says this is necessary so that title of the home can pass unencumbered to Sonya's sister, Kelly Campbell, and her daughter, Samantha, who've occupied, and paid taxes on it since Sonya's death.
  • Campbell and the estate are represented by Bruce Perrone and Elizabeth Wehner with Legal Aid of West Virginia.(2)

Source: Mother of domestic violence victim challenging son-in-law's estate claim.

(1) How this case turns may well depend on the application of West Virginia's common-law "slayer rule" as well as the state's "slayer statute" (W.Va.Code, 42-4-2), an issue which was most recently addressed by the Supreme Court of Appeals of West Virginia in Plumley v. Bledsoe, 216 W.Va. 735, 613 S.E.2d 102 (2005). In that case, the West Virginia high court affirmed a lower court ruling that cut out a son, who killed his mother, from consideration when determining inheritance rights to the deceased mother's property, despite the fact that there was no criminal conviction against the son for the death.

For a discussion of the "slayer rule", see Sneddon, Karen J.: Should Cain's Children Inherit Abel's Property: Wading into the Extended Slayer Rule Quagmire, 76 UMKC L. Rev. 101 (2007-2008).

(2) Legal Aid of West Virginia provides free advocacy services to West Virginians with twelve offices throughout the state, from Wheeling to Princeton, Martinsburg to Logan. Click here for a map of its office service areas.

Continued Crappy Loan Servicer Practices Harm Homeowners Even After 'Successfully' Obtaining Loan Modifications

ProPublica reports:

  • Chanel Rosario was supposed to be one of the lucky ones. After years of sending and re-sending documents, waiting on hold and attending court hearings to avoid foreclosure on her Staten Island home, she'd finally received a much-needed reduction on her mortgage. Eagerly, she and her husband signed it and mailed it in last September. "We thought it was over."
  • It wasn't. After months of making payments, Rosario called the bank handling her mortgage, Chase Home Finance, and found out Chase was still reporting her as delinquent, damaging her credit score and putting her home in jeopardy. Despite months of trying to get an explanation with the help of a legal-aid attorney, she still doesn't know why Chase isn't abiding by the agreement.
  • It's a disturbingly common occurrence, say consumer advocates: Many homeowners have been granted a hard-fought mortgage modification only to have their mortgage company effectively pull a bait and switch. The problems range from homeowners being hit with unexpected extra charges to the bank simply ignoring the signed agreement.


  • To get a sense of how common this problem is, the nonprofit Connecticut Fair Housing Center conducted an informal survey of 16 legal aid organizations and one private attorney. In nearly a quarter of the 655 cases of modifications they reviewed, the mortgage servicer didn't abide by the terms of the agreement. In the worst cases, homeowners who thought they'd successfully run the gauntlet of servicer errors and delays found themselves once again facing foreclosure. Sometimes the house was actually foreclosed on.
  • "It's not just one servicer screwing up," said Andrew Neuhauser, an attorney with Advocates for Basic Legal Equality of Toledo, Ohio. "It's industry-wide practice."

For more, see Even After Mortgage Modification, Shoddy Bank Practices Hurt Homeowners.

See also, Profiles: Shoddy Bank Practices Continue Even After Mortgage Mods for profiles of six homeowners who ended up getting screwed over, despite 'successfully' obtaining a loan modification from their respective banksters.

Tuesday, June 14, 2011

Recent Michigan Court Ruling Slamming MERS Means More Headaches For Banksters Defending Securitization Process

The Wall Street Journal reports on the recent slamming of MERS by an Ann Arbor, Michigan trial judge in ruling on a recent paperwork screw-up that will be the source of great headaches to banksters defending the flawed securitization process by which they transferred mortgage loans to investors:

  • Last week, we wrote about how borrowers and courts have uncovered potential defects that could make it harder for banks to foreclose on certain homeowners whose loans were bundled together and sold as securities.
  • On Monday, a Michigan judge overturned a foreclosure after concluding that the foreclosing entity couldn’t have owned the mortgage after it failed to comply with certain mortgage securitization rules.


  • The decision is a possible setback for the securitization industry, which has argued that its transfers of mortgage loans are valid under the Uniform Commercial Code, which governs commerce across the nation. The Michigan court ruled that the specific securitization agreements didn’t comply with New York trust law, which superseded the UCC because it governs most so-called pooling and servicing agreements. (For more, see this write-up by Naked Capitalism.)


  • Potentially more troubling is the fact that investors in the mortgage bond deal didn’t actually own the loan that it believed it did. Securitizations are governed by very specific rules to ensure that they wouldn’t run afoul of special IRS rules designed to make mortgage-backed securities investments tax exempt. The case follows a similar decision by an Alabama trial court judge in March.

For more, see In Michigan Case, Securities Trip Up Foreclosure.

In a related story, see Naked Capitalism: Michigan Court Relies on New York Trust Theory, Rules Loan Never Made it to Trust.

For the Michigan court ruling, see Hendricks v. U.S. Bank Nat'l Association, Case N. 10-849 CH (Washtenaw Cty. Trial Ct., June 6, 2011).

Standing-Lacking Banksters Take Another Hit In Federal Bankruptcy Appeals Ruling

In a 46-page opinion, the Bankruptcy Appellate Panel of the U.S. Court of Appeals for the 9th Circuit handed the bankster industry its latest drubbing in an Arizona case, finding that the banksters in question failed to establish that, given the facts of the case, they both:

  • lacked standing to seek relief from the automatic stay, and
  • lacked standing to file a proof of claim.

In addition to setting forth the facts in the case, the opinion discusses the issues as it breaks down as follows:

  • A. Standing in Mortgage Cases:

    1. Constitutional Standing
    2. Prudential Standing
    3. Prudential Standing and the Real Party in Interest Doctrine
    4. Real Party in Interest Status and Its Policies

    B. The Substantive Law Related to Notes Secured by Real Property

    1. Applicability of UCC Articles 3 and 9
    2. Article 3 of the UCC and the Concept of a “Person Entitled to Enforce” a Note
    3. Article 9 and Transfers of Ownership and Other Interests in a Promissory Note

    C. Wells Fargo’s Lack of Standing to Seek Relief from the Automatic Stay

    1. Standing to Seek Relief from Automatic Stay
    2. Wells Fargo’s Argument Regarding Standing
    3. Wells Fargo’s Lack of a Connection to the Note

    D. AHMSI’s Lack of Standing To File Proof of Claim

    1. The Lack of Findings on Central Issues
    2. Analysis of the Record and AHMSI’s Status as a “Person Entitled to Enforce” the Note

As referenced earlier, the opinion is 46 pages, so for those who are interested in this kind of stuff, you'll need to set aside some time to digest this ruling.(1)

For the ruling, see Veal v. American Home Mortgage Servicing, Inc. (In re Veal), BAP Nos. AZ-10-1055-MkKiJu, AZ-10-1056-MkKiJu, Bk. No. 09-14808 (9th Cir. BAP June 10, 2011).

Thanks to Mike Dillon at GetDShirtz. com and Deontos for the heads-up on the ruling.

(1) In the following selected excerpt, the court identifies one of the problems that, while it may not have directly impacted on the court's ruling, exists in many cases throughout the country: an assignment of mortgage that doesn't also assign the promissory note (while, in most jurisdictions, the general rule is that a mortgage follows the note that has been assigned, the note does doesn't follow the mortgage when only the latter is assigned) (bold text is emphasis contained in the ruling):

  • The purported assignment from Option One to Wells Fargo was different, however, and more limited. It purported to transfer

    the following described mortgage, securing the payment of a certain promissory note(s) for the sum listed below, together with all rights therein and thereto, all liens created or secured thereby, all obligations therein described, the money due and to become due thereon with interest, and all rights accrued or to accrue under such mortgage.

    Thus, unlike the assignment from GSF to Option One, the purported assignment from Option One to Wells Fargo does not contain language effecting an assignment of the Note. While the Note is referred to, that reference serves only to identify the Mortgage. Moreover, unlike the first assignment, the record is devoid of any indorsement of the Note from Option One to Wells Fargo. As a consequence, even had the second assignment been considered as evidence, it would not have provided any proof of the transfer of the Note to Wells Fargo. At most, it would have been proof that only the Mortgage, and all associated rights arising from it, had been assigned.7

In footnote 7 of its ruling, the court elaborated on the foregoing with this observation, one which may be helpful to those trying to convince a trial judge that a mortgage assignment doesn't operate to transfer the promissory note it secures unless the language of the assignment specifically provides for such a transfer (bold text is my emphasis):

  • One might argue that the clauses in the assignment which follow the italicized appositive phrase are broad enough to pick up the Note, and thus effect a transfer of it. They do, after all, purport to transfer “all rights therein and thereto, . . . all obligations therein described, [and] the money due and to become due thereon with interest.”

    But given the carve out of the Note at the beginning of the sentence, the relative pronouns “therein,” “thereto,” and “thereon” more naturally refer back to the obligations contained in the Mortgage itself, such as the obligation to insure the Property, and not to an external obligation such as the Note. It would be odd indeed if, after referring to the Note but not explicitly making it the object of the transfer (as the initial assignment from GSF did), the words were made to curl back and pick up the Note just because the Mortgage mentioned the Note among its many terms. Although the clauses might be sufficiently vague to permit parol evidence to clarify their intended meaning, no such evidence was offered or requested.

Ingham County Commissioners To Fund Effort To Fight Local Foreclosures Based On Dubious 'Docx' Docs

In Ingham County, Michigan, The Michigan Messenger reports:

  • A committee of the Ingham County Board of Commissioners unanimously approved a plan to fund an attorney that will be dedicated to helping homeowners battle the growing number of foreclosures based on faulty documents.
  • In a meeting Tuesday night, the General Services Committee of the Board approved a contract worth up to $60,000 for Legal Services of South Central Michigan. That money will be used to pay an attorney full time to work with county residents caught up in the burgeoning cases of foreclosures based on bad documents.
  • Those documents have been identified as robo-signed documents from the now defunct company Docx in Georgia. Curtis Hertel, Jr, the county’s register of deeds, discovered the documents after seeing a 60 Minutes report on the company.
  • Those documents, which Hertel says number more than 100, have been referred to both the Michigan Attorney General’s Office and the FBI. In addition, other questionable documents have been found, and Hertel says investigations into the documents are ongoing.

Source: Ingham County to fund attorney to help with foreclosures (Register of Deeds finds more than 100 cases of fraud).

Local Register Of Deeds To Banksters Recording Robosigned Docs: 'Take A Hike!' Says Those Creating Havoc To Chains Of Title Should Be Held Accountable

Firedoglake reports:

  • John O’Brien[, Register of Deeds]] of the Southern Essex District in Massachusetts, has decided to reject all robo-signed records coming into his office, forcing the entities wishing to foreclosure under his jurisdiction to file separate forms. Thigpen has backed up O’Brien on this announcement. Here’s the press release.

    Saying “the buck stops here” Massachusetts Southern Essex District Register of Deeds, John O’Brien, today rejected 2 robo-signed documents submitted to his Registry for recording and plans to continue doing so. “My Registry will not be a knowing participant in this fraud against homeowners. From today forward, lenders be on notice, the Southern Essex District Registry of Deeds will not record robo-signed documents.”

    The rejected documents containthe signatures of three known robo-signers, Linda Green, Korell Harp and Linda Burton. According to O’Brien, in his Registry he has 22 different variations of Linda Green’s signature and 5 different variations between Korell Harp and Linda Burton. “I find this practice very troubling on many levels. It has completely jaded my understanding that a notarized document was something that could be relied upon.” stated O’Brien. In Massachusetts, notaries must take an oath of office, under the pains and penalties of perjury. “If these documents are signed by anyone other than the noted signatories, these notaries and those that employed them should be held accountable for the fraudulent documents that they have produced and the havoc they have caused to chains of title everywhere.”

    Register O’Brien said, “Knowing what I now know, it would be a dereliction of my duties as the keeper of the records to record these documents and any other documents that contain questionable signatures. To do so, would make me a willing participant in a continuing scheme which has corrupted the chain of title of thousands of Essex County property owners. I have decided to put a stop to this reckless behavior and hold these lenders and their agents accountable for the authenticity of what they are attempting to record in my Registry. I do not believe this to be unreasonable.”

For more, see Register of Deeds O’Brien Rejects Fraudulent Foreclosure Documents.

Court Slams Foreclosure Defense Attorney For $39K+ For Filing Unsupportable Affirmative Defenses To Improperly Delay Proceedings

A recent ruling by a Florida appeals court appears to be a warning shot to all attorneys involved in foreclosure litigation in Florida (both the plaintiff and defense bars) that they had better get up to speed on the workings of Section 57.105, Florida Statutes,(1) or run the risk getting slammed, as one attorney recently found out.

In it, the 4th District Court of Appeal affirmed a lower court ruling belting a foreclosure defense attorney for $18,682.99 in delay damages for filing affirmative defenses on behalf of a defendant/homeowner in a mortgage foreclosure action that the trial court said were unsupportable by the material facts and were filed primarily for the purpose of unreasonable delay (the $18,682.99 represented the amount of interest that accrued on the borrowers’ note from the day the affirmative defenses were filed and asserted until the day they were stricken).

In addition, the trial court order also awarded the foreclosing lender costs and attorney’s fees in the amount of $20,563.59, and imposed the liability for this entire amount on the foreclosure defense attorney. This portion of the trial court order was not appealed, nor was the trial court’s finding that under the inequitable conduct doctrine, the foreclosure defense attorney is responsible for the full amount of attorney’s fees as opposed to a fifty-fifty split with the borrowers as would normally be required under section 57.105(1).(2)

One interesting point in this case is that the conduct that the attorney was accused of engaging in didn't seem to rise to the level sufficient to register a blip on the 'Richter scale' of bad faith conduct, at least not compared to the kind of crap that the attorneys slaving for the foreclosure mill rackets have been getting away with.(3)

It may be that the foreclosure defense bar can consider what this ruling stands for and incorporate it into their approach in defending their clients (by filing Section 57.105 motions against the foreclosure mills for the crappy paperwork they're submitting to the courts), because it sure as hell looks like the plaintiffs bar has already done so (by the way, the law firm representing the foreclosing lender - at least in this appeal - is not one of the legal lightweights that foreclosure mills generally tend to be; it is a heavyweight firm well known in Florida and well-respected throughout the state).

For the ruling, see Korte v. US Bank National Association, 4D09-4285 (Fla. App. 4th DCA, June 8, 2011).

(1) Section 57.105 was the subject of earlier posts relating to the claim for attorneys fees entitlement when an attorney successfully fends off an attempted foreclosure. See:

(2) According to the ruling, the trial court granted the homeowners' motion seeking to have the damages paid solely by the foreclsoure defense attorney (during the litigation, the homeowner in foreclosure hired a new defense attorney) based on the inequitable conduct doctrine. In footnote 2 of its ruling, the appeals court gives this tidbit on the inequitable conduct doctrine:

  • "The inequitable conduct doctrine permits the award of attorney's fees where one party has exhibited egregious conduct or acted in bad faith. . . . [T]his doctrine is rarely applicable. It is reserved for those extreme cases where a party acts in bad faith, vexatiously, wantonly, or for oppressive reasons." Bitterman v. Bitterman, 714 So.2d 356, 365 (Fla. 1998) (citations and internal quotation marks omitted).

    In Rosenberg v. Gaballa, 1 So.3d 1149 (Fla. 4th DCA 2009), we held that the "inequitable conduct doctrine" was not rendered obsolete by the 1999 amendments to section 57.105. Id. at 1150.

See also, Moakley v. Smallwood, 826 So.2d 221 (Fla. 2002), and these links, for more on Florida's "inequitable conduct doctrine."

(3) According to the appeals court:

  • The trial court's order determining U.S. Bank's entitlement to sanctions included the following findings:

    The Court further finds that Mr. Korte was not acting in good faith based on representations of his clients since, as to Ms. Rivero, the record before the Court established that Mr. Korte never spoke with her. The record before the Court further established that Mr. Korte made no effort to review the documentation provided by Ms. Brandon which documentation was claimed to be the sole support for the defenses raised.

    Finally, as to both Ms. Rivero and Ms. Brandon, the records before the Court established that Mr. Korte never provided either with a copy of the defenses that he filed on their behalf and that upon receipt of the section 57.105 motion filed in this case, Mr. Korte made no efforts to verify with them the accuracy or veracity of the facts asserted in support of the defenses.

    These factual findings are sufficient in this case to describe "the specific acts of bad faith conduct that resulted in the unnecessary incurrence of attorneys' fees." See Moakley, 826 So. 2d at 227; cf. Finol v. Finol, 912 So.2d 627 (Fla. 4th DCA 2005) (reversing an award of sanctions based on the trial court's inherent authority because the proceedings and order were inadequate to support the sanctions imposed).

Fla. Appeals Ct. Nixes Prevailing Party Legal Fee Award In Foreclosure Defense; Failure To Include Request In Pleading Sinks Recovery Attempt

A major screw-up by a foreclosure defense attorney seeking recovery of prevailing party attorneys fees pursuant to section 57.105(7), Florida Statutes(1) on behalf of a client in a defense of a mortgage foreclosure action was at the heart of a recent decision by a Florida appeals court.

An abbreviated, somewhat 'butchered' summary of the facts follows:

  1. Lender filed a mortgage foreclosure action against defendants.
  2. Defendants filed their answer.
  3. The answer did not contain a claim for attorneys' fees.
  4. Subsequently, Defendant filed a supplemental answer to correct a scrivener's error but again failed to raise a claim for attorneys' fees.
  5. Court grants foreclosure judgment, and lender ultimately takes title to property at a foreclosure sale.
  6. Lender then filed a motion for deficiency judgment against defendants.
  7. The hearing was scheduled for February 10, 2009, and began as scheduled. However, due to insufficient time to present all evidence, the hearing was continued to February 18, 2009.
  8. Five days before the scheduled continuation of the evidentiary hearing, counsel for defendants filed an emergency motion to withdraw and to continue the hearing. The trial court granted the motion, and the hearing was continued to March 19, 2009.
  9. New counsel for defendants filed a notice of appearance on March 12, 2009.
  10. On March 13, 2009, only seven days before the final hearing on lender's motion for deficiency judgment (and after obviously realizing the screw-up by the original foreclosure defense attorney in failing to raise a claim for attorneys' fees in the defendant's answer to the foreclosure complaint), defendants filed a notice of intent to seek attorneys' fees and costs ("Notice of Intent").
  11. Following completion of the evidentiary hearing, the trial court entered final judgment denying lender's motion for deficiency judgment.
  12. Defendants subsequently filed a motion for attorneys' fees and costs, claiming entitlement to attorneys' fees and costs for both the foreclosure and deficiency judgment proceedings pursuant to portions of the subject loan documents as well as the reciprocal fees provisions of section 57.105.
  13. Lender filed a response to the motion, objecting to defendant's entitlement on multiple bases.
  14. Following the hearing on the fee motion, the trial court awarded $44,667.50 in attorneys' fees to defendants on account of the work of the foreclosure defense attorneys. The fee award reflected time spent by all of the attorneys involved in defendant's defense throughout the foreclosure and deficiency judgment proceedings.

In reversing the trial judge's $44K+ attorney fee award to the foreclosure defense attorneys, the appeals court, citing multiple authorities, simply said that the fee request must be included in a 'pleading' (Complaints, answers, and counterclaims are 'pleadings pursuant to Rule 1.100(a) of the Florida Rules of Civil Procedure), and said that including the attorney fee claim in the "Notice of Intent" did not satisfy the 'pleading' requirement, because the "Notice of Intent" is not a pleading.(2)

This ruling should serve:

  • as a handy reminder for attorneys representing homeowners in foreclosure of what to do (and just as importantly, what not to do) when addressing the issue of recovering attorneys fees paid by their clients from the losing bankster in a successful defense,(3) and
  • as valuable information for homeowners successful in fending off foreclosure regarding their rights to recover, from the losing bankster, any fees paid or payable to the attorney representing them in a foreclosure action.

For the ruling, see BMR Funding, LLC. v. DDR Corporation, 2D10-2284 (Fla. App. 2d DCA, June 3, 2011).

(1) See Fla. Appeals Court: Homeowner Entitled To Nail Bank For Prevailing Party Legal Fees After Lender Voluntarily Dismissed F'closure Case w/out Prejudice.

(2) The appeals court ruled as follows in applying Florida law to the facts of this case (bold text is my emphasis):

  • Because DDR and Dunn did not claim entitlement to attorneys' fees and costs in any pleading, as defined by Florida Rule of Civil Procedure 1.100(a), the trial court erred in granting DDR and Dunn's motion for attorneys' fees and costs. In Stockman v. Downs, 573 So. 2d 835 (Fla. 1991), the supreme court held that a claim for attorneys' fees must be pleaded, regardless of whether the claim is based on contract or statute. Id. at 837. This pleading requirement was subsequently clarified in Green v. Sun Harbor Homeowners' Ass'n, 730 So. 2d 1261 (Fla. 1998):

    This Court's use of the phrase "must be pled" [in Stockman] is to be construed in accord with the Florida Rules of Civil Procedure. Complaints, answers, and counterclaims are pleadings pursuant to Florida Rule of Civil Procedure 1.100(a). A motion to dismiss is not a pleading. Stockman is to be read to hold that the failure to set forth a claim for attorney fees in a complaint, answer, or counterclaim, if filed, constitutes a waiver.

    Id. at 1263 (emphasis added).

    Subsequently, in Precision Tune Auto Care, Inc. v. Radcliffe, 815 So. 2d 708 (Fla. 4th DCA 2002), the Fourth District reversed an attorneys' fee award where the claimant failed to plead entitlement to fees. Applying the supreme court's ruling in Green, the court stated: "We assume that the supreme court meant what it said and said what it meant in Green. The plaintiffs here were required to set forth their claim for attorney's fees in a pleading." Id. at 712.

    In this case, DDR and Dunn urge this court to find that their "Notice of Intent" satisfied the pleading requirement. In its entirety, the notice states:

    Defendants, DDR Corporation and Carol J. Dunn, by and through their undersigned attorneys, hereby provide notice that, if they prevail with respect to Plaintiff's efforts to obtain a deficiency judgment, Defendants intend to seek the recovery of their attorneys' fees and costs from Plaintiff pursuant to the express terms of the subject Guaranty and the operation of the reciprocal fee provision of F.S. 57.105.

    We agree with BMR that the Notice of Intent is not a pleading. Having filed two answers to the amended complaint, DDR and Dunn had multiple opportunities to plead a claim for attorneys' fees. Thus, DDR and Dunn failed to raise entitlement to attorneys' fees in any pleading, as defined by Stockman and Green, and any claim they may have had was waived. See Sardon Found. v. New Horizons Serv. Dogs, Inc., 852 So. 2d 416, 421 (Fla. 5th DCA 2003).

    Further, pursuant to Stockman and Green, the purpose of the pleading requirement is notice. By pleading entitlement to attorneys' fees, the claimant puts the opposing party on notice, thereby preventing unfair surprise. Sardon Found., 852 So. 2d at 421. "The existence or nonexistence of a claim for attorney's fees may often affect the decision whether to pursue, dismiss or settle a claim. For these reasons, a party may not recover attorney's fees unless he has put the issue into play by filing a pleading seeking fees." Id.

    Here, not only did DDR and Dunn fail to plead entitlement, their "Notice of Intent" failed to satisfy the purpose behind the pleading requirement. The issue of DDR and Dunn's entitlement to attorneys' fees was not raised until the final hearing on BMR's motion for deficiency judgment was well underway and the foreclosure proceedings were complete. Not only was BMR deprived of any meaningful opportunity to consider whether to proceed with the deficiency judgment in light of possibly being assessed attorneys' fees, it was never put on notice of a potential claim for attorneys' fees during the pendency of the foreclosure action.

    Finally, DDR and Dunn urge this court to apply the exception to the pleading requirement recognized by the court in Stockman. "Where a party has notice that an opponent claims entitlement to attorney's fees, and by its conduct recognizes or acquiesces to that claim or otherwise fails to object to the failure to plead entitlement, that party waives any objection to the failure to plead a claim for attorney's fees."

    Stockman, 573 So. 2d at 838 (citing Brown v. Gardens by the Sea S. Condo. Ass'n, 424 So. 2d 181 (Fla. 4th DCA 1983); Mainlands of Tamarac by Gulf Unit No. Four Ass'n v. Morris, 388 So. 2d 226 (Fla. 2d DCA 1980)).

    DDR and Dunn argue that BMR failed to object to their "Notice of Intent" on the basis that such notice was not a pleading; however, the record conclusively establishes otherwise. BMR's written response to the "Notice of Intent," as well as its argument at the fee entitlement hearing, clearly relied upon the pleading requirement and Stockman in objecting to DDR and Dunn's entitlement to fees. BMR did not "recognize[ ] or acquiesce[ ] to that claim" for attorneys' fees. Stockman, 573 So. 2d at 838.

    Accordingly, the final judgment awarding attorneys' fees to DDR and Dunn is reversed.

(3) See Pleading Requirements for a Claim for Attorneys' Fees for an old (July/August, 2000) article in The Florida Bar Journal that may be of some value in providing guidance to lawyers in requesting court-ordered, prevailing party attorneys fees from losing defendants (ie. lenders, servicers, etc.).