Saturday, October 1, 2011

California City Begins Using Violations Of Public Health Ordinance As Quick, Easy Way To Boot Squatters In Vacant F'closed Homes Without Court Process

In Manteca, California, the Manteca Bulletin reports:

  • Every neighborhood seems to have one. And they’re not hard to spot. They are foreclosures with a twist. Homes owned by small-time landlords that are in process of being repossessed by the bank. The investor’s name is on the tax rolls but they’ve been missing in action even before the property started going south. Even if you know the name of the bank that holds the loans it does no good until the legal foreclosure process is completed.

  • That process is now taking upwards of a year or more thanks to the backlash from the robo signing scandal. The tenants were served eviction notices but they either didn’t leave or they came back. They are anything but good neighbors.

  • They often don’t have water. The city turns it off for non-payment and then they bypass it. That results in the city removing the meter and shutting off the flow of water.

  • Electricity and natural gas bills have been cut off for non-payment. Some use noisy generators to keep the lights going.Others - if they have a swimming pool - use that stagnant water to flush toilets.


  • You call the police. They respond. They are caught in a twilight zone. They can’t order anyone out of the home or arrest them for trespassing because they don’t have a complaint from the owner. It is a hassle to find out who the mortgage holder is but that is an exercise in futility since the legal owner is still the party the bank is foreclosing on.

  • So what can be done? In extreme cases, the city has stepped up its game. This week, City Manager Karen McLaughlin working with municipal workers exercised one of its few options.

  • They declared such a home uninhabitablefor public health reasons. They have the power to do that when there is no water and electricity to a house.

  • The posting gives police the ability to chase trespassers - a polite name for squatters - off the property. [...] McLaughlin correctly notes the city’s legal options are pretty limited in such cases. But she emphasized the city intends to work diligently and do what it can to try to get the problem under control.

For the story, see No water, no power = home uninhabitable.

Former Charleston Navy Base Foreclosure Leads To Boot For Homeless Veterans Benefitting From McKinney Act

In Charleston, South Carolina, The Post and Courier reports:

  • Since the Navy shuttered its base in North Charleston, more than 2,000 homeless veterans have lived there, rent-free, as they battled drug and alcohol addiction and tried to repair their lives. They resided in the "Veterans Villas," a series of neat brick ranch homes along Manley Avenue first built for naval officers and their families. Now that this property is owned by S.C. Public Railways, the few dozen veterans there are preparing to move.

  • Melissa Kelly, director of the Chesapeake Health Education Program, said the organization will consolidate operations at its site off Ashley Phosphate Road rather than sign a lease with S.C. Railroad Railways.

  • The Chesapeake Health Education Program, which has run the villas since 1998, originally got access to the properties through the McKinney Act -- a federal law that addressed homelessness in part by giving agencies that serve the homeless free access to surplus federal property.

  • That act no longer applies now that the base property has changed hands. The Noisette Co. had allowed Chesapeake to continue to occupy the homes at no cost -- the nonprofit pays insurance and maintenance costs -- but when the Public Railways acquired the property last year after Noisette's foreclosure, things began to change.


  • For the veterans, who stay in the program about four months on average, the move will mean a longer commute to their treatment at the Veterans Administration health center in downtown Charleston.

  • Their new neighborhood also won't have the same quietude -- or the quality and quantity of nearby parks or the chance to fish in the nearby creek. A regular narcotics support group meeting, known as "Staying Alive," also will relocate.

  • Kelly said the move is most unsettling to some older veterans who have grown familiar with the former base.

For more, see Homeless veterans to leave old base site (Group to relocate men to Ashley Phosphate facility).

Go here for more from HUD on the McKinney-Vento Act.

Landowner's Unpaid Water Bills & Mortgage Payments, Failing Sewage System Threaten To Drive Mobile Home Park Residents Out Of Their Homes

In Clermont County, Ohio, WKRC-TV Channel 12 reports:

  • Dozens of worried mobile home park residents crowd into a Clermont County courtroom, anxious to know if they're going to be forced out of their homes because their landlord hasn't been paying his bills.

  • If that scenario sounds familiar, that's because it's being repeated in courtrooms across the Tri-State with properties owned by the same man ... Lanny Holbrook. Holbrook owns at least 31 different properties across the area, and one by one, they're going into foreclosure, as millions of dollars in debts against him mount.

  • Today, the scene was a Clermont County Courtroom and Local 12's Rich Jaffe says one of the biggest concerns is raw sewage. Clermont County officials are concerned this mobile home park may have to be shut down, because the owner hasn't been paying the bills on this park and others, and sewage from this park is allegedly being channel straight into the Little Miami River.

  • The sewage system has failed health department inspections over and over again. You can see the putrid sludge accumulating, even though the system is running at full tilt, with the Little Miami just beyond.

  • Today in court, property owner Lanny Holbrook agreed with health department findings. He also agreed he owes more than 28,000 dollars in water bills. He also agreed he owes close to half a million dollars in back taxes on the three mobile home parks.

For more, see Property Owner In Court Again.

Outfits Peddling Anti-Homestead Tax Exemption Fraud Software, Services Target Cash-Strapped Counties Desperate For Funds

From a press release from LexisNexis regarding a recent conference of county tax assessment administrators:

  • LexisNexis will be conducting demos of their Homestead Exemption Fraud Detection Solution on the exhibit floor at Booth #506. Attendees will learn how leveraging the combined power of public records and advanced search technology enables cities to discover millions of dollars in revenue from back taxes and new revenue assessments.

Source: Remarks to Focus on Leveraging Public Records to Detect Homestead Exemption Fraud and Boost Tax Revenue.


In Forsyth County, Georgia, Forsyth News reports:

  • Forsyth County commissioners expressed interest Tuesday in a plan to attack tax fraud. The proposal, aired during a work session, could net the county up to $2.5 million in three years.

  • The money would come from taxes owed by residents claiming more than the one homestead exemption allowed, said Royce Lain of Affiliated Computer Services Inc.

  • The Fairfax, Va.-based company offered to launch a nationwide search of records to determine which Forsyth County homeowners may be taking advantage of the exemption, Lain said. From there, the service would narrow the results and present cases to the board of assessors.

For more, see Group offers to hunt down tax cheats (Proposal would target homestead exemptions).

Cops Pinch Man Facing F'closure For Running Indoor Pot Farm Out Of Home; Suspect Said He Needed To Supplement Income After Boss Cut His Hours At Work

In Oak Lawn, Illinois, The SouthtownStar reports:

  • A 34-year-old Oak Lawn man who allegedly was growing more than a dozen marijuana plants at his home faces drug charges after an anonymous tip led police to the home Saturday, Oak Lawn police said.

  • Mark A. Korzeniewski, [...] was charged with manufacturing and possessing marijuana with intent to deliver, possession of drug paraphernalia and unlawful production of marijuana plants, police said.

  • Police said they found five marijuana plants in the back yard and 11 plants in a “grow room” in the basement. The room also had heat lamps, a ventilation system on a timer, fertilizers and a digital scale. Police also found several clear plastic bags that contained about 290 grams of marijuana, police said.

  • Korzeniewski, who gave police consent to search the house, told police he was growing the marijuana plants to supplement his income. He said his house is in foreclosure and his hours at work have been cut.

Source: Police: Home in foreclosure, so Oak Lawn man grew pot to sell.

Friday, September 30, 2011

State Bar Gives Golden State Counsel Six Months In Penalty Box For Violating Tenants' Rights In Running Fraudulent Robosigning F'closure Eviction Mill

In San Francisco, California, Highland News reports:

  • Two years after Tenants Together demanded that attorney David Endres stop illegally evicting tenants, the State Bar of California has suspended Endres from practice. Endres has been notorious for pursuing eviction actions on behalf of major banks after foreclosure in violation of federal, state and local law. The Bar suspended Endres from practice for six months and ordered Endres to pay the costs of the proceeding in the amount of $4,000.

  • Dean Preston, Executive Director of Tenants Together, California’s statewide organization for renters’ rights, welcomed the news of disciplinary action, but called for stronger sanctions: “We are pleased to see the Bar taking action to police unethical eviction lawyers, but this 6-month suspension is not nearly enough. David Endres should be disbarred, if not put in jail. His fraudulent robo-signing eviction mill caused the mass eviction of thousands of tenants and undermined the integrity of the judicial system. He should never be permitted to practice law in this state again.”


  • Endres has handled thousands of eviction cases on behalf of major financial institutions including U.S. Bank, HSBC, and Aurora Loan Services. The August 23, 2011 suspension order from the State Bar notes that he filed over 1,000 cases between July 1, 2009 and December 31, 2009 alone.

  • To accomplish these mass filings, Endres had non-attorney staff prepare verified pleadings and sign on his behalf.

  • Endres knowingly submitted false verifications to the court. The Bar concluded that “respondent aided the unauthorized practice of law, in willful violation of Rules of Professional Conduct, Rule 1-300(A)” and “sought to mislead judicial officers, in willful violation of Business and Professions Code section 6068(d).”

For more, see California Bar Suspends Attorney for Illegal Foreclosure Evictions of Tenants (Statewide Tenant Organization Calls for Stiffer Sanctions).

See also, Davis attorney suspended in foreclosure evictions probe.

Cops Bust Foreclosed Homeowner On Charges Of Stripping Fixtures From Former Home, Using Craigslist Ads To Unload Goods

In Woodbury, Minnesota, KSTP-TV Channel 5 reports:

  • A 35-year-old Woodbury woman is accused of selling thousands of dollars worth of fixtures and property, after her home fell into foreclosure. According to the criminal complaint, Riana Bennerotte made her first court appearance on September 14 on charges of defeating security on realty.

  • According to Woodbury Police, Bennerotte and her then husband obtained a mortgage of about $359,000 to purchase the property in July of 2005. The couple defaulted on their mortgage in August of 2008, but were given time to correct the default. The loan was assigned to US Bank in 2009. During this time, the couple separated, and Bennerotte's husband moved out of the home in January of 2010.

  • Bennerotte was served with a foreclosure notice on January 14, 2010, and a foreclosure sale occurred on March 25, 2010. A six month redemption period went into affect, in which she was permitted to stay in the home.(1)

  • During this time investigators learned Bennerotte was placing ads on Craigslist and other online services to sell items from the home. Among other items, the ads included a china hutch, office suite, and chandelier. Bennerotte's phone number was listed with each ad as the contact.(2)

For more, see Woodbury Woman Accused of Gutting Foreclosed Home.

See also, Woodbury Bulletin: Felony charge filed against woman accused of gutting foreclosed Woodbury home (A Woodbury woman whose home fell into bank ownership after foreclosure is accused of gutting the house and selling off tens of thousands of dollars in fixtures before she moved out).

(1) See State v. Zacher, 490 NW 2d 149 (Minn. App. 1992) for an example of one property owner who successfully scored a reversal of a conviction of this charge where the property was taken after the sheriff's foreclosure sale had taken place (owner removed the fixtures one day before the end of the statutory six-month redemption period).

(2) See Minnesota Prosecutors Invoke Seldom-Used Law To Charge Office Building Owner In Foreclosure With Removing/Damaging Property Subject To Mortgage for another story on a criminal prosecution of a real estate owner in foreclosure who was charged with stripping the fixtures from his property.

Vacant Foreclosed Home Hijacking Incidents On The Rise In Los Angeles

In Los Angeles, California, Fox Channel 11 reports:

  • Law enforcement officials say that when houses go into foreclosure, well-organized criminals break into the homes and create illegal titles. They set up the utilities in their names and they live there until they are evicted. In other cases, the criminals take over the foreclosed houses and then rent them to unsuspecting victims.

  • We approached the people living in one Hollywood Hills home that residents in the neighborhood accused of being squatters. Bank officials say they want them out and law enforcement is also investigating.

  • When FOX 11's Gina Silva approached them -- after an ugly confrontation -- they told us they paid $5,000 to rent the house. The man yelling obscenities in the video is rapper, J.O. Felony. His girlfriend told us they rented the house and insisted they are not squatters.

  • A lot of innocent people are caught up in these illegal foreclosure scams. Los Angeles city attorneys tell us they prosecute one case a week.

Source: Squatting Cases on the Rise in Los Angeles.

Thursday, September 29, 2011

WPB Cops Pinch Now-Disbarred Title/Closing Attorney For $800K+ In Real Estate Escrow Account Ripoffs

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

  • A disbarred Wellington attorney defrauded clients out of more than $800,000 while representing them in real estate transactions,(1) West Palm Beach police said. Christian N. Scholin, 45, was booked into the Palm Beach County Jail Tuesday night after being charged with grand theft, organizing a scheme to defraud and practicing law while disbarred or suspended.

  • Scholin's alleged actions date back to 2004, when he was operating International Title Company of the Palm Beaches in West Palm Beach, a probable cause arrest affidavit stated.

  • According to the affidavit, Scholin represented a woman living in Finland with the sale of her Lake Worth home in May 2004. The house closed for $800,000, and she was due $733,125. Scholin allegedly deposited the money into a Wachovia account and made several payments from the account to the client. But $468,000 was not delivered and instead was deposited into another bank account, the affidavit stated.

  • Scholin's actions led to his suspension from practicing law in October 2009, and he was disbarred by the Florida Supreme Court in July 2010, the affidavit stated. During his suspension, Scholin represented another woman during the attempted short sale of a Royal Palm Beach townhouse. The closing occurred in February of 2010, with the woman and a buyer from Finland believing that $245,158.66 in unpaid principal had been negotiated by Scholin and satisfied by the short sale.

  • The buyer wired $74,000 to Scholin, the affidavit said. But Scholin did not use the money to satisfy his client's mortgage and kept it instead, the affidavit said. The woman's home went into foreclosure, causing a judgment against her in the amount of $277,790, according to the affidavit.

Source: Disbarred Wellington attorney charged with defrauding clients out of $800,000.

(1) The Florida Bar's Clients' Security Fund was established to reimburse clients who have suffered a loss due to misappropriation or embezzle­ment by a Florida-licensed attorney.

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

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

NYC-Area Title Insurance Agency Operator Gets 20 Months For Misappropriating Million$ In Client Cash From Escrow Accounts In Real Estate Transactions

From the Office of the U.S. Attorney (New York City):

  • PREET BHARARA, the United States Attorney for the Southern District of New York, announced that BRIAN H. MADDEN, the former president and co-founder of a title insurance agency, Liberty Title Agency, LLC [...], was sentenced [...] to 20 months in prison for misappropriating and embezzling escrow and other client funds from Liberty Title and two other insurance agencies he controlled and operated in New York and Suffolk counties.


  • Beginning around early 2008, MADDEN misappropriated millions of dollars of escrow and other client funds by transferring and commingling those funds among various bank accounts held by Skyline Title, GNY Liberty, and Liberty Title. MADDEN then used the misappropriated funds to sustain LibertyTitle's operations and to make significant withdrawals of monies for his personal use.

For the U.S. Attorney press release, see President Of Title Insurance Agency Sentenced In Manhattan Federal Court To 20 Months In Prison For Misappropriating Millions Of Dollars Worth Of Client Funds.

Closing Agency Owner Gets 3+ Years For Snatching Escrow Cash; Took $200K To Buy Out Prior Owners; Says 'I Didn't Steal The Loot, I Only Borrowed It!'

In Missoula, Montana, the Ravalli Republic reports:

  • The owner of a Florence escrow company will spend 3 1/2 years in prison and be required to pay close to $500,000 in restitution after being convicted of wire fraud and money laundering. Stacey M. Hebuck, 37, of Florence, pleaded guilty earlier this month before U.S. District Judge Donald W. Molloy in a plea agreement that dropped seven additional counts.

  • Court records said Hebuck manipulated financial transactions associated with five different real estate closings handled by her company, New Pinnacle Title LLC, and its predecessor, Pinnacle Title and Escrow, between June 2008 and January 2009.

  • Hebuck was charged with diverting funds obtained by the escrow companies into her personal bank accounts. The diverted funds were wired to banks outside of Montana.

  • Rather than spending the money to pay off existing mortgages, Hebuck used the money to buy a $31,000 pickup truck, $41,000 horse trailer and $17,000 for facial plastic surgery. She also used $90,000 to pay off her parent's mortgage on land at Seeley Lake.

  • The first $200,000 she diverted while still an employee of Pinnacle Title and Escrow was spent to buy the business from its previous owners.(1)

  • In some cases, Hebuck continued to make monthly mortgage payments on loans that were supposed to be closed. Twice she paid the entire balance on mortgages with smaller payoff amounts.

  • When investigators interviewed Hebuck about the fraud in February 2009, she admitted the essence of what she'd done, but referred to her actions as "business practices." She told investigators she planned pay off all five loans as her business grew.

  • In a written statement, Hebuck said she felt she was borrowing the money, not stealing it.

For the story, see Florence woman sentenced to prison for fraud, money laundering.

(1) Go here for the Notice of Proposed Action from the office of the Montana insurance regulator containing more details about Hebuck's antics, including the fact that she had a previous felony conviction in California for welfare fraud, and the fact that, in ripping off the escrow account of $200K+ to buy out the escrow agency owners, she took ownership of the outfit under her sister's name.

'Stagecoach To Hell' Accused Of More Sleaze; Homeowners' Attorney: "They Forged Signatures, They Backdated Documents. We've Got Them Cold!"

In Las Vegas, Nevada, the Las Vegas Review Journal reports:

  • A Las Vegas attorney who represents people facing foreclosure has accused Wells Fargo of forging loan documents. The allegation is the latest sign that efforts to hold mortgage lenders accountable are escalating in Nevada.

  • In court papers filed this month in Clark County District Court, attorney Dave Crosby alleged bank employees committed forgery and fraud in making a $350,000 loan to a father of four who was unemployed at the time. "They forged signatures, they backdated documents," Crosby said. "We've got them cold."

  • Crosby said the bank has presented two deeds of trust for the same property. One bears the signature of Olivia A. Todd, who on Jan. 27, 2010, was identified as an assistant secretary with MERS, Inc., a mortgage servicer from the Phoenix area and a co-defendant in the lawsuit.

  • But on Feb. 16, 2010, Todd's signature appears on a second deed of trust, where she is identified as the firm's president. Both assignments were notarized as authentic, Crosby said in court papers.

  • Crosby made his allegations in a request to have a judge review three failed mediations between him and his clients, Ryan and Mical Henderson of Las Vegas, and lawyers with Wells Fargo, formerly Wells Fargo Home Mortgage.


  • Crosby said he suspects robo-signing is widespread in Nevada. One of his cases was the subject of an appeal filed with the state's high court, and he used the lender's own words against it. Supreme Court justices found in favor of Crosby's client, Moises Leyva, ruling unanimously that lenders have an absolute duty to strictly follow foreclosure mediation rules exactly as written.(1)

For more, see Wells Fargo accused of forging loan documents.

(1) See Defective Assignment, Failure To Produce Note Endorsement Sanctionable Under Nevada Mediation Rules; Halts F'closures; Another Lower Court Reversal.

Elderly Fresno-Area Senior Cops Plea To Grand Theft Charges In Vacant Foreclosed Home Hijacking Scam; Rented 13 Houses, Scouted 150 Others, Say Cops

In Fresno, California, KMJN Radio reports:

  • A Fresno man admitted his role in an elaborate foreclosure scam late Monday afternoon -- a scam in which he rented out foreclosed homes that he did not own. Sam Haley, 69, pleaded no contest -- the equivalent of guilty -- to three counts of grand theft. Haley did not have a real estate license, but he was able to find foreclosed homes -- then rent them out.

  • When he was arrested three years ago, police say he was renting out 13 homes, had another 19 people ready to rent and was scouting out another 150 homes in the Fresno area. Police Chief Jerry Dyer called him nothing more than a scam artist.

  • His plea could put Haley in jail for a year, but his lawyer will argue that he's suffering from post traumatic stress disorder from years in the military and ask a judge to give him probation and perhaps treatment. Haley agreed to pay $35,000 in restitution.(1)

Source: Alleged Fresno Scam Artist Admits It.

(1) I wonder if Haley's agreement to cough up $35K is part of a deal to buy his way out of any possible jail/prison time.

Wednesday, September 28, 2011

'Criminal Charges Coming To A Mortgage Servicing Racket Near You!': Nevada AG

HousingWire reports:

  • Mortgage servicers could soon face criminal actions in Nevada, according to the state Attorney General Catherine Cortez Masto.

  • Masto reportedly opposed releasing the largest servicers from future criminal liability. Earlier in September, Iowa AG Tom Miller, who is leading the settlement talks, pledged the final agreement would not indemnify the banks from any criminal actions and not all civil suits. Miller's office further clarified that immunity from criminal prosecution is not and never has been part of the settlement negotiations.

  • "Criminal actions are likely coming to the industry soon," a spokesperson for Masto's office told HousingWire Wednesday, though no other details were provided.

For more, see Nevada AG: Criminal actions coming to servicing industry soon.

Kentucky AG On Foreclosure Fraud Probe: "There Should Be Absolutely No Criminal, Civil Immunity Given To Banks For Activity Not Yet Investigated!"

The Huffington Post reports:

    li>Kentucky Attorney General Jack Conway has added his name to a list of state law enforcers who fear that a settlement being negotiated among government officials and big banks isn't backed by a sufficient investigation into potential wrongdoing.

  • As law enforcers approach a deal with banks to settle allegations that the companies improperly foreclosed on American homeowners, the banks are pushing for a broad release from liability for actions that have not yet been fully investigated, Conway said in a Thursday email to the Progressive Change Campaign Committee, obtained by The Huffington Post.

  • By raising these concerns, Conway has aligned himself with New York Attorney General Eric Schneiderman and law enforcers from other states who have questioned the adequacy of the groundwork underlying the settlement talks.

  • "Today's economic crisis was caused by Wall Street acting improperly," Conway, a Democrat, said in the email. "Every American has paid the price -- with families losing their homes, investors losing their money, and many Americans losing their jobs. There should be absolutely no criminal or civil immunity given to banks for activity that has not yet been investigated."

For more, see Kentucky Attorney General Backs New York's Schneiderman In National Foreclosure Settlement Talks.

Federal Appeals Court Affirms 10-Year Prison Sentence For Notorious Central Florida Foreclosure Rescue, Home Equity Scammer

From a recent ruling from a federal appeals court:

  • Peter James Porcelli, II, appeals his sentence for one count of mail fraud, in violation of 18 U.S.C. § 1341. He raises four issues on appeal.

    First, he argues that the district court erred in applying the U.S.S.G. § 3B1.3 offense-level enhancement for abuse of trust or use of a special skill, particularly in light of its simultaneous application of the § 3B1.1 aggravated-role enhancement.

    Second, he claims that the financially distressed victims facing home foreclosure were not "vulnerable victims" for purposes of § 3A1.1(b)(1).

    Third, he contends that the portion of the forfeiture money judgment that exceeded the loss amount constituted a violation of the Excessive Fines Clause of the Eighth Amendment.

    Finally, he argues that the decision to impose the instant sentence to run consecutively to his sentence in a Southern District of Illinois telemarketing-fraud case was substantively unreasonable.

    For the reasons set forth below, we affirm.

For the ruling, see U.S. v. Porcelli, No. 10-14777 (11th Cir. September 21, 2011) (unpublished).

(1) Among the observations made by the appeals court in ruling against this lowlife are those appearing in the following five excerpts (anyone going after dirtbags lilke this guy, either in criminal prosecutions or civil lawsuits (either in state court or federal court), would be well advised to work into their presentations in court the following points in seeking stiff criminal penalties, and, in the case of civil lawsuits, stiff compensatory and punitive damages):

  1. Porcelli and the others searched for homeowners who were in jeopardy of losing their homes through foreclosure, specifically targeting those who still had equity in their homes.

  2. The probation officer calculated that 68 homeowner-victims borrowed a total of approximately $1.8 million. Of that amount, approximately $1.2 million constituted fraudulent loan fees and costs, and, thus, was the "loss and restitution" amount owed to the victims.

  3. At the first sentencing hearing, several victims testified that Porcelli had caused them emotional and physical distress by manipulating, intimidating, and confusing them into the agreements, then harassing and threatening them and stealing their homes after they defaulted. One victim experienced high blood pressure and a heart attack as a result of Porcelli's actions, another was seeing a psychologist and taking considerable medication, and a third attempted to commit suicide.

  4. "[T]he primary concern of § 3B1.3 is to penalize defendants who take advantage of a position that provides them freedom to commit or conceal a difficult-to-detect wrong." Garrison, 133 F.3d at 838 (quotation marks omitted). The court "must distinguish between those arms-length commercial relationships where trust is created by the defendant's personality or the victim's credulity, and relationships in which the victim's trust is based on [the] defendant's position in the transaction." Id. (quotation marks omitted).

    "Fraudulently inducing trust in an investor is not the same as abusing a bona fide relationship of trust with that investor." United States v. Mullens,
    65 F.3d 1560, 1567 (11th Cir. 1995).

    Here, Porcelli falsely held out Safe Harbour as a nonprofit foundation dedicated to "foreclosure relief." Victims contacted Porcelli in reliance on that representation, as well as on the misrepresentations that Safe Harbour was established to "keep [people] in [their] home[s]," "give [them] a second chance," "[s]ave [their] credit," and protect them from "predators" who wanted to profit from their misfortunes.

    Porcelli then took advantage of the victims' belief that he was a nonprofit foreclosure-relief counselor in order to induce them to take out second mortgages through Silverstone Lending or another of his for-profit lenders. Silverstone Lending's ability to make such mortgages and to create the attendant fees depended on Porcelli's state-issued mortgage-lending license.

    Under all the circumstances, the district court did not clearly err in finding that Porcelli held, or falsely led the victims to believe that he held, a bona fide relationship of trust with them. See § 3B1.3 & comment. (n.3); Garrison, 133 F.3d at 837.

    Furthermore, Porcelli's interactions with the victims were not limited to "arms-length" lending transactions in which Porcelli, as a representative of Silverstone Lending, "[f]raudulently induc[ed] trust in" the borrowers. See Garrison, 133 F.3d at 838; Mullens, 65 F.3d at 1567.

    Rather, Porcelli also used his falsely assumed position as a nonprofit foreclosure-relief coordinator to manipulate and intimidate the victims into believing that a second mortgage from Silverstone Lending was their only remaining option, and, in doing so, caused the victims to be more susceptible to signing the exorbitant mortgage contracts. Thus, the court did not err in finding that Porcelli abused his falsely assumed position of trust with the victims. See § 3B1.3 & comment. (n.3); Garrison, 133 F.3d at 837-38; Mullens, 65 F.3d at 1567.

  5. "If the defendant knew or should have known that a victim of the offense was a vulnerable victim," he is subject to a two-level enhancement. § 3A1.1(b)(1).

    A "vulnerable victim" is a victim "who is unusually vulnerable due to age, physical or mental condition, or who is otherwise particularly susceptible to the criminal conduct." Id., comment. (n.2). The adjustment applies when the defendant selects his victim due to his perception of the victim's vulnerability to the offense. United States v. Day,
    405 F.3d 1293, 1296 (11th Cir. 2005).

    Thus, in determining whether the victims were "vulnerable," we focus on the facts known to the defendant when he decided to target the victims, not on the harm actually suffered by the victims. United States v. Page,
    69 F.3d 482, 489 & n.6 (11th Cir. 1995). "It is clear that having bad credit or otherwise being in a precarious financial situation is a `vulnerability' to fraudulent financial solicitations . . . ." Id.

    When a fraudulent loan scheme is "specifically addressed . . . to persons with bad credit," it "target[s] the most desperate victims." Id. at 490. "We will not absolve. . . defendants of their culpability for having targeted `vulnerable victims' simply because, in casting out their net, they happened to ensnare and defraud some individuals who did not share this vulnerability." Id. at 491-92.

    Porcelli specifically targeted individuals who were financially distressed and were in danger of losing their homes through foreclosure. He marketed Safe Harbour as a nonprofit organization that would "give people a second chance when no one else w[ould]," and he wrote the marketing materials to appeal to people who were facing "financial pressures," bankruptcy, harassment by creditors, and "ruin[ed] . . . credit ratings."

    Although Porcelli suggests that some or all of the victims might have lost their homes despite their involvement with him, the actual harm suffered is irrelevant to this analysis. See Page, 69 F.3d at 489 n.6.

    Furthermore, his speculation that some of the victims might not have been financially distressed or might have sought the mortgages for reasons other than imminent foreclosure does not prove that the vulnerable-victim finding was plainly erroneous. See Massey, 443 F.3d at 818; Page, 69 F.3d at 491-92. The district court did not plainly err in finding that the victims were unusually susceptible to the mortgage-fraud scheme, that Porcelli had targeted them for that reason, and, thus, that the vulnerable-victim enhancement applied. See § 3A1.1(b)(1) & comment. (n.2); Massey, 443 F.3d at 818; Page, 69 F.3d at 489-90.

Report Shines Light On Effects Of Robosigning Racket On Prince William Land Document Public Records

In Prince William County, Virginia, The Washington Post reports:


  • A team of more than 30 VOICE volunteers found widespread irregularities in a random selection of more than 1,600 real estate records, which amount to 10 percent of the foreclosures filed between 2004 and 2009, when foreclosures in Prince William peaked.

  • They found that one employee of a loan processing firm based in Jacksonville, Fla., signed foreclosure documents as an official for seven different banks. They also found mismatched signatures for the same notary public.

For more, see Probing Pr. William foreclosures, group sees widespread irregularities, ‘robo-signed’ papers.

Tuesday, September 27, 2011

U.S. Labor Department To BofA: 'You Illegally Fired Mortgage Fraud Whistleblower For Doing Her Job - Now Pay Her $930K & Give Her Back Her Job!'

Michael Hudson of the The Center for Public Integrity's iWatch News reports:

  • In the summer of 2007, a team of corporate investigators sifted through mounds of paper pulled from shred bins at Countrywide Financial Corp. mortgage shops in and around Boston.

  • By intercepting the documents before they were sliced by the shredder, the investigators were able to uncover what they believed was evidence that branch employees had used scissors, tape and Wite-Out to create fake bank statements, inflated property appraisals and other phony paperwork. Inside the heaps of paper, for example, they found mock-ups that indicated to investigators that workers had, as a matter of routine, literally cut and pasted the address for one home onto an appraisal for a completely different piece of property.

  • Eileen Foster, the company’s new fraud investigations chief, had seen a lot of slippery behavior in her two-plus decades in the banking business. But she’d never seen anything like this.


  • More surprises followed. She began to get pushback, she claims, from company officials who were unhappy with the investigation. One executive, Foster says, sent an email to dozens of workers in the Boston region, warning them the fraud unit was on the case and not to put anything in their emails or instant messages that might be used against them. Another, she says, called her and growled into the phone: “I’m g--d---ed sick and tired of these witch hunts.”

  • Her team was not allowed to interview a senior manager who oversaw the branches. Instead, she says, Countrywide’s Employee Relations Department did the interview and then let the manager’s boss vet the transcript before it was provided to Foster and the fraud unit.

  • In the end, dozens of employees were let go and six branches were shut down. But Foster worried some of the worst actors had escaped unscathed. She suspected, she says, that something wasn’t right with Countrywide’s culture — and that it was going to be rough going for her as she and her team dug into the methods used by Countrywide’s sales machine.

  • By early 2008, she claims, she’d concluded that many in Countrywide’s chain of command were working to cover up massive fraud within the company — outing and then firing whistleblowers who tried to report forgery and other misconduct. People who spoke up, she says, were “taken out.”

  • By the fall of 2008, she was out of a job too. Countrywide’s new owner, Bank of America Corp., told her it was firing her for unprofessional conduct.”

  • Foster began a three-year battle to clear her name and establish that she and other employees had been punished for doing the right thing. Last week, the U.S. Department of Labor ruled that Bank of America had illegally fired her as payback for exposing fraud and retaliation against whistleblowers. It ordered the bank to reinstate her and pay her some $930,000.

For more, see Countrywide protected fraudsters by silencing whistleblowers, say former employees (iWatch News investigative series reveals legacy of corruption that still plagues Bank of America).

Federal Agency Inspector General: Fannie Had Chance To Catch Its Law Firms Manucaturing Phony Foreclosure Documents & Blew It!

The Associated Press reports:

  • Fannie Mae missed chances to catch law firms illegally signing foreclosure documents and its government overseer did not take the right steps to ensure Fannie was doing its job, federal regulators say.

  • The Federal Housing Finance Agency's inspector general said in a report Friday that Fannie failed to establish an "acceptable and effective" way to monitor foreclosure proceedings between 2006 and early 2011. Government regulators then failed to ensure it was complying with demands that it clean up its programs.

  • Mortgage industry employees — including law firms employed by Fannie Mae — signed documents they hadn't read and used fake signatures on foreclosure cases across the country.

  • The practices, known collectively as "robo-signing," resulted in a suspension of foreclosures last fall and a probe by all 50 state attorneys general into how corners were cut to keep pace with the crush of foreclosure paperwork.

For more, see Fannie Mae cited for failing to stop robo-signing.

For the Federal Housing Finance Agency Inspector General's report, Evaluation of Whether FHFA Has Sufficient Capacity to Examine the GSEs (EVL-2011-005, September 23, 2011).

Utah Federal Judge Boots Post-Foreclosure Eviction Case Back To State Court

In Salt Lake City, Utah, KCSG-TV reports:

  • St. George attorney John Christian Barlow, representating homeowners who have been lost their home to the Bank of America's foreclosure machine ReconTrust, may have finally achieved a measure of victory in the battle of Utah homeowners against ReconTrust fraudulent foreclosures.

  • Federal Judge Clark Waddoups Thursday returned to Utah Fifth District Court in St. George a case in which ReconTrust was named as a third-party in the complaint claiming immunity under the National Bank Act in an unlawful detainer action. (Court Order and Memorandum).

For more, see Bank of America-ReconTrust to Face State Court Judicial Process in Illegal Homeowner Foreclosures.

Homeowner's Post-F'closure Sale Bankrptcy Leaves Winning Bidder Holding The Bag Where Trustee's Deed Had Yet To Be Executed At Time Of Petition Filing

Lexology reports:

  • The United States Bankruptcy Court for the Central District of California recently held that the filing of a bankruptcy petition by a borrower can void a trustee sale even where the petition is filed after the trustee sale, so long as the borrower files the petition before the execution of the trustee's deed upon sale. In re: Gonzales 2011 WL3328508 (Bkrtcy. C.D.Cal. August 1, 2011).

  • A real property secured lender is generally aware that the borrower always has the option of filing a bankruptcy to stay the trustee sale prior to the trustee's sale but once a trustee sale occurs, most lenders believe the bankruptcy filing by the borrower does not impact the sale.


  • The Lender conducted a trustee sale and a third party successfully bid at the sale, paying $167,000 for the property. On the same day as the sale but after the sale, the borrower filed a Chapter 7 bankruptcy petition. The Trustee then issued the Trustee's deed, memorializing the sale to the third-party purchaser, and the deed was not recorded until a number of days later.

  • When the borrower was asked to vacate the residence, the borrower refused and the purchaser at the sale filed a motion for relief from the automatic stay in order to evict the borrower. The purchaser argued the deed issued by the foreclosure trustee was valid, notwithstanding the fact that it was not recorded until after the bankruptcy because it "related back" to the date and time of the foreclosure sale.

  • The Bankruptcy Court denied relief from the automatic stay and disagreed with a number of earlier Bankruptcy Court opinions, holding that the doctrine of relation back did not apply because California Civil Code section 1091 provides that title to real estate can pass only by deed or operation of law.

  • Since no deed had been executed prior to the bankruptcy filing, the title remained in the hands of the debtor/borrower. For a decision that disagrees, see In re: Garner 208 BR 698 (BK ND Cal 1997).

  • While you may disagree with the court, and the decision is not a binding precedent on any other court, it illustrates that once a trustee sale takes place, it is important to have the trustee's deed signed and recorded as soon as possible.

For the story, see It's important to record the trustee's deed promptly after foreclosure (may require subscription; if no subscription, GO HERE; or TRY HERE - then click the appropriate link for the story).

Monday, September 26, 2011

F'closing Banksters Score Another Big 'Win' As Lender Dodges Bullet, 'Games' Judicial System, 'Buys Off' Homeowner; Ohio Supremes Declare Issue "Moot"

Foreclosing banksters throughout the U.S. are presumably in a celebratory mood as they have recently succeeded in buying off another homeowner in foreclosure who had the temerity to bring a dubiously-conducted foreclosure case to the attention of a state supreme court.(1)

Go here for the one-page ruling issued by the Ohio Supreme Court declaring the case of U.S. Bank v. Duvall moot.(2)

Thanks to OHIO FRAUDclosure, who contributed a 'friend of the court brief" in this matter, for the heads-up on the ruling.(3)

Editor's Note:

According to U.S. Bank's Memorandum regarding notice of suggestion of mootness filed in this matter, there are at least two other cases percolating through the Ohio judicial system that present the same issues. It may be that the Ohio Supreme Court merely dismissed this case with the view of addressing the issues by hearing one or both of the other two cases.

Interestingly, according to footnote 1 of U.S. Bank's Memorandum regarding notice of suggestion of mootness, counsel representing the bankster in this case notes that it also represents the banksters involved in the other two cases. It remains to be seen if the banksters in those cases are equally successful in 'buying off' the respective homeowners in foreclosures with a 'free house.'

(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:

See also, F'closure Mill Dodges Appellate Court Reversal On Merits; Opts To 'Confess Error' Instead In Agreeing To Reversal Of Rubber-Stamped Lower Court Ruling, where, in an appeal by a homeowner of a lower court ruling favorable to a foreclosing bankster, the bankster agreed to 'confess error,' thereby leading a Florida intermediate appeals court to boot the case back to the lower court without actually ruling on the merits of the appeal. In effect, the foreclosure mill law firm/sweatshop may have intentionally thrown the case to avoid even more negative precedent and publicity that these faulty foreclosure cases have been generating.

(2) For earlier posts on this story, see:

(3) For some commentary from OHIO FRAUDclosure on the dismissal of this case, see Ohio Supreme Court's Shocking Decision in Landmark Case.

Government Suits Targeting Banksters' Recording Fee Dodge Begin To Attract Interest, Gain Traction

Bloomberg reports:

  • Bank of America Corp. is among a group of lenders that may face a wave of new lawsuits claiming cash-strapped counties were cheated out of millions of dollars by a system used for more than a decade to register mortgages.

  • Dallas County District Attorney Craig Watkins said state attorneys general and county officials across the U.S. have expressed interest in his lawsuit against Mortgage Electronic Registration Systems Inc. and Bank of America, filed in Texas state court on Sept. 21. Dallas County could be owed as much as $100 million in filing fees, he said.(1)

  • This is a big new front,” said Christopher L. Peterson, associate dean and professor at the University of Utah S.J. Quinney College of Law. “This case is scary because if Dallas wins then there are a lot of other counties around the country that are going to follow.”


  • Dallas County called that crisis “a direct result of the financial system’s commoditization, packaging, securitization and sale of tens of millions of mortgages throughout the U.S.,” according to the complaint. “Without the fiction of the MERS system, these activities would not have been possible.”

For more, see BofA Case May Be Followed by More Mortgage Suits by Counties.

(1) See also:

Dallas DA Fires Shot At MERS; Sues Suspected Racket, Others Over Alleged Mortgage Recording Fee Dodge Costing County Million$

In Dallas, Texas, the Dallas Observer reports:

  • District Attorney Craig Watkins on behalf of Dallas County, Texas, commenced an action against MERSCORP, Mortgage Electronic Registration System ("MERS"), Bank of America, and others seeking a judicial determination of whether the MERS System established by the mortgage banking industry to electronically track home mortgages violates Texas law related to the public recording of interests in home loans and the mortgages securing them.


  • Dallas County, Texas, believes that the MERS System may violate a number of laws applicable to the recordation of mortgages in Texas and has asked the court to order MERS and the other defendants to pay statutory penalties to Dallas County for having filed mortgage records which improperly claim that MERS is a beneficiary of tens of thousands of mortgages filed in the Dallas County deed records and for the filing fees that Dallas County would have been paid had all transfers of the subject mortgages been properly recorded in the deed records.

For more, see Craig Watkins Makes Good on Threat to Sue Mortgage Processor Over "Tens of Millions"

For the lawsuit, see Dallas County, Texas v. Merscorp Inc., et al.

See also, Reality Check: Dallas County, Texas Sues BofA through MERS for over $2.8 billion.

(1) The Dallas Observer describes the lawsuit as one:

  • [w]hich reads less like a lawsuit -- at least, initially -- and more like a treatise on the events leading up to the financial collapse of 2008, the history of the mortgage system in the U.S. and why "public recordation of mortgage interests in the U.S dates back to at least the middle of the 17th Century," augmented with charts, graphs and quotes from Frederic Mishkin and Paul Krugman.

'Forced Sale" Homestead Protection Pierced Where Out-Of-State Judgment Creditor Traces Cash Obtained Through "Constructive Fraud" To Florida Home

Lexology reports:

  • The District Court of Appeal of Florida upheld an exception to the Florida homestead exemption in a case where a trustee/deceased husband of the defendant breached his fiduciary duty as trustee in California, and the defendant later used the proceeds resulting from this breach to purchase real property in Florida.

  • Ordinarily the Florida homestead exemption law prevents the creditor of a Florida homeowner from taking the homeowner's residence in satisfaction of a monetary claim. In Hirchert, the defendant's deceased husband had been the beneficiary of a trust of which he was the trustee and was permitted to withdraw principal for his own benefit only if his personal assets had been fully dissipated.

  • After his marriage to the defendant, he withdrew a 75% interest in a California residence from the trust despite having other assets, sold the residence, and purchased a new California residence with the defendant. After the trustee's death, the defendant sold this residence and purchased a residence in Florida.

  • When the successor trustee of the trust learned that the defendant's husband had breached his fiduciary duty by withdrawing the 75% interest in the residence from the trust, he sued the defendant in California to recoup the proceeds received upon the sale of the residence. The successor trustee received a California judgment in his favor and sought to force the defendant to convey her Florida residence to a receiver to force a sale of the residence in satisfaction of his California judgment.(1)

  • The Florida court found that, while the Florida homestead exemption ordinarily protects a homeowner's equity from creditor claims, the exemption would not apply in this case because the trustee's original breach of his fiduciary duty was a "constructive fraud" that allowed for the application of an exception to the homestead protection. The Florida court then remanded the case to the trial court with instructions to enforce the injunction to convey title to the receiver and force the sale of the property.(2)

  • Although rare, this case illustrates one of the few exceptions in which an individual can lose the protection of the Florida homestead exemption despite no actual wrongdoing on their part.(3)

Source: Hirchert Family Trust v. Johnee Ann Alle Hirchert (District Court of Appeal of Florida, Fifth District, June 17, 2011) (may require subscription; if no subscription, GO HERE; or TRY HERE - then click the appropriate link for the story).

For the court ruling, see Hirchert Family Trust v. Hirchert, Case No. 5D09-3054 (Fla. App. 5th DCA, June 17, 2011).

(1) In addressing the enforceability of the foreign judgment in Florida, the court stated:

  • We do not believe that the Quitclaim Deed is entitled to full faith and credit because the California court did not have in rem jurisdiction over the property. However, the California court did have jurisdiction over Appellee and, therefore, the Postjudgment Order establishing a mandatory injunction requiring Appellee to convey the Kissimmee Property is entitled to full faith and credit.

    Robertson v. Howard, 229 U.S. 254, 261 (1913) ("[I]t may not be doubted that a court of equity in one state in a proper case could compel a defendant before it to convey property situated in another state." (citing Fall v. Eastin, 215 U. S. 1, 8 (1909))); Fall v. Eastin, 215 U. S. 1, 11-12 (1909) (holding that a court of equity can order a person over which it has jurisdiction to convey title to real property located in another state, but the court cannot itself transfer title because it does not have jurisdiction over such real property); Gardiner v. Gardiner, 705 So. 2d 1018, 1020 (Fla. 5th DCA 1998) (holding that a New York court had jurisdiction to a order a property owner to execute a quitclaim deed for property located in Florida); Hammond v. DSY Developers, LLC, 951 So. 2d 985 (Fla. 3d DCA 2007) (holding that a trial court outside of the circuit in which the subject property was located could order specific performance of a contract for sale of that land; but holding the portion of the order purporting to transfer title to that property unenforceable); Farley v. Farley, 790 So. 2d 574, 575 (Fla. 4th DCA 2001) (holding that an out-of-state order to sell real property located in Florida was not entitled to full faith and credit because enforcement requires the application of in rem jurisdiction; but noting that an out-of-state order directing one litigant to convey title to another would be entitled to full faith and credit (citing Sammons v. Sammons, 479 So. 2d 223, 225 (Fla. 3d DCA 1985); Gardiner)); Dusesoi v. Dusesoi, 498 So. 2d 1348, 1350 (Fla. 2d. DCA 1986) (holding that a decree from a foreign state purporting to award title to real property located in Florida was not entitled to full faith and credit; but stating in dictum that the portion of that decree ordering conveyance of the title "appears to be entitled to full faith and credit").

(2) In addressing the application of the protection against forced sale in Florida under Article X, Section 4 of the state constitution, the court stated:

  • The courts recognize an exception to the homestead protection if the property was acquired with funds generated by fraudulent activity and a constructive trust is necessary to prevent unjust enrichment. See, e.g., Labelle v. Labelle, 624 So. 2d 741, 742 (Fla. 5th DCA 1993) (stating, "[T]he protection[s] afforded by Article X, Section 4 of the Florida Constitution . . . do not apply to properties which are purchased with fraudulently obtained, traceable proceeds and which are, therefore, subject to the imposition of a constructive trust."); see also Zureikat v. Shaibani, 944 So. 2d 1019, 1024 (Fla. 5th DCA 2006) (affirming an equitable lien placed on a homestead where proceeds obtained from fraudulent or reprehensible conduct were used to invest in, purchase, or improve the homestead (citing, inter alia, Havoco of Am., Ltd. v. Hill, 790 So. 2d 1018 (Fla. 2001))); In re Fin. Federated Title & Trust, Inc., 347 F.3d 880, 881 (11th Cir. 2003) (holding that the Florida Constitution does not protect a homestead purchased with fraudulently obtained funds from an equitable lien or constructive trust).

    The exception to homestead protection applies even "where funds obtained through one spouse's fraud are used to invest in, purchase, or improve the homestead . . . despite the other spouse's innocence or ignorance of wrongdoing."
    Zureikat, 944 So. 2d at 1024 (citing Palm Beach Savings & Loan Ass'n v. Fishbein, 619 So. 2d 267 (Fla. 1993)).

    Contrary to the trial court's conclusion, we believe that a breach of fiduciary duty is "constructive fraud" and thus may form the basis to apply the exception to the homestead protection. As this court explained in
    First Union National Bank of Florida v. Whitener, 715 So. 2d 979, 982 (Fla. 5th DCA 1998):

    Constructive fraud is the term typically applied where a duty under a confidential or fiduciary relationship has been abused, or where an unconscionable advantage has been taken. Constructive fraud may be based on misrepresentation or concealment, or the fraud may consist of taking an improper advantage of the fiduciary relationship at the expense of the confiding party.

    Allie v. Ionata, 466 So. 2d 1108, 1110 (Fla. 5th DCA 1985), this court further explained:

    Florida courts have recognized that constructive fraud may exist independently of an intent to defraud. It is a term which is applied to a great variety of transactions that equity regards as wrongful, to which it attributes the same or similar effects of those that follow from actual fraud and for which it gives the same or similar relief.
    (Emphasis added)

    Moreover, the Florida Supreme Court has affirmed equitable liens on homes that qualify as homestead property to prevent unjust enrichment. See, e.g.,
    Fishbein, 619 So. 2d at 270 ("[I]t is apparent that where equity demands it this Court has not hesitated to permit equitable liens to be imposed on homesteads beyond the literal language of article X, section 4. . . . [T]here was no fraud involved in either La Mar [v. Lechlider, 185 So. 833 (Fla. 1939)] or Sonneman [v. Tuszynski, 191 So. 18 (Fla. 1939)].

    In those cases, the equitable liens were imposed to prevent unjust enrichment.");
    La Mar v. Lechlider, 185 So. 833, 836 (Fla. 1939) (affirmed equitable lien where defendants refused to give the plaintiffs an interest in their homestead, as promised, in exchange for improvements plaintiffs made to the homestead property); Craven v. Hartley, 135 So. 899, 901 (Fla. 1931) (equitable lien appropriate where homeowner borrowed money from lender to purchase property but failed to execute a mortgage in lender's favor as promised).

(3) The wrongdoing in this case was actually committed by the woman's now-deceased hubby. While she appears to have had nothing to do with improperly drawing the loot out of the trust that was ultimately traced into the Florida residence, she ends up picking up the tab by having to give up the home.

For additional background on this case, see the appeals court's earlier ruling in this litigation in Hirchert v. Hirchert Family Trust, 988 So.2d 63 (Fla. App. 5th DCA, 2008).

Sunday, September 25, 2011

Sleazy Banksters To Launch Toll-Free Phone Number In Search For Robosigner Victims?

The Wall Street Journal reports:

  • It probably won’t include “1-800-ROBO,” but big banks are preparing to launch a toll-free number to find consumers harmed by problems in foreclosure processing. The effort to find consumers is an outgrowth of the controversy over so-called robo-signing and other problematic foreclosure practices.(1)

For more, see Foreclosure Complaint? Stand By for New Toll-Free Number.

(1) Inasmuch as the banksters have demonstrated a complete inability to deal in good faith throughout this entire mortgage debacle (whether with the homeowners/consumers when originating or modifying the troubled loans, or the investors currently left holding the bag on the crappy securitized paper the banksters peddled all around the world), I hope there is nobody out their stupid enough to believe they are going to reform their ways at this late stage (except, of course, for some of the moronic regulators and bureaucrats who come up with these proposals).

Lamenting Booting Of 101 Year Old Homeowner, HUD Backpeddles, Says She Can Come Back To Her Home Of 50+ Years & Stay As Long As She Wants

In Detroit, Michigan, the Detroit Free Press reports:

  • A 101-year-old Detroit woman evicted from her home earlier this week says she's grateful for the outpouring of support. Texana Hollis was staying with a longtime friend on Detroit's west side Friday, looking forward to going home sometime in the next few days.


  • Hollis found out she was being evicted when officers from Detroit's 36th District Court showed up with disposal trailers Monday morning. She ended up at Henry Ford Hospital in Detroit after those around her realized her medication was buried in the trailer among the family's belongings. She went to Cheeks' home after she was released Thursday night and will stay there until her house is put back in order.

  • Warren Hollis, 64, said he had his mother sign a reverse mortgage in 2002, and he used the $32,000 they received to fix the roof and pay other bills. But he failed to continue paying the property taxes and insurance, a requirement for reverse mortgages to avoid going in arrears.

  • The U.S. Housing and Urban Development Department took over the mortgage in 2007 from Financial Freedom Senior Funding, a subsidiary of Lehman Brothers Bank, according to HUD spokesman Brian Sullivan and court records. HUD has made $6,964.60 in tax payments on the Hollises' behalf since then.

  • But Warren Hollis and brother Ira Hollis Jr., 69, did not follow through with repayment arrangements they made with HUD, Sullivan said this week. And they ignored 36th District Court officers' warnings since May that they were about to be evicted, according to Chief Judge Marylin Atkins.

  • After Texana Hollis' situation became national news and went viral on the Internet, HUD announced late Wednesday the agency would allow her to return to the home for as long as she wants.

  • "Truth be told, this foreclosure action shouldn't have been brought forward in the first place," Sullivan said Thursday. Sullivan said HUD officials mistakenly thought Hollis' home was a tax foreclosure before they reviewed the case.


  • While Hollis is staying with [a long-time frien and neighbor], a grassroots group called It Takes A Village Y'All and family friend Laurie Ridgell will fix up the home Hollis lived in for more than 50 years.

For the story, see Evicted 101-year-old grateful for support, ready to return home.

Real Estate Investor Scores Win With Court-Ordered Sale Stall In Effort To Save Home From Foreclosure Fraud; "We're Not Trying To Get A Free House!"

In San Antonio, Texas, the San Antonio Express News reports:

  • A San Antonio real estate investor who helps homeowners avoid foreclosure, recently found himself in the same predicament as his clients. Rather than simply fight to stop the foreclosure on his investment home, Ezequiel Martinez filed suit against his lender saying the mortgage should be voided because of phony loan documents and because he doesn't think the bank can prove it owns the mortgage note.

  • "We're not trying to get a free house," he said. "We're trying to save the house from foreclosure fraud."

  • Finding that Martinez "will probably prevail" at trial, state District Judge Karen Pozza on Aug. 26 issued an order prohibiting the house's foreclosure until the case either is settled or goes to trial in March.

  • Martinez's case is one of thousands across the country where homeowners are challenging the validity of foreclosure postings.

  • The robo-signing scandal erupted last fall with allegations that lenders had employees process foreclosure documents without required review and notarization. Since then, the foreclosure scandal has grown to include issues of not properly assigning mortgage notes - tracing the line of ownership as the note is packaged and resold through the secondary market - and the allegedly phony documents created to reconstruct the line of ownership where it's broken.

  • Rick Sharga, senior vice president with RealtyTrac, a national foreclosure website, said lenders likely can simply restart the foreclosure process if they need to correct faulty paperwork. But he said the prove-you-own-the-mortgage-note issue could become serious. "If you can't prove that I owe you money, that's a problem," he said. "It could throw the whole mortgage industry into chaos."

  • The lawsuits represent a tug-of-war that pits home-owners who fell behind on mortgages against lenders who insist any mistakes are mere technicalities.

  • John Fleming, general counsel for the Texas Mortgage Bankers Association, said that in almost all cases, he expects lenders or servicers will be able to cure any gap in mortgage assignments. "At the end of the day, if a homeowner or investor has not complied with the terms of the mortgage, they will face foreclosure," Fleming said.(1)

For the story, see Real estate investor sues lender to halt foreclosure.

See also, Fighting foreclosure and hoping for a free house (Missing links in the chain of ownership lead to some foreclosure postings being challenged).

(1) What this paid hack representing the bankster industry seems to conveniently ignore is why the phony documents are being manufactured to cure the gaps in the assignments in the first place.