The Home Equity Theft Reporter Cases & Articles

Suit: Judgment Debtor Played 'Keep-Away' With Creditor By Fraudulently Transferring Real Estate Ownership To Complicit Mom To Avoid Collection Efforts

2012-01-27T00:05:00.000-05:00

In Galveston, Texas, The Southeast Texas Record reports:

Claiming fellow Galvestonians Daniel and Rita Higgins committed a fraudulent property transfer, Leslie and Sandra Bartosh have a filed a lawsuit. The lawsuit, filed Dec. 30 in Galveston County District Court, accuses Daniel P. Higgins of turning two pieces of real property on the farther West End of Galveston over to his mother "with the intent to hinder, delay or defraud the plaintiffs."

Recent court documents explain that the Bartoshes pursued legal action against the younger Higgins in 2009 and eventually won a settlement in the amount of $67,704 on June 14. "The plaintiffs allege that the foregoing judgment was a valid and subsisting judgment and that the plaintiffs obtained an abstract of judgment," the original petition says.

The suit shows the properties in question had a fair market value that was in excess of $67,704 when Danny P. Higgins transferred them by way of quitclaim deed to Rita Higgins on Oct. 25.

According to the complainants, said transfer occurred to prevent the defendant transferor's creditors and the plaintiffs from obtaining collection of the claim.

They additionally claim Rita Higgins had notice of her son's alleged actions and was aware he was experiencing "serious financial difficulty" at the time of the transfer in question. "The defendant Rita Higgins did not pay adequate or any consideration for the properties," the suit says.

Source: Suit claims property transfer was fraudulent.

Property Owner Sues Sibling/Co-Owner Over Alleged Failure To Cough Up Her Share Of Real Estate Tax Bill; Asks Judge To Order Forced Sale Of Land

2012-01-27T00:03:00.000-05:00

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

A woman claims her sister failed to pay her half of the property taxes on a piece of Jefferson County real estate the siblings jointly owned. As a result, the property has settled into disrepair, according to recently filed court documents.

Susan Manuel filed a lawsuit Dec. 30 in Jefferson County District Court against Gwendolyn Lejunie. In her complaint, Manuel alleges she and Lejunie owned the property at 2010 Seventh St. in Port Neches. They inherited the land from their mother, Bonita Manuel, on Aug. 1, 2005, according to the complaint.

Despite her 50 percent share of the property, however, Lejunie has refused to pay property taxes on it, the suit states. She has also failed to keep the property in a "liveable and marketable" condition, the complaint says.

Manuel wants the court to order sale of the property. She wants to receive 60 percent of the proceeds as compensation for the loss of market value of the property.

Source: Siblings in dispute over property taxes.

Federal Judge 'Green-Lights' Embattled Foreclosure Sweatshop Operator's Lawsuit Alleging BofA Stiffed Him Out Of $11M In Legal Fees

2012-01-27T00:01:00.000-05:00

In Miami, Florida, Courthouse News Service reports:

A Plantation, Fla., law firm can seek $11 million in unpaid legal fees for its work on Bank of America foreclosure cases, a federal judge ruled.

The Law Offices of David J. Stern says it was the legal counsel for Bank of America's Florida residential foreclosure cases across the state, employing some 1,200 attorneys and support staff at its peak. [...] Stern's 11-count complaint claims that Bank of America and its corporate parent owe more than $1.9 million, while BAC Home Loans Servicing owes more than $8.7 million.

For more, see Bank of America May Owe Lawyers $11 Million.

For the order denying BofA's Motion to Dismiss, see The Law Offices of David J. Stern, P.A. v. Bank of America Corp. et al.

Media Intervention Saves Another Homeowner From Sloppy Servicer's Handiwork; Bankster Ran Up Late Charges, Threatened F'closure Over Bookkeeping Gaffe

2012-01-26T00:05:00.000-05:00

In Caldwell County, North Carolina, WSOC-TV Channel 9 reports:

A Caldwell County woman was threatened with foreclosure over a missing payment she said she made to her loan company. Sherry Story is a hard-working single mother and does not have money to waste. For the last two months she has been trying to chase down the $400 payment she made on her second mortgage to Litton Loan Servicing just as her loan was being sold to Ocwen Loan.

***

Story said she sent Ocwen a copy of the payment that came through her bank and has called Ocwen 15 times, but still cannot get credit for the payment. Now the company has tacked on additional charges totaling nearly $1,200. “I’m fearful they’re going to get away with what they’re doing and they will foreclose. I have been threatened with foreclosure,” Story said.

That’s when Story went online and discovered the company has an ‘F’ rating with the Better Business Bureau and more than 900 complaints. Some of the complaints are similar to hers.

So Action 9 called Ocwen Loan, was put in contact with someone in their overseas research department and asked them to investigate. Action 9 waited on the line for 45 minutes.

Finally, Ocwen said they credited the $400 payment and removed the additional fees. Story demanded they send proof. Story said she will be able to sleep at night when she gets proof her mortgage payment was properly credited.

“I don’t think I could have done it if you hadn’t helped me with it. I just wasn’t getting anywhere with them,” she said.

For the story, see Woman's home loan sold, payment lost.

Insurance Squeeze Continues For Florida Homeowners; 'Backdoor' Rate Increases, Industry Campaign Cash To Business-Friendly Governor Pinch Pocketbooks

2012-01-26T00:03:00.000-05:00

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

Linda Sapp's reaction to her insurance bill was sticker shock: The annual premium doubled to $4,800, adding hundreds to her monthly mortgage payment. Her first thought: "There's no way I can afford my house."

***

In Boynton Beach, retiree Thomas Spatafora is on a fixed income and said he has never filed a property claim. But annual premium increases just keep on coming from the state's insurer of last resort, Citizens. "How the hell much is enough?" Spatafora said. "They keep increasing the cotton-picking premiums. Are they going to price us out of existence so we can't afford it?"

Affordability is not as popular a word as it once was in Tallahassee, where the emphasis these days is on encouraging insurance rates to rise. That is particularly true with Citizens [Florida's property/casualty insurer of last resort], the state's biggest carrier with 1.5 million policyholders.

"The true cost of living close to the coast, where hurricanes are most destructive, is much higher than Citizens policyholders have been paying," said Lane Wright, spokesman for Gov. Rick Scott. "That's because the rates have been held artificially low by politicians who've postponed the inevitable and kicked this can down the road. [...]"

Insurance interests gave more than $94,000 to Scott's campaign in the 2010 cycle, among the four industries most generous to him, according to online data compiled by the National Institute on Money in State Politics.

Private insurers stand to benefit as Citizens' bills climb, influencing the market as a whole. Scott wants legislators to consider letting Citizens raise rates beyond the 10 percent a year currently allowed.

For many customers, bigger hikes are already coming through what consumer advocates characterize as backdoor rate increases.

One way to boost premiums is to raise the projected cost of rebuilding homes, though existing home prices in many parts of Florida continue to fall and the construction industry has struggled. Software that Citizens uses to determine replacement costs is under review in South Florida and Tampa this month following consumer complaints.

Then there are reinspections that overwhelmingly tend to find homeowners no longer qualify for storm-resistant features that bring discounts, despite protests from homeowners they followed the rules the state set and later repeatedly changed. Reinspections raised Citizens premiums an average of 24 percent, or $718 a year, for 63 percent of 78,000 homes visited through Nov. 30. In 2012, reinspections are scheduled for 209,000 homes - adding $94 million to premiums at 130,000 homes statewide if trends hold.

For more, see Wind-less storm brews over skyrocketing premiums.

NM Homeowner Seeks State High Court Review Of Subprime Refinance Involving No Appriasal, Income Check That Left Couple With Unaffordable Payments

2012-01-26T00:01:00.000-05:00

In Santa Fe, New Mexico, NewsOK reports:

A Chimayo, N.M., couple remain in their home into the new year as their 2007 default on their refinanced mortgage wends its way to the New Mexico Supreme Court.

Their attorney, Joshua Simms of Albuquerque, N.M., said Joseph and Mary Romero continue to make minimal payments to the Bank of New York to stay in their family home until the legal fight is concluded.

They haven't had much success so far in the court system with their case, which has gotten the support of such groups as the Santa Fe Neighborhood Law Center, Somos Un Pueblo Unido and the Roman Catholic Archdiocese of Santa Fe.

The law center, in a court brief, called the Romeros' loan “a wild home mortgage refinancing loan based on no appraisal and no income verification.” The groups supporting the Romeros hope the case can lead to more support from the court system for those enticed into risky home mortgages.

For more, see New Mexico Supreme Court will rule on foreclosure case (A Chimayo, N.M., couple remain in their home into the new year as their 2007 default on their refinanced mortgage wends its way to the New Mexico Supreme Court).

More On Borrower Squeeze By Banksters' Force-Placed Homeowners' Insurance Racket

2012-01-25T00:07:00.000-05:00

The New York Times reports:

New York State financial services agency is investigating several large banks to see whether they fraudulently steered homeowners into overpriced insurance policies. The investigation centers on so-called force-placed insurance that has become increasingly common since the downturn of the housing market began and homeowners had trouble keeping up with payments on their home insurance.

JPMorgan Chase, Bank of America, Citigroup and Wells Fargo are among the major companies involved in the inquiry by the office of Benjamin M. Lawsky, the superintendent of New York State’s Department of Financial Services, according to a person briefed on the investigation who asked to remain unidentified because the matter was private.

***

In general, mortgage servicers are allowed to take out insurance policies on homes after a homeowner allows existing coverage to lapse. Though homeowners have little choice and sometimes little notice about the new plans, they often end up shouldering the costs of the insurance through their mortgage payments.

The increased cost is to be expected to some degree because homeowners who missed insurance payments on old policies are risky customers. However, Mr. Lawsky’s office views some of the increases as exorbitant. For instance, in one case his office is examining, a homeowner who paid $2,000 a year to State Farm ended up paying $6,000 a year to a new insurer.

Potential wrongdoing may occur when both mortgage servicing and insurance units are within the same company or affiliated in some way. That introduces a potential conflict because companies may have an incentive to place homeowners in policies offered by their affiliates rather than looking for the best rates on the open market.

For the story, see Big Banks Face Inquiry Over Home Insurance.

Homeowner/Couple Claims Russian Mob Electronically Stole Refinance Proceeds; Title Insurer To Victims: 'Get Lost - We Ain't Payin' Your Claim!'

2012-01-25T00:05:00.000-05:00

In Parker, Colorado, KMGH-TV Channel 7 reports:

A simple refinance more than two years ago has a Parker family fighting for their home after the Russian mafia allegedly stole money during a wire transfer. Now the family’s home faces foreclosure again, with a hearing scheduled for Jan. 25.

***

In September of 2009, [Kim & Tim Canning] refinanced their home with Ryan Rodenbeck of Classic Title. At some point when the funds were being transferred online to Chase Bank, $900,000 disappeared. Rodenbeck said nine $100,000 transfers were stolen -- $277,000 of that was part of the Cannings refinancing.

In 2010, Rodenbeck said he did nothing wrong and that the money was intercepted by the Russian mafia. Classic Title has since gone out of business.

Tuesday, a representative from Chase Bank said they determined Rodenbeck transferred the money without using a secure site with encryption.

***

Bank of America held the Cannings first mortgage. It was supposed to be paid off during the transfer. Since the money never made it to them, the Cannings basically have two mortgages on their home. Bank of America wants its money back so it’s foreclosing on their home.

***

But trying to get the foreclosure to stop is only half of the problem according to the Cannings.

Rodenbeck was working as an agent for Attorneys’ Title Guaranty, a title insurance company. “They could make the whole thing go away today and they chose not to,” said Kim Canning.

She said Attorneys’ Title refuses to pay their claim. Cedars asked isn’t that what insurance is for? “Correct,” said Tim Canning. “And that is the question every attorney that has looked at this (case) and every person who has any experience in this industry has asked -- why is the title company not stepped up on this?” “I want them to tell me to my face, why they are doing this, because this is a choice, they are choosing to do this to us,” said Kim Canning. No one from Attorneys’ Title would return phone calls from 7NEWS [].

The Cannings went to the state Department of Regulatory Agency, known as DORA for help. “We've been told that is what DORA is there for," said Kim Canning. She said DORA should be able to force them to pay the claim.

In a statement to 7NEWS, DORA said, “We continue to monitor the situation to ensure the title company is fulfilling its obligation.”

For the story, see Stolen Wire Transfer Leaves Family In Foreclosure (Russian Mob Allegedly Stole Refinance Money).

Bay State Regulator Strips Sticky-Fingered Broker Of Real Estate License; Writing Rubber Check, Failure To Return Buyer's Deposit Among Dirty Deeds

2012-01-25T00:03:00.000-05:00

In Marblehead, Massachusetts, The Salem News reports:

The state board that oversees real estate brokers has revoked the license of a Marblehead man who allegedly failed to turn over deposits to a seller and a buyer, as well as a commission owed to another broker, in real estate transactions he handled in 2010.

Barry A. Rosenberg's license was revoked effective Oct. 8, the Board of Registration of Real Estate Brokers and Salespersons announced in a press release yesterday, after Rosenberg failed to respond to requests for information or documentation concerning the complaints.

According to findings issued by the board, Rosenberg handled the sale of a property on Sayward Street in Gloucester, as well as two properties in Chelsea, during the summer and fall of 2010.

The board found that in the first Chelsea transaction, Rosenberg sent the seller's attorney a check for $9,665 that later bounced.

He then allegedly handled the sale of the Gloucester property but failed to pay a commission to another broker that was spelled out under the Multiple Listing Service agreement.

In October 2010, he was given a deposit to put in escrow by the buyer of another Chelsea property, but when the seller backed out of the deal and took the property off the market, Rosenberg failed to return the $10,600 deposit to the potential buyer.

For more, see Marblehead real estate broker loses license.

Pair Cop Guilty Pleas in Scams Involving Use Of Forged Mortgage Satisfactions, Rent Skimming To Screw Over Banks, Landlords

2012-01-25T00:01:00.000-05:00

From the Office of the U.S. Attorney (District of Columbia):

The owners of a property management company, Bryan W. Talbott, 48, and Chester D. Ransom, Jr., 44, have pleaded guilty to defrauding their clients, mortgage lenders, and the government out of more than $2.8 million.

***

According to the government’s evidence, Talbott was the president and Ransom was the vice president of a property management company located in Washington, D.C., that operated under multiple names, including Esquire LLC, Federal City Mowbray, and Private Properties Inc. (collectively referred to as “Esquire”). The defendants also lived together at a residence on North Portal Drive NW, Washington, D.C.

From 2004 to the present, the defendants engaged in three separate fraudulent schemes, resulting in more than $2.8 million in losses to the victims.

As part of [one of] their fraudulent scheme[s], the defendants frequently collected rental payments from tenants but did not pay the bills for the properties, despite falsely representing to the property owners that the bills had been paid. Instead, the defendants used these funds for their own benefit. In addition, the defendants also sent forged bank statements to some of their clients, misstating the balances in their clients’ accounts.

Through this fraudulent scheme, the defendants defrauded at least 54 clients out of a total of $1,269,278.

[In another fraudulent scheme,] On June 30, 2004, Ransom purchased the property on North Portal Drive NW for $975,000, financing the purchase, in part, with two loans in the total amount of $731,250 from WMC Mortgage Corp. , a mortgage lender. Ransom executed two deeds of trust on the property, granting WMC a security interest in the property.

On December 29, 2005, Ransom filed with the District of Columbia Recorder of Deeds two forged Certificates of Satisfaction, purporting to release the WMC liens on the Portal property.

Then, on January 13, 2006, Ransom sold the Portal property to Talbott for $1,110,000. The defendants provided copies of the forged lien releases to the settlement company. Talbott obtained a loan in the amount of $750,000 from Fremont Investment and Loan. Talbott executed a deed of trust on the property, granting Fremont a security interest in the property. Ransom received a check in the amount of $515,034 from the settlement.

Less than a month later, on February 2, 2006, Ransom again “sold” the Portal property to Talbott, this time for $1,250,000, despite the fact that Talbott was already the legal owner.

The defendants provided copies of the forged lien releases to the settlement company. Talbott obtained a loan of $890,000 from First National Bank of Arizona. Talbott executed a deed of trust on the property, granting First National Bank of Arizona a security interest in the property. Ransom received a check in the amount of $801,280 from the settlement.

For the U.S. Attorney press release, see Owners of Property Management Company Plead Guilty To Defrauding Clients, Mortgage Lenders and Government (Scheme Involved More Than $2.8 Million).

Illinois AG Tags Two With Criminal Charges For Allegedly Promising To Save Homeowners From Foreclosure By Peddling Sale Leaseback Schemes

2012-01-24T00:07:00.000-05:00

From the Office of the Illinois Attorney General:

Attorney General Lisa Madigan announced the arrest of a Chicago man who stole more than $350,000 in a wide-reaching mortgage fraud scheme in which they promised to help desperate homeowners avoid foreclosure.

Madigan said defendant Warren Jackson, 41, of Chicago, was arrested late Thursday and is being held in Cook County jail. Yolanda King, 46, of Chicago, who was also charged in the scheme, was arrested on Jan. 10. Both were formally indicted earlier this month.

Jackson was charged with one count of organizing a continuing financial crimes enterprise, four counts of financial institution fraud and three counts of theft by deception, one count of criminal mortgage rescue fraud, one count of forgery by delivery, and one count of false impersonation of an attorney. King was charged with two counts of financial institution fraud and one count of forgery by delivery.

***

Jackson and King are facing six to 30 years and four to 15 years in the Illinois Department of Corrections, respectively.

Madigan alleges that Jackson orchestrated two mortgage-related schemes involving Chicago homeowners. King was charged for her role in helping Jackson perpetuate these schemes. The first scam targeted homeowners at risk of foreclosure, promising to save their homes by negotiating lower mortgage payments. Madigan alleges that after collecting upfront fees, Jackson failed to negotiate or perform any services on behalf of the homeowners, placing their victims at even greater risk of foreclosure.

In the second scheme, called a “sale-leaseback” to purportedly save the homeowner’s home,(1) Jackson used straw buyers to purchase homes from distressed homeowners, sometimes falsely promising them that they could pay rent for a year and then could potentially buy back the property. Jackson also tricked homeowners into unknowingly selling their homes to straw buyers by leading them to believe that they were signing paperwork for a new loan to help them avoid foreclosure.

Madigan alleges that Jackson used the sale-leaseback scheme to transfer title from homeowners to straw buyers for the purpose of stripping the remaining equity from the home. Individual homeowners lost from $70,000 to $150,000 of equity in their homes as a result of the schemes.(2)

For the Illinois AG press release, see Madigan: Two Chicago Con Artists Arrested In Criminal Mortgage Scheme.

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

Criminal Prosecutions Of Sale Leaseback Peddlers In Equity Stripping Foreclosure Rescue Deals;
Dreams Foreclosed: The Rampant Theft of Americans' Homes Through Equity-stripping Foreclosure 'Rescue' Scams (June 2005).

(2) At one time, many in state and local law enforcement (particularly those with untrained eyes and who were otherwise clueless in handling 'semi-sophisticated' white collar crimes - for some, anything more complex than investigating a 'rubber check' case is 'semi-sophisticated') once passed on prosecuting these sale leaseback equity stripping ripoffs that under the flimsy pretense that these cases were merely 'civil matters.'

Over the last couple of years, it's been primarily the Feds (U.S. Attorneys, FBI, Secret Service, etc.) that have been bringing prosecutions in these equity stripping ripoffs. However, as this story reflects, more and more state court prosecutors now appear to be stepping up to the plate and showing some guts by bringing criminal charges against these scammers. See, for example:

Sale Leaseback Equity Stripping Peddler 'Scores' Guilty Verdict In Equity Stripping Ripoff; Grand Larceny, Scheme To Defraud, Conspiracy, Says Jury (Prosecuted by the Westchester County, NY District Attorney, a scammer who swindled four local families out of their homes was convicted after a jury trial of four felony counts of second-degree grand larceny and one each of first-degree scheme to defraud and fourth-degree conspiracy),

Convicted Foreclosure Rescue Scammer Could Face Life Sentence On New Charges In Alleged Sale Leaseback, Equity Stripping Ripoff That Fleeced 5 Victims (Los Angeles District Attorney charged alleged scammer with 23 felonies — including theft from the elderly, identity theft and real estate fraud — for allegedly tricking five people into unknowingly granting him title to their homes, and charged him under California's 'three-strikes' law),

Foreclosure Rescue Scam Mastermind Found Guilty Of Dozens Of Felonies; Ran Upfront Fee Land Grant Scheme, Sale Leaseback Rent Skimming Racket (After an eight-week trial, and through the efforts of the San Diego District Attorney, a scammer was found guilty of 160 counts of conspiracy to commit grand theft, grand theft, rent skimming and deceitful practices by a foreclosure consultant),

Delaware AG Levels 21-Count Indictment Against Alleged Foreclosure Rescue Racket Using "Divine" Cover In Sale Leaseback, Equity Stripping Ripoff (The Delaware Attorney General obtained an indictment alleging that the scammer ran a criminal enterprise involving theft, money laundering, and forgery in which he preyed on vulnerable homeowners who faced imminent foreclosure),

Central Florida Sale Leaseback Peddler Linked To 50 Ripoff Deals Gets 10 Years On Racketeering Charge; Targeted Cash-Strapped, High-Equity Homeowners (A joint prosecution by the Orange County, Florida and the state attorney general (under former AG Bill McCollum) led to the scammer copping a plea to a single count of felony racketeering after initially being charged with 12 first-degree felony counts, including racketeering, conspiracy to commit racketeering and numerous counts of grand theft),

NY AG Squeezes Guilty Pleas From 4 For Roles In Alleged Sale Leaseback, Equity Stripping Foreclosure Rescue Racket; 1 Awaits Trial On 23 Felony Counts (After a New York Attorney General prosecution, four employees of a sale leaseback racket pleaded guilty in Albany County to felony charges that included grand larceny, scheme to defraud and falsifying business records, after the Attorney General's Office filed criminal complaints),

Queens DA Bags Seventeen Suspects In Alleged Sale Leaseback, Equity Stripping Foreclosure Rescue Racket (Queens County, NY DA (joined in the probe by the office of the New York State Banking Department and the New York State Police) variously charged the defendants with first- and second-degree grand larceny, first degree criminal possession of stolen property, first-degree money laundering, first-degree identity theft, second-degree forgery, second-degree criminal possession of a forged instrument, first-degree falsifying business records, first-degree offering a false instrument for filing, first-degree scheme to defraud and fourth-degree criminal facilitation.).

Disgraced Ex-Lawyer Gets 15 Years For Role In At Least 102 Chicago-Area Sale Leaseback-Peddling, Equity Stripping Ripoffs

2012-01-24T00:05:00.000-05:00

From the Office of the U.S. Attorney (Chicago, Illinois):

A former Chicago lawyer was sentenced to 15 years in federal prison for engaging in mortgage and bankruptcy fraud schemes involving a so-called “mortgage bailout” program that purported to “rescue” financially distressed homeowners but instead tricked victims into relinquishing title to their homes and declaring bankruptcy.

The defendant, Norton Helton, participated in at least 102 fraudulent mortgage bailout transactions and more than a dozen fraudulent bankruptcies in 2004 and 2005. He was ordered to pay more than $3.2 million in mandatory restitution to various lenders and financial institutions that were not repaid by the borrowers or fully recovered through subsequent foreclosure sales, federal law enforcement officials announced [].

Helton, 50, of Atlanta and formerly of Chicago, was sentenced Wednesday by U.S. District Judge Samuel Der-Yeghiayan in federal court in Chicago. He was ordered to begin serving his sentence in June.

Helton and two co-defendants, Charles White and Felicia Ford, were convicted of multiple fraud counts following a five-week trial in June and July 2010. White, 43, of Chicago, was sentenced late last year to more than 22 years in prison, while Ford, 39, of Chicago, is awaiting sentencing next month.

White owned and operated Eyes Have Not Seen (EHNS), which purported to offer insolvent homeowners mortgage bailout services that would prevent them from losing their homes in foreclosure by selling their property to third-party investors for whom the defendants fraudulently obtained mortgage financing.

The victim-clients were assured they could continue living in their homes rent and mortgage-free for a year while they attempted to eliminate their debt and repair their credit.

EHNS misled clients concerning the operation of the purported program. In particular, victim-clients were not told that their homes were, in fact, being sold to third parties and that ENHS would strip their homes of any available equity at the time of sale, which EHNS did.

Instead, ENHS clients were told that they were only temporarily transferring their homes and would preserve their ownership rights.

Helton was recruited by White to represent ENHS participants at the real estate transactions it orchestrated. The victim-clients typically met Helton for the first time at the closings at which they sold their homes. Helton worked to placate individuals who questioned the program and to dissuade them from retaining independent legal advice.

He received above-market legal fees for appearing at closings at which he did little more than guide victim-clients through the paperwork that sold their homes with EHNS receiving all of the profits from the sale. Helton further used the ENHS real estate closings to recruit prospective bankruptcy clients, informing them that bankruptcy would serve as a component of the bailout program. Helton subsequently filed more than a dozen bankruptcy petitions for victim-clients that omitted any reference to their recent EHNS property sales.

In addition to participating in ENHS’s bailout program, Helton attempted to implement his own mortgage bailout program through Diamond Management of Chicago, Inc., a foreclosure avoidance company comparable to EHNS. Helton marketed Diamond’s bailout program and his bankruptcy services as part of a “credit repair” system.(1)

For the U.S. Attorney press release, see Former Chicago Lawyer Sentenced to 15 Years in Prison for Mortgage Fraud Involving At Least 102 Fraudulent “Bailouts.”

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

Criminal Prosecutions Of Sale Leaseback Peddlers In Equity Stripping Foreclosure Rescue Deals;
Dreams Foreclosed: The Rampant Theft of Americans' Homes Through Equity-stripping Foreclosure 'Rescue' Scams (June 2005).

Feds Continue 'Pinch' On F'closure Rescue, Sale Leaseback Peddlers As Pair Get Tagged w/ Indictment In Equity Stripping Racket That Fleeced Homeowners

2012-01-24T00:03:00.000-05:00

In Norfolk, Virginia, The Virginian Pilot reports:

Two Chesapeake men have been indicted by a Norfolk federal grand jury on nine charges related to an alleged foreclosure rescue scheme, federal officials announced Thursday. The charges against Philip Villasis, 41, and Ray D. Gata, 56, include conspiracy to commit wire fraud, wire fraud and money laundering.

***

From November 2006 until February 2011, “Villasis and Gata engaged in a foreclosure rescue scheme that defrauded homeowners and mortgage lenders,” according to the indictment as cited in the government announcement.

Villasis allegedly “promised homeowners that he could save them from foreclosure by arranging a sale of their homes to Gata and other straw borrowers.”

Homeowners were promised that they could stay in their homes after the sale and pay rent, and Villasis would resell their homes back to them once they were “more financially secure,” according to the government’s announcement.

“Villasis and Gata profited from this scheme by taking all of the proceeds from the home sales,” it states.

The pair are alleged to have “executed false closing documents that showed the proceeds of the sale going back to the homeowners when, in fact, the proceeds were going to Villasis, Gata and the other straw borrowers.”

Homeowners, according to the government, “received nothing from the sale of their homes while Villasis, Gata and others received in excess of $170,000.”

“In almost every case, Villasis required the homeowners to pay more in rent to cover a larger mortgage, and he ultimately evicted these homeowners from their homes,” the government’s release states.(1)

For the story, see Two Chesapeake men indicted in alleged foreclosure scam.

For the U.S. Attorney (Norfolk, Virginia) press release, see Chesapeake Men Indicted for Foreclosure Rescue Scheme.

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

Criminal Prosecutions Of Sale Leaseback Peddlers In Equity Stripping Foreclosure Rescue Deals;
Dreams Foreclosed: The Rampant Theft of Americans' Homes Through Equity-stripping Foreclosure 'Rescue' Scams (June 2005).

F'closure Sale Bid-Rigging Outfit Gets Break On Paying Fines After Guilty Plea For Sherman Act Violations; Aid To Feds Helps Bag 2 Add'l Confederates

2012-01-24T00:01:00.000-05:00

In Mobile, Alabama, the Press Register reports:

A local company will pay a $250,000 fine plus restitution for rigging real estate foreclosure auctions, a federal judge ruled this afternoon. U.S. District Judge Ginny Granade endorsed the deal worked out between prosecutors and attorneys for M&B Builders. Company co-owner Harold H. Buchman, who appeared on behalf of the corporation [], faces 6 months in jail and a $21,141 fine at his sentencing hearing in April.

Defense attorney Donald Briskman said in an interview that M&B Builders will take a hit. “It’s not a positive effect, but it’s something they are going to work towards satisfying,” he said.

Buchman, along with his firm and Allen K. French pleaded guilty in October to violating the Sherman Anti-Trust Act in a scheme dating to May 2001.

***

The company’s fine could have been worse under advisory sentencing guidelines, which laid out a range of more than $300,000 to more than $500,000.

But attorneys from the U.S. Department of Justice recommended the lower amount because of the company’s cooperation, which officials indicated led to the prosecution of 2 other real estate investors or participated in the fixed auctions.(1)

In addition to French, Bobby Threlkeld Jr., pleaded guilty in December.

For more, see Mobile company fined $250,000, ordered to pay restitution for fixing foreclosure auctions.

Go here for other posts & links on bid rigging at foreclosure and other real estate-related auctions.

Go here for links to more from the U.S. Justice Department on bid-rigging prosecutions, generally.

(1) The more confederates a 'squealing' defendant can 'throw under the bus', the better the break on the plea deal he can expect a prosecutor to cut (and a judge might approve).

"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 phenomenon some refer to as the 'race to the courthouse' (or 'race to the prosecutor's office') that breaks out among participants in an 'about-to-collapse' criminal conspiracy).

Brooklyn Judge Voids Foreclosure Forbearance Agreement; Sneaky Bankster Slicked Unrepresented Homeowner Into Signing One-Sided Deal

2012-01-23T00:07:00.000-05:00

In Brooklyn, New York, Reuters reports:

A Brooklyn judge has voided what she deemed an "unconscionable" forbearance agreement that required a mortgage holder to drop his legal defense against foreclosure proceedings in exchange for reduced payments that the judge said provided him "little, if any benefit."

In a ruling dated January 6, Kings County Supreme Court Justice Marsha Steinhardt slammed the forbearance agreement struck between Brooklyn homeowner Jaime Arroyo and the company that bought his mortgage, Rossrock Fund II LP, saying the company and its counsel took advantage of the unrepresented homeowner to draft a one-sided deal.

***

"An examination of the terms of the agreement and the circumstances of its execution reveal a transaction which is ostensibly designed to ease the foreclosure process in favor of the plaintiff while affording virtually no benefit to Arroyo," Steinhardt wrote. "Under these circumstances, the court finds that the subject agreement is unconscionable and employs its equitable powers to rescind the agreement."

Sara Manaugh, a staff attorney in the Foreclosure Prevention Project at South Brooklyn Legal Services,(1) said she had rarely encountered an agreement "so plainly calculated to divest the homeowner or his or her home."

For more, see Brooklyn judge rescinds unfair forebearance deal.

For the court ruling, see Rossrock Fund II LP v Arroyo, 2012 NY Slip Op 50048(U) (NY Sup. Ct. Kings Cty., January 9, 2012).

(1) South Brooklyn Legal Services is a non-profit law firm that provides a range of legal advocacy and information for low-income people in Brooklyn. SBLS is a program of Legal Services NYC.

Mich. Woman Gets Up To 12 Months, Ordered To Pay $36K+ Restitution For Running Loan Mod Racket; Employee Gets 45 Days To Be Served Three Days/Week

2012-01-23T00:05:00.000-05:00

In Allegan County, Michigan, The Allegan County News reports:

A former Fennville woman will spend up to one year in jail after defrauding several dozen homeowners through her foreclosure rescue company. Tonya Raisbeck, 36, stood before Allegan Circuit Court Judge Margaret Zuzich Bakker on Friday, Jan. 13, and said she knew people questioned her intentions.

***

Through her business, Mobile Modification Inc., Raisbeck accepted payments from homeowners in exchange for what they were told would be help in adjusting the terms of their mortgages; many faced foreclosure and were hoping to keep ownership of their homes. Raisbeck has been self-employed since 1999 and had been a real estate agent.

Representing the state attorney general’s office was Scott Teter, who said 43 victims contacted his office; he said 35 lost their homes. The attorney general’s office announced the charges against Raisbeck and her company and eight others in July 2010.

***

Bakker sentenced Raisbeck to one year in Allegan County Jail with credit for one day served for false pretenses, $1,000 to $20,000. Raisbeck will be on probation for five years and, in addition to court costs and fees, will also have to pay $36,417 in restitution.

She received similar, concurrent sentences for one other count of false pretenses and one count of conspiracy to commit false pretenses.

Bakker also sentenced Raisbeck to concurrent sentences of 90 days jail with credit for one day served for each of five violations of the Credit Services Act.

Bakker said Raisbeck economically destroyed her victims. “The extensive, ongoing victimization that occurred...it’s phenomenal,” Bakker said. She said property crimes like this can trigger a chain of events that can ruin families. “To take away a family’s funds...results in so many ongoing effects; they can lose their mortgage, their home, their job, sometimes their spouse—sometimes their lives (through suicide).”

***

Also on Jan. 13, Bakker sentenced Raisbeck’s one employee at Mobile Modification to 45 days jail to be served Tuesday through Thursday at Allegan County Jail. Jessica Sheldon, 32, pleaded no contest to one count of false pretenses in exchange for the prosecution dropping the remaining charges. Sheldon was also sentenced to three years probation and must pay court costs and fees along with $6,559 in restitution, joint and several with Raisbeck.

For the story, see ‘One-woman crime wave’ sentenced.

Lawsuit: Bankster Played "Hide & Seek" With Debtors, Judges, Others In Battling Tens Of Thousands Of Bankrupt Homeowners; Action Seeks Class Status

2012-01-23T00:03:00.000-05:00

In Los Angeles, California, Courthouse News Service reports:

JPMorgan Chase routinely fabricated documents to deceive bankruptcy judges, going so far as to Photoshop documents to "create the illusion" of standing "in tens of thousands of bankruptcy cases," according to a federal class action.

Lead plaintiff Ernest Michael Bakenie claims that Chase's "pattern and practice of playing 'hide-and-seek' with debtors, judges and other bankruptcy players" bore rich fruit: that Chase secured motions for relief of stay and proofs of claim in 95 percent of its cases.

"Through the use of fabricated assignments, endorsements and affidavits that purport to transfer deeds of trust, notes and the rights to all monies due under the terms of tens of thousands of non-negotiable promissory notes (the 'MLNs'); Chase has demonstrated a pattern and practice of playing 'hide-and-seek' with debtors, judges and other bankruptcy players," the complaint states.

For more, see Chase Accused of Brazen Bankruptcy Fraud.

For the lawsuit, see Bakenie v. JPMorgan Chase Bank, et al.

Recent Michigan Appeals Court Foreclosure Ruling Expected To Affect Similar Suits Impacting On Lenders' Failure To Record Mortgage Assignments

2012-01-23T00:01:00.000-05:00

In Shelby Township, Michigan, The Oakland Press reports:

A Shelby Township couple won a state Court of Appeals precedent-setting ruling that stops a foreclosure and allows them for now to keep their home that was once worth $650,000.

Husband-and-wife Eui H. and In Sook Kim gained a reversal of a Macomb County judge’s dismissal of their lawsuit against JP Morgan Chase Bank. The couple won because the bank failed to publicly record its interest in the mortgage after buying it from another bank, and before the sheriff’s sale.

The Kims’ attorney, Flint-based Bernhardt “Chris” Christenson, said the “for publication” decision likely will affect the outcome of other similar lawsuits and force banks to reveal it owns a mortgage before it can foreclose on a property. “Somebody will know who’s foreclosing on their house,” Christenson said. “Things (mortgages) change hands so frequently nowadays. You could be talking to one bank and they aren’t even the ones that have the mortgage.”

JP Morgan’s acquiring and interest in the property should have been recorded with the Macomb County Register of the Deeds, Christenson said. He said the bank likely avoided recording its interest to save filing costs, which could add up to a large sum of money if done on thousands of foreclosures.

For more, see Precedent-setting ruling that stops foreclosure could help other homeowners.

For the court ruling, see Kim v. JP Morgan Chase Bank, No. 302528 (Mich. Ct. of App., January 12, 2012).

Another Homeowner Driven Into F'closure Over Misapplied Mortgage Payments; Bankster Refuses To Admit Error Until Media, State AG, US Senator Intervene

2012-01-22T00:07:00.000-05:00

In East Pennsboro Township, Pennsylvania, The Patriot News reports:

Citimortgage received a $20 billion government bailout on grounds it’s “too big to fail.” Fortunately, Citi isn’t too big to admit a mistake — although not fast enough to impress Myrna Hoke, whose daughter nearly lost her East Pennsboro Twp. home over an error by Citi.

"It’s been unbelievably stressful,” said Hoke, 65, who spent months untangling the situation and sweated until minutes before a planned Jan. 4 sheriff’s sale.

Hoke’s daughter, Christina May, went through a divorce and bankruptcy several years ago, and Hoke and her husband took over the $880 monthly mortgage.

In 2010, Citi mistakenly applied mortgage payments to bankruptcy-related legal costs that had already been paid and declared the mortgage in default over missed payments.

Hoke didn’t know anything was amiss until a foreclosure noticed arrived in late 2010. She spent months figuring out what went wrong, proving the mistake to Citi, and fending off sheriff’s sale of the house where her daughter and three grandchildren have lived for 11 years.

It took the involvement of the Pennsylvania Attorney General’s Office, which helped obtain a refund of the five mortgage payments Citi had mistakenly applied to legal fees.

Still, in order to reinstate the mortgage and call off a sheriff’s sale scheduled for early December, Citi wanted an immediate lump sump payment covering all missed payments since Citi stopped accepting them in 2010, plus late charges. That amount eventually topped $14,000.

Citi turned down requests from The Patriot-News to discuss the situation. Hoke said she wouldn’t pay the fees, on the grounds the situation was Citi’s fault. Hoke, who has a mortgage of her own, further argued Citi should tack the missed payments onto the end of the loan, rather than require her to pay so much at once.

Citi called off a sheriff’s sale scheduled for early December at the last minute as Hoke frantically argued her case and The Patriot-News also pressed for information.

After reading about the situation in The Patriot-News, the staff of U.S. Sen. Bob Casey Jr. also contacted Citi, which eventually said it would waive late charges and accept $12,481 to reinstate the mortgage and call off the sale, now scheduled for Jan. 4.

But Citi wanted the money immediately, and told Hoke that, otherwise, the home would be sold on Jan. 4. Hoke had to cash in an investment and use much of the Christmas bonus of her husband, an electrician who supervises trades workers at a nuclear power plant in Mississippi, where he spends much of the year.

After agreeing on the $12,481, Citi called almost daily to ask when she would pay, Hoke said. She said she wired payment to Citi late on Friday, Dec. 31 — just before the New Year’s holiday. But she said she was surprised to call the Cumberland County Courthouse early on Jan. 4 and find the house still scheduled for sheriff’s sale.

That prompted another round of panic for Hoke, along with calls to Citi and Casey’s office. It turned out Citi had tried to inform the Cumberland County sheriff’s department by fax the previous day, but the fax hadn’t gone through, said Jody Smith, the chief deputy. However, a lawyer who arrived to represent Citi on several properties said Citi had informed her the sale of the East Pennsboro home was called off.

Meanwhile, Hoke said she was appalled by such behavior on the part of a company that received so much taxpayer aid. She contends Citi should have taken more aggressive steps to resolve the problem, and removed the threat of sheriff’s sale as soon as it realized its error caused the foreclosure “They should have said, ‘We were totally wrong, we have to do what we need to do to stop this foreclosure and do what we need to do to correct this,’” she said.

In responding to one of The Patriot-News’ requests to discuss the matter, a Citi spokesman said it would require Hoke’s permission. But after Hoke granted permission, the spokesman said it was Citi’s policy not to discuss such cases.

For the story, see East Pennsboro Township woman nearly loses her home over error made by Citimortgage.

Foreclosure Sweatshop Operator Takes Scolding From Judge Over Sloppy Work; Ordered To Continue Personal Court Appearances Until Each File Is Corrected

2012-01-22T00:05:00.000-05:00

In Poughkeepsie, New York, the New York Post reports:

Take that, Steven Baum! The 50-year-old lawyer, who owns New York’s largest home-foreclosure mill, made a rare appearance in a courtroom [recently] — and was promptly ripped by a Bankruptcy Court judge frustrated by his firm’s sloppy work.

Baum, whose eponymous firm has filed more than 25,000 foreclosure actions across the state over the past three years — many of which have been attacked for containing bogus documents — was lectured by Judge Cecilia Morris to correct his way of practicing law.

“How many times do I have to tell you, you didn’t do it right,” Morris said during the afternoon hearing. “Do you not understand ‘do it right’?” she asked Baum.

Morris had ordered Baum to appear in her courtroom personally after a steady stream of his firm’s lawyers mucked up several of the 180 foreclosure cases he has before the New York federal courts.

The judge accused Baum of “slowing down the court” by failing to properly transfer his cases to other lawyers as he prepared to shutter his Buffalo-area firm. [...] “Please don’t make me angry,” Morris warned.

The hearing in the Poughkeepsie courtroom was attended by several bankruptcy lawyers who have sparred with Baum in the past, who said afterwards that they were there just to see Baum sweat.

***

Apparently not happy with his responses to questions, Morris ordered Baum to make repeat appearances in her courtroom until “each file” is corrected. “I’m telling you, you are walking on bad faith,” Morris said.

For the story, see He’s losing his appeal (Judge gives foreclosure king the Baum’s rush).

State AG Jumps Into Utah Homeowner's Foreclosure Case; Moves To Intervene, Contesting Adverse Court Ruling Holding Federal, Texas Law Trumps Local Law

2012-01-22T00:03:00.000-05:00

In Salt Lake City, Utah, KCSG-TV Channels 14/16 report:

The Utah Attorney General has moved to intervene in a case filed by St. George attorney John Christian Barlow on behalf of Utah homeowner Garry Franklin Garrett in which senior Federal Judge David Sam ruled the Bank of America's foreclosure arm, ReconTrust Company, N.A. is operating under the National Bank Act regulated by the Office of the Comptroller of the Currency, is a trustee under the Texas law where ReconTrust is located, rendering Utah Code 57-1-21(3) inapplicable.

The Attorney General's Motion to Intervene and Memorandum of Support of Intervention written by Assistant Attorney General Jerrold Jensen said, "Utah is a non-judicial foreclosure State and that most real estate foreclosures in Utah never see the inside of a courtroom."

The pleading says that "in the last couple of years, as the number of foreclosures has escalated, there has been an increasing interest among homeowners who believe they have been wronged by their lender or mortgage servicer to challenge these foreclosure actions in court."

For more, see Utah Attorney General Moves to Intervene in Federal Judge's Ruling Utah Foreclosure Trustee Law Inapplicable.

Homeowner In Foreclosure Has Possession Of Vacated Home Swiped Out From Under; Cops Refuse Help, Say It's A Civil Matter

2012-01-22T00:01:00.000-05:00

In Bakersfield, California, KGET-TV Channel 17 reports:

A viewer e-mailed 17 News, saying squatters have taken over his southwest Bakersfield home. He says no one will help get them out. "I was very naive, foolish you might say. I wanted to help them," said Juan Medina.

Juan Medina is packing up for a new life in Tehachapi. A messy divorce in 2008 left him with a house payment he could no longer afford. While trying to modify his loan, his southwest Bakersfield home was empty. Two months ago, he says he returned and discovered people living there.

"I went to the garage and the garage was locked with a different padlock, went to the front door and my keys did not work. I felt really bad for them. I had heard so many families get in trouble because they had been lied to. My first thought wasn't to kick them out. My first thought was to help," explained Medina.

The family told Medina they have a rental agreement with a local relator, but has yet to show him the document. Medina showed 17 News the deed to his home. He is the legal owner. But, he is trying to turn it over to the bank to avoid foreclosure.

However, that can't happen because Medina says the bank requires it to be empty and clean. "There's an unaccountable amount of dogs and cats running through the house, in the backyard, large dogs. It smells like feces and urine inside," he continued.

We followed Medina to his home. A man told us his sister lives in the home and has a rental agreement. "The cops were here yesterday and she showed cops. It has nothing to do with you guys," he said. A woman inside the home wouldn't come out and no one showed us the rental agreement. "I just want to speak to you for two minutes," Medina told the woman through the door. "Serve me a 30-day notice. Please leave me alone," she responded.

Medina said Bakersfield police officers came to the home, but they couldn't kick the family out. "Unless we can prove that the proclaimed renter knew that the situation was fraudulent from the very beginning, our hands are tied. It's a civil situation," said Sgt. Mary DeGeare, Bakersfield Police Department.

For the story, see 17 News investigation: Man says squatters have taken over his home.

Court To Slum-Financing Lender: Cough Up The Repair Cash; Bank Learns It 'Can't Just Wash Its Hands & Walk Away'

2012-01-21T00:07:00.001-05:00

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

City Council Speaker Christine Quinn on Tuesday was touting a court decision to hold a bank responsible for repairs to a dilapidated Brooklyn tenement. “I think this is really a precedent-setting decision,” the mayoral hopeful said. “The buck finally stops somewhere for tenents in the city of New York.”

Six elderly and disabled tenants at 294 5th Avenue in Park Slope filed a motion in May 2011 after two years of living with deteriorating conditions since the building’s owner defaulted on a $1.85 million mortgage. The tenants were living with on-and-off heat and hot water, no trash collection, an unsecured front door and a roof in danger of collapse.

The building has 109 open violations, including seven “immediately hazardous” violations, according to the New York City Department of Housing Preservation and Development. The decision by Judge Sylvia O. Hinds-Radix on Dec. 20 orders the National Bank of New York City to pay a receiver who is responsible for overseeing repairs when the rent doesn’t cover the fixes.

Shira Galinsky, a senior Staff attorney at South Brooklyn Legal Services, which handled the case, said the case will lead to banks being “held responsible for bad lending.”

Quinn said the decision can be cited by tenants in future cases to force banks to pay for repairs when a foreclosure had been initiated and a receiver is in place to oversee repairs. "It says that the mortgage holders are not without responsibility,” Quinn said, “that they can’t just wash their hands and walk away.”

Source: Christine Quinn touts case which could lead to banks being 'held responsible for bad lending' (Court holds bank responsible for repairs to Brooklyn tenement).

Court Strips Landlord Of Control Over Dilapidated Buildings Innundated With Code Violations; Gives Hope To Dozens Of Poor, Boot-Fearing Residents

2012-01-21T00:05:00.000-05:00

In St. Paul, Minnesota, the Star Tribune reports:

Halima Eidl lives in a St. Paul apartment that has urine-stained carpet and also mold, mice, roaches and rats. Despite that, she isn't looking to move. But Eidl and about five dozen of the city's poorest families could find themselves homeless later this month.

The families live in two East Side apartment buildings that are on the verge of bank foreclosure, city condemnation or orders for eviction. Because money is short, moving isn't possible for most tenants, including Eidl and her daughters, Rashida Eidl, 17, and Maidah Ali, 11. Halima Eidl said owners Peggy and Randall Chun repeatedly ignore requests to fix problems.

***

In early December, an inspection of the two buildings [...] yielded nearly 300 code violations -- an appalling number to City Council members. The buildings each have about 30 rental units and also have produced a substantial history of police calls for thefts, drug dealing and prostitution.

***

Wells Fargo filed in Ramsey County District Court to foreclose on the Chuns for the $3.1 million mortgage on the buildings, [...]. The bank will ask a judge [] to appoint a receiver who could begin repairs on the battered properties.

For more, see Families face eviction from infested St. Paul apartments (The landlords said they will make the necessary repairs on the rundown East Side property, but it may be too little too late).

For story updates, see:

Judge to appoint receiver for shabby St. Paul apartments,
Troubled east St. Paul buildings to change hands (New receiver will have to decide whether to fix the apartment units or to declare them uninhabitable).

Man Pinched For Setting Up Indoor Pot Farm In Foreclosed Dad's House; Said He Decided To Grow His Own Stash After Being Burned By Local Pot Peddlers

2012-01-21T00:03:00.000-05:00

In Sheboygan Falls, Wisconsin, the Sheboygan Press reports:

A marijuana growing operation discovered when the locks on a house were changed during foreclosure led to charges Friday for a 43-year-old Sheboygan Falls man. Brock O. Bizzell, [...] is charged with marijuana manufacturing, maintaining a drug trafficking place and marijuana possession, felonies punishable by up to eight years in prison.

Bizzell was arrested Wednesday after police raided a house at W3180 Highway PP and seized 40 marijuana plants and an array of related equipment. Sheboygan Falls Police Chief Steve Riffel called it a "large-scale and elaborate growing operation."

***

[According to a criminal complaint,] Bizzell admitted to growing the marijuana but claimed it was only for personal use. He told police he was sick of getting burned by the people he bought marijuana from and decided two months prior to start growing his own. Bizzell did not live at the home, which had belonged to his father.

For the story, see Foreclosure helps uncover marijuana growing operation.

Cops: 'Disappointed' Homeowner Threatened To Shoot Judge After F'closure Hearing, Telling Paralegal He Was Taking Bomb, Missiles, Gun Into Courthouse

2012-01-21T00:01:00.000-05:00

In Lakeland, Florida, The Ledger reports:

A Lakeland man is accused of threatening to shoot a Polk judge after a foreclosure hearing, deputies said. Walter E. Norris, 55, was arrested Friday and charged with threatening to discharge a destructive device.

Norris called his lawyer [...] and told a paralegal that he was going to take a bomb, missiles and a gun into the courthouse, according to an arrest report. The law firm's security division contacted deputies.

Norris was released Saturday on a $5,000 bail, according to records.

Source: Man Accused of Courthouse Plot, Threatening to Shoot Judge at Hearing.

Another Would-Be Tenant Clipped By Rent-Skimming Property Owner; Kicks Herself For Not Checking Out Home's Foreclosure Status Before Signing Lease

2012-01-20T00:05:00.000-05:00

In Augusta, Georgia, WRDW-TV Channel 12 reports:

An Augusta woman thought she found her dream home only to be forced to move out weeks after signing the lease. April Williams fell in love with the two-bedroom, one-bath cottage on McDowell Street as soon as she stepped through the front door.

"Once I seen it I said, 'This is the spot for me. This is where I want to be,'" she said. She signed a year lease after two long months of searching for the perfect, affordable home. "It was right at $1,300 because I had to pay the $650 deposit and the $650 to move in," she said.

She moved into her new address Dec. 6. A month later, she found a letter posted on her front door. "It says, 'This property is now owned by Fannie May,'" she said.

Williams says her landlord never told her the home was in foreclosure. "I'm tremendously angry and she is still trying to call and get money from me," she said. The government requires Fannie Mae to pay Williams to move out.

Williams is kicking herself for not checking to see if the property was in foreclosure before she signed the lease. "It never crossed my mind -- never, never, never, because she never said anything. Nothing," she said.

Source: 12 On Your Side: Renter finds herself in foreclosure, forced to move (A woman is forced to move after finding out the home she just leased was foreclosed on).

Now-Disbarred Closing Attorney Gets 3 Years For Looting Trust Accounts Of $1M, Ingloriously Ending 44-Year Law Career

2012-01-20T00:03:00.000-05:00

In Henrico County, Virginia, the Richmond Times Dispatch reports:

Character witnesses for longtime attorney William Orr Smith described him Tuesday as a trusted mentor whose decades-long career combined a sharp knowledge of the law, respect and a street-smart awareness.

But when Smith stood to address a Henrico County judge poised to sentence him in a $1 million embezzlement scheme, Smith described his 44-year career as leading to guilty pleas that reduced him to "a common thief."

The solemn-looking, chagrined attorney will spend three years in prison despite sentencing guidelines that called for no active prison time. Smith, 72, will report to the Henrico jail Jan. 27, Circuit Judge George F. Tidey ruled.

Special Prosecutor Tracy Thorne-Begland described Smith as unequalled in the assistance he gave investigators tasked with unraveling the savvy attorney's embezzlements from a subsidiary of Bank of America that handled foreclosures and mortgages. But Thorne-Begland said, too, that the five-year scheme involved hundreds of illegal transfers from mortgage accounts and foreclosure accounts — repeated acts that could have stopped at any time but that resulted in only three actual criminal counts of embezzlement.

***

"It was who he was for virtually all his life," defense lawyer Craig S. Cooley said of Smith's ended law career, noting that insurance will pay $650,000 of the loss and that Smith will be hard-pressed to make restitution of the balance of the $1,065,327.10 that he pilfered.

Smith surrendered his law license in June, cooperating with State Bar investigators as much as he did detectives. He pleaded guilty to two embezzlement counts in September.

For the story, see Lawyer, 72, will serve three years in $1 million embezzlement.

Bankster's Insurance Premium Overcharge Drives Foreclosure Defense Attorney Into Foreclosure

2012-01-20T00:01:00.000-05:00

In Indianapolis, Indiana, The Huffington Post reports:

Christine Jackson's three-bedroom wood-frame home in Indianapolis is in danger of foreclosure. It's not because she can't afford her mortgage, but because of a bank error, she said.

Jackson is among thousands of homeowners from all walks of life who have complained that the major banks that service their mortgages have made frequent errors in calculating their loans. These errors include slapping unnecessary inspection fees onto accounts, misapplying payments in violation of Fannie Mae and Freddie Mac guidelines and "force-placing" expensive insurance on homes that are already insured.

Jackson knows all this all too well because she is a lawyer who represents homeowners trying to stave off foreclosure. Often, those clients have claimed that their bank or mortgage servicer made a mistake in tabulating the cost of their loan, triggering a wrongful default.

Jackson, 54, a former fraud investigator for the Internal Revenue Service, now understands firsthand the frustration that her clients feel.

JPMorgan Chase & Co., the bank that services Jackson's mortgage, has declared her loan in default, blocked access to her online account and threatened foreclosure if she doesn't pay late charges that she said are unwarranted. Her once sterling credit is ruined and she could lose her home if the mess isn't resolved, Jackson said in a recent interview.

Jackson blames her situation on an extra annual insurance premium that she said Chase deducted from her account in 2009 on top of her usual payment. The overcharge triggered a series of account miscalculations, eventually leading to default, according to Jackson.

"I'm disgusted with the whole thing," she said. "My credit is trashed. I have nothing at all to finance my business. I might have to file for bankruptcy."

For more, see Foreclosure Lawyer Could Lose Her Home Because Of Alleged Bank Error.

Squatters Score With Vacant Foreclosed Homes; Use Phony Leases To Get Free Temporary Housing, Squeeze Banks For 'Cash For Keys' 'Walking' Money

2012-01-19T00:05:00.000-05:00

In Antioch, California, NBC Bay Area reports:

It's a problem plaguing our country. Squatters moving into foreclosed homes and banks paying them to get out. It's happening in one Antioch neighborhood. Neighbors formed a neighborhood watch program in part because they noticed lots of homes being foreclosed in he area.

They were apparently right to be worried. Police arrested three people Tuesday on Bedrock Way in Antioch.

Police said the people in the home tried to show them a phony lease, but they weren't fooled. A following search of the home netted stolen goods and a stolen car.

Authorities believe the people arrested were involved in what is called cash for keys. That's when criminals move into foreclosed homes and banks end up paying them thousands of dollars to move out.

"I think most of the bank agents know that these folks shouldn’t be there it’s easier just to pay them get them out and everything’s left there," Capt. Leonard Orman with Antioch police said. Orman said cash for keys happens all the time in his city where there are hundreds of bank owned homes nestled in nice neighborhoods.

Source: Squatters Plaguing Foreclosure Neighbors (The latest crime wave to hit Antioch is called cash for keys).

Cops Pinch Pair For Illegally Hijacking Possession Of Temporarily Vacated Rental Home; Landlord Was In Process Of Remodeling Unoccupied Premises

2012-01-19T00:03:00.000-05:00

In Taylorsville, Utah, KSTU-TV Channel 13 reports:

Amanda Booth and Tony Hoskins face criminal charges related to squatting in a Taylorsville home. The two suspects apparently took up illegal residence November by allegedly squatting at a home on 5200 South and 3700 West.

The rental property was vacant and being prepared for a new tenant, according to Taylorsville Police Sgt. Tracy Wyante. Wyante says the owner was upgrading the space by having it remodeled.

Crews doing the remodeling noticed something was wrong when thousands of dollars worth of new carpet was missing. They informed the owner, who called police. "The case was investigated as a burglary, unfortunately we could not prove the burglary element of the case, which certainly existed, but we couldn't prove it," says Wyante.

***

Police say it is becoming more common to see individuals squat in homes while hundreds of properties sit vacant due to foreclosure, from owners who walked away from an upside-down mortgage, or, such as this case, a home that is being renovated.

For the story, see Police say squatters allegedly took up residence in vacant Taylorsville home.

Now-Defunct Title Agency Typo Screw-Up Leads To Foreclosure Headaches For Former Homeowner Eight Years After Selling & Moving Out

2012-01-19T00:01:00.000-05:00

In Plant City, Florida, The Tampa Tribune reports:

Barbara and Rick Borchers sold their house and paid their mortgage in full eight years ago. But now, all these years later, another lender, Bank of America, is suing them for foreclosure on the same house. When the process server knocked on their door, lawsuit in hand, the Borchers thought it must be a mistake.

"Everyone I tell says, 'That's impossible, it's a scam, somebody is pulling your leg,'" Barbara Borchers said. The lawsuit is no mistake. But it starts with one – made by the title company the Borchers hired to handle their sale in 2003. The lawsuit, real estate experts say, illustrates the complexity of foreclosure and how innocent people can get pulled into someone else's financial trouble.

When the Borchers sold their home, the title company made a typo on the deed, according to the lawsuit and public records. Instead of "Bloomingdale Section R," the deed reads "Bloomingdale Section H," a legal description for a different house in the neighborhood. The mistake stuck with the home through three more sales.

The last buyer in the chain is the one who fell behind on payments and may lose the home to foreclosure. But the error on the deed means that mortgage holder, Bank of America, can't take the home back because the property mortgaged is listed incorrectly.

The bank can't get the clear title required for a transaction until the error is fixed. The bank named the Borchers – and all buyers after them – in the lawsuit.

***

This type of mistakes is why homeowners get title insurance in the first place, said Ron Donalson of Alday-Donalson Title Agencies of America. The homeowners should be able to go back to the title company and ask it to correct the deed. But in this case, the Borchers' title company is out of business.

For more, see Deed typo haunts couple in foreclosure suit years after they sold.

Recent Florida IG Report Adds More Proof Of State Officials' Fear Of Prosecuting Foreclosure Fraud

2012-01-18T00:05:00.000-05:00

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

The Nevada attorney general calls signing another person's name on documents used to repossess a home "forgery" and a "scheme."

Michigan's attorney general launched a criminal investigation that includes whether "falsified signatures" were used in foreclosure cases.

But Theresa Edwards and June Clarkson were forced to resign their jobs as foreclosure fraud investigators for the Florida Attorney General's Office, in part, for referring to so-called "surrogate signing" as forgery.

According to a Florida Inspector General report that cleared Attorney General Pam Bondi's office of wrongdoing in the firings, the duo repeatedly used the word "forgery" in a 2010 presentation that included documents from the Jacksonville-based Lender Processing Services. The company complained and drew the attention of economic crimes boss Richard Lawson.

Lawson says in the inspector general's Jan. 6 report that surrogate signing as it relates to Lender Processing Services, also called LPS, is not forgery, which requires an intent to defraud. The practice was authorized by the company, more evidence, Lawson said, that no forgery occurred.

Homeowner advocates who support Edwards and Clarkson are now questioning portions of the 83-page report. They point to the LPS signature issue as an example of what they say is Florida's resistance to go after foreclosure fraud.

For more, see Is signing foreclosure documents for others forgery?

Contra County DA, Recorder Implement Plan Notifying Property Owners Of Recent R/E Recordings In Effort To Curb Title Thefts Due To Land Doc Forgeries

2012-01-18T00:03:00.000-05:00

From the Office of the Contra Costa County, California District Attorney:

Contra Costa County District Attorney Mark A. Peterson, in joint cooperation with County Clerk-Recorder Steve Weir, announces the implementation of a real estate fraud notification program. This process is made possible with the cooperation of the County Assessor Gus Kramer through inter-county data sharing.

Beginning November 1, 2011, citizens will be notified by mail if certain real estate recordings occur pertaining to their property. In order to identify the transaction, the notifications will include copies of the first two pages of the subject document.

Property owners are usually aware of these recorded transactions. However, if the recording was not authorized by the owner or the owner feels potential fraud may be taking place, a dedicated phone number at the District Attorney's Real Estate Fraud Unit will be provided. The property owner will be able to inquire about the details of the transaction or notify the District Attorney of potential fraud.

Contra Costa County recognizes the potential for real estate fraud is a serious problem. Contra Costa County District Attorney Mark A. Peterson and County Clerk-Recorder Stephen L. Weir are committed to the prevention and prosecution of real estate fraud.

Go here for the Contra Costa County DA press release.

Celebrated Immigrant NYC Real Estate Operator Accused Of Building Empire By Preying On His Own

2012-01-18T00:01:00.000-05:00

In Richmond Hill, Queens, The New York Times reports:

For years, a self-made real estate magnate named Edul Ahmad personified the collective dreams of Richmond Hill, Queens, which is populated by many immigrants from Guyana, in South America. Mr. Ahmad drove a yellow Lamborghini, sponsored a cricket team and held white-glove parties at a lavish banquet hall that he owned.

At a prominent intersection near the border of Richmond Hill and South Ozone Park, his smiling face looked down from a large billboard that promoted his real estate services. Many residents responded, taking out high-risk mortgages that they were told they could readily afford.

In July, it all came crashing down. Agents from the Federal Bureau of Investigation arrested Mr. Ahmad, charging him with masterminding a $50 million mortgage fraud that seemed to exemplify a nationwide phenomenon of celebrated immigrant brokers who were accused of preying on their own.

Now, scores, if not hundreds, of Guyanese immigrants are facing financial ruin because of loans said to have been arranged by Mr. Ahmad, and the repercussions from the case have extended from Queens to Washington to Guyana.

Mr. Ahmad is currently engaged in intensive plea-bargain negotiations with federal prosecutors, according to court documents, but it appears that the impact of the loans will endure for years.

For more, see Queens Broker Is Accused of Bringing Immigrants’ Ruin.

NJ Feds Squeeze Guilty Plea From Another Sale Leaseback Peddler In Equity Stripping Ripoff Of Homeowners In Foreclosure Having High Equity, No Cash

2012-01-17T00:07:00.000-05:00

From the Office of the U.S. Attorney (Newark, New Jersey):

A former employee of a Parsippany, N.J., mortgage lender admitted [] to taking $138,402 in illegitimate proceeds of multiple home sales as a result of a mortgage fraud scheme, U.S. Attorney Paul J. Fishman announced.

Jorge Abbud, 33, of Dover, N.J., pleaded guilty before U.S. District Judge William H. Walls in Newark federal court to an Information charging him with wire fraud.

According to documents filed in this case and statements made in court:

In 2008, Abbud was an employee of a Parsippany mortgage lender. He admitted that he targeted homeowners in New Jersey who had equity in their homes, but were facing foreclosure because of their inability to pay their monthly mortgage payments.

Abbud falsely promised to help these homeowners avoid foreclosure, keep their homes, and repair their damaged credit. He instructed the homeowners to permit the titles of their homes to be recorded in the names of third-party purchasers ( “straw buyers”) for approximately one to three years, promising the homeowners that he would improve their credit scores during that time, obtain mortgages with more favorable interest rates for them and return the titles of the homes to the homeowners.

Abbud said he then recruited straw buyers with good credit scores to act as buyers of the homes facing foreclosure. He told the straw buyers they were helping the homeowners keep their homes, and that the straw buyers would make money when the homes were sold back to the original homeowners.

Abbud admitted that on certain occasions, and notwithstanding his promises to the homeowners and straw buyers, the homes fell into foreclosure.

For the U.S. Attorney press release, see Former employee of Parsippany, N.J., mortgage lender pleads guilty to fraud.

For the formal criminal charges, see Information - U.S. v. Abbud.

Michigan Appeals Court: Failure To Record Mortgage Assignment Prior To Sale Sinks Foreclosure

2012-01-17T00:05:00.000-05:00

From a press release from the Michigan law firm Warner Norcross & Judd:

On January 12, 2012, the Michigan Court of Appeals issued its opinion in Kim v. JP Morgan Chase Bank, No. 302528. The foreclosure-by-advertisement statute, MCL 600.3204, provides, “If the party foreclosing a mortgage by advertisement is not the original mortgagee, a record chain of title shall exist prior to the date of sale under section 3216 evidencing the assignment of the mortgage to the party foreclosing the mortgage.” MCL 600.3204(3).

In Kim, the defendant was the assignee of the mortgage, and it failed to record its ownership of the mortgage before foreclosing by advertisement.

Thus, the Court held that the foreclosure sale was invalid because the defendant had not complied with MCL 600.3204’s requirements.

For more, see Court Sets Aside Foreclosure Sale Where Assignee Of Mortgage Failed To Record Its Interest Prior To Sale.

For the court ruling, see Kim v. JP Morgan Chase Bank, No. 302528 (Mich. Ct. of App., January 12, 2012).

Unimpressed w/ Progress In Current Negotiations, State AG Group Meets To Discuss Enforcement Options/Strategies Around Various F'closure Fraud Issues

2012-01-17T00:03:00.000-05:00

The Huffington Post reports:

Attorneys general or representatives from nearly 15 states met in Washington, D.C., on Tuesday to discuss and share different enforcement options and strategies around various mortgage-related issues, according to sources familiar with the conversation.

The meeting was prompted by the slow pace at which a national foreclosure settlement led by the Obama administration is progressing, and is likely to be the first in a series, said these sources.

The participating attorneys general, from states including California, Nevada, Delaware, Massachusetts and New York, discussed how they could possibly join together to investigate and potentially file lawsuits against abusive mortgage lenders and servicers. Principals or representatives also attended from Hawaii, New Hampshire, Missouri, Mississippi, Maryland, Kentucky and Minnesota.

"This past Tuesday, a group of like-minded Attorneys General met in D.C. to discuss ongoing and future investigations into the mortgage finance and foreclosure industries," said Delaware Deputy Attorney General Ian McConnel.

"The talks weren't just about investigations," said a source with knowledge of the discussions. "They were also about the attorneys general offices feeling uninvolved in a process by which their federal colleagues have been negotiating on their behalf."

For more, see Attorneys General, Frustrated With National Foreclosure Settlement, Consider Alternate Course.

Process Server's Failure To Keep Adequate Records Sinks NY Foreclosure; May Open Floodgates In Effort To Vacate Judgments

2012-01-17T00:01:00.000-05:00

In Nassau County, New York, Reuters reports:

A process server working for a once-prolific foreclosure law firm in upstate New York broke the law by failing to keep any record of papers served in a 2008 foreclosure case, a Long Island judge has ruled, giving defense attorneys a new angle to explore in foreclosure cases as they seek to buy time for their financially beleaguered clients to modify or refinance their mortgages.

Gary Cardi, a former police officer contracted by A&J Process Service -- which has offices on the same floor in the same building as the foreclosure firm Steven J. Baum PC -- admitted in Nassau County court last October that he didn't have any record of serving foreclosure papers on Soledad Murillo in 2008. In fact, he told state Supreme Court Justice F. Dana Winslow during an October hearing, he hasn't kept records of any of the "thousands" of cases he served over the last six years.

An attorney for the Baum firm, Victor Spinelli, representing foreclosing bank U.S. Bank NA, told Winslow that he thought the failure to keep tabs on service wasn't a reason to overturn a foreclosure judgment against Murillo under New York law.

But Winslow disagreed. Not only was Cardi required to keep some record of his attempts to serve Murillo, Winslow ruled, but his failure to do so violated New York General Business Law Article 8, which defines and outlines the duties for process servers -- including, Winslow said, the need to keep "legible" records of service.

"The duty to keep comprehensive records may have been unnoticed, or underestimated, by litigants and the courts," Winslow wrote in a ruling dated Dec. 22. "Past practice, however, cannot be the motivating force for future conduct and determinations.

"The need, particularly in this economic environment and under these telling circumstances, for valid and reliable proof of service, mandates the rejection of 'trust me,' and the adoption of 'show me,'" Winslow wrote.

***

Traverse hearings -- which are held to determine whether parties were properly served -- are still a relative rarity in foreclosure cases, said Rebecca Grammatico, an attorney at the Empire Justice Center who works on foreclosure issues.

But defense attorneys in foreclosure cases may find a useful new approach in the wake of Winslow's ruling, Grammatico said. "Time is frequently the thing you really need," she said. "This will, for many petitioners across the state, become the tool."

It is possible that other defendants who were served by Cardi or another server who failed to keep records could use Winslow's ruling as a way to get judgments against them vacated, Grammatico added.

For the story, see NY judge: Sloppy service has legal consequences.

Bay State High Court Invites Supplemental Briefing In Pending Foreclosure Case That Looms As Possible Disaster For Massachusetts Land Titles

2012-01-16T00:05:00.000-05:00

From The Boston Globe's Real Estate Now blog:

Attorney Richard D. Vetstein reports on another court case about foreclosure paperwork problems.

The Supreme Judicial Court has just issued an unusual order in the very important Eaton v. Federal National Mortgage Association case, indicating its deep concern over whether its ruling with have a disastrous impact on foreclosure titles and, if so, whether its ruling should be applied prospectively rather than retroactively.

As outlined in my prior post on the case, the Court is considering the controversial question of whether a foreclosing lender must possess both the promissory note and the mortgage in order to foreclose. If the SJC rules against lenders, it could render the vast majority of securitized mortgage foreclosures defective, thereby creating mass chaos in the Massachusetts land recording and title community. If you thought U.S. Bank v. Ibanez was bad, Eaton v. FNMA could be Apocalypse Now.

The court is requesting supplemental briefing on whether requiring a unity of the mortgage and the underlying promissory note, in order for there to be a valid foreclosure, would cloud any title that has a foreclosure in the chain of title, regardless of how long ago the foreclosure occurred, and if so, what legal or practical measures exist that might limit the consequences of such a requirement.

The court is also concerned that if it were to hold that unity of the mortgage and note is required under existing law, whether the court’s holding should be applied prospectively only.

For more, see SJC concerned with toxic foreclosure fallout.

Go here for links to the briefs filed in this case.

Fla Appeals Court: 'Green Card-Lacking' Couple Entitled To Benefit Of State Homestead Exemption Against Forced Sale, Dodging $500K Claim Against Home

2012-01-16T00:03:00.000-05:00

The Florida Bankruptcy Law Blog reports:

A Florida appellate court has liberalized homestead exemptions for temporary U.S. residents. The court said that a foreign citizen’s eligibility for Florida homestead depends on his intent rather than the U.S. Immigration Service’s rules.

A debtor’s eligibility for homestead is based on the all the facts relevant to his intent to reside permanently in his house even if the debtor has not yet received a “green card.”

The court upheld the homestead exemption of a foreign debtor who resided in a Florida property since its purchase, had a visa giving him the right to reside in Florida, and was actively pursuing permanent resident status.(1)

Source: Court Liberalizes Homestead Exemption For Foreign Debtors Living In Florida Properties.

For the court ruling, see Grisolia v. Pfeffer, Case No. 3D11-198 (Fla. App. 3d DCA, November 23, 2011).

(1) It should be noted that a fact in this case that appears to have played a big part in tipping the scales in favor of the non-U.S. citizen, 'green card-lacking' homeowners (a wife & her now-deceased husband) was the fact that they had a U.S.-born son (making the child a U.S. citizen) who was the target of an attempted kidnapping in the family's native country, Venezuela.

The court made the following observations in connection with the foregoing:

It is undisputed that the Decedent and the Widow were not in the United States as tourists. Instead, they were registered aliens legally allowed to reside in the United States under their temporary visa.

Moreover, in the Son's case, he was an American citizen who was born in Miami, Florida and had resided in Florida since his family moved here in 2005.

The Widow testified at the evidentiary hearing that her intent, along with that of the Decedent, was that the family reside permanently in the Property due to safety concerns stemming from the attempted kidnapping of the Son in Venezuela.

The Widow further testified that she and the Decedent had applied for permanent residence in the United States prior to the Decedent's passing.[5] These specific circumstances are sufficient to demonstrate the Decedent's intent to have his family permanently reside in Florida.

***

Under the specific facts of the this case, because the Decedent's American-born Son resided in the Property since its purchase, the Decedent and Widow had a visa which gave them the legal right to reside in Florida, and were actively pursuing permanent residence status prior to the Decedent's death, we find that the Decedent demonstrated the requisite intent to make the Property his family's permanent residence.

Based upon the foregoing, we reverse the probate court's order denying the petition for declaration of homestead exemption.

Reversed.

--------------------------------------

In this case, the court made clear the distinction between the homestead exemption granted to Florida homeowners under Article X, Section 4 of the state Constitution (which deals with the protection against forced sale of a Florida resident's homestead), and the real estate tax exemption (also referred to as a homestead exemption) allowed to Florida homeowners under Article VII, Section 6 of the state Constitution.

Other cases cited by Appellees are inapposite as they involve Florida's homestead exemption from taxation that is now set forth in article VII, section 6 of the Florida Constitution ("Tax Exemption"), rather than the homestead exemption from forced sale found in article X, section 4.

For example, in Juarrero v. McNayr, 157 So. 2d 79 (1963), the Florida Supreme Court held that a citizen and former resident of a foreign country, who is in the United States solely on the authority of a temporary visa, "has no assurance that he can continue to reside in good faith for any fixed period of time in this country . . . [and, therefore] does not have the legal ability to determine for himself his future status and does not have the ability legally to convert a temporary residence into a permanent home."[6] Id. at 81.

Likewise, in DeQuervain v. Desguin, 927 So. 2d 232 (Fla. 2d DCA 2006), the court found that homeowners who held only temporary visas "could not form the requisite intent to become permanent residents for purposes of the [Tax Exemption]." Id. at 233.

However, the Second District also clarified that "because the [Tax Exemption] provides relief from an ad valorem tax, we must construe the statute strictly against [the homeowners]." Id. (citing Capital City Country Club, Inc. v. Tucker, 613 So. 2d 448, 452 (1993)). The strict construction applicable to the Tax Exemption stands in contrast to the liberal construction of the homestead exemption from forced sale at issue here. See Taylor, 941 So. 2d at 562; Law, 738 So. 2d at 524.

Similarly, at the evidentiary hearing the Appellees raised the fact that the Decedent had never claimed a Tax Exemption on the Property. They further argue on appeal that a person in the United States under a temporary visa cannot meet the requirement of permanent residence or home, and therefore, cannot claim the Tax Exemption. Fla. Admin Code R. 12D-7.007 (2002).

We note that the portion of the Florida Administrative Code to which they cite applies to the Tax Exemption and not to the homestead exemption from forced sale at issue here. The probate court referenced in the order on appeal that "[i]n fact, the Decedent never claimed a [Tax Exemption] according to the Miami-Dade County Tax Rolls."

As we have previously stated, "[f]ailure to claim the [Tax Exemption] is not evidence that property is not, in fact, homestead." Taylor, 941 So. 2d at 563 (citing Pierrepoint v. Humphreys, 413 So. 2d 140, 143 (Fla. 5th DCA 1982)).

Clearly, "the homestead exemption from forced sale is different from the [Tax Exemption]." Taylor, 941 So. 2d at 563 (citing S. Walls, Inc. v. Stilwell Corp., 810 So. 2d 566, 569 (Fla. 5th DCA 2002))., 810 So. 2d 566, 569 (Fla. 5th DCA 2002)).

-----------------------------------------------

Prevailing in this case was a big win for the family in that the stakes for them were pretty high. By being entitled to the homestead exemption against forced sale of their homestead as provided to Florida homeowners under the state's Constitution, a claim against the family home made by a creditor of the deceased husband's estate to the tune of $500,000 was successfully avoided.

AZ Appeals Court: Intent To Occupy Home As Residence Where Homeowner Never Actually Moves In Enough To Qualify For Protection Against Deficiency Jdgmt

2012-01-16T00:01:00.000-05:00

The Arizona Republic reports:

A would-be homeowner has the same right to walk away from a mortgage as someone who already is living in the house, the Arizona Court of Appeals has ruled.

The judges acknowledged that laws which bar lenders from pursuing borrowers for the difference between what the property is worth and the amount owed is reserved under state law for owner-occupied premises. And in this case the borrowers never actually moved in.

But Judge Patrick Irvine, writing for the unanimous court, said it is clear that Trevis and Lisa Mueller did intend to move in.

It was only when construction problems developed, Irvine said, that the couple decided to walk away from the home and the mortgage. That , Irvine said, gives them the protections of the law.

Court records show the Muellers purchased a vacant plot in 2005. The following year they borrowed $444,000 from M & I Marshall & Ilsley Bank to build a single-family home on the property for their own use. Several months later, the Muellers said the contractor was behind schedule and that much of the construction was defective.

The Muellers notified the bank they would need advances on the loan disbursements to fix the defects. When the bank did not agree, the couple abandoned the property and defaulted on the mortgage. After foreclosing on the property, the bank sought to recover $68,197, the difference between the amount the couple still owed and the appraised value of the home before the foreclosure sale. When a trial judge threw out the bank's lawsuit, its lawyers appealed.

Arizona law precludes lenders from going after a deficiency if the property is 2½ acres or less and is limited to and utilized for either one-family or single two-family dwelling. Based on that, the bank said the protection does not apply to the Muellers because a home was never built on the property and, therefore, it was never used as a single-family home.

To back that argument, the bank's attorneys pointed to a 1991 state Supreme Court ruling which said the anti-deficiency protection does not apply to companies building homes. Irvine said that case is different because that borrower was a corporation that never intended to occupy the property.

"The Muellers intended to live in the single-family home upon its completion," the judge said. "The primary purpose of Arizona's anti-deficiency statutes is to protect 'homeowners' from deficiency judgments -- not to afford protection to commercial homebuilders."

To require actual occupancy to get the legal protections would create other problems, Irvine said. "An individual facing the possibility of foreclosure may camp out in the unfinished home, claiming to be 'utilizing' the dwelling," the judge wrote. "Additionally, a person who lives in a new home for a day would be entitled to the anti-deficiency protection, whereas someone who had not yet moved into a newly constructed home would not."

Source: Court: Statute also protects would-be owner (Appellate ruling says actual occupancy of home is not necessary).

For the court ruling, see M & I Bank v. Mueller, 1 CA-CV 10-0804 (Ariz. App. Div. 1, Dept. A, December 27, 2011).

NYS Insurance Regulator Probes Suspected Force-Placed Insurance Shenanigans By Major Bankster/Servicers

2012-01-15T01:17:00.001-05:00

The New York Times reports:

A New York State financial services agency is investigating several large banks to see whether they fraudulently steered homeowners into overpriced insurance policies. The investigation centers on so-called force-placed insurance that has become increasingly common since the downturn of the housing market began and homeowners had trouble keeping up with payments on their home insurance.

JPMorgan Chase, Bank of America, Citigroup and Wells Fargo are among the major companies involved in the inquiry by the office of Benjamin M. Lawsky, the superintendent of New York State’s Department of Financial Services, according to a person briefed on the investigation who asked to remain unidentified because the matter was private.

Mr. Lawsky’s office issued 31 subpoenas or other legal notices related to the case in early October, just as the state’s insurance and banking departments were merged under his new agency. His office has already turned up instances where mortgage servicing units at large banks steered distressed homeowners into insurance policies up to 10 times as costly as the homeowners’ original plans.

For more, see Big Banks Face Inquiry Over Home Insurance.

Chase Beginning Consumer Debt Collections Shutdown? Lawsuits Virtually Disappeared In Several Major Cities; Document Irregularities May Be Problem

2012-01-15T01:15:00.001-05:00

American Banker reports:

JPMorgan Chase & Co. has quietly ceased filing lawsuits to collect consumer debts around the nation, dismissing in-house attorneys and virtually shutting down a collections machine that as recently as nine months ago was racking up hundreds of millions of dollars in monthly judgments.

A sampling of court records in the major cities in five states shows that Chase collection suits have virtually disappeared. In a sixth state, Illinois, contract attorneys continue to file small-dollar cases, though at a reduced rate.

It is unclear whether Chase has stopped pursuing collection on many claims nationwide, or if intends to pursue the debts in some other fashion. The bank has not explained its apparent moratorium and declined comment.

Chase's halt does, however, follow scattered defeats in state courts and a whistle-blower's allegation that it falsely overstated the balances of thousands of delinquent accounts it sold to a third party. Former Chase employees and debt collection experts insist that the bank would not have abruptly retreated from its collections efforts in the absence of trouble.

In a sign that Chase acted with urgency, numerous regional collections teams were fired in mid-2011 at the order of the New York bank's headquarters, according to people familiar with the events.

"Nobody told anybody anything. It was very traumatic," says a former Chase attorney who asked to remain anonymous because of a nondisclosure agreement. "I think there were investigations by the [Office of the Comptroller of the Currency] and other government entities. If we're not there, we can't be interviewed."

***

Robo-signing, or the high-volume production of signed legal documents, has been a key element of the governmental and media foreclosure reviews. Chase's current pullback raises at least the possibility that at least some banks may have documentation problems in other business lines.

***

Linda Almonte, a former team leader in Chase's San Antonio credit card services division, accused the bank of firing her for objecting to the sale of $200 million in legal judgments obtained by bank attorneys. Half the accounts lacked adequate documentation of judgment and one-sixth listed the wrong amounts owed, Almonte claimed in a suit filed in U.S. District Court for the Western District of Texas.

In its response, Chase did not dispute inaccuracies in the debt balances and documentation. Instead, it said its sales agreement allowed for errors and thus was proper. "[T]he parties explicitly agreed that the judgments were purchased 'as is' and "with all faults," Chase's attorney wrote.

Chase was unsuccessful in getting the case dismissed and settled it on undisclosed terms last April; it ceased filing new consumer debt lawsuits in many states the same month.

For more, see JPM Chase Quietly Halts Suits Over Consumer Debts.

Reuters On Foreclosure Fraud: The Watchdogs That Didn't Bark

2012-01-15T01:08:00.000-05:00

Reuters reports:

Four years after the banking system nearly collapsed from reckless mortgage lending, federal prosecutors have stayed on the sidelines, even as judges around the country are pointing fingers at possible wrongdoing.

The federal government, as has been widely noted, has pressed few criminal cases against major lenders or senior executives for the events that led to the meltdown of 2007. Finding hard evidence has proved difficult, the Justice Department has said.

The government also hasn't brought any prosecutions for dubious foreclosure practices deployed since 2007 by big banks and other mortgage-servicing companies.

But this part of the financial system, a Reuters examination shows, is filled with potential leads.

For more, see Special Report: The watchdogs that didn't bark.

Nevada AG Begins To Pull Back Curtain & Prosecute Shenanigans At Foreclosure Document Processing Sweatshop

2012-01-15T01:00:00.001-05:00

The New York Times reports:

Last month, [Nevada Attorney General Catherine Cortez] Masto sued Lender Processing Services, the huge default and foreclosure processor that works behind the scenes for most large banks. With this case, she demonstrated how enlightening an in-depth study can be.

The complaint, which came after a 14-month inquiry, contends that L.P.S. deceived consumers by committing widespread document execution fraud, misrepresenting its fees and making deceptive statements about its efforts to correct paperwork. Investigators interviewed former L.P.S. employees and customers and examined foreclosures the company had worked on.

***

The details recounted in the Nevada lawsuit describe how that system hustled borrowers through the foreclosure process. A boiler-room operation comes to mind, or that great Lucille Ball skit in which she tries in vain to keep up with the assembly line at a chocolate factory.

For example, a former L.P.S. employee who worked in “attorney management,” overseeing firms that performed legal work for foreclosures, told Nevada investigators that L.P.S. required him to resolve issues raised by the firms at a rate of 30 foreclosure files every hour. That’s two minutes apiece. The employee soon left L.P.S.

Former workers at another division described their work as “surrogate signers.” They said their job was to forge signatures on documents. These people were hired through temporary agencies; one said she was paid $11 an hour and told that her job was “to sign somebody else’s signature on documents,” the lawsuit said. She told investigators that she signed roughly 2,000 documents a day for months.

Another former worker said that when a banking executive came by for a tour, the signers were told “to lie” and tell the executive they were signing their own names, the lawsuit says.

Notarization worked much the same way, the complaint said. One former worker said she realized that she might have notarized documents she had also signed as a surrogate. As a result, the lawsuit said, borrowers had to deal with documents containing “false assertions about which entity was authorized to foreclose, and false assertions about whether the consumer was delinquent on a loan payment.”

For the story, see From East and West, Foreclosure Horror Stories.

For the lawsuit, see State of Nevada v. Lender Processing Services, Inc., et al.

Family Duped Into Leasing Home With Unpaid Mortgage Caught Between Rent Skimming Landlord, Foreclosing Fannie

2012-01-14T00:05:00.000-05:00

In Acworth, Georgia, WSB-TV Channel 2 reports:

A local family says they leased a home, and then a week later they received a Fannie Mae foreclosure notice on the door to move out. “I feel like I have been duped,” explained tenant Sonya Croft.

Croft says there weren’t any red flags when she signed the lease. The rent was reasonable, she paid a $300 deposit and the landlord allowed her to pay monthly or weekly. But she says what the landlord didn’t tell her is that he was trying to fend off the bank from foreclosing on their Acworth rental home. “He should have made us aware of what was going on. He should have disclosed to us that there was a possibility that this could happen, because he had to know. It didn’t happen in a week and half,” explained Croft.

Croft’s first call was to her landlord, Robert Lemal. “I contacted him, and he said disregard the notice because he was working on a loan modification,” said Croft.

Channel 2’s Craig Lucie called Lemal, too. He told Lucie that he didn’t want to do an on-camera interview, but did tell him that he was trying to get a loan modification from the bank. He says the bank foreclosed prematurely. He also told Sonya Croft that he would be cutting off her water and power right before the holidays since she quit paying rent.

Sonya says there’s reason why she quit paying him. “We were told not to pay him anymore money by Fannie Mae,” said Croft.

It’s become a lease dilemma that is now so common, there’s a federal law that protects tenants like Sonya Croft. It called the Protecting Tenants Act at Foreclosure. Croft and her family can stay for the remainder of their 12-month lease, but Fannie Mae is now making them an offer to get out.

The offer is nearly $1700 dollars to move. Croft says she doesn’t know if she wants to move her three children for the third time in a month.

Source: Renters face eviction weeks after moving into foreclosed home.

Lack Of Cash, Unrepaired Defective Boiler Leave Tenants In 100+ Units In Bronx Building Complex In Foreclosure Without Heat, Hot Water

2012-01-14T00:03:00.000-05:00

In The Bronx, New York, The Riverdale Press reports:

It was a cold Christmas at the historic Shalom Aleichem Houses in Kingsbridge Heights. More than 100 apartments at the troubled housing complex were without heat for most of December, including on Dec. 25.

As Russell and Susan Paige’s family gathered around the table on Christmas Day, they donned winter coats just to keep warm. The Department of Buildings issued a violation for a defective boiler on Christmas Day and according to Mr. Paige, the apartment warmed up again on Dec. 27. But he said his radiator had been ice cold too often up until then. He had to set up a space heater in the living room and Ms. Paige had taken to bundling up with a blanket.

Approximately 117 of 234 apartments in the 15-building complex, located between Giles Place, Sedgwick Avenue, Cannon Place and West 238th Street, were without heat or hot water at times until Dec. 27, the latest in a long line of problems at the building.

Last year, tenants complained of no heat, a leaking roof, collapsing ceilings, crumbling walls and other dilapidated conditions. In May, the building went into foreclosure after owner Van Cortlandt Village LLC failed to make mortgage payments and could not negotiate a deal with New York Community Bank. Shortly afterward, the bank sold the mortgage note to Riverdale’s Chestnut Holdings.

***

The conditions have landed five of the buildings in the complex — however not the buildings without heat — onto Public Advocate Bill de Blasio’s NYC Worst Landlord Watchlist. Buildings at 3058 Godwin Terrace, 2709 Heath Ave. and 2856 Webb Ave. also made the list.

For more, see No heat for Christmas in troubled buildings.

Blaze In Building In F'closure Latest Problem For Tenants In Complex Plagued By Dilapidated Conditions, Lack Of Heat/Hot Water, Freezing Temperatures

2012-01-14T00:01:00.000-05:00

In Chicago, Illinois, WGN Radio 720 AM reports:

Chicago firefighters [last week] quickly extinguished a small fire in a large South Side building that residents said has been without heat and hot water for all but a few hours since the weekend. More than a half-dozen residents of the courtyard building in the 7600 block of South East End Avenue managed to escape without injury, despite early reports of people being trapped, according to fire officials and neighbors.

The fire may have been caused by a cracked boiler in the building's basement, though an investigation was still under way, a fire department spokesman said.

The fire that temporarily forced residents into the cold streets was just the latest disruption at a South Shore building plagued with problems since it went into foreclosure, said resident Pachina Scarelli.

Hot water and heat at the building was cut off without explanation over the weekend, Scarelli said. Scarelli said building officials promised to fix leaky ceilings and broken doorbells when she moved in last May. But the problems worsened after the building was foreclosed on with a South Side property firm temporarily put in charge, she added. Busted ceilings, rain coming through the ceilings, it's just so much stuff going on and this is what we've been dealing with (in) 22-degree weather," she said.

The building's hot water and heat returned Tuesday evening only to be shut off again because of the fire. "Now we have no hot water, no heat and (some of) the lights are out (because of the fire)," Scarelli said.

Calls left with the building management company named by Scarelli weren't returned this morning.

For the story, see No heat, no hot water, then fire at South Side apartment building.

Daughter Convicted Of Improperly Pocketing Mortgage Payments & Forging Docs To Rip Off $105K Of Mom's Home Equity Insists Nothing Untoward Was Done

2012-01-13T00:05:00.000-05:00

In Sussex County, New Jersey, the Star Ledger reports:

A Sussex County woman who fraudulently obtained a $105,000 second mortgage loan on her mother’s home used the money to help her and her mother make ends meets, and pay their monthly bills, her attorney said. “There’s nothing to suggest she spent the money on anything extravagant. Unlike other cases like this, there’s nothing in the house to suggest that she spent the money on anything but household bills,” said public defender Steven Insley, who represents 47-year-old Dianne Butto-Sibilia.

Insley also said Butto-Sibilia has a history of both mental and physical health problems. “This is a very, very sad case. It’s a very sad situation with her. In my opinion, she’s not a criminal and doesn’t belong in prison,” he said.

Butto-Sibilia, who lived with her 70-year-old mother in Hamburg, pleaded guilty last month in Newton to identity theft, perjury and theft, all third-degree crimes, before Superior Court Judge N. Peter Conforti. Assistant Prosecutor Rachelle Jones said the crimes came to light after Butto-Sibilia told a judge during an eviction hearing last year that she didn’t know why their home was facing foreclosure.

A subsequent investigation led by Detective Douglas Porter of the prosecutor’s office found Butto-Sibilia had stolen the monthly mortgage payments given to her by her mother that were supposed to be sent to the bank. She also had forged her mother’s name and the name of an attorney on the application for the second mortgage loan, said Jones.

“The mom had no idea why the home was in foreclosure,” said Jones. “She (Butto-Sibilia) did the entire closing. She definitely had knowledge of real estate closings.”

***

Butto-Sibilia is expected to be sentenced to 364 days in jail, a probationary term and be required to pay full restitution to her victims when she is sentenced Jan. 23, said Jones.

For the story, see N.J. woman who fraudulently obtained home mortgage used money to make ends meet, attorney says.

Cops Tack On Forgery Charge In Prosecution Of Adverse Possession-Claiming Squatter; Allegedly Used Phony Papers To Get Power In Snatched Vacant Home

2012-01-13T00:03:00.000-05:00

In Douglasville, Georgia, the Douglasville Patch reports:

Forgery will be added to the charges of criminal trespass and misdemeanor possession of marijuana for Roderick Walker who was arrested by the Douglas County Sheriff's Department on Dec. 22.

Sheriff Phil Miller said that Walker forged a signature to get utilities turned on by Greystone Power at another person's home. Walker counsels others to claim vacant houses as their own.

Walker first appeared on WSB-TV, explaining his use of the law of adverse possession to move into an abandoned Douglasville three-bedroom, 2½-bathroom house on Mackenzie Court; the house once was valued at almost $300,000.

Source: Add Forgery to Squatter's Charges (Forgery will be added to the charges of criminal trespass and misdemeanor possession of marijuana for Roderick Walker who was arrested by the Douglas County Sheriff's Department on Dec. 22).

Cops Begin Meeting With Local Homeowners, Residents To Address Concerns Over Adverse Possession-Claiming Squatters

2012-01-13T00:01:00.000-05:00

In Douglasville, Georgia, The Holly Springs-Hickory Flat Patch reports:

Members of the Douglasville Police Department and the Douglas County Sheriff's Department have scheduled a meeting on Jan. 3 with homeowners and residents that are concerned with squatters.

Squatters have been using Georgia's adverse possession law, which is meant to resolve property disputes, to live in empty houses that are in a state of limbo. The process takes advantage of the high number of foreclosures and abandoned houses in recent years.

"We want people to feel more comfortable and want them to know what to look for," said Det. Mac Abercrombie of the Douglasville Police Department. "We see a problem and want to help address a need.

"We've been taking a pro-active approach to this problem," said Det. Mac Abercrombie of the Douglasville Police Department. "We've been planning this since October. This is not a reaction to recent stories in the news."

For the story, see Police Meet with Residents to Answer Squatting Questions (Members of the Douglasville Police Department and the Douglas County Sheriff's Department have scheduled a meeting on Jan. 3 with homeowners and residents that are concerned with squatters).

Another Homeowner Needing Home Loan Modification Gets Put Through BofA Wringer

2012-01-12T00:05:00.000-05:00

In Phoenix, Arizona, KPHO-TV Channel 5 reports:

A Valley man calls it a rude awakening. Potential buyers knocked on this door Tuesday morning, saying his house was up for auction. "It made me angry," said Ryan Huber, homeowner.

Huber, who grew up in the home and currently shares it with his mother, said he called the bank to tell them the sale was a mistake – that they received letters from Bank of America saying they had been approved for loan modification. He said the bank representative confirmed it was a mistake, but he's still nervous about how things will shake out.

"We've been fighting with Bank of America since about July," said Huber. "Every time, we do what they ask of us, and something else comes up or they change it or reject what we send them, even though it's exactly what they asked for."

Huber said the whole ordeal has been stressful and frustrating to the point of tears. "It's not right," said Huber.

CBS 5 News reached out to Bank of America Tuesday afternoon after receiving Huber's call. A bank representative emailed, saying, "We are having the report researched, but there has not been adequate time to confirm details of the account for your story. If an unwarranted foreclosure takes place, the sale usually will be rescinded. If this is the case here, the bank will work with the Hubers to rectify the situation quickly."

Source: Man OK'd for home loan modification gets a surprise.

Keypad Error Results In 80 Cent Mortgage Underpayment, Leading BofA To Boot Homeowner From Loan Modification Program

2012-01-12T00:03:00.000-05:00

In Largo, Florida, The Tampa Tribune reports:

When Tom Mudie was approved for a mortgage modification program, he thought his foreclosure troubles were over. Bank of America lowered his monthly payment by nearly $200. All he had to do was make the new payments — on time for three months — and the new amount would be made permanent.

But a simple error — hitting a "0" on his telephone keypad instead of an "8" — threatened not only to cancel the savings but also to cost him his home. "I want to keep my home," Mudie said. "And to lose it over 80 cents is crazy."

Mudie paid his second trial mortgage payment by phone. The keypad mistake meant that instead of paying $615.82, he paid $615.02. He was three quarters and a nickel short. The mistake meant that, in the precise calculus of the computer, Mudie broke his modification contract. He was kicked out of the program.

Banking and government officials say his story reflects a broader trend of simple mistakes with consequences that are all out of proportion, hurting homeowners' modification chances.

When he realized what happened, Mudie said, he contacted a customer service representative who told him to send a check for the 80 cents. That would clear up the problem, he said he was told.

"I did everything they told me to," Mudie said. "I wrote the check for 80 cents, as crazy as that sounds. I included it with my next payment. They cashed it." But the next month, Bank of America sent back the 80 cents — plus the next payment he had made. Then a letter from the bank arrived bearing bad news: "Your loan is not eligible for the Fannie Mae modification program because you did not make all the required trial period plan payments by the end of the trial period."

It goes on to say the foreclosure is back on track. Then other alarming paperwork arrived. "This home transition guide is through the United Way," read one pamphlet. "When you start seeing that," Mudie said, "you start thinking charities and stuff. So I knew that I am in trouble."

For more, see Typo involving 80 cents nearly cost man his home.

Citi Calls Off Erroneous Foreclosure, But Refuses To Bear Costs Incurred For Its Own Screw-Up

2012-01-12T00:01:00.000-05:00

In St. Louis Park, Minnesota, the Star Tribune reports:

In a last-minute move, Citi- Mortgage called off the foreclosure sale of a St. Louis Park house whose owner battled to stay in her home with the support of the Minnesota attorney general.

Nancy Gosselin was scheduled to lose her house in a sheriff's auction scheduled for Tuesday, even though an investigation by the attorney general determined that at most, she had missed one payment of $584 more than two years ago. After Gosselin was featured in a Whistleblower column on Nov. 13, CitiMortgage postponed the foreclosure for a month. Then, this week, Gosselin got the good news.

***

A receptionist at Sela Roofing, Gosselin refinanced her house with Bremer Bank for a $84,100, 20-year mortgage in 2005. Then the mortgage was sold to CitiMortgage. Gosselin said she never missed any payments, and a loan officer at Bremer Bank agreed. Yet CitiMortgage began assessing monthly late fees on the Xenwood Avenue house, which she repeatedly contested, and last spring the company refused to accept Gosselin's monthly payments and took action to sell the house at foreclosure.

***

In a letter to William Gosiger of the attorney general's office, Susie Birmes of CitiMortgage's Executive Response Unit said it was waiving the late fees, reinstating the loan and canceling the foreclosure. But she said it was not waiving "foreclosure costs and attorney fees in the amount of $2,140.11," which "can be paid at any time during the life of the loan and will be required to pay ... in full, upon payoff."

Gosselin remains furious about those charges and says she will not pay them. CitiMortgage can pay their legal fees out of their bailout money," she said. Her Bremer Bank loan officer, Stephan O'Connor, said she should not have to pay them, because she was not at fault.

"If they are pursuing those [attorney fees], we will continue to go to bat for the homeowner to see whether the fees can be waived or reduced," said Ben Wogsland, a spokesman for Minnesota Attorney General Lori Swanson. "It's good that Ms. Gosselin will be able to stay in her home, that the sheriff sale has been called off and the loan has been reinstated."

Nick Slade, a Minneapolis attorney who works on foreclosure cases, said it takes an enormous amount of time, energy and resources on the part of numerous people to get something done for a homeowner fighting foreclosure. "It's only when you bring in the level of firepower that happened in this case that they pull it out of the nightmare bin in the regular process and give it to somebody and really truly handle it in a way that makes sense," Slade said.

For the story, see Whistleblower: With help on high, foreclosure avoided (St. Louis Park woman has mortgage reinstated, but CitiMortgage still wants fees for its attorneys and foreclosure costs).

Operators Of Outfit Suspected Of Snatching Foreclosed Homes Defend Their 'Non-Profit' Racket

2012-01-11T00:05:00.000-05:00

In San Diego, California, KGTV Channel 10 reports:

Foreclosed homes in the South Bay are the subject of a dispute between real estate agents who want to sell them and a nonprofit group that has taken the titles and are renting them out.

Dexter and Dianne Brown formed Prudent Constituents Association (PCA) nine months ago after they were foreclosed upon. "All these homes where people are being evicted by the lenders are wrongful evictions," said Dianne Brown, who also goes by the name Harmony.

Using quick-claim [sic] deeds and other processes she won't name, PCA takes over a foreclosed home and rents it out. "The money from the rent goes to pay for taxes and litigation," Dexter Brown said. The lawsuits, according to the Browns, seek retribution against the lenders.

"When the case gets settled that's when PCA will split the award with the owners. If we can't find the former owners, then the money will go into a trust with the state," Dianne Brown said.

Some realtors 10News spoke to have called it a scam. The Browns, however, insist they are working for the public good. "All you have to do is research your rights. That's what I've done and that's what I am doing and that's how we're helping the people we are," Dianne Brown said.

Source: Group Responds To Foreclosure Scam Allegations (Prudent Constituents Association Says They Are Renting Foreclosed Homes Within Rules).

Financially Strapped Seniors Selling Off Pension, Retirement Payments To Meet Pressing Cash Needs?

2012-01-11T00:03:00.000-05:00

In Greenville, North Carolina, The Daily Refector reports:

Many people are doing whatever they can to make it to the next mortgage payment or bill paying day. In some cases people face foreclosure on their homes and need a large cash payment in order to stop the bank.

Retirees and veterans who have a defined benefit pension now have another opportunity to get a lump sum payment but it does have a significant downside. They can sell the future stream of monthly pension payments to an investor who will provide a single lump sum of money in return.

This use of the secondary market has become very attractive for many investors. One feature of the pension investment is that the retiree signs a contract that yields a 5-6 percent interest rate for the purchaser. These transactions also are facilitated by websites that seek retirees willing to sell their pensions. These middlemen bundle the pension investments and send a sheet showing all available options to investors. The investor works through the middleman in completing the purchase transaction.

For this service the middleman agency collects a sizeable fee that is taken out of the stream of payments. Although the stated interest rate may only be 5-6 percent for the investor when the cost of middleman fees are added the effective interest rate is considerably higher.

***

Congress has [] taken notice of the pension purchasing business. Sen. Tom Harkin of Iowa heads a U.S. Senate committee that is investigating the pension-for-cash contracting business.

He is concerned that retirees are not fully aware of just how much interest they are paying as a result of signing away pension payments. There also is concern that retirees who are desperate have not thought through the effect of losing monthly payments.

Even though the Senate investigation is in its infancy, the business of purchasing pensions is not. It is moving forward just as fast as investment firms can find new methods of advertising it.

For more, see Pension payments sold to middlemen.

Maryland High Court: Criminal Conviction Invalid For Builder Who Accepted Cash From Customers, Then Failed To Deliver Homes

2012-01-11T00:01:00.000-05:00

In Prince George's County, Maryland, The Washington Examiner reports:

Maryland's highest court has affirmed the reversal of a theft conviction for a builder sentenced to 12 years behind bars for failing to construct Upper Marlboro homes he had contracts to develop.

The Maryland Court of Appeals upheld a lower appellate court's decision to overturn Leon T. Coleman's June 2009 conviction in Prince George's County on charges of theft by deception and failing to deposit money into an escrow account.

The "evidence was insufficient to conclude that Coleman intentionally deprived the buyers of their property," the Court of Appeals opinion says.

The saga began in 2004, when Coleman entered into contracts with 10 families to build homes in an Upper Marlboro subdivision. The contracts said the buyers would purchase lots before their homes were built, according to court records. The buyers obtained loans for the purchases; Coleman used some their initial payments to buy the lots and put the rest in an escrow account, court documents say.

But he never went forward with construction because he ran out of money before he could obtain the necessary permits.

Prosecutors contended that Coleman never intended to build the homes, saying he didn't use the initial funds for construction and made "misrepresentations" about the development's progress. But that doesn't constitute theft, the appeals court said. "When a defendant has a right to receive money or property, he cannot be guilty of stealing it," the opinion says.

The prosecution also argued that Coleman's failure to spend some of the funds he received implies that he kept the money for himself or spent it improperly. The appeals court, however, said there was no evidence that Coleman used the money for anything other than the construction project.

Coleman was the first person prosecuted for building violations in Prince George's County under Maryland's Custom Home Protection Act, which requires builders to place advance payments in escrow accounts.

But because the buyers received the property deeds before the homes were built, the act isn't relevant, according to the appeals court. The court said the act "does not apply when a builder or vendor deeds land without a home on it."

Emma Coleman, the builder's wife, was also initially charged in the case, but the accusations against her were dropped.

Source: Maryland court affirms reversal of builder's theft conviction.

Lax Oversight, Snoozing Bureaucrats Make For Easy Ripoffs For Foreclosure Surplus Snatching Rackets

2012-01-10T00:07:00.000-05:00

In Fulton County, Georgia, the Atlanta Journal Constitution reports:

John Nelson fought Fulton County and the private tax lien industry for years to keep his house in Inman Park. He lost the battle and nearly lost much more. After the Edgewood Avenue house was foreclosed in 2000 and sold at a sheriff’s auction, Nelson made the best of a bad situation and filed a claim for the excess funds — proceeds from the sale remaining after overdue taxes and other debts were paid.

He was entitled to $212,000 under state law. But somebody got there first, the sheriff’s office told him.

Nelson’s money was in a county fund that now totals $11.9 million, all from the excess proceeds from foreclosure sales. Most belongs to former property owners like Nelson.

It’s a perfect pot of money to attract con artists, experts say: there’s lots of it — Fulton collected $47.8 million over the last 10 years; oversight is easily dodged; and property owners who are due the money frequently don’t know it belongs to them.

Fulton has a troubled history with the fund. Seven years ago, it was at the center of a scandal that reached into the highest levels of county government and deposed a Fulton sheriff.

It’s not clear how often fraudulent claims are made on the fund. The company that filed a claim for Nelson’s proceeds said the claim was made in error. But property tax and legal experts agree cases such as Nelson’s are not isolated and the fund will attract scam artists as long as oversight is lax.

The county makes little effort to prevent fraud and has demonstrated unwillingness to prosecute fraud even when a property owner brings charges, they say. Other metro area counties have tougher controls on access to the funds.

Attorneys with knowledge of Fulton’s property tax operations say fraudulent claims on the fund are not uncommon. “I think a lot of people have been ripped off like this,” said Frank Moore, Nelson’s attorney. “You have however-many millions of dollars sitting in a pot and people thinking, ‘well, how can I get a piece of that?’”

In Nelson’s case, a company named Guishard, Wilburn and Shorts submitted a claim for $212,000 in Nelson’s name, with a photo ID picturing a man who was not Nelson and a forged power of attorney, Moore said. The company has said they believed they were submitting documents provided by John Nelson.

The signature on the power of attorney was not Nelson’s. The notarization was also forged, according to the Secretary of State’s office in Colorado, where the document was supposedly notarized and where Nelson lives.

After Nelson filed his claim, the sheriff’s office asked Fulton Superior Court to settle the competing claims and Guishard, Wilburn and Shorts withdrew the claim they filed. Neither the sheriff’s office or the district attorney investigated, although Moore said he and Nelson requested an investigation.

Nelson took his case to U.S. District Court and a Rome judge released the money to Nelson in October.

Nelson said he never received notice that he owed $1,669 in taxes on the house or notice of the foreclosure auction.

***

Tempting targets

All Georgia counties collect excess funds and it’s common practice across the country. The funds are collected by the sheriff’s department or the tax commissioner’s office. If a property is sold for more than the value of the tax bill, penalties and other debts against the property, that excess cash is held until someone claims it. Mortgage companies often claim the funds to cover debt.

Often, ownership is unclear or property owners are unaware they can claim the extra proceeds. As a result, the money can sit for years and becomes a tempting target. Fulton has long-standing issues with the excess funds and with its overall handling of delinquent property taxes.

For more, see Tax lien issues plague Fulton.

Pair Faces Multiple Felony Charges For Engaging In Alleged Harassment Campaign By Filing $100+ Billion In Bogus Liens Against Public Officials

2012-01-10T00:05:00.000-05:00

In Hennepin County, Minnesota, the Pioneer Press reports:

A Brooklyn Park man and his wife were charged Wednesday with filing of a slew of bogus and harassing liens worth more than $100 billion against public officials, including Hennepin County Sheriff Rich Stanek and Hennepin County Attorney Mike Freeman.

Thomas Wayne Eilertson, 44, and Lisa Joan Connery Eilertson, 47, filed false liens against "numerous individuals and businesses" using the name "Blessings of Liberty," according to criminal complaints filed Wednesday in Ramsey County District Court.

Lisa Eilertson faces 47 felony counts. Thomas Eilertson faces 30 counts. The Hennepin County sheriff's office referred the case to St. Paul police for investigation because several of the 12 victims are Hennepin County officials.

The Eilertsons' alleged activities stem from 2009, when their home at 4448 Cedar Ave. S. in Minneapolis went into foreclosure, the complaint said. A sheriff's sale was held Dec. 8, 2009, and the Eilertsons were evicted July 2, 2010. The complaint describes the subsequent events this way:

Someone they met online, identified in the complaint by the initials P.K., gave them instructions on how to file Uniform Commercial Code liens against people in retaliation for their economic problems. They were told that filing under the name "Blessings of Liberty" shielded them from civil and criminal liability.

P.K. described to them how they could "do death by a thousand paper cuts" by filing the liens, which are legal claims against an asset. All the liens - which totaled $114 billion over 2009 and 2010 - were filed at the secretary of state's office in St. Paul.

For more, see Couple accused of harassing Hennepin County officials with $114 billion in bogus liens.

Abrupt Close-Down Of Loan Modification Outfit Leaves Slew Of Homeowners In Mortgage Payment Limbo

2012-01-10T00:03:00.000-05:00

In Chamblee, Georgia, WSB-TV Channel 2 reports:

People who sought help with loan modifications at a center in DeKalb County are getting a shock. The location has locked its doors. "It scares me, my family, my kids," one client said who asked not to be identified. He says he paid $250 to The Community Business Center in Chamblee for help with a loan modification to save his home from foreclosure. Now, he feels like he's been left in limbo.

***

[C]ustomers have been showing up, one after the other, trying to get answers about the status of their loans, fearing that their homes may have been sold at auction this week or could soon be sold. "I don't know what's going to happen right now, so I have to ... look for a lawyer or something," Alfredo Bustos said, who claims he also paid $250 for loan modification help.

For the story, see Homeowners left in limbo after loan modification office abruptly closes.

Pennsylvania Man Gets 81 Months For Using Fraudulent POAs To Pocket Cash From Refinancing Homes Owned By Elderly Parents, Other Family Members

2012-01-10T00:01:00.000-05:00

From the Office of the U.S. Attorney (Philadelphia, Pennsylvania):

Anthony Iacono, Jr., 60, of Rutledge, PA, was sentenced [] to 81 months in prison for fraudulently obtaining over $2 million in cash, and real and personal property, announced United States Attorney Zane David Memeger. Iacono pleaded guilty to wire fraud, credit card fraud and aggravated identity theft charges on August 19, 2010.

Judge Bartle described the actions of the defendant as committed with a "depravity of heart and mind." Iacono fraudulently obtained over $2 million in loans secured by properties owned by his parents and other family members using fraudulent powers of attorney and credit cards in the names of relatives and businesses owned by relatives.

To obtain the credit card used in the identified credit card transactions, Iacono used the victims' names, dates of birth and social security numbers without permission. When he failed to pay the loans, his family bore the brunt of the lenders efforts to recover their money.

In addition to the prison term, U.S. District Court Judge Harvey Bartle III ordered forfeiture and restitution in the amount of $2,098,000. There was no fine imposed because the Court found the defendant without means to pay one.

Source: Pennsylvania Man Sentenced For Identity Theft.

Fla. AG Tags Alleged F'closure Relief Racket w/ Civil Suit; Outfit Allegedly Pocketed Upfront, Monthly Fees, Promised Homeowners Mortgage-Free Living

2012-01-09T00:05:00.000-05:00

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

Two West Palm Beach-based companies are being sued by the state for taking upfront fees to help struggling homeowners and promising them they can live mortgage-free for years.

In return for the free-living, the homeowners paid CRS Marketing and MGD Management $300-a-month to stall a foreclosure, according to the state complaint. Also named in the suit is West Palm Beach resident Mark Dalen, who owns the two firms.

Florida Attorney General Pam Bondi obtained a temporary injunction and limited asset freeze against the companies, which also have offices in Hollywood. The lawsuit, dated Dec. 28, says hundreds of Florida consumers have been "victimized" by the companies' "false representations." Homeowners were also allegedly charged upfront fees of between $1,500 and $2,500 as well as the monthly $300 fee.

It is illegal in Florida for most companies to charge upfront fees for foreclosure rescue services or loan modification help.

For more, see Florida AG lawsuit: West Palm Beach firms preyed on distressed homeowners.

For the lawsuit, see State of Florida v. MGD Management, LLC, et al.

For the Florida AG press release, see Attorney General Pam Bondi Sues Two Foreclosure Management Companies for Defrauding Homeowners Facing Foreclosure (Attorney General Bondi Achieves Temporary Injunction and Limited Asset Freeze).

Lawsuit: Capital One Illegally Squeezed Short Sale Homeowners On Deficiency Payments

2012-01-09T00:03:00.000-05:00

Courthouse News Service reports:

Homeowners say in a class action that Capital One illegally made them pay thousands of dollars in deficiency contributions after short sales of their homes, though the state prohibited that in 2010.

Then-Gov. Arnold Schwarzenegger signed Senate Bill 931 into law in late 2010 to reduce foreclosures and boost short sales. Before the law took effect in January 2011, homeowners had no incentive to short sell their homes because while lenders could not obtain a deficiency judgment on foreclosed properties, they could go after homeowners who sold short.

"However, it quickly became apparent that where there was a second mortgage, the junior lien holder often refused to release the lien and the short sale never went through," according to the complaint.

For more, see Class of Homeowners Sues Capital One Over Short Sales.

For the lawsuit, see Teson v. Capital One, N.A.

Texas Man Agrees To Plea Guilty In Fractional Interest Deed Transfer Foreclosure Rescue Scam

2012-01-09T00:01:00.000-05:00

In Austin, Texas, the Austin American Statesman reports:

A Lakeway man who has been accused of fraudulent business dealings at least twice has agreed to plead guilty in a new investigation involving allegations that he was paid to fraudulently delay foreclosures on behalf of distressed property owners, according to court documents.

Frederic Alan Gladle, 53, is in jail awaiting his guilty plea to charges of bankruptcy fraud and aggravated identity theft. That plea is scheduled for Friday . He faces two to seven years in prison.

From 2007 until his arrest in October, Gladle operated a business that helped distressed property owners delay foreclosure by paying a monthly fee — usually about $750 a month, according to prosecutors and charging documents.

After clients signed up for his services, one of Gladle's salespeople had them sign deeds transferring a fractional share — usually one one-hundredth — of their distressed property, the documents said.

The shares were transferred to an unrelated person who had previously filed a bankruptcy petition in court, the documents said. Those people were unaware that Gladle was using their names, which were obtained from online court records, the documents said.

Gladle, or "a co-schemer operating at his direction," would then send a copy of the fractional deed and a copy of the unrelated person's bankruptcy petition to the lender that was expected to foreclose, the documents said.

Because bankruptcy proceedings automatically delay foreclosure actions, the lender would not be able to immediately foreclose on Gladle's client's property, the documents said.

Eventually, after the unrelated debtors claimed they knew nothing about owning the fractional interest, the foreclosure continued, according to the documents.

Gladle would then go through the process again, causing further delay, the documents said. Through the course of the scheme, Gladle and his unnamed associates collected $1.6 million from clients and delayed the foreclosure sales of more than 1,100 properties, the documents said.(1)

For the story, see Lakeway man to plead guilty in scheme to delay foreclosures.

(1) See Final Report Of The Bankruptcy Foreclosure Scam Task Force for a discussion of fractional interest deed transfer scams and other foreclosure rescue rackets involving the abuse of the bankruptcy courts.

Maryland AG, Wells Reach Settlement On Charges Involving Alleged "Pick-A-Pay" Mortgage Loan Ripoffs

2012-01-08T00:07:00.000-05:00

In Baltimore, Maryland, The Baltimore Sun reports:

Under an agreement announced Thursday by the Maryland Attorney General's Office, Wells Fargo has agreed to make loan modifications and pay nearly $1 million in restitution to customers of two lenders acquired by the bank.

The office's Consumer Protection Division, which reached the agreement with Wells Fargo, said lenders Wachovia and Golden West Financial used deceptive marketing in offering consumers adjustable-rate home loans.

Wells Fargo will pay $940,056 to borrowers with "Pick-a-Payment" mortgages written by Wachovia and Golden West who lost their homes in foreclosure, the agreement says. Wells Fargo acquired the two lenders in 2008. So far about 250 borrowers in Maryland with "Pick-a-Payment" mortgages are known to have lost their homes to foreclosure, but that number could grow, said David Paulson, a spokesman for the Attorney General's Office.

In addition to the agreement in Maryland, Wells Fargo has signed similar pacts with attorneys general in 11 states.

For the story, see Wells Fargo agrees to pay restitution to mortgage borrowers (Consumer Protection Division alleges deceptive marketing of loans).

Ex-F'closure Mill King Tagged In Suit By His Now-Defunct Document Sweatshop For Allegedly Inflating Income By "Cutting Corners" In Litigation Process

2012-01-08T00:05:00.000-05:00

In Fort Lauderdale, Florida, Reuters reports:

David J. Stern, who became one of the country's best-known foreclosure lawyers before shutting his business under regulatory pressure, has been sued for fraud by the publicly traded company he helped create to take on his now-defunct law firm's back-office operations.

DJSP Enterprises Inc said Stern, a former chief executive, concealed that his law firm David J. Stern PA inflated revenue by systematically "cutting corners" in the foreclosure process. It said this took place even though the firm knew that such clients as Citigroup Inc, Fannie Mae and Freddie Mac might flee.

DJSP said the shortcuts included letting workers sign foreclosure documents without reading them, known as "robo-signing," and submitting false or backdated documents to courts. It also said Stern awarded bonuses and "extravagant gifts" to workers who could churn out foreclosures quickly.

Stern had "specific intent to fraudulently induce DJSP" to assume the back-office operations, the company said. The demise last March of Stern's law firm "directly and necessarily resulted in the destruction of DJSP's business," it added.

DJSP in January 2010 took on the Stern operations in exchange for paying nearly $60 million in cash to Stern, whose lifestyle included luxury homes and a yacht.

For the story, see Foreclosure lawyer Stern sued by his old company.

NY Appeals Court: Missed Filing Deadline Not Enough To Dismiss Foreclosure Action

2012-01-08T00:03:00.000-05:00

In New York City, Thomson Reuters reports:

A Brooklyn judge should not have tossed a foreclosure case just because the foreclosing bank's counsel--from the scandal-plagued Steven J. Baum P.C. law firm--missed a deadline for filing paperwork rebutting its alleged conflict of interest, a New York appeals court has ruled.

The unanimous, unsigned order from the Appellate Division, Second Department, restores the foreclosure action brought against Kelvy Guichardo by the trustee for his mortgage US Bank NA. The case had been dismissed sua sponte by Kings County Justice Arthur Schack in a Nov. 8, 2010 ruling.

For more, see Late foreclosure filing not grounds for dismissal: NY court.

For the ruling, see U.S. Bank, N.A. v Guichardo, 2011 NY Slip Op 09630 (App. Div. 2nd Dept. December 27, 2011).

Legal Loophole Makes Paying Real Estate Taxes Optional For Some Detroit Homeowners

2012-01-08T00:01:00.000-05:00

In Detroit, Michigan, The Detroit News reports:

Paying property taxes has become optional for a growing number of Detroit landowners using a legal loophole to wipe away debt by buying back their properties in foreclosure.

As the city nears financial collapse, owners erased at least $4.7 million in property taxes and liens this fall on more than 400 properties Wayne County appeared to sell back to them for pennies on the dollar, according to a Detroit News analysis.

That's double the number of buybacks found at 2010's Wayne County tax foreclosure auction. In many cases, no one else bids other than the former property owners, who can reclaim the properties for as little as $500 apiece.

The increase has a top aide to Mayor Dave Bing and others calling on Wayne County Treasurer Raymond Wojtowicz or the state Legislature to crack down. "Unfortunately, some laws have loopholes, and in this case results in others exploiting matters for their personal advantage at the expense of responsible taxpayers and the city," Kirk Lewis, Bing's chief of staff, said in a statement.

"Legislative remedies must address and prevent the myriad of ways these property owners can scam the system for their personal gain."

For more, see Homeowners buy back own property, dodge taxes.

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

2012-01-07T00:05:00.000-05:00

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

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

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

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

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

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

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

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

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

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

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

2012-01-07T00:03:00.000-05:00

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

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

***

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

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

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

2012-01-07T00:01:00.000-05:00

In Lakeland, Florida, The Ledger reports:

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

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

***

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

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

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

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

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

2012-01-06T00:05:00.000-05:00

In Austin, Texas, the Austin American Statesman reports:

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

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

***

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

***

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

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

***

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

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

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

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

2012-01-06T00:03:00.000-05:00

In Martinsburg, West Virginia, The Journal reports:

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

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

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

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

***

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

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

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

2012-01-06T00:01:00.000-05:00

CNNMoney reports:

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

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

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

***

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

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

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

2012-01-05T00:05:00.000-05:00

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

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

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

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

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

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

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

Source: Risk Incurred In Renting To Own.

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

2012-01-05T00:03:00.000-05:00

In Bloomington, Minnesota, the Star Tribune reports:

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

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

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

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

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

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

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

2012-01-05T00:01:00.000-05:00

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

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

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

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

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

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

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

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

2012-01-04T00:05:00.000-05:00

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

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

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

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

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

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

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

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

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

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

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

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

2012-01-04T00:03:00.000-05:00

In Mansfield, Texas, the Star Telegram reports:

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

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

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

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

***

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

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

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

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

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

2012-01-04T00:01:00.000-05:00

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Source: Retired NYC school teacher fights for her freedom.

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

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

2012-01-03T00:07:00.000-05:00

In New York City, the New York Post reports:

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

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

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

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

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

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

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

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

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

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

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

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

2012-01-03T00:05:00.000-05:00

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

***

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

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

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

2012-01-03T00:03:00.000-05:00

In Elkhorn, Wisconsin, The Janesville Gazette reports:

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

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

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

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

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

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

2012-01-03T00:01:00.000-05:00

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

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

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

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

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

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

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

2012-01-02T00:07:00.000-05:00

The Minnesota Lawyer reports:

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

***

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

***

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

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

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

2012-01-02T00:05:00.000-05:00

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

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

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

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

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

***

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

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

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

***

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

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

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

2012-01-02T00:03:00.000-05:00

In Brooklyn, New York, The Buffalo News reports:

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

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

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

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

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

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

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

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

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

2012-01-02T00:01:00.000-05:00

In Concord, New Hampshire, The Nashua Telegraph reports:

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

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

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

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

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

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

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

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

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

(1) Go here for:

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

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

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

2012-01-01T00:05:00.000-05:00

In San Francisco, California, The Recorder reports:

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

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

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

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

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

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

2012-01-01T00:03:00.000-05:00

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

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

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

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

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

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

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

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

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

2012-01-01T00:01:00.000-05:00

The New York Times reports:

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

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

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

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

Dozens Of Renters Face Possible Boot From Buildings In Foreclosure Over Code Violations, Dangerous Living Conditions

2011-12-31T00:07:00.000-05:00

In St. Paul, Minnesota, Minnesota Public Radio reports:

About 60 families in St. Paul might be forced out of their apartments next month because of dangerous living conditions. City officials say the scope of the problems and the number of potentially displaced tenants are especially troubling.

City inspectors cited nearly 600 code violations in two rental buildings near Interstate 35E and Maryland Avenue, such as missing sinks, a gas leak and an infestation of mice and cockroaches. "It's not safe, it's not sanitary, it's not healthy," said City Council member Lee Helgen. "We don't want to kick people out, but at the same time, we're not going to tolerate these kinds of conditions." Reports of drug deals and prostitution are common. Since 2000, police have received more than 700 calls involving just one of the buildings.

City officials say part of the problem is that the landlord, Peggy Chun, is failing to screen her tenants. Some of the renters are immigrants who are afraid to report the problems.

Marcia Moermond, the city's legislative hearing officer, said the city will revoke the buildings' certificates of occupancy Jan. 18th if the problems aren't resolved. [...] Moermond said the properties are in foreclosure. A hearing next week will determine whether the bank, Wells Fargo, can appoint a receiver.

For the story, see Dangerous conditions could evict 60 families from St. Paul apartments.

Owners Of Another Riverside County Mobile Home Park Forced To Relinquish Control Over Expensive Code Violations, Health & Safety Issues

2011-12-31T00:05:00.000-05:00

In Riverside County, California, The Desert Sun reports:

The conditions at a Thermal mobile home park are so bad they threaten the health and safety of the 90 or so residents there, a Riverside County Superior Court judge declared Wednesday.

Accordingly, owners of the Hernandez mobile home park, [...] must now hand control of the property to a court-appointed receiver who is expected to start making arrangements for repairs within 30 days.

***

It's a victory in the residents' lawsuit against the Hernandez park owners. Residents filed suit in 2010, claiming they endured more than a month without electricity during the sweltering summer heat. [...] The outages intermittently returned this past summer to the park, which lacks the proper Riverside County permits. Park residents, many of them farmworkers, also deal with sewage spills and an on-site well that has tested positive for potentially harmful bacteria.

Scores of other east valley mobile home parks lack permits and have similar hazards. Wednesday's action makes the neglected Hernandez park the latest where conditions grew so bad, compiling expensive code violations, that the owners were forced to relinquish control.

For more, see Judge orders owner to give up Hernandez mobile home park over health violations.

Homeless Take Pass On Local Shelters, Opt For Wide Selection Of Vacant Foreclosures Instead

2011-12-31T00:03:00.000-05:00

The Los Angeles Times reports:

[N]ew York would seem to offer an ideal setting for squatters, with its ubiquitous apartment blocs providing safe hiding for people who can't afford the sky-high rents or stomach life in the shelters. The cutoff of funding this year for a program called Advantage, which helped needy renters pay for housing, has deepened the dilemma for people like [Tasha] Glasgow, 30, who has two children, one of them autistic. Her 9-year-old girl and 5-year-old boy have been taught to adapt to the idiosyncrasies of life in a squat, which is a bit like life during wartime.

There is no heat. Empty jugs sit on the kitchen counter, waiting to be filled when the water comes on. Toilet-flushing and bathing are timed according to the faucets' erratic flow. Bare bulbs jut from ceiling fixtures, the wood floors are bare of carpeting, and tattered drapes cover the windows. There are none of the signs of regular family life: no dishes in the sink from the last meal, no dining table, no mail to be opened.

Still, it's better than a shelter. "I didn't want to be in a shelter. It was depressing. I wasn't getting support trying to find a place to live," said Glasgow, who has occupied this apartment near the ocean, on the foggy tip of Queens, on and off since 2007.

***

If all goes well, Glasgow and the children soon will move to another, better squat — a vacant Brooklyn house. The children's father, Alfredo Carrasquillo, entered it Dec. 6 as part of a nationwide effort by homeless advocates to highlight the housing crisis, which included public occupations of bank-owned properties. He won't move the rest of the family in until he has made it more suitable for habitation.

"Honestly, we just thought it would be a great opportunity," Carrasquillo said of taking over the vacant house in a public manner, which included a march through the neighborhood and a party on the quiet street, complete with balloons and housewarming gifts. "This is for everyone who doesn't have a house right now — to show people they can fight back."

For more, see Squatters say foreclosed homes beat homeless shelters (They may lack heat and a consistent water supply, but the vacant dwellings aren't as 'depressing,' as one New York mother puts it. Advocates say the number of squatters nationwide is rising).

S. Fla. Volunteer Group's Effort To Save Canine Victims Of F'closure, Recession Runs Out Of Cash; Dog Dumping In Predator-Packed Everglades Continues

2011-12-31T00:01:00.000-05:00

In Miami, Florida, Miami New Times reports:

The past four months have been a horror show for local animal rescuer Amy Restucci. Along with a group of volunteers, she has spent every weekend in rural South Dade rounding up dogs -- all of them former pets abandoned on the edge of the Everglades by feckless owners.

When she finds the animals, they're usually emaciated and sick from being tossed to the streets. "Some of them have needed leg amputations," Restucci says. "They have missing eyes. They have infections."

But here's the really bad news: After rescuing 178 dogs -- and three cats -- and spending roughly $65,000 on vet bills, Restucci can't afford to rescue the animals anymore. She first heard about the packs of recently dumped dogs in September.

They're found in Kendall, Homestead, Florida City, and -- most harrowing for the pets -- the predator-packed Everglades. They're not longtime strays: Many of them nuzzle Restucci when she approaches. It's unclear if the mass abandonment is a longtime phenomenon only now being discovered or a new by-product of the foreclosure spike and recession gripping the county.

A public service announcement for the cretinous dog owners doing the dumping: Fido is not embarking on a fun Milo & Otis adventure with, like, talking owls. If you abandon your pet in the Glades, it will most likely die of starvation or under the wheels of a car. Miami-Dade Animal Services picks up the dogs only when called. Because the animals are in bad shape, Restucci says, they are almost always quickly euthanized.

None of the animals she has rescued has been put to sleep. She raised all of the cash through donations -- documented in detail on the effort's Facebook page -- and swung discounted vet care and boarding at Acacia Animal Hospital in Pompano Beach. But she ran out of funds a couple of weeks ago. (Want to help by donating cash or adopting a rescued animal? Visit the effort's Facebook page or contact fladogs@thenokillnation.com.)

"My heart is broken," Restucci says. "We've saved more than one hundred, but it should be one thousand. There are countless more out there suffering."

Source: With Hundreds of Dogs Abandoned Near Everglades, Rescuers Are Out of Funds.

Cops Pinch Two In Adverse Possession Home-Hijacking Scam; Use Of Forged Lease To Turn On Utilities Could Lead To More Charges

2011-12-30T00:05:00.000-05:00

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

A man who told Channel 2 Action News that he could help anyone move into a foreclosed house and live for free, is now in jail. Roderick Walker filed an Affidavit of Adverse Possession for a $300,000 vacant home on Mackenzie Court in Douglas County, and has lived there for the past six months for free. He also started a Facebook page teaching others how to do the same thing, but that's not what he was arrested for. Deputies charged Walker with criminal trespassing Thursday night, saying he helped one of his clients get back into a house on Prestley Mill Road which he'd been evicted from.

"He'd come back in after the cleanup crews left. Went through the basement, up through the house and helped him move all his property right back in," said Douglas County Sheriff's Investigator Josh Skinner.

Deputies moved the belongings right back out, and charged the client that day. "If they would have just took the 3 or 4 months of rent free living as a good blessing and left, nobody would have gotten in trouble that day," said Skinner.

But he says Walker and the others' attempted use of Georgia's Adverse Possession law to occupy the vacant homes is not legal. He calls it fraud and says law enforcement intends to crack down on anyone using paperwork to try to claim houses they don't own.

"I think it's a very good way to wind up in jail," said Skinner, "We just won't tolerate this kind of behavior." [...] Walker interpreted Georgia's adverse possession law to say the house would be his if he could live in it for seven years. Investigators say a successful adverse possession cannot be rooted in fraud, but unless a neighbor or realtor calls, it would be hard to catch. Plus, many homes are in foreclosure limbo right now, making them ripe for adverse possession attempts.

***

[Skinner] says both Walker and his client could face even more charges relating to the house on Prestley Mill Road. The power company required proof of residency and investigators believe the pair forged a lease to open an account. Walker is being held in the Douglas County Jail on an $11,000 bond.

For the story, see Police arrest man who moved into vacant home.

Nevada AG: Ex-HOA Treasurer Hijacked $800K+ In Fire Insurance Proceeds, Leaving Damaged Premises Unrepaired, Elderly Residents Homeless

2011-12-30T00:03:00.000-05:00

From the Office of the Nevada Attorney General:

Nevada Attorney General Catherine Cortez Masto announced [] that on Dec. 16 a Clark County Grand Jury returned a six count indictment against Massoud Aaron Yashouafar, 50, of Beverly Hills, Calif., for his actions in allegedly defrauding the Paradise Spa Home Owners Association of over $1 million dollars.

“This type of crime is particularly jarring when you realize that older victims, many of whom were living on fixed incomes in Paradise Spa, were forced to find and pay for alternative living quarters when they were still obligated to make mortgage payments on their burned condo units, while waiting for repairs that would never be made,” said Masto.

***

In his capacity as treasurer of the Home Owners Association he was provided two checks, one over $400,000 and the other check over $430,000 issued by the Civil Service Employees Insurance Group, for property damage to two separate buildings caused by fires.

The insurance checks were issued to repair the damaged buildings. Rather than repair the buildings, Yashouafar deposited the checks in an out of state bank account on which he was the sole signator. As a result, numerous condo owners, many of them senior citizens, were forced to find other living arrangements, while still making mortgage payments on their damaged, uninhabitable units.

In some cases, Yashouafar rented units he owned to the displaced condo owners, resulting in them paying him rent while they waited for repairs that were never done because of the alleged theft.

For the Nevada AG press release, see Attorney General Announces Indictment In Paradise Spa Home Owners Association Embezzlement Scheme.

For the indictment, see State of Nevada v. Yashouafar.

Texas AG Civil Lawsuit: Bill Collector Threatened Consumers With Arrest, Prosecution, Imprisonment In Effort To Collect Delinquent Debts

2011-12-30T00:01:00.000-05:00

From the Office of the Texas Attorney General:

Texas Attorney General Greg Abbott [] charged a third-party Houston debt collection firm with violating the Texas Finance Code. First Integral Recovery, LLC is a third-party collector hired by creditors to collect outstanding, short-term payday loan payments.

According to the State’s enforcement action, First Integral Recovery’s representatives unlawfully claimed that the firm is associated with law enforcement agencies. After falsely citing their purported law enforcement ties, the defendant’s staff told debtors they faced arrest, prosecution and imprisonment because of their delinquent debt.

In addition to improperly misleading debtors about First Integral Recovery’s law enforcement ties, the State’s enforcement action cited the defendant for attempting to intimidate debtors and using profanity during debt collection calls.

According to state investigators, First Integral Recovery also failed to properly verify whether the alleged debtor actually owed the debt in question – even after those contacted by the firm sought additional information or insisted they did not incur the indebtedness in question.

Although Texas law requires that debt collectors identify the name of the creditor, First Integral Recovery representatives routinely refused to identify the alleged creditor on whose behalf they were calling. Finally, the firm also operated for seven months during 2010 without having posted a surety bond with the Texas Secretary of State, a legal requirement of third-party debt collectors. The attorney general seeks civil penalties for violations of the Finance Code and Texas Deceptive Trade Practices Act.

For the Texas AG press release, see Texas Attorney General Charges Houston Debt Collection Firm with Deceiving Consumers (First Integral Recovery threatens debtors with arrest, prison).

For the Texas Attorney General's lawsuit, see State of Texas v. First Integral Recovery, LLC.

Utah Federal Court Rulings On Unqualified BofA Foreclosure Trustee In Conflict

2011-12-29T00:05:00.001-05:00

In Salt Lake City, Utah, KCSG-TV Channel 14 reports:

Utah senior federal Judges Dee Benson and Bruce Jenkins have ruled Bank of America's foreclosure arm, ReconTrust Company, N.A. (NYSE: "BAC") may not be qualified to perform non-judicial foreclosures in Utah.

However, [last] week senior federal Judge David Sam ruled that ReconTrust is operating under the National Bank Act regulated by the Office of the Comptroller of the Currency (OCC), is a trustee under the Texas law where ReconTrust is located rendering Utah Code 57-1-21(3) inapplicable. Ruling

The ruling comes in a case filed by attorney John Christian Barlow, in which ReconTrust is being sued by Utah homeowner Garry Franklin Garrett accusing ReconTrust of conducting an unlawful foreclosure sale because it's is not a qualified trustee under Utah Law. The judge's decision conflicts with rulings by other Utah federal judges over the Bank of America's Utah foreclosure activities.

The Utah Attorney General intervened in another Utah homeowner's lawsuit filing an Amicus Curiae petition charging that the Bank of America was illegally foreclosing on Utah homeowners. Peni Cox vs ReconTrust

The Utah Attorney General accused the Bank of America in May 2011 of illegal foreclosure activities using its subsidiary ReconTrust Company. In the letter, the Attorney General said that ReconTrust is in violation of Utah law as set forth in Utah Code Sections 57-1-21 and 57-1-23, which outline the requirements for lawful non-judicial foreclosures. Support for the attorney general's position is found in a recent 10th Circuit case, Shurtleff v. Kleinsmith in which Utah Code Sections 51-1-21 and 57-1-12 were found to be constitutional.

The letter said that ReconTrust is in violation of the National Bank Act, which does not allow national banks to operate in contravention of State and local law. ReconTrust's exercise of the fiduciary powers in the State of Utah is a violation of State law and applicable federal law, the Attorney General said.

For more, see Utah Federal Judges Decisions Conflict in ReconTrust Utah Home Foreclosure Actions.