Saturday, September 1, 2012

Real Estate Investor Files Suit To Derail Demolition Of Two Homes Scheduled For Date With City Wrecking Ball

In Beaumont, Texas, The Southeast Texas Record reports:

  • Diamantis Investments has filed a petition and application for temporary restraining order against the city of Beaumont, seeking to stop the slated demolishment of two properties. The injunction request was filed Aug. 16 in Jefferson County District Court.

    According to the petition, Diamantis Investments owns two homes in Beaumont located at 1785 Elgie St. and 3950 Congress St., both of which have been declared to be dilapidated structures and scheduled to be demolished by the city.

    In its petition, Diamantis Investments argues that if the homes are demolished, the plaintiff will lose almost all the investment in the properties, causing the plaintiff to suffer immediate and irreparable loss.

    Diamantis Investments is asking the court to enjoin the city following an injunction hearing. In addition to the injunction, Diamantis Investments is seeking court costs.

Vacant Home In Foreclosure Since 2008 Likely Cause Of Neighborhood Cockroach Invasion; City Slates Date With Wrecking Ball, But Must 1st Purge Pests

In Hammond, Indiana, The Times of Northwest Indiana reports:

  • An emergency demolition order was issued Thursday for an empty East Hammond house that neighbors claim is the nexus of an expanding cockroach infestation.

    Residents of the 900 block of Eaton Street sought assistance from the Board of Public Works and Safety last week in combating the insect invasion, which they said was spreading to adjacent streets in all directions.

    Before the 91-year-old building can be torn down, the roaches must first be killed, said Kelly Kearney, code enforcement commissioner, or they would immediately occupy neighboring properties.

    "Everything in there is infested," Kearney said. "There's a massive, massive amount of roaches." Residents said the insects first appeared in June after the owner and a tenant moved out, leaving behind mounds of debris and a dead dog in the basement.

    Pest control professionals estimated at one to three weeks could be needed to exterminate all the roaches, Building Commissioner Kurt Koch said.
  • Owner Carl Harris told the works board Thursday he would like to get his property back but doesn't have the money to catch up with his mortgage on the house, which has been in foreclosure since 2008.

City To Tenants: 'Everybody Out!' Sewage Leak/Backup Likely Cause For 36-Unit Apartment Building Shutdown; Renter Return Possible Upon Landlord Fix

In Hopewell, Virginia, The Progress-Index reports:

  • The City of Hopewell has shut down a local apartment complex, deeming it unfit for habitation. Residents of the Broadway East Apartments say that police knocked at their doors Tuesday morning, telling them to pack up and leave by midnight. The city has now extended the deadline until Friday.

    Assistant City Manager March Altman said that living conditions at the property on 600 E. Broadway are unsafe, unsanitary and pose a threat to the health, safety and welfare of the residents. "The city has taken the step of declaring the property unfit for habitation, and requested the tenants vacate the premises," Altman said.

    Human waste and sewage have created unlivable conditions at the apartment complex. "One of the residents called us to complain about the smell of sewer," Altman said. "We went out there last week and after we saw what was going on, we posted a note, ordering people to move," he said.

    Altman said that the it is likely that a sewage leak or backup has caused raw sewage to spread into the hallway and several apartments on the bottom of the 36-unit premises. He also said that black mold was found inside at least one unit.

    Anitra Garland, who has lived at the apartment complex for two years, said that the units on the bottom floor had been closed for quite some and that the sewage problem had never been fixed. "I could smell it in my bedroom, it was that strong," she said. "When I had people over, they would notice the smell as well and they would say that it stinks."
  • Altman said that the city regrets the discomfort that the evacuation causes for residents, but that it was necessary. "The city is acting in the best interests of the tenants of the apartment complex," he said. "While we are sympathetic to the residents' difficult situation, we cannot allow our citizens to live in the conditions that exist on the property."
  • Altman said that residents would be allowed to move back in once the owner has fixed the sewage leak and the affected units are cleaned up.

Friday, August 31, 2012

The Death Of Sunny Sheu

Truthout recently ran a story on the late Sunny Sheu, the now-deceased Flushing, Queens homeowner who had his home stolen out from under him by reason of a forged power of attorney, and, in the battle to get it back, found himself murdered.

In his battle to get it back, and despite that the fact that the forgers were prosecuted and pled guilty, a bankster that had wrestled the property away through a wrongful foreclosure was never legally required to give it back and, in fact, was the beneficiary of the actions of a Queens County, New York judge who, according to Sheu, had consistently ruled against him and in favor of the bank, to wrongfully ensure that he never recovered his property.

According to the Truthout story, it wasn't until six months after his death that Sheu's house was somehow mysteriously returned to his estate with the mortgage fully paid.

For the story, see The Death of Sunny Sheu.

For the earlier 3-part series of reports on this story from Black Star News, see:

Final Member Of Trio Pinched For Vandalizing, Torching Biracial Man's Home In Effort To Force Him To Move Sentenced For Housing Rights Interference

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

  • A Missouri man was sentenced [] to 30 months in prison for his role in the vandalism and arson of a biracial man's home in Independence, Mo., the Department of Justice announced. David Martin, 24, of Independence, was sentenced in the Western District of Missouri by U.S. District Judge Dean Whipple.

    On March 7, 2012, Martin pleaded guilty to one count of conspiracy and one count of violating the Fair Housing Act. Martin's co-conspirators, Teresa Witthar and Charles Wilhelm, pleaded guilty on Feb. 2, 2012, and March 8, 2012, respectively, for their roles in vandalizing and burning down Nathaniel Reed's home in Independence.

    According to the plea agreement filed with the court, Martin, Witthar and Wilhelm conspired to intimidate and scare Reed, a biracial man, into moving out of the Highland Manor Mobile Home Park in Independence, in part because of his race.

    On or about June 6, 2006, Martin, along with Witthar and Wilhelm, entered Reed's mobile home, without his permission, and vandalized it by writing at least 15 racially derogatory slurs on the walls of his trailer.

    Two days later, on or about June 8, 2006, Witthar drove Martin and Wilhelm to a neighborhood behind Reed's home so that they could set fire to his home without being detected. Witthar waited in her vehicle for Martin and Wilhelm to set the fire and then provided them a ride back to the Highland Manor Mobile Home Park.

    Every American has the right to live in their homes without fear of racially-motivated violence," said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. "The Department of Justice will continue to vigorously enforce the Fair Housing Laws that prohibit these heinous acts."

    Witthar was sentenced to 63 months in prison on June 18, 2012. Wilhelm was sentenced to 42 months in prison on July 24, 2012.

Down-And-Out Woman Seeking Refuge At Hotel For Homeless Scores $50K Settlement Of Suit Accusing Now Ex-Manager Of Sexual Harassment

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

  • The Justice Department announced [] that the owner and former manager of the Lowrey Hotel and Café in New Richmond, Wis., has agreed to pay $50,000 to settle a lawsuit alleging they had sexually harassed a homeless woman who sought shelter at the hotel [go here for Consent Decree].

    The lawsuit, filed in the U.S. District Court in Madison, Wis., on Nov. 23, 2011, involved the Lowrey Hotel & Café, a residential hotel that often provides housing to homeless people, who have been referred by local social services agencies.

    According to the complaint, Gerald Hoglund, of McClusky, N.D., formerly one of the hotel’s managers, sexually harassed a female tenant, who had been referred to the hotel by a social service agency, by making unwelcome requests to her for sexual favors.

    The complaint also alleged that Stacy Wright, co-manager and owner of the Lowrey Hotel & Café LLC, warned the tenant that Hoglund might ask for sexual favors but failed to take reasonable steps to prevent it.

    It is unacceptable that a woman looking for shelter should be subject to sexual harassment at the very place where she has sought refuge,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division.
  • A person’s home should be a place of complete safety and security – no one should be subjected to unwanted sexual advances from any landlord,” said John W. Vaudreuil, U.S. Attorney for the Western District of Wisconsin.
  • The federal lawsuit arose when the tenant filed a complaint with the Chicago Regional Office of the Department of Housing and Urban Development (HUD), which conducted an investigation and, after issuing a charge of discrimination, referred the matter to the Department of Justice.

Two Tenants Score $15K, Feds $10K From Landlord After Judge Finds Housing Discrimination In Renting To Families With Kids

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

  • The Justice Department announced [] that John Wingard Altman has agreed to pay $25,000 to settle a lawsuit involving violations of the Fair Housing Act at Altman Apartments, a 16-unit apartment complex he owns in Summerville, S.C. In July 2012, the court, ruling on a motion filed by the government, found that the defendant had violated the Fair Housing Act by discriminating against families with children.

    Under the consent order, which was approved [] by the U.S. District Court for the District of South Carolina, the defendant must pay $15,000 to two people who were harmed by the defendant’s discriminatory practices and $10,000 to the United States as a civil penalty. In addition, the order prohibits the defendant from engaging in discrimination against families with children in the future and requires that he adopt a non-discrimination policy in addition to receiving training on the Fair Housing Act.
  • Filed in September 2011, the lawsuit alleged that Mr. Altman, through published advertisements and statements to testers, maintained a policy or practice of discouraging families with children from living in the apartment complex. Testers are individuals who pose as renters to gather information about possible discriminatory practices; the evidence in this case was obtained by the department’s Fair Housing Testing Program.

    The federal Fair Housing Act prohibits discrimination in housing based on race, color, religion, national origin, sex, disability and familial status. Fair housing enforcement is a priority of the Civil Rights Division. More information about the Civil Rights Division and the laws it enforces is available at

    Individuals who believe that they may have been victims of housing discrimination can call the Housing Discrimination Tip Line at 1-800-896-7743, email the Justice Department at, or contact the U.S. Department of Housing and Urban Development at 1-800-669-9777.

Thursday, August 30, 2012

Man Who Pledged Home As Loan Collateral To Help Friend Now Faces The Boot As Latter Stops Making Repayments

In Ridgefield, Connecticut, The Ridgefield Press reports:

  • Bob Simonson is known perhaps equally for riding his bicycle all year round for transport rather than sport, and for the mass of miscellany that’s grown around his Branchville Road house over the years. Now he’s at risk of losing that house that he’s called home for more than half a century and teeters on the verge of homelessness.

    Over the years, debt has piled up on the property that two decades ago Mr. Simonson owned free and clear. In a letter to the editors last week, Mr. Simonson asked “Is there anyone here who can do anything to help me buy time enough to save my home?

    He inherited the property in 1989 with no mortgage, and in a fateful moment of what he calls “weakness,” Mr. Simonson said, he used his windfall to help a friend buy a house in Pennsylvania where he sought to start an antiques business.

    He was the grandson of a famous antiques dealer, so he knew his stuff,” Mr. Simonson said. “I figured he was a safe bet.”

    He borrowed $50,000 — $25,000 for a “200-year-old colonial that was falling apart” and $25,000 to fix it up, and he used his Branchville Road house as collateral.

    I knew him for a number of years and I trusted him,” Mr. Simonson said. They had been roommates in town when Mr. Simonson’s parents were alive, he said. “I used to be more trusting.”

    For a couple of years he made payments,” he said. In the mid-1990s, the payments stopped and Mr. Simonson, who has worked retail jobs around town for decades, picked up the slack. “I could have foreclosed on him at any time,” he said.

    Back taxes accrued and the debt swelled to around $70,000 ten years ago, Mr. Simonson said. A man Mr. Simonson describes as a venture capitalist offered him $30,000 for the house. He took it, but was left owing $40,000.

    Then his indebtedness exploded up to around $200,000 today. “It just sort of snowballed over the years,” he said.

Houston City Controller Sells Out Forgery Victims; Testifies As Character Witness On Behalf Of 5-Time Felon Prosecuted For Stealing 23 Area Properties

In Houston, Texas, the Houston Chronicle reports:

  • City Controller Ron Green, Houston's top elected money manager and self-described watchdog, is seeking leniency for a five-time convicted felon and contractor who masterminded an elaborate real estate and forgery scam targeting the city's historically African-American neighborhoods.

    Green is asking a judge for probation for his friend and former next-door neighbor Dwayne K. Jordon, a rogue developer who pleaded guilty to felony theft. According to indictments, Jordon pilfered 23 Houston properties from different owners and then duped unsuspecting buyers into purchasing homes built on stolen ground.

    The ex-con contractor and the city controller have known each other about five years, the same period, according to a Houston Chronicle review of dozens of court records and related real estate documents, that Jordon carried out the series of land thefts, mortgage frauds and deed scams.
  • Victims of the property pilfering say they are stunned to see Green stand up for a man who ripped off people Green was elected to protect.

    "It makes my heart hurt and it makes me sick to my stomach," said Darlene Sims, a native Houstonian whose family land was stolen and whose father's fruit and pecan trees were bulldozed in the scam.
  • Sims, whose family land was taken by Jordon, says she once admired Green as a public servant but won't support him again. Sims doesn't understand why the city controller believes Jordon will repay his victims. A deadbeat dad and con man, Jordon has never paid the Sims family any of the $225,000 a jury awarded them after finding that his company, E. Jordon Inc., stole their land by forging Darlene Sims' dead parents' signatures on a fake deed, according to court records.

    "He didn't pay and he has no regard for the families he has harmed," Sims said.
For the story, see Houston city controller seeks leniency for con man.

In a related story, see Ethics issues arise in rulings by justice of the peace (City controller's wife ordered evictions despite her connections to felon).

Elderly Woman Duped Into Borrowing Against Home By Convicted Con Man Now Fears F'closure; Cops Bag Suspect On Grand Theft, Elder Embezzlement Charges

In Riverside County, California, the Press Enterprise reports:

  • A Menifee man charged with conning two women in their 70s out of tens of thousands of dollars — using tearful pleas that he needed the money for lifesaving surgeries — was convicted years ago in Orange County in a similar scam, authorities said.

    This guy is a creep,” said Investigator Glenn Johnson of the Riverside County Sheriff’s Department. “His whole life is conning women.”

    Frankie Jay Szabo, 55, who lives in the Sun City area, pleaded not guilty Wednesday, Aug. 15, to two counts each of grand theft and embezzlement from an elder, court records show. He was being held with no bail amount set, jail records show.

    Szabo is accused of convincing a 70-year-old Homeland woman to take out a loan on her house to fund a surgery that was supposedly necessary to save his stepfather’s life, Johnson said.

    In the second case, Johnson said, Szabo took $10,000 from a 71-year-old Lake Elsinore woman on the pretense that it was, again, a loan for a life-saving surgery, this time for himself. The woman took the money out of her retirement fund, he said. Szabo promised both women he would pay them back.

    In fact, neither man was in need of surgery. The money was used to purchase a Mercedes, meals at restaurants and shopping trips, Johnson said. “It’s financing his lifestyle,” he said.

    One of the women fears she may lose her house to foreclosure, Johnson said. “She’s petrified.”
For more, see ELDER FRAUD: Convicted con man faces new charges (Frankie Jay Szabo, 55, is jailed, accused of bilking two women in Homeland and Lake Elsinore).

Greensboro Cops Investigate Local Minister/Self-Proclaimed Homeless Advocate/Ex-Con For Allegedly Running Rent Scams

In Greensboro, North Carolina, Yes! Weekly reports:

  • A minister and self-professed advocate for the homeless has been accused of defrauding at risk individuals for personal gain, including by two people who said he still owes them money in Greensboro.

    Ronnie Lee Chrisp, 48, allegedly posed as a property manager, collecting security deposits and rent from people who trusted him as an advocate. Greensboro police are actively investigating Chrisp, spokesperson Susan Danielsen said.

    Chrisp once worked at Urban Ministry and has recently filed for bankruptcy twice.

    Roger Fitzgerald, who collects disability, was looking for a new place to live after the house he was living in went into foreclosure. A friend put him in touch with Chrisp, whom he recognized from Urban Ministry. After seeing the apartment Chrisp was offering on Huffman Street, Fitzgerald said he provided proof of income showing how much disability assistance he received monthly, then gave a $200 cash deposit and $675 in rent.

    When it came time to move in June 1, Fitzgerald said he couldn’t reach Chrisp. After several excuses from Chrisp, Fitzgerald said he looked up the property owner and found out Chrisp wasn’t authorized to lease the apartment.

    After contacting the police, Fitzgerald said Chrisp began to pay him in small amounts of anywhere from $10 to $100. Fitzgerald filed fraud charges and continues to periodically meet Chrisp to receive small payments, which he said totaled less than $300 of the $875 he is owed.
  • Jenny Hudson, the office manager at the Interactive Resource Center, a homeless day center, said “quite a few” of the homeless people they serve have had problems with Chrisp.

    Unfortunately he thrived on folks that were at the bottom of the barrel,” Hudson said. “He should be ashamed of himself. It really sickens me to know that there are people out there that will take advantage of somebody so quickly and not even think about the crisis that you’re putting them in.”

    Greensboro police are investigating but there are no warrants for his arrest. Danielsen said Chrisp had a lengthy arrest history but that her records didn’t show if he was convicted and said the charges were unrelated to fraud.

    Chrisp’s most recent bankruptcy filing was dismissed Aug. 13. His standing trustee Anita Troxler recommended his Chapter 13 bankruptcy filing be dismissed after “the debtor failed to appear at the meeting of creditors on July 23, 2012, and has defaulted in required plan payments as of July 23, 2012,” court documents show.

    In 1999, Chrisp was released after a nearly four year prison term for common-law robbery, conspiracy and possession of a firearm by a felon. He had previously served time after being convicted for larceny in 1995.

Couple Say Pastor Screwed Them Over In Home Sale; Claim Clergyman Abused Trust Relationship, Language Barrier To Dupe Them Into Signing 'Toxic' Docs

In Austin, Texas, Courthouse News Service reports:

  • After defrauding a married couple in a home sale, their pastor tried to wrongfully evict them, the couple claims in court - and they say they're not the only ones.

    Maximino Medenilla Gonzalez and Janeth Denova Jaimes sued Salvador Villegas, in Travis County Court. They claim they're not the only victims of the pastor, who "perpetuates a relationship of trust, then defrauds individuals when they 'buy' a house from him."

    The couple say they bought a home from Villegas in 2007, after leasing it for a year. They claim Villegas "urged" them to buy the property and preyed upon their language difficulties by having them sign incorrect documents, which left them owing more than the actual balance of the mortgage.

    "Interestingly, defendant knew that plaintiffs were not English speaking, but to take advantage of them had all the documents created in English, despite the fact that he himself the defendant spoke fluent English and Spanish, so to have the documents in Spanish would not have created any inconvenient [sic] whatsoever," the complaint states.

Wednesday, August 29, 2012

Nevada AG Indicts Las Vegas Pair In Alleged Scam Purporting To Save Homeowners From Foreclosure With Mortgage Balance Reduction Refinancing Program

In Las Vegas, Nevada, the Las Vegas Sun reports:

  • A Clark County grand jury has indicted two Las Vegas men in a mortgage-lending fraud case in which victims lost thousands of dollars, Nevada Attorney General Catherine Cortez Masto announced Wednesday.

    The grand jury on Aug. 15 returned an 18-count indictment charging Gary Dimattia, 62, and Lawrence Bateman Jr., 36, with multiple felony charges, including mortgage lending fraud and theft. They operated under the firm Financial Link Services.

    Authorities allege the pair made false claims from April 2009 to August 2010, saying they could rescue homeowners looking to refinance their mortgages by negotiating new loans through a balance reduction program. The program, however, did not exist, officials said.

    Dimattia and Bateman collected an upfront fee — often from $3,495 to $3,895 — from victims for the proposed service that was never performed, officials said.

Indiana AG Extends 'Hoosier Hospitality' To Aggrieved Out-Of-State Consumer w/ Civil Suit Targeting In-State Outfit Allegedly Running Loan Mod Racket

In Indianapolis, Indiana, WISH-TV Channel 8 reports:

  • A local business that took $1,200 from an out-of-state consumer and failed to provide a home-loan modification or refund is now facing a state lawsuit.

    Indiana Attorney General Greg Zoeller said the lawsuit was filed against Statewide Federal Assistance Corporation headquartered in Carmel and its owner Ashley Grant.

    The company collected money upfront from a Washington state resident and then failed to obtain the promised home-loan modification, according to a complaint.

    "This is a unique and rare case because it involves an Indiana company taking advantage of an out-of-state homeowner - the opposite of what we regularly investigate," Zoeller said.

    "I believe that's because Hoosier hospitality is not extended to scammers and illegitimate businesses. This lawsuit highlights our ongoing mission to pursue those operating within the state's borders that intentionally deceive consumers."
For more, see Carmel-based foreclosure consultant faces state lawsuit (Zoeller calls filing a 'unique and rare' case).

Maryland Regulator Issues Final Order Directing Fake Lawyer/Loan Mod Scammer To Refund All Upront Fees To Victims & Pay State $236K In Penalties

In Baltimore, Maryland, LegalNewsline reports:

  • Maryland Attorney General Douglas Gansler announced on Friday that his Consumer Protection Division issued a final order against a man claiming to be a lawyer who allegedly took thousands of dollars from consumers.

    Corey W. Hankerson, who operated as Equity Law Group LLC from 2009 to 2011, allegedly told consumers he was a lawyer and offered to provide credit and legal services. The services included foreclosure consulting and loan modification services. The six victims who testified in the case allegedly paid $12,750 in fees to Hankerson for assistance he never provided.
  • The final order requires Hankerson to stop representing his qualifications to consumers and stop offering credit services unless he obtains a license and posts the required bond. Hankerson must also return all the money he took from consumers, including the $12,750 he allegedly took from the six consumers who testified.

    The order penalized Hankerson $300 for each of the 787 days he allegedly illegally advertised his services for a total penalty of $236,100.

Tuesday, August 28, 2012

Minn. Counties: 'Fannie, Freddie Stiffed Us, Too!' Another County Hops On Municipal Bandwagon Of Local Gov'ts Accusing Outfits Of Recording Fee Dodge

In Hennepin County, Minnesota, the Pioneer Press reports:

  • The Hennepin County attorney's office has filed a federal lawsuit against mortgage giants Fannie Mae and Freddie Mac, claiming the companies illegally failed to pay required taxes on home sales.

    The class-action suit, filed on behalf of all 87 Minnesota counties, is the latest in a string of similar lawsuits filed by other states against federal government-sponsored Fannie Mae and Freddie Mac in recent weeks.

    Hennepin County Attorney Michael Freeman said at a news conference Friday, Aug. 24, that there are "tens of thousands" of transactions in question, going back six years, and that the lost tax dollars number in the millions.

    "This is solely a question of law," Freeman said after the conference, regarding the companies' claim of tax exemption. "The question is: 'Are Fannie and Freddie exempt from this law?' We know Fannie and Freddie sold houses and we know they didn't pay the tax."

    Specifically, the lawsuit points to Minnesota's deed transfer tax, a tax of 0.33 percent collected on any property sale of more than $500. About 97 percent of the tax funds go to the state and the rest to counties. Hennepin and Ramsey counties were granted, via special legislation, the right to collect an additional sliver of tax dollars for environmental clean-up funds.

    Freeman estimated that Fannie Mae and Freddie Mac own or guarantee about 40 percent of home mortgages in Hennepin County, a number that has ballooned since the foreclosure crisis began in 2005.
  • But Hennepin County contends that "all taxation" does not include excise taxes, which are not direct taxes on real property. Minnesota's deed transfer tax is an excise tax.

    Freeman said at least eight similar lawsuits have been filed in other states over the last two weeks. He said a recent court decision in Michigan set a precedent for these cases.

    The Michigan lawsuit, filed last year by Oakland County, hinged on the same tax exemption argument. A U.S. District judge ruled in favor of Michigan counties in March, saying the mortgage companies were not exempt and therefore required to repay the money. Fannie Mae and Freddie Mac have indicated they plan to appeal.

Iowa Federal Judge OKs MERS' Recording Fee Dodge; Nixes Class Action Suit Filed On Behalf Of Counties Throughout State

In Sioux City, Iowa, the Sioux City Journal reports:

  • A federal judge has dismissed a class-action lawsuit that claimed a national electronic mortgage registry company was enabling banks to avoid paying Iowa mortgage registration fees.

    U.S. District Judge Mark W. Bennett said in his ruling, filed Tuesday, that Iowa law does not support the claims raised by Plymouth County Attorney Darin Raymond, who in March filed the lawsuit in U.S. District Court in Sioux City on behalf of all 99 Iowa counties against MERSCORP Holdings Inc., Mortgage Electronic Registration Systems Inc., known as MERS, and several large banks and mortgage companies.

    Raymond had contended that MERS has allowed banks subscribing to the company's service to skirt Iowa's public information and recording laws by trading mortgages through an electronic registry that lists MERS as the mortgage holder, even though the banks are buying and selling the mortgages. The MERS electronic system tracks changes in ownership so that each buyer doesn't have to record the transaction.

    Raymond cited Iowa law that requires a document called an assignment of mortgage to be filed in the county recorder's office when a mortgage is sold. The MERS system enables banks to avoid that practice and the payment of accompanying filing fees, the lawsuit said.

    Bennett ruled that none of the Iowa statues cited in the lawsuit imposes a requirement on the party assigning a mortgage or receiving an assignment to record the transaction.

    "What the county seeks, on its own behalf and of the putative class of Iowa counties, under the guise of construction of recording statutes, is an extension of those statutes that completely changes the meaning of the statutes, but the courts have no power to grant such an extension," Bennett wrote in his ruling.

Nevada Tax Commission Fiddles, Letting Fannie, Freddie Slide On Payment Of Transfer Taxes As Statute Of Limitations 'Clock' Continues To Tick

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

  • The state Tax Commission on Monday turned down Treasurer Kate Marshall's request that Nevada begin collecting real property transfer taxes on mortgages guaranteed by the federal Fannie Mae and Freddie Mac companies.

    She urged the commission to require the Federal National Mortgage Association and the Federal Home Loan Mortgage Corp. to pay the tax of $5.10 for each $500 in property value in Clark County. About half of the tax goes to the state.

    But commission Chairman Robert Barengo said the "law is unsettled" on whether the federal lenders, who hold more than half of all mortgages, can be assessed the tax. He suggested the state wait until additional court decisions. A majority of the eight-member board backed his view, but not all board members attended and two voted "no."

    The state could collect more than $24.5 million in transfer taxes from the past three years if the state sued and won litigation over the issue, Marshall said. Either Fannie Mae, Freddie Mac or the banks that made the loans could be required to pay the taxes, she said.

    "There are district courts that have ruled in our favor and district courts that ruled for Fannie and Freddie," said Marshall, who has been arguing in favor of the tax collection for more than a year.

    Michigan, Illinois and Ohio have won cases and can collect the real estate transfer taxes. But Nevada's Department of Taxation has chosen not to try to collect the tax from the federal government.

    Since there is a four-year statute of limitations on the tax collection, every day the state waits is another day "Fannie and Freddie don't pay," Marshall said. The state and local governments vitally need the money because of the recession and foreclosure crisis, she added.

Monday, August 27, 2012

More On Modern Day Debtors' Prison

From a post by Professor Eboni Nelson, University of South Carolina School of Law, appearing in Public Citizen's Consumer Law & Policy Blog:

  • In our country, we generally don’t put people in jail for failing to pay private debt, right? Wrong, according to recent articles published in the ABA Journal and the St. Louis Post-Dispatch.

    The articles discuss some Missouri creditors’ practices of petitioning the court to obtain “body attachments,” whereby a debtor can be arrested and held until he/she posts bond or has a court hearing. While it is unclear how widespread the practice is, the fact that it is being used by some creditors, including payday lenders, to incarcerate consumers is troubling.

Modular Home Manufacturer/Installer Left Holding The Bag After Being Stiffed By Customer/Property Owners When Bank Forecloses On Underlying Land

The following facts are taken from a recent court ruling by a California appeals court reported on The Lien Blog:

  1. The owners of two vacant lots contracted with a modular home manufacturer ("Vieira") to buy two full-sized, $200K modular homes and have them delivered to and installed on their land.

  2. Vieira completed the contract in full, but the property owners failed to pay the balance owed on their purchase.

  3. The property owners also stiffed a lender which happened to be holding a mortgage secured by the vacant lots, and consequently, the owners of the two vacant lots were foreclosed upon.

  4. As part of the foreclosure, the foreclosing lender wound up with the modular homes on the basis that the homes, once attached to the land, are no longer personal property, but becomes part of the realty.

  5. Needless to say, Vieira did not acquiesce with this result and moved to assert its mechanics lien claim against the modular homes by reason of the unpaid balance on its contract with the now-foreclosed lot owners.
A California Court of Appeals affirmed a decision of the trial court, which concluded that the common law of fixtures applies and the undisputed facts established that the manufactured homes were fixtures to the real property at the time of the foreclosure and therefore Vieira's property interest in the homes had been extinguished.

For more, see
The Lien Blog: California Court Holds Manufactured Home Is One Big (Attached) Fixture.

For the court ruling, see Vieira Enterprises, Inc. v. City Of Palo Alto, No. A132754 (Cal. App. 1st Dist. Div. 2 August 15, 2012) (Certified for Publication).

Editor's Note
: The underlying facts of this case are much more complicated than what's been described above. For those dealing with modular homes, as well as those dealing with mechanics liens and the common law of fixtures, this case may make for some interesting reading.

Homebuyers Accuse BofA Of Helping Insolvent Developer Peddle Lots Subsequently Rendered Unbuildable Due To Failure To Provide Roads, Sewers, Utilities

In Asheville, North Carolina, Courthouse News Service reports:

  • Fifteen frustrated customers claim Bank of America defrauded them by helping a now-bankrupt developer sell lots without mentioning that "roads, sewers, water, gas, or electric service" were not part of the deal.

    In 15 separate federal complaints, homebuyers claim Bank of America aided and abetted the developer of Grey Rock, a subdivision of Lake Lure, N.C. The bank was so aggressive it set up a booth next to the developer at the site to recruit customers, according to Robert Nagle's complaint, which resembles the other 14.

    The plaintiffs claim BofA helped push the lots, but failed to tell buyers that the developer was insolvent and could not complete the promised "amenities," such as roads and utilities.

    After selling 435 lots for $90 million, the developer filed for bankruptcy in 2008, without completing the subdivision, and with only $905 in its bank account, according to the complaint.

Sunday, August 26, 2012

Elderly Homeowner Left Having To Pay Twice For Same Roof After Now-Defunct Contractor Stiffs Materials Supplier

In Kensington Park, Florida, the Sarasota Herald Tribune reports:

  • Beverly Boganrief is hopping mad. A retired Kensington Park resident living on social security, Boganrief said she could not believe it when a Tampa company that sells roofing supplies slapped a mechanics lien on her house demanding payment of $3,000 by Aug. 31.

    Boganrief said she paid $6,000 for a new roof in March and it is not her fault if the now defunct Harbour Roofing did not pay its bill Gulfeagle Supply.

    But sprawled across the top of the letter she received from Gulfeagle’s attorney on Aug. 10 are the words:


    Calls to to Gulfeagle’s Tampa headquarters and to its St. Petersburg attorney Robert E. Burguieres were not returned.

    As far as Boganrief is concerned, Florida Eagle and Burguieres are simply harassing seniors in the hope they can be bullied into paying for something twice.

    I’m really upset,” Boganrief said. “This is not my debt. I already paid $6,000 for a brand new roof and I can’t help it if the man who was supposed to pay his bill did not pay it.” “I wonder how many more people are being harassed by this company,” she asked.

Ethics Issues Arise For Houston Judge For Rulings Favorable To Convicted Felon Accused Of Pilfering 23 Properties, Hijacking Dead Granddad's Home

In Houston, Texas, the Houston Chronicle reports:

  • Elected Justice of the Peace Hilary Harmon Green repeatedly ordered the eviction of tenants and relatives on behalf of a five-time felon even though she and her husband, City Controller Ron Green, both had financial and personal ties to the home builder.

    In one case involving Dwayne K. Jordon - a convicted thief who has admitted to repeatedly pilfering people's properties for his residential construction projects - Green evicted Jordon's own uncle despite a dispute over whether Jordon held ownership of the family home.

    That ruling, which later was overturned by a county court, came in 2009 - the same year Green's husband, a lawyer, was paid an undisclosed amount of money to advise Jordon on his criminal case, meet with a Harris County prosecutor and recommend a defense attorney.

    Through her clerk, Hilary Green refused to comment on why she did not recuse herself from more than a dozen matters involving Jordon, who has been her neighbor, her home renovation contractor and for whom her husband has served as a character witness in the pending real estate criminal case.
  • In 2007, the year Green became a justice of the peace for Precinct 7, the Greens lived in a rental house next door to Jordon because their own home, which they nearly lost to foreclosure, was uninhabitable due to unfinished renovations they could no longer afford.

    Impressed by the work Jordon was doing in their neighborhood, they agreed in 2008 to pay him more than $200,000 to renovate their own house. Their contract with Jordon helped the Greens land a $508,000 mortgage, though their house had an assessed value in 2008 of only one third that amount, according to Harris County tax records.

    Ruled in family dispute

    Ethically, Hilary Green should have recused herself on legal cases involving Jordon because of her other associations with him, said Lillian Hardwick, an Austin attorney and expert in judicial conduct who co-authored the authoritative Handbook of Texas Lawyer and Judicial Ethics.

    Green's most unusual ruling favored Jordon in a family dispute over the ownership of his grand­father's house in 2009.

    Jordon, who has five prior felony convictions for robbery, kidnapping, firearms, drugs and theft, was raised by his maternal grandfather, Ezekel Jordon Sr., who for decades owned a brick home on Simsbrook Drive only a block from Sims Bayou in Houston, according to records and family members.

    But soon after the elder Jordon died in September 2009 at age 87, Dwayne Jordon changed the locks on his grandfather's house and later claimed to be the true owner by presenting two different wills and a deed that his uncle denounced as forgeries, according to documents filed in related court cases. Dwayne Jordon, who helped manage his grandfather's money, also had taken out a loan against his grandfather's house, according to interviews and public records.

    Even before the funeral, Jordon filed an eviction case in Green's court against his uncle Ezekel Jordon Jr., his grand­father's only son, who had been living in the house for about month before the elder Jordon died.

    Despite disputes over the ownership of the house and the authenticity of documents, Green ruled for Dwayne Jordon and later denied his uncle permission to re-enter the house to collect his personal property, court records show.

    "She illegally evicted me," Ezekel Jordon Jr. told the Chronicle. "She would not let me say anything. … I was trying to tell her that the will was fake and she would cut me off."

    Jurisdiction question

    Ezekel Jordon Jr. said Green never disclosed her relationship to his nephew in court, but he learned of it in a Chronicle article published last week. In November 2009, he won an appeal, according to an order signed by then-County Court at Law Judge Jack Cagle, now a county commissioner.

    Jordon lacked authority to evict his uncle because he never legally established ownership of the property and therefore Green, as a justice of the peace, should not have ruled in the eviction case at all, according to arguments made in the appeal by Jordon's attorney with nonprofit Lonestar Legal Aid.

    According to the Texas Government Code, justices of the peace do not have jurisdiction in matters where more than $20,000 is at stake or in trials to resolve "title to land."

    "Justices of the peace are not supposed to act in an eviction case when there's a dispute about title," said Rich Tomlinson, director of litigation at Lonestar Legal Aid.

    Ezekel Jordon Jr., who was unemployed in 2009 after a recent drug possession conviction, said he was unable to afford a lawyer to fight his nephew's claim to the house by contesting the will and taking it to probate court. Instead, Dwayne Jordon quickly resold the house, records show.

    Lone Star Legal later provided copies of two versions of the disputed wills to the Harris County DA's office for a possible criminal investigation. "The signatures (of the deceased) on the documents do not match," Tomlinson said.

    Jordon's attorney, Chip Lewis, said that Jordon's uncle agreed to give up his rights to the house after being compensated by a $2,500 settlement. Lewis said he knew nothing about the will dispute.

    Jordon is scheduled to be sentenced Friday in the court of Harris County District Judge David Mendoza after pleading guilty to felony theft for his role in a real estate scam. Two 2009 indictments describe how Jordon and an accomplice pilfered 23 different properties, mostly in Sunnyside neighborhoods, used forged deeds to take land from rightful owners and then built houses that were sold to others. Each man blames the other for the thefts.
  • Hilary and Ron Green, one of the city's highest elected officials, appeared in court on Jordon's behalf in March. Ron Green described him as a family "friend" and has urged a lenient sentence for Jordon so that he can pay back his victims. Prosecutors are seeking at least 25 years to life in prison.
For the story, see Ethics issues arise in rulings by justice of the peace (City controller's wife ordered evictions despite her connections to felon).

In a related story, see Houston city controller seeks leniency for con man.

SoCal Law Firm Develops Seemingly Out-Of-Control Rep In Effort To Collect Debts; Stands Out "As Among The Worst Of The Worst" Says One Consumer Lawyer

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

  • [B]rachfeld Law Group in El Segundo, one of the nation's largest debt collection law firms, has been contending with allegations that it failed to investigate the facts adequately when it pursued some debts. A spokesman said the firm checks to ensure accuracy. In one case, though, Brachfeld allegedly helped pursue the wrong person for a debt he never owed.

    Several years ago, debt collectors began pursuing state Sen. Lou Correa (D-Santa Ana) for an unpaid Sears bill they said he owed. He told them they had the wrong man, but the debt collectors never wavered.

    "These folks are very aggressive," Correa said. "They'll call back repeatedly and say, 'Tell us some personal information so we can tell it's not you.' When all of a sudden is the burden of proof on me?"

    Last year, Correa discovered his Senate paycheck was being garnisheed because of a $4,329 lien for the Sears debt. Brachfeld had obtained a default judgment in court, even though, Correa said, the lawsuit was never served on him and he knew nothing of the claim or the court hearing.

    He later learned that the debt belonged to a Luis Correa from Santa Ana. The man had a different Social Security number, different address, even different first name — the senator is legally Jose Luis Correa.

    "I always pay my bills on time. Then to have somebody garnish my wages, I thought was pretty astounding," the lawmaker said. He later resolved the problem and stopped the wage garnishment.

    Now Correa is supporting a bill by state Sen. Mark Leno (D-San Francisco) to require debt collectors to document that they are pursuing the right person for the correct amount of money. The bill passed the Senate and is pending in the Assembly.
  • The Brachfeld law practice files several thousand debt-collection lawsuits a month. Consumer lawyers said the firm often files suits with little documentation.

    "They stand out to me as among the worst of the worst," said Aidan Butler, a Los Angeles consumer attorney.

    In 2009, Butler won a $12,000 judgment from Brachfeld in Los Angeles County Superior Court for a consumer who had been sued by the firm to collect a $16,000 Capital One debt.

    Butler had alleged that Brachfeld violated debt collection laws by, among other actions, making harassing phone calls and failing to validate the debt. Butler said he has defended about a dozen clients against suits filed by Brachfeld and each time the suit was dismissed.

    In Alameda County, two consumers filed a class-action suit in 2010 against the Brachfeld firm and Encore [Capital Group, Inc.] subsidiaries, accusing them of illegally sending repayment letters and pursuing collection lawsuits without conducting reasonable investigations of the debt, with little involvement by lawyers and with the use of false affidavits. The suit is pending.
For the story, see Aggressive debt collection tactics are drawing federal scrutiny (Federal regulators and state lawmakers are taking action against aggressive tactics by debt collectors that have been aided by outdated laws and lax oversight).