Saturday, January 26, 2013

Civil Rights Feds, Property Manager Agree To $15K Slam To Settle Allegations That He Sexually Harassed Female Tenants In Violation Of Fair Housing Act

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

  • The Justice Department [] announced that property manager Rudy Ferrante agreed to a $15,000 civil judgment against him, to resolve allegations that he sexually harassed female tenants in Portland, Maine.

    The department’s complaint alleged that Ferrante subjected his female tenants to unwanted sexual comments and touching, granted tangible housing benefits in exchange for sexual favors and took adverse actions against female tenants when they refused his sexual advances.
  • “The women involved in this case were subjected to intimidating and severe acts of sexual harassment in their homes, where they have a right to feel safe,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “This order sends the message that the Civil Rights Division does not tolerate such conduct and will enforce the right to equal access to housing when it learns of violations of the Fair Housing Act.”

    The department began investigating Ferrante after Pine Tree Legal Assistance,(1) a Portland-based legal aid organization, notified the department of sexual harassment complaints it had received about Ferrante.
For the DOJ press release, see Justice Department Obtains Judgment Against Maine Landlord for Sexually Harassing Tenants.

(1) Pine Tree Legal Assistance provides free legal help to Maine people with low incomes, and has offices in every part of the state.

Co-Conspirators Variously Get A Few Months Prison Time &/Or House Arrest For Hanging Dead Raccoon From Noose On African Family's Porch, Interfering w/ Their Housing Rights Under Fair Housing Act

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

  • U.S. District Judge Ellen L. Hollander sentenced James Nowicki, age 29, of Baltimore, [] to five months in prison followed by three years of supervised release, with five months of the supervised released to be served as home detention, for conspiring to deprive a person of civil rights and violating the Fair Housing Act, in connection with his involvement in hanging a raccoon on the porch of a family from Africa.

    Judge Hollander also sentenced Dena Whedbee, age 43, to seven months of home detention as part of two years probation, and sentenced her daughter Brittany Whedbee, age 21, [] to six months of home detention. Judge Hollander also ordered the Whedbees, both of Baltimore, to each perform 100 hours of community service for their involvement in the conspiracy.
  • According to their plea agreements, Nowicki conspired with Dena and Brittany Whedbee, Joshua Wall and Billy Pratt to hang a dead raccoon from a noose on the porch of an African family, in order to frighten the family and interfere with their housing rights. Dena and Brittany Whedbee encouraged their co-conspirators to hang the raccoon on the family’s porch. On April 29, 2010, Nowicki and Dena Whedbee found a dead raccoon and gave Wall a rope to make a noose. Later that night, Pratt acted as a look-out while Nowicki and Wall hung the raccoon on the porch of the home.

    Billy Ray Pratt, age 24, of Halethorpe, Maryland and Joshua Wall, age 21, of Essex, Maryland, previously pled guilty to their involvement in the conspiracy, and both were sentenced to four months in prison.
For the U.S. Attorney press release, see Final Three Conspirators Sentenced for Civil Rights Violation (Used a Noose to Hang a Dead Raccoon on a Family’s Porch).

Michigan Bank Settles Race-Based Home Lending Discrimination Charges With Feds For $165K

In St. Charles, Michigan, MLive reports:

  • A Michigan bank based in Saginaw County will open a loan office in a black Saginaw neighborhood as part of a $165,000 settlement in a racial discrimination lawsuit, the U.S. Justice Department announced.

    The deal, which requires court approval, was announced on Tuesday, Jan. 15, on the same day the DOJ complaint was filed.

    The Justice Department claims that St. Charles-based Community State Bank served the needs of white Saginaw- and Flint-area neighborhoods "to a significantly greater extent than" majority black neighborhoods from 2006 to 2009.

    Documents: Complaint and Settlement

    The FDIC visited the bank in 2010 and referred the case to the DOJ for investigation.

    The bank disputes many of the claims, chief executive Bob Wolak said, but decided to settle to avoid a lengthy court battle.

    Under the settlement, the bank will invest $75,000 in a special financing program to increase the amount of credit the bank extends to majority black neighborhoods in and around Saginaw, $75,000 in partnerships with organizations that provides credit, financial, homeownership, and/or foreclosure prevention services to the residents of these neighborhoods, and $15,000 in outreach that promotes its products and services to potential customers in these neighborhoods.

    The bank also will open a loan production office in a majority black neighborhood of Saginaw and conduct fair lending training for its employees. The agreement also prohibits Community from discriminating on the basis of race in any aspect of a credit transaction.

Friday, January 25, 2013

U.S. Army Dentist's Suit Accuses BofA Of Violating Sevicemember's Rights When Foreclosing On Her Home While On Active Duty

In Los Angeles, California, KNBC-TV Channel 4 reports:

  • For two years, U.S. Army reservist Diana Zschaschel has been fighting foreclosure against the West Los Angeles condo she shared with her husband, citing the Servicemembers Civil Relief Act, which protects active military personnel from financial hardship while on duty.

    Zschaschel and husband Paul Garcia have filed a lawsuit against Bank of America, which claims was exempt from abiding by the Servicemembers Civil Relief Act because Zschaschel wasn’t eligible for the protection at the time.
  • The Servicemembers Civil Relief Act protects active military personnel from financial hardship while on duty and specifically denies banks the ability to foreclose on a property during that time.

    Zschaschel said she's willing "to embarrass myself and expose my personal situation to help other people going through the same thing. Because it sucks."

    In a statement to NBC4, Bank of America said it checked Zschaschel’s status with the Department of Defense. Because she was in her two-week training, the bank said, the U.S. Army dentist was not considered active military and therefore she did not qualify for the benefits.

    An NBC4 investigation into the code found that "active duty" does include training, a point now under scrutiny in the lawsuit filed by Zschaschel against the bank.
For more, see Citing Federal Protection, Army Dentist Fights Foreclosure (U.S. Army reservist Diana Zschaschel has filed suit against Bank of America, which claims she was not eligible for federal protection while a foreclosure went through).

Now-Disbarred Lawyer Gets Hand Slap After Pleading No Contest To Charges He Allegedly Pocketed Cash From Upfront Fees In Loan Mod Scam Among Other Client Ripoffs

From the Office of the District Attorney (Sacramento County, California):

  • District Attorney Jan Scully announced [] that 71-year-old Frank Ferris pled no contest to one felony count of grand theft and three misdemeanor counts of collecting illegal up-front fees for loan modification services.

    Ferris was a licensed attorney. While representing a victim in a civil case, he received $10,000 in trust to apply towards a settlement of the victim’s legal matter. Instead, Ferris misappropriated the funds for his own personal use, causing a default judgment to be entered against the victim. The victim later discovered the judgment and had to hire another attorney to vacate the judgment and resolve the matter.

    In addition, Ferris failed to return $50,000 he received as an investment from another client and instead wrote that client non-sufficient fund checks.

    In a separate matter, Ferris was involved with Turbo Mortgage Modification, a business that provided mortgage modification services. On multiple occasions, Ferris demanded and collected illegal up-front payments from clients before services were performed.

    The Honorable Kevin J. McCormick sentenced Ferris to five years of formal probation and ordered him to serve one year in the county jail. Given his age and health conditions, the Sheriff’s Department may allow Ferris to serve his time through alternative sentencing.

    In addition, Ferris was ordered to pay $72,271.90 in victim restitution. Ferris has been disbarred from practicing law by the State Bar of California.

    Ashik Azeez and Vicente Perez, who were involved in the loan modification business with Ferris, were previously convicted and sentenced on misdemeanor charges.

Players In Offshore Loan Modification Score Big Win; Despite $2.39M Judgment, Feds Let Scammers Walk After Latter Turn Over Remaining $17K In Outfit's Assets

From the Federal Trade Commission:

  • As part of its continuing crackdown on scams that target consumers in financial distress, the Federal Trade Commission obtained a settlement order resolving charges against a nationwide scam operating from the Dominican Republic and banning the defendants from providing mortgage assistance relief.

    Pretending to be in Chicago, the Freedom Companies operation allegedly peddled fake mortgage assistance relief to financially distressed Spanish-speaking homeowners in the United States. At the request of the FTC, a U.S. district court halted the operation in July.

    The FTC settlement order bans the eight defendants – David F. Preiner, Daniel Hungria, Freedom Companies Marketing, Inc., and five other companies controlled by Preiner and Hungria – from marketing any mortgage assistance relief products or services. The settlement also prohibits the defendants from making misleading claims about any product, service, plan, or program that they market or advertise.

    Filed in July 2012, the FTC’s complaint charged the defendants with violating the FTC Act and the Mortgage Assistance Relief Services Rule, known as the MARS Rule. According to the complaint, 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 in three years, but failed to provide homeowners with the promised services.

    Speaking in Spanish and targeting homeowners behind in their payments or facing foreclosure, telemarketers empathized about the tough economy and claimed to provide information about federal mortgage assistance programs, according to the complaint. In lengthy sales calls, the telemarketers falsely claimed to be affiliated with or approved by the consumers’ lenders or the federal government, “making sure to mention President Obama or the (federal) Making Home Affordable Program by name,” according to documents filed with the court.

    The settlement also imposes a $2.39 million judgment, which reflects the full amount of consumer injury during the three years before the operation was shut down.

    The judgment will be suspended due to the defendants’ inability to pay after they turn over the operation’s remaining $17,337 in assets. If it is determined that the financial information the defendants gave the FTC was untruthful, the full amount of the judgment will become due.

    Charging what they said was a one-time advance fee of $995 to $1,500, the callers allegedly falsely promised homeowners a mortgage modification in 30 to 90 days, often advising them to stop paying their lenders.
For the FTC press release, and links to relevant court documents, see Defendants in Dominican Mortgage Assistance Scam that Allegedly Defrauded Spanish-Speaking U.S. Homeowners Settle FTC Charges (Telemarketers Who Allegedly Falsely Claimed Affiliation with Federal Mortgage Assistance Programs Are Banned from Mortgage Assistance Business).

Thursday, January 24, 2013

NYC HOA Tags Unit Owner With Suit Claiming Smoke From Pot Parties Goes Through Walls, Air Vents & Wafts Into Neighboring Units

In New York City, the New York Post reports:

  • This co-op says its going to pot, thanks to one of its residents.

    The board of The Fontaine, on the Upper East Side, is suing the longtime occupant of Unit 8B, claiming the man’s guests spark up so much marijuana in his apartment that the acrid smoke wafts into neighboring units.

    In the lawsuit filed in Manhattan Supreme Court yesterday, a property manager for the co-op at 353 E. 72nd St. blamed all the purple haze in the building on Richard Kempter, 73, who has lived in the apartment for 12 years.

    “Problem is that the stepson and a group of his friends use the apartment as a place to smoke marijuana when Richard is away,” the manager said in the filing.

    There’s so much pot smoke coming from 8B, the suit alleges, that one neighbor opened the “dishwasher on a clean load of dishes and the smell was overwhelming,” court documents claim.

    “The smell of VERY strong marijuana is wafting in through the vent in the bathroom and the stench goes right to my bedroom. This is so offensive, you have no idea,” one resident complained in the suit.

    Another griped, “It is 10:45 p.m. and my apartment smells like a party was going on while I was out for the evening . . . The stench of musty pot that is lingering in my closet is unbearable.”(1)

NH Supremes: Tenant To Pocket $1K Plus Add'l $1K/Day For Each Day Landlord Willfully Failed To Provide Heat After TRO Issuance; State Statute Also Sticks Landlord With Tab For Renter's Legal Fees

From Justia US Law:

  • Respondent [landlord] Nahla Abounaja appealed a district court order that awarded petitioner [tenant] Myla Randall, $18,000 in damages because of the [landlord]'s willful failure to provide heat to the [tenant]'s apartment for eighteen days. [Tenant] rented an apartment from the [landlord] in Rochester. At some point before March 23, 2011, [tenant] complained to the city's plumbing and health inspector that her apartment lacked heat.

    An inspector came to the premises and discovered that there was no heat in the [tenant]'s master bedroom because neither the radiator nor the electric heater worked. The inspector called [landlord] about this issue and met with her two days later.

    The inspector then sent a letter to the [landlord] about this problem, giving her fourteen days to remedy it. The [landlord] did not respond to the letter, nor did she return the inspector's subsequent telephone calls.

    [Tenant] then filed suit on April 12, and the trial court issued a temporary order requiring [landlord] "to immediately restore and maintain all utility services" to the [tenant]'s apartment. Following the hearing on the petition, the trial court found that the [landlord] was aware that the heating units did not work and that she failed to have them repaired until April 18, and that her actions were willful.

    In her brief, [landlord] argued that her conduct was not "wil[l]ful" because she did not cause the petitioner's apartment to lack heat in the first instance. She argued that, at most, she merely "allow[ed]" the heating service to be interrupted; she did not "cause" the interruption itself. Her merely "negligent omission" did not constitute a willful act.

    Based upon the evidence at trial, the [New Hampshire] Supreme Court concluded the trial court reasonably found that the [landlord]'s failure to have the units repaired was intentional, and, therefore, willful.

    However, because the trial court committed plain error when it awarded the [tenant] $1,000 per day for at least some days that the [landlord]'s violation of RSA 540-A:3, I, the Court vacated $17,000 of the damage award and remanded the case for further proceedings.

    On remand, the trial court was tasked with determining whether [landlord] willfully violated RSA 540-A:3, I after April 12, and, if so, the court was instructed to award [tenant] $1,000 per day for each day that the [landlord]'s violation continued.(1)
Source: Opinion Summary: Randall v. Abounaja.

For the ruling, see Randall v. Abounaja, No. 2011-456 (N.H. January 11, 2013).

(1) According to the court:
  • Under the version of RSA 540-A:4, IX(a) in effect when the events giving rise to this appeal occurred, a violation of RSA 540-A:3, I, entitled the petitioner to "the civil remedies set forth in RSA 358-A:10 for the initial violation, including costs and reasonable attorney's fees incurred in the proceedings." RSA 540-A:4, IX(a) (Supp. 2012).

    RSA 358-A:10 (2009) provides for recovery "in the amount of actual damages or $1,000, whichever is greater." Because we have upheld the trial court's finding that the petitioner willfully violated RSA 540-A:3, I, we also uphold its determination that the petitioner was entitled to damages of $1,000 for that initial violation.

    RSA 540-A:4, IX(a) also entitled the petitioner to damages for "[e]ach day" that the respondent's violation continued "after issuance of a temporary order." RSA 540-A:4, IX(a) (emphasis added); see Wass, 158 N.H. at 283. The temporary order in this case was issued on April 12, 2011.

Feds Pinch Eleven In Vegas-Area Scheme To Fraudulently Take Over Control Of Local HOAs

From the Office of the U.S. Attorney (Washington, D.C.):

  • A federal grand jury in Nevada today returned an indictment against 11 individuals for their alleged roles in a scheme to fraudulently take control of homeowners’ associations in the Las Vegas area.
  • The charged defendants, all from the Las Vegas area, include: Jose Luis Alvarez, 45; Rodolfo Alvarez-Rodriguez, 44; Ricky Anderson, 49; David Ball, 44; Leon Benzer, 46; Edith Gillespie, 51; Keith Gregory, 59; Maria Limon, 45; Barry Levinson, 45; Charles McChesney, 47; and Salvatore Ruvolo, 84. Each is indicted on one count of conspiracy to commit mail and wire fraud. Most of the defendants are also variously charged with individual counts of mail fraud and/or wire fraud. Limon is additionally charged with making a false statement to law enforcement.

    According to court documents, the fraud scheme operated from approximately August 2003 through February 2009 to direct construction defect litigation and repairs at condominium complexes to a particular, conspiring law firm and Benzer’s construction company, Silver Lining Construction (SLC).

    In order to accomplish the scheme, according to the indictment, Benzer and co-conspirators identified homeowners’ associations (HOAs) that could potentially bring construction defect cases. They then allegedly enlisted real estate agents to identify condominium units within the HOA communities for purchase.

    According to court documents, Benzer and others, including Gillespie, then enlisted “straw purchasers” to use their names and credit to purchase condos in the complexes. The indictment alleges that Alvarez, Alvarez-Rodriguez, Anderson, Ball, Gillespie, Limon, McChesney and Ruvolo acted as straw purchasers.

    On at least 37 occasions, Benzer and certain co-conspirators allegedly provided the down payments and monthly payments on behalf of the straw purchasers, including HOA dues and mortgage payments, and various false and misleading statements were made to secure financing for the properties. To manage the properties, Benzer and others allegedly conspired to open at least five bank accounts through which they moved more than $8 million. Eventually, 33 of the 37 units went into foreclosure.

    According to court documents, on several occasions and at the direction of Benzer, co-conspirators transferred a partial interest in particular condominiums to other co-conspirators to make them look like homeowners who could stand for election to the HOA board of directors, which many of these individuals and the straw purchasers agreed to do.

    To ensure conspirators won the elections, according to the indictment, the defendants employed deceitful tactics, such as submitting fake and forged ballots, some of which were sent through the U.S. mail.

    Co-conspirators also hired complicit attorneys to run the HOA board elections as “special election masters,” to preside over the HOA board elections and supervise the counting of ballots.

    Once elected, according to the indictment, the conspiring board members met with Benzer and other co-conspirators in order to manipulate board votes and process, including the selection of property managers, contractors, general counsel and attorneys to represent the HOA – including Benzer’s construction company and the conspiring law firm. Gregory and Levinson, both attorneys licensed in Nevada, allegedly agreed to become the general counsel for the Vistana and Sunset Cliffs; and Park Avenue and Pebble Creek complexes, respectively.

    Limon, Benzer and others also allegedly agreed to open a property management company in order to provide services at Chateau Nouveau and other condo complexes in furtherance of the scheme. According to the indictment, Limon falsely told law enforcement officials she did not communicate with Benzer about this and did not know he funded and controlled her company.

    At the conclusion of the scheme, millions of dollars of Vistana’s construction defect settlement proceeds were transferred to Benzer and SLC, according to the indictment. According to court documents, the defendants were each given cash or things of value from Benzer and others for their alleged roles in the conspiracy.

Wednesday, January 23, 2013

Phony Real Estate Agent Pinched For Grand Theft After Allegedly Selling Home That Didn't Belong To Him; Victimized Family Coughed Up $25K To Move In, $20K More In Fix-Up, Then Got The Boot From Foreclosing Bank

In Miami, Florida, Miami New Times reports:

  • In January 2011, Renan Rico bought a home for $25,000 and moved his family in. Then, after completing tens of thousands of dollars of renovations, he started receiving notices that the home was owned by a bank and under foreclosure.

    Turns out the realtor they bought it from, Ricardo Ribas, didn't own the home. Nor did he represent the people that did. Nor was he actually a realtor. Basically, he was an "unrealtor."

    Ribas had pretended to be a realtor, and in the case claimed that he had bought the home he was selling along with several others at auction.

    Rico and his family moved in, even thought they didn't receive the title. Ribas told him that the closing was pending. In the meantime Rico had spent $20,000 upgrading the home.

    The bank eventually forces Ribas and his family out of the home.

    Police arrested Rico [] on charges of grand theft. They believe that others victims may have also fallen for his scam. Anyone who may have dealt with Ribas is asked to call Economics Crime Bureau at 305-994-1000.

Baltimore Feds Indict Six In Alleged Straw Buyer Scam Designed To Generate Cash Proceeds That Were Subsequently Pocketed While Leaving Existing Mortgages Unpaid

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

  • A federal grand jury has indicted six defendants for conspiracy in a $4.5 million mortgage fraud scheme: [...](1)
  • The indictment alleges that Kreamer worked at Sanford Title Services LLC located at 8900 Snowden River Parkway, Columbia, Maryland. In 2002, her Maryland license to issue title insurance policies was revoked.

    From June 2008 to January 2010, Kreamer, Williams, Scott, Udeze and Peete allegedly arranged for individuals, including Green, to buy and sell real estate so they could improperly obtain money from the transactions.

    Kreamer, Williams, Scott, Udeze and Peete are alleged to have created multiple versions of settlement statements to deceive lenders, lien holders, buyers and sellers; and arranged for proceeds from mortgage transactions to be disbursed to shell companies created by the defendants in order to disguise that the money was really for their benefit.

    Kreamer and Sanford Title failed to make required disbursements of settlement funds to pre-existing lien holders, funneling the money instead to themselves.
For the U.S. Attorney press release, see Six Defendants Indicted in $4.5 Million Mortgage Fraud Scheme (Defendants Used Sanford Title Services and Shell Companies to Fraudulently Disburse Settlement Proceeds to Themselves).

(1) Bonnie Kathleen Kreamer, a/k/a “Bonnie Meehan,” age 47, of Riva, Maryland; Niesha Williams, age 33, of Fort Washington, Maryland; Rhonda Scott, age 51, of Oxon Hill, Maryland; Emeka Udeze, age 37, of Bowie, Maryland; Demetrius Peete, age 45, of Manassas, Virginia; and Gregory Green, age 49, of Waldorf, Maryland.

DC City Council Considers Bill To Minimize Inflated Fee Scams That Target Homeowners In Connection With Delinquent Real Estate Tax Foreclosures

In Washington, D.C., The Blog of Legal Times reports:

  • District of Columbia Councilmember Jack Evans (D-Ward 2) introduced legislation this week aimed at changing how the city manages the sale of properties with delinquent taxes, from requiring more notice to homeowners to lowering the interest rate and placing caps on attorney fees.

    The bill (PDF) stems from a recent push for reform by a relatively new coalition of legal service providers, law firms, and advocates known as the Alliance to Help Owners Maintain Equity, or AT HOME. Proponents say existing laws don't always protect the due process rights of homeowners, especially elderly and low-income residents, and can require them to pay much more than they owed in taxes to redeem their home.

    But lawyers for investors who participate in tax sales have warned that making some of the proposed changes, such as lowering the interest rate on unpaid taxes and capping attorney fees, could push away investors who generate revenue for the city.
  • Once a property is sold [at a tax foreclosure sale], the bill would require the city to notify the homeowner within two months. Under the current law, owners are notified when they're served with the investor's complaint, at which point attorney fees are on the table. The law would reduce the interest rate from 18 percent to six percent and place caps on attorney fees.

    Attorney fees are often the biggest obstacle for homeowners, [supervising attorney for the Legal Counsel for the Elderly Amy] Mix said. Fees can run as much as $4,000 or $5,000, which she said is prohibitive for a homeowner who had trouble paying $1,000 in taxes.

Tuesday, January 22, 2013

Homeowner Lawsuit: Law Office Charged Me Ten$ Of Thousand$ For Foreclosure Defense, Yet Had Me File As 'Pro Se' Defendant

In Chicago, Illinois, Courthouse News Service reports:

  • A "foreclosure defense" office charged a client $41,000 for "filing fees" and charged her for filing her own legal work, telling her filing pro se would "give her an advantage" on appeal, the woman claims in court.

    Lori Lappas sued Illinois Foreclosure Defense LLC and Innocent Obi, in Cook County Court. The brief, 4-page complaint contains a welter of alarming allegations.

    Illinois Foreclosure Defense is "owned by two attorneys who provide legal services for clients," the complaint states, and Obi is and was their employee.

    The complaint does not state that Obi is an attorney, but Lappas says he was her "only contact" with the office.

    She says she hired the defendants in January 2012 to represent her in two foreclosure cases.

    "Lori Lappas paid Illinois Foreclosure defense in excess of $20,000 over the last 10 months," the complaint states.

    It adds: "That in addition to the defense of the two foreclosure lawsuits, Innocent Obi and Illinois Foreclosure Defense agreed to represent Lori Lappas in three additional lawsuits and represent her with yet a fourth matter with regard to issues with the Internal Revenue Service.

    "That for each of the cases and the issue with the IRS, Ms. Lappas paid retainer fees to the Illinois Foreclosure Defense.

    "That for each of these three additional lawsuits and with the representation Innocent Obi and Illinois Foreclosure Defense did no work and refuses to refund any of the retainers paid [by] Ms. Lappas."

    "That with respect to the original foreclosure cases Innocent Obi had, despite being paid as attorneys for Ms. Lappas, had Ms. Lappas file appeals as pro se defendant with Illinois Foreclosure Defense and Innocent Obi not only did the actual filing of the pro se filings but further cut and pasted Ms. Lappas's signature without her authority.

    "That with the pro se appeals, such appeals were prepared by Obi Innocent on behalf of Illinois Foreclosure Defense yet had Ms. Lappas file pro se and also had her pay retainer fees for those appeals.

    "That Ms. Lappas was told that filing pro se would give her an advantage in the appellate court.

    "That these appeals have not halted any prosecution of the foreclosure cases nor had any advantage to Ms. Lappas."

    To cap it off, Lappas says: "That before Ms. Lappas left town on October 23, 2012, Ms. Lappas left a blank signed check with Innocent Obi and Illinois Foreclosure Defense in order to pay any needed filing fees or her monthly $400 fee if she could not be reached.

    "That upon her return Ms. Lappas found that Innocent Obi had written out the check for $41,000 to Illinois Foreclosure Defense; further noting that the check was written the same day Ms. Lappas left town on October 23, 2012."

    Lappas says she has repeatedly asked for "copies of all work completed by Illinois Foreclosure Defense," but "was never given any copies."

    She seeks damages for fraud and breach of contract, and says her damages "include but are not limited to the loss of her homes."

Prosecutors To Push For 14 Years For Scam Head Who Used Control Of Entire R/E Closing Process To Pocket Refinance Procceds From 40+ Victimized Homeowners, Leaving Dozens Of Existing Mortgages Unpaid; Squealing Confederates Expect Probation, Dodge Jail

In Freehold, New Jersey, the Monmouth County Prosecutor's Office recently announced:

  • Frederick Tropeano pleaded guilty [] to laundering millions of dollars through an extensive mortgage refinance fraud scheme that victimized more than 40 homeowners in New Jersey and New York, Acting Prosecutor Christopher J. Gramiccioni announced.

    Tropeano, 46, of Holmdel, pleaded guilty to first-degree financial facilitation of criminal activity (money laundering) before Monmouth County Superior Court Judge Ronald L. Reisner.

    Tropeano, who has been incarcerated in lieu of bail since the date of his arrest on July 21, 2010, was remanded to the Monmouth County Correctional Institution. Tropeano’s sentencing was scheduled for March 22.

    In accordance with his plea agreement, the Monmouth County Prosecutor’s Office will recommend that Tropeano is sentenced to 14 years in prison, with a 7-year period of parole ineligibility.  The Office will also recommend that Tropeano be required to make full restitution to his victims as a condition of his sentence.

    The year-long investigation revealed that Tropeano and a number of his associates from Hawthorne Capital Corporation (Hawthorne), formerly of Manalapan and New York City, engaged in a systematic scheme to defraud dozens of homeowners and financial institutions throughout New Jersey and New York – a fraudulent investment system often referred to as a “Ponzi” scheme.

    The investigation began in May 2010 after a homeowner contacted the Office regarding concerns she had about her home refinance with Hawthorne. The homeowner indicated that a check sent by Hawthorne, that was intended to pay off her original mortgage, had bounced with non-sufficient funds to support its deposit.

    Further investigation uncovered widespread and ongoing fraud within the company, to include 11 additional homeowners who were defrauded by Hawthorne in the refinance of their homes, as well as an attorney in New York whose identity had been stolen and used in furtherance of the fraud.

    The president of Hawthorne was identified in corporate filings as Silvano Tropeano, the father of Frederick Tropeano. Hawthorne had offices in New Jersey, New York and Pennsylvania, although the principal location of its operations was in Manalapan. Frederick Tropeano was identified as the individual responsible for the daily business operations at Hawthorne.

    The mortgage refinance fraud scheme was perpetrated by Tropeano and his conspirators’ ability to manipulate and control the entire property settlement process. An example of the fraud scheme is as follows:

    Homeowners would refinance with Hawthorne and banks would thereafter issue mortgage funds at settlement to refinance the properties. Rather than using these funds to appropriately pay off a homeowner’s original mortgage, Tropeano and his conspirators diverted and stole settlement funds and used the money to enrich themselves or members of their families, or alternatively used them to pay other outstanding and unrelated business debts.

    Two title [companies] directly involved with Hawthorne - “Hawthorne Abstract” and “Rapid Abstract” – intentionally failed to conduct proper records checks to determine whether prior mortgages were being paid.

    Title companies are required to ensure that original mortgages are paid in full, and new refinance mortgages are properly recorded as an existing mortgage debt. Since Tropeano and his associates operated these related title companies, they effectively controlled the entire “vertical” refinance process and were therefore able to defraud homeowners who expected their homes to be refinanced, and banks that expected to have mortgage debts repaid or new debts properly recorded.

    As the investigation progressed, investigators determined that more than 40 homeowners had been victimized by Hawthorne’s refinance scam. In some instances, funds that were intended to pay off the homeowners’ original mortgages were significantly delayed, resulting in negative reports on their credit scores and the need to hire legal counsel.

    In other instances, payoffs never occurred, leaving the homeowners with two mortgages attached to their properties.

    Tropeano and his associates also stole the identities of two homeowners who had filled out initial refinance applications, and illegally used these identities to cause financial lending institutions to fund refinances that never actually occurred.

    The total amount of calculated theft perpetrated by Tropeano and his associates was more than $7.5 million.

    To further the refinance fraud scheme, Frederick Tropeano and Silvano Tropeano established fraudulent bank accounts in the names of two attorneys, and listed them as the settlement agents on mortgage refinances without their knowledge or consent.

    Co-defendant John Kosta conducted the closings on the new mortgages and also notarized documents required for the closings, despite the fact that Kosta was not a notary or licensed to conduct such closings.

    As a further part of the scheme, co-defendant Krista Selig, Esq., was listed as the settlement attorney on 12 fraudulent closings and facilitated the fraudulent transactions on behalf of Hawthorne.

    Silvano Tropeano, John Kosta, and Krista Selig, Esq. all pleaded guilty earlier last year to third-degree conspiracy charges before Superior Court Judge Thomas F. Scully and are pending sentence.  Selig also pleaded guilty to a single third-degree theft count.

    All defendants agreed to cooperate in the prosecution of their co-defendants and are expected to receive probationary sentences.(1)
For the Monmouth County Prosecutors's Office press release, see Fraudster Admits To Laundering More Than $7.5 Million, And Defrauding Dozens In Widespread Mortgage Refinance Fraud Scheme.

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

Misapplication Of Entrusted Property Lands Ex-Closing Attorney Four Years After Pocketing $237K+ In Client's Refi Cash; Failed To Pay Off Existing Lien, Leaves Homeowner With Two Mortgages & Facing Foreclosure

In Freehold, New Jersey, reports:

  • A former Freehold attorney was sentenced to four years in prison for misappropriating her clients mortgage funds, the prosecutor’s office said Friday.

    Deirdre Przygoda, 48, was representing a client who was refinancing her home and was given more than $237,000 to pay off the original mortgage, Acting Prosecutor Christopher Gramiccioni said in a news release. The attorney removed the funds, which had been deposited in her trust account, he said.

    Since the original mortgage was not paid off, the homeowner now has two mortgages attached the property, and it’s in foreclosure, Gramiccioni said.

    Przygoda pleaded guilty Nov. 13, 2012 to second-degree misapplication of entrusted property. In addition to the prison sentence, she was ordered to pay $237,444 in restitution.(1)
Source: Former attorney sentenced to prison for misusing client's money.

(1) To the extent the victimized homeowner can't collect any money on its restitution judgment from the attorney, he/she may consider filing a claim (if one hasn't already been filed) with the New Jersey Lawyers' Fund for Client Protection, which was established to reimburse clients who have suffered a loss due to dishonest conduct of a member of the New Jersey Bar. According to the Fund's website, for loss claims that are determined to be eligible for a reimbursement there currently is a limit of $400,000 per claimant for claims arising after January 1, 2007 and an aggregate maximum for claims against a single attorney of $1,500,000. Lower per claimant maximums apply to claims arising prior to January 1, 2007, its website states.
For similar funds established to reimburse clients who have suffered a loss due to the dishonest conduct of attorneys in other states and Canada, see:

Monday, January 21, 2013

California Supremes: Oral Promises Not Appearing In Written Contract Admissible In Court When Trying To Prove Bankster Fraudulently Tricked Borrower Into Signing Agreement

In Sacramento, California, the San Francisco Chronicle reports:

  • Borrowers facing default on a loan can try to prove that the lender orally promised them an extension that didn't appear in the written contract, the state Supreme Court ruled Monday while overturning a 1935 decision that restricted evidence of fraud in contract disputes.

    A lawyer for the borrowers, a Fresno County couple, called the unanimous ruling a victory for consumers. The lender's lawyer said the court had eliminated important protections for written contracts.

    The couple, Lance and Pamela Workman, fell behind on repaying a $776,000 loan from the Fresno-Madera Production Credit Association and signed an agreement in March 2007 pledging eight properties as security in return for a three-month extension.

    The lender sought foreclosure after the Workmans failed to meet the three-month deadline. But the couple said the credit association's vice president had told them two weeks before the agreement was signed, and repeated at the time of signing, that they would actually have two years to make the payments and would have to put up only two ranches as security.

    The Workmans later repaid the loan - selling the eight properties at a loss, according to their lawyer, Steven Paganetti - and then sued the lender for fraud for allegedly misleading them about the terms of the loan.

    The credit association argued that the vice president's alleged promise to the couple was inadmissible because, under the law, a written contract overrides any previous oral statements between the signing parties.

    The California Bankers Association and other lending organizations took the same position when the case reached the state's high court. Arguing that contracts should be enforced as written, they asked the court to reaffirm the 1935 ruling that allowed oral evidence in such cases only to prove that a contract was procured by fraud and not to contradict any of its stated terms.

    But the court, in an opinion by Justice Carol Corrigan, said the 1935 ruling was poorly reasoned, had been rejected by other states and "may actually provide a shield for fraudulent conduct."

    Monday's decision allows the Workmans to offer the lending officer's promise as evidence that the credit association had deceived them into signing the agreement or misled them about its contents.

    The ruling will "protect consumers from the old bait-and-switch" and should allow the Workmans to take their case to a jury, said Paganetti, their lawyer.

    Scott Ivy, the credit association's lawyer, said the ruling allows California courts to refuse to enforce written contracts "based upon alleged oral statements that directly conflict with the written terms." He said the lender will now try to get the suit dismissed on the grounds that the Workmans acted unreasonably by failing to review the contract before signing it.

Screwed Over S. Florida Houseboat Owner Scores Big Win In U.S. High Court; Supremes Say Contraption Used As Floating Home Was A Non-Vessel Not Subject To Federal Maritime Law; City Wrong In Seizing, Auctioning, Destroying It

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

  • Fane Lozman, a Marine turned multi-millionaire inventor turned thorn in the side of Riviera Beach officials, has won his long-running legal battle against the city over his floating home.

    In a 7-2 decision, the U.S. Supreme Court on Tuesday declared that Lozman’s 60-foot, two-story home that was once anchored at the Riviera Beach Marina was not a vessel. As Lozman has argued for years, the court ruled that the city shouldn’t have been able to seize it using centuries-old maritime law.

    The decision sets the stage for Lozman to return to court to seek damages against Riviera Beach for destroying his home, which he valued at more than $50,000. He said he will also ask the city to reimburse him for more than $300,000 in legal fees he spent since the fight began nearly seven years ago.

    “It’s an amazing day in my life,” said Lozman, who represented himself in the early stages of the legal battle. “Today is a day to celebrate that the legal process works. It shows if you’re a stubborn enough son of a b—— you can win. You have no idea what’s going through my mind. Just to actually get a reversal — it kind of blows your mind.”

    City officials were understandably less effusive about the decision. “We are disappointed with the Supreme Court’s ruling,” City Attorney Pamala Ryan said in a statement. “However, we respect and accept the decision, and we will abide by legal implications that flow from it.”

    Maritime lawyers, who have been watching the case closely, said the ramifications are potentially far-reaching. In deciding the case, the high court struck down lower court rulings(1) that turned on a simple concept that if it floats, it’s a boat.

    Writing for the majority, Justice Stephen Breyer said such an interpretation is overly broad. “Not every floating structure is a ‘vessel,’ ” Breyer wrote.

    To state the obvious, a wooden washtub, a plastic dishpan, a swimming platform on pontoons, a large fishing net, a door taken off its hinges or Pinocchio (when inside the whale) are not ‘vessels,’ even if they are ‘artificial contrivances’ capable of floating.”

    Instead, he wrote, the key is whether a “reasonable observer, looking to the home’s physical characteristics and activities, would consider it designed to a practical degree for carrying people or things over water.” Because Lozman’s strange craft had no engine, no steering ability and could neither generate nor store electricity it clearly was not designed as a means to transport people or cargo, he said.

    The test as outlined by Breyer, which came with a sharply worded dissent written by Justice Sonia Sotomayor and joined by Justice Anthony Kennedy, is likely to spur additional litigation, predicted Boca Raton attorney Michael McLeod, chairman of the Admiralty Law Committee for the Florida Bar.

    By midday, his email box was filling up with messages from attorneys across the nation who said they would be advising marinas, marine bankers and others they represent to review their operations in light of the ruling. It could arguably be a factor in the types of vessels allowed to dock at marinas and the types of non-traditional craft that are approved for maritime loans. It could also affect how creditors can recover unpaid bills.

    The distinction — what is and isn’t a vessel — is important because of laws that have developed since the nation’s founding to deal with the unique characteristics of boats, namely that they can be easily moved, leaving workers stranded or creditors unpaid. As a result, people have been given the power to “arrest” boats to recover debts. In some cases, that option may no longer be available.

    To illustrate the import of the case, dozens of groups, such as the National Marine Bankers Association, the American Gaming Association, the United Brotherhood of Carpenters and Joiners of America, and Floating Home Associations in Seattle and Sausalito, Calif., filed briefs.

    Even the U.S. Solicitor General chimed in. He worried that if the court found Lozman’s home was a boat, the U.S. Department of Homeland Security, the U.S. Coast Guard and myriad other federal agencies could be forced to change policies and possibly increase manpower to regulate and inspect floating structures that were never intended for navigation.

    Breyer acknowledged that the new test of what constitutes a boat isn’t exact. Admitting it is “neither perfectly precise nor always determinative, it is workable and consistent and should offer guidance in a significant number of borderline cases,” Breyer wrote.

    Sotomayor disagreed. In a 12-page dissent, she countered that the court muddied the waters. “In its haste to christen Lozman’s craft a non-vessel (the court) delivers an analysis that will confuse the lower courts and upset our longstanding admiralty precedent,” she wrote.

    Like McLeod, Lozman said the case’s legal questions are complex. His own legal path isn’t clear-cut. But, he said, he is prepared to do whatever he can to recover the money he lost simply because, he claims, the city wanted to silence him.

    The high court noted that lower courts forced Riviera Beach to post a $25,000 bond which Lozman could seize if he ultimately proved the city wrong. Ryan made no mention of the bond in her prepared statement Tuesday. Instead, she said, the city would reimburse Lozman the $300 he spent filing the case with the nation’s high court and pick up some of his printing costs. City spokesman William Jiles said city officials aren’t certain about the fate of the bond.

    Lozman said he’s not surprised the city isn’t ready to give up the fight.

    Vindictiveness has fueled the battle from the start, he said. Upset by his vociferous opposition to their failed plan to transform the poverty-wracked city into an upscale yachting community, Riviera Beach officials just wanted to get rid of him, he said. The easiest way was to use maritime law to tow his home out of the city.

    “To punish someone just because they’re a city activist, that’s not what America is all about,” he said. “Where does the city get off saying we’re just going to squash this guy?”

Federal Appeals Court: Mortgage Foreclosure = Debt Collection Under Fair Debt Collection Practices Act

From Law360:

  • The Sixth Circuit on Monday said mortgage foreclosure actions are debt collections under the Fair Debt Collection Practices Act, reversing the dismissal of a property owner's claims against an Ohio law firm that attempted to foreclose his property on behalf of a JPMorgan Chase & Co. unit.
For more, see Foreclosures Are Debt Collections Under FDCPA: 6th Circ.

For the court ruling, see Lawrence Glazer v. Chase Home Finance, LLC, No. 10-3416 (6th Cir. January 14, 2013).

See also Credit Slips: Is enforcement of a security interest (e.g. a foreclosure) "debt collection" under the FDCPA?:
  • Yes, says the Sixth Circuit, in Glazer v. Chase Home Finance, issued yesterday. This is good news for FDCPA plaintiffs, who have had to contend for years with a district court consensus that the enforcement of a security interest is not subject to most of the provisions of the Act.

    An odd type of split is developing on this issue: most district courts are getting it wrong, whereas most courts of appeals are getting it right. Usually, one expects the districts to follow the circuits, but the narrow view of debt collection continues to prevail at the district court level. (The circuits also have the better reading of the statute, in my view, which makes it all the more strange that the split seems to have persisted for so many years.)

Sunday, January 20, 2013

Delusional Feds On Surrendering To Banksters On Latest Foreclosure Fraud Deal: We Drove A Hard Bargain

American Banker reports:

  • The abrupt and embarrassing end of the independent foreclosure review raised many questions that policymakers didn't bother to answer.

    Until now.

    In an interview Tuesday, Morris Morgan, the federal government's point man for the painstaking review of 3.8 million mortgage loans, provided new details about the $8.5 billion deal regulators cut with 10 servicers last week.

    "The settlement idea was certainly initiated by the regulators," said Morgan, who joined the Office of the Comptroller of the Currency in 1985.

    That runs counter to conventional wisdom, which says the servicers moved to shut the costly review process down. Mike Heid at Wells Fargo Home Mortgage is widely credited with spearheading the settlement.

    But Morgan not only insisted government officials drove the deal, he said the negotiations were tough and nearly collapsed.

    "I was more active in" the negotiations "than any other individual from the regulatory side," Morgan said. "Did we drive a hard bargain? I think yes."
For more, see OCC Defends Foreclosure Deal, Says It Drove 'Hard Bargain' (The abrupt and embarrassing end of the independent foreclosure review raised many questions that policymakers didn't bother to answer).

Ex-State AG's 11th Hour 'Sellout' Of Utah Homeowners In Foreclosure On Eve Of Joining Law Firm Representing BofA Not Binding On Successor In Future Cases

In Salt Lake City, Utah, The Salt Lake Tribune reports:

  • Despite former Attorney General Mark Shurtleff’s decision to personally sign onto a settlement in a foreclosure lawsuit that Bank of America seemed to be losing, his successor will continue to pursue other suits pending against the bank.

    It isn’t clear what new Attorney General John Swallow thinks about Shurtleff’s reversal of the state’s position in a suit brought by Holladay homeowners Timothy and Jennifer Bell that ReconTrust- — BofA’s foreclosure arm — illegally began foreclosure proceedings against their property when their $3 million loan went into default.

    But Shurtleff’s change of mind in the last weeks of his term disheartened lawyers in his office, which previously had intervened in the case as a plaintiff, arguing that ReconTrust had violated state law by carrying out foreclosures on its own instead of going through a Utah attorney or title company.

    "Mr. Shurtleff made the decision that he did. Not everyone in the office would agree to that, and people would come to different conclusions about whether or not the state should dismiss the case," assistant attorney general Thom Roberts said after a hearing Tuesday before U.S. District Judge Bruce Jenkins to decide whether the settlement between BofA and the Bells should be approved.

    Shurtleff’s about-face came some time between Dec. 17, when the Bells agreed to settle without support from the Attorney General’s office, and 11 days later when a BofA lawyer filed documents carrying Shurtleff’s signature to dismiss the case.

    Shurtleff’s term ended Jan. 7, and he will go to work for a law firm that regularly represents BofA. Shurtleff has said his new job had nothing to do with his decision, adding that he changed his mind because it made no sense for Utah to continue to be involved at taxpayer expense in a case that the Bells had settled.
For more, see Shurtleff’s BofA about-face won’t bind new A.G. (State intends to fight other foreclosure suits involving bank).

Now-Scrapped Independent Foreclosure Review Doomed From The Start: Insiders

The Huffungton Post reports:

  • Last January, dozens of independent contractors showed up for their first day of work at a large, single-story Bank of America building in Tampa to right the wrongs of a foreclosure crisis that many had witnessed firsthand. Or so they thought.

    They were lawyers, paralegals and other mortgage industry veterans. Along with thousands of other contractors working at banks and auditing firms like Deloitte and PriceWaterhouseCoopers, the Tampa crew was to comb through the mortgages of people whose homes were in foreclosure at the height of that crisis, in 2009 and 2010. They were looking for lost paperwork, overcharges, botched loan modifications -- evidence of the kinds of errors and misconduct widely alleged by foreclosed borrowers.

    It was called the Independent Foreclosure Review, and it was one of the most ambitious and costly auditing projects in U.S. history.

    It was also, some of the contractors soon came to believe, a fiasco in the making. At Bank of America, contract employees were to answer more than 2,000 questions written by Promontory Financial, the consulting firm the bank hired to audit its mortgage loan files. Those questions, the contractors said, were confusing and open to interpretation. Training was spotty and mistakes were frequent, they said. Sometimes, when they noted bank-caused mistakes, they were told by Bank of America managers not to believe their own eyes.

    That last serious irregularity, which has not been previously reported, was described by three of the five contract employees who spoke to The Huffington Post. All asked that their names not be used for fear of not getting future work in the industry.

    "We knew what we were looking at," said one employee. "But we were told under threat of losing our jobs to not report what we saw."

More On The Federal Government Sellout Of Homeowners Screwed Over In Banksters' Foreclosure Fraud Scandal

Op-Ed Columnist Joe Nocera writes in The New York Times:

  • It’s been five days since Jessica Silver-Greenberg’s article on the latest bank settlement was posted on The New York Times’s Web site. I’m still shaking my head. Her “story behind the story” of the $8.5 billion settlement between federal bank regulators and 10 banks over their foreclosure misdeeds illustrates just about everything that is wrong with the way the government has handled the Great Foreclosure Crisis.

    Shall we count the ways?

    1. It is more about public relations than problem-solving. Pick a program — any program — that the Obama administration unveiled to help troubled homeowners over the past four years. Not one has amounted to a hill of beans.

    This settlement is no different. The country’s primary bank regulator, the Office of the Comptroller of the Currency — which, along with the Federal Reserve, engineered the settlement — is trying to make it look like a victory. Of the $8.5 billion, $3.3 billion will go directly to foreclosed-upon borrowers, making it “the largest cash payout to date,” according to Bryan Hubbard, the O.C.C.’s chief spinmeister. (The rest of the money will consist of reduced interest payments and loan modifications.)

    In truth, the O.C.C. needed to save face after a foreclosure review process it had mandated had become an expensive fiasco. As amply demonstrated by Silver-Greenberg and American Banker, the government insisted that the banks hire expensive consultants to do a review of every foreclosure that took place in 2009 and 2010. The consultants racked up more than $1 billion in fees, while proceeding at such a molasseslike pace that the feds and the banks finally threw up their hands. The settlement made the whole thing go away.

    2. Accountability? What’s that? We have known for a long time that overwhelmed bank servicers took shortcuts, like robo-signing, that violated many state laws. They also put people through hell who were trying to get a modified mortgage. “I’ve seen marriages break up because of what banks put families through,” says Elizabeth Lynch of MFY Legal Services. All this settlement does is push those misdeeds under an $8.5 billion rug.

    3. It won’t actually help anybody. The settlement will cover some 3.8 million foreclosures. The government is going to distribute $3.3 billion dollars. It comes to around $1,150 per lost home.

    Of course, the O.C.C. says that is the wrong way to look at it: Some people — military personnel, for instance — could get as much as $125,000 while others won’t get much at all. People denied a modification will be eligible for up to $40,000 or $50,000, said Hubbard. I have no doubt that money will be welcome. But for those who lost their homes because of bank misconduct, it doesn’t come close to making them whole.

    4. The money is being distributed with no regard to whether a borrower suffered harm. In some ways, this is the sorriest part of the whole episode. The foreclosure review never answered the key question: which borrowers had legitimate claims against their bank and which didn’t. Thus, the settlement doesn’t make that distinction. If you lost your house in 2009 and 2010, you are going to get money — whether the bank was culpable or not. “The notion of error is not involved in this settlement,” conceded Hubbard.

    As a result, those who really were truly harmed by bank behavior will be shortchanged. As Karen Petrou, the well-known banking consultant, puts it, the government has “come up with something that gives every borrower — maybe — a pittance and leaves the truly hurt — and there were many — as much in the lurch as before.”

    This is hardly the only time in recent months that a settlement that is publicized as righting a wrong instead hands money to people who were never victimized. Think back to the $4.3 billion fund established by Congress to compensate people who became sick because of their exposure to toxic dust created by the 9/11 attacks. Even though there is no scientific evidence that the dust caused cancer, the government added cancer to the list of diseases that would be compensated. The result will be less money for those who truly did become sick because of their exposure to the 9/11 aftermath.

    Or take Toyota, which recently paid $1 billion to settle a lawsuit claiming that an electrical flaw caused some accelerators to stick — even though there turned out to be no evidence to support that claim.

    People who do these kinds of settlements regularly say that the world has become so complicated that, more often than not, it is simply too expensive to figure out who was harmed and who was not. So best just to throw a little money at everybody and make the problem go away.

    That is what the federal government did last week in its settlement with the banks. It’s nothing to be proud of.
For the column, see The Foreclosure Fiasco.