21 Residents Driven From Homes Into Frigid Cold As Frozen, Bursting Water Pipes, Electricity Short Out Spell Shut Down For Building In Foreclosure

In Cicero, Illinois, NBC Chicago Channel 5 reports:

• The town of Cicero stepped in Friday after 21 residents, including 12 children, were displaced from their home because of bursting water pipes amid a foreclosure battle.



• Ahead of the coldest morning of the year, several frozen pipes burst Thursday night in the building in the 5100 block of 30th Street, causing the electricity to short out. For the past year, the residents have been caught in foreclosure proceedings between the building's owner and the city.



• The owner, who city officials said couldn't be found Friday, is accused of owing thousands in water bills to the city. The town of Cicero paid for hotel rooms for the displaced families. Because of the foreclosure, it's not clear who will pay for repairs in the building.



• One thing's for sure. The residents can't go home right now. A community service car blocked the building, which has been closed by the town.



• The fire department said the building is currently a safety hazard for residents.

Source: 21 Cicero Residents Displaced on Frigid Day (The town stepped in to pay for hotel rooms).

Texas Man Files Suit To Dodge Boot From Home Owned By Another That He's Lived In, Maintained For 35 Years

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

• A Nome man who has lived on a Jefferson County property for 35 years is asking the court to overturn a woman's eviction orders.



• Charles Malveaux filed a lawsuit Jan. 5 in Jefferson County District Court against Mary E. Jackson. In his complaint, Malveaux claims he has lived on and maintained a property in Nome for more than 35 years.



• However, Jackson is now attempting to evict him from the property, claiming she was given 100 percent ownership of it following the death of Sarah Parker, according to the complaint.



• Malveaux maintains that Parker gave him permission to occupy the land and says he should be granted the right to remain on the property because of the work he has performed for the past 35 years.

For the story, see Nome man sues property owner to stop eviction.

L.A. City Tags Scofflaw Landlord For $322K In Relo Funds For Dozens Of Low-Income Tenants To Assist In Forced Move From 3-Unit Health/Safety/Fire Trap

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

• The Los Angeles City Council voted [] to provide up to $322,000 in relocation money to dozens of low-income tenants who must move from a South Los Angeles apartment building deemed unsafe by city inspectors.



• Tenants were given eviction notices last month after housing officials concluded that owner John Callaghan had illegally converted what was supposed to have been a three-unit apartment building [...] into as many as 44 separate living spaces — a warren of narrow hallways; tiny, shared bathrooms; and communal kitchens, much of it laced with unpermitted electrical and plumbing work.

***

• The payments, which will range from $7,300 to $18,300, will come from a fund established by the Housing Department for tenants who must move out because of hazardous conditions. Those who receive the maximum must have lived in the apartment for more than three years and qualify as low income.



• The payments are designed to cover the first month's rent, a rental deposit, moving costs and the likelihood that tenants will be charged a higher rent at their next apartment, said Sonia Pflaster, a lawyer with the Inner City Law Center.(1) Some renters have been paying as little as $350 per month and are finding that similarly sized apartments are now going for $700 to $900, said Pflaster, who represents 35 tenants at the 49th Street property.



• Although the city's action goes a long way toward helping the tenants, council members still want to know why it took inspectors so long to figure out what had happened at the building — and how many other similar properties might exist.

***

• In recent weeks, city officials have required that the owner pay for an around-the-clock security guard on the property to make sure the unpermitted electrical work doesn't spark a fire.

For the story, see Tenants get relocation funds after eviction from illegal units (The l.A. City Council approves up to $322,000 for dozens of people who were living in an illegally remodeled apartment building. Lawmakers are still trying to determine what went wrong with inspections).

(1) Headquartered on Skid Row, Inner City Law Center provides free legal representation and social service advocacy in Los Angeles County to over 2,000 homeless and working poor clients each year.

F'closures Also Affect Dearly Departed; Loved Ones' Final Resting Place Anything But Peaceful As Pending Sale Of Troubled Cemetary Worries Families

In Madison, Indiana, WDRB-TV Channel 41 reports:

• Grandview Memorial Gardens Cemetery gained attention for water-logged graves and will now go to the highest bidder. The auction is just the latest problem for Grandview, that has many folks wondering what will happen to all of their loved ones.



• Pictures are all Hazel Wilkerson has of her late husband Fred who died October 22nd. "It will be three months Sunday," says Wilkerson, a secretary at the Madison Airport. She worked alongside her husband, a pilot, for many years. "We'd been married 45 years when he passed away."



• He is buried next to his mother at Grandview. Hazel already has her plot next to Fred. But their final resting place is anything put peaceful. "I just wonder what's going to happen," wonders Wilkerson.



• She's wondering because next month the cemetery is going on the auctioning block. Grandview's history is bogged down in controversy. Bodies were exhumed several years ago to fix problems with water logged graves. The actual owner is still in dispute with lawsuits dating back to 2006.



• "I just don't know. That's up to a judge to decide," says Jim Holt. He thought he sold the cemetery years ago to Keith Mefford and wants nothing to do with it now as it goes up for auction. "When Mefford stopped making his payments to me, then I stopped making the payments to the bank."



• The bank then filed foreclosure against the cemetery. Holt says he knows of two interested parties.



• Hazel Wilkerson just hopes the highest bidder holds this sacred ground in high regard. "Somebody's going have to take it over that's going to take care of it cause it's not really been taken care of like it should be." "The sheriff plans to auction off the cemetery on February 23rd.

Source: Troubled Madison cemetery will go to the highest bidder.

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

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

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

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

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

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

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

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!'

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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'

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).

See also, Elderly and Disabled Tenants Win Suit Compelling Bank to Pay for Repairs.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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).