Ohio AG Lawsuit: Rogue Contractor Violated State Law By Stiffing Homeowners Out Of $20K+ In Paving Work

From the Office of the Ohio Attorney General:

• Ohio Attorney General Mike DeWine announced that his office has filed a lawsuit against Cleveland-based Family Paving & Cement LLC for multiple violations of consumer law, including failure to deliver and shoddy work.



• “Consumers paid this company thousands of dollars for driveway paving or general home improvement work that either was never delivered or was done in a shoddy manner,” Attorney General DeWine said. “Previous attempts to resolve the issues have failed, leaving us no choice but to file this lawsuit.”

***

• The Ohio Attorney General’s Office has received four consumer complaints against the business since August 2009. In the complaints, consumers report total losses of more than $20,000. One consumer said she paid $16,400 for windows and siding work that was never completed.



• The Attorney General’s lawsuit charges Family Paving & Cement and its owner with multiple violations of Ohio’s Consumer Sales Practices Act, including failing to deliver, violating the Deposit Rule, performing shoddy work, failing to secure permits, and failing to register as a contractor. The lawsuit seeks injunctive relief, civil penalties, and restitution for consumers.

For the Ohio AG press release, see Attorney General DeWine Files Lawsuit Against Cleveland-Area Paving Company.

For the lawsuit, see State of Ohio v. Family Paving & Cement LLC, et al.

Stiffed Subs' Mechanics Liens, Threat Of F'closure Leave Recent Homebuyer In Pickle Over New Pool; Contractor Claims Bad Economy Left Him Sucking Wind

In Middleburg, Florida, First Coast News reports:

• Elizabeth Theiss likes her new swimming pool, but she said she can't enjoy it if she has to pay for it twice: She recently received two notice of liens from two separate companies. "I love the pool, it is just the liens," said Theiss.



• Most recently, a cement company sent Theiss a letter stating that unless the outstanding balance of $2,100 is paid in five days, under Florida's construction lien law, the company will file for foreclosure of her home.



• "I don't want to lose this house. I just bought it. I don't want to lose it," she said. Theiss paid the pool contractor, Majestic Pools, $2,400. The pool company has a good reputation, helping other consumers and doing quality work. It has an 'A' rating with the Better Business Bureau.



• Knowing that, Theiss said she was surprised to learn that Majestic Pools failed to pay its cement company. "I checked them out," she said. [...] . When reached by phone, [Majestic Pools'] owner Joe Fitzsimmons said his business is a victim of the economy. "This was not in my plans, I had no plans on sticking her," said Fitzsimmons. "I'm in a bind and can't do anything until I get some work," he said. "I am trying to sell some of my equipment."



• The cement company told Theiss she has three options:
  
  Get the company to pay the balance,
  Pay it herself,
  Seek legal advice.



• Theiss said she would rather pay it than lose her home to a foreclosure lawsuit. A consumer tip: Always get a waiver of lien from any construction related work on your home, before making the last payment, it gives you some protection against the state's construction lien.

Source: Homeowner Afraid she may Lose Home to Foreclosure Lien - all Because of a Pool.

Stiffed Sub To Eat $6K Mechanics' Lien On Adult Care Home After Contractor Files B'kptcy; 6 Elderly Tenants Dodge Displacement From Possible F'closure

In Portland, Michigan, the Lansing State Journal reports:

• Allen Haskin, owner of HSV Redi-Mix Inc., said Tuesday he'll drop the construction lien from Joe and Lisa Shaltry's adult foster care home in Portland. That's good news for the Shaltrys; not so good for Haskin, who expects to eat the cost of the $6,000 worth of concrete used on the Shaltrys' new driveway.



• "I have nothing against the Shaltrys," Haskin said. "We're just trying to survive. I guess I'll get (shortchanged) on the deal."



• [T]he Shaltrys, who run Walnut Grove Assisted Living, hired Leik Foundation of Portland to replace the driveway at the home. They paid Leik $6,000 upfront and the remaining $6,000 when the job was finished.



• As far as the Shaltrys were concerned, it was a done deal. But then they learned Leik Foundation, on its way to bankruptcy, failed to pay HSV Redi-Mix for the concrete. Exercising an option provided by Michigan law (and not knowing if the Shaltrys had paid Leik) HSV put a lien on the Shaltrys property.

***

• The Shaltrys, who provide housing for six elderly people, were afraid of foreclosure. They were relieved to hear of Haskin's decision [].

For more, see Adult care home will be free of construction lien.

Massive Foreclosures A Godsend For Vegas-Area Indoor Pot Farm Operators

The Los Angeles Times reports:

• [L]as Vegas has a pot home problem. And like many of the region's maladies, it's tied to the housing slump.Last year, authorities took down 153 indoor grow sites in Nevada and seized more than 13,000 plants, compared with 18 sites and 1,000 plants in 2005, the U.S. Drug Enforcement Administration said. (By comparison, California busted 791 indoor sites last year.)



• "You can't have crime without opportunity," said William Sousa, a criminologist at the University of Nevada, Las Vegas. "And all those empty homes present an opportunity for criminal activity."



• Major cultivators spend tens of thousands of dollars turning cheap homes into greenhouses. Small-scale growers transform bedrooms into grow rooms, [...]. In neighborhoods where residents may be as transient as crowds in a subway station, growers are rarely questioned about dark windows and empty driveways. Those are also hallmarks of abandoned homes, of which America's foreclosure capital has plenty.



• "I don't know anybody here, and I don't want to stick my nose in their business," an elderly man who lived near [the site of one recent indoor pot farm bust] said one afternoon. Then he shut his door.

For more, see In foreclosure-plagued Vegas, empty homes go to pot.

Florida Cop Charged With Homestead Exemption Fraud Desperate To Save Career, Pension; Looks For Plea Deal To Dodge Felony Conviction

In Key West, Florida, the Florida Keys Keynoter reports:

• A suspended Florida Department of Law Enforcement agent accused of homestead-exemption fraud is scheduled for court [...], with a pretrial conference set in anticipation of a Nov. 14 trial.



• However, Vince Weiner, 47, won't go to trial that day, said Assistant Monroe County State Attorney Mark Wilson. That's because plea talks are ongoing, and Weiner hopes to keep a felony conviction off his record so he can retain his state police certification and not lose his state retirement (convicted government employees forfeit their retirements).



• On Aug. 17, the FDLE -- his employer -- arrested the Key West-based Weiner on charges of felony grand theft and misdemeanor homestead-exemption fraud. He was immediately put on administrative leave.



• Wilson said then that Weiner bought a Big Pine Key house in 2005, then got assigned to Fort Myers in 2006. While living in Fort Myers, Weiner rented his Keys house out but claimed the homestead exemption, Wilson said.

For more, see Suspended FDLE agent seeks plea deal.

S. Fla. Mayor Quits Post, Gets Free Pass Out Of Criminal Homestead Exemption Fraud Charges As State Attorney Punts On Moving Forward With Prosecution

In Miami, Florida, The Miami Herald reports:

• Miami-Dade prosecutors opted not to charge North Bay Village’s former mayor, Corina Esquijarosa, with shirking on property taxes, and activists the tiny town say they are outraged.



• But prosecutors rarely ever bring “homestead exemption” fraud cases against citizens, instead allowing the county’s property appraiser’s office to go after them with the ultimate goal of repaying the money owed to government coffers.



• “It would be an inconsistent application of our practice in similar cases to treat Ms. Esquijarosa different from other private citizens in similar circumstances,” Assistant State Attorney Tim VanderGiesen wrote in a final memo released Tuesday.(1)



• Esquijarosa resigned Friday, avoiding prosecution for the homestead exemption fraud, an issue that dogged from her since the start of her troubled one-year tenure as the city’s mayor. A recall election, spurred by the very activists who uncovered the homestead exemption issue, had been imminent.



• “I understand a lot of people do this. I know it’s flagrant,” activist Al Blake, leader of the recall effort, said about homestead exemption fraud. “We understand that. But she’s an elected official and she’s got to be held to a higher standard.”



• Florida property owners get a $50,000 tax break if they live in the home. More than 400,000 properties in Miami-Dade receive homestead exemptions, Miami-Dade Deputy Property Appraiser Lazaro Solis said Tuesday. The office employs seven full-time investigators and was recently loaned four Miami-Dade economic crimes detectives to ferret out fraud.



• Giving false information in applying for the exemption is a misdemeanor and most cases — in which criminal intent is difficult to prove, and dollar amounts are not staggering — are handled administratively.



• With Miami-Dade County facing a massive budget shortfall, homestead exemption cheating has become a hot-button issue in recent months. Earlier this fall, Miami-Dade’s police union — facing $74 million in cuts during contract negotiations — complained that the county wasn’t collecting on “rampant” homestead exemption cheats.



• Miami-Dade Property Appraiser Pedro J. Garcia shot back, saying enforcement efforts has been stepped up.

***

• According to VanderGiesen’s memo, prosecutors also took into consideration that the fraud “did not relate to her role as a public official” and occurred “prior to her becoming the mayor of North Bay Village.”



• The county’s property appraiser’s office has filed a lein [sic] on the more than $3,000 she owed in back taxes and penalties, while the county’s ethics commission fined her $500 for not disclosing her rental income and mortgage.



• “The primary purpose of a formal criminal case would be to get her to pay back the money she owes,” VanderGiesen wrote. “Such a resolution is already being accomplished by the Miami-Dade Property Appraiser without the expense of additional criminal litigation.”

For the story, see North Bay Village mayor avoids charges in crime rarely charged in Miami-Dade (Prosecutors say homestead exemption fraud is usually left to the county property appraiser’s office to handle).

Go here and go here for Miami-Dade Inspector General press releases for two examples where alleged homestead exemption fraudsters were criminally charged with grand theft in Miami-Dade County, Florida.

Minnesota AG: 'CitiMortgage Won't Give Us Straight Answer!' As Accounting Screw-Up Over 1 Loan Payment Leaves Homeowner Facing Imminent F'closure Sale

In St. Louis Park, Minnesota, the Star Tribune reports:

• Nancy Gosselin cannot understand why CitiMortgage is about to foreclose on her St. Louis Park house. Neither can her local banker or the Minnesota attorney general.



• At the heart of the dispute is a single monthly payment of $584 that CitiMorgage says she failed to make more than two years ago, according to the attorney general's office. Gosselin says she made all her payments. A loan officer at Bremer Bank agrees. The attorney general's office, which says it can't get a straight answer from CitiMortgage, has urged the mortgage giant to stop the foreclosure and work out a deal.



• But the fallout from the alleged missed payment has been a series of cascading late fees and penalties and refused payments that has culminated in CitiMortgage's threat to auction Gosselin's home at a sheriff's sale Dec. 2.

For more, see Bank forecloses even though experts say homeowner made all payments (CitiMortgage claims she missed a single payment, but original lender and others disagree. Auction is set for Dec. 2).

NYC Cops Pinch Flipper For Pocketing $200K Selling Same Home Twice Before Deal Documents Were Recorded

In Staten Island, New York, the New York Post reports:

• A scam artist twice sold the same property in Woodrow, and profited $200,000 from the sales before the transactions were recorded by the County Clerk’s Office, authorities said.



• Dariusz Mruczynski, 44, first sold the home at 263 Edgegrove Ave. on Dec. 16 before flipping it on Dec. 30, according to court records. He pulled off the scheme by fraudulently obtaining two mortgages, cops said. He failed to pay $29,527 in taxes for 2008 and 2009, records show. He was busted Tuesday for grand larceny and tax fraud, said a spokesman for DA Dan Donovan.

Source: NYPD Blotter (Staten Island).

Attempt To Peddle Recently Tax-Foreclosed Home Squleched By Cops; Unlicensed Sales Agent Says She Had No Idea Of Change In Property's Ownership Status

In St. Paul, Minnesota, the Pioneer Press reports:

• The sign said the home at 806 Edmund Ave. in St. Paul was for sale and the buyer could get it "cheap" - at a 50 percent discount. Cash only.



• But there's a catch: The seller doesn't own the house. The state of Minnesota does. The state took ownership of the home Aug. 2 after the owner failed to pay taxes, said Kris Kujala, a supervisor for tax-forfeited land in Ramsey County, which manages the state-owned property.



• County employees were tipped off Nov. 1 when they drove by the home and saw the for-sale sign. "We just came to a screeching halt and thought, 'What is going on here?' " Kujala said.



• City police were called, and a meeting was set up with the seller, she said. The woman, who said she was working on behalf of the owner, apparently didn't know the state had acquired the home.

For more, see St. Paul house's sale price a steal - but seller didn't own it.

Threat Of Triple Damages Over Possible False Claims Leaving Banksters Gun-Shy Over Submitting FHA Insurance Claims On Robosigner-Obtained F'closures?

The Wall Street Journal reports:

• Today’s WSJ looks at how the Federal Housing Administration is facing steeper than projected losses that threaten to wipe out the agency’s reserves if home prices decline. Despite the potential for much bigger losses, the FHA actually saw its cash on hand go up in the last year. Taxpayers can thank the robo-signing crisis for that.



• The FHA doesn’t actually make loans, but instead it insures lenders against losses on loans that meet its standards. The agency functions like an insurance company: It charges premiums to borrowers who take out FHA-backed loans, and holds those premiums in reserve to pay out against claims in the future.



• Today’s report focuses on the FHA’s expected reserves after it subtracts all anticipated losses. Right now, that leaves the FHA with a razor-thin $2.6 billion in capital to pay for losses that aren’t baked into the current forecast. This is down from $4.7 billion last year and $3.6 billion in 2009.



• But the FHA’s cash on hand increased by around $800 million to $33.7 billion. While banks are completing foreclosures on FHA-backed loans, they aren’t yet filing claims to be reimbursed because of the “robo-signing” and other dubious back-office practices that surfaced last year.



• Banks that submit claims to the FHA for improperly handled mortgages can be liable under the False Claims Act to pay treble damages—or fines that are triple the amount of the claim the lender is submitting to the government.



• Banks have been holding off on submitting claims, it seems, until they’ve double- and triple-checked their processes to ensure that their reimbursement requests to Uncle Sam are iron proof.

For the story, see More on the FHA: Robo-Signing’s Effect.

Jury Convicts 'Dream Homes' Founder, Ponzi Scheme Operator; Racket Promised Home Loan Eliminations In Exchange For Upfront Payments

From the Office of the U.S. Attorney (Greenbelt, Maryland):

• A federal jury convicted Andrew Hamilton Williams, Jr., age 60, of Hollywood, Florida today of fraud conspiracy, wire fraud and conspiracy to commit money laundering in connection with his participation in a massive mortgage fraud scheme which promised to pay off homeowners’ mortgages on their “Dream Homes,” but left them to fend for themselves.

***

• According to evidence presented at the two week trial, beginning in 2005, Williams and his conspirators targeted homeowners and home purchasers to participate in a purported mortgage payment program called the “Dream Homes Program.” In exchange for a minimum of $50,000 initial investment and an “administrative fee” of up to $5,000, the conspirators promised to make the homeowners’ future monthly mortgage payments, and pay off the homeowners’ mortgage within five to seven years.

For the entire press release, see Owner and Founder of “Metro Dream Homes” Convicted In $78 Million Mortgage Fraud Scheme (Conspirators Spent Millions of Dollars of Investor Funds to Employ Chauffeurs and Maintain a Fleet of Luxury Cars, Travel in Luxury to the NFL Super Bowl and NBA All-Star Game, Pay Off Prior Investors as Part of a Ponzi Scheme, and Fund Failed Investment Ventures and Undisclosed Third Party Businesses).

Florida Lawyer Cops Plea To Ripping Off At Least $2.4M In Client Cash From Trust Account

From the Office of the U.S. Attorney (Fort Myers, Florida):

• United States Attorney Robert E. O'Neill announces that Joseph A. Troiano, (63, Fort Myers) pleaded guilty last week to six counts of wire fraud and one count of mail fraud. Troiano faces a maximum penalty of twenty years in federal prison for each count of wire and mail fraud.



• According to the plea agreement, Joseph A. Troiano was a licensed lawyer in Florida. From in or about late 2005, through in or about January of 2010, Troiano, without his client's authority, or consent, used funds belonging to his clients and their beneficiaries for his own purposes, including investing money in various real estate projects. In all, Troiano misappropriated at least $2.4 million for his own use.(1)

For the U.S. Attorney press release, see Fort Myers Attorney Pleads Guilty To Fraud.

(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:

• Directory Of Lawyers' Funds For Client Protection (now includes Canadian recovery 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.

Jacksonville-Area Clerk Of Court Joins Others In Tagging MERS w/ Lawsuit Over Alleged Mortgage Recording Fee-Dodging Racket; Action Seeks Class Status

In Jacksonville, Florida, the Jacksonville Business Journal reports:

• Duval County Clerk of the Court Jim Fuller has filed a class action suit against the mortgage servicing company Merscorp Inc. and its wholly owned subsidiary Mortgage Electronic Registration Systems Inc.



• The suit, filed in the Fourth Judicial Circuit in Jacksonville on behalf of all Florida Clerks of Court, claims that the defendants created a private mortgage recording system called MERS to circumvent state law that requires mortgages to be recorded publicly by the clerks of the court.



• “MERS is listed as the ‘mortgagee’ on millions of loans throughout the nation,” the suit states. “However, MERS does not originate any loans, lend any money, or own or hold any promissory notes. MERS instead acts merely as a straw man — a placeholder in the public records — allowing the true, beneficial owner of a loan to remain anonymous and to be changed at will without notice to the public and without recording an assignment in the official records or paying the fees.”



• The eight-count suit, filed Oct. 31, claims civil conspiracy, unjust enrichment, fraudulent misrepresentation and negligent misrepresentation.

For the story, see Duval County Clerk of Court sues mortgage servicer.

Suit: MERS, Michigan F'closure Mills, Title Agencies Perpetrated Tax-Dodging "Shell Game" In Connection w/ Dubious Title Transfers After Forced Sales

Michigan Messenger reports:

• Two county registers of deeds filed a class action lawsuit Monday on behalf of Michigan’s 83 counties alleging that the Mortgage Electronic Registration Services owes millions of dollars in property title transfer taxes.



• Curtis Hertel, Jr., the Ingham County Register of Deeds, and Branch County Registrar Nancy Hutchins filed the suit, which alleges that the company and numerous banks failed to pay property transfer taxes when the title to the company was transferred to another owner in the MERS system.



• “MERS created a shadow registry system that has made it very difficult for the public and for government offices like mine to keep track of who owns what mortgage,” Hertel said. “They have also stated they were created to avoid fees in my office. When we began the investigation into robo-signing I asked my attorneys to research MERS foreclosures to see if there were patterns of irregularity. This lawsuit is a direct result of that investigation. I believe there has been a systematic attempt to avoid paying taxes by MERS and the banks that use MERS.”



• Hertel alleges the company has created a “shell game” designed to dodge taxes. “MERS has transformed the entire mortgage industry into a giant shell game”, said Hertel. “The current servicer of a mortgage is no longer a matter of public record, and once a property is foreclosed, the real games begin, as deeds and other paperwork are filed in such a way to avoid transfer taxes at every step. Property ownership is clouded, and the simple task of collecting transfer tax has been turned into this legal battle, largely because of the involvement of MERS.”



• The lawsuit also targets three foreclosure attorneys — Marshall Isaacs from Orlans Associations and Ellen Coon and Jeanne Kivi of Trott and Trott. Both Orlans and Trott and Trott have come under fire in recent months for participating in robo-signing. Both organizations are also significant Republican donors in Michigan.



• Also of interest, David Trott’s Attorney’s Title company is named as a defendant. Trott owns what is considered the largerst foreclosure law firm in the state. Linda Orlans’ title agency eTitle is also named. Orlans’ runs Orlans Associates.

For more, see Class action lawsuit filed against MERS over unpaid taxes (Foreclosure firms also implicated).

Another County Takes Shot At Banksters Over Unpaid Fees For Unrecorded Mortgage Assignments; Lawsuit Seeks Class Status For All Pennsylvania Counties

In Washington County, Pennsylvania, the Pittsburgh Tribune Review reports:

• Pennsylvania's 67 counties may have lost $100 million in fees because of a system that assigns mortgages without recording documents in county courthouses, according to a lawsuit filed by Washington County.



• The county sued U.S. Bank Corp. of Minneapolis in Washington County Court, claiming the bank failed to pay a $52 recording fee when it acquired residential properties bundled in investment securities and sold them through the Mortgage Electronic Registration System Inc. of Reston, Va., known as MERS.

***

• In the lawsuit, Washington County estimated it lost $1.6 million in recording fees over seven years from U.S. Bank's failure to record mortgages it acquired. Based on the estimated losses, about 30,470 mortgages were not recorded in the county.



• Washington County Recorder of Deeds Deborah Bardella said that estimate may be low because the county does not know how many times the mortgages were assigned to different investors.



• The lawsuit, filed Sept. 28, not only wants restitution from U.S. Bank but asks the court to require the bank to record prior mortgage assignments on all properties on which it foreclosed. The county also is seeking class-action status that would cover the lost recording fees in the state's 67 counties.

For more, see Counties lose $100 million in fees, suit claims.

NY Foreclosure Mill To Shut Down; Loss Of Fannie, Freddie Business Over Dubious Practices Dooms Controversial Sweatshop

In Buffalo, New York, Buffalo Business First reports:

• The embattled Steven J. Baum P.C. law firm is the closing its doors after a series of missteps that included mortgage industry giants Freddie Mac and Fannie Mae cutting off business with the Amherst-based firm.



• Baum has filed a Worker Adjustment and Retraining Notification notice with several government agencies, saying it plans on shutting its doors. The firm has 67 full- and part-time employees at its Northpointe Parkway offices and another 22 full- and part-time workers at its Long Island office.



• “We will fulfill all of our obligations under WARN and during this process we will also fulfill our remaining work on behalf of our clients,” Baum said in a prepared release. "Disrupting the livelihoods of so many dedicated and hardworking people is extremely painful, but the loss of so much business left us no choice but to file these notices.”



• The Baum agency focused on real estate foreclosure transactions. The firm has been under fire from federal agencies and the public, including members of the local “Occupy” movement, for its alleged business practices.



• Last month, the Baum firm settled a federal claim relating to alleged mishandling mortgage filings on behalf of his clients. Baum agreed that the firm would pay $2 million in fines and promised to change business practices at the firm.



• The Baum agency was also working under a cloud of suspicion concerning allegedly misleading pleadings and affidavits, some of which led to people having their homes foreclosed under what was deemed unfair circumstances.



• The New York Times also ran a photo of Baum employees dressed and apparently mocking homeless people during a company-sponsored Halloween party.(1) The photo attracted national attention, drawing criticism.



• But, the largest blow came on Nov. 10 when Freddie Mac and Fannie Mae cut off all business with the Baum firm because of its business practices.

Source: Baum law firm to close.

(1) See Joe Nocera: What the Costumes Reveal (October 29, 2011).

Rent-To-Own Ripoffs, Short Sale 'Flopping', Rent Skimming, Deceptive Trade Practices Among Charges Flying At Suspected Foreclosure Rescue Racket

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

• The Nationwide Investment Firm peddles foreclosure rescue to South Florida's most desperate homeowners, offering to beat the banks while maintaining dignity and peace of mind.



• Amid the wreckage of this once vibrant real estate market, the 3-year-old Boca Raton company persuades struggling borrowers to quit claim-deed their properties to Nationwide. In return, the for-profit firm promises to streamline a short sale and negotiate a debt-free ending for the homeowner.



• Instead, homeowners say in at least five lawsuits filed this year in Palm Beach and Broward counties, they've been pulled into a game of real estate musical chairs in a short sale ruse that has grown to involve dozens of homes in Palm Beach, Broward and St. Lucie counties. The lawsuits describe variations of alleged real estate wrongdoing, but mostly revolve around one business model.



• While Nationwide negotiates a short sale, often with the intent to buy the property itself at the cheapest possible price, the homeowner is shuffled into another Nationwide property where he or she puts 20 percent down to enter into a rent-to-own style contract.

***

• [A]ttorneys who filed the suits against the firm and its president, Guilfort Dieuvil, say the company, in truth, is violating arm's-length short sale rules meant to prevent the type of house flipping partly responsible for the economy's epic failure.
  
  Affidavit aims to prevent abuses



• Most major lenders require an " arm's-length" affidavit be signed at closing. While the affidavit may differ by lender or servicer, it must generally include language that says the short sale transaction has been negotiated by unrelated parties, who do not share business or familial relationships, and that there have been no prior agreements for the owner to remain in the property as a tenant or to regain property at any time after the sale.



• According to national mortgage backer Freddie Mac, the short sale addendum is to prevent "common schemes where the borrowers sell their property to a prearranged straw buyer or family member who allows them to stay in the home after the short sale, with a greatly reduced mortgage obligation."



• Two of the recently filed lawsuits include charges of "flopping" ­­- defined as when the company negotiating the short sale tells the bank it is getting less for the property than what the buyer is actually paying, thus the company pockets the difference.



• Other specific charges in the lawsuits include violations of Florida's Deceptive and Unfair Trade Practices Act, statutory disclosure requirements that apply when buyers assume fee obligations to homeowners associations, and the state's equity skimming statute that is supposed to prevent people from applying rents from foreclosed dwellings for the person's own use, according to one lawsuit.

For more, see Investment firm offers salvation to distressed homeowners, but some say they were misled.

Google Gets Hammered By Negative Publicity For Role In Loan Modification, Other Internet Scams As Feds Shut Down Dozens Of Rackets

The Associated Press reports:

• The federal government has shut down dozens of Internet scam artists who had been paying Google to run ads making bogus promises to help desperate homeowners scrambling to avoid foreclosures.



• The crackdown announced Wednesday renews questions about the role that Google’s massive advertising network plays in enabling online misconduct. It may also increase the pressure on the company to be more vigilant about screening the marketing pitches that appear alongside its Internet search results and other Web content.



• The criminal investigation into alleged mortgage swindlers comes three months after Google agreed to pay $500 million to avoid prosecution in Rhode Island for profiting from online ads from Canadian pharmacies that illegally sold drugs in the U.S.



• A spokesman for the U.S. Treasury Department division overseeing the probe into online mortgage scams declined to comment on its scope other to say it’s still ongoing. Google Inc. also declined to comment Wednesday.



• No company wants to be tainted by a criminal investigation, but the prospect is even more nettlesome for Google because it has embraced “don’t be evil” as its corporate motto. That commitment may make it difficult for Google to fend off a call by Consumer Watchdog to donate the revenue from fraudulent mortgage ads to legitimate organizations that help people ease their credit problems. Consumer Watchdog is an activist group that released a report in February asserting that Google was profiting from ads bought by mortgage swindlers.(1)



• “Google should never have published these ads, but its executives turned a blind eye to these fraudsters for far too long because of the substantial revenue such advertising generates,” said Consumer Watchdog’s John M. Simpson, a frequent critic of the company.



• To fight future abuse, Google has suspended its business ties with more than 500 advertiser and agencies connected to the alleged scams, according to the U.S. Treasury Department’s Office of the Special Inspector General for the Troubled Asset Relief Program.



• The evidence collected in the current investigation led to the government’s closure of 85 alleged mortgage scams. The identities of the businesses and people involved in the scams weren’t disclosed Wednesday.



• The con artists are accused of duping people into believing they could help lower their home loan payments under a government-backed mortgage modification program created to reduce the foreclosures that have made it more difficult for the slumping real estate market to recover. The alleged rip-offs typically relied on collecting upfront fees or getting victims to transfer their monthly mortgage payments to the scam artists, according to the Office of the Special Inspector General for the Troubled Asset Relief Program. In some cases, the swindlers passed themselves off as being affiliated with the government.



• Google’s name popped up because the scam artists relied on the company’s vast advertising network to bait their victims. About two out of every three Internet search requests are made through Google, making its ad network a prime outlet for finding people hoping to save their homes, according to Christy Romero, deputy special Inspector General for the Troubled Asset Relief Program.



• “The first place many homeowners turn for help in lowering their mortgage is the Internet through online search engines, and that’s precisely where they are being taken advantage of and targeted,” she said.

For the story, see Government regulators shut down alleged mortgage swindlers who baited victims with Google ads.

(1) See Consumer Watchdog: Liars and Loans: How Deceptive Advertisers Use Google.

See also The Wall Street Journal: Mortgage Fraud Underscores Online Ad Challenge for Consumers:

• Last February the group produced a report that said that Google was profiting from deceptive advertising to homeowners. The report, entitled “Liars and Loans: How Deceptive Advertisers Use Google,” counted 20 foreclosure rescue or mortgage modification companies advertising on Google search results pages between September 10 and September 30, 2010. “Google’s practice
 of
 selling
 prime
 advertising
 space
 to
 dubious
loan‐modification 
marketers 
is 
extensive,” said the report.

Suit: Credit Union Snatched Borrower's Auto In Response To Default On Home Mtg Loan Obtained From Same Lender, Despite Car Note Payments Being Current

In St. Petersburg, Florida, ABC Action News reports:

• A Tampa Bay teacher is filing a lawsuit against the Suncoast Schools Federal Credit after they repossessed her car, despite her loan payments being up to date. In a statement released Friday, Attorney Charles Gallagher explains that the bank repossessed Angela DiNapoli’s car in response to her defaulting on a separate mortgage loan, also financed through the same bank.



• DiNapoli discovered that her car was missing after she had returned home from a vacation. She called police thinking that her car had been stolen, but found out that the bank had taken the car.



• Suncoast Schools Federal Credit Union had not even filed a foreclosure lawsuit with regard to her mortgage or sent any demand for payment on her car loan when it took her car, according to the press release. “This is an new tactic for lenders," DiNapoli’s attorney stated in the release.



• "There is absolutely no legal justification for taking her car, when she was up to date on her payments." The release goes on to say that after the repossession, Suncoast later filed a foreclosure lawsuit and DiNapoli counter-sued Suncoast for the wrongful repossession and other bank misconduct.

Source: Teacher suing Suncoast Schools Federal Credit Union for wrongful repossession of car.

Rogue Ch. 7 Bkptcy Trustee's Attempt To Block Debtor Conversion To Ch. 13, Then Pocket Cash By Rent Skimming Upside Down Homestead Gets Judicial Boot

From the Florida Bankruptcy Law Blog:

• I’ve written recently about some Chapter 7 trustees trying to take or administer “upside down” homestead properties when the bankruptcy debtor chooses not to claim a homestead exemption because their home has no equity.



• The debtors purposefully avoid claiming the homestead exemption in order to then qualify for the $4,000 wildcard exemption [available under applicable non-bankruptcy, state law - Section 222.25(4), Florida Statutes] that they can employ to protect cars and other personal property. Some trustees argue that since they can administer for the benefit of creditors all non-exempt debtor property they have the right to get money from the debtor’s homestead by, for example, making the debtors pay rent or by forcing a short sale of the upside down home.



• A bankruptcy judge in south Florida rebuked a Chapter 7 trustee who wanted to take the upside down homestead and make the debtors pay rent to live there.



• The trustee would collect rent but let the mortgage go into default (ie. 'rent skimming'). The trustee would then distribute rent collected to the unsecured creditors until the inevitable foreclosure.



• The debtors in this case tried to save their upside down home from a Chapter 7 trustee by converting to Chapter 13. The Chapter 7 trustee tried to block the conversion; he argued that if the debtors wanted to save their homestead they should claim the homestead exemption and forfeit the wildcard exemption that had been protecting their cars. He said the debtors’ conversion was in bad faith.



• The judge pointed out that a Chapter 7 trustee owes a fiduciary duty to all parties including unsecured creditors, secured creditors (mortgage company), and the debtors themselves. The trustees position, said the judge, ignores his fiduciary obligation to the debtors and the mortgagee. He said, “The Trustee’s proposed administration of this case would have allowed the Debtors’ home to be sold to a vulture-investor imply so that the Trustee could collect rent prior to a default on the mortgage and tax obligation.”



• The court went on to say that, “The Trustee’s position...is misguided and wholly inappropriate.”(1)



• This decision should be used to protect debtors who try to extort money settlements from honest debtors by threatening to confiscate their upside down homesteads.

Source: Court Rebukes Chapter 7 Trustee's Attack On Debtors' Upside Down Homestead.

For the ruling, see In re Luban, Case No. 11-13633-AJC (Bankr. S.D. Fla., September 15, 2011).

For more on out-of-control Chapter 7 Trustees attempting to use over-the-top tactics to screw Florida homeowners in bankruptcy cases, see:

• Underwater Fla Homeowners Using State 'Wildcard' Exemption In Bkrptcy Urged To Resist Being Squeezed By Rogue Trustees Using Unsavory Ch. 7 Shakedowns,



• Bankruptcy Trustee's Attempt To Boot Homeowner In Underwater Home Fails; State 'Wildcard' Exemption Allows Debtor To Stay Put.

(1) In elaborating on the arguably egregious proposal by the Chapter 7 trustee, U.S. Bankruptcy Judge A. Jay Cristol made this point:

• The Court seriously questions how it advances the purpose of the Bankruptcy Code for a Chapter 7 Trustee to administer this estate. The assets to be marshaled would be split among the Trustee and his professionals, leaving perhaps a small percentage of value for unsecured creditors.
• However, the costs inflicted by such administration may include:
  
  (a) honest Debtors in need of a fresh start and their disabled son being driven from their home despite (or perhaps because of) the fact they are current on their mortgages;
  
  (b) a $133,857.00 first mortgage that is being paid going into default and the lien holder necessarily incurring the costs of a foreclosure action;
  
  (c) a $100,165.00 under-secured second mortgage that is being paid also going into default and the creditor likely suffering a significant loss;
  
  (d) a Miami-Dade County real property tax obligation that is being paid going into delinquency; and
  
  (e) another Miami-Dade County single family home going into foreclosure, and needlessly adding another case to an already-overburdened court system.
  
• The Trustee's position in this case is misguided and wholly inappropriate. The Trustee appears to want to administer a fully secured asset primarily for his benefit and the benefit of his professionals, at great cost to the Debtors' interests and at great cost to the interests of the first and second mortgage holders, not to mention whatever damage would result to Miami-Dade County for delinquent tax revenues.

Shameless Head Of Embattled NY F'closure Mill Sweatshop Acknowledges Being On Road To Ruin; Responds To Recent Revelations By 'Shooting The Messenger'

Author and columnist Joe Nocera writes in The New York Times:

• “Mr. Nocera — You have destroyed everything and everyone related to Steven J. Baum PC. It took 40 years to build this firm and three weeks to tear down.”



• Thus began a lengthy e-mail that I received, on Thursday evening, from Steven J. Baum, the owner of his eponymous law firm, the largest “foreclosure mill” in New York State. Foreclosure mills, of course, are firms that represent banks and servicers trying to foreclose on the millions of homeowners who have defaulted since the housing bubble burst.



• Baum was referring to a column I had written in late October after a former employee had sent me some photographs of the firm’s 2010 Halloween party.(1) They showed employees wearing costumes that mocked people who had lost their homes; the ex-employee who forwarded the pictures had described them as “appalling.”



• A lot of people agreed. Representative Elijah Cummings, a Maryland Democrat, wrote the firm a letter demanding documents and records. In New York, the attorney general’s office ratcheted up its investigation of the firm; I heard that investigators were looking for more photographs of Baum Halloween parties.



• Occupy Buffalo protesters picketed Baum’s offices in nearby Amherst, N.Y. And, not least, Fannie Mae and Freddie Mac, which own or guarantee half the country’s mortgages, issued new rules forbidding servicers of their mortgages from using Steven J. Baum.



• None of which was why I had contacted Baum’s press spokesman earlier this week. What had caught my eye was an article in The Buffalo News headlined, “Foreclosure law firm is battling rule on accuracy.”



• The article described a court hearing a few weeks ago during which the Baum firm asked the judge to reject — as unconstitutional! — a year-old rule that foreclosure lawyers must attest to the validity of the mortgage documents held by their bank and servicer clients.



• You would think that any lawyer worth his salt would be happy to affirm that his client was using valid documents to toss someone out of a house. But not, apparently, Steven J. Baum.



• In fact, this case matters a lot more than a creepy Halloween party. In October 2010, reacting to the robo-signing scandal, the judge overseeing the New York State court system had issued an order commanding that lawyers representing banks and servicers sign a document “affirming” that their clients had reviewed the accuracy of the documents and records — and that the documents were, indeed, accurate.

***

• “There is blood on your hands for this one, Joe,” he wrote at the end of that second e-mail. “I will never, ever forgive you for this.”



• I think that’s what they call shooting the messenger.

For the column, see Baum Weighs In After Uproar.

(1) Joe Nocera: What the Costumes Reveal (October 29, 2011).

California AG Hits Fannie, Freddie w/ Subpoenas; Demands Information About Conduct Towards Renters In F'closed Homes, Involvement With Toxic Mortgages

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

• Investigators with the California attorney general's office have subpoenaed information from mortgage titans Fannie Mae and Freddie Mac as part of a wide-ranging inquiry into lending and foreclosure practices in the state.



• The subpoenas ask the government-controlled finance companies to answer a series of questions about their activities in California, including their roles as landlords who own thousands of foreclosed properties.



• The attorney general's office is also seeking details of Fannie and Freddie's mortgage-servicing and home-repossession practices, according to a person familiar with the matter.



• In addition, investigators want to learn more about the companies' purchases and sponsorship of securities holding "toxic mortgages" in the Golden State, said the person, who was not authorized to speak on the matter and requested anonymity.

For more, see California attorney general's office subpoenas Fannie, Freddie (Information is sought on the mortgage giants' roles as landlords who own thousands of foreclosed properties in California. Also sought are details of their mortgage-servicing and home-repossession practices, a source says).

Notary Nabbed In Nevada Criminal Robosigning Probe Cops Guilty Plea

From the Office of the Nevada Attorney General:

• The Office of the Nevada Attorney General announced [] that Tracy Lawrence, 43, a local notary, has pled guilty to one count of notarizing the signature of an individual not in her presence, a gross misdemeanor in violation of NRS 240.155.



• Notary fraud carries a potential jail sentence of one year and/or a fine of up to $2,000. "The case against Lawrence was based on an investigation by the Attorney General’s mortgage fraud task force which revealed that between 2005 and 2008, tens of thousands of fraudulent documents were filed with the Clark County Recorder’s office”, said Chief Deputy Attorney General John Kelleher. Lawrence pled guilty on November 14, 2011.

For the Nevada AG press release, see Office Of The Attorney General Announces Notary In Robo-Signing Scheme Pleads Guilty.

For the criminal charges, see State of Nevada v. Lawrence.

Fannie Joins Freddie In Bouncing Baum From Future Foreclosures; Firm That Mocked Homeowners At Halloween Party On Embarrassing Road To Unraveling

In Buffalo, New York, The Buffalo News reports:

• Steven J. Baum PC has suffered another blow, as Fannie Mae joined Freddie Mac in barring the Amherst law firm from getting any new foreclosure or other legal business from lenders servicing mortgages for the giant federally backed company. According to an updated version of Fannie Mae's "Retained Attorney List," dated Nov. 15, Baum's law firm is "not eligible for new referrals."

***

• The action by Washington, D.C.-based Fannie Mae, the nation's dominant player in the mortgage industry with a $2.8 trillion book of business, follows on the heels of a similar step late last week by Freddie Mac, the No. 2 player with $2.1 trillion.



• The impact of being banned by the federal mortgage giants can be devastating for a foreclosure firm. The last time a law firm such as Baum was banned from both Fannie Mae and Freddie Mac involved Florida lawyer David J. Stern. Other major servicers quickly followed suit in withdrawing their business from Stern. That firm is now virtually out of business, with just a skeleton crew wrapping up a few matters and handling lawsuits against its former lender clients.

***

• "It is not surprising to see Fannie Mae suspend Steven Baum's firm after the announcement from Freddie Mac last week," said Rebecca Case-Grammatico, an attorney at Empire Justice Center in Rochester. "It is interesting to witness the unraveling of such a large player in New York's foreclosure field."



• "It was expected Fannie and Freddie would dump Mr. Baum," said Susan Chana Lask, a New York City attorney who sued Baum on behalf of a client last year, fought off a defamation suit by Baum and was depicted in photos of Baum employees lampooning foreclosure victims at a company Halloween party last year. Those photos recently emerged into the national spotlight, and may have triggered some of actions against the firm. "How much more embarrassing can he be to the banking industry?," Lask said.

***

• The firm has been at the center of the foreclosure controversy over "robo-signing," and has been accused by consumers, consumer advocates, other attorneys and even judges of submitting sloppy and perhaps fraudulent paperwork riddled with legal errors.



• The firm is currently challenging as unconstitutional a new state rule requiring foreclosure attorneys to affirm, under penalty of perjury, that the documents they submit are accurate.



• It agreed a few weeks ago to pay a $2 million fine and change its practices under a settlement with the U.S. Attorney Preet S. Bharara in Manhattan, capping a probe by the U.S. Justice Department. It's currently under investigation by New York Attorney General Eric T. Schneiderman, who has issued subpoenas to the firm and those associated with it. It has also been sued several times in class-action cases.

For the story, see Fannie Mae hits Baum firm with ban (Foreclosure specialist no longer gets referrals).

Nevada AG Scores Indictment Of Robosigner Duo; Charges Allege Massive Fraudulent Foreclosure Document Manufacturing Racket

From the Office of the Nevada Attorney General:

• The Office of the Nevada Attorney General announced [] that the Clark County grand jury has returned a 606 count indictment against two title officers, Gary Trafford and Gerri Sheppard, who directed and supervised a robo-signing scheme which resulted in the filing of tens of thousands of fraudulent documents with the Clark County Recorder’s Office between 2005 and 2008.



• According to the indictment, defendant Gary Trafford, a California resident, is charged with 102 counts of offering false instruments for recording (category C felony); false certification on certain instruments (category D felony); and notarization of the signature of a person not in the presence of a notary public (a gross misdemeanor).



• The indictment charges defendant Gerri Sheppard, also a California resident, with 100 counts of offering false instruments for recording (category C felony); false certification on certain instruments (category D felony); and notarization of the signature of a person not in the presence of a notary public (a gross misdemeanor).



• ”The grand jury found probable cause that there was a robo-signing scheme which resulted in the filing of tens of thousands of fraudulent documents with the Clark County Recorder’s Office between 2005 and 2008,” said Chief Deputy Attorney General John Kelleher.



• The indictment alleges that both defendants directed the fraudulent notarization and filing of documents which were used to initiate foreclosure on local homeowners. The State alleges that these documents, referred to as Notices of Default, or “NODs”, were prepared locally.



• The State alleges that the defendants directed employees under their supervision, to forge their names on foreclosure documents, then notarize the signatures they just forged, thereby fraudulently attesting that the defendants actually signed the documents, which was untrue and in violation of State law. The defendants then allegedly directed the employees under their supervision to file the fraudulent documents with the Clark County Recorder’s office, to be used to start foreclosures on homes throughout the County.



• The indictment alleges that these crimes were done in secret in order to avoid detection. The fraudulent NODs were allegedly forged locally to allow them to be filed at the Clark County Recorder’s office on the same day they were prepared. District Court Judge Jennifer Togliatti has set bail in the amount of $500,000 for Sheppard and $500,000 for Trafford.

For the Nevada AG press release, see Office of the Attorney General Announces Indictment In Massive Clark County Robo-Signing Scheme (Defendants to be Held Criminally Accountable for Filing Tens of Thousands of Fraudulent Foreclosure Documents).

For the criminal indictment, see State of Nevada v. Trafford. et ano. (440 pages).

See LPS Responds to Nevada Attorney General Announcement for Lender Processing Services' response to their two employees being pinched for their alleged involvement in the manufacturing of fraudulent foreclosure documents.

MERS Scores Michigan Win As State High Court Reverses Earlier Unfavorable Appeals Court Ruling On Bankster's Right To Foreclose

In Lansing, Michigan, WILX-TV Channel 10 reports:

• The Michigan Supreme Court ruled 4-3 in favor of Mortgage Electronic Registration Systems (MERS) Wednesday, allowing thousands of previously halted foreclosures around the state to resume.



• The decision overturns a lower court ruling from April that had blocked MERS' foreclosures because the company doesn't own or have any interest in the homeowners' debt. MERS isn't a bank or lending institution itself, it acts as a middleman to help speed up transfer of properties.



• Ingham Co. register of deeds Curtis Hertel Jr. says MERS was responsible for more than a quarter of the county's foreclosures during the last 4 years. "The Supreme Court’s decision affirms MERS' business model and will allow the Michigan real estate industry to get back to business as usual," said Bill Beckmann, MERS’ President and CEO in a statement sent to WILX. "This will allow homeowners to resolve title issues and buyers to move forward with the purchase of foreclosed properties, which is good for neighborhood stability.”



• In Michigan, companies like MERS don't need a court to foreclose. They can simply post an ad in the paper and post a notice on the door once a homeowner is in default in a process known as foreclosure-by-advertisement.



• Hertel Jr. says the extra delays the original court ruling added had helped homeowners fighting foreclosure have a fighting chance of staying in their homes. "It gave time for people to work out reasonable modifications and it gave time for people to recover financially," said Hertel Jr., who strongly disagrees with Wednesday's ruling. "This decision takes that time away."

Source: Mi. Supreme Court OK's MERS Foreclosures (The ruling reverses a lower court ruling that halted thousands of foreclosures in the state).

For the ruling, see Residential Funding v Saurman, No. 143178-9 (Mich. November 16, 2011).

Beginning Of A Well-Deserved End For NYS Foreclosure Mill Sweatshop? Freddie Gives Baum The Boot; Whether Others Follow Suit Remains To Be Seen

In Buffalo, New York, The Buffalo News reports:

• National mortgage servicing giant Freddie Mac has barred its loan servicers from referring any new foreclosure or bankruptcy cases in New York State to Steven J. Baum PC, delivering a severe blow to a firm that depends on such work.



• According to a new bulletin posted on the Freddie Mac website on Thursday, effective "on or after" Nov. 10, the Amherst-based law firm is no longer an approved option for the many mortgage lenders that work with Freddie Mac.

***

• Baum has been under heavy fire around the state, and even nationwide, for the firm's role in mortgage foreclosures and the "robo-signing" controversy. He and his firm have been castigated not only by consumers and consumer advocates, but also by other attorneys and even some judges, who have criticized the firm's paperwork as sloppy and riddled with errors.

***

• Most recently, it's been denounced for making fun of foreclosure victims, after photos emerged from the firm's Halloween party last year,(1) showing staff dressed up in costumes as debtors and, in one case, mocking a New York City attorney. The attorney, Susan Chana Lask, sued the firm in 2010 on behalf of a client, and then fought off a defamation suit from Baum.



• "This looks like the beginning of a well-deserved end for Baum," Lask said.

For more, see Freddie Mac bans Baum from N.Y. loan service.

(1) See The New York Times: What the Costumes Reveal.

8th Circuit Bankruptcy Appeals Panel OKs Chapter 13 Lien Stripping Move

In St. Paul, Minnesota, the Pioneer Press reports on a story of a homeowner/couple and their successful effort at getting a United States Bankruptcy Appellate Panel (made up of 3 bankruptcy judges) for the 8th Circuit Court of Appeals to allow for a lien stripping of a 2nd and 3rd lien on thier home where the amount owed on the first mortgage exceeded the value of the residence.

In obtaining the favorable ruling, the the couple convinced the appellate panel to overturn an earlier ruling of the bankruptcy judge who initially heard the case and ruled against the homeowners' move.

Reportedly, the appellate panel's decision is being appealed to the full 8th Circuit Court of Appeals, but attorneys say they expect the panel's decision to stand, as it mirrors decisions in other circuits,(1) the story states.(2)

For the story, see Bankruptcy made easier: Appeals court decision allows stripping of second mortgages.

For the court ruling, see Fisette v. Keller (In re Fisette), 455 B.R. 177 (B.A.P. 8th Cir. 2011).

Go here for other posts on lien stripping in bankruptcy cases.

(1) The court made the following observation in connection with this point:

• We agree with courts holding that §1322(b)(2) does not bar a Chapter 13 debtor from stripping off a wholly unsecured lien on his principal residence, a position that has been adopted by all Circuit Courts of Appeal to address this issue. See, e.g., Zimmer v. PSB Lending Corp. (In re Zimmer), 313 F.3d 1220 (9th Cir. 2002); Lane v. W. Interstate Bancorp (In re Lane), 280 F.3d 663 (6th Cir. 2002); Pond, 252 F.3d at 127; Tanner v. FirstPlus Fin., Inc. (In re Tanner), 217 F.3d 1357 (11th Cir. 2000);[2] In re Bartee, 212 F.3d 277 (5th Cir. 2000); McDonald v. Master Fin. Inc. (In re McDonald), 205 F.3d 606 (3d Cir. 2000).[3] Bankruptcy appellate panels of the Tenth and First Circuits have agreed with this conclusion. Griffey, 335 B.R. 166; In re Mann, 249 B.R. 831 (B.A.P. 1st Cir. 2000).[4]

(2) Worth noting is that within one year of the couple filing their Chapter 13 bankruptcy petition in this case, the couple had filed an earlier Chapter 7 bankruptcy case, in which the Debtor received a discharge of his unsecured debts. This maneuver is sometimes informally referred to by some bankruptcy practioners as a 'Chapter 20' bankruptcy (Ch.7 + Ch 13 = Ch.20). Go here for other posts on the so-called 'Chapter 20' bankruptcy.