Saturday, January 7, 2012

Deteriorating Conditions, Suspended Utility Service Leave Low-Income Tenants In Limbo With Financially Strapped Landlord, Foreclosing Lender

In Las Cruces, New Mexico, the Las Cruces Sun News reports:

  • Narine Rodriguez had brought her 2-day-old baby home for only an hour. "I am hoping there is not carbon monoxide here," said the 27-year-old single mom while standing with one foot propping open the apartment door at the Madrid Manor, 202 W. Madrid in Las Cruces.


  • She stood with a group of other tenants who gathered Wednesday afternoon outside her apartment to address what they say is an intolerable situation throughout their complex: roofs leaking and ceilings caving in, bath tubs held together with duct tape, inoperable toilets, neglected heaters they fear may be leaking poisonous carbon monoxide and - the final holiday topper - no water service until late Wednesday, when it was restored.


  • "I don't have any water, nothing running out of the sink," said Monica Salazar, a mother of five children ranging from 3 years of age to 10. She had just arrived home with her kids to find empty water pipes. "I don't know how I'm going to cook now. Obviously, I will have dishes to wash. My kids need to be bathed," said the 31-year-old, who said she always pays rent and bills promptly.


  • "I will call the landlord, but you can never reach them," she said. "All you get is the answering machine. I don't know what I'm going to do."


  • It's a problem that has tenants stuck between their low-income status and a landlord mired in a foreclosure that she says limits her responsiveness to tenant complaints about deteriorating living conditions and suspended utilities.


  • The landlord, who tenants identified as Cheryl Butler, had her published office number disconnected. Butler is listed on the Realtor.com as an agent for Abstract Real Estate and Rentals, [...] in Las Cruces.


  • When contacted on her cell phone, Butler said the Madrid Manor property had been foreclosed on and that she was not responsible for paying its bills. Butler said she was aware the water had been temporarily turned off and had done all she could to remedy it.


  • But, she said, it was the responsibility of "the bank" to pay the water bill and that she could not do anything without the bank's permission. "I can only do what the bank allows me to do," said Butler. When asked for the identity of the bank, she said she could not recall the name, adding: "I only report to the person I report to, and he deals with the bank." When asked for the name of person who reported to the bank, Butler declined to give that person's name.

For the story, see Apartment foreclosure leaves tenants in limbo.

Landlord's Foreclosure Drives Church Congregation Onto Streets; Hold Xmas Services In Parking Lot

In Phoenix, Arizona, KNXV-TV Channel 15 reports:

  • A congregation said they were just locked out of their Valley church four days before Christmas. Their Christmas tree was up and the toys were still inside. Members of the Destiny Center International Church told ABC15 that since their landlord lost the church in a foreclosure, they consequently were kicked out.

***

  • We decided we’re gonna stick it out,” he said. Service will carry-on, just in the parking lot. On Friday, Lephiew said the now banked-owned property allowed members to remove all of their belongings from the building near 35th and Northern Avenues. Everything that was once inside the church is now sitting inside a storage POD outside of it.

For the story, see Congregation evicted from church four days before Christmas.

See also, Parishioners of Foreclosed Church Attend Service in Parking Lot.

C. Florida Church On Verge Of Foreclosure Gets Boot Over Unpaid Electric Bill; Fire Marshal: Lack Of Power To Premises Makes Sanctuary Unsafe For Use

In Lakeland, Florida, The Ledger reports:

  • Polk County's largest church sanctuary sits idle, its power turned off and its future uncertain. Without Walls Central, the 9,000-seat sanctuary in North Lakeland formerly known as Carpenter's Home Church, has not held services since at least August, when Lakeland Electric disconnected electrical service because of missed payments by its owner, Tampa-based Without Walls International Church.


  • Rev. Randy White, a co-founder of Without Walls International and the ex-husband of its senior pastor, Paula White, told The Ledger in November that the Lakeland property was on the verge of either being sold or going into foreclosure and that an announcement on its future would come soon.

***

  • Lakeland Electric discontinued electrical service to the property in August, city spokesman Kevin Cook said. He said Without Walls owed more than $50,000 in unpaid bills at the time. Lakeland Electric applied the church's deposit of $51,180, he said, leaving the owners with a balance of $2,953.79.


  • Lakeland Fire Marshal Frank Bass posted notices at the property in late September reading, "This structure is unsafe for human occupancy and ordered vacated. This structure must remain vacant and unoccupied until all violations are corrected."


  • Bass said he posted the order because the lack of power to the sanctuary makes it unsafe for use.

For the story, see Future In Doubt for Without Walls Central Church Property (Without Walls Central has not held services since at least August).

Friday, January 6, 2012

New Texas Law Aims To Curb Property Owners' Errors, Fraud In Obtaining Real Estate Tax Exemptions On Homestead Claims

In Austin, Texas, the Austin American Statesman reports:

  • Some Texas homeowners are finding that they face new rules when applying for a homestead exemption on their property, the result of a new law that took effect in September.


  • The rules — which lawmakers say are intended to prevent fraudulent homestead exemptions — will affect people whose circumstances have changed. That includes first-time buyers, those purchasing a new home or people who have become eligible for a different type of homestead exemption, such as turning 65 or becoming disabled. It will not affect homeowners who already have a homestead exemption on their primary residence.

***

  • Homestead exemptions remove a portion of a home's value from taxation, lowering the amount of property tax a homeowner must pay. The measure's author, state Rep. Harvey Hilderbran, R-Kerrville, said the changes were needed to prevent property owners from claiming homestead exemptions on more than one property. Hilderbran said he heard complaints from appraisal districts across the state about homestead duplications — particularly from out-of-state and in-state residents filing exemptions for vacation homes.

***

  • Jim Robinson, the Harris County Appraisal District's chief appraiser and legislative chairman of the Texas Association of Appraisal Districts, said the state needed to crack down on duplication of homestead exemptions.


  • "You're talking about major theft, really, when (homestead duplication) occurs," Robinson said. "The homestead exemption is the single largest source of tax relief for people, and when you have people who are cheating on it and are saving gigantic amounts on taxes that they really should be paying, it means that the taxing units where this cheating is occurring have to set a higher tax rate, which penalizes everybody to raise the money that they need to fund their budgets."

***

  • Robinson said one problem occurring all around Texas has been property owners applying for homestead exemptions for rental properties.


  • "We had one case where a man and woman (in Harris County) had more than a dozen homesteads on their ... rental properties, and on each case, they used the address of the rental property, but they would use a different variant of their names. On some of them, they would show both of them as the owner; on some they would show either the husband or the wife as the owner," Robinson said.

For more, see Texans adjusting to changes in homestead exemption rules.

BofA Throws Foreclosure Contractor Under The Bus As Burglary Charge Brought For Alleged Unauthorized Entry, Disturbance Of Family's Belongings

In Martinsburg, West Virginia, The Journal reports:

  • A Martinsburg man contracted by Bank of America to cut grass at a home a day after its foreclosure was arraigned on one count of daytime burglary Wednesday after he allegedly entered the house and rifled through the family's personal belongings.


  • Warren Edward Brown, 30, of Herman Lane, was later released after posting $15,000 bail. One of the alleged victims told police that boxes in a family room had been disturbed, a bedroom closet was rummaged through, a safe in the basement was moved and copper wire had been moved from the garage to the driveway, according to court records.


  • Brown has denied any wrongdoing, telling police that another man working with him found that a back door had been kicked in and that it was part of his job to enter the residence to see if there were any damages or if anything was missing, records show.


  • Brown's supervisor and a Bank of America representative, however, told police that no one, including Brown, was authorized to enter the residence.

***

  • On Oct. 21, [West Virginia State Trooper N.F.] Alatta contacted the field service office for Bank of America and spoke with a representative about the situation. The representative told the officer that Bank of America had submitted an order for the grass to be cut at the residence and stated that no one should have gone into the home, including Brown, records show.

For more, see Bank contractor charged with burglary (Martinsburg man hired by Bank of America to cut grass at foreclosed home arraigned).

Financially Strapped Homeowners Becoming More & More Comfortable Fighting Back Against F'closure, Using Technicalities To Leave Banksters Sucking Wind

CNNMoney reports:

  • Delinquent borrowers facing foreclosure are learning that they can stay in their homes for years, as long as they're willing to put up a fight. Among the tactics: Challenging the bank's actions, waiting to file paperwork right up until the deadline, requesting the lender dig up original paperwork or, in some extreme cases, declaring bankruptcy.


  • Nationwide, the average time it takes to process a foreclosure -- from the first missed payment to the final foreclosure auction -- has climbed to 674 days from 253 days just four years ago, according to LPS Applied Analytics.


  • It takes much longer than that in Florida, where the process averages 1,027 days, nearly 3 years. In D.C., foreclosure averages 1,053 days and delinquent borrowers in New York often stay in their homes for an average of 906 days.

***

  • Ironically enough, the banks have given delinquent borrowers some of the ammunition they need to delay the foreclosure process. During the "robo-signing" scandal in 2010, it was revealed that bank employees signed paperwork attesting to facts they had no personal knowledge of. Now, borrowers are routinely challenging that paperwork.

For more, see Foreclosure free ride: 3 years, no payments.

Thursday, January 5, 2012

Wanna-Be House-Buying Couple Left Holding The Bag In Rent To Own Scam Involving Home In F'closure; Attorney: 'Protect Yourself - Get A Title Search!'

In Columbus, Ohio, WBNS-TV Channel 10 reports:

  • With the real estate market down, and some financial problems in the past, the Kaiser family decided they would try to find a home with a lease-option to buy, Consumer 10’s Kurt Ludlow reported on Friday.


  • Sandy and Tim Kaiser rented a condo, with a promise from the owner that he would sell them the condo in a few years. He promised to pay the association fees and the mortgage during that time. The Kaiser’s eventually discovered that the condo was in foreclosure.


  • I’m trying really hard not to be bitter about the fact that I think he knew from the beginning that he wasn’t going to be making his payments,” Sandy Kaiser said. “I think he just booked.”


  • Lawyer Gary Price said what happened to the Kaisers could have been prevented if they had used a lawyer. “Lease to own, it's not the end of the world,” Price said. “Land installment contract's not the end of the world. But comply with the law."


  • Under the law, any deal to sell property, even leasing to own, must be in writing, witnessed and notarized, Price said. "Find out who you're dealing with,” Price said. “Best way to do that, safest way to do that, and yes it costs a little money, is to get a title search.” Finally, the contract must be filed with the County Recorder, Price said.


  • The Kaiser family said that they are waiting for the Sheriff to knock on their door. “I (have to) keep paying him, and he's already stealing from the bank is the way I look at it,” Tim Kaiser said.

Source: Risk Incurred In Renting To Own.

Minnesota Regulator Slams Loan Modification Racket For Clipping Desperate Homeowners For Illegal Upfront Fees; Victims To Get Refunds

In Bloomington, Minnesota, the Star Tribune reports:

  • State regulators have yanked the license of a Bloomington mortgage modification company it says was preying on desperate homeowners.


  • Mortgage Connection Inc., also called Mordicorp, didn't have the appropriate license, altered documents and charged illegal advance fees for loan modification services that it frequently failed to provide, the Commerce Department said Thursday. In some cases, the consumers fell behind even further on payments and are losing their homes in foreclosure.


  • Thirty-six consumers, including about 19 in Minnesota, were charged on average more than $2,000 in advance fees for modifications they didn't receive. They will get refunds within the next 30 days, the department said.


  • "Time and time again we see vulnerable homeowners turn over their last dollar in hopes that their homes might be saved," state Commerce Commissioner Mike Rothman said in a statement.


  • The company's license has been revoked and its president, Augustus Odoom, has been barred from originating or servicing mortgages and must pay a civil fine of $40,000 if he doesn't return fees to customers, among other things, according to the consent agreement signed last week. Odoom, 58, is recently of Eden Prairie.

For the story, see State slams alleged Bloomington mortgage scammer (Consent agreement calls for consumers to get advance fees returned).

Would-Be Tenant/Couple Stung For $2300 In Rent Scam; Cops: Matter Being Treated As A Crime

In Contra Costa County, California, the Martinez News-Gazette reports:

  • This week Rachael and Ray Gray are wishing they would have asked many more questions before handing over $2300 in first, last and security deposit on a two-bedroom Pacheco Blvd. rental house, they said.


  • The couple – desperate to avoid homelessness and wholly trusting that nothing was amiss – paid the advance rent and deposit via money order to a woman who represented herself as the agent for the property owner.


  • A couple of weeks later, the Grays came home to find the locks changed and a warning, from the real owner, that they would be arrested by the Contra Costa County Sheriff’s Office for trespassing and squatting at the home, [...].


  • The “agent” was apparently an impostor, and the Grays haven’t seen nor heard from her since. She’s long gone, say the Grays, along with the family’s entire savings and fake lease.


  • We are looking into this case,” said CCCSO spokesperson Jimmy Lee on Wednesday. “It is being treated as a crime.”

For more, see Rental scam hits home in Martinez (Impostor landlords fleece tenants).

Wednesday, January 4, 2012

Florida Supreme Court Slams Six Attorneys In 'Sticky Fingers' Syndrome Cases

The Florida Bar has recently issued its quarterly gossip sheet, listing Florida attorneys that have recently received one or more forms of discipline.

Among those making this quarter's hit parade for possibly playing fast and loose with the cash sitting in their client's trust account, or who otherwise suffered from 'sticky fingers' syndrome with regard to other people's money, are:

  1. Ryan Scott Hobby, 836 W. Montrose St., Suite 1, Clermont, suspended until further order, following an October 6 court order. (Admitted to practice: 2005) According to a petition for emergency suspension, Hobby appeared to be causing great public harm by misappropriating client trust funds. Hobby admitted through counsel to making 13 improper transfers from his trust bank account to another bank account totaling $14,250. (Case No. SC11-1886)


  2. John D. Hooker, 13610 E. U.S. Highway 92, Dover, suspended until further order, following an October 10 court order. (Admitted to practice: 1974) According to a petition for emergency suspension, Hooker appeared to be causing great public harm by misappropriating trust funds. Hooker improperly commingled funds. He also failed to maintain certain trust accounting records and follow mandatory trust accounting procedures. (Case No. SC11-1766)


  3. James Lewis Hunter, 150 2nd Ave. N., Suite 1170, St. Petersburg, suspended until further order, following an October 10 court order. (Admitted to practice: 2004) According to a petition for emergency suspension, Hunter appeared to be causing great public harm by misappropriating client trust funds. He also abandoned his law practice. (Case No. SC11-1919)


  4. James Crenshaw Kelley, 12651 S. Dixie Highway, Suite 201, Pinecrest, suspended until further order, following an October 31 court order. (Admitted to practice: 1977) According to a petition for emergency suspension, Kelley appeared to be causing great public harm by misappropriating and/or diverting funds entrusted to him. Kelley disbursed more than $124,000 that was deposited into his trust account for a client’s benefit, to himself for personal use. Kelley subsequently wrote the client, begging her not to report his actions to The Florida Bar. (Case No. SC11-2035)


  5. Octavio Enrique Mestre, 9031 S.W. 162nd Court, Miami, disbarred following an October 11 court order. (Admitted to practice: 1992) In 2005, while acting as a settlement agent in a real estate transaction, Mestre failed to satisfy an underlying mortgage and in so doing, failed to preserve and apply the funds in accordance with Bar rules regulating trust accounts. (SC11-1867)


  6. Gregg Adam Steinberg, 4441 Comanche Trail Blvd., Saint Johns, disbarred effective retroactive to August 30, 2010, following an October 7 court order. (Admitted to practice: 1993) Steinberg knowingly made false statements in court under oath; he failed to disclose that he was the subject of a pending criminal investigation; he misappropriated funds; and he engaged in a pattern of blaming others in an attempt to deflect attention from himself. (Case No. SC10-161)

In addition, one attorney received a scolding for associating himself with a loan modification group and sharing fees with nonlawyers:

  • Curt G. Levine, 5036 Dr. Phillips Blvd., Suite 358, Orlando, publicly reprimanded following an October 6 court order. (Admitted to practice: 1973) Levine associated himself with a loan modification group and shared fees with nonlawyers. (Case No. SC10-536)

For the entire gossip sheet, see Disciplinary Actions (1/1/2012).

Widow Wins Battle To Wrestle Back Control Of Her Vacated Home From Adverse Possession-Claiming House Hijackers; Squatter Claims $7.5K Mechanics' Lien

In Mansfield, Texas, the Star Telegram reports:

  • A teary-eyed widow got her house back from squatters Thursday morning without a fight. "This has made a toll on me and my family right now," said Brenda J. Thornton, who appeared in eviction court. "This needs to be told. ... How they can come in and do this to us? It hurts."


  • The latest squatter case in Tarrant County was resolved in about five minutes in Justice of the Peace Matt Hayes court after attorney Robert Frisch said his clients, Andre and Selena Brown, were not disputing their rights to the house on Hillgrove Court under state adverse possession law.


  • State law allows persons to claim a right to abandoned property if they maintain it and pay taxes on it. Over time, if no owner claims the property, then the person may stake a claim. The Browns filed an affidavit of adverse possession months ago, claiming a right to the property on Hillgrove Court.Thornton owns the title on the property and raised her family there, she said.


  • "It's a little bit of an unusual situation there but it looks like everything was resolved amicably," Hayes said after the eviction hearing. No testimony was heard and no arguments were presented. Frisch said his clients only wanted to make arrangements with Thornton and her attorney to get their belongings out of the house.

***

  • All told, about 55 affidavits have been filed in the last six months at [County Clerk Mary Louise] Garcia's office by people claiming rights to abandoned property. On Nov. 7, Tarrant County District Attorney Joe Shannon instructed Garcia's office to stop taking the affidavits because of alleged fraud. Shannon's office also has vowed to pursue criminal action against those who file fraudulent paperwork.


  • The Browns were arrested for burglary of a habitation almost two weeks ago. Family members Alicia and Andrew LaTour, who had filed affidavits on another Mansfield home, were arrested earlier on the same charges. Formal charges may be filed in upcoming days, officials said. Frisch represented the LaTours and the Browns.


  • Andre Brown also placed a mechanic's lien on Thornton's Hillgrove Court property, asking for compensation for about $7,500 in construction and repairs he made to the house since moving in. La Rue said that claim would be discussed in the next few days, among other items, such as arranging for the Browns to retrieve their possessions from the house.

For the story, see Widow gets Mansfield house back from squatters.

See also, Mansfield squatter suspects keep it all in the family.

Bklyn Judiciary, Guardianship System Strike Again; Hijack Supervision Over Elderly Widow, Control Over Her Assets; Victim "I Was Sold Like A Slave..."

In Brooklyn, New York, the The Washington Examiner reports:

  • Ella Card had it made in America. After emigrating to the United States from her native Belize, she earned a masters degree and taught third grade in the New York City Public School system for three decades.


  • She and her late husband Raymond, who died as a result of taking the recalled painkiller Vioxx, had saved and invested their money wisely, so Card was looking forward to a comfortable retirement.


  • But her well-laid plans took a terrible detour when she suffered temporary dementia after being struck by a car in 2010. Her two sons, whom she says lost their jobs as corrections officers due to drug abuse, petitioned the Brooklyn Supreme Court for guardianship over her affairs.


  • And after recovering from her injuries, the 73-year-old widow -- a naturalized U.S. citizen who retains dual citizenship in Belize -- finds herself in an ongoing guardianship nightmare that has now gone international.


  • On March 16, Brooklyn Judge Betsy Barros held one of five ex parte hearings on Card, appointing a temporary guardian. On April 26, Barros ignored Card's durable power of attorney, irrevocable trust, and two quit claim deeds and read the still-very-much-alive woman's will in open court before declaring her "incapacitated."


  • The court transcript obtained contains this Kafkaesque passage: "... the Incapacitated Person, Ella Card, vigorously contested the proceedings." "It felt like a hanging. I was the only one sticking up for my mother," Card's 43-year-old daughter Cindy told us. "Every one of them standing there and allowing it knew my mother was not incapacitated."


  • Card was then placed under the near total control of a court-appointed guardian, The Vera Institute of Justice, located in the same Brooklyn courthouse. The Vera Institute of Justice's website describes it as "an independent, nonpartisan, nonprofit center for justice policy and practice." According to IRS records, $16.7 million of its $24 million annual funding comes from government grants.


  • Card told The Washington Examiner that The Vera Institute of Justice promptly froze all of her assets (valued at approximately $1 million), including her teachers' pension, began collecting rent on the property she owned, and forced her to live in her own home without heat, hot water or access to her own money.


  • Card petitioned the court to remove the guardianship. Her petition was denied. She had to borrow money to travel to Washington where, on June 14, she was one of 40 people from 17 states to tell a congressional listening session chaired by Rep. Ted Poe, R-Texas, about abuses of the guardianship system that strip vulnerable seniors and disabled people of their civil and constitutional rights.


  • Card was the only witness deemed "incapacitated" to testify for herself: "I was sold like a slave to The Vera Institute ... which closed all of my bank accounts, took control of my money, filed a change of address to get my mail, demanded keys to my properties and contacted Belize to try to take control of my property and bank accounts in that country. ..."


  • Card says her niece, who works in the American consulate, told her that the Belizean authorities confirmed she was living there, but refused to give The Vera Institute of Justice any other information.


  • The Examiner has learned that Nestor Mendez, Belize's ambassador to the United States, read a November letter from Card requesting his protection and passed it on to the embassy's legal division for follow-up. Karen Goldstein, the Vera Institute of Justice's general counsel in New York, said she would look into the matter. We're still waiting for her response.


  • Meanwhile, the feisty Card -- who clearly demonstrated her mental and verbal acuity in an interview with this newspaper -- continues to fight for her freedom.(1)

Source: Retired NYC school teacher fights for her freedom.

(1) For other posts on the abuse of the guardianship system and 'granny-snatching' incidents, see:

Tuesday, January 3, 2012

Bankruptcy Court Watchdog In Ongoing Probe Into Allegations Of Foreclosing Banksters' Mortgage Escrow Fee Double Dipping Yielding Million$ In Profit$

In New York City, the New York Post reports:

  • Federal investigators are looking into allegations that banks have wrongly pocketed tens of millions of dollars from troubled homeowners by double-billing for mortgage escrow fees, The Post has learned.


  • Exactly how much in phony profits the banks may have pocketed from this alleged practice is not known, but an analysis by The Post of bankruptcy cases in 2011 shows it could range higher than $150 million for just the new cases filed this year.


  • The problem has gotten so out of hand that lawyers and accountants at the New York City office of US Trustee — charged with protecting the integrity of US bankruptcy courts — are poring over local Chapter 13 bankruptcy cases for evidence of wrongdoing.


  • The federal investigators were tipped to the alleged practice by metro area bankruptcy lawyers. Cases specifically involved Wells Fargo and GMAC Mortgage, but lawyers say most banks had double-dipped.


  • It seems prevalent, and it’s a moneymaking machine,” David Shaev, a Manhattan bankruptcy defense lawyer, said of the banks’ double-dipping.


  • Westchester bankruptcy defense lawyer Linda Tirelli says 75 percent of her clients face escrow double-billing by their lender or mortgage servicer, for amounts up to $2,800.


  • Here’s how the double-dipping scam can be pulled off. Many homeowners opt to pay part of their property taxes and homeowners insurance with their mortgage every month. The funds are then put into an escrow account and used to periodically pay the taxes and insurance.


  • But after falling behind on a few payments, troubled borrowers in Chapter 13 often find that their bank or mortgage servicer tries to collect twice on the escrow funds — once as part of the overall mortgage payment, and again as a separate “escrow shortage” charge.


  • The average double charge is about $2,000, said forensic accountant Jay Patterson of Full Disclosure in Arkansas, who sees escrow issues in half the cases he examines. In 2011, there were 362,000 Chapter 13 cases filed nationwide, according to the National Bankruptcy Research Center. If three-quarters of those cases involved homeowners, and even one-third of that subset of cases had extra escrow charges of $2,000, then banks clobbered homeowners with an astonishing $179 million in false charges.


  • Following on the heels of the widespread robo-signing scandal — where executives signed reams of foreclosure paperwork without reviewing it — the escrow double-dipping is just another example of the shoddy if not outright fraudulent practices by banks thirsty for profit above all else.

Source: Sloppy seconds: Feds probe million$ in 'double-billing' by banks.

Schack Blisters F'closing Bankster For Invoking "Absurd" "Pontius Pilate/Sgt. Schultz Defense" After Being Nailed For Submitting Robosigned Court Docs

In Brooklyn, New York, the New York Daily News reports:

  • A Brooklyn judge ridiculed HSBC's "know nothing" defense for filing a false document in a foreclosure case and slapped the bank with the maximum $10,000 penalty. “HSBC sounds like ... Sgt. Schultz in the classic 1960s television comedy, 'Hogan's Heroes,'" Supreme Court Justice Arthur Schack wrote in a Dec. 22 decision made public Wednesday.


  • "The inept Sgt. Hans Schultz ... would feign ignorance about the escapades of his Allied prisoners by telling his commandant, Col. Klink, 'I know nothing! Nothing!'"(1)


  • HSBC had incurred Schack's wrath earlier this year when he caught its lawyers submitting documents filed by “robo-signers" purporting to work for the bank who were were actually employed by a loan servicing firm.


  • Bank officials and their lawyers are required to review and verify the accuracy of filings in foreclosure cases under regulations issued by state Chief Judge Jonathan Lippman. Later, a bank senior vice president submitted a sworn affidavit claiming HSBC had no knowledge of the mortgage in question and blamed the fiasco on the loan servicer.


  • But Schack, whose blistering and colorful opinions from the bench have made him a folk hero for financially troubled homeowners — said HSBC is responsible for the actions of its agents. The ticked-off judge also docked the bank's Rochester-based law firm $5,000 for its conduct in the matter, according to court papers.


  • The judge had ordered HSBC President and CEO Irene Dorner to appear at a hearing last July, but she blew it off. "She was missing in action, demonstrating her personal contempt for the Supreme Court of the State of New York," Schack fumed.


  • A representative for the law firm Shapiro DiCaro & Barak said it is appealing Schack's decision. Bank spokesman Neil Brazil said HSBC neither serviced the loan nor “prepared nor filed any of the underlying legal documents presented to the court.”


  • The tumult stemmed from homeowner Ellen Taher's delinquent mortgage on her Bedford-Stuyvesant, Brooklyn, residence.

Source: HSBC like ‘know nothing’ Sgt. Schultz from ‘Hogan’s Heroes,’ Brooklyn judge says; Blames bank in foreclosure errors.

For the ruling, see HSBC Bank USA, N.A. v Taher, 2011 NY Slip Op 52317(U) (NY Sup. Ct., Kings County, December 22, 2011, Schack, J.).

(1) In hammering the foreclosing bankster, Justice Schack made these comments:

  • Further, as indicated by the Musarra affidavit and the Michael Ware Memorandum of Law, HSBC sounds like a combination of Pontius Pilate and Sergeant Schultz in the classic 1960's television comedy, Hogan's Heroes.

    HSBC washes its hands of any responsibility and places any blame upon OCWEN, its servicer for the TAHER mortgage. To paraphrase Matthew 27:24, in the New Testament, "when HSBC saw that it could prevail nothing, but that rather a tumult was made, it took water, and washed its hands before the multitude, saying, 'I am innocent of responsibility and should not be sanctioned.'"

    John Banner, the actor who played the inept Sergeant Hans Schultz, a guard in World War II's Stalag 13, would feign ignorance about the escapades of his Allied prisoners by telling his commandant, Colonel Klink, "I know nothing! Nothing!"

***

  • Moreover, HSBC's Pontius Pilate/Sergeant Schultz defense is absurd. The case caption states that HSBC is the plaintiff, not OCWEN. If HSBC has its name on the caption, it can't claim ignorance. HSBC as plaintiff is responsible for the actions of its agents, such as OCWEN.

    Mr. Ware's claim that "neither HSBC not Dorner was in any practical position to control the prosecution of this action" is ludicrous. This does not absolve HSBC of its corporate sins. If HSBC is a ship, Ms. Dorner is the Captain and responsible for both the good and the bad. However, in the instant action, HSBC appears to be the RMS Titanic. Ms. Dorner, unlike Captain Edward Smith of the RMS Titanic, did not go down with the ship after it struck an iceberg.

Man To Stand Trial For Allegedly Forging Ex-Fiance's Signature To Strip Home Title, Allowing Scammer To Sell It, Pocket The Cash, Flee To Europe

In Elkhorn, Wisconsin, The Janesville Gazette reports:

  • Jacqueline Sharlein recognizes the forged signatures that stripped her ownership of her East Troy home, allowing someone to sell it and flee to Eastern Europe. The signatures were forged by her former fiancĂ©, she said.


  • Gerald Nickels was ordered [] to stand trial after Walworth County Judge John Race ruled Nickels probably committed a felony.


  • Sharlein was the only witness to take the stand during the preliminary hearing, where Nickels silently watched with his attorneys. Sharlein testified she was familiar with Nickels' handwriting, and signatures on a quit claim deed and escrow check matched those of her former fiancĂ©. Sharlein said her first name was even misspelled on one of the signatures.


  • Nickels is charged with forgery and misappropriating identity, both felonies carrying a maximum prison sentence of up to six years.

For the story, see Suspect ordered to stand trial for felony forgery charge.

City Council Member Announces Re-Election Run Despite Alleged Ripoff Of 94-Year Old Man's Home; Deed Subsequently Voided; Criminal Trial Pending

In Phenix City, Alabama, the Columbus Ledger Enquirer reports:

  • Despite being under indictment for forgery and perjury, Phenix City Council member Arthur L. Sumbry Sr., announced [] that he is running for re-election. If Sumbry is convicted, he would have to vacate the office and would not be eligible to run.


  • His co-defendant, Ella Mae Sanders, was convicted of first-degree perjury but was acquitted of charges she forged a warranty deed that Sumbry notarized. She was sentenced to four years in prison.


  • The two were indicted in January on charges they forged a deed that transferred the Phenix City home of an ailing 94-year-old man to Sanders’ son. The man’s daughter claimed her father was not competent to execute legal documents in his failing health.


  • A judge declared the document null and void. Sumbry’s trial date has not been set, but will likely be next year after the Russell County Courthouse is reopened.

Source: Phenix City councilman Arthur L. Sumbry Sr. to run for re-election despite indictments for perjury, forgery.

Monday, January 2, 2012

Lien Stripping Question In Chapter 13 Bankruptcy Proceedings Comes To A Head In Minnesota; Advocates Seek Case Law Consistency With Rest Of Country

The Minnesota Lawyer reports:

  • [Minnesota]’s bankruptcy attorneys are hoping that a case before the 8th Circuit Court of Appeals will allow debtors to get out from under second mortgages in Chapter 13 bankruptcies and bring Minnesota in line with the rest of the country when it comes to a practice called lien stripping.

***

  • In the 1990s into the 2000s bankruptcy courts said you couldn’t do lien stripping on unsecured second mortgages, but over the past few years every other circuit except for the 8th started to change its mind and say you can do lien stripping if there is no value on the home,” [Bloomington bankruptcy attorney Craig Andresen] said. “As real estate values have plummeted now you have lots of totally unsecured second mortgages, and Minnesota is still saying that you can’t strip those liens. I felt that if every other court was allowing it, why not Minnesota? It’s time to get lien stripping approved by an appeals court.”

***

  • Jasmine Keller, the Chapter 13 bankruptcy trustee for the District of Minnesota, agrees that second and third mortgages should be stripped because homeowners need help. She said some families have $200,000 mortgages on homes now worth $125,000. For them, lien stripping is no different than when corporations file for bankruptcy protection.

For more, see Lien stripping could be in state’s future (Case could allow practice now barred in bankruptcy).

Fla. AG Seeks State High Court Ruling On Applicability Of Deceptive Practices Law To Attorneys Creating, Using Invalid Assignments In F'closure Cases

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

  • Florida Attorney General Pam Bondi wants the Supreme Court to weigh in on her failed bids to investigate foreclosure law firms, saying unlawful practices have put homeowners "at considerable risk."


  • In what one lawmaker called Bondi's first aggressive move against so-called "foreclosure mills", she filed a request Wednesday for the 4th District Court of Appeal to send a query to Supreme Court justices about her investigatory authority.


  • State subpoenas against the Law Offices of David J. Stern and the Boca Raton based-Shapiro and Fishman, were quashed in the 4th DCA with judges ruling the state has no power to pursue firms under the Florida Deceptive and Unfair Trade Practices. The losses effectively killed the state's ability to pursue civil charges against seven Florida firms currently under investigation.


  • While this week's request is just the first step in getting a Supreme Court decision, some foreclosure defense attorneys and lawmakers lauded the move, saying high court rulings are needed to sort out the state's foreclosure morass.

***

  • At issue in Bondi's request is whether the creation of invalid assignments of mortgages by a law firm and the use of the documents in court is an unfair or deceptive trade practice subject to state investigation.


  • Assignments of mortgage are typically issued to banks as a way to show ownership. They have played a bigger role in foreclosure cases since the real estate bust as the chain of ownership records were obscured when loans were securitized.


  • Earlier this month, the Florida Supreme Court took the unusual step of deciding to take up an already settled foreclosure case involving an allegedly backdated assignment. The opinion, the majority of justices wrote, could impact the "mortgage foreclosure crisis throughout this state."

***

  • Bondi is besieged by critics who say she has been apathetic about the foreclosure investigations she mostly inherited from former Attorney General Bill McCollum. The furor came to a head over the summer when it was learned two of the leading foreclosure investigators had been forced to resign despite stellar performance evaluations.

For the story, see Florida's AG files motion requesting Supreme Court decision on foreclosure cases.

Brooklyn Judge Clips Bankster, Foreclosure Mill Sweatshop For $15K In Sanctions For Wasting Judicial Resources In Continuing Heavily Defective Suit

In Brooklyn, New York, The Buffalo News reports:

  • An outspoken State Supreme Court justice in Brooklyn known for taking on banks and throwing out foreclosures has fined HSBC Bank USA $10,000 for “frivolous conduct” in trying to seize a home without proper paperwork.


  • Justice Arthur M. Schack sanctioned the U. S. subsidiary of London-based HSBC Holdings Plc last week, citing the bank’s “waste of judicial resources” in continuing a foreclosure action “with all of its defects.”


  • In his ruling, he said the bank’s “use of robosigners” is “completely without merit in law,” and he accused the bank of asserting “material factual statements that are false.”


  • He also sanctioned HSBC’s legal counsel, the law firm of Shapiro DiCaro & Barak LLC, for the same reasons, putting blame specifically on attorney Frank M. Cassara but imposing a $5,000 fine on the firm instead of the attorney.


  • The judge did not fine HSBC USA CEO Irene M. Dorner, whom he had ordered to appear in a hearing July 15 to justify why he should not sanction her or the bank. Dorner was out of the country and did not appear at that hearing, but rather sent an attorney as her representative.


  • That had triggered indignant outrage among a few online pundits and foreclosure victims, but Schack acknowledged in his ruling that, because she had the attorney present, “It’s HSBC that I might be able to sanction, not Ms. Dorner as an individual.”

For more, see HSBC Bank USA fined $10,000 in home seizure.

For the ruling, see HSBC Bank USA, N.A. v Taher, 2011 NY Slip Op 52317(U) (NY Sup. Ct., Kings County, December 22, 2011, Schack, J.).

Sale Leaseback-Peddling Prosecution Ends Up With 6-Months House Arrest For One; Sentencing For Another Delayed Pending Evaluation Of Snitch's Help

In Concord, New Hampshire, The Nashua Telegraph reports:

  • A former Nashua man’s sentencing on federal mail fraud charges for stripping equity from troubled homeowners facing foreclosure has been postponed again. Walter Bressler, now of Frisco, Texas, will be sentenced on federal mail fraud charges March 12. Bressler has pleaded guilty to the charges and was supposed to be sentenced Dec. 5, according to documents filed at U.S. District Court in Concord.(1)


  • Meanwhile, a second man who admitted to his role in the same mortgage scheme was sentenced Dec. 6. Richard Winefield was sentenced in U.S. District Court on felony mail fraud charges and was given three years probation with special conditions, including a six-month period of home detention and electronic monitoring. He was ordered to pay $407,500 in restitution.


  • Bressler’s sentencing hearings have been postponed several times to give him and prosecutors time to evaluate his cooperation inresolving other targets,”(2) according to court documents. Bressler was supposed to be sentenced Aug. 11 and then Dec. 12, according to court records.


  • Prosecutors claim Bressler and Winefield helped persuade financially troubled homeowners to sign over the deeds to their properties with the promise they could stay on as tenants, pay rent for two years and then buy the property back at a prearranged price.


  • Instead, the scheme’s participants resold the homes to “straw buyers,” often in amounts that exceeded the original owner’s loans, according to the U.S. attorney. Some of the rent money was used to pay off the new mortgages, but the loans eventually went unpaid and the homes fell into foreclosure.


  • The original owners had no “realistic opportunities” to buy their homes back because they had been stripped of equity and encumbered with large defaulted loans, according to the U.S. attorney.


  • Michael Prieto has been identified by prosecutors as a partner of Bressler’s and Winefield’s, but he hasn’t been charged. Prieto said it was no scheme, but rather a refinancing program intended to help struggling homeowners, which would have worked if they had paid their agreed-upon rent.


  • The agreement and the program … was not a scam,” Prieto previously told The Telegraph. “It was designed for its purpose, which was helping people pay off their debts, giving them breathing room, giving them an opportunity to stay in their homes for two years.”

For the story, see Former Nashua man’s sentencing for mortgage scheme postponed.

(1) Go here for:

(2) "Resolving other targets" is an apparent euphemism used by the Feds and other insiders in place of the more common vernacular familiar to the public, 'throwing under the bus'. The existence of negotiations to assess the value of Bressler's contribution in dragging down more of the scam's confederates reinforces the observation made by one learned Federal judge with regard to plea deal negotiations and the so-called race to the prosecutor's office:

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

Sunday, January 1, 2012

Another Screwed-Over Homeowner Needs Appeals Court To Reverse Trial Judge's Erroneous Summary Judgment In Foreclosure Case

In San Francisco, California, The Recorder reports:

  • The Sixth District Court of Appeal tossed out a summary judgment for Citibank and a loan servicer in a foreclosure case on Wednesday, giving a plaintiff another shot to prove he was a victim of predatory lending.


  • Jonas Lona — who claimed he was bamboozled in a mortgage refinancing scheme — had demonstrated triable issues of fact as to whether the loans were procedurally and substantively unconscionable, the three-judge panel concluded.


  • "And while this evidence may not ultimately be persuasive at trial, in this case, it was sufficient to defeat the motion for summary judgment," wrote Santa Clara County Superior Court Judge Brian Walsh, sitting by assignment.

For more, see Mortgage Fraud Suit Can Proceed, Appeal Court Rules.

For the court ruling, see Lona v. Citibank, N.A., H036140 (Cal. App. 6th Dist. December 21, 2011).

San Bernardino DA: Pinched Pair Conspired To Forge Documents In Title Theft Of Recently-Deceased Woman's Home

From the Office of the San Bernardino County, California District Attorney:

  • Two men accused of using fraudulent means to obtain the certificate of title to a deceased woman’s home have been arraigned in San Bernardino Superior Court. Troy Lamar Preston, 41, of San Bernardino, and Mario Emile McKinley, 31, of Riverside, have been charged with two counts of forgery, two counts of offering a false or forged instrument, theft from elder or dependent adult, first degree burglary, and identity theft.


  • On November 14, 2008, Velma Jean Lee's residence in San Bernardino was paid off. Three days later, Lee died. Preston and McKinley conspired to take over title for the purpose of selling it to an investor to benefit from the proceeds.


  • On December 22, 2008, Lee's name was forged on a Grant Deed fraudulently transferring her property over to Seaboard Inc. The public notary was positively identified as McKinley. In the meantime, Preston signed an Affidavit-Death of Joint Tenant in an effort to avoid probate. McKinley was the notary for this document as well.


  • Upon interviewing the Chief Executive Officer (CEO) of Seaboard Inc., investigators learned that the CEO knew Preston, but was unaware that his corporate identity had been stolen to transfer Lee’s property over to his corporation.


  • Preston was positively identified in two separate interviews by the decedent's son and the Seaboard Inc. CEO Senior Investigator Maurice Landrum from the San Bernardino County District Attorney’s Office, Real Estate Fraud Division, obtained a search warrant for McKinley's Riverside residence.


  • During the course of the search, Landrum located and seized McKinley's notary journal, which placed him inside the decedent's home. Based on McKinley's statements and the notary journal, criminal charges were filed against McKinley and Preston (who, at the time, was on formal probation and had not reported in since April of 2011).

For the San Bernardino County DA press release, see Two Men Charged With Real Estate Fraud.

Latest Federal Program To Help Homeowners In Foreclosure "Looks Like More Of The Disappointing Same"

The New York Times reports:

  • THROUGHOUT the foreclosure crisis, Washington has done little to help people hang on to their homes. All those programs that were supposed to help — HAMP, HARP, Hope for Homeowners — have mostly failed.


  • So many were skeptical when the Office of the Comptroller of the Currency announced yet another program in April. This one was intended to provide reparations to homeowners who’d been hurt financially by foreclosure abuses at banks.


  • As the details trickle out, the program looks like more of the disappointing same. “This is just the next program that’s getting people’s hopes up,” said Alys Cohen, staff attorney at the National Consumer Law Center in Washington. “Not only will it not help people, it could easily harm them.”

For more, see Foreclosure Relief? Don’t Hold Your Breath.