Observations On Today's Identity Theft Posts

For those of you who read today's posts, it should be obvious to you that today was Identity Theft Day here at The Home Equity Theft Reporter. I want to conclude the day with a few observations based on these posts that I hope you will give me your indulgence on.

We have learned (or have had confirmed) that if you are about to go on an out-of-town trip, you can't check into a hotel or motel without the risk of an employee there swiping your I.D. information. If you travel abroad, you might have to wonder why the clerk at the passport office is smiling at you. Since we are currently in income tax season and you want to get your taxes done before leaving on your trip, maybe you should think twice about have them done by your friendly accountant or tax preparer. If you decide to do them yourself and you need to make copies of your documents, would it be wise to go to your local neighborhood Copy Center and risk having the photocopier pilfer your I.D. information? If you've been recently wronged by someone and want to take legal action, will the attorney you hire check to see that you have good credit before he/she takes your case?

If all these things stress you out to the point that it gives you a heart attack and you need to be rushed to the hospital, remember one thing. As you are being wheeled into the emergency room, be sure and ask if the intake clerk or nurse's assistants are "bonded and insured." And if you survive the hospital, make it home to recuperate (assuming no one has stolen your home yet), and are looking for something to pass the time, you can always open, read, and shred all that junk mail that you allowed to pile up at home (assuming you haven't dumped it all in the garbage unopened, in which case you might want to rush out and buy yourself an identity theft insurance policy before the dumpster divers get a hold of all that unopened, unshredded mail).

As a concluding note, financial experts often advise that you should check your credit periodically, just to make sure your identity hasn't been stolen. It may be a good idea to also check your local county property records office periodically, just to make sure your house hasn't been stolen, either!
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Discarded Unopended Junk Mail Poses An Identity Theft Risk

For this post, see my March 23, 2007 post, or for the online news article, see Junk mail ID theft warning.
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Identity Theft Insurance A Good Idea?

See my March 10, 2007 post on identity theft insurance, or for the full article, see What Is Identity Theft Insurance?.
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Nursing Assistant, Others Plead Guilty In Identity Theft

This post is a rerun of my February 1, 2007 post. It involved an I.D. theft in connection with a theft of hospital patients' personal identity information that the accused then used to fraudulently obtain mortgage loan proceeds. To see the full article, see Four Sentenced for Bank Fraud and Aggravated Identity Theft, Reports U.S. Attorney.
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Disbarred Attorney Arrested For Identity Theft

Former Rockford attorney Lisa Anne Leitter has been charged with 17 counts of identity theft for allegedly running up credit card debts on accounts she opened up in her secretary's name, according to an article in the Rockford Register Star at rrstar.com.

She was also the subject of an administrative investigation as a result of a complaint filed by the Illinois Attorney Registration and Disciplinary Commission in 2006 based on similar allegations. She had also been alleged by the Commission to have (1) stolen her former partner's identity and (2) bilked clients out of money as well. That investigation ended with her disbarment as an attorney. To read more, see Former attorney faces identity theft charges.
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Dateline NBC Going After Identity Theft

NBC's Dateline program, which has recently garnered much attention recently for its To Catch A Predator investigation, has launched a new investigation, To Catch An I.D. Thief, which premiered last night. NBC's investigative reporter/super sleuth Chris Hansen is at it again in this year-long investigation; this time (at least in part 1 of the series) masquerading as a delivery man in his attempt to infiltrate identity theft networks, using such devices as "bait cards", an undercover "online store" (HansenDiscountElectronics.com), and a "delivery service" (CH Delivery) in his quest to nail the bad guys (with the help from the folks at CardCops.com).

Go here for the Preview Video on NBC's Today Show (5:56).

For the full episode, go here To Catch An I.D. Thief - Part 1 for links to the following program segments:

1. ‘To Catch an ID Thief’ (4:24)
2. Underground den of thieves (8:58)
3. 'Hansen Discount Electronics' (3:51)
4. CH Delivery (10:53)
5. Where's Wendy (8:07)
6. Harsh Truth (4:19)

Go here for the program Transcript: On the hunt for ID thieves.

Go here for the Dateline: To Catch An I.D. Thief webpage.

Part 2 is scheduled to air next Tuesday, April 3 at 8:00 p.m. EST (as they often say: "check your local listings").
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Culprit Copiers Pose Identity Theft Risk

Expert are warning that the modern photocopier could pose a risk in identity theft, according to an Associated Press article published on the WRTV Channel 6 (Indianapolis, Indiana) website. According to the report:

• That's because most digital copiers manufactured in the past five years have disk drives -- the same kind of data-storage mechanism found in computers -- to reproduce documents. As a result, the seemingly innocuous machines that are commonly used to spit out copies of tax returns for millions of Americans can retain the data being scanned.

Add the modern public photocopier to the list of people, places and things one must approach with suspicion. To read more, see Hard Drives In Copiers May Keep Your Papers (Photocopiers Use Hard Drives To Store Scans)
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Emergency Room Clerk Arrested For Identity Theft

This story was originally posted last Saturday. For the origional post, see Alleged Identity Theft Scam Targets The Dead. For the media story, see Identity theft targeted the dead (Three arrested; more than 100 names stolen)
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Tax Preparation Employees Arrested For Identity Theft

I posted a story on this case this past Sunday. I'm mentionong it again to keep all these I.D. theft stories together. Go here for my 3-25-07 post; or see Pair accused of using Latinos' tax preparation information to steal identities (Pair worked at Latino services business in 2006) for the link to the story.
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Pennsylvania Passport Clerk Charged With Identity Theft

Postal worker Kim McKnight Jimenez of Exeter Township, Pennsylvania was charged with unlawfully obtaining 18 credit cards by using postal customers’ names and Social Security numbers, according to a recent story in the Reading Eagle, at readingeagle.com. The names on the cards Jimenez obtained matched those of people whose passport applications she handled. Authorities say that in addition to the 18 victims they know about, there could be other victims who have yet to discover that their identities have been compromised. For more, see Postal worker faces charges in identity theft.
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Motel Employee Charged With Identity Theft

Oklahoma woman and motel employee Shaniak Nikole Walker was charged with committing identity theft, according to The Sun. She is accused of using the credit card of a Motel 6 guest to pay a $65.02 bill owed to Aaron Rents in Midwest City, Oklahoma. Credit goes to the Midwest City Police Department for investigating a case that others might not have bothered with. (It's close to the point where you can't use your credit card anymore.) To read more, see Woman charged with identity theft.
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Strong Arm Homeowner Association Collection Tactics Suspected

AHRC News Services has issued a March 21, 2007 Press Release from the California law firm Gottschalk & Associates that reports:

• The Law Offices of Gottschalk & Associates announced today that it is launching a RICO investigation of attorneys and management companies for homeowners associations in California.

The issue involved appears to be the alleged, excessive padding of legal and collection fees (and other costs of rules enforcement) by the management companies and homeowner association-hired attorneys when they attempt to (a) collect association maintenance fees from those unit owners who have fallen behind on their payments, and (b) otherwise enforce the association rules and regulations. In effect, it appears that the association-hired attorneys and management companies are being accused of using the threat of the possible loss of the equity in a property owner's home as leverage against the homeowner in collecting excessive fees and charges.

(A similar tactic is used by predatory mortgage servicing companies in attempting to improperly squeeze money out of a homeowner - click here for posts on predatory mortgage servicing).

Reportedly, there is an existing complaint in the Orange County, California Superior Court under the RICO Act (Racketeer Influenced and Corrupt Organizations Act) and other claims that is set for trial in July 2007 against the law firm of Swedelson & Gottlieb, David Swedelson and Sandra Gottlieb individually, Association Lien Services and others.

The Press Release further requests that:

• Homeowners who currently live or formerly lived in homeowners' associations that have information of potential claims against Swedelson & Gottlieb and Peters & Freedman are requested to forward debt collection letters, bills for excessive fees not due and copies of their complaints and lawsuits and to advise whether you wish to be considered as a Plaintiff Class Representative in a class action. Homeowners who already are represented by an attorney are requested to have their attorneys contact Gottschalk and Associates with the information.

To read more, see the March 21 AHRC Press Release.

For another report on foreclosure lawsuits filed by homeowners associations and their attorneys, see the Houston Chronicle, A growing housing trend (Foreclosure suits filed by homeowners groups add up)

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Note:.

The American Homeowners Resource Center ("AHRC") is described in their website as a public interest interactive website for homeowners who live in homeowners associations which is intended to help these homeowners protect themselves from, what in effect is, the abusive, overreaching, and egregious conduct engaged in by some of those who run the associations (ie. the association directors and officers), and the management companies, attorneys and others who are hired by them.

Is Your Mortgage Interest Rate Fixed Or Adjustable? 1 In 3 Have No Clue, Says Poll!

34 percent of homeowners recently polled by a firm commissioned by Bankrate.com do not know what type of mortgage they own, according to a recent article reported by the Florida Association of Realtors. To read more, including other key findings from the poll, see ARM or FRM? 34% of homeowners don’t know.

To view the complete poll results, go to Bankrate.com Mortgage Poll.
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Cash Back And Other Incentive Deals Available From Builders/Developers

For those of you who follow sales incentive programs being offered by builders/developers in their attempts at unloading their inventory, I came across a few this past weekend from South Florida that caught my eye (pages may be slow-loading):

• Up to $20,000 Cash Back
• Zero Down Moves You In; $30,000 Any Way You Want It
• Up to $15,000 in Decorator Credits, $0 Closing Costs, Free HOA For 2007
• Up To $30,000 Cash Back, $o Closing Costs, One Year Free HOA, One Year Guaranteed Rent, Full Condo Management
• $30,000 Cash Back, No Closing Costs, $5,000 Down

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South Florida Homeowner Victimized By Foreclosure Rescue Operator

A suburban Miami woman who was victimized by a foreclosure rescue operator is featured today in a story published by Reuters and appearing in the San Diego Union Tribune. Reportedly, she was solicited in June by a "door to door foreclosure rescue operator" who offered her financial help on an $89,000 mortgage on her home. According to the article:

• Nine months later, her $89,000 mortgage has ballooned into a $234,000 loan, her monthly payments have doubled and she faces foreclosure on a house she no longer owns.

For the rest of the story, see U.S. sub-prime crisis exposes mortgage scams.

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Editor's Note:

Hopefully, an experienced, competent South Florida real estate attorney (someone who also knows his/her away around a courtroom and knows how to make legal arguments in front of a judge and jury) will come forward and help the victimized homeowner in this story. Such an attorney will be aware of the fact that just because she signed away her home, it doesn't mean she can't get it back.

Quoting from Guest v. Claycomb, 932 So. 2d 567 (Fla. App. Ct. 5th Dist. 2006), which, in turn, quotes from the Florida Supreme Court decision in Williams v. Grogan, 100 So.2d 407, 410 (Fla. 1958), a Florida appeals court stated:

• "The rule is well established in Florida and elsewhere to the effect that when a person acquires title to property through the influence of a confidential relationship or otherwise obtains an advantage which he should not in good conscience be permitted to retain, a court of equity will prevent the abuse of the confidence and grant relief on the broad principle that one should not be permitted to be unjustly enriched under such circumstances at the expense of another." (quoting from Williams v. Grogan, 100 So.2d 407, 410 (Fla. 1958))

• "The Court proceeded to explain that the court of equity will grant relief in such instances by imposing a constructive trust "which is created by operation of law" and "is not within the statute of frauds and may be proved by parol evidence." Id."

Further, if the financially strapped homeowner who signs away their home never relinquishes possession of the property, Florida law (and the law of many other states as well) is that actual possession of the property serves as notice to subsequent purchasers and encumbrancers of all rights and equities that the person in possession may have, in which case, the woman's ownership rights to her home, as adjudicated by a court, should be superior to the rights of any subsequent purchaser or (foreclosing) mortgagee. Having constructive notice of the woman's occupancy will eliminate any entitlement to claim the status of "bonafide purchaser".

The Florida Supreme Court, in Florida Land Holding Corp. v. McMillen, 135 Fla. 431, 186 So. 188 (Fla. 1938) stated the following:

"This Court had before it a similar set of facts in the case of Marion Mortgage Co. v. Grennan, 106 Fla. 913, 143 So. 761, when this Court said:

• "Actual possession is constructive notice to all the world or anyone having knowledge of said possession, of whatever rights the occupants have in the land. Such possession when open, visible and exclusive, will put upon inquiry those acquiring any title to or a lien upon the land so occupied to ascertain the nature of the rights the occupants really have in the premises. Carolina Portland Cement Company v. Roper, 68 Fla. 299, 67 So. 115; Tate v. Pensacola G.L. & Dev. Company, 37 Fla. 439, 20 So. 543; McAdams v. Wachab, 45, Fla. 482, 33 So. 702. This court also specifically held in the case of Crozier, et al., v. Ange, 85 Fla. 120, 95 So. 426, that 'where at the time property is mortgaged it is actually occupied by others than the mortgagor, the mortgagee is thereby put upon notice to inquire as to the rights of the occupants.' 19 R.C.L. 421, Sections 201 and 202.

One final point on this case. If a Florida attorney takes on a case like this, and would like the possibility of obtaining a court ordered attorney fee award, he/she may have to assert claims of violations of Federal or Florida consumer protection laws (which entitles an attorney representing a prevailing plaintiff to a fee award to be imposed upon the accused fraudster), in addition to asserting claims of fraud, constructive trust, or any other equitable claims that may be applicable. See my prior post, Voiding A Title Transfer In A Foreclosure Rescue Transaction, which discussed a Nebraska case where the attorney for a dozen victims of a foreclosure rescue operator was granted a $378,000 fee award (imposed on the foreclosure rescue operator) for successfully asserting violations of the Nebraska Consumer Protection Act (in addition to fraud and conspiracy), and which involved the application of a contingency fee risk multiplier in calculating the fee award, which is allowed in Florida on state law claims. The case was Eicher v. Mid America Financial Investment Corp., 270 Neb. 370, 702 N.W.2d 792 (2005).

With regard to the application of contingency fee risk multipliers in Florida, see generally, Bell v. U.S.B. Acquisition Company, Inc., 734 So.2d 403 (Fla. 1999), which discusses Florida Patient's Compensation Fund v. Rowe, 472 So.2d 1145 (Fla. 1985), where the Florida Supreme Court discusses what the contingency fee risk multiplier is based on and how it is calculated and applied.

While these cases may be difficult to make (which is why you need a sharp attorney), those having or creating the impression that nothing can be done for the woman featured in the article are simply uninformed. equitable mortgage zebra

Dillon Continues Battle Against Alleged Predatory Mortgage Servicer

The ongoing saga of New Hampshire homeowners Michael Dillon and Jennifer Kresge and their tenacious battle against the alleged predatory mortgage servicing company formerly known as Fairbanks Capital Corporation, now known as Select Portfolio Servicing, Inc. ("Select"), and five other financial institutions is continuing in a New Hampshire court.

A complaint was filed by Dillon alleging, among other things, fraud, intentional misrepresentation, conspiracy, unfair collection practices, unfair and deceptive commercial practices, and violation of the Federal Truth In Lending Act, all in connection with alleged abusive mortgage servicing tactics used in the servicing of Dillon's home mortgage. Attorney Walter L. Maroney, of the New Hampshire, Massachusetts, and Maine law firm Gallagher, Callahan & Gartrell, P.C., represents Dillon and Kresge.

Click here for more on the Dillon matter.

Go here , go here , and go here for posts on questionable mortgage servicing practices. questionable mortgage servicing practices tactics zebra

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Editorial Note:

One allegation in the Dillon lawsuit that caught my eye (and should catch the eye of any attorney who represents and defends homeowners being sued in a foreclosure action) is "Avoidance of Note". Apparently, Mr. Dillon requested evidence that the defendants have actual possession of the promissory note that Dillon signed when he borrowed the money against his house. The Defendants, according to the complaint,

• [h]ave been unable or unwilling to provide Mr. Dillon with evidence that they hold the original of the Note secured by the Mortgage.

The complaint then goes on to state that

• "[i]n the absence of an ability to show that it possesses the original of the Note, neither [the mortgage lenders] ha[ve] a right to enforce the same; nor [do Select or the collection attorney] have any right or capacity to seek to enforce the same on their behalf."

It is my understanding that a mortgage lender generally cannot bring an action to foreclose on a mortgage loan without first either (a) having possession of the original promissory note, signed by the borrower, that they are trying to collect on; or if the note has been lost, destroyed or stolen, (b) bringing legal action to re-establish the lost, destroyed or stolen instrument, which may not be as easy as it sounds. Further, inasmuch as the promissory note typically used in a residential mortgage loan transaction is in such a form that it is legally treated as a "negotiable instrument", the maker of the note (the debtor) is, as a matter of law, entitled to the return of his original note upon full payment. Accordingly, a mortgage lender's failure to present the original note for payment in a foreclosure action is an issue that should always be raised (and pressed) by counsel for a homeowner.

For examples of cases where a mortgage lender was not entitled to foreclose on its mortgage because it didn't have possession of the original note, see State St. Bank & Trust Co. v. Lord, 851 So. 2d 790; (Fla. App. Ct. 4th Dist., 2003), and the cases cited therein.

Given all the turmoil in the subprime mortgage lending industry, with mortgage loans being bought and sold numerous times before ending up in a mortgage pool collateralizing mortgaged-backed securities - then going into default, the increase in foreclosures, and the number of subprime lenders going out of business (and, in the process, dumping their subprime loans at a discount to others - see Frmont Unloads $4 Billion in Whole Loans), it seems to me that there is a significant potential for a large number of foreclosing mortgage lenders who are going to have fits trying to find, much less produce, the actual original promissory note in a foreclosure action. However, unless the homeowner (and legal counsel) know enough to make the demand for the original note (and insist on the original note being produced), either before or after the foreclosure action commences, the situation will end up as nothing more than a lost opportunity for the homeowner to (at least attempt to) effectively defend against a foreclosure action.

Addendum:

To read a court order from a Pinellas County, Florida trial court ruling that a certain mortgage servicer "lacked standing" to bring foreclosure actions on behalf of the actual mortgage holders whose loans the mortgage servicer was servicing, (and, accordingly, dismissed twenty foreclosure actions that the mortgage servicer had brought on their behalf), see in re Mortgage Electronic Registration Systems, Inc. (MERS), available online courtesy of Mortgage Servicing Fraud .org, at msfraud.org.
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California To End Sale Of Social Security Numbers

According to a report dated today, the California Progress Report states:

"Assemblyman Dave Jones last week revealed that a state-run web site had been selling access to the Social Security numbers of thousands of California consumers, a practice that began in 2004 and only ended this week when Jones raised objections. According to Jones this is

• "potentially the longest running government Internet breach in California's history."

• “For the past 3 years, the state has been in the data broker business [...]. It has sold Social Security numbers for a mere $6 each to any member of the public with an Internet connection and a credit card. This is a gold mine for identity thieves.”"

For the rest of the report, including a link to legislation proposed by Assemblyman Jones designed, for among other reasons, to stop this practice, see Legislation to End California's Sale of Social Security Numbers (State Sold Thousands Over Three Years on the Internet for $6 A Pop)
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Tax Form Preparation Office Target Of Identity Theft

The story of two Utah identity theft victims is featured in a story published today in The Salt Lake Tribune. The victims allegedly had their personal identification information stolen by employees of one tax return preparation firm where the victims went to have their taxes done.

About two weeks ago, a federal grand jury indicted Heber Uriel Nevarez (currently on the lam) on two counts of bank fraud and two counts of aggravated identity theft, and Juan de Jesus Lopez (currently in custody) on four counts of bank fraud and four counts of aggravated identity theft. Both worked for the firm that prepared the victims' income tax forms.

One victim reports that the identity theft experience has delayed his plans to get a new house for his wife and three grown kids. To read more, see Pair accused of using Latinos' tax preparation information to steal identities (Pair worked at Latino services business in 2006)
(revised 3-25-07 - 11:30 p.m.)
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More On Alleged Mortgage Fraudster Matthew Cox

Accused mortgage fraud operator Matthew Bevan Cox (known in Nashville, Tennessee as Joe Carter) is featured in a story today in the Dickson Herald, published at dicksonherald.com. The story highlights some of his real estate activities in Nashville prior to his apprehension. He currently is in federal custody in Atlanta.

To read more, see Intown developer tied to fraud prosecution (Real estate investor pitched revival of Napier area) (link no longer available).

More On Manufactured Home Dealer Glenn Vaught

The stories of several alleged fraud victims of accused South Carolina manufactured home dealer Glenn Vaught are featured in a story published by The Sun News, at MyrtleBeachOnline.com. Vaught, owner of the now-closed, Conway, South Carolina manufacured home dealer G&E Home Center has been named in two lawsuits by mortgage lenders containing allegations that, in ten deals, he took over $1.5 million in loan proceeds for non-existent homes.

To read more, see Buyers lose more than cash (Mortgage scheme steals dream, home, credit) (no longer available online).

For a prior article in The Sun News on Glenn Vaught, see Conway home seller accused of loan fraud (Horry's manufactured house problems continue to mount) (no longer available online).
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Financial Counselors Overwhelmed With Calls From Homeowners Facing Foreclosure

Financial counselors at the Home Ownership Center of Greater Cincinnati are reportedly swamped with phone calls from consumers facing foreclosures, according to a recent Reuters article reported at CNN.com. In addition, demand for counseling appointments at the Cincinnati offices of Consumer Credit Counseling Service has risen 87 percent from a year earlier. For more, see Mortgage crisis overwhelming credit counselors.
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FBI, Mortgage Bankers Association Working Together To Combat Mortgage Fraud

The FBI, with the cooperation of the Mortgage Bankers Association (MBA), has issued to MBA members an advisory recently covering a number of points designed to combat mortgage fraud. The details of the advisory are aimed at both lenders and consumers who are contemplating engaging in fraudulent real estate transactions and provides consumers suggestions to avoid getting lured into a scam. To read more, see How Not To Become A Mortgage Fraud Statistic, reported by Realty Times.
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Alleged Identity Theft Scam Targets The Dead

An alleged Louisiana mother-son-daughter in law team has been charged in an identity theft scam involving the information of over 100 dead people, according to a report in The Times-Picayune.

The mother, an emergency room clerk at Slidell Memorial Hospital, allegedly sent her son text messages with the names, birth dates and Social Security numbers of hospital patients who had recently died or were near death so he could submit fraudulent credit card applications in their names as soon as they died, authorities said.

Robert Ezell and his mother, Rebecca Stockdale, both of Slidell, Louisiana, were booked with 124 counts of identity theft among a slew of other charges. Ezell's wife, Charlotte Cooper-Ezell, accused of filling out some of the fraudulent credit applications, was booked with 84 counts of identity theft.

For the whole story, see Identity theft targeted the dead (Three arrested; more than 100 names stolen)

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Disbarred Massachusetts Attorney Pleads Not Guilty

Peter L. Schofield, a disbarred lawyer of Grafton, Massachusetts pleaded not guilty at his arraignment earlier this month to nine charges of stealing about $750,000 from former clients, according to an article in the Worcester Telegram & Gazette. The charges include alleged theft of sale proceeds from real estate transactions. To read more, see Lawyer denies stealing $750K - Not guilty plea to theft charges.

Click here for other posts on the Schofield case.
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Home Thieves Zero In On Homes With "For Sale" Signs

Putting a "For Sale" sign on your front lawn could be placing a homeowner's home and personal information at risk, according to a report in CityNews. When a "For Sale" sign goes up on someone's front lawn, scammers will look up the owner's information and use those details to take out a mortgage against the home. To read more, including the story of Toronto, Canada woman Susan Lawrence who had her home stolen from out from underneath her, see Mortgage Fraudsters Targeting Homes With "For Sale" Signs.

Click here to watch the TV report on CityNews.ca, or here for other posts on the Toronto home theft.
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Junk Mail May Fuel Identitity Theft Problem

A recent survey in Northern Ireland indicates that there may be a connection with junk mail delivery and identity theft, according to a report in the Belfast Telegraph. According to the report, the average Belfast household gets 509 unsolicited letters stuffed into their mailboxes annually; this equates to almost 40,000 in a lifetime.

But in an insurance company-commissioned survey of 4,000 people, 85% of those polled admitted to chucking the junk mail in the garbage unopened - thereby leaving valuable personal information available to dumpster divers, scam artists, and other collectors of garbage. For more, see Junk mail ID theft warning.

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New Century Off The Hook On $1 Billion In Bad Loans

New Century Financial Corporation has informed the Securities and Exchange Commission in a filing that it had reached a deal with Barclays Bank PLC that releases New Century from nearly $1 billion in repurchase claims associated with the subprime mortgage lender, according to a report on Housing Wire. For more, see Barclays, New Century Reach Agreement
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Mortgage Lenders Facing $100 Million Lawsuit

In a lawsuit filed in November, Countrywide Financial Corp., IndyMac Bancorp Inc. and 23 other defendants were named as defendants by two dozen homeowners in which they are asking for $100 million in fraud damages and a halt in debt collection and foreclosures, according to a Bloomberg News article published in today's Los Angeles Times website. The homeowners recently increased their money damages demand from $50 million.

The homeowners claim that they were duped into borrowing the money and investing the proceeds. To read more, see Countrywide, IndyMac sued by homeowners.
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Defending Against Eviction And Voiding Title Transfers In Foreclosure Rescue Transactions

Additional posts are available containing a survey of selected state court cases regarding the application of the equitable mortgage doctrine. These cases could be useful in building a case to both void title transfers and defend against homeowner evictions in foreclosure rescue transactions. See Equitable Mortgage Defense In Homeowner-Tenant Evictions:

• Part 6 - a Massachusetts case,
• Part 7 - cases from from Idaho, Ohio, Oregon, Alabama, and South Dakota.
• Part 8 - a couple of Washington State cases. equitable mortgage zebra

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California AG Closely Watching Foreclosure Rescue Activity

California State Attorney General Jerry Brown's office is keeping close tabs for reports of activity by foreclosure rescue operators and their offers to financially strapped homeowners facing foreclosure, according to the chief of the AG's consumer law section and reported by Reuters. To read more, see California alert for mortgage rescue scams.
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Texas Straw Buyer Scammer Convicted

Vernon Cooks, Jr. a/k/a Jibreel Rashad was convicted on all counts of a federal indictment (one count of bank fraud, seven counts of wire fraud, and six counts of money laundering) that charged him with operating a mortgage fraud scheme in the Dallas area, according to the U.S. Attorney's Office in Dallas.

One other co-defendant who was involved in the same scheme has pleaded guilty and is awaiting sentencing. Co-defendant Deirdre Dione Anderson, who was charged with six counts of wire fraud, was acquitted.

The fraud scheme involved was your basic straw buyer scam involving:

• Recruiting and paying straw buyers to use their names and credit to purchase homes that Cooks was going to rent to others,
• Promises that Cooks would pay all closing costs, mortgage payments and taxes associated with the properties until he transferred them out their names, within six months to a year after closing,
• Use of bogus appraisals to support the inflated sales prices of the homes,
• Use of fraudulent loan applications and other supporting documents, including fraudulent tax returns, W2s, and employment, rent and deposit verifications, to be submitted to the mortgage lenders so that the straw borrowers would qualify for the inflated loans,
• Use of the fraudulently-obtained proceeds to pay off the original, bona-fide sellers, keeping the rest of the money for himself,
• Ultimately defaulting on the mortgage loans in the straw buyers’ names, thereby leaving them stuck "holding the bag."

Source: U.S. Attorney Press Release, Federal Jury Convicts Real Estate Investor In Mortgage Fraud Scheme.

For story update, see Co-defendant in City Hall case sentenced in mortgage fraud (Dallas: House flipper gets 11 years in jail, denies wrongdoing) (The Dallas Morning News - 10-19-07).

U.S. Senate Hearings On Subprime Mortgage Lending

The U.S. Senate Committee on Banking, Housing, and Urban Affairs held a hearing today to address the current turmoil in the subprime mortgage market.

Click here for the televised subprime lending Senate proceedings.

Click here for Opening Statement of Chairman Chris Dodd - Hearing on "Mortgage Market Turmoil: Causes and Consequences"

Click here for list of witnesses and links to their prepared statements.
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Subprime Mortgage Loan "Autopsies"?

When big Wall Street firms in the business of pooling real estate loans into mortgage-backed securities end up getting stiffed on loans that go sour, did you ever wonder who gets called in to do the "autopsy" on the bad mortgage?

Did you ever wonder who these big firms call in to perform a "physical" on the mortgage loans they're buying before actually buying them in the first place?

A recent Fortune Magazine article, appearing at CNNMoney.com features Clayton Holdings, described as "a tiny $240 million Shelton, Conn., company that performs an important service: reducing subprime risk for such clients as Bear Sterns, Goldman Sachs, and Morgan Stanley."

When a loan goes bad, the article reports:

• Clayton's forensic analysts get to work, looking for fraud and other slip-ups that can get its clients off the hook for big investment losses.
  

(Presumably, only for the loans that go bad after the early payment default / buy-back period expires. After expiration of this period, the Wall Street firm can still generally demand that the mortgage lender buy back the bad loan if there was fraud or underwriting errors involved in originating the loan.)

Before buying a pool of mortgages from a mortgage lender in the first place, the article reports:

• [W]all Street firms use Clayton to visit lenders and pore through a sampling of the loans they're buying before pooling them into mortgage-backed securities and selling them off to investors.

.....

• Generally, Clayton tests between 15 percent and 25 percent of the mortgages for sale. (Considering the industry's current mess, Wall Street firms will probably be asking for bigger samples in future securitizations.)

To read more, see CSI: Subprime (Before big Wall Street firms sell off bundles of mortgages, they turn to tiny Clayton Holdings to investigate.)
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California Man Charged In Identity Theft Involving Alleged Real Estate Fraud

An Apple Valley, California man, who was arrested in December and charged with identity theft in connection with the purchase of a home and a vehicle using a stolen identity, was charged again last week with six felony charges involving identity theft and forgery using the same stolen identity in connection with three separate escrows he allegedly opened on properties within San Bernadino County, according to a report in the Victorville Daily Press. For more see Apple Valley man charged with identity theft and forgery.
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Toronto Woman Victim Of House Theft, Cost $50K To Recover It

A Toronto woman attempting to sell her home had it swiped instead. A "For Sale" sign in her front yard may have made her a target of house thieves. It took her close to a year and $50,000 to get it back. To read the full article reported in The Vancouver Province, see Beware fraudsters stealing homes (You can lose your house without even realizing it).
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