Saturday, August 11, 2012

Disbarred Attorney Found Guilty Of $186K+ Ripoff From Elderly Clients

From the Office of the Massachusetts Attorney General:

  • A former Greenfield attorney has been convicted in connection with stealing more than $186,000 from an elderly couple he represented in a personal injury settlement case, Attorney General Martha Coakley’s Office announced [].

    After a three day trial, a Franklin Superior Court jury found defendant Edward Pepyne, Jr., age 59, of South Deerfield, guilty of the charge of Larceny over $250 of a Person Over Sixty Years of Age. Pepyne will be sentenced by Superior Court Judge John A. Agostini at a hearing on June 29.
  • In 2006, authorities believe Pepyne targeted an elderly husband and wife that had been in a serious automobile accident and offered to represent them in their personal injury claim. Investigators discovered that Pepyne and the elderly husband had known each other prior to the accident, and Pepyne used this relationship to offer his services as an attorney.

    Pepyne entered into an agreement that allowed him to keep one third of the funds he recovered for his clients in the personal injury claim. Pepyne settled his clients’ case prior to litigation and he eventually deposited the settlement funds into his business account he had at a local bank.

    Investigation revealed that instead of giving his clients the settlement proceeds they were owed, Pepyne lied to the couple and told them that he had to keep more than one third of the money he recovered on their behalf to pay for outstanding medical expenses.

    Investigators discovered that in reality no outstanding medical expenses existed. As a result of his scheme, Pepyne withheld more than $186,000 from his elderly clients and used those stolen funds for his personal use. Pepyne was later disbarred from practicing law in February 2010 after his activities were reported to the Office of Bar Counsel.(1)

(1) The Massachusetts Clients' Security Board of the Supreme Judicial Court manages and distributes monies in their recovery fund to members of the public who have sustained a financial loss caused by the dishonest conduct of a member of the Massachusetts bar acting as an attorney or a fiduciary. Go here for Case Summaries for Claims Decided by the Massachusetts Clients' Security Board of the Supreme Judicial Court (ie. results of claims filed by allegedly screwed over clients).

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

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

Feds Squeeze City Of Santa Rosa, HOA For $50K+ To Settle Housing Discrimination Suit Over Alleged Improper Exemption Claim As Age-Restricted Community

From the U.S. Department of Justice (Washington, D.C.):

  • The Justice Department [] announced an agreement with a California municipality and a homeowners’ association to resolve allegations of discrimination on the basis of familial status in violation of the Fair Housing Act. The settlement, in the form of a consent order, must be approved by the U.S. District Court for the Northern District of California.

    The department’s lawsuit, which was filed on Nov. 21, 2011, alleged that the city of Santa Rosa, Calif., and La Esplanada Unit 1 Owners’ Association, a homeowners’ association, unlawfully sought to restrict residency at a housing development to seniors aged 55 and older.

    While the law allows an exemption for senior housing, the suit alleged that neither the city nor the homeowners’ association took the steps, such as routine age-verification, necessary to qualify for an exemption to the Fair Housing Act.
  • The homeowners’ association [] is prohibited from excluding families with children from the development unless it affirmatively elects to become an age-restricted community for persons 55 years of age or older and conforms to the requirements of the Fair Housing Act.

    The Fair Housing Act's requirements include ensuring that at least 80 percent of the occupied units are occupied by at least one person who is 55 years of age or older and ensuring there are proper age verification procedures in place.

    In addition, the homeowners’ association will provide compensatory damages to the aggrieved persons in an amount of $44,000 by providing a set-off to amounts it has claimed it is owed by the aggrieved persons.

    The consent order also requires the homeowners’ association’s officers, agents and employees, as well as city employees and agents with responsibilities related to zoning and land use to receive fair housing training, and requires the homeowners’ association and the city to pay $5,000 each to the United States as a civil penalty.

F'closing Bank Accused Of Booting Church Prematurely, Changes Locks w/o Title; Lack Of Sprinklers Leads To Loss Of School Operator's License, Default

In Sunrise, Florida, the South Florida Sun Sentinel reports:

  • The clock is ticking for 300 parishioners at the United Pentecostal Church in Sunrise. With the church in foreclosure limbo, Pastor G. Oliver Barnes says a banker arrived Tuesday morning without warning to change the locks. TD Bank has given Barnes and his flock two weeks to clear out, the pastor said.

    "We need more time – at least a few months," Barnes said. "We are at our wit's end." It turns out the bankers failed to change one of the locks, so Barnes plans to hold Sunday services at the church, perhaps for the last time.

    The bank won the church at a foreclosure sale on July 18, but had not yet taken title to the property when it changed the locks, Barnes says. The bank failed to give Barnes the required 10 days to object to the sale.

    "That's a no-no," said real estate attorney Gary Singer, who is not representing the church. "You need to follow the [legal] steps" in the foreclosure process.

    Edward Cochran, vice president of TD Bank in Boca Raton, referred questions to attorney Jon Swergold. Swergold could not be reached for comment Friday despite phone calls and emails.

    Barnes' attorney has requested an emergency hearing, but one has not yet been granted by the court.
  • The church paid $5.7 million for the property, a former temple at 7100 W. Oakland Park Blvd.

    Barnes said the church fell on hard times in 2009 after losing its charter school. The school brought in $20,000 a month – helping the church makes its $34,500 mortgage payment, Barnes said. The school lost its license after being cited by Sunrise officials for operating without fire sprinklers.

    With the church struggling to make its payments, Barnes said he asked the bank to let the church refinance its loan. The request was denied, he said.

Bankster Agrees To Pay $12M To Settle DOJ Allegations It Ripped Off & Otherwise Trampled On Active Duty Servicemembers' Rights Under SCRA

From the U.S. Department of Justice (Washington, D.C.):

  • Capital One N.A. and Capital One Bank (USA) N.A. (together Capital One), have agreed to pay approximately $12 million to resolve a lawsuit by the Department of Justice alleging the companies violated the Servicemembers Civil Relief Act (SCRA), the Justice Department announced [].

    The settlement covers a range of conduct that violated the protections guaranteed service members by the SCRA, including wrongful foreclosures, improper repossessions of motor vehicles, wrongful court judgments, improper denials of the 6 percent interest rate the SCRA guarantees to service members on some credit card and car loans and insufficient 6 percent benefits granted on credit cards, car loans and other types of accounts.

    The proposed consent order, which was filed simultaneously with the complaint, is one of the most comprehensive SCRA settlements ever obtained by a government agency or any private party under the SCRA.

Friday, August 10, 2012

Suit: Minneapolis Couple Not 'In Good Hands' With Allstate; Say Insurer Cut $68K Check To Cover $204K Tornado Wreckage; Home Unlivable, In Foreclosure

In Minneapolis, Minnesota, KARE-TV Channel 11 reports:

  • When Jenae and Travis Hutchins got married nine years ago, they bought their first home, a two story house on Russell Avenue North ready for a young family. "We wanted something that was move right in and not have any issues," Travis said. "And that was this place for us."

    Until last summer's tornado, with winds of up to 130 miles an hour the Hutchins say damaged their home. "The house acted like a bellows, essentially," said Travis. "It came in and sucked out and that's why we have the floor ripples and the separation of this wall."

    But when the couple called their insurance company, Allstate, to claim $204,000 for repairs, they instead got $68,000, and now they're suing Allstate for the difference.

    "It couldn't be more of a Goliath vs. David situation," said George Antrim, the attorney representing Travis and Jenae Hutchins.
  • Travis and Jenae say they're frustrated they've waited more than a year without a settlement while they live in a rental with their home unrepaired, unlivable, and now in foreclosure.

Another Casualty Insurer Fails In Clutch; Danger From Developing Sinkhole Drives Georgia Family From Home After Getting Dropped From Coverage

In Albany, Georgia, WFXL-TV Channel 31 reports:

  • A woman whose home began sinking and falling apart while she was still living in it is fighting to have the foreclosure expunged from her record.

    When Tracy Singletary bought into the dream of home ownership in 2002, she couldn't imagine that 10 years later she'd be condemned to only the outside looking at her shattered dream. Year after year a small hairline crack in the foundation of the Savannah Lane home widened as Singletary began to notice more cracks popping up inside.

    When I was in the home, the interior of home there had cracks and breaks in the middle of the home,” says Tracy Singletary, former homeowner.

    After trying to convince insurance companies that the home was falling apart, her coverage was dropped. Singletary says at that point she had to leave because the safety of her family comes first.

Texas Homeowner's Lawsuit: 'My House Caught Fire & Casualty Insurer Is Stiffing Me On My Damage Claim!'

In Jefferson County, Texas, The Southeast Texas Record reports:

  • A Jefferson County man claims his insurance company refuses to compensate him for damages his property sustained in a fire.

    Michael Meeks filed a lawsuit June 15 in Jefferson County District Court against Texas Farmers Insurance Co. In his complaint, Meeks alleges he owned an insurance policy issued by Texas Farmers when his home at 3831 Fourth St. in Port Arthur caught on fire on June 18, 2010. The fire damaged the interior and exterior of the property, and Meeks filed a claim for damages, according to the complaint.

    However, Farmers denied Meeks's claim, saying it was not covered under the policy, the suit states. Meeks insists the fire was a covered occurrence.

Casualty Insurer Drags Feet Addressing Damage Claim As Frightened Homeowners Witness Mother Nature Swallow Up Family Home

In Bartow, Florida, ABC Action News reports:

  • Almost on a daily basis, Heather and James Williams find a new crack or a new gaping hole in their house. For the last eight months, the family has lived in a home that appears to be sitting on a sinkhole. As the problem worsens, they’ve seen pieces of wall and ceiling begin to crumble to the ground. [...] The cracks have gotten so bad that in some parts of the house, you can see clear into the backyard.

    As frustrating as the problem is, the bigger battle is now with their insurance. The Williams’ filed a claim back in December, but they say the company kept dragging their feet.

    After getting so fed up, they hired attorney, Brad Stewart from Frost Van den Boom & Smith in Bartow. “By the time they came to me, there had been no attempts by the insurance company to determine whether the house was being damaged by a sinkhole,” he said.
  • Sadly I see this kind of thing happen a lot,” he said. Stewart admits he’s biased, but his advice is to hire an attorney because he’s seen how companies will purposely try to overwhelm customers.

    The Williams’ are waiting to see what will happen with their claim. They don’t have the money to move out. “Personally, I don’t want to stay here,” said Heather Williams. “I’m scared.”
For the story, see Apparent sinkhole is slowly swallowing a Bartow home while owners battle insurance company (Homeowners discover new crack in home nearly daily).

Fla. Casualty Insurer Begins Yanking Homeowner Discounts For Hurricane Protections; Some Suspect Effort A Pretext To Jack Up Rates & Dodge 10% Cap

The South Florida Sun Sentinel reports:

  • Citizens Property Insurance's push to inspect homes and revoke discounts for hurricane-resistant features has drawn fire and questions.

    Premiums went up for nearly three-fourths of the 225,502 homeowners who have had the inspections. About 7 percent had decreases, and there was no change for 18 percent. The average inspection resulted in a $598 increase.

    State-backed Citizens is the largest property insurer in Florida with 1.4 million policies.

    We answer common questions about the inspections.

    Why is Citizens doing the inspections?

    Citizens found many forms used to verify discounts weren't filled out correctly and it appeared some customers were getting discounts they didn't deserve. Citizens plans to conduct about 138,000 more residential inspections this year.

    Some people think Citizens is using the inspections as a back-door way to raise premiums more than 10 percent a year – a cap set by state law. Citizens estimates premiums increased by $137 million based on inspections done so far. The insurer has spent $35 million on the inspections.
For more, see Citizens revokes hurricane-proofing discounts (Inspections draw fire and questions).

Thursday, August 9, 2012

Accused Vacant Home Hijacker Pinched For Allegedly Renting Homes She Didn't Own; Servicemember/Homeowner Away In Iraq On Active Duty Among Victims

In Yakima, Washington, KIMA-TV Channel 29 reports:

  • KIMA learned a suspected bogus landlord is now behind bars. Yakima police told us they've been on her tail for months. Detectives said she ripped people off by renting homes she didn't own. Action News discovered why it took the city so long to catch her and how you can keep it from happening to you.

    It's normally a given. When you meet with a landlord you assume the person actually owns the property. But that hasn't always been the case. Jade Chester's neighbor on Lincoln Avenue is a service member who was fighting in Iraq. Chester became concerned when a woman rented out the solider's property.

    "She rented out this back house," said Chester. Problem is police said Lashawne Rojas never had permission to rent out the Lincoln Avenue home. That home isn't the only place where she's done this city codes has a list of other homes and apartments here in Yakima.

    "She broke into five buildings that were vacant, changed the locks, came here opened up accounts and rented them out to people and collected rent," said code enforcement manager, Joe Caruso.

    City codes and police have been trying to find Rojas since March. They tell Action News Rojas went so far as to put water bills and at least one house deed in her name, using false documents.

    "I called YPD numerous times about her, but the problem was, we couldn't get a hold of the home owner," said Chester. The difficulty of tracking down that service member overseas allowed this issue to persist.

    It wasn't until Chester’s neighbor returned that Rojas was finally locked up forgery charges. It's likely this bogus landlord wasn't the only one taking money from tenants around town.

    "This is what's happening to our home owners here in Yakima,” said Chester. “It could happen to anybody it's an epidemic problem."
For the story, see Bogus landlord behind bars.

Homeowner's French Drain Installation To Ease Flooding Problem Leads To $589K In Invalid HOA Liens, Costing Her $50K+ In Legal Bills To Stop F'closure

In Mint Hill, North Carolina, WCNC-TV Channel 36 reports:

  • For Rosanna Wilfong, it started a decade ago. Her front yard was flooding. A pool of rainwater swelled until it was knee-deep. So she hired a company to install a French drain -- a kind of underground trench with a pipe to channel the water away from the foundation of her home.

    She said she spent $6,500 to install the drainage system. Her homeowners’ association forced her to spend another $6,500 tearing it out.

    It was only the beginning of a years-long legal battle with her HOA that ate up more than $50,000 in legal bills and almost cost her her home.
  • Simply removing the French drain didn’t satisfy the HOA board in Mint Hill’s St. Ives neighborhood. Wilfong, a grandmother, has documents to show the HOA asked her to grade the land. She said grading the front of the property would have led to the same flooding she was trying to correct.

    She said the conflict ultimately was not about flooding and grading and French drains. “It was about the money,” she said. “They wanted their money.”

    She’s referring to fines, which racked up at the rate of $400 per day, according to court documents. “They got to be $589,000,” Ms. Wilfong said. “The house wasn’t worth that much….I knew I was going to lose my house. We were all packed up.”

    Ms. Wilfong hired one attorney, then another, then a third. When her lawyer got documents from the HOA, she made a startling discovery. The HOA’s architecture review committee had approved the French drain. “I felt betrayed by the homeowners association,” she said.

    In a ruling earlier this year, Judge Richard Boner waived all the fines and she got to keep her home. But she still had to pay for her attorneys.

    This is a cash cow for the lawyers and the management companies,” said Chris Zbodula, who served on the St. Ives HOA board before having his own dispute. “They’re making an absolute killing on this.”

    The St. Ives HOA board kicked Zbodula off the board for missing meetings. He says the real reason is that he challenged the president for suing neighbors like Ms. Wilfong. “The only choice a homeowner has is to dig deep in their pocket with tens or even hundreds of thousands of dollars for what could be bogus charges,” Zbodula said.

Cape Cod Mobile Home Peddler Settles Civil Suit Alleging It Extorted Cash From Owners With Bogus Fees/Charges Under Threat Of Loss Of Leased Home-Site

From the Office of the Massachusetts Attorney General:

  • In a settlement resolving allegations that it strong-armed residents into paying $16,000 for memberships of questionable value, Peters Pond RV Resort in Sandwich will refund residents, pay an additional $200,000 in civil penalties and costs, and refrain from future unfair and deceptive practices, Attorney General Martha Coakley announced today.

    This company took advantage of elderly customers and retirees who invested a significant amount of money in their homes,” AG Coakley said. “It is difficult to believe that any business would try to strong arm people who worked and saved their entire lives so they could enjoy their golden years. We are thankful that these practices will end and that consumers will receive restitution.”

    The AG’s Office filed the original complaint in Suffolk Superior Court in August 2011 alleging violations of the Massachusetts’ Consumer Protection Act. In September 2011, the court ordered a preliminary injunction prohibiting any future intimidating sales tactics.

    Residents at Peters Pond originally purchased “park model homes” that appeared to be manufactured homes, often referred to as mobile homes, that are costly to move. Although the homes are owned by residents, the lots are leased from Peters Pond. Residents believed they could renew their lease indefinitely as long as they paid rent and abided by community rules.

    According to the complaint, the owners and operators of Peters Pond – Peters Pond RV Resort, Inc., Morgan RV Resorts, LLC, Ideal Private Resorts, LLC and Robert Moser – allegedly threatened consumers that if they did not purchase a new $16,000 membership, in addition to paying the annual $6,000 homeowners fee, they would lose their home-site and be forced to move their mobile homes at their expense and without compensation. The membership fees did not include any apparent benefits.

    Nearly 100 homeowners paid to join the club out of fear that they would lose their home, in which many had invested their life’s savings. Then, when residents tried to sell their homes, the defendants allegedly interfered with the homeowners' rights by preventing homeowners from using brokers to assist in the sale and charging a $2,000transfer fee.”

    The consent judgment filed [] provides refunds to consumers who paid for the membership program. Residents who feel they are owed money will file claims with the company. Additionally, the defendants will pay $200,000 to the Commonwealth in penalties and costs.

    The consent judgment also prohibits the defendants from continuing certain alleged unlawful sales practices, provides lease rate increase restrictions for current Peters Pond consumers and requires full itemized disclosure of all fees charged for goods or services provided, including any transfer fees. The defendants must also allow consumers to retain an appropriate broker to sell their homes.
For the Massachusetts AG press release, see Peters Pond RV Resort to Pay Restitution for Allegedly Strong Arming Residents into Buying Memberships (Management Company also Required to Pay $200,000 in Civil Penalties and Costs).

Banksters' Failure To Complete F'closure Process On Violation-Plagued Homes Leaves Some Cleveland Homeowners Holding The Bag, Facing Criminal Charges

In Cleveland, Ohio, The Plain Dealer reports:

  • Renetta Atterberry thought she had lost her East 102nd Street house. So she was shocked to learn in January -- five years after her mortgage company filed for foreclosure -- that it was still in her name.

    Worse, the long-vacant rental home had been vandalized and she faced a raft of housing code violations. Since then, she has been saddled with debts of about $12,000 to pay for demolition and back taxes.

    "I thought I had nothing else to do with that home," said Atterberry. "I was so embarrassed and humiliated by this."

    Her mortgage company didn't buy the house and never took it to sheriff's sale to see if somebody else would, leaving Atterberry the legal owner, responsible for upkeep and taxes.

    These so-called "bank walkaways" are another troubling development in the foreclosure crisis, particularly in cities like Cleveland with weaker housing markets, say housing advocates and government officials.

    Lenders or mortgage companies decide they don't want homes they have already foreclosed on, sometimes because the value has plummeted or they believe the homes could become costly liabilities if they are socked with housing code violations.

    But without that sale, the property can languish abandoned and ripe for vandalism. As liens and liabilities mount -- creating a so-called "toxic title" -- it becomes even harder to transfer the property. Neighborhoods and local governments are left to deal with the mess.
  • Properties left in 'legal limbo'

    Joseph Schilling, associate director of the Metropolitan Institute at Virginia Tech and an expert on abandoned property, said the issue of bank walkaways is increasing. Lenders may decide that given low prices and their mounting inventory of foreclosed property, it makes sense to walk away.

    "But as a result, it leaves the property in this type of legal limbo and it leaves the community and local government really holding the bag," Schilling said.

    The problem has gotten the attention of government officials who are trying to fill a void in Ohio law and force companies that foreclose on property to act. State Rep. Dennis Murray of Sandusky is drafting a bill he hopes to introduce in the next two months that would require lenders or mortgage service companies to take foreclosed properties to sheriff sale within a certain time -- or see their mortgage lien erased.

    The lender wouldn't be required to buy the property -- only to take it to sale. More time could be given to lenders working to keep people in their homes by restructuring the mortgage.
  • 'I see shocked people every single week'

    Some of the fallout that results when properties languish vacant and abandoned shows up in Cleveland Housing Judge Raymond Pianka's courtroom. "I see shocked people every single week," Pianka said. "They thought the burden was lifted because they filed bankruptcy or because somebody somewhere told them they're no longer responsible, and then they're pulled back in facing criminal code violations."

Wednesday, August 8, 2012

Federal Court Slams Brakes On Dominican Republic-Based Upfront Fee Loan Mod Scam Pretending To Be In Chicago; Racket Targeted Spanish-Speaking Victims

From the Federal Trade Commission (Washington, D.C.):

  • At the request of the Federal Trade Commission, a U.S. district court has halted a nationwide scam operating from the Dominican Republic – but pretending to be in Chicago – that allegedly peddled fake mortgage assistance relief to financially distressed Spanish-speaking homeowners in the United States.

    The defendants promised to dramatically lower homeowners’ monthly mortgage payments in exchange for a hefty upfront fee, and collected more than $2 million in fees during the last three years, but failed to provide homeowners with the promised services, according to the FTC complaint.

    Speaking in Spanish and targeting homeowners behind in their payments or facing foreclosure, the telemarketers would empathize about the tough economy and claim to provide information about federal mortgage assistance programs, according to the complaint.

    In lengthy sales calls, the telemarketers would lie to create a sense of trust, falsely claiming to be affiliated with or approved by the consumers’ lenders or the government, and “making sure to mention President Obama or the Making Home Affordable Program by name,” according to documents filed with the court.
For the FTC press release and links to court documents, see FTC Action Halts Dominican Mortgage Assistance Scam That Allegedly Defrauded Spanish-Speaking U.S. Homeowners of more than $2 Million (Court Issues Restraining Order against Telemarketers Who Falsely Claimed Affiliation with Federal Mortgage Assistance Programs).

Investor Solicited To Help Restructure $500M In Sour Loans Buys Defaulted Debt Instead, Snatches Project Out From Under Hapless Developer By F'closure

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

  • The developer of the Town Square shopping and office complex south of the Strip has sued the Connecticut investment fund that foreclosed on it last year, seeking more than $300 million in damages.

    According to the complaint filed in Clark County District Court late Wednesday, Miami-based developers Jeffrey and Jacquelyn Soffer and their company, Turnberry Capital, spent more than two years trying to restructure nearly $500 million in loans. The effort included bringing in Five Mile Capital Partners of Stamford, Conn., as a potential co-owner.

    However, the court papers contend that Five Mile covertly switched from partner to adversary, buying enough of the loans then in default to force a foreclosure and squeeze out the Soffers. Soffers' lawyers contended that this amounted to "stealing" the 1.2-million-square-foot project, noted for its mix of shopping, entertainment and offices set retro architectural style.

    "(Five Mile's) conduct was so egregious and vulture-like that it should be punished and made an example of," wrote Soffer attorney Daniel McNutt.

Vulture Funds Seek To Snatch Title To Small, Violation-Plagued NYC Rental Buildings With Delinquent Debt-Buying Spree Followed By Foreclosure

In New York City, The Real Deal reports:

  • Private equity firms such as Stabilis Capital Management, Madison Realty Capital and Onex Real Estate Partners have been buying debt on small, often severely distressed rental properties in secondary neighborhoods in New York City with little fanfare over the past year.

    The acquisitions resemble activity during the height of the market when private equity firms, often in partnership with local operators, purchased large portfolios of rent-regulated apartment buildings.

    Yet this post-boom trend is different in two significant ways: The properties are much smaller, and the buyers are seeking to gain control of them by buying the debt, instead of directly buying the buildings.

    The trend to buy debt on small properties in New York City mirrors a national investment strategy in which large funds are buying distressed single-family homes and converting them to rentals.

    In New York City, firms are targeting the non-performing debt on rental buildings that often have a high number of violations because the in-place owner cannot cover the mortgage and is cutting back on maintenance, several real estate professionals involved in this practice said.
For more, see Private equity firms snap up debt on small NYC rental buildings (NYC follows national buying trend, but city's real estate firms focus on violation-laden buildings).

Clueless Bidder At Foreclosure Sale Left Holding The Bag After Discovering $80K Townhome Just Purchased For $8K Comes With $184K Existing 1st Mortgage

In Tampa, Florida, WTVT-TV Channel 13 reports:

  • With home prices still down across the Bay Area, some people believe now is still a great time to buy an investment property. However, they are quickly learning a lesson: You'd better be careful what you bid on, even if the clerk of the court is selling it.

    Eric Dalhberg is an amateur investor who has learned a hard lesson after bidding on a property in Pasco County. "I thought I got a ridiculous good deal," said Dalhberg, who bought a three-bedroom townhouse in Wesley Chapel's Saddle Creek Manor for just over $8,000.

    What Dalhberg didn't realize is he did not buy a mortgage foreclosure from a bank, but rather a foreclosure brought on by the homeowners association. So when he took possession of the title, he learned the property had a first mortgage of $184,000. The debt was left by the previous owner.

    Nick Lang, a real estate attorney in St. Petersburg who is often hired by homeowners associations, has heard plenty of stories of amateur investors in the Bay Area making the same mistake.

    "They're acquiring it subject to a first mortgage. But the public is often unaware of that circumstance and there are probably inadequate available disclosures to the public with the clerk's offices in the various counties."

    Dalhberg says if he had known it was a homeowners, or HOA, foreclosure, he never would have bid on it. "Being a state-run auction, I really thought that, hey, it's the highest bidder wins. They did have the disclaimers saying buyer beware, but nowadays everything has that disclaimer and I just assumed."

Tuesday, August 7, 2012

Jury Convicts South Florida Pair Accused Of Running Sale Leaseback, Equity Stripping Foreclosure Rescue Racket That Swindled Distressed Homeowners

From the U.S. Department of Justice (Washington, D.C.):

  • The Department of Justice [] convicted two defendants for their roles in a South Florida mortgage fraud scheme that took advantage of homeowners on the brink of foreclosure and left many without their homes.

    Cathy Saffer of Pompano Beach, Fla., and Barrington Coombs, a certified public accountant of Weston, Fla., were convicted [] by a jury in West Palm Beach, Fla. on conspiracy and fraud charges in connection with a so-called “foreclosure rescue scheme,” in which the defendants promised to help distressed homeowners but instead swindled them out of the remaining equity in their houses.(1)

    The jury convicted Saffer of one count of conspiracy, three counts of mail fraud and two counts of wire fraud. Coombs was convicted of one count of conspiracy and one count of wire fraud. Lisa Wright of Pompano Beach, Fla., pleaded guilty to her participation in the same foreclosure rescue scheme in March 2012.(2)

    At trial, evidence revealed that Saffer and Wright operated a business called Foreclosure Solution Specialists (FSS) from 2006 to 2009. Through FSS, Wright and Saffer targeted homeowners facing foreclosure, advertising that FSS could assist those homeowners in remaining in their homes.

    When contacted by distressed homeowners seeking assistance, Wright and Saffer misrepresented to those homeowners that their homes would be sold to investors.

    According to witnesses at trial, Wright and Saffer also claimed that customers could remain in their homes after the sales and promised them an opportunity to repurchase the homes at a later date. Rather than selling the homes to legitimate investors, Wright and Saffer designed sham sales to straw purchasers whom they paid to participate in the scheme.
  • These sham sales drew equity out of the homes, which Wright and Saffer pocketed for their own purposes. After doing so, Wright and Saffer allowed the loans to go into foreclosure. Homeowners ultimately lost all of the equity in their homes, and most of the victims were forced to move out of their homes.
For the Justice Department press release, see Two Individuals Convicted in Florida in Foresclosure Rescue Scheme.

(1) For more on this type of foreclosure rescue ripoff, see:

(2) Presumably, part of the 'prize' Wright hopes to get by 'winning the race to the prosecutor's office' and agreeing to plead guilty instead of going to trial on her charges includes softening the hammering she'll likely get at sentencing for throwing her co-conspirators under the bus:

  • "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).

Outfit Accused Of Foreclosure Sewer Service To Cough Up $925K To Settle Fla. AG Suit; Admits No Wrongdoing, Promises Never To Do It Again

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

  • A Tampa-based company responsible for serving foreclosure notices on homeowners will pay $462,500 to a Florida Bar foreclosure defense program under a settlement reached with the state attorney general’s office.

    The office began a civil investigation of the company ProVest in the fall of 2010 following allegations of shoddy paperwork and incomplete service that may have left homeowners unaware that they were being foreclosed on.

    ProVest did not admit to any wrongdoing in the agreement, called an “assurance of voluntary compliance.” But it will pay an additional $462,500 to the attorney general’s office for investigative and attorney’s fees.
  • This is the second foreclosure-related settlement obtained by the attorney general’s office since the housing bust. In March 2011, the Fort Lauderdale-based Law Offices of Marshall C. Watson agreed to pay a $2 million settlement to end its civil investigation.

    Serving foreclosure summonses became big business after the real estate crash as banks began to repossess hundreds of thousands of homes. But foreclosure defense attorneys and some homeowners complained that the service was often sloppy.

    In a 2010 case, a Miami appeals court sided with a homeowner in a foreclosure suit because the judge ruled the summons handled by a ProVest sub-contractor was not properly served. The person serving the summons swore he personally handed it to the homeowner at her residence.

    But the server’s own notes on the file showed he left the documents at the door after seeing curtains move and assuming someone was home. The homeowner later said she had no knowledge of the foreclosure until a final judgment was entered against her.
For more, see Foreclosure server settles with state (Tampa-based ProVest admits to no wrongdoing but will pay a total of $925,000).

Missouri AG Drops Criminal Charges Against Alleged Robosigning Outfit; LPS To Cough Up $2M, Agrees To Throw DocX Founder/Ex-Prez Under The Bus

In Columbia, Missouri, The Columbia Daily Tribune reports:

  • A company indicted by a Boone County grand jury in February on criminal charges that it fraudulently prepared mortgage documents for its lender clients has reached a settlement with the Missouri attorney general.

    Attorney General Chris Koster's office announced [] it had agreed to drop charges against DocX. In return, DocX's parent company, Jacksonville, Fla.-based Lender Processing Services, agreed to pay a $2 million fine and cooperate in ongoing criminal proceedings against DocX founder and former President Lorraine Brown.(1)

    The February indictments accused Brown and DocX of forging signatures on documents used to evict people who had fallen behind on their mortgages, a practice commonly known as "robo-signing."

    The charges accuse Brown and the company of submitting 68 deeds of release to Boone County Recorder of Deeds Bettie Johnson notarized by Linda Green, a DocX employee acting as designated vice president for large banks. However, the charges said, Green was not the person who actually signed the documents.

    Numerous instances of questionably prepared mortgage and foreclosure documents have emerged around the country in the wake of the "robo-signing" scandal of 2010.

    The Boone County charges are significant not only because they originated locally but because they are one of the few instances where criminal rather than civil charges have been filed against companies involved in preparing questionable documents.

(1) By obtaining LPS' agreement to cooperate in the ongoing criminal probe against Brown, the Missouri AG's office presumably is operating under the expectation that LPS will throw her under the bus'. How helpful their cooperation turns out to be remains to be seen. As noted by one learned Federal judge in referring to the not-uncommon 'race to the prosecutor's office' that breaks out among participants in an 'about-to-fall-apart' criminal conspiracy:

  • "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).

Borrower's TILA Rescission Suit Need Not Allege Ability To Repay Loan; Signing Over Collateral To Lender Doesn't Necessarily Meet Debtor's TILA Duty

For certain mortgage loans covered by the Truth-in-Lending Act (TILA), a timely written notice of rescission triggers the creditor’s duty to release its security interest and refund any finance charges. Once the creditor satisfies this duty, the borrower must return the loan proceeds. Until the creditor satisfies this duty, the borrower may keep the loan proceeds.

Because this TILA rescission duty often imposes an unfair risk on creditors: it requires the creditor to release its security interest without assurance that the consumer stands ready to honor his or her own rescission obligations,
several Federal circuit courts of appeal allow lower courts to equitably condition the creditor’s duty on the borrower’s ability to repay the loan proceeds.

In a recent court ruling, the
10th Circuit Court of Appeals was asked to address whether a lower court can mandate that a borrower allege it its TILA lawsuit that he/she has an ability to repay the loan proceeds as a requisite for allowing the case to continue. The suit was brought by a homeowner/couple who failed to allege an ability to repay the proceeds. Because of such failure, the lower court dismissed the borrowers' suit.

In a nutshell, the 10th Circuit ruled that the lower court overstepped its bounds by requiring the borrower to allege its ability to repay the loan proceeds it the lawsuit for the following reasons:
  1. it adds a condition to the remedy not found in the statute or the regulation: it
    requires consumers to allege that they can repay the loan proceeds
    , and

  2. the imposition of such a mandate at a point in the litigation where the equities in the case have yet to be determined is premature. It said that the lower court’s pleading rule would give all creditors the benefit of the more burdensome pleading rule without requiring them to first show a need for equitable relief.
However, it went on to say that although the rescinding consumer need not plead an ability to repay the proceeds of the loan, the lower court may nevertheless, in an appropriate case, use its equitable powers to protect a creditor’s interests during the TILA rescission process, leaving open the possibility that, once the case is more fully developed and equities determined, the lower court can equitably condition a consumer's loan rescission on an ability to repay the loan.

Because the court found that the pleadings did not establish whether this was an appropriate case, it reversed the lower court's ruling.

In addition, because the issue may arise on remand, the appeals court also
considered whether the consumers can satisfy their rescission obligations by tendering their home. For the reasons set forth in its ruling, the court concluded the tender of the home does not necessarily meet their tender obligations under TILA.

For the ruling, see
Sanders v. Mountain America Federal Credit Union, No. 11-4008 (10th Cir. July 30, 2012).
Thanks to Deontos for the heads-up on the court ruling.

Monday, August 6, 2012

Head Of N. Jersey Sale Leaseback Equity Stripping Scam Gets 46 Months, Employee Gets 18 Months; Created Phony Liens To Divert Cash To Themselves

In Newark, New Jersey, reports:

  • A Piscataway man who owned and operated multiple foreclosure rescue companies was sentenced Tuesday to 46 months in prison for his role in a mortgage fraud scheme that defrauded numerous mortgage lenders of more than $10 million, authorities said.

    Ronald Harris Jr., 42, formerly of West Orange, previously pleaded guilty to a sworn, written indictment charging him with one count each of conspiracy to commit wire fraud and conspiracy to commit money laundering.

    A former employee of Harris’ — Sterling Bruce, 38, of Newark — was also sentenced Tuesday, to 18 months in prison. Bruce previously pleaded guilty to one count of wire fraud conspiracy. U.S. District Judge Faith S. Hochberg imposed the sentences in Newark federal court.

    According to documents filed in this case and statements made in court, Harris owned and operated Harris Capital and Skyline Capital Group, both of which held themselves out as foreclosure rescue companies and operated out of offices in Newark and Maplewood.

    Harris admitted that he and other individuals, including Harris Capital employee Bruce, fraudulently promised to help homeowners avoid foreclosure, keep their homes, and repair their damaged credit. They directed the homeowners to allow the title to their homes to be put in the names of third-party purchasers, or straw buyers, for six months to a year.

    Harris told the homeowners that during that time period, he and others would help them obtain more favorable mortgages and improve their credit ratings. The homeowners were told the titles to their homes would be returned to them.(1)

    After the homeowners were signed up, Harris, Bruce and others recruited individuals with good credit scores to act as straw buyers of the distressed properties. The straw buyers were told that they were helping someone save his or her home and that they would make money when they sold the property back to the current owner.

    Once the distressed homeowners and straw buyers were in place, Harris, Bruce and Pia Perkinson, 40, of Parlin — a mortgage loan officer at a number of different mortgage loan companies — and others caused loan applications to be sent in the straw buyers’ names to mortgage lenders.

    Prior to the closings of these fraudulent transactions, Harris and Bruce regularly filed fraudulent liens for tens of thousands of dollars on the properties. At the closings of the transactions, the liens would be paid off with the proceeds of the fraudulently obtained loans.

(1) For more on this type of foreclosure rescue ripoff, see:

The 'Sewage' Continues To Ooze Out Of Big Apple's Surrogate Courts

In New York City, the latest media report on the stench emanating from the sewage that is the Big Apple's Surrogate Courts (the part of the local court system that deals with the estates of those dying without a will and that handles the appointment of guardians for those who are mentally incapacitated) recently appeared in the New York Post.

Like previous stories, the report describes recent horror stories of the decades-old ripoffs in which court insiders essentially take control of the estates and loot and otherwise pick the bones clean and seemingly get away with it.

For links to earlier media reports, see:

Bill Collector Accused Of Embedding Collection Agents In Hospital Emergency Rooms To Conduct Patient Financial Shakedowns Settles Minnesota AG Suit

In St. Paul, Minnesota, The New York Times reports:

  • Accretive Health, one of the nation’s largest collectors of medical debt, has agreed to pay $2.5 million to the Minnesota state attorney general’s office to settle accusations that it violated a federal law requiring hospitals to provide emergency care, even if patients cannot afford to pay. The company has not admitted wrongdoing.

    As part of Monday’s settlement, Accretive Health is also barred from contracting with hospitals within the state for at least two years, effectively ending its business at three Minnesota hospitals. For four years after that, the company will have to obtain permission from the attorney general before resuming business in the state.

    In April, Lori Swanson, the Minnesota attorney general, disclosed hundreds of Accretive’s internal documents that outlined aggressive collection tactics, including embedding debt collectors in emergency rooms and pressuring patients to pay before receiving treatment.
  • The revelations in Minnesota have reverberated across the country because they raise concerns that such aggressive tactics have become widespread at hospitals. Accretive Health contracts with some of the largest hospital systems in the country to help them recoup money on unpaid bills that have piled up during the financial crisis and the economic downturn.
  • Hospitals have long hired outside collection agencies to pursue patients after they have received care. But mounting financial pressures have resulted in hospitals letting collection firms in the front door, turning over the management of their staffing, like patient registration and scheduling, along with their collection activities, according to Ms. Swanson.
See also, Minnesota AG press release: Attorney General Swanson Says Accretive Will Cease Operations In The State Of Minnesota Under Settlement Of Federal Lawsuit (Cannot Reenter Minnesota For Six Years Without Attorney General’s Agreement):
  • A hospital emergency room is a place of medical trauma and emotional suffering for patients and their families. It should be a solemn place, not a place for a financial shakedown of patients. It is good to close the door on this disturbing chapter in Minnesota health care,” said Attorney General Swanson.
Go here for the parties' Settlement Agreement.

Golden State's 2nd-In-Command To Wall Street: Cease Threats Towards Those Considering Use Of Eminent Domain To Flush Away Crappy Underwater Mortgages

Reuters reports:

  • California Lieutenant Governor Gavin Newsom on Friday warned influential investor group Securities Industry and Financial Markets Association to "cease making threats to the local officials of San Bernardino County" over a plan to use eminent domain to seize underwater mortgages from private investors.

    San Bernardino County, located east of Los Angeles, and some of its towns have set up a joint authority that would use the power of eminent domain to forcibly purchase distressed mortgages. Rather than evict homeowners through foreclosure, the public-private entity would offer residents fresh mortgages with reduced debts.

    Newsom said governments that choose to employ eminent domain could be subject to a form of boycotting from mortgage investors, who would stop lending in communities that might use this power.

    The Securities Industry and Financial Markets Association, known as SIFMA, and other investment trade groups have warned that the proposed use of eminent domain could scare away future mortgage financing.

Foreclosing Banksters Begin Feeling Effects Of Recent Georgia Appeals Court Ruling As Screeching Brakes Bring Some Sales To A Halt

In Forsyth County, Georgia, WSB-TV Channel 2 reports:

  • A metro Atlanta consumer attorney said he has already been able to halt a dozen foreclosures using a new ruling from the Georgia Court of Appeals. The latest case involves a Forsyth County home and lending giant Wells Fargo.

    "Having to move out of the dream home that my son and I built is the worst thing I could think of," said homeowner David Stripland. The recession hit his car dealership around the same time the housing crisis, cutting his home's value more than 60 percent. "You can't sell it, you can't re-fi, you have to get a modification," said his wife, Paulette.

    The Striplands said the process went on for more than a year. They then received a string of foreclosure notices from Wells Fargo. "Foreclosure. It's a shame," said Paulette through a stream of tears.

    The foreclosure has now been halted, after a recent ruling by the state appellate court. Wells Fargo does not hold the note. It only services the loan. The note holder is not clearly stated.

    The Striplands paid forensic auditors who found the loan has been divided up into dozens of securities sold to investors. "Once these notes are chopped up and turned into bonds, securities, whatever; who really owns it?" asked their attorney, Bob Thompson.

    But the Georgia Court of Appeals ruling in a case involving a Cobb County family and servicers Provident Funding, LLC, ruled homeowners have "a right to know" to whom they actually owe the money, lest they be "misled or confused."(1)

    "Even a dog in Georgia has the right to know who's kicking him," Emory law professor Frank Alexander told Channel 2's reporting partners at the Atlanta Journal Constitution. "These big banks and Wall Street have to follow the law of the land, just like I do," said Paulette Stripland.

    Channel 2's Jim Strickland learned just before 5 p.m. Thursday, Wells Fargo had halted the foreclosure. Thompson said most homeowners in peril should take action on their own. "Call and get it stopped and get yourself some time, because with time most people can work things out," he said.

    It is likely Provident will appeal to the state supreme court.

(1) See Reese v. Provident Funding Associates, LLC., A12A0619 (Ga. App. July 12, 2012). See also, Georgia Appeals Court: Failure To Include Name Of Actual Owner Of Mortgage Loan Sinks Foreclosure; Ruling Could Affect Tens Of Thousands Of Cases.

Sunday, August 5, 2012

Brothers File Lawuit To Stop Out-Of-Control NYC Co-Op Board From Booting Them From Apartment Their Now-Deceased Parents Lived In For 50+ Years

In New York City, the New York Post reports:

  • Don’t let the door hit you on the way out. An apparently heartless Greenwich Village co-op board is ousting the next generation of a family that has lived in its Fifth Avenue building for 57 years without an explanation, stunned residents say.

    Michael Del Terzo, who had hoped to raise his own son in his childhood home, and his brother now have just six months to vacate the building.

    I don’t see this as an apartment. It’s just like anybody else who wants to hang onto their home,” a teary Michael Del Terzo told The Post. “I do not want this as a weekend getaway. I did not view this as, ‘Let’s try to turn a profit.’ I want this as my home.”

    Del Terzo’s parents, Robert and Helen, first moved into 33 Fifth Ave. back in 1955, when Robert, a doctor and World War II veteran, opened a medical office on the first floor. Robert and Helen, a nurse, ran the practice for 30 years. At first, the building superintendent let them convert part of the space into a small studio apartment, but the couple quickly moved up to a fifth-floor apartment in the building.

    They had two sons, and eventually expanded, renting the apartment next door in 1965. When the building went co-op in 1985, Robert Del Terzo closed his practice and happily bought his family’s home. “My parents, at age 70 and 71, they thought this would give us all more stability,” Del Terzo said.

    The doctor died in 1988, and Helen stayed on, inheriting the co-op shares and living the next 22 years in the family’s combined apartments until she died there in November 2010, a day after her 96th birthday, with her family by her side.

    While one son currently lives in the home with his family, the brothers agreed to transfer the co-op shares to Michael, a successful Pennsylvania urologist who plans on moving home to New York with his wife and 10-year-old boy.

    The co-op requires any transfer of shares to get board approval. Expecting no trouble, Michael and his brother Robert submitted an application — and were stunned when they were rejected. “We had absolutely no inkling whatsoever” that the board would turn them down, Del Terzo said. “I just don’t get it.”

    The decision is just plain mean, said Del Terzo’s lawyer, who has filed suit against the board in Manhattan Supreme Court. “This is a highly unreasonable, unfair thing, to lock these people out after 57 years. Who would think that’s the right thing to do?” attorney Jack Malley said. “There should be a twinge in their stomachs. It was a heartless decision.”

    Co-op board president Nancy Cohen could not be reached for comment.

C. Florida City Commissioner Bagged By Taxing Authorities For Allegedly Claiming Double Homestead Property Tax Exemption; Forced To Cough Up $3K+

In Winter Springs, Florida, the Seminole Chronicle reports:
  • Although reports show Winter Springs Commissioner Avery Smith is facing penalties for claiming two homestead exemptions in Seminole County, her position in city government remains much safer than her checkbook.
  • Since Smith is a valid resident of Winter Springs and an elected commissioner, there must be a violation of the Winter Springs charter, as stated in Section 4.08b, performed in order to consider removing her from office, he said.

    However, she is still being ordered to pay $3,106.47 in fees and back taxes to the county, which she did on July 19, Seminole County Property Appraiser David Johnson said.

    The trouble first began on June 25 after Smith entered the public eye, filling the empty seat left by former Commissioner Gary Bonner.

    After accepting her position on the Board of Commissions, Smith signed an affidavit stating that she had lived in a Winter Springs residence for five and a half years, Lacey said. During that time, reports show a permanent residence in Casselberry was registered under Smith's name.

    A separate residence in Winter Springs was registered under her husband's name, Stuart Knoll, at the same time, and both had applied for a homestead tax exemption on their residences, Johnson said.

    After this discovery, a revised affidavit stating that Smith resided in Winter Springs for more than a year was submitted to the Board of Commissions, Lacey said.

    "State law allows Florida homeowners to claim up to a $50,000 Homestead Exemption on their primary residence," according to the Seminole County Property Appraiser Office's website.

    From the time Smith and Knoll were married, they became a single family unit, Johnson said. According to the website, a single family unit cannot apply for two homestead exemptions on two different permanent residences.(1)

    "Homestead exemption fraud is a serious case, and we take it very seriously," Johnson said. "The situation has kind of been resolved, but this has been an extremely rare situation."

    After Smith stated in the affidavit she signed that she lived in Winter Springs for the past five years, the Property Appraiser's Office found it inconsistent with its records and launched an investigation, he said.
(1) In Florida (and contrary to popular belief, particularly among uninformed government bureaucrats charged with the duty of setting tax valuations on homes and collecting real estate taxes thereon), state law and prior opinions issued by the state Attorney General appear to make pretty clear that, provided they otherwise qualify, there is nothing necessarily illegal or otherwise improper about a husband and a wife to each claim a homestead exemption on separate residences in certain circumstances ('double homesteads') (while formal opinions issued by the Florida Attorney General are not binding on any court, the Florida case law cited therein is certainly binding). See:
  • Florida Administrative Code Rule 12D-7.007(7):

    "A married woman and her husband may establish separate permanent residences without showing “impelling reasons” or “just ground” for doing so. If it is determined by the property appraiser that separate permanent residences and separate “family units” have been established by the husband and wife, and they are otherwise qualified, each may be granted homestead exemption from ad valorem taxation under Article VII, Section 6, 1968 State Constitution. The fact that both residences may be owned by both husband and wife as tenants by the entireties will not defeat the grant of homestead ad valorem tax exemption to the permanent residence of each."

    Florida Attorney General Opinion 75 Op. Att'y Gen. 146 (1975), Husband And Wife Maintaining Separate Residences May Both Qualify For Homestead Exemption;

    Florida Attorney General Opinion 05 Op. Att'y Gen. 60 (2005), Homestead Exemption -- separate residences and homestead exemption. Art. VII, s. 6, Fla. Const.

    Wells v. Haldeos, Case No. 2D09-4250 (Fla. App. 2d DCA 2010).

Empty County Coffers, Fear Of Job/Program Cuts By Gov't Interest Groups Drive Push To Boost Law Enforcement Targeting Fraudulent Homestead Claims

In Miami, Florida, The Miami Herald reports:

  • For years — decades, really — Miami-Dade homeowners have been ducking property taxes by illegally claiming homestead exemptions, usually with impunity. [...] But these days, gambling on getting caught is a fool’s game.

    Homestead-exemption deceit has erupted into a red-hot issue in Miami-Dade and a crackdown is under way with all indications that it will only get tougher for tax cheats to elude detection.

    The price of getting caught: Up to 10 years of unpaid back taxes, plus a 50 percent penalty and 15 percent annual interest. The biggest tab this year: $403,329.70 on [one] property.

    Since January, six detectives from the Economic Crimes Bureau of the Miami-Dade Police Department have been working to bolster the muscle of 15 investigators at the Property Appraiser’s Office in nailing violators. That is up from two police detectives deployed in 2011 to tackle a backlog of some 3,500 complaints (now about 2,166) which typically come from tips from neighbors, estranged spouses and others.

    This May, Property Appraiser Pedro J. Garcia unveiled a new contract for software and services to flag suspicious claims among the 440,000 homestead properties.
    For July alone, the property appraiser, armed with smarter tools, filed $11 million in homestead liens. That compares with $8 million filed for all of 2011.

    Fueling the intensified scrutiny: money, of course.
    Starved for revenue, interest groups at the county, the school district and cities are clamoring for tougher enforcement of homestead- exemption rules in hope of bringing in revenue to help save public jobs and programs threatened by the budget ax.

    At the same time, the new use of data-mining tools to cross-check property records against an array of data from deaths to marriages to voter registrations to auto tags to water bills holds the promise of weeding out suspect exemptions in bulk, generating more and better leads than the hotlines and anonymous tips that have spawned many cases in the past.
  • Broward County Property Appraiser Lori Parrish, who has long advocated getting tough on homestead cheats, recently reeled in a [] whale for double homestead. In June, Michael and Susan Hooley were hit with a $325,459.16 in back assessments on their waterfront home at 1352 Seminole Dr. in Fort Lauderdale.

    The tax tab, covering 2007 through 2010, came after Ron Cacciatore, director of investigations for the property appraiser’s office, confirmed that Michael had purchased a second home in the Florida Keys and filed for homestead on it.

    Records show Michael was registered to vote in Monroe County. Still, married couples are only allowed a single homestead between them.(1)
For more, see Property-tax cheats facing crackdown (Illegal claims are costing Miami-Dade millions of dollars. The county is putting the squeeze on scammers).
(1) In Florida (and contrary to popular belief, particularly among uninformed government bureaucrats charged with the duty of setting tax valuations on homes and collecting real estate taxes thereon), state law and prior opinions issued by the state Attorney General appear to make pretty clear that, provided they otherwise qualify, there is nothing necessarily illegal or otherwise improper about a husband and a wife to each claim a homestead exemption on separate residences in certain circumstances ('double homesteads') (while formal opinions issued by the Florida Attorney General are not binding on any court, the Florida case law cited therein is certainly binding). See:
  • Florida Administrative Code Rule 12D-7.007(7):

    "A married woman and her husband may establish separate permanent residences without showing “impelling reasons” or “just ground” for doing so. If it is determined by the property appraiser that separate permanent residences and separate “family units” have been established by the husband and wife, and they are otherwise qualified, each may be granted homestead exemption from ad valorem taxation under Article VII, Section 6, 1968 State Constitution. The fact that both residences may be owned by both husband and wife as tenants by the entireties will not defeat the grant of homestead ad valorem tax exemption to the permanent residence of each."

    Florida Attorney General Opinion 75 Op. Att'y Gen. 146 (1975), Husband And Wife Maintaining Separate Residences May Both Qualify For Homestead Exemption;

    Florida Attorney General Opinion 05 Op. Att'y Gen. 60 (2005), Homestead Exemption -- separate residences and homestead exemption. Art. VII, s. 6, Fla. Const.

    Wells v. Haldeos, Case No. 2D09-4250 (Fla. App. 2d DCA 2010).

Notary Cops Plea For Role In I.D. Theft Scam In Connection With Fraudulently Obtaining Several Mortgage Loans In Name Of Unsuspecting Victim

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

  • District Attorney Gregory D. Totten announced [] that on June 14, 2012, Ventura resident Elizabeth Ortiz (DOB 6/28/1974) pled guilty to a felony count of fraud related to a deed of trust. This case was investigated by the District Attorney's Real Estate Fraud Unit and the Oxnard Police Department.

    Ortiz, along with an accomplice, impersonated the victim and used the victim's identity to secure several residential real estate loans.

    Ortiz, who is also a notary public, placed her notary seal on deeds of trust that were fraudulently obtained. Her crimes were discovered through a credit history check that revealed the presence of several mortgage loans that were attributed to the unsuspecting victim.

Oakland-Area DA Issues Advisory Against Out-Of-State Operators Running Grant Deed Scams That Use Mailings To Solicit Unwitting Homeowners

In Oakland, California, the Office of the Alameda County District Attorney recently announced:

  • The Real Estate Fraud Unit of the Alameda County District Attorney’s Office is issuing a consumer advisory to Bay Area residents about recent mailings from private companies offering to obtain a copy of grant deeds or property title records for a high fee.

    The solicitations offer to obtain a copy of the grant deed for a high fee, which can be up to 20 times more than the actual cost charged by the County Recorder. In Alameda County, a copy of a grant deed can be obtained for as low as $3.50.

    Alameda County District Attorney Nancy O’Malley noted, “This mailer was sent from outside of California, and attempts to charge high fees for a relatively simple process. The Real Estate Fraud Unit of the Alameda County DA’s Office works to ensure the integrity and lawfulness of all real estate solicitations made to homeowners in our community.”

    Consumers are urged to shop wisely before engaging in any real estate related transactions. Homeowners interested in obtaining a copy of the grant deed to their property can go to the Alameda County Recorder’s website to see if they can save money by ordering their own grant deeds at:

    Go here for the Alameda County Recorder’s Office.