Judge To Developer: Falsely Luring Condo Buyers With Promises Of Panoramic NYC Views Will Cost You $4.8M+

In Jersey City, New Jersey, the New York Post reports:

• Jamie LeFrak, heir to iconic New York real-estate company The LeFrak Organization, has been ordered to fork over $4.8 million to 16 jilted residents of one of his luxury apartment buildings in Jersey City.



• The award closes the loop on a ruling from June that found LeFrak falsely lured buyers to his tony Shore Club condominium with promises of panoramic views of Manhattan that were soon obstructed by another LeFrak building, the 32-story AquaBlu.



• New Jersey state court Judge Edward O’Connor’s order included $3.8 million in damages, plus interest, for the false advertising. Adding insult to injury, the judge also ordered the 38-year-old developer and his firm to cough up close to $1 million in legal fees -- bringing the final tally to close to $5 million.



• LeFrak has 45 days to appeal. A call to a LeFrak Organization spokeswoman of wasn’t returned.

Source: LeFrak’s view screw costs $4.8M.

Despite Already Receiving Payment On Delinquent Dues, HOA Forces Foreclosure Sale On Homeowner Anyway

In Riverview, Florida, Fox 13 reports:

• Riverview resident Stephanie Bonefont has been a homeowner for nearly 11 years, but this week she could wind up homeless. The reason why is the tricky part. The single mother is in a twisted legal fight with her homeowners association, South Pointe of Tampa, over unpaid dues. And she says "they're making off like bandits, getting paid twice for this house. Meanwhile, I have to buy it three times."



• Back in 2008, her home was foreclosed and the title was sold. Here's the problem: Bonefont said she never got any notices. That's because they were mailed to the wrong address. Then one day she got an unexpected knock at her door. "The guy who came to my door, it wasn't in foreclosure at this point, (the house) was in his name," she said.



• The homeowners association had sold the title to a man named Pasto Angulo for $7,400 - the amount Bonefont owned on fees. She fought it. Because the notices were sent to a wrong address, a judged reversed the sale.



• And she said she paid Angulo more than $7,300 to get the deed back in her name. But the homeowners association says not so fast. It says it has no evidence that she repaid Angulo. His attorney confirmed the sale to FOX 13 by providing a copy of the check.



• But since the association never received a payment directly from Bonefont, a judge will allow the home to go up for sale Friday.



• "They are double dipping, and unfortunately, my research didn't turn up any cases where this has happened before because I don't think its ever happened, " David Jordan, Bonefont's attorney, said.



• The homeowners association said in a written statement its moving forward with the lawsuit. "The court twice rejected the legal theories advanced by Ms. Bonefont's counsel and confirmed her property should be sold for homeowners association assessments," a portion of it read.



• It seems Bonefont's only choice to stop the foreclosure is to write another big check, this time to the homeowners association. "How many people has this happened to that are too afraid to fight - that can't fight?" she said.

Source: Woman says homeowners association wrong for selling home.

Lawsuit: Bankster Violated Court Order Staying F'closure Proceedings; Went Forward & Took Title Anyway, Hired Contractor In Attempt To Take Possession

In Pittsburgh, Pennsylvania, the Pittsburgh Post Gazette reports:

• A Shaler woman filed a lawsuit in U.S. District Court [] alleging that a mortgage firm and its contractors improperly took title to her house, tried to break in and posted a foreclosure notice on her front door while she was holding a party.



• Pamela A. Vukman sued Beneficial Consumer Discount Co., the law firm of attorney Martha E. Von Rosenstiel and others, saying that actions taken in relation to her home last October violated an order by Allegheny County Common Pleas Court Judge Lee J. Mazur staying foreclosure proceedings against her.



• Ms. Vukman's attorney, Jeffrey L. Suher, said that she won a court ruling that Beneficial had violated state law when it foreclosed, and the company has appealed that to Superior Court.



• Despite her victory in the case, Mr. Suher said, the lender took title to her house. It then hired a company to enter her house, remove trash and change the locks. That company's agent was caught trying to break in, the complaint said.



• Then, a contractor posted a notice of foreclosure on her front door, causing embarrassment. Mr. Suher said that Ms. Vukman is still in the house. Ms. Rosenstiel declined comment. A Beneficial spokesperson could not be reached.

Source: Shaler woman sues over house foreclosure.

Trio To 'Enjoy' Federal Prison Time For Scheme Designed To Steal Home Equity Out From Under Two Unwitting Property Owners

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

• A North Hollywood man was sentenced [] to 15 months in federal prison for his role in a mortgage fraud scheme in which the schemers used stolen identities to “purchase” homes that were not for sale.



• Venedie Roberto Valencia, 27, who worked at Bank of America at the time of the offense, was sentenced by United States District Court Judge Dale S. Fischer. In addition to the prison term, Judge Fischer ordered Valencia to pay $51,688 in restitution.



• Previously in this investigation, two of the Valencia’s co-conspirators were convicted and sentenced to prison. Felix Pichardo, 29, of Lancaster, was sentenced to eight years in federal prison in 2009 and Latrice Shaunte Borders, 31, of Long Beach, was sentenced to two years in federal prison in 2010 for their part in the scheme (see December 14, 2009 U.S. Attorney Press Release).



• According to court documents, Pichardo, a licensed real estate agent, and Borders participated in two separate fraudulent real estate sales transactions. Pichardo, using identities appropriated from other people, caused loan applications to be submitted to AmTrust without the property owner’s knowledge for real estate which was not for sale.

For the U.S. Attorney press release, see Former Bank Employee Sentenced To 15 Months In Federal Prison For Role In Mortgage Fraud Scheme.

Unanswered Questions On MERS' Role In Washington State Foreclosures To Be Decided By State High Court; Fed. Judge Referral Shortcuts Drawn Out Process

In Washington State, The Oregonian reports:

• Washington state's highest court is set to determine whether thousands of pending foreclosures can proceed out of court, potentially averting months of conflicting and murky rulings. The court will hear arguments over whether lenders can file foreclosures in the name of MERS, a private company that owns a computerized mortgage registry system.



• Big lenders, including Fannie Mae, Freddie Mac and several large U.S. banks, created MERS in 1995 to get around cumbersome laws that required paperwork to be filed with county clerks when a mortgage changed hands.

***

• If the court rules against MERS, it could force thousands of foreclosures into court that would otherwise have been handled without ever going before a judge. And any decision could bring some order to a hodgepodge of state and federal rulings in wrongful foreclosure complaints -- at least, in Washington. Elsewhere, including Oregon, similar cases continue their long slog toward Supreme Court resolution, a legislative fix or a different tack by lenders.



• At issue is whether MERS meets the definition of a beneficiary under Washington law, and therefore whether it can legally file a foreclosure on a lender's behalf. "MERS cannot meet that definition because MERS is never a note holder," said Melissa Huelsman, an attorney representing Kristin Bain, one of the homeowners in the case. "They are simply a name on a piece of paper sitting there for the purposes of record keeping."

***

• In Washington, the questions went to the Supreme Court at the order of U.S. District Judge John C. Coughenour.(1) That expedites a case that could have taken years to reach the Supreme Court, Huelsman said. "This is absolutely a shortcut to get it there," she said.

For more, see Washington Supreme Court to weigh legality of MERS foreclosures.

(1) See Bain v. OneWest Bank, Case No. C09-0149-JCC (W.D. Wash. March 15, 2011) for Judge Coughenour's order deferring on ruling on this issue of state substantive law until the Washington State Supreme Court decides the issue.

In refusing get sucked into the foreclosure fraud muck and add to the nationwide confusion as to whether MERS can or can't 'soil' foreclosure proceedings with its involvement, Judge Coughenour made these comments in deciding to defer to the Supreme Court of Washington (the court most qualified to decide questions of state substantive law in Washington state) until it rules as to whether MERS has any business playing a role in foreclosures under the law of the state of Washington (bold text is my emphasis; [alteration added] to adjust an apparent judicial/administrative oversight in transcribing the text):

• This Court does [not] need to add even more pages to the legal discourse discussing whether MERS may serve as a beneficiary in deeds of trust generally. Compare, e.g., Silvas v. GMAC Mortg., LLC, No. CV-09-265-PHX-GMS, 2009 WL 4573234 (D. Ariz. 2009) (favoring MERS); Pantoja v. Countrywide Home Loans, Inc., 640 F. Supp. 2d 1177, 1188-89 (N.D. Cal. 2009) (favoring MERS), with, e.g., Mortg. Elec. Registration Sys., Inc. v. Sw. Homes of Ark., 301 S.W.3d 1 (Ark. 2009) (favoring borrower); In re Agard, No. 810-77338-reg (E.D.N.Y. Bankr. Feb. 10, 2011) (favoring borrower). See also Christopher L. Peterson, Foreclosure, Subprime Mortgage Lending, and the Mortgage Electronic Registration System, 78 U. Cin. L. Rev. 1359 (2010).
  
  Nor will the Court discern, more narrowly, whether MERS may serve as a beneficiary under Washington's Deed of Trust Act. That answer remains patently unclear. See Certification Order, Vinluan v. Fidelity National Title & Escrow Co., No. 10-2-27688-2 SEA (King Cnty. Superior Ct. Jan. 18, 2011). Because a state circuit court has recently certified this very question to the Washington Supreme Court, this Court declines to decide the issue before the Washington Supreme Court evaluates it.

***

• Plaintiff admits that she has been delinquent in her mortgage payments. A ruling favorable to Plaintiff in this case and others like it cannot and should not create a windfall for all homeowners to avoid upholding their end of the mortgage bargain—paying for their homes. But a homeowner's failure to make payments cannot grant lenders, trustees, and so-called beneficiaries like MERS license to ignore state law and foreclose using any means necessary. Whether these and similar defendants complied with Washington state law remains unclear.

***

• The Court STAYS this action pending the Washington Supreme Court's decision in Vinluan v. Fidelity National Title & Escrow Co., No. 10-2-27688-2 SEA. Counsel for the parties shall notify the Court when the Washington Supreme Court decides whether to accept certification and, if so, when it renders an opinion.

*********************

Note: Judge Coughenour deserves to be commended for:

• making it clear that a homeowner's mere failure to make house payments does not "grant" the banksters "license" to trample over the rule of law when carrying out foreclosure proceedings (a point that seems to fall outside the intellectual grasp of the banksters, and their enablers and apologists),



• taking this position, notwithstanding any personal feelings he may have against attempts by homeowners to score, as he put it, "a windfall" by dodging their responsibility for paying for what they bought (regrettably, many trial judges find great difficulty in setting aside their personal feelings in this regard while seemingly ignoring the fraudulent conduct by the banksters and their foreclosure mill conspirators - a point evidenced by the growing number of lower court rulings being challenged and reversed on appeal).

50-State AG Foreclosure Fraud Probe Chief: Our Settlement Won't Release Banksters From 'All' Civil Liability Or 'Any' Criminal Liability

Bloomberg reports:

• The 50-state attorney general group investigating mortgage foreclosure practices won’t release banks from all civil, or any criminal, liability in a settlement, Iowa Attorney General Tom Miller said.



• Miller said criticism of the multistate case was based on the “false notion” that its organizers were prepared to release the banks from all liability, including criminal liability. New York Attorney General Eric Schneiderman has been portrayed as resisting that position, Miller wrote in a letter to New York lawmakers who complained about Schneiderman’s removal from an executive committee working on the agreement.

For more, see Iowa Says State AG Accord Won’t Release Banks From Liability.

Federal Reserve, NYS Bank Regulator Announce Robosigner Settlements With Goldman, Loan Servicers

The Wall Street Journal reports:

• The Federal Reserve announced an enforcement action against Goldman Sachs Group Inc., saying the company's mortgage-servicing unit had engaged in "a pattern of misconduct and negligence" in its handling of home-mortgage loans.



• The Fed's action on Thursday seeks changes in mortgage-servicing practices and unspecified monetary damages. It came as Goldman reached an agreement with New York state banking regulators over wrongful foreclosures,(1) allowing it to complete the Sept. 1 sale of its Litton Loan Servicing unit to Ocwen Financial Corp. A spokesman for Goldman Sachs declined to comment.



• The Fed action is the latest response by government officials investigating mortgage-servicing irregularities including "robo-signing," in which bank employees signed foreclosure documents without reviewing case files as required by law. Federal and state officials continue to pursue a settlement with the nation's largest mortgage companies over allegations they mishandled home loans.

For more, see Fed Hits Goldman With Mortgage Order (may require paid subscription; if no subscription, GO HERE; or TRY HERE - then click the appropriate link).

(1) See Superintendent Lawsky Announces Agreement with Goldman Sachs, Ocwen, Litton on Groundbreaking New Mortgage Practices (Sale of Goldman’s Subsidiary, Litton, Conditioned on New Servicing Practices; Goldman to Significantly Reduce Loan Amounts for Those Hit by Financial Crisis).

AP Report: Banksters' Dubious Docs Dating Back To 1990s Threaten Land Recording System Across U.S.; Title To Tens Of Thousands Of Properties Infected?

The Associated Press reports:

• Counties across the United States are discovering that illegal or questionable mortgage paperwork is far more widespread than thought, tainting the deeds of tens of thousands of homes dating to the late 1990s. The suspect documents could create legal trouble for homeowners for years.(1)



• Already, mortgage papers are being invalidated by courts, insurers are hesitant to write policies, and judges are blocking banks from foreclosing on homes. The findings by various county registers of deeds have also hindered a settlement between the 50 state attorneys general who are investigating big banks and other mortgage lenders over controversial mortgage practices.

***

• But now, as county officials review years' worth of mortgage paperwork, in some cases combing through one page at a time, they are finding suspect signatures — either signed with the same name by dozens of different people, improperly notarized or signed without a review of the facts in the paperwork — on all sorts of mortgage documents, dating as far back as 1998, The Associated Press has found.



• "Because of these bad titles, property owners can't prove they own the properties they think they bought, and banks can't prove they had the right to sell them," says Jeff Thigpen, the registrar of deeds in Guilford County, N.C. In Guilford County, where Greensboro is located, a sample of 6,100 mortgage documents filed since 2006 turned up 74 percent with questionable signatures.

***

• Widespread robo-signing that stretches back a decade or more could create problems for homeowners. Regulators have so far not asked lenders to clean up the potentially millions of suspect documents filed in the past decade or earlier. That troubles some banking experts, including Sheila Bair, who until early July was chairwoman of the Federal Deposit Insurance Corp.



• "We do not yet really know the full extent of the problem," Bair said in written remarks to the Senate Banking Committee. She and others have called for a comprehensive study on the extent of the fraudulent signatures in mortgage documents.



• If documents with robo-signed signatures are challenged in court, judges could question the ownership of the properties, says Katherine Porter, a professor at University of California Irvine School of Law and an expert on consumer credit law. The consequences extend to homeowners in good standing when they try to sell.



• If invalid documents are discovered in the chain of ownership, it could delay the sale or make it difficult for buyers to get a mortgage because title insurers won't write a policy for the property, says Justin Ailes, vice president of government affairs of the American Land Title Association, a trade association representing the title insurance industry. Banks and other mortgage lenders won't write a home loan without title insurance.

***

• "The banks are playing with the integrity of the land record system," says John O'Brien, the recorder of deeds from Salem, Mass. [...] O'Brien, the recorder of deeds from Massachusetts, says he's only responsible for one county out of more than 3,000 in the U.S. "Federal regulators with a lot more authority than me have to step up to the plate and help correct this," he says.(2)

For more, see Robo-signed mortgage docs date back to late 1990s (if link expires, TRY HERE).

(1) For additional background on the 'chain of title' problem arising by reason of robosigning, see:

• Congressional Testimony of Associate Professor Adam J. Levitin, Geo. U. L. Center, Robo-Signing, Chain of Title, Loss Mitigation, and Other Issues in Mortgage Servicing,
• 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) See Home Preservation Network: John O'Brien Calls On CEOs and AGs to Come to Salem:

• John O’Brien, Southern Essex County Register in Salem, Massachusetts has been leading the national effort to hold lenders accountable, and has refused to record robo-signed documents has invited the CEO’s of the nation’s largest banks and all of the state’s attorneys generals to come to the Salem Registry and view first-hand the damage that has been caused to thousands of Essex County homeowners’ chains of title.



• “It's like a tornado came through here,” said Register John O'Brien, referring to the financial havoc and damage done to property records at the Registry of Deeds. “Following any disaster, the powers that be generally show up to assess the damage. That is what I would like these major lenders and the Attorneys General to do – sooner than later,” O’Brien said.

Deed Recording Head Invites Banksters, State AGs To Survey Robosigner-Induced Wreckage To Local Land Records; "It's Like A Tornado Came Through Here!"

The Home Preservation Network reports:

• John O’Brien, Southern Essex County Register in Salem, Massachusetts has been leading the national effort to hold lenders accountable, and has refused to record robo-signed documents has invited the CEO’s of the nation’s largest banks and all of the state’s attorneys generals to come to the Salem Registry and view first-hand the damage that has been caused to thousands of Essex County homeowners’ chains of title.(1)



• “It's like a tornado came through here,” said Register John O'Brien, referring to the financial havoc and damage done to property records at the Registry of Deeds. “Following any disaster, the powers that be generally show up to assess the damage. That is what I would like these major lenders and the Attorneys General to do – sooner than later,” O’Brien said.



• O’Brien believes that a sweetheart deal, in the form of a settlement to grant lenders immunity from prosecution, is in the works.

For more, see John O'Brien Calls On CEOs and AGs to Come to Salem.

(1) For additional background on the 'chain of title' problem arising by reason of rob0signing, see:

• Congressional Testimony of Associate Professor Adam J. Levitin, Geo. U. L. Center, Robo-Signing, Chain of Title, Loss Mitigation, and Other Issues in Mortgage Servicing,
• 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.

Media Coverage Raises The Heat On Foreclosure Probe, Shining Light On Evidence Of Continuing Sloppy, Fraudulent Bankster Practices

From the Columbia Journalism Review's The Audit blog:

• It’s clear that the banks aren’t much chastened by the foreclosure scandal that erupted last fall and which threatens to cost them tens of billions of dollars.



• An American Banker investigation [] shows shows that several banks are still fraudulently backdating documents to foreclose on homeowners.(1) And it’s not the first to show this. Last month, an outstanding Reuters probe by Scot Paltrow showed similar behavior [...].(2)



• These stories raise serious questions for the Obama administration and states attorneys general led by Iowa’s Tom Miller who have been rushing to settle and release the banks from liability for fraud. How can you release folks who’ve repeatedly shown that they’ll ignore the law and even recent settlements promising they’ll obey it?

For more, see The Foreclosure Scandal Continues (American Banker and Reuters show banks thumbing their nose at the law).

(1) American Banker: Robo-Signing Redux: Servicers Still Fabricating Foreclosure Documents:

• Some of the largest mortgage servicers are still fabricating documents that should have been signed years ago and submitting them as evidence to foreclose on homeowners.

(2) Reuters: Special report: Banks still robo-signing.

See also:

• The Associated Press: AP Exclusive: Mortgage 'robo-signing' goes on ('Robo-signing,' at center of foreclosure probe last year, is still rampant).
• Firedoglake: Banks Continue to Fabricate Documents, Commit Foreclosure Fraud.

Federal Regulator Suit: Banksters Made False Claims Regarding Compliance w/ Sound Underwriting Guidelines When Making, Peddling Securitized Home Loans

Reuters reports:

• A U.S. regulator sued a number of major banks on Friday over losses on more than $41 billion in subprime mortgage bonds, which may hamper a broader government mortgage settlement with banks.



• The lawsuits by the Federal Housing Finance Agency, which oversees Fannie Mae and Freddie Mac, came as a surprise to the market and weighed on bank shares. The lawsuits could add billions of dollars to the banks' potential costs at perhaps the worst possible time for the industry.



• The FHFA accused major banks, including Bank of America Corp, its Merrill Lynch unit, Barclays Plc, Citigroup Inc and Nomura Holdings Inc of selling bonds backed by mortgages that should have never been packaged into securities.

***

• While the ultimate amount FHFA will seek is still unclear, [an unnamed mole reportedly familiar with the matter] said it could top the $20 billion being discussed by the banks and the state attorneys general.



• "Defendants falsely represented that the underlying mortgage loans complied with certain underwriting standards and guidelines, including representations that significantly overstated the ability of the borrowers to repay their mortgage loans. These representations were material to the GSEs, as reasonable investors, and their falsity violates (the law) and constitutes negligent misrepresentation, common law fraud, and aiding and abetting fraud," the FHFA said in the suit against Merrill Lynch.

For more, see U.S. regulator sues major banks over mortgages.

See also, The New York Times: U.S. Is Set to Sue a Dozen Big Banks Over Mortgages:

• The Federal Housing Finance Agency suits, which are expected to be filed in the coming days in federal court, are aimed at Bank of America, JPMorgan Chase, Goldman Sachs and Deutsche Bank, among others, according to three individuals briefed on the matter.

Accused Home Title-Snatcher Faces Charges Of Forgery, Obtaining Property By False Pretenses, Breaking & Entering For Hijacking Vacant F'closed Mansion

In Raleigh, North Carolina, the News Observer reports:

• Police have arrested and charged a Tarboro man with squatting for at least seven months in a North Raleigh home valued at nearly $2 million.



• The 7,664-square-foot home in Wakefield Plantation has six bedrooms, six full bathrooms, theater and game rooms, a wine cellar, vaulted ceilings and an elevator. There is also a swimming pool and a Jacuzzi whirlpool bath.



• Thomas Everette Jr., 31, apparently enjoyed the [...] luxury home so much that he created a fake company with forged documents to transfer the property to himself at no cost, according to police reports.



• But the scam fell apart when a concerned neighbor did some investigating and called police.

***

• Everette is charged with one felony count each of breaking and entering, obtaining property by false pretenses and forgery of deeds or wills, according to arrest warrants filed at the Wake County Magistrate's Office.



• His arrest came about two weeks after state Attorney General Roy Cooper announced that a group of Triangle residents had filed bogus paperwork at the county's Register of Deeds office to try to claim ownership of six foreclosed homes in Wake County.(1)



• Anne Redd, a spokeswoman with the Wake County Register of Deeds, said she was contacted by the state Attorney General's Office before Everette's arrest. "They told me they were fixing to get him because he had been living there since December," she said.



• The neighbor, who called the 911 operator last week, said he had called earlier in February about people going into the house because he thought it was a burglary. Everette avoided arrest, however, by showing paperwork that claimed he was trustee of the property to the police officer who responded, the neighbor said.



• The house is actually owned by the New York Bank of Mellon and Bank of America after it went into foreclosure last year, according to Wake County real estate records.

***

• Investigators say Everette set up a fictitious company, International Fidelity Trust, and filed it with the Secretary of State's Office on April 20. He then created a false deed that listed International Fidelity Trust as the owner of the Victoria Park Lane house, state records show.



• Next, he filed paperwork giving the home's "occupants" 90 days to satisfy all financial obligations or waive their right to the home. The home was vacant, so there was no one to respond to the bogus claim to the home, county records show.



• Everette filed another document with the Register of Deeds on July 13, showing that International Fidelity Trust had transferred the home to him at no cost, court records show. On that document, police say Everette forged signatures of a Bank of America official and a South Carolina notary public to gain control of the $1,941,949 property for which he never paid a dime.

***

• Everette apparently is not a novice at running scams. He has a 28-page record of previous charges that include breaking and entering, trespassing, violation of a domestic violence order, impersonating a bail bondsman, identity theft, larceny, resisting arrest, obtaining property by false pretense and insurance fraud, state records show. He is being held at the Wake County jail, his bail set at $85,000, a jail spokeswoman said Tuesday.

For the story, see Man accused of being a squatter in N. Raleigh.

(1) See Criminal, Civil Charges Brought In Vacant Home Hijacking Scam; NC AG: Phony Deeds, Bogus Liens "Filled With Gibberish ... A Fraud On The Whole System".

Nevada AG Expands Pending BofA Suit To Include Dubious Lending, Foreclosure Practices; Joins NY AG In Upping Heat On Notorious Bankster

Paul Kiel at ProPublica reports:

• The state of Nevada dramatically expanded its lawsuit against Bank of America today, turning the narrow case it filed late last year into a broadside that targets virtually all aspects of the bank's mortgage operations. Bank of America has previously denied wrongdoing.



• The sweeping new suit could have repercussions far beyond Nevada's borders. It further jeopardizes a possible nationwide settlement with the five largest U.S. banks over their foreclosure practices, especially given concerns voiced by other attorneys general, New York's foremost among them. (You can read the suit here).

***

• According to the suit, borrowers were duped into unaffordable loans and then victimized again through a misleading mortgage modification program that homeowners tried to use to avoid foreclosure. Finally, the suit alleges, the bank filed fraudulent documents to move forward with the foreclosures.

***

• The state's suit had previously been confined to the modification issue. At that time, Bank of America also said homeowners would be best served not through litigation but through reaching a multistate settlement that would "broaden programs for homeowners who need assistance."



• By expanding the suit, Nevada's Catherine Cortez Masto joins New York Attorney General Eric Schneiderman in stepping up investigations of the bank. In addition to initiating a broad investigation of banks' securitization practices, he recently filed a suit charging that Bank of America had fraudulently foreclosed on homeowners.

For more, see Nevada Wallops Bank of America With Sweeping Suit; Nationwide Foreclosure Settlement in Peril.

Go here for links to other articles by Paul Kiel on the rackets involving bank foreclosures and loan modifications.

Two Notorious Players In Nationwide Foreclosure Robosigning 'Phenomenon' Receive Appeals Court Recognition For Their 'Contributions' To The Effort

A recent federal appeals ruling from the 3rd Circuit Court of Appeals reinstating a bankruptcy judge's hammering of a foreclosure mill for its use of robosigned documents.(1)

While not directly involved in the litigation of the appeal, two notorious players in the foreclosure robosigning 'phenomenon' that's swept the nation nevertheless received recognition by the court for their apparently 'less-than-meritorious' contibutions to this once fast-growing industry.

Although the court 'buried' the recognition of these 'fine' outfits in two footnotes, the court's observations with regard to this pair arguably deserve some highlighting here.

In footnote 2 of the ruling, the court gives a foreclosure mill law firm its due (alterations in the original):

• Moss Codilis is not involved in the present appeal. However, it is worth noting that the firm has come under serious judicial criticism for its lax practices in bankruptcy proceedings. "In total, [the court knows] of 23 instances in which [Moss Codilis] has violated [court rules] in this District alone." In re Greco, 405 B.R. 393, 394 (Bankr. S.D. Fla. 2009)(2); see also In re Waring, 401 B.R. 906 (Bankr. N.D. Ohio 2009).

In footnote 5 of the ruling, a notorious foreclosure document sweatshop gets its due:

• LPS is also not involved in the present appeal, as the bankruptcy court found that it had not engaged in wrongdoing in this case. However, both the accuracy of its data and the ethics of its practices have been repeatedly called into question elsewhere. See, e.g., In re Wilson, 2011 WL 1337240 at *9 (Bankr. E.D.La. Apr. 7, 2011) (imposing sanctions after finding that LPS had issued "sham" affidavits and perpetrated fraud on the court); In re Thorne [and try here for more on In re: Thorne], 2011 WL 2470114 (Bankr. N.D. Miss. June 16, 2011); In re Doble, 2011 WL 1465559 (Bankr. S.D. Cal. Apr. 14, 2011).

For the court ruling, see In Re Taylor, No. 10-2154 (3d Cir. August 24, 2011).

(1) See Federal Appeals Court Reinstates Reversed Ruling Hammering Foreclosure Mill For Littering Courtroom With Robosigned Docs; Bankruptcy Judge Vindicated.

(2) See In re Greco, footnote 1, where U.S. Bankruptcy Judge John K. Olson lists the following nine cases filed in the Southern District of Florida which he ties to Moss Codilis 'handiwork:'

• (1) In re Kearse, 07-21486-BKC-JKO; (2) In re Nicholson, 08-11474-BKC-JKO; (3) In re Greco, 08-13051-BKC-JKO; (4) In re Kassar, 08-13077-JKO; (5) In re Morton, 08-18853-BKC-JKO; (6) In re Studer, 08-19300-BKC-JKO; (7) In re Buhagiar, 08-19610-BKC-JKO; (8) In re Vargas, 08-20302-BKC-JKO; and (9) In re Imburgia, 08-17153-BKC-JKO.

In footnote 2 of the same case, Judge Olson lists the following additional fourteen cases filed in the Southern District of Florida which he connects to Moss Codilis:

• (1) In re Cecil, 08-10925-BKC-RBR; (2) In re Bertke, 08-16351-BKC-RBR; (3) In re Woods, 08-11231-BKC-PGH; (4) In re Salandy, 08-12866-BKC-PGH; (5) In re Lissandrello, 08-13372-BKC-PGH; (6) In re Biggers, 08-13780-BKC-PGH; (7) In re Colon, 08-14903-BKC-PGH; (8) In re Noble, 08-15675-BKC-PGH; (9) In re Sao, 08-16549-BKC-PGH; (10) In re Shank, 08-18596-BKC-PGH; (11) In re Vega, 08-16381-BKC-AJC; (12) In re Espinoza, 08-21253-BKC-AJC; (13) In re Hargis, 08-21366-BKC-EPK; and (14) In re Brown, 08-23103-BKC-EPK.

'Biggest Case In Ohio F'closure Law In A Century' Takes Unusual Turn; Homeowner's Mtg. Debt Mysteriously Disappears; Banksters, Lawyers: 'No Comment!'

In Cleveland, Ohio, Ohio Public Radio reports:

• The Ohio Supreme Court is getting ready to take on what some are calling the biggest issue in state foreclosure law in a century. The question before the justices is what paperwork does a lender need to force an owner out of his home? For Ohio Public Radio, WCPN’s Mhari Saito reports that what the state's justices decide could have huge implications for the financial services industry.



• Antoine Duvall and his wife and young son waited until after Christmas to move into their freshly renovated two-story house in Cleveland’s Collinwood neighborhood. It was 2006 and Duvall, a salesperson for a legal document services company, had just happily signed a mortgage and a promissory note to get his loan from Wells Fargo. But soon, he started to get letters about his loan.

***

• The Duvall case seemed like a good one for the state Supreme Court to rule on to settle the issue but it has taken an unusual twist. You might even call it another bank snafu. The homeowner, Duvall, now owes nothing on his mortgage because - in an action unrelated to the Supreme Court case - the loan servicer cleared his debt completely in June.



• Duvall doesn’t know why it happened and neither his loan servicer nor US Bank’s attorneys are commenting. It’s not clear what the state Supreme Court will do, but attorneys for both sides say the legal question is not going away. The court could still take up the Duvall case or it could address several other cases on the same issue, waiting in the wings.(1)

For more, see Who owns the deed? (The Ohio Supreme Court is taking up the question of what a bank needs to prove to force someone from his home).

(1) The use of '11th hour' legal maneuvers to dodge a potentially adverse court ruling in the foreclosure context by the sleazy banksters is not unheard of. In a recent Florida foreclosure case involving the use of dubious documents to obtain a foreclosure judgment, the banksters and their foreclosure mill avoided having the Florida Supreme Court hear an appeal of a case by reaching a settlement with the screwed over homeowner shortly before the case was presented to the Florida high court (keep in mind that this was a case the banksters had won decisively at the intermediate appeals level). See:

• Banksters Dodge Big Bullet In Major Florida Supreme Court Foreclosure Fraud Case; Reach Settlement With Screwed-Over Homeowner,
• Use Of Voluntary Dismissal To Dodge Scrutiny After Failed Attempt To Dupe Court By Producing, Filing Dubious Docs At Issue In Recent Foreclosure Suit,
• F'closure Mill Dodges Appellate Court Reversal On Merits; Opts To 'Confess Error' Instead In Agreeing To Reversal Of Rubber-Stamped Lower Court Ruling.

Negotiations To Keep Brooklyn Great Grandma In Home Of 40+ Years Stall; Activists Plan On Another Protest

In Bedford Stuyvesant, Brooklyn, Bed Stuy Patch reports:

• Negotiations faltered again last Wednesday for Ms. Mary Ward, the Brooklyn great-grandmother whose home was sold following a predatory lending scheme. After an eviction blockade the prior Friday, August 19, organized by non-profit housing advocates and local residents, supporters were able to postpone the eviction of Ms. Ward by city marshals.



• The successful blockade ended with Assembly member Annette Robinson volunteering to mediate a meeting on behalf of Ms. Ward and the property’s new owner, Shameem Chowdhury, set for last Monday, August 22. Lawyers for Ms. Ward submitted to Chowdhury a formal offer of $70,000—money Ms. Ward had in escrow. Additionally, Chowdury could donate the property to a land trust as a tax write off.



• However, Chowdhury has been unresponsive. After he no-showed for the Monday meeting, and the second meeting rescheduled for that Wednesday, August 24, lawyers for Ms. Ward have started preparing a contingency plan in the likely event that the property’s new owner refuses to negotiate.

***

• Lawyers for Ms. Ward offer their reason why the home's sale was illegal in the following article: An Illegal Home Sale, According to Common Law.



• And finally, Shameem Chowdhury talks! Click here to read the exclusive interview he gave Bed-Stuy Patch: Housing Speculator to Ms. Ward: "I'm Innocent".

For more, see Still no Deal for 82-Yr-Old Great Grandma; Another Protest Planned (After a second no-show by the property's owner, organizers plan another protest and march).

HOA Denies Winning Bidder Title To Co-Op Unit Bought At F'closure Sale; NYS Appeals Court: Sale Subject To Association's Governing Docs, Restrictions

In New York City, Habitat Magazine reports:

• Congratulations! You're the successful bidder at a foreclosure sale of co-op shares. But wait! Can you actually take ownership of the apartment — or do you still need permission from the co-op board? Does a co-op's governing documents trump long-established precepts of property ownership? The answer may surprise you.



• The 2010 case that set the precedent on this was LI Equity Network LLC v. Village in the Woods Owners Corp.

***

• After their eviction [for failure to pay co-op maintenance fees], [the unit owners] defaulted on their loan. The lender declared the loan in default and scheduled a public auction — in this case, a "nonjudicial" sale. LI Equity was the successful bidder — but then the co-op's board of directors said that it would not approve the transfer of shares to.



• While LI Equity never filed a formal application with the board to obtain the shares, the board independently reviewed and rejected the company's proposal to close on the unit and then, well, sell it to a board-approved purchaser. What's the problem?



• LI Equity, naturally, sued the co-op in May 2007 on the ground that the company was statutorily entitled to own the apartment, regardless of the terms of the co-op's governing documents.



• It also sought damages for breach of the implied duty of fair dealing. And the company won in a lower court, which directed that the co-op transfer the shares to LI Equity. The court reasoned that the co-op board did not have the power to interfere with the transfer of the lease and shares from a "judicial" sale, so the same would hold true of "nonjudicial" sale.



• The appellate court, however, reversed that decision.
  
  What, My Money's No Good?
  


• That court found that LI Equity was subject to the approval requirements found in the co-op's governing documents. It further said that the co-op board properly exercised its business judgment when it applied the approval requirements to the LI Equity's request to close on the shares.

For more, see Who Owns a Co-op Apartment When You Win a Foreclosure? Maybe Not You.

For the ruling, see LI Equity Network LLC v. Village in the Woods Owners Corp., 910 N.Y.S.2d 97, 79 A.D.3d 26 (App. Div. 2nd Dept., 2010).

Cops: Scam Used Title Searches To Find 'High-Equity' Homes For Rent, Tenant 'Posers,' I.D. Theft To Rip Off Landlords' Equity In Rental Homes

In Southern California, The Orange County Record reports:

• Authorities have arrested seven people, including some in the United States illegally, on suspicion of posing as owners of at least 20 homes they were renting, taking out $5.9 million in home-equity loans and pocketing the cash.



• The suspects,(1) some of whom are Korean and Chinese nationals, reportedly stole the homeowners’ identities to conduct the transactions, authorities said. One of the suspects is believed to be a resident of Garden Grove, Los Angeles County Sheriff’s Detective Christopher Derry said.



• Two of the targeted homes were in Orange County: a five-bedroom house on Spartan Street in Mission Viejo and a four-bedroom house on Threewoods Lane in Fullerton, he said.



• A loan for $200,000 was taken out on the Mission Viejo home and one for $250,000 was taken out on the Fullerton home, Derry said. The rest of the homes are in Los Angeles and San Bernardino counties. Individual law enforcement agencies had been working on their respective cases for a while and had recently begun cooperating, Derry said.

***

• Derry said the case was especially hard to crack because the suspects used prepaid cell phones and web-based email addresses, the homes were spread across several law enforcement jurisdictions, and the homeowners learned of the fraud months after the loan transactions, when lenders started the foreclosure process.

***

• In a scheme that lasted at least two years, Derry said, the suspects used title searches to find homes for rent that had small or no mortgages on them. Using fake identities and documents, they signed leases and paid security deposits and first month’s rent to gain access to the homes.



• Then, using “really good” fake IDs, Derry said, the suspects took on the homeowners’ identities, applied for home-equity loans and ordered appraisals. They typically sought loans from “hard-money” lenders who lend for shorter periods and at higher interest rates than commercial financial institutions. Hard-money lenders base funding decisions on property value, equity and salability rather than creditworthiness and income of a borrower.



• When the loans were funded, escrow companies were directed to transfer the money into several bank accounts opened by the suspects in the real homeowners’ names. From there the money was withdrawn in small amounts as cash or checks.

***

• Title companies – which insured the mortgage liens against invalidity or unenforceability – have been paying out millions of dollars to reimburse the lenders for their losses, and homeowners are spending thousands of dollars in court to clear their homes’ titles, Derry said.

For the story, see Police: Renters pose as owners, steal home-equity cash.

(1) According to the story, Federal magistrate John E. McDermott has ordered all seven suspects held without bail. According to McDermott’s order, the suspects are considered flight risks because:

• Joon Hwan Kim, 24, is a Korean national with no legal status. Kim declined to be interviewed by pretrial services staff.
• Guang Chen Jin, 37, is a Chinese national and has been unemployed for eight months.
• Hyung Kyu Lim, 48, is in the U.S. illegally. His mother and four siblings live in Korea.
• Suhua Lin, 54, is a Chinese national, has recently traveled to China and has family there.
• Kyounghoon Kim was using multiple identities at the time of arrest, unknown bail resources, family ties to Korea and immigration status issues.
• Andrew Byun Yoo, 56, has been unemployed for 10 years, has no relevant bail resources and has lived in four other states.
• Ju Young Chung, 36, has a prior failure to appear and an outstanding warrant.

Double-Talking Judge To Foreclosure Mill: "Lying Is Unacceptable!" But Then OKs Use Of False Affidavits Anyway, Proceeds To Ratify Forced Sale Of Home

In Baltimore, Maryland, The Daily Record reports:

• Lawyers at Shapiro & Burson LLP repeatedly lied by signing each other's names to foreclosure affidavits, but their actions did not alter the rights of the lender or the homeowners, a Baltimore County judge has ruled.



• Circuit Court Judge Susan Souder wrote in her Aug. 11 opinion that she did not believe monetary sanctions were appropriate, and that she would leave any punishment levied against the plaintiffs -- all lawyers -- to bar counsel at the Attorney Grievance Commission.



• Souder dismissed an order requiring the plaintiffs to show cause why the case should not be dismissed and why they should not be sanctioned and ratified the sale of the home.



• Anthony DePastina, director of litigation for Civil Justice Inc., a Maryland-based public interest legal association, said he understands that these homeowners and others in the foreclosure process have not paid their mortgages and that if another attorney had signed the documents correctly, the whole process would be "copacetic," but, he said, that's not what happened here.



• "The reality is we're lawyers. We're supposed to play by the rules and know what the rules are," said DePastina, who is not involved in this case. "When we don't, we compromise the integrity of the entire game. And it's not a game."



• Souder said she could not comment on the case or whether it was the first decision in the county regarding signatures on foreclosure affidavits, many of which have been questioned with show-cause orders.

***

• Souder wrote that the "most disturbing" revelation in this case (John S. Burson, et al. v. Grosso) was that Murphy falsely signed Yoder's name to affidavits regarding military status for Frank and Patricia Grosso, the notice of intent to foreclose and the appointment of substitution of trustees.



• She found it "very disturbing" that the plaintiffs argued that their lies were proper under Maryland rules. "No case, no statute, and no rule cited by Plaintiffs supports the argument that it is proper for a person to sign another person's name to an Affidavit. That Plaintiffs are attorneys who concluded that such lies are 'entirely proper' is astounding .... It is a lie. And lying is unacceptable," she wrote.



• Despite her shock at the lawyers' behavior, Souder agreed with the plaintiffs that the false affidavits "did not alter the rights of the parties."

For more, see Home sale ratified despite faulty affidavits (requires paid subscription; if no subscription, GO HERE).

More Observations On Proposed 50-State AG Foreclosure Fraud Settlement, The Booting Of NY AG From Probe Committee & The Buying Off Of Tom Miller

From a recent column in The Huffington Post:

• John O'Brien, Registry of Deeds for Southern Essex County in Massachusetts is asking that Tom Miller, Iowa Attorney General, step down. Miller is the lead AG in the controversial settlement with the big banks on mortgage servicing fraud.



• In his most recent obscene act Miller kicked Attorney General Eric Schneiderman off of the 50-state task force probing foreclosure abuses and negotiating a possible settlement agreement with the mortgage firms.

***

• Schneidernan getting kicked off the committee should come as no surprise to anyone following the foreclosure negotiations and is sickeningly similar to Pam Bondi, Florida's Attorney General firing Theresa Edwards and June Clarkson, who were heading up investigations on a series of mortgage related crimes for over a year. While Bondi insists that the firings were a result of poor job performance, Miller points more towards attitude and that Schneiderman is somehow not a team player.

***

• Schneiderman's removal will likely make it easier for state and federal officials to reach an accord with the five banks. However, the potential amount of money they'll be able to extract will likely decrease. American Banker posted the 27 term sheet of the negotiations presented to the banks with major servicing operations by the AGs and Federal Banking Regulators.



• The deal completely handcuffs state attorneys general whose constituents are suffering serious economic damage as a result of the foreclosure fiasco and fraud by the banks and servicers.



• When the investigation into robo-signing and fraud, Tom Miller had a brief moment of righteous advocacy until he received $261,445 in campaign contributions from out-of-state law firms and donors from the finance, insurance, and real estate sector shortly after he announced he was seeking criminal charges and retribution from the banks for mortgage fraud -- that's 88 times what he has received in the past decade.

For more, see John O'Brien MA Registry of Deeds: AG Tom Miller Should Step Down.

Dozens Of NYC Seniors To Get The Boot After Non-Profit's Insider Pulls Off Lucrative Deal In Nursing Home Buyout

In New York City, the New York Post reports:

• The oldest-running nursing home on the Lower East Side is shutting its doors for good even as residents protest a pricey property deal struck by one of its board members.



• About 95 seniors are getting the boot from the Bialystoker Center -- a kosher nursing home that many have lived in for over a decade, including Catherine McDonald, a 107-year-old woman from the neighborhood. She and others like Mildred Mondshein, 88, and Annie Green, 85, have to find new digs at nursing homes elsewhere in the city.



• But the demise of the Bialystoker Center has been a boon for one of its board members -- real-estate magnate Ira Meister picked up a four-story commercial building owned by the nursing home last year in a no-bid insider deal.(1)



• Meister is the chairman of the Bialystoker board that's charged with keeping the senior center financially sound. But that didn't stop him from buying the commercial property at 232 East Broadway for $1.5 million in an all-cash deal that never was up for bid on the open market.



• The insider sale infuriated Bialystoker residents, family members and staffers, who only learned of it last month after being told the home is shutting and the Bialystoker building, at 228 East Broadway, is going up for sale.



• "I was shocked when I heard about it. It's a dirty thing. We're out, the nursing home building is being sold and he winds up with the property next door," said Denise Perez, who visits her grandmother Miguela Candelaria, 88, daily.



• The Bialystoker board said Meister's purchase was made as a last-ditch effort to help save the nonprofit nursing home, which is $8.5 million in debt and hemorrhaging $100,000 a month, according to board spokeswoman Virginia Lam.



• Meister plans to lease it to a community group for two years while renovating it, she said. Then he'll move his private real estate company -- Matthew Adam Properties in Midtown -- to the Lower East Side.



• That news doesn't sit well with the nursing-home seniors being forced to leave. "If I'm not in the Lower East Side, nobody will be able to come visit me," said Green, who wants to stay in the neighborhood where she grew up.



• The residents are also miffed no local pols spoke up for the fabled Jewish institution, built in 1928 and later a haven for many Holocaust survivors. "I think all the politicians have forgotten us -- they only remember us when it's time to vote," said Mondshein.

Source: Sale rakes in 'old' money (Real-estate meanie to close senior home).

(1) See The Real Deal: Bialystoker nursing center hits market for residential conversion.

Cops: Foreclosed Owners' Home-Trashing Escapade Leaves Them Facing Five Years In Prison; Couple Declined 'Cash for Keys' Offer: Investor

In Tampa, Florida, ABC Action News reports:

• When real estate investor Jon Spinks walks into a foreclosure property, he is never sure what he'll find. One month ago, he found a big mess. "The house was totally trashed," he said.



• Photos show the New Tampa house in a gated community littered with trash when the former owners moved out. Deputies say when the married couple took off, they also stripped $10,000 worth of property and took it with them.



• "All the cabinet doors were missing. Of course, the refrigerator was gone," said Jon Spinks. The ceilings fans, fixtures, bathroom vanities, water heater and more were also missing, according to Spinks.

***

• Spinks says he offered the couple cash to leave their keys and the house intact. He also says they refused the offer.



• Now the couple is dealing with foreclosure and criminal charges. "That was our intent at first, to try to recover the property," said Sergeant Joel Masci with the Hillsborough County Sheriff’s Office. Sergeant Masci says they arrested the couple, who now face five years' prison time if convicted.



• "If it was something you would normally purchase a house that you expect it to be included with the house, then that's what we look at. If those items were taken, we can actually file grand theft charges," he said.

For the story, see New Tampa couple accused of stealing $10,000 of goods from foreclosed home (Deputies say couple stripped front door, cabinets).

Ex-Homeowner Squats Her Way Into Loan Modification, 18 Months After Losing Home To Foreclosure

In Alameda County, California, The Bay Citizen reports:

• It's hasn't been easy, but nearly a year and a half after Wells Fargo foreclosed on her home of 27 years, Tanya Dennis has finally convinced the lender to modify her mortgage.



• "They had to deal with me to pacify me and get me out of their hair," joked Dennis, who made headlines earlier this year by hiring a locksmith and breaking into her South Berkeley home after Alameda County sheriff's deputies evicted her.



• Since then, Dennis, a short, 63-year-old woman who was once vice principal of Oakland's Castlemont High, has been a thorn in the side of the nation's largest mortgage originator.



• Wells Fargo spokesman Tom Goyda said the deal — which Dennis said reduces the amount of money she owes on her home from $484,000 to $365,000 — occurred not because of Dennis' persistence, "but because we want to keep homeowners in their homes."

***

Here are some of the steps Dennis took after breaking back into her home in January:

1. Representing herself, she sued Wells Fargo in federal court. When U.S. District Judge Claudia Wilken dismissed her suit, Dennis appealed her case to the 9th Circuit — all without the help of a lawyer.



2. On May 3, Dennis was carted away in handcuffs after disrupting Wells Fargo's annual shareholders meeting.



3. On May 24, she confronted Jim Foley, the bank's regional president for the San Francisco Bay Area, at Wells Fargo's Oakland office. The meeting was arranged by Oakland's teachers' union. (The union's president, Betty Olson Jones, was also among those who disrupted Wells Fargo's shareholders meeting).



4. In June, three members of the state Legislature — state Sen. Loni Hancock (D-Berkeley) and East Bay assemblymembers Sandré Swanson and Nancy Skinner — wrote to Wells Fargo on Dennis' behalf.



5. On June 17, with another eviction from the sheriff looming, the Alliance of Californians for Community Empowerment, an advocacy group founded by former employees of the now-defunct ACORN, sent an email asking its supporters to contact Foley and Leesa Whitt-Potter, the bank's senior vice president for consumer operations.

For more, see Squatting Homeowner's Persistence Pays Off (Breaking into her own home was just the beginning of Tanya Dennis' campaign to convince Wells Fargo to modify her mortgage).

Law School Clinic Scores 3-Year, State AG Grant To Fund Unit Defending Homeowners Facing Wrongful Foreclosure, Victims Of Mortgage Fraud

From Arizona State University School of Law:

• Distressed homeowners have a new advocate in their corner as the Homeowner Advocacy Unit in the Civil Justice Clinic at ASU's Sandra Day O'Connor College of Law opens its doors this month.



• In response to the foreclosure crisis, student attorneys enrolled in the new program will start working with clients who have been victims of mortgage fraud or are facing a wrongful foreclosure. The unit is made possible through a three-year grant from the Arizona Attorney General’s Office.



• “This is an excellent opportunity for the law school to provide a valuable public service while training up to 90 new attorneys over the next three years in the skills needed to become effective advocates on behalf of distressed homeowners,” said Douglas Sylvester, interim dean of the college.



• “We are grateful to the Attorney General’s Office for funding this project. It comes at a time when the community is in desperate need of professionals with training in the complex legal and social issues created by the mortgage crisis."

For more, see Distressed homeowners to receive assistance from ASU law school.

Squatter Movement Begins To Gain Steam In Detroit As Local Laws Leave Complaining Residents Frustrated, Cops With Hands Cuffed

In Detroit, Michigan, The Detroit News reports:

• The foreclosure crisis has led to a surge of complaints about squatting in Detroit, and city officials acknowledge they're not sure what they can do about the problem.



• In a city with more than 100,000 vacant properties, city officials and residents say they're increasingly seeing people take over empty houses and call them their own. Once they're in, it's tough to get rid of them: Michigan law places the burden of proof on rightful owners, and the eviction process can take months.

***

• Squatting isn't new, and its secretive nature makes it tough to track. But city officials say it's spiking as one in every 339 city homes received foreclosure notices last month, according to RealtyTrac, an industry marketer. City ombudsman Durene Brown points to a thick stack of complaints about squatting she's received over the past two years. A few years ago, about 100 people a year called about the issue. Now, 300 do.

***

• Squatting laws present a major challenge in ridding someone who illegally possesses a home. Legally, only the homeowner or banks can seek remedies to remove squatters. And under a loophole, a squatter can gain possession of a home if he or she openly lives in it uninterrupted for 15 years, according to state law.



• No real moves have been made to change squatting laws by the state Legislature, but some community groups and city officials said the loopholes need to be closed.

***

• As the head of the mobile patrol for the nearby Grandmont Association, Muhsin Muhammad said the group has fought against people who have taken over eight homes in the past year. Rosedale-Grandmont, a larger contingent of seven associations, has dealt with about 30 homes, he said.



• They ranged from a family just finding a place to stay for the children, to a group of about 30 young people who took over a house. At that home, there was gambling on the street, illegal drug use, incidents of the inhabitants urinating on nearby properties and loud music playing until 3 or 4 a.m., Muhammad said.



• "The homeless and criminals have been wise as to how the system protects them. They go through the neighborhood shopping for nice homes to move into," said Muhammad, the father of the former Michigan State University and professional football star who shares his name.

For the story, see Squatter problem balloons in Detroit (State law makes it hard to evict illegal residents, city claims).

NYC Congressman, Other Queens Pols Could Feel The Squeeze After Indictment Of Suspect Accused Of Falsifying $50M In Home Loan Applications

In New York City, the New York Post reports:

• The walls may be closing in on Rep. Gregory Meeks with the indictment of a real-estate broker pal who gave him $40,000. Edul Ahmad faces up to 30 years in prison if convicted of mortgage fraud in an indictment Friday.



• Though the indictment makes no mention of his political ties, the threat of a lengthy sentence could give the feds leverage to question Ahmad about Meeks and other Queens pols.(1)



• Ahmad, 43, is accused of falsifying $50 million in loan applications for borrowers who lacked the means to pay them back and pocketing "fees and commissions in excess of those permitted by the lenders," the indictment says.



• His relationship with Meeks has been under intense scrutiny since the Queens Democrat revealed the $40,000 payment last year. Earlier this month, a House ethics panel announced that it would investigate Meeks over the 2007 payment.



• Meeks has said that the $40,0000 was a loan from Ahmad, but he did not report it on his personal financial disclosure forms until 2010, after the FBI questioned Ahmad about it.

Source: Meeks' mortgage 'lender' indicted.

(1) As has been observed by at least one learned federal judge:

• "When a conspiracy is exposed by an arrest or execution of search warrants, soon-to-be defendants know that the first one to "belly up" and tell what he knows receives the best deal. The pressure is to bargain and bargain early, even if an indictment has not been filed." United States v. Moody, 206 F.3d 609, 617 (6th Cir. 2000) (Wiseman, J., concurring) (referring to the not-uncommon 'race to the prosecutor's office' that breaks out among participants in an uncovered criminal conspiracy).

Whether Ahmad, if guilty, considers to "belly up" and "sell out" others on whom he may have some 'dirt' remains to be seen.

Roof & Sinkhole Foreclosures May Be On Horizon As Changes In One Insurer's Underwriting Guidelines May Squeeze Some Florida Homeowners Onto Street

In Central Florida, The Tampa Tribune reports:

• Homeowners across Florida who are up for an insurance policy renewal with the state's insurer of last resort are receiving letters about their roofs. Anyone with a home 25 years old or older must get an inspection and prove to Citizens Property Insurance Corp. that their roof is expected to last at least three more years.



• Robert Brown says he thought he had a few more years to save money to put new roofs on his rental homes. But Citizens told him the roofs must be replaced now, or it won't renew his policies.



• "They're forcing people to put on a new roof, even if you have a few years of life left on the roof," Brown said. "This could force a lot of people into foreclosure, if they can't afford the roof and then lose their insurance." Replacing a roof on a typical home can cost several thousands of dollars.



• The relatively new requirement for the roof inspection comes on the heels of another controversial Citizens policy. The company recently said it's raising its rates for sinkhole coverage by 400 to 2,000 percent in some Bay area locations.(1)



• When it comes to the roof policy, some customers can't afford a new roof now and say they're letting their insurance lapse, local insurance agents said. "This couldn't come at a worse time," said Laura Hart, of Florian Insurance Inc. in Hudson. "This is the worst economy most of these people have seen in their lives." Hart said some customers are angry that their insurance company is taking away their chance to save longer for a new roof.

For more, see Citizens policy pushes some homeowners to add new roofs.

(1) See Residents rally in Pasco against sinkhole coverage hike:

• Al Kutchera said he'll be one of many residents abandoning their homes and leaving the state if Citizens Property Insurance fulfills its proposal to raise rates for optional sinkhole coverage. The plan increases rates by more than 400 percent on average statewide and more than 2,000 percent in some Bay area locations.



• "Nobody will buy the house, so I'll just let the bank have the house and look for a Realtor in South Carolina or Alabama or something," said Kutchera, who owns a home in Hernando County.

***

• State Sen. Mike Fasano, R-New Port Richey, organized the rally with consumer advocacy group Policyholders of Florida. Fasano said the issue is bringing together people from all over the Bay area and from all walks of life that wouldn't be able to afford the increased rates.



• He said a senior citizen came to his office because her mortgage company told her she had to have sinkhole coverage. The woman was in tears because she can't afford the coverage under the proposed rate hikes.

Law "Was Designed To Be A Noble Profession," Says Cal. AG In Announcing Civil Action Against 3 Firms Bringing 'Mass Joinder' Foreclosure Relief Suits

In San Francisco, California, The Bay Citizen reports:

• California Attorney General Kamala Harris stood before a bank of news cameras [one recent] morning and declared war on unscrupulous lawyers. The occasion: a new lawsuit against three Southern California law firms, who stand accused of taking millions of dollars from homeowners who expected the lawyers to help them get mortgage relief. But the attorneys simply pocketed the money, Harris said.



• Law "was designed to be a noble profession," Harris told reporters. Instead, she said, the accused attorney, Philip Kramer, and lawyers at two other firms took advantage of borrowers who were already "deeply disappointed, frustrated and hurt."



• According to officials, the defendants extracted retainer fees of up to $10,000 from each of 2,500 homeowners to participate in lawsuits that actually hurt their chance of staying in their homes. Because these homeowners gave their meager savings to Kramer and his associates, they were less able to make their mortgage payments and more likely to lose their home to foreclosure.

For mor, see State Cracks Down on Unscrupulous Mortgage Lawyers (Law "was designed to be a noble profession").

Westchester DA: Pair Used Escrow Acct. Holding Clients' Home Refi Proceeds As Personal 'Piggy Bank;' Alleged Scammer's Elderly Dad Among Those Screwed

From the Office of the Westchester County, New York District Attorney:

• From April 2009 to June 2009, operating under the home mortgage closing company Settle One Corporation, with an office located at 428 Main Street in Armonk, New York, the defendants, Loronda Murphy and real estate attorney Scott Forcino, engaged in what amounted to a home mortgage fraud "Ponzi" scheme.(1)



• The targeted homeowner/victims each took out a new mortgage on their home through Settle One Corporation with the understanding that real estate attorney Scott Forcino would oversee their closing and that money from their new mortgage would pay off their pre-existing mortgage.



• However, Forcino instead allowed Murphy to fraudulently assume the role of attorney for each closing, and, much to the homeowner's surprise, rather than paying off their pre-existing mortgage, Murphy instead stole portions of their new loan money and left their pre-existing mortgage unpaid.(2)



• Murphy's theft then left the homeowner with the unsustainable burden of having multiple mortgages on their family home at one time. Over this time period the pair defrauded five victims including Murphy’s father.



• In addition to skimming money out of the Settle One Corporation bank account for her own personal benefit, Murphy also attempted to conceal her crimes by using money left in the Settle One bank account to make monthly mortgage payments on various unpaid mortgages and, in some cases, Murphy even stole one homeowner's new mortgage loan money and used it to pay off another homeowner's previously unpaid mortgage.



• In the three months, beginning in April of 2009 and ending in June of 2009, Murphy orchestrated the preparation and submission of a series of false mortgage documents in connection with five mortgage loan closings that resulted in her, through the Settle One bank account, receiving over one million dollars from two home mortgage lenders: Wells Fargo Bank and Live Well Financial.



• In turn, Murphy then stole over fifty thousand dollars in loan money from each of five Westchester County homeowners, including her own elderly father, all for her own personal financial gain and to cover up her continuing criminal activity.

For the Westchester County DA press release, see Former North Castle Republican Chairwoman Indicted For Mortgage Fraud.

(1) According to the press release, a nineteen count indictment against Loronda Murphy charges her with:

• one count of Residential Mortgage Fraud in the First Degree, a class “B” Felony,
• one count of Residential Mortgage Fraud in the Second Degree, a class “C” Felony,
• five counts of Grand Larceny in the Second Degree, class “C” Felonies,
• ten counts of Falsifying Business Records in the First Degree, class “E” Felonies,
• one count of Scheme to Defraud in the First Degree, a class “E” Felony,
• one count of Conspiracy in the Fifth Degree, a class “A” Misdemeanor.

In addition, a three count indictment against Scott Forcino charges him with:

• one count of Scheme to Defraud in the First Degree, a class “E” Felony,
• one count of Conspiracy in the Fifth Degree, a class “A” Misdemeanor,
• one count of Criminal Facilitation in the Fourth Degree, a class “A” Misdemeanor.

(2) To the extent attorney Forcino is found guilty of playing a role in this ripoff and fails to cough up restitution, The Lawyers’ Fund For Client Protection Of the State of New York may find itself being asked by the victims to step up and cover at least some of the losses they suffered. The Fund exists to protect legal consumers from dishonest conduct in the practice of law in the state, to preserve the integrity of the bar, to safeguard the good name of lawyers for their honesty in handling client money, and to promote public confidence in the administration of justice in the Empire State. It attempts to secure these goals by, among other things, reimbursing client money that is misused in the practice of law.

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 (now includes Canadian attorney ripoff funds; 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.

Questions Surrounding Applicability Of State Consumer Protection Law To Mortgage Servicer Activities To Be Decided By Ohio Supreme Court

From the Supreme Court of the State of Ohio:

MOTION AND PROCEDURAL RULING

Certified Question of State Law, United States District Court, Northern District of Ohio, Western Division, Case Nos. 3:10-cv-02537-JZ and 1:10-cv-02709-JZ. On review of preliminary memoranda pursuant to S.Ct.Prac.R. 18.6. The court will answer the following questions:

1. "Does the servicing of a borrower's residential mortgage loan constitute a `consumer transaction' as defined in the Ohio Consumer Sales Practices Act., R.C. 1345.01(A)?"

2. "Does the prosecution of a foreclosure action by a mortgage servicer constitute a `consumer transaction' as defined in the Ohio Consumer Sales Practices Act., R.C. 1345.01(A)?"

3. "Is an entity that services a residential mortgage loan, and prosecutes a foreclosure action, a `supplier . . . engaged in the business of effecting or soliciting consumer transactions' as defined in the Ohio Consumer Sales Practices Act., R.C. 1345.01(C)?'"

O'Donnell, J., dissents.

Source: 08/24/2011 Case Announcements, 2011-Ohio-4217 (State ex rel. DeWine v. GMAC Mtge. L.L.C.).

Woman Gets 11 Years For Swindling Elderly Couple In Foreclosure Rescue Ripoff Perpetrated While On Bail On Earlier Housing Scam Charge Targeting Nuns

In Santa Barbara, California, KEYT-TV Channel 3 reports:

• A local woman who stole money from an elderly Montecito couple was sentenced to state prison Monday. The Santa Barbara District Attorney's Office says a judge sentenced Denise D'Sant- Angelo, 56, to 11 years in state prison.



• D'Sant-Angelo was found guilty of financial elder abuse, grand theft and unauthorized practice of law in March 2010 while out on bail for stealing nearly $3,000 from a group of elderly nuns.

Source: Woman Sentenced In Elder Abuse Case.

See also, The Santa Barbara Independent: Nun Scammer Found Guilty of Financial Elder Abuse (Jury Convicts Denise D'Sant Angelo on 12 Felony Counts):

• A Santa Barbara jury [] found Denise D'Sant Angelo guilty of embezzling $30,000 from an elderly couple whose home was about to go into foreclosure.



• The bespectacled fraudster, convicted last year of lining her pockets with money meant to save housing for a group of nuns, convinced the husband and wife she was skilled in the ways of financial and legal maneuvering and could save their home if they paid her.

Michigan AG: Upfront Fee F'closure Rescue Ripoffs Not A 'Civil Matter' As Prosecutors Score Criminal Convictions On False Pretenses, Conspiracy Counts

In Allegan County, Michigan, The Holland Sentinel reports:

• A Fennville woman was convicted Thursday on nine charges relating to a mortgage fraud rescue scheme, according to the state attorney general’s office.



• Tonia Raisbeck, 36, was accused of collecting upfront fees of $795 to $1,500 from homeowners with the promise of securing new mortgages with lower interest rates. She never secured the mortgages, however, and several victims lost their money and their homes to foreclosure, authorities said.



• Raisbeck was found guilty on nine counts Thursday, including false pretenses and conspiracy to commit false pretenses, as well as for violating the Credit Services Protection Act and conspiracy to violate the Credit Services Protection Act.



• Raisbeck will be sentenced at 9 a.m. Sept. 23 before Circuit Court Judge Marge Baker in Allegan County Circuit Court.

Source: Fennville woman convicted for mortgage scheme.