Dispute, Confusion Over Code Enforcement Repair Orders Lead To Wrecking Ball Treatment For Recently-Purchased Fixer-Upper, Leaving Vet Out $10K Purchase Price Plus Sweat Equity

In Akron, Ohio, the Akron Beacon Journal reports:

• In 34 minutes, Larry Modic’s house was down. A worker operating a huge excavator from Ray Bertolini Construction Co. demolished the Akron house Tuesday morning and was scheduled to tear the house next door down, as well.

***

• Modic, 57, who has an apartment in Lakewood, was trying to establish residency in Akron. He bought the brick house near Summit Lake in May for $10,000 and said he was unaware that the city housing division had cited the home for repair issues and issued orders to repair the problems. He spent weekends in the 1925 home, trying to fix it up.
  
  The demolition came after the city won a court fight last week. Modic had threatened violence during his ordeal with the city about code violations. Akron police took him into custody in January and transported him to a local mental health facility. He then was transferred to the Louis Stokes Cleveland VA Medical Center’s Wade Park facility.
  
  Police found four loaded rifles, a loaded handgun, two boxes of ammunition and a flak jacket in the house. Modic has not been charged with any crimes related to the threats.
  
  Volunteers helped him remove his personal belongings over the weekend.
  
  The two homes knocked down Tuesday were among 650 vacant or abandoned homes that are to be torn down in the city this year, said Abraham L. Wescott, Jr., development manager of the city’s Department of Planning and Urban Development.

***

• Modic attended a June meeting of the Housing Appeals Board and was given 30 days to make repairs. At the July meeting, he received 60 more days to make repairs. But at the September meeting, which Modic did not attend, the board voted to condemn the home. Modic failed to appeal the decision within 30 days as required by law.
  
  Attorney Warner Mendenhall filed a suit on Modic’s behalf last week in an attempt to block demolition, but Summit County Common Pleas Judge Paul Gallagher ruled against Modic and allowed the demolition to go forward.
  
  Other issues addressed in the lawsuit by Mendenhall over the city’s demolition process are still to be heard and decided in court. Akron officials have said they are researching the possibility that the city will file a third-party lawsuit against the seller of the property to Modic.

For more, see Veteran’s house torn down in 34 minutes; effort under way to raise money for another.

Outside Pressure Causes Bankster To Come Clean, Admit Escrow Screw-Up That Wrongly Triggered Loan Default & Subsequent Foreclosure Sale On 91-Year-Old Widow/Veteran's Home

In Pasadena, Texas, KTRK-TV Channel 13 reports:

• Severina Wilson is a 91-year-old widow, and a veteran of both World War ll and Korea. And through no fault of her own, she was about to lose her Pasadena home.
  
  On Friday, widow and veteran was to be evicted from her home but she had done nothing to lose it. Proving it was another matter, until some lawyers with hearts and a bank willing to correct the mistake intervened.
  
  Wilson has seen a lot in her life. She served in the Army during World War II and during the Korean War, she was assigned to the Marines. What she never expected to see was a foreclosure notice. "And I got the letter the house had been sold," she explained to Eyewitness News.
  
  Last year, Chase Bank refused Mrs. Wilson's mortgage payments because there was an escrow problem -- and not of her making. Her proof of insurance was never passed on by the branch bank to the mortgage division. That triggered a default, so her home was sold to Fannie Mae, and she can't take surprises. "I have a heart condition and they say if I get too stressed, I could have a heart attack," Mrs. Wilson said.

***

• Chase Bank issued a statement Tuesday afternoon saying, "We have resolved Mrs. Wilson's mortgage situation so she can stay in her home permanently."

For the story, see Bank error nearly causes veteran, 91, to lose her home.

Indiana AG Petition For Emergency License Suspension Targets C. Indiana Real Estate Agent Named In Dozens Of Complaints Over Allegations Of Screwing Over Customers

In Indianapolis, Indiana, WXIN-TV Channel 59 reports:

• The real estate license of a Central Indiana realtor and business owner has been suspended, but the suspension could only be temporary. Now, one of his alleged victims spoke to Fox59 about her experience in hopes of warning others.
  
  “He told me to just come to his office and fill out an application, that it wouldn’t be a problem, that he could put me in a home,” said Bille Rackemann. However, Rackemann said all David Garden, owner of Garden Homes Realty and Star Homes, Inc., did was take her money.
  
  She said she paid first month’s rent for a home on Alabama Street, but when moving day came, he told her the house wasn’t ready. “I actually went by (and saw) the people and stuff still in there,” Rackemann said.
  
  She said he continued to make excuses about why the home wasn’t ready and why she couldn’t move in. Rackemann said she doesn’t think Garden ever intended to rent the home to her. When she asked for a refund on the rent, she said she was told they’d already cashed the check.
  
  “He likes to use bible terms and Christianity a lot to try to pull people in to make himself sound God-like, so people think he’s an honest man and they want to do business with him and he’s the complete opposite,” Rackemann said.
  
  That’s one of dozens of complaints about David Garden and his businesses.
  
  The Indiana Attorney General’s Office has been investigating Garden for about a year.
  
  Deputy Attorney General, Gabrielle Owens said their petition for emergency license suspension involved 30 counts with complaints, ranging from earnest money issues to allegations of him attempting to commit mortgage fraud.
  
  “We also had allegations regarding abuse of the bankruptcy system and having folks file for bankruptcy in order to abuse the automatic stay provisions of the bankruptcy process to forestall the foreclosure,” Owens said.

For more, see Victim speaks out after being scammed by Central Indiana realtor.

Convicted Felon Invokes Race Card In Failed Attempt To Dodge The Boot From Vacant Home He, Fiance Allegedly Hijacked; Bank-Stiffing Owner Didn't Realize Lender Never Filed Foreclosure, Leaving Him On Title

In Brighton, New York, WHAM-TV Channel 13 reports:

• The family moved into 44 Meadow Drive last March. The ranch house, which had been vacant for two years, sits at the end of a cul de sac of modest single-family homes. “They mixed with us at first. They talked of the children being enrolled in our schools,” said neighbor Meg Northrop. “Why would we doubt that?”
  
  Doubts set in when neighbors didn’t see any record of a sale in the newspaper. “We couldn’t figure out who they bought it from and how they bought it,” said Northrop. “They would show up, drop off a bunch of stuff and then we wouldn’t see them for days,” said neighbor Ann Vitale.
  
  Neighbors contacted the home’s owner, William Good. He stopped paying his mortgage after he moved out. Good didn’t think he owned the property anymore, but neighbors discovered the bank had not started foreclosure proceedings. That meant Good was still in control of the property. He told neighbors he did not authorize anyone to live there.
  
  Neighbors called police to report the family was trespassing. Police took a report, but did not make any arrests. Because the family had been living in the house for some time and claimed rights to the property, they were considered squatters under the law and had to be evicted in civil court. Good gave the neighbors permission to hire a lawyer to represent him in an eviction proceeding.

***

• The Family
  
  Santashia Reed and her fiancé, Christopher Newton, moved into 44 Meadow Dr. with four of Reed’s children. “This has nothing to do with squatting. This is pure discrimination,” said Reed. Reed and Newton believe the neighbors targeted them because they’re black. They said the neighbors called them the “N” word and sent them racist messages. “We’re honest people. I’ve never been in trouble before,” said Reed. “It’s just unfortunate that I was born the wrong skin color.”
  
  Newton said he found the house by driving around. He knew it was vacant and researched its ownership. Newton said he called Good, who told him he didn’t want anything to do with the property. Newton said he contacted the bank holding the mortgage, which told him it couldn’t sell him the house because it had not started the foreclosure. Newton said he went back to Good, who gave him the keys and permission to move in. Newton said he had an understanding with the bank and Good he would buy the house when the bank took possession.
  
  Why would Good give away his house? “He had already lost it,” said Newton. Newton admitted he put no money down, had nothing in writing and paid no taxes on the property.
  
  “Based on my conversation with Mr. Good and with the bank, and seeing his interest in the property was basically nonexistent, there was no problem with it,” said Newton. “Had the neighbors just been neighbors, this conversation wouldn’t be happening.”
  
  Newton served more than 10 years in state prison for robbery, burglary, criminal possession of a forged instrument and escape. Reed and Newton expressed anger Newton’s parole was violated after neighbors contacted police.
  
  13WHAM News contacted Good. He said he’d never met Reed and Newton or gave them permission to move into his house. “That’s something they made up,” Good said. “They did their homework.” “They were pure squatters,” said Samuel Dispenza, Good’s attorney.
  
  The Eviction
  
  The court proceeding took several months. After considering evidence, including testimony from Reed and Good, a Brighton Town judge ordered the family evicted.
  
  Sheriff’s deputies served the notice on Tuesday. The neighbors paid for a moving truck, locksmith and deputies, all required for an eviction.
  
  The family had moved out the night before. The house was in shambles. Appliances were removed. There was a hole in the living room floor. Clothes and mattresses were scattered in rooms. Reed and Newton said they removed items they installed in the house.

For the story, see Family Accused of Squatting in Brighton Home.

Owner Of Vacant, $1M Home In Foreclosure Says His Title Was Hijacked Thru Forgery; Current Occupant Says He Rented Premises, But Can't I.D. Who He Did Business With; Coral Gables Cops, City Attorney Left Befuddled

In Coral Gables, Florida, The Miami Herald reports:

• Police are investigating whether a family allegedly squatting in a million-dollar Coral Gables house forged a lease they turned over to city officials Wednesday.
  
  Meanwhile, the owners of the rambling four-bedroom house at 601 Sunset Dr. face a $500-a-day fine unless they secure the house and properly register the vacant house, said Craig Leen, the attorney for the city of Coral Gables.
  
  Since September, when police were called to the house by a tenant renting a room, city officials have suspected the family was squatting in the house. The house had been empty and in the midst of a foreclosure after the owners divorced five years ago. Owner Damian Echauri said his wife was given the majority of the house in a settlement and was supposed to sell it, but when she couldn’t, she stopped paying the mortgage.
  
  In November, Echauri said he discovered Robert Ramos, 33, his wife Ana Alvarez, 52, and Alvarez’s son, Jonathan, 27, living in the house when his son spotted an ad on Craigslist listing a room for rent.
  
  Echauri called police and confronted the family at the house. But police were unable to determine who rightfully belonged in the house and told Echauri to seek eviction.
  
  Frustrated and worried over spending money on a house that was already in foreclosure, Echauri said he didn’t know what to do. “I don’t want to evict people when I know they’re trespassers,” he said. “Why should I go to the expense?”
  
  But Leen said if Echauri comes to the city and proves the family is trespassing, the police can take action. “If he can show they have absolutely no right, no lease, he can come to the police,” Leen said.
  
  The house’s murky ownership is furthered complicated by a deed recorded with the clerk of court in March 2012 by a partnership, Prescott Rosche, indicating Echauri sold the house to the group. Echauri said his signature on the deed is forged.
  
  A spokeswoman for Chase, which paid the 2012 tax bill for $20,460.15, said Wednesday that bank records indicate Echauri is still the property owner. A foreclosure action has been started, she said, but has yet to conclude.
  
  When contacted by Code Enforcement Officer Michael Kattou Tuesday, the family living in the house vowed to produce a lease. But the document they turned over Wednesday to the city included signatures belonging to Echauri and his wife, Nadia Casamayor, that do not match those on notarized records, Leen said.
  
  The city assigned a Coral Gables detective to investigate the lease late Wednesday, said acting Police Chief Scott Masington. The family living in the house, who has insisted they were duped by a landlord they cannot name, told Kattou they planned to leave by the weekend, Leen said.

For the story, see Police are investigating possible fraud in squatters’ case in Coral Gables (The property owners face a $500-a-day fine from the city of Coral Gables).

WPB Woman Claims 'Adverse Possession' Defense After Being Collared By Cops On Grand Theft, Fraud Charges For Allegedly Hijacking Neighbor's Vacant Home In Foreclosure, Subsequently Pocketing $13K+ From Unwitting Renters Thru Craigslist Ad

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

• A West Palm Beach woman is accused of commandeering her neighbor’s empty and foreclosed-upon home, renting it through Craigslist and collecting more than $13,000 in rent before the owner discovered the ruse and called the cops.
  
  Nathalie Heil, 30, was booked into the Palm Beach County Jail on Friday. Facing charges of grand theft and fraud, she was released Saturday after posting $6,000 bond.
  
  But Heil said she believes she has ownership of the house, stating that she filed what’s called “adverse possession” papers. The arcane Florida law, created hundreds of years ago, states that if a person claiming adverse possession stays in a home for seven years, paying taxes and caring for the property, they can take permanent ownership.
  
  Andre De Palma Barbosa, the 23-year-old Brazilian now known as the “Boca Raton squatter,” used adverse possession to move into an empty foreclosed 7,000-square-foot mansion in Boca Raton in December.
  
  As for Heil, she said the owner of the property at 314 Vallette Way abandoned the home more than six years ago. She assumed that as soon as she filed her papers with the courts, the property was hers. “Legally, I thought it was right,” she told the Palm Beach Post. Heil said she’s received death threats since the story first ran on the Post’s website Tuesday afternoon. “I’m freaking out,” she said. “I have a full-time job and I’m a single mom.”
  
  West Palm Beach police were tipped off to the situation Friday morning, when they got a call from Kelly Keefner, who manages the 314 Vallette Way property for her father-in-law, Juan Cedeno. Keefner told police the home is in foreclosure, and for that reason she had not checked on the property in the last eight months. She said when she stopped by in late January, the place looked lived-in.
  
  Keefner returned to the home with her husband and met April Wehle, 24, and Talia Williams, 25, who said they had been renting the home for $1,500 a month since mid-June. The women said they found the place through a Craigslist ad placed by Heil, who lives next door at 312 Vallette Way.
  
  The women told police they’d paid a total $13,500 in rent by check to Heil and spent another $500 to make various repairs, according to Heil’s arrest report. The home sits south of downtown and just blocks south of the Mango Promenade historic district, tucked between S. Dixie Highway and S. Olive Ave. south of Okeechobee Boulevard.
  
  After confirming Cedeno’s ownership — the county property appraiser lists him as the owner of record since 2007 — police said they confronted Heil when she went to the home to collect rent. Heil told police she had gone to the county courthouse and “completed paperwork giving her possession of the residence.”
  
  Police said they found no such paperwork, and property records name Cedeno as the owner. After her arrest, Heil said she was told to “show up for court with the paperwork.”

For the story, see Cops say West Palm woman rented out neighbor’s foreclosed home, collected more than $13,000 in rent.

Cops, Local Prosecutor Finally Conclude That Case Of Mansion-Squatting, Adverse Possession-Claiming Crackpot Merits Trespassing Probe, Assist BofA In Reclaiming Possession Of $2.5M Vacant Foreclosure

In Boca Raton, Florida, WTVJ-TV Channel 6 reports:

• South Florida's infamous squatter is squatting no more. On Thursday police moved in to evict 23-year-old Andre Barbosa from a Boca Raton mansion – but said he was no longer there.
  
  Bank of America owns the foreclosed mansion, worth $2.5 million. Investigators said Barbosa used an obscure process called “adverse possession” to occupy the home. Bank of America sued him.
  
  Boca Raton police conducted a trespassing investigation on Thursday, to make sure that nobody was inside, and Barbosa was not.
  
  “From a police department's perspective, we needed a legal foundation to take some action,” Police Chief Dan Alexander said. “We were able to determine with the state attorney after extensive legal research that there was a basis for us to conduct an investigation.”
  
  Neighbors said it was around Christmastime when Barbosa forced his way into the home and started making it his own, with friends coming and going.

For the story, see Police Move in To Evict Squatter From Boca Raton Mansion, But Don't Find Him There (Andre Barbosa, 23, used "adverse possession" to occupy the home, investigators said).

Dilapidated Homes Sold By County Officials At Tax Foreclosure Sales Are Subsequently Being Demolished By Order Of Local City Officials, Leaving Unwitting Homebuyers Caught In Middle

In Jackson, Michigan, MLive reports:

• Terrence Hill had spent months working on a new home he thought he'd bought in a Jackson County tax foreclosure sale in September.
  
  He'd sunk $3,000 in the home on Maple Avenue — putting on a new roof, installing brand new carpeting and putting up new drywall. Just new windows would have completed the home, which he planned to rent out.
  
  On Friday, Jan., 18, Hill discovered the city had turned utilities off and claimed the home was on its demolition list. Just three days later, he headed over to the property, only to see a crane tearing down the home he'd worked on for four months. “I just couldn’t believe it,” he said. “I was shocked.”
  
  Hill isn't alone in his confusion.
  
  Homeowners who think they are helping the city tackle blight by purchasing foreclosed homes are finding themselves in a much different fight.
  
  Several homeowners who say they've bought houses in a Jackson County tax sale are seeing their new homes demolished, or scheduled to be knocked down.

***

• Although the properties have been purchased from the county, city officials say the structures on them are governed by city housing codes and state building codes.
  
  Buyers also only purchase the deed to a property at tax auctions, this allows the city to demolish them, even if the property is sold by the county, officials said.

For more, see Jackson residents upset over demolition of city homes purchased in county tax sale.

Contract For Deed Real Estate Deals: 1st Step On Road To Disaster For Wanna-Be Homebuyers?

From an op-ed column in the Minneapolis Star Tribune:

• A Robbinsdale woman faced foreclosure even though she had faithfully made payments. She had purchased her house under a contract-for-deed arrangement, but the seller went bankrupt and didn't pay his lender. So the woman lost her home, the payments she had made and the $25,000 she had put down on the property.
  
  That example -- and dozens of others across the metro area -- bring renewed power to the "buyer beware'' adage. And they demonstrate why more must be done to protect consumers from shady contract-for-deed real-estate deals.
  
  In a Star Tribune investigation published earlier this week, reporter Jeffrey Meitrodt tracked hundreds of questionable property transactions. In examining 1,330 deals over the past five years, he found that many of the homes were sold for highly inflated prices, with high interest rates and other terms that almost guaranteed that buyers would default. Hundreds of deals occurred without housing inspections that would have revealed code violations and safety hazards.
  
  Contract sales typically occur as private agreements with no bank, appraisals or lawyers involved. The seller acts as the bank by financing the sale and collecting payments. If the seller still has a mortgage on the property, then he or she must continue to make the payments.
  
  Traditional property transactions take months to complete and involve title searches, credit checks, truth-in-housing appraisals and inspections. But contract sales can be done with little or no oversight.
  
  In fairness, not all of these transactions are bad deals. Historically, they have been used between friends, relatives, neighbors, or longtime renters and landlords to help transfer home ownership. And the Greater Metropolitan Housing Corp. nonprofit has successfully used the process to help lower-income people successfully buy homes and stabilize struggling neighborhoods.
  
  Yet in recent years, these agreements have morphed into big business for some landlords and real-estate investors. In Hennepin and Ramsey counties, registered contract sales grew from 539 in 2007 to 841 in 2012 -- not including transactions that were never formally registered.
  
  Housing advocates call the deceptive contract deals yet another form of predatory lending that take advantage of lower-income, less-experienced buyers and renters. Ron Elwood, supervising attorney with the Minnesota Legal Services Advocacy Project, said that when the mortgage crisis prompted a government crackdown and tighter lending, some unscrupulous landlords and sellers moved into the contract-for-deed business.
  
  Elwood said some of his clients thought they were signing new rental forms and learned later that they were contracts used to help the building owners "get around'' city housing code requirements for rental properties.

For the op-ed column, see Editorial: Risky housing deals need more scrutiny (Too many contract-for-deed property buyers are victimized).

See also Contract for deed can be house of horror for buyers (High-risk housing often is sold on such contracts, with little or no oversight).

Antitrust Feds Score 27th Guilty Plea In Ongoing Probe Targeting R/E Operators Running N. California Foreclosure Sale Bid-Rigging Rackets

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

• A Northern California real estate investor has agreed to plead guilty for his role in conspiracies to rig bids and commit mail fraud at public real estate foreclosure auctions in Northern California, the Department of Justice announced.
  
  Felony charges were filed today in the U.S. District Court for the Northern District of California in San Francisco against Gilbert Chung of Burlingame, Calif. Chung is the 27th individual to plead guilty or agree to plead guilty as a result of the department’s ongoing antitrust investigations into bid rigging and fraud at public real estate foreclosure auctions in Northern California.
  
  According to court documents, Chung conspired with others not to bid against one another, but instead to designate a winning bidder to obtain selected properties at public real estate foreclosure auctions in San Francisco and San Mateo counties, Calif. Chung was also charged with conspiring to use the mail to carry out schemes to fraudulently acquire title to selected properties sold at public auctions, to make and receive payoffs and to divert to co-conspirators money that would have otherwise gone to mortgage holders and others.
  
  The department said Chung conspired with others to rig bids and commit mail fraud at public real estate foreclosure auctions in San Francisco and San Mateo counties beginning as early as January 2010 and continuing until about December 2010.
  
  “The conspirators went to great lengths to suppress competition and prices at these foreclosure auctions,” said Bill Baer, Assistant Attorney General in charge of the Department of Justice’s Antitrust Division. “The division will continue to vigorously enforce the antitrust laws and to prosecute those who violate them at the expense of distressed homeowners.”
  
  The department said that the primary purpose of the conspiracies was to suppress and restrain competition and to conceal payoffs in order to obtain selected real estate offered at San Francisco and San Mateo County public foreclosure auctions at non-competitive prices. When real estate properties are sold at these auctions, the proceeds are used to pay off the mortgage and other debt attached to the property, with remaining proceeds, if any, paid to the homeowner.
  
  “Today’s charges are another example of our resolve to bring to justice those who engaged in fraudulent bid rigging and anticompetitive practices at foreclosure auctions,” said FBI Special Agent in Charge David J. Johnson of the San Francisco Field Office. “We continue our partnership with the Antitrust Division in aggressively pursuing individuals who participate in these criminal acts.”
  
  A violation of the Sherman Act carries a maximum penalty of 10 years in prison and a $1 million fine for individuals. The maximum fine for the Sherman Act charges may be increased to twice the gain derived from the crime or twice the loss suffered by the victim if either amount is greater than $1 million. A count of conspiracy to commit mail fraud carries a maximum sentence of 30 years in prison and a $1 million fine. The government can also seek to forfeit the proceeds earned from participating in the conspiracy to commit mail fraud.
  
  The charges today are the latest filed by the department in its ongoing investigation into bid rigging and fraud at public real estate foreclosure auctions in San Francisco, San Mateo, Contra Costa and Alameda counties, Calif.
  
  These investigations are being conducted by the Antitrust Division’s San Francisco Office and the FBI’s San Francisco office. Anyone with information concerning bid rigging or fraud related to public real estate foreclosure auctions should contact the Antitrust Division’s San Francisco Field Office at 415-436-6660, visit www.justice.gov/atr/contact/newcase.htm or call the FBI tip line at 415-553-7400.

For the Justice Department press release, see Northern California Real Estate Investor Agrees to Plead Guilty to Bid Rigging at Public Foreclosure Auctions (Investigation Has Yielded 27 Plea Agreements to Date).

Ex-County Treasurer Cops Guilty Plea, Forfeits Entire Public Pension Over Role In Bid-Rigging Racket Involving Pay-To-Pay Scheme Rewarding Political Contributors With High-Rate Liens, Preferred Seating At Tax Auctions

From the Office of the U.S. Attorney (East St. Louis, Illinois):

• The former treasurer of Madison County, Illinois, pled guilty in US District Court on February 5, 2013, to violating the Sherman Antitrust Act, the United States Attorney for the Southern District of Illinois [...] announced []. Fred Bathon, 58, was convicted of structuring Madison County property tax sales in a way that increased prices and rewarded campaign contributors.
  
  The charges allege that at Illinois tax lien auctions, investors bid to purchase tax lien certificates issued against delinquent tax payers. Investors are supposed to compete to purchase these tax liens by bidding on the interest rate the property owner will be required to pay prior to redeeming the tax lien filed on the owner's property.
  
  The bid opens at no more than the statutory maximum of 18% and through a competitive bidding process can be driven as low as 0 percent. The bidder offering the least penalty percentage rate, i.e., the bidder who is willing to allow the owner to redeem his property for the smallest penalty, is allowed to purchase the tax lien.
  
  As such, competitive bidding benefits financially distressed homeowners by reducing the amount of money that they have to pay to save their home from foreclosure; however, that same system reduces the profit made by tax buyers. Tax buyers prefer to receive high interest rates, which correspond to higher profits.
  
  It was revealed in Court today that for the tax sales conducted in 2005-2008, Bathon structured the tax sales in a way that eliminated competitive bidding and allowed the tax buyers to engage in price fixing by only bidding the statutory maximum interest rate of 18%.
  
  In addition to awarding properties at non-competitive interest rates, Bathon also used a seating chart to ensure that his largest campaign contributors were recognized by the auctioneer as the winning bidder.
  
  By 2007 and 2008, the bid rigging and price fixing was so pervasive that distressed homeowners were charged the statutory maximum interest rate on nearly every property tax lien sold. During the tax auction occurring November 14-15, 2007, 2,549 out of 2,574 property tax liens were awarded to bidders for the statutory maximum interest rate of 18%, which represented 99.03% of the property tax liens auctioned. During the tax auction occurring November 13-14, 2008, 2,290 out of 2,364 property tax liens were awarded to bidders for the statutory maximum interest rate of 18%, which represented 96.86% of the property tax liens auctioned.
  
  US Attorney Wigginton said, “This crime exploited financially-distressed homeowners who were at risk of losing their homes for the financial gain of political contributors. This type of pay-to-play politics is intolerable and will be aggressively prosecuted. It is time that those involved in politics learn that public office is a public trust that should never be manipulated to reward friends and supporters. I want to make it clear that not only is this particular investigation far from finished, but that I will continue to investigate violators wherever they are found. Note that today’s charge is a charge of conspiracy. By its very nature, conspiracy involves more than one person.”
  
  A violation of the Sherman Antitrust Act is punishable by up to 10 years imprisonment and a $1,000,000 fine. The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims if either amount is greater than the statutory maximum. However, the United States Sentencing Guidelines must be applied to the case and considered by the Court during sentencing. Sentencing has been scheduled for May 17, 2013.
  
  Under Illinois law, Bathon will also forfeit his entire public pension as a result of his conviction. The Illinois Pension Code provides that “[n]one of the benefits herein provided for shall be paid to any person who is convicted of any felony relating to or arising out of or in connection with his or her service as a member.” This provision of Illinois law is oftentimes referred to as the “Ryan Rule,” following the Illinois Supreme Court’s decision in Ryan v. Bd. of Trustees of Gen. Assembly Ret. Sys., 236 Ill. 2d 315, 924 N.E.2d 970 (2010), which determined former Governor George Ryan forfeited all of his public pension benefits following his conviction on federal corruption charges. The state pension forfeiture provision reaches all public pension benefits, including those earned while serving in public positions with no connection or nexus to the federal conviction.

For the U.S. Attorney press release, see Pay To Play: Former Madison County Treasurer Guilty Of Structuring Property Tax Sales To Reward Campaign Contributors.

Massachusetts AG Tags Developer In Suit Alleging It Pocketed $200K+ In Buyer Deposits, Then Failed To Deliver Homes Or Return Downpayments

In Boston, Massachusetts, the Boston Business Journal reports:

• A Foxborough real estate developer who fell on hard times after the economic downturn has been sued for allegedly taking — and then refusing to return — more than $200,000 in down payments for new homes in Sharon that were never provided, according to Attorney General Martha Coakley.
  
  The AG's office has obtained a restraining order in Suffolk Superior Court against Michael Intoccia and his companies including Bella Estates Realty Trust, MTI Realty and Intoccia Builders Corp., prohibiting them from accepting future deposits for new homes unless the deposits are put into escrow.
  
  The order also freezes assets enough to pay a possible court judgment, and requires the defendants to disclose records that might reveal the existence of other consumers who paid deposits but never received a new home.
  
  The lawsuit seeks more than $200,000 in restitution for five homebuyers who paid for single-family homes in the Bella Estates development in Sharon. Coakley’s office is also seeking statutory penalties and a further injunction preventing the defendants from taking unsecured deposits.
  
  Intoccia operates a development business in Norfolk County through a network of companies that were involved in the planning, marketing, and construction of the Bella Estates development that was to consist of 29 single-family house lots, according to the complaint. The defendants allegedly solicited buyers and took deposits of up to $55,300 per residence, Coakley said.

***

• According to the AG's complaint, Intoccia and his companies also allegedly made false promises to promptly build homes when they knew that construction was prevented by permitting issues, and in some cases took multiple deposits for the same lot. Homebuyers suffered additional expenses for moving, temporary housing, appliances and fixtures for houses that were never built.
  
  The defendants allegedly held consumers’ deposits long after the final deadlines for closing passed and in some cases more than two years after the deposit was paid. The complaint alleges that the defendants allowed many lots in Bella Estates to fall into foreclosure.

For the story, see Foxborough real estate developer Michael Intoccia sued by AG.

3rd Circuit: Not Necessary To File TILA Lawsuit Within Three Years To Exercise Loan Rescission Rights; Firing Off Letter To Mortgage Holder Invoking Claims Enough To Satisfy Statute

Forbes reports:

• A recent decision by the Third Circuit Court of Appeals gives borrowers an indefinite period to rescind their home-equity loans, complicating life for lenders and setting up a conflict that may have to be resolved at the Supreme Court.
  
  Home buyers normally have three days to rescind a loan, and after that mortgages to purchase a property can’t be reversed. But federal law allows other types of loans to be rescinded for up to three years if the borrower can prove violations of the Truth in Lending Act, such as an inaccurate interest rate or undisclosed finance charges. If they prevail — and have enough cash to repay the loan principal — borrowers can get a refund of their interest and fees.
  
  Most courts, including the Ninth Circuit Court of Appeals, have held that borrowers who want to do this also must sue the bank within the three-year deadline.(1)
  
  But the Third Circuit, in Sherzer vs. Homestar, ruled that borrowers only have to send a letter of notice to the bank. They can sue whenever they want after that, leaving a potential cloud on the lender’s claim against the property that can only be resolved if the lender gets a declaratory judgment denying the recission.
  
  The ruling released Tuesday follows a similar decision by the Fourth Circuit(2) and gives borrowers another tactic for delaying lenders that want to seize the collateral backing their loan.
  
  “If you’re having trouble making payments and worried about foreclosure, you could fire off letter to the lender saying you believe there was a material TILA violation,” said Martin Bryce Jr., a partner with Ballard Spahr in Philadelphia. “Then you get to sit back and hold that in your pocket.”

***

• Under the reasoning adopted by the Third and Fourth Circuits (based in Philadelphia and Richmond, respectively) borrowers don’t need to worry about whether they have the cash to pay off the loan, however. The smartest course is to fire off a letter demanding recission within three years and keep it on hand in case they get in trouble. Then it becomes a bargaining chip with a lender who’s already facing a certain loss on the loan. The question becomes how much more the lender wants to spend on legal fees to gain clear title to the collateral.
  
  Other borrowers, of course, pay the price. Look for this case, or one like it, to percolate up to the Supreme Court.

For more, see Court Decision Gives Lenders A Headache, Borrowers An Ace In The Hole.

For the ruling, see Sherzer v. Homestar Mortgage Services, No. 11-4254 (3d Cir. February 5, 2013).

(1) See Rosenfield v. HSBC Bank, USA, 681 F.3d 1172, 1188 (10th Cir. 2012); Yamamoto v. Bank of N.Y., 329 F.3d 1167, 1172 (9th Cir. 2003); Large v. Conseco Fin. Servicing Corp., 292 F.3d 49, 54–55 (1st Cir. 2002).

(2) Gilbert v. Residential Funding LLC, 678 F.3d 271, 277–78 (4th Cir. 2012). See also Williams v. Homestake Mortgage Co., 968 F.2d 1137, 1139–40 (11th Cir. 1992) (explaining that rescission occurs automatically upon notice).

Note: The binding effect of these federal appeals court rulings are limited to all lower Federal courts located in the states within the appeals court's jurisdiction, but may be considered for its persuasive effect by other courts. To find out which Federal appeals court has jurisdiction over appeals from the lower Federal courts in your state, you can check the U.S. Circuit Court of Appeals Map.

Banksters Score Another Big Win As Florida Supremes Say Current Procedural Rules Allow Foreclosure Mills To Use Voluntary Dismissals To Dodge Accountability When Bagged By Homeowners For Using Fraudulent Docs In Foreclosure Actions

In Tallahassee, Florida, Reuters reports:

• Florida's highest court has ruled a homeowner cannot re-open a voluntarily dismissed foreclosure case despite allegations that the bank falsified documents, giving a win to banks in a closely watched ruling that could have affected thousands of cases in a state hit hard by the foreclosure crisis.
  
  The Florida Supreme Court had been asked to decide whether banks accused of using fraudulent documents to file foreclosure lawsuits could dismiss the cases, and then later re-file them with different paperwork.
  
  The case involves a foreclosure brought against homeowner Roman Pino in 2008 by Bank of New York Mellon Corp , the trustee for the security that owned his loan. The mortgage was serviced by Bank of America .
  
  Pino asked the court to dismiss the case, arguing that the documents filed by the bank and its attorneys had been fraudulently backdated. The case stems from the robo-signing scandal, in which banks and law firms allegedly signed off on foreclosure documents without verifying their accuracy.
  
  The documents in Pino's case had been signed by an employee of the now-defunct David Stern law firm, one of the biggest foreclosure law firms in the country.
  
  Before the court could rule, BNY Mellon voluntarily dismissed the case. The foreclosure was later re-filed, using different documents. Pino's lawyer asked the court to re-open the first case, saying the bank should not have been allowed to bring the same case when it committed fraud the first time around.
  
  Before the case reached the Florida Supreme Court, Pino and BNY Mellon reached a confidential settlement. The high court decided to hear the case anyway to address what it said was a key policy question that has vexed courts across the state - whether or not voluntary dismissals can be reversed when there is an allegation of fraud.
  
  On Thursday, the Florida Supreme Court decided that it could not, unless the plaintiff - in this case, the bank - had obtained some kind of affirmative relief, and the dismissal had kept the fraud from being remedied by the court.
  
  However, the court acknowledged the "multiple abuses that can occur from fraudulent pleadings," and asked Florida's bar association to review civil litigation rules to determine if changes should be made to address the issue.
  
  A lawyer for Pino, Amanda Lundergan of the Ice Firm, said she believed the ruling "will have the unintended effect of encouraging underhanded tactics" by plaintiffs in foreclosure and other cases.
  
  A spokesman for BNY Mellon, Kevin Heine, declined to comment. Bank of America did not immediately return a request for comment Friday evening.
  
  The case has been closely watched by banks and homeowners. An unfavorable ruling for the banks could have exposed them to severe financial liability in the state.

Source: Florida court finds for bank in major foreclosure case.

For the ruling, see Pino v. Bank of New York Mellon, No. SC11-697 (February 7, 2013).

Bank's Lien Wiped Out In Tax F'closure; 'Lack Of Notice' Claim Kiboshed When It Failed To Include Its Address On Recorded Docs; Left Holding The Bag Despite Assessing County's Failure To Review Court File In Bank's Earlier-Dismissed F'closure Action For Current Mailing Address

Wisconsin Bar News reports:

• A bank’s failure to list its address on mortgage documents filed with the register of deeds means a default foreclosure judgment will stand.
  
  In Juneau County v. Associated Bank, N.A., 2012AP1304 (Jan. 31, 2013), a state appeals court ruled that Juneau County was not required to “look beyond the record in the office of the register of deeds” to find the bank’s address for notice purposes.
  
  That is, a three-judge panel ruled that Juneau County complied with Wis. Stat. section 75.521(3), which sets out the notice requirements counties must follow to commence tax lien foreclosure proceedings against property owners and secured creditors.
  
  Sebastian Madej used Associated Bank to finance the purchase of two parcels of land in Necedah, located in Juneau County. The bank recorded its mortgages with the county register of deeds, but neither mortgage listed an address for the bank.
  
  In subsequent years, Madej failed to pay property taxes. In 2008, the bank mailed a tax payment to satisfy Madej’s tax debt for 2003 and 2004 to the county treasurer.
  
  The cover letter accompanying the check listed the bank’s address in Green Bay. In 2009, Madej defaulted on the notes secured by the mortgages.
  
  The bank filed foreclosure actions, and recorded a lis pendens for each lot. The recorded warnings did not list an address for the bank. However, they listed the case numbers for the foreclosure actions, and the complaints listed the bank’s address.
  
  In 2010, the bank obtained default judgments of foreclosure on Madej’s property, and sent payments to the county treasurer for some delinquent tax years, but not all. The treasurer sent tax receipts to the bank’s address in Green Bay.
  
  Before the sheriff’s sale however, the bank settled with Madej and moved to vacate the foreclosure judgments. It also recorded discharges of lis pendens.
  
  Soon after, the county commenced tax lien foreclosure proceedings against 94 parcels, including the Madej parcels, under section 75.521. The county retained a title insurance company to ascertain the names of owners and secured creditors for notice purposes.
  
  It listed Associated Bank, a secured creditor, as having an “unknown address” because the bank’s address could not be found in recorded documents with the register of deeds. The county published a notice of affected parcels in the official newspaper.
  
  Associated Bank did not appear or file an answer to the county’s foreclosure action against the Madej properties, and default judgments of foreclosure were entered.
  
  The bank moved to vacate the judgments, arguing that the county did not comply with notice requirements of section 75.521(3). But the appeals court panel affirmed the circuit court’s ruling that Juneau County met the notice requirements.
  
  “[T]he County was not required to expand its search for the Bank’s address beyond what was ascertainable directly from the records relating to the two affected lots located at the office of the register of deeds,” wrote Judge JoAnne Kloppenburg.

Source: County Complied with Notice Requirement for Tax Lien Foreclosure.

For the court ruling, see Juneau County v. Associated Bank, N.A., Appeal No. 2012AP1304 (Wi. App. January 31, 2013).

Maryland Lawmakers Smack Shameless Colleague Over His Failed Efforts To Pass Law That Would Have Enabled Him To Reinstate R/E License Lost When Found Liable For Screwing Over Homeowners In Foreclosure

In Annapolis, Maryland, The Washington Post reports:

• Maryland’s House of Delegates on Tuesday voted overwhelmingly to reprimand one of its own for working to insert language in a bill last year that would have directly benefited the lawmaker’s business as a real estate broker.
  
  Anne Arundel County Del. Tony McConkey “drafted, offered, lobbied and voted for” a provision that would have allowed him to reinstate his Maryland real-estate license while he still owes one of the state’s largest fines on record for having preyed on homeowners in foreclosure, according to a legislative ethics report released Monday.
  
  McConkey is still a practicing real-estate broker in the District. His maneuvering on the bill, first reported last year by The Washington Post, also would have cut interest charges and processing fees that could have saved McConkey and a small handful of other delinquent Maryland brokers tens of thousands of dollars.
  
  The House voted 127-3 to adopt a resolution of reprimand, an admonishment just one step below the censure last year of veteran Prince George’s legislator Ulysses Currie for his failure to disclose outside consulting payments that became the subject of a federal investigation.
  
  Like Currie (D) before him, McConkey was asked to make a public apology. But unlike Currie’s somber tone, McConkey’s on Tuesday took on a combative one that colleagues on both sides of the aisle derided as something less than repentant.
  
  “I do humbly apologize, with great regret, that the ethics committee found that I acted improperly,” McConkey, said, “Not to provide an excuse, but if the body would indulge me, two minutes, just to provide an explanation...”
  
  McConkey, who had admitted “lobbying hard” for the bill to lawmakers investigating his actions, then went on to claim that colleagues had approved the measure with little interference from him. “People thought it was a good amendment,” he said. McConkey also suggested the legislature’s chief ethics adviser had cleared him of any wrongdoing.
  
  McConkey’s defense of what the legislative ethics committee had ruled indefensible left many lawmakers slack-jawed and prompted Baltimore Del. Shawn Tarrant (D) to walk off the House floor while McConkey was still speaking. “Does that sound like an apology?” he asked a colleague before getting up from his chair.
  
  The remarks also drew a terse rebuttal from Del. Brian K. McHale (D-Baltimore), co-chair of the ethics committee.
  
  “I feel compelled to address that,” McHale said. “Anyone with a clear mind… would have clearly known…that it was an act of misconduct to have presented that amendment and to have lobbied both houses to have it passed ... I would not want anyone to anyhow misinterpret the advice that the ethics counsel gave.”
  
  Three Republicans voted against the reprimand, including Del. Don Dwyer (R-Anne Arundel). Dwyer was the only lawmaker to speak on the resolution. He dryly said he was “honored that we all care so much about our oath that we’re going to do this to our fellow member.”
  
  Afterward Dwyer said he was not defending McConkey but voted no “to point out the hypocrisy ... We have lawyers who regularly pass legislation in their name, that they financially benefit from. It’s hypocrisy to do this selectively when we ought to be calling people out on a regular basis.”
  
  The other two no votes were Del. Glen Glass (R-Cecil) and Del. Neil Parrott (R-Washington). An aide to Glass said he felt there was not enough information to vote yes. Parrott did not immediately return a call seeking comment.
  
  Speaking to a reporter afterward, McConkey appeared bewildered at the House’s displeasure, and questioned the process by which he was investigated by colleagues. “They’re very secretive. It’s like the college of cardinals,” he said.
  
  In 2010, McConkey was ordered to pay $75,000 for what an administrative law judge called “fraudulent and unethical” behavior in real estate transactions. In one instance, the state found that McConkey promised to help a woman keep her home, then didn’t return her calls, bought her property in foreclosure and sought to evict her.
  
  Under the measure inserted into the bill last year by McConkey, he and others could have entered long-term payment plans to replenish a state fund used to compensate consumers who suffer financial losses as a result of actions by Maryland real estate professionals. Three of McConkey’s clients were each paid the maximum $25,000 from the fund,(1) making his debt to the state fund the largest of any real estate licensee in the five years preceding the 2010 decision.
  
  At the time McConkey sought to pass the measure last year, the Maryland Real Estate Commission said it had no evidence McConkey had paid any of the balance due.
  
  Under an agreement with the state, his license to sell homes in Maryland was suspended for one year. But commission officials said he would need to pay the entire amount due before seeking reinstatement of his license.
  
  McConkey’s measure would have halved the 12 percent interest rate on his debt to the state, and eliminated another 16-percent charge for processing the fee. It also would have allowed McConkey to regain his license if he began a payment plan.
  
  The measure was tucked into a bill that lawmakers said had to pass. Without it, the Real Estate Commission, which licenses the state’s 41,000 real estate brokers and other industry professionals, would have ceased to exist.
  
  Sen. Edward R. Reilly (R-Anne Arundel) filed the complaint last April after he said McConkey cursed at him in a heated exchange urging him to support the measure.
  
  Reilly said he took no pleasure in the result.
  
  “I’m never pleased with this kind of thing. This is a black mark on the entire General Assembly. The public has a poor attitude about elected officials in general, and this just supports the stereotype.”(2)

Source: Md. lawmaker reprimanded for bill that would have helped his real-estate practice.

(1) The Maryland Real Estate Commission Guaranty Fund is a special fund that, with limitations, compensates victims of ripoffs committed by Maryland-licensed real estate professionals..

(2) For more on McConkey, the reportedly twice-suspended real estate agent, once-disbarred lawyer, sale leaseback peddler and current member of the Maryland state legislature, see:

• Lawmaker/Sale-Leaseback Peddler Slips Provision Into Pending Law Enabling Him To Recover R/E License w/out 1st Fully Paying Off Damages From Ripoffs,
  ........................................
• MD Lawmaker Takes 1-Year R/E License Loss To Resolve Claims Arising From Running Sale Leaseback Racket; Victims Seek Recovery From State Guaranty Fund,
  ....................................
• Maryland Lawmaker Accused In Equity Stripping Foreclosure Rescue Scam Tells Jury He Was "Doing The Lord's Work",
  ........................
• Maryland Lawmaker To Cough Up $109K For Violating State Law Regulating Sale Leaseback Foreclosure Rescue Scams ("You have to be remarkably self-centered - virtually delusional - to see a $109,000 judgment as a vindication," the victim's attorney Michael Morin reportedly said in response to McConkey's apparent victory declaration in this case, according to an article in the Capital Gazette),
  ......................
• Maryland Lawmaker Accused Of Scamming Homeowner In Foreclosure Dodges Bullet As Unfavorable Jury Verdict Limits Liability To $11K,
  .......................
• Maryland State Lawmaker's Bankruptcy Filing Stalls Completion Of Sale Leaseback, Foreclosure Rescue Court Case.

Feds Tag Major Securities Rating Service For Disregarding Its Own Standards When Giving High Grades To Crappy Mortgage Bonds That Eventually Imploded, Leaving Unwitting Investors Holding The Bag

The Wall Street Journal reports:

• The Justice Department sued Standard & Poor's Ratings Services late Monday, alleging the firm ignored its own standards to rate mortgage bonds that imploded in the financial crisis and cost investors billions.
  
  The civil charges by U.S. Attorney General Eric Holder against the New York company, one of the bond-rating industry's three giants, are the first federal enforcement action against a credit-rating firm over the crisis. Several state attorneys general are likely to join.
  
  S&P said in a statement earlier Monday that the government suit would be "entirely without factual or legal merit," and denied wrongdoing.
  
  After The Wall Street Journal reported Monday afternoon that the government intended to launch the civil case, S&P confirmed the expected lawsuit and said the rating firm was being punished unfairly by the U.S. government for "failing to predict" the housing meltdown or financial crisis.
  
  The two sides have discussed a possible settlement for about four months, according to people close to the negotiations, but S&P balked over concerns that a deal could sink the company.
  
  The government was seeking penalties of more than $1 billion, another person close to the talks said, which would be the biggest sanction imposed on a firm related for its actions in the crisis.
  
  S&P officials also were rattled that the government was pushing the company to admit wrongdoing that could leave it more vulnerable to pending or new lawsuits by investors.

For more, see U.S. Sues S&P Over Ratings (Justice Department Says Endorsements of Risky Mortgage Bonds Fueled Crisis).

For the lawsuit, see U.S. v. McGraw-Hill Companies, Inc., et al.

Maine Supremes Smack Title Insurer For Stiffing Policy-Holding Homeowner On Its Duty To Defend Against Neighbor's Title Challenge Relating To Alleged 'View' Easement

From Justia.com US Law:

• [Homeowner] purchased title insurance for a condominium unit she had recently purchased. [Homeowner]'s neighbor subsequently initiated a lawsuit against [Homeowner] alleging that [Homeowner]'s property was subject to a view easement.
  
  [Homeowner] tendered the complaint to her title insurance company (Insurer) requesting a defense pursuant to her title insurance policy. Commonwealth denied [Homeowner]'s request based on certain exclusions in the policy.
  
  [Homeowner] sued Insurer alleging a breach of contract and requesting a declaratory judgment that Insurer had a duty to defend [Homeowner] against her neighbor's complaint. The superior court granted Insurer's motion for summary judgment, finding that the policy specifically excluded the view easement from coverage.
  
  The Supreme Court vacated the judgment, holding that due to the broad nature of the duty to defend and the law's requirement that insurance-policy interpretation be focused on the insured, Insurer had a duty to defend [Homeowner] in the underlying litigation.

Source: Justia.com Opinion Summary - Cox v. Commonwealth Land Title Ins. Co.

Fro the ruling, see Cox v. Commonwealth Land Title Ins. Co.

Florida Bar Seeks Discipline Against Ex-King Of Now-Defunct Foreclosure Mill

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

• The Florida Bar is seeking disciplinary action against Florida foreclosure baron David J. Stern, whose massive law firm collapsed in 2011 amid allegations that it mishandled the cases of the nation’s largest mortgage holders by filing forged and fraudulent court documents.
  
  Grievance committees found probable cause to pursue punishment in 17 cases stemming from formal complaints made by homeowners, defense attorneys, judges and a bank representative.
  
  It’s the first attempt by the Bar to hold Stern accountable for actions that occurred at his so-called “foreclosure mill,” which grew quickly following the real estate crash to more than 1,500 employees and more than 140,00 cases statewide. Ten probable cause findings were approved Jan. 25 with seven more following on Friday.
  
  Stern’s company closed in March 2011 after losing most of its clients, including federal mortgage backers Fannie Mae and Freddie Mac, as concerns about robo-signing hit lenders and law firms nationwide.
  
  The allegations against Stern where probable cause was found include notary fraud, backdating documents, misleading the court, failing to appear before the Fifth District Court of Appeal, failure of his attorneys to appear at hearings, and the inability of a Michigan-based bank to get clear title to a property because a lawsuit notice was never withdrawn from official records.

For more, see Florida Bar pursues discipline against foreclosure mill boss David J. Stern.

FTC Issues New Report On Zombie Debt Buyers, Their Structure & Practices

From The Consumerist:

• In spite of the many rules imposed on the debt collection industry, it still generates, by far, the largest number of complaints to the Federal Trade Commission each year. That’s why the agency recently completed a lengthy investigation into debt-buyers and why they do such a bad job.
  
  Specifically, the FTC wanted to know why debt-buyers, the companies that snatch up old debt from other companies for pennies on the dollar, seem to constantly be contacting the wrong people and/or using incorrect information about the debt.

For more, see 8 Things We Learned From FTC Report On Debt-Buyers.

See also New FTC Report Highlights Problems in the Collection of Purchased Debt, Consistent with Legal Aid Client’s Experience.

From the Federal Trade Commission, see The Structure and Practices of the Debt Buying Industry:

• 50-page report plus tables and appendices,
• Press release.

Florida Lawyer Gets Bar Boot For Role In Nationwide Loan Modification, Foreclosure Defense Racket

In Fort Lauderdale, Florida, the South Florida Business Journal reports:

• Fort Lauderdale attorney William Timothy O’Toole was permanently disbarred recently as part of the Florida Bar and Florida Supreme Court’s attorney discipline actions.
  
  In 2011, the Bar said it had received 20 complaints about O’Toole. In a petition for emergency suspension at the time, O’Toole was accused of allowing non-lawyers to improperly solicit clients on his behalf for loan modifications and foreclosure defense on a nationwide basis, despite the fact he can only practice law in Florida.
  
  He was alleged to have been splitting fees with non-lawyers, a violation of Bar rules. The Bar announced O’Toole’s disbarment in a monthly release that included discipline actions for five other attorneys in Florida in December and January.
  
  O’Toole’s permanent disbarment took effect on a Jan. 24 court order. He was found in contempt for failing to comply with a May 22 disbarment order, that might have allowed his reinstatement at some point if he had complied with conditions of the order. But the Bar said in a news release that O’Toole failed to comply with providing a sworn affidavit with names of people who had received a copy of his disbarment order.

Source: Fort Lauderdale foreclosure attorney permanently disbarred.

Career Lowlife Gets 12+ Years For Role In Effort To Swipe Cape Cod Man's $2.8M+ Waterfront Property

From the Office of the U.S. Attorney (Boston, Massachusetts):

• A New York man was sentenced [] in connection with a scheme to defraud a Massachusetts man of his Hyannis waterfront property.
  
  Michael Howard Clott, aka Michael Howard, 60, was sentenced [...] to 152 months, followed by 36 months of supervised release, forfeiture of $1,269,168 and ordered to pay $1,425 in restitution. In November 2012, Clott pleaded guilty to three counts of mail fraud and three counts of wire fraud.
  
  From December 2009 through April 2010, Clott spent several months on Cape Cod engaged in a scheme to defraud a Massachusetts man of a property he valued at more than $2.8 million.
  
  During this period Clott was a fugitive from a federal criminal case against him in New York. Clott used the alias “Michael Howard,” and represented to others that he was an attorney and financial executive who specialized in purchasing, repairing and marketing bank-owned real estate when, in fact, Clott was none of those things.
  
  Clott, however, persuaded a local real estate broker to sell a client’s property for half the asking price, then give the sale proceeds to Clott who would use his purported financial expertise to generate an after-tax benefit for the client equivalent to the client’s asking price.
  
  Instead of using the proceeds for the client’s benefit, Clott manipulated others to unwittingly assist in negotiating the proceeds check to enable him to deposit the funds in an account for Clott’s personal benefit. However, Clott’s scheme was discovered and the funds were secured before Clott could further disburse or conceal them.
  
  During the past 30 years, Clott has either been engaged in significant fraud schemes, or been serving time in prison for those schemes.
  
  Most recently, Clott was sentenced by the Southern District of New York to 259 months in prison which he will serve concurrent to his sentence in the District of Massachusetts.

For the U.S. Attorney press release, see New York Man Sentenced for Cape Cod Property Fraud Scheme.