Central Florida Fraudster Cops Plea; Two Others Face Trials

The Orlando Sentinel reports:

• "An Osceola County man accused of defrauding home buyers and mortgage lenders faces five years in prison and 15 years of probation as part of a plea he entered Thursday in Osceola Circuit Court. Leandro Javier Obenauer, 38, was charged with racketeering and other offenses in 2004 after he was accused of swindling thousands of dollars from lenders and first-time Central Florida home buyers or those with low income or poor credit in a scheme dating back to 1999. [...] The state said Obenauer and co-conspirators purchased low-value properties at a discount, and resold them at inflated prices while pretending to represent the property owners. They obtained the loans with falsified information and negotiated contracts worth more than the houses, putting buyers in loans for which they did not qualify and which they could not afford to repay ..."

Reportedly, seventeen families lost money. Trials for co-defendant Robert E. Merchant and Scott Hutchinson, 51, of Winter Springs, a real-estate appraiser who prosecutors said inflated the values of houses and charged with organized fraud of more than $50,000, are pending. For more, see Osceola man pleads guilty in real-estate fraud case.

Go here for Florida Attorney General Press Release - Osceola Man Pleads Guilty to Mortgage Fraud Scheme.

For story update, see Man gets prison time for fraud. (Obenauer was sentenced to five years in a prison and 15 years probation Monday. He pleaded guilty to conspiracy to commit racketeering and grand theft of over $100,000 -- both first-degree felonies -- in addition to four counts of third-degree grand theft) (Orlando Sentinel - 9-11-07).

Texas Feds Get Guilty Plea In $15M Fraud, Money Laundering Conspiracy

From the U.S. Attorney's Office - Western District of Texas:

• "United States Attorney Johnny Sutton announced that 56-year-old Firooz Deljavan, former owner and operator of Austin Realtors Network, Inc., faces five years in federal prison after pleading guilty to participating in a fraud and money laundering scheme that defrauded federally insured financial institutions and mortgage lenders of more than $15 million. [...] Deljavan pleaded guilty to one count of conspiracy to commit mail, wire and bank fraud and one count of conspiracy to commit money laundering."

His wife, Rosemary Rios, pleaded guilty to one count of making false statements in obtaining a real estate loan. Nineteen other individuals have been convicted and sentenced for their roles in this scheme while two remain as fugitives.

For more, see U.S. Attorney Press Release - Former Austin Businessman And Federal fugitive Pleads Guilty To Fraud And Money Laundering Charges.

Two Minnesota Mortgage Brokers Cop Guilty Pleas In Fraud Conspiracy

In Minnesota, the Pioneer Press reports:

• "Two more Twin Cities mortgage brokers have pleaded guilty as the U.S. Attorney's office continues its crackdown on mortgage fraud. Sean Leaf of Woodbury and Christopher Horton of Minnetonka, both 34, pleaded guilty in federal court Thursday to one count each of conspiracy to commit mail fraud and bank fraud in connection with their business at First Rate Mortgage Group, the U.S. Attorney's office said Thursday. The men admitted to mailing bogus loan applications to banks and mortgage lenders between 2000 and 2004, along with four co-defendants connected to the business."

Reportedly, the scheme involved loaning home buyers money for down payments without disclosing same to mortgage lenders, using inflated buyers' income and assets, falsely describing the buyers' employment, using forged signatures, and using faked and altered pay stubs, gift letters and bank statements. Among the recipients of the doctored loan applications were Washington Mutual Bank for $1.33 million and to Associated Bank for $378,555.

Reportedly, co-defendants Edward Septon, Christopher Septon, Joddilee Lindberg and Micah Thormodsgaard have arraignments scheduled and plan to plead guilty to at least one of the counts, according to court documents. For more, see 2 guilty in mortgage scheme (link no longer available online).

See also, U.S. Attorney Press Release - Two More Individuals Plead Guilty to Charges Related to Mortgage Fraud (link no longer available online).

Downstate NY Consumer Affairs Cite 200+ Unlicensed Home Repair Contractors

The New York City Department of Consumer Affairs recently announced:

• "New York regional consumer affairs and law enforcement agencies [recently] announced the results of a coordinated, multi-county enforcement initiative targeting unlicensed home improvement contractors operating in the five boroughs and beyond. The New York City Department of Consumer Affairs, Nassau, Suffolk, and Westchester counties collectively reported issuing more than 200 violations, 200 criminal summonses or arrests, and seizing more than 70 vehicles owned by unlicensed home improvement contractors during the month of July."

For more, see NYC Dept. of Consumer Affairs Press Release - NY Officials Announce Results Of Coordinated Enforcement Targeting Unlicensed Home Improvement Contractors.

See also, Contractor sting nets hundreds of violations (Newsday), and City, counties battle home-fix scammers (New York Daily News).

President Bush Announces Plan To Help Families Keep Homes

The White House reports:

• "Today, President Bush Announced Steps At The Federal Level To Help Homeowners In Need Of Assistance Avoid Foreclosure. These steps will help homeowners having difficulty paying their mortgages and ensure that the problems now disrupting the housing industry do not happen again. The fundamentals of America's economy are strong – economic growth is healthy, wages are rising, and unemployment is low. The markets are in a period of transition as participants are re-assessing and re-pricing risk. One area that has shown particular strain is the mortgage market, particularly the subprime sector."

For more, see Fact Sheet: New Steps to Help Homeowners Avoid Foreclosure (President Bush Announces Steps To Help American Families Keep Their Homes And Reform The Mortgage Finance System) (Office of the Press Secretary - 8-31-07).

For transcript of President Bush's announcement, see President Bush Discusses Homeownership Financing.

Non Owner Occupied Houses Make Up Big Chunk Of Foreclosures, Says MBA

The Wall Street Journal reports:

• "Investors played a big role in pumping up home prices during the housing boom. Now, they account for an outsize proportion of loan defaults, mortgage bankers and builders say. A survey by the Mortgage Bankers Association found that mortgages on properties that aren't occupied by the owner -- mostly investment homes -- account for between 21% and 32% of the defaults on prime-quality home loans in Arizona, California, Florida and Nevada, states where overdue payments are mounting fast. [...] When the market was hot, many speculators bought homes hoping to flip them for a quick profit. But now that home prices have turned lower, that strategy is backfiring. As a result, some investors have 'simply walked away from their mortgages' ... ."

For more, see Investors Default On Outsize Share Of Home Loans.

Go here for posts on landlords,investors and others cutting their losses when being "upside down" on their mortgages through equity skimming, where the property owner begins stiffing the mortgage lender on the mortgage payments while renting the home out and pocketing the tenant rentals until the property is sold in a foreclosure or trustee's sale.

Feds Nail Two Attorneys In Unrelated Fraud Conspiracies

In two unrelated cases, a Virginia and a Kentucky atttorney have each gotten nailed by Federal authorities in conspiring to commit bank or wire fraud.

In Virginia:

The Fairfax County Times reports:

• "A United States District Judge on Aug. 30 sentenced a former bankruptcy attorney from Fairfax, Leslie W. Lickstein, to 12 months and one day in prison following his conviction in May 2007 of conspiracy to commit bank fraud. Lickstein, 54, was also ordered to pay $1.1 million in restitution."

Lickstein allegedly prepared a bogus HUD-1 closing statement involving a multi-million dollar home mortgage that ultimately went into default, causing the bank to take a $1.1 million hit. For more, see Attorney sentenced in mortgage fraud scheme.

In Kentucky:

An Associated Press report in the Lexington Herald-Leader states:

• "Court documents unsealed in Lexington contain an admission by a 41-year-old lawyer that he conspired to commit wire fraud. Kim Clay of Lexington admitted in documents unsealed yesterday that he worked with real estate buyers and sellers to falsify information on mortgage forms, deceiving banks and mortgage companies. Clay is the owner of Universal Title. He was indicted in May, last year on state charges related to missing money from Universal Title's escrow accounts. As part of an agreement that Clay reached with federal prosecutors, the state charges will be dropped."

Source: Lawyer admits conspiracy to commit wire fraud.

Go here for stories on other alleged escrow agent mishandling of funds. sneaky slick escrow agents alpha

South Carolina Feds Get Guilty Plea For Bank Fraud/Money Laundering; Bank Takes $4.5 Million Hit

In South Carolina, the Rock Hill Herald reports:

• "A Rock Hill man has pleaded guilty to defrauding a bank out of $4.5 million, according to the U.S. Attorney’s Office. Kyle Wimmer ... pleaded guilty to bank fraud and money laundering during a hearing Tuesday... . "

The scam involved using false information on loan applications and inflated appraisals to induce a BB&T branch in South Carolina to loan more money than they ordinarily would. About 100 loans were taken out, but many went into default, ultimately costing the bank about $4.5 million. For more, see Rock Hill man pleads guilty to $4.5M in bank fraud (if link expires, try here).

Seattle Mortgage Broker Gets 18 Months In Money Laundering Conspiracy

In Washington State, The Seattle Times reports:

• "A Seattle mortgage broker was sentenced to 18 months in federal prison Tuesday for forging documents that helped several convicted drug dealers buy homes and property with drug money. Todd Love, 50, pleaded guilty last year to conspiracy to engage in money laundering."

Among Love's alleged escapades were: (1) forging a $190,000 gift letter, (2) creating CPA firm letter stating that one convicted drug dealer was a property manager who hired the firm to do his taxes, (3) falsifying employment records for another convicted dealer, (4) using $50,000 of several hundred thousand dollars a third dealer gave him to invest in real estate.

For more, see Mortgage broker sentenced in money-laundering case.

Ex Mortgage Broker Steals Client's I.D., Buys $400K Home, Gets Jail Time

In Connecticut, the Hartford Courant reports:

• "A former mortgage broker who used a client's identity to buy herself a $400,000 house in a plum Manchester neighborhood is headed to prison after her conviction Tuesday on identity theft and forgery charges. A judge in Superior Court in Hartford sentenced Elsa Joiner, 37, of Manchester, to a 12-year prison term, suspended after four years, plus five years of probation. [...] [The client] had to file a civil lawsuit to get her name removed from the mortgage."

All told, Joiner forged her client's name on 29 documents in this identity theft, mortgage fraud scam. For more, see Former Mortgage Broker Gets 4 Years In Prison.

Atlanta Mortgage Scammer Gets 9+ Years In Federal Pen

The Atlanta Business Chronicle reports:

• "The ringleader of $4 million mortgage fraud scheme in Atlanta is heading to prison for nine years and seven months, and must pay $2.5 million in restitution. Nathan Parker, 49, of Philadelphia, was sentenced [last] Friday ... on charges of conspiracy to commit mortgage fraud and mail fraud. Parker was indicted in October 2005, and pleaded guilty to the charges in April 2007. Parker, a mortgage broker, led a scheme to defraud commercial lenders and financial institutions of more than $4 million relating to more than 20 properties. A number of people participated in the scheme, including real estate appraisers, closing attorneys, straw purchasers, straw sellers, investors, loan processors, and insiders at various verifying agencies and lenders."

For more, see Mortgage fraud leader sentenced to jail.

Mortgage Servicers Look To Overcome Perception That They Want To Foreclose On Homeowners

A press release issued by Default Servicing News announces:

• "[T]he 2007 Five Star Default Servicing Conference and Expo will attract a record breaking 2200 professionals this year seeking industry insight. Hosted by DS News, the fourth annual conference will be held in Dallas, Texas September 9-12 at the Hilton Anatole. Lenders, servicers, attorneys, title companies, service providers and real estate agents and brokers will participate in a series of educational sessions, town halls and networking events covering every aspect of the industry -- from economic trends and fraud to titles and valuation."

For more, see Press Release - Largest Gathering of Default Servicers in the History of Residential Mortgages Takes Center Stage September 9-12 in Dallas, Texas (DS News Hosts First-Ever Town Hall Meeting to Debunk Public Misconception Lenders and Servicers Are Looking to Foreclose on Homeowners).

For another view of the mortgage servicing industry, see Michael Dillon's GetDShirtz.com.

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

D.C. AG Files Suit Against Foreclosure Rescue Operator Metropolitan Money Store

The Washington Post reports:

• "The D.C. attorney general filed a lawsuit yesterday against Metropolitan Money Store Corp., hoping to recover lost home equity and prevent foreclosure for city residents who dealt with the Prince George's County-based mortgage company. [...] "We have the evidence to make the case," [Washington, DC] Attorney General Linda Singer said in an interview yesterday. "Once we have proof, we're going to move forward." Singer said she was driven to file the lawsuit to keep at least 27 District residents from losing their homes. Investigators say Metropolitan promised to rescue homeowners from foreclosure but instead drained the equity from clients' homes. "We think it's an outrage," Singer said."

Reportedly, there are over a dozen defendants named, among whom are Joy Jackson and Kurt Fordham. The defendants are accused of unjustly enriching themselves in a scheme that used misrepresentations and unconscionably high fees to strip equity from the homes of the alleged victims.

The lawsuit seeks to (1) stop the homes from being foreclosed, (2) void the contract between the homeowners and the foreclosure rescue operators, (3) order restitution from the defendants, and (4) require the defendants to pay civil penalties up to $1,000 for each violation of the District's Consumer Protection Procedures Act.

For more, see District Sues Mortgage Company Based in Prince George's County (Goal Is to Help Clients Retain Equity and Homes).

Go here for other posts and links to other media reports on Metropolitan Money Store.

For cases involving the criminal prosecution of foreclosure rescue operators, see Foreclosure Rescue - For Criminal Prosecutors Only.

For more on equity stripping scams, generally, see DREAMS FORECLOSED: The Rampant Theft of Americans' Homes Through Equity-stripping Foreclosure 'Rescue' Scams (4.61 MB approx.).

Delays In Processing "Short Sales" & Lender-Owned Foreclosures Frustrating To Those Involved

The Minneapolis Star Tribune reports:

• "If you believe the infomercials promising instant wealth from distress sales, then the record number of foreclosures should mean easy pickings for investors. But real estate agents and prospective buyers say that offers on many bank-owned houses go unanswered for weeks and that closings are sometimes abruptly canceled. Sales agents blame the delays on a growing backlog of listings and on ill-prepared mortgage companies that might be hundreds of miles away and grossly understaffed. Some experts say that buyers themselves are contributing to the problem by making unrealistic offers in hopes of snagging a bargain."

In one case, one agent reported receiving four offers on one home, but that none of the prospective buyers were willing to wait for the lender to process the offer, leaving the sellers closer to foreclosure.

For more, see Foreclosures become more than some bargain for (Buyers seeking quick deals on bank-owned homes are losing out to the industry backlog) (if link expired, try here).

Investigative Reports Gives Look At How Some Foreclosure Rescue Operators Work

Two recent investigative reports by the Miami Herald gives a view of some of the tactices used by some foreclosure rescue operators when scamming unsuspecting homeowners.

1) One firm, National Foreclosure Management, obtained weekly lists of homes set for foreclosure.

2) It recruited ''field analysts'' to go door-to-door, hawking its ''home saver'' program. At its peak, more than 60 people fanned out into South Florida neighborhoods. Reportedly, one field analyst was being paid $4,000 each time a homeowner signed up.

3) Part of the program involved offering "credit counseling" and "financial-planning courses."

4) On Saturdays, the field analysts would pile into National Foreclosure's Miami Lakes office to discuss strategy and to role-play, honing their sales skills.

5) According to one former field analyst, there were people from different walks of life, including teachers teachers and police officers, seeking to make extra money in off hours.

6) In mailings to homeowners, the firm pledged to ensure ''that you regain full rights and ownership to your home.'' It offered to equip clients "with the necessary tools need[ed] to improve your financial planning skills.''

7) Once willing homeowners were found, it matched them with ''investors'' who would act as "straw buyers." These investors rarely saw the homes they were buying, but lent their names and credit for a fee, with the understanding that the original homeowner would take the home back in a year.

8) Upon consummation of a "home saver" deal, which was structured as a sale leaseback transaction with a right to buy back the home after a period of time, the operators would "strip the equity" from the home with high fees and unexplained charges that were paid from the funds.

10) In the cases reported in the investigative reports, both the financially strapped homeowners seeking help as well as the straw buyers were left holding the bag, as each thought that the other was making the payments on the new mortgage, which ended up in foreclosure.

For more, see:

Foreclosure 'rescue' deals shackle homeowners (Homeowners who accepted help to avoid foreclosure have gone to court with claims that they were stripped of equity in their homes).

$66,000 'servicing fee' gobbles much of owner's profit on sale (The buyer thought the seller was making the new mortgage payments; the seller assumed that the buyer was doing it).

Homeowner complaints are similar: false promises, hefty fees.

For Criminal Prosecutors

For cases involving the criminal prosecution of foreclosure rescue operators, see Foreclosure Rescue - For Criminal Prosecutors Only.

Foreclosure Rescue - For Criminal Prosecutors Only

(original post 8-29-07)
For criminal prosecutors who are curious about what some of your colleagues are doing around the country in going after those engaged in fraudulent equity stripping arrangements that are typically structured as sale leaseback transactions, and are generally referred to as foreclosure rescue transactions, please feel free to look over the following summary of incidents that have resulted in criminal prosecutions:

1) The U.S. Attorney's Office in Tampa, Florida tried and convicted five individuals working together in foreclosure rescue scam stemming from a federal indictment alleging a scheme to cheat homeowners out of the equity in their homes and to defraud mortgage lenders. They were convicted of multiple counts of mail fraud, wire fraud, bank fraud, and false statements to a federally insured lender. It also obtained a guilty plea from a sixth member of the group. For more, see U.S. Attorney Press Release (3-29-07) - Tampa Federal Jury Convicts five Persons In Home Equity/Bank Fraud Scheme. For a copy of the grand jury indictment in this case, see Indictment - U.S. vs. Moumneh, et al.

2) The U.S. Attorney's Office in Los Angeles, California has obtained guilty pleas from four out of five members of a foreclosure rescue group that were accused of participating in a $12 million foreclosure rescue scam in which over 100 homeowners who were in default on their mortgages were promised refinancing, but ended up having their homes sold to others after the equity had been stripped. The fifth member of the group is currently awaiting trial (see 8-3-07 Findings & Order). The indictment reportedly alleged 19 counts of mail fraud and seven counts of aggravated identity theft. For more, see U.S. Attorney Press Release (7-20-06) - Three Defendants Added To Federal Indictment In Foreclosure Scam Targeting Homeowners In Default. See Stipulation To Continue Sentencing Hearing in connection with the four defendants pleading guilty - hearing set for December 17, 2007. For copy of plea agreement of one of the defendants, see Plea Agreement - U.S. v. Valenzuela.

3) The U.S. Attorney's Office in Sacramento, California obtained a guilty plea from a foreclosure rescue operator for bank fraud, and from two straw buyers for misprision of a felony in a scam where the operator admitted to a scheme in which he approached homeowners on the verge of having their homes foreclosed on by their mortgage lenders, promised to loan them money, and instead, he created documents deeding away their residential properties to the straw buyers who applied for financing from a mortgage lender, claiming falsely that they were the true owners of the properties and that there were no pending mortgages on the properties. For more, see U.S. Attorney Press Release (5-10-07) - Man Posing As Foreclosure Specialist Takes Advantage Of Homeowners To Rip Off Bank For Almost $1 Million. For a copy of the grand jury charges, see Indictment - U.S.A. vs. Christopher Craig, et al. For a copy of the plea agreement, see Plea Agreement - U.S.A. vs. Craig.

4) The U.S. Attorney's Office in Minneapolis, Minnesota obtained indictments of two individuals who were charged with one count of conspiracy, three counts of mail fraud, and one count of engaging in a financial transaction with criminally derived property. Among the allegations was a scheme to defraud homeowners who were either in foreclosure or behind on their mortgage payments. Specifically, they allegedly caused homeowners to refinance their homes and then stole some or all of the equity checks produced through the refinancing process. In some instances, the defendants also allegedly used physical intimidation to force homeowners to endorse equity checks over to them. The matter is currently being prosecuted. According to documents filed this month (August 2007), one of the defendants appears to have reached a resolution with prosecutors and a Change of Plea hearing has been scheduled on her behalf. For more, see U.S. Attorney Press Release (6-21-07) - Local Mortgage Broker and Assistant Indicted for Bilking Homeowners. For a copy of the grand jury charges, see Indictment - United States vs. Fiorito & Jerde.

5) For those prosecutors interested in a case where one of your colleagues successfully convicted a foreclosure rescue operator by first, proving that a foreclosure rescue, sale leaseback transaction should be recharacterized as a secured loan, and then proving that the "interest income" on the recharacterized loan exceeded the maximum amount of interest allowed by law, see Browner v. Dist. of Columbia, 549 A.2d 1107 (D.C. 1988). This case should be of some interest to those in states that have usury statutes. See also:

• Sale Leaseback Recharacterization As Loan Results In Criminal Conviction,
• Usurious Loans Masquerading As Sale Leasebacks?

6) See Criminal Prosecutions Of Foreclosure Rescue Operators for links to other cases involving your colleagues going after foreclosure rescue operators, including online media articles reporting on state court prosecutions.

Re: Metropolitan Money Store

In conclusion, I would be remiss if I didnt include a reference to a civil case currently being litigated in a Federal District Court in Maryland. The complaint, in which class action status is sought, reads a lot like a criminal indictment (ie. it uses words and phrases like, "illegal kickbacks and unearned fees", "false HUD-1s," "wire fraud" and "mail fraud", and that "the false HUD-1 Settlement statements were utilized to launder the money being paid to the RICO defendants for the purpose of evading taxes ..." etc.).

For a copy of the complaint, see Proctor, et al. v. Metropolitan Money Store, et al. - Case # 8:07-cv-01957-RWT (Does not include the 28 exhibits).

It can also be obtained by going here for direct links to the lawsuit (76 pages - $2.40) and the 28 accompanying exhibits (50+ pages - $.08/page) on the U.S. Courts' PACER website. PACER registration required.

In the alternative, you can drop me an e-mail at:

HomeEquityTheft@yahoo.com

and I'll e-mail the complaint to you (sorry, no exhibits - be sure to put "Metropolitan Money Store" in the "Subject" line of the e-mail).

Teed Off Tenants To Target Deutsch Bank Golf Tournament

The Boston Herald reports:

• "A Hub activist group is taking direct aim at this week’s Deutsche Bank Championship golf tournament in a protest over foreclosures, casting a cloud over one of the region’s major corporate and professional sports events. Dozens of protesters from City Life plan to rally outside the Four Seasons tomorrow night at the PGA tournament’s kickoff dinner, amid a dispute with the German bank over its stance on foreclosures. And the Jamaica Plain-based group said it will take its act on the road and protest outside the four-day tournament that starts Friday in Norton unless it can come to an agreement before then with the bank. [...] The Hub group’s actions come as it pressures the bank to take a firm stand against the eviction of apartment tenants in cases where the landlord has lost the property to foreclosure."

For more, see Teed off at bank: Tenant groups target golf event.

See also, Deutsche Bank golf event coverage a boon for sponsors.

Maryland High Court To Hear Case Of Family Who Lost Home In Foreclosure Despite Making Every Payment

The Baltimore Sun reports:

• "The Maryland Court of Appeals has agreed to hear arguments in the foreclosure case of Kwaku Atta Poku, the Columbia cab owner who lost his home after refinancing, despite making every mortgage payment. [...] Gerald M. Richman of Ellicott City, one of Atta Poku's lawyers, said the court will 'determine whether or not you have a right to appeal a foreclosure action.' "

• "Another issue is whether a home can be foreclosed on when the lender has exclusive control of the funds to pay off the mortgage. Atta Poku never had possession of the settlement check involved in the 2001 refinancing that later resulted in foreclosure. He could not prove the mortgage was paid, however, because a bank lost the original check. The Court of Appeals said a hearing will be scheduled in December after submission of legal briefs, according to an order received Friday by another of Atta Poku's lawyers, Scott C. Borison of Frederick, a foreclosure specialist."

• "Atta Poku, 55, a naturalized American citizen originally from Ghana, was unable to prove in court that the loan was paid, as he insists it was, partly because the financial institutions involved lost some of the documents. Although no one -- including Washington Mutual -- has blamed him for the alleged default, he lost the house, has ruined credit and his AAAA Star cab business was damaged. The family of five, including his wife and three children younger than age 5, is being aided by a small cash fund administered by Columbia's Grassroots Crisis Intervention Center, and by Congregations Concerned for the Homeless, a Howard County nonprofit group that rented a three-bedroom townhouse last week for the family to sublet."

For more, see Court to hear foreclosure case (Decision in appeal by Howard Co. man could affect similar cases).

Links to earlier Baltimore Sun articles on Kwaku Atta Poku.

Go here for earlier posts on this story.

South Florida Foreclosure Rescue Firms Operating With Impunity; Two Non Profit Law Firms Average 6-7 Foreclosure Rescue Cases Weekly

Foreclosure rescue operators are alive and well in Broward County, Florida, according to recent stories in The Miami Herald. One story reports:

• "[M]ore than a dozen other homeowners contend in interviews and court filings that two companies -- National Foreclosure Management and American Home Rescue -- promised to save them from foreclosure but sucked out their home equity through excessive fees, what they claim is a fraud known as equity stripping. Then, they say, the firms skipped out, leaving owners scrambling again to prevent foreclosure on new, higher mortgages."

George Castrataro, an attorney with Legal Aid Service of Broward County representing a number of alleged victims, said he found $532,000 in questionable closing expenses in a review of 12 National Foreclosure deals alone. In a deal involving American Home Rescue, the company ended up collecting a $66,331.80 "Servicing Fee'' from the homeowner.

According to Castrataro, between the firm he is with and its sister agency, Coast to Coast Legal Aid of South Florida, an average of six or seven new equity stripping cases arrive in Broward County each week.

(Editorial Note: My guess is that if you include the equity stripping cases in neighboring Dade County arriving at the Legal Services of Greater Miami, another non profit law firm who handles equity stripping cases, the weekly number would at least double. And this doesn't include the cases being taken by private attorneys.)

For more, see:

• Foreclosure 'rescue' deals shackle homeowners (Homeowners who accepted help to avoid foreclosure have gone to court with claims that they were stripped of equity in their homes).
• $66,000 'servicing fee' gobbles much of owner's profit on sale (The buyer thought the seller was making the new mortgage payments; the seller assumed that the buyer was doing it).
• Homeowner complaints are similar: false promises, hefty fees.

For criminal prosecutors, see Foreclosure Rescue - For Criminal Prosecutors Only.

South Florida Homeowner Caught Up With Foreclosure Rescue Operator

WFOR-TV Channel 4 in South Florida reports on the story of another homeowner who reportedly signed over her property for a fraction of the equity she had in the home. According to the story:

• "She told CBS4 consumer reporter Al Sunshine without realizing it, she sold them her home for just $10-thousand in cash - even though she had several hundred thousand dollars in equity after years of payments.“He took out all of equity from my house, approximately $240,000,” said Maddox. "They charged me $45,000 in closing costs and they also took out the additional equity that was in my home, which was an extra $100,000.”Maddox, a mother of two, said with nowhere else to turn, she contacted Broward Legal Aid for help. Attorney George Castratoro says he sees a case like Maddox’s at least once a day."

Go here to watch the Channel 4 story - Part 1, and here for Part 2.

To read the online reports, see:

• Foreclosure Scams Skyrocketing Across S. Fla.
• Mortgage Scams More Rampant Than Ever In Fla.

For criminal prosecutors, see Foreclosure Rescue - For Criminal Prosecutors Only.

Owners Of New $600,000 Homes Left High & Dry As Developer Goes Under

In Massachusetts, The Eagle-Tribune reports on the story of the upscale but unfinished Crystal Farms subdivision in Haverhill and the handful of owners of new homes there dealing with the problems of living in the unfinished subdivision. The developer went under, and the project was foreclosed by the lender (and now the new owner), North Shore Bank of Peabody. Among the problems are that the residents who have moved in to their completed homes pay $5,000 to $6,000 a year in real estate taxes, but have no street lights, no municipal trash, snow removal or other services normally provided by the city, no mail services, no curbing or sidewalks, but plenty of potholes. For more, see Neighborhood abandoned after developer forecloses.

Subprime Mortgage Aftershocks Affecting Airline Business?

The aftershocks of the subprime mortgage disaster may begin being felt in one industry that has nothing to do with residential real estate. According to a recent article in Forbes:

• "One place, it appears, is in the airline industry. Airlines and aircraft leasing companies have been quietly grounding plans to sell securities backed by airplane assets. In theory, aircraft-asset deals could provide diversification to a mortgage-dominated securitization market. But burned investors are "throwing the baby out with the bathwater," says Josh Rosner, managing director at Graham Fisher & Co. "Investors aren't indicting securitization, just the lack of transparency in how portfolio managers try to maximize their compensation by marking asset values with a huge amount of discretion,'' he adds. In other words, investors now realize they didn't know enough about what they were buying with mortgage-backed securities. So (justifiably or not) they've become wary of other types of asset securitizations too. This newfound skepticism comes at a bad time for U.S. airlines, which are currently flying the oldest fleets in history (13.3 years) and poised to buy thousands of new jets."

For more, see Aftershocks From The Subprime Quake.

More On Maryland Forecloure Rescue Operator Facing Class Action Suit

(original post 8-26-07; updated 8-29-07)
The Washington Post reports on the following in connection with the investigation on and class action lawsuit against lead defendant, foreclosure rescue operator Metropolitan Money Store:

1) The $800,000 fairy tale wedding between two of the primary defendants, former exotic dancer Joy Jackson and popular ex-disc jockey in Prince George's clubs, Kurt Fordham in June 2006,

2) Among those who performed at the wedding were singer Patti LaBelle -- who gave a seven-song concert with "Lady Marmalade" as her finale -- gospel harpist Jeff Majors and R&B crooner Raheem DeVaughn performed, as did a Howard University choir.

3) How Jackson, Fordham & others used straw buyers in their alleged scheme to purportedly help homeowners in foreclosure save their homes,

4) How Jackson & Fordham, & others allegedly siphoned off all the equity in the homes of the unwitting owners, who were often unable to repurchase their property; some said they were unaware they were signing over their deeds.

5) How Metropolitan Money store began laying off employees by the end of the summer in 2006 and how it stopped airing ads,

6) How one employee realized something was wrong when he returned to his office one afternoon in October, 2006 and found employees having a "shredding party." All the documents on his desk, he said, were missing. The company shut down in December.

7) How Jackson and Fordham have moved out of their house, and efforts to locate them were not successful. They also did not respond to requests from The Washington Post for comment,

8) How the U.S. Secret Service, the FBI, and Maryland regulators are all investigating Metropolitan Money Store,

9) In May, Jackson and Fordham put their house up for sale; in early June, an "estate sale" sign went up: Beds, expensive lamps, jewelry, designer clothes, even a rack of fur coats were for sale, neighbors said.

10) In a development in this saga that seems both fitting and somewhat poetic, the house that Jackson and Fordham called home is reportedly now in foreclosure.

For more, see Prince George's Fairy Tale Unravels For Woman at Center of Fraud Probe.

Go here for other posts on Jackson, Fordham, & Metropolitan Money Store.

Go here for a significant Federal criminal prosecution of a Southern California foreclosure rescue operator who was charged with victimizing over 100 homeowners facing foreclosure, not unlike what Metropolitan Money Store allegedly did.

For criminal prosecutors, see Foreclosure Rescue - For Criminal Prosecutors Only.

Maryland-Based Metro Dream Homes Offers Refunds

(original post 8-27-07)
The Free Lance-Star reports:

• "Fredericksburg-area residents concerned that troubled Metropolitan Grapevine won't pay off their mortgages as promised can ask for a refund. Chief Executive Officer Andrew H. Williams offered to return the investors' money during a meeting at the Washington Plaza Hotel on Aug. 18. It was held mainly so the officials could respond to reports raising the possibility that the company, which says it can pay off investors' mortgages in five years, could be operating a pyramid scheme."

• "Virginia's State Corporation Commission is investigating Metropolitan Grapevine ... and its affiliate, POS Dream Homes. Earlier this month, Maryland Attorney General Douglas F. Gansler ordered the companies and their officials to stop soliciting new investors in that state until a hearing can be held."

• "Metropolitan Grapevine and POS Dream Homes are both based in Laurel, Md. Officials of both companies issued a statement late Thursday saying Maryland's order is "unconstitutional," and that the attorney general "rendered an arbitrary and capricious decision as it relates to our companies." The officials have filed a petition with the court to have the order lifted, according to the statement."

For more, see Dream Homes Offers Refunds (Metropolitan Grapevine fires back at the Maryland attorney general's order to cease operating).

For Andrew Williams' response to The Washington Post (no longer available online):

• High Bandwidth go here.
• Low Bandwidth go here.
• Dial-Up go here.
• Radio - go here.

Go here for other posts on Metro Dream Homes.

Missouri Homeowner Falls Victim To Foreclosure Rescue Scam; Files Suit To Get Home Back

Buried in a recent article in The Kansas City Star is the story of a local homeowner facing foreclosure who had the equity in his home stripped by someone offering a "program" to help save his home. According to the article:

• "[A homeowner] was facing foreclosure when he was approached by a woman who got his name from published records. The woman offered to save his house. All he had to do was to assign the home over to her temporarily and she would refinance the loan in her name. He began paying her rent. [...] But she said the next thing the man knew the bank was foreclosing on the new loan. He was evicted and his $65,000 in equity was gone. The woman allegedly didn’t pay the mortgage, ..."

Reportedly, the man has retained an attorney and is suing to fight the foreclosure and get his home back. For the story, see Foreclosure ‘rescue’ scams on the rise.

Squatters Move Into $1.4 Million Vacant Foreclosed L.A. Mansion

Buried in an article in the Los Angeles Times is this excerpt about a foreclosed, lender-owned home that has apparently been taken over by squatters:

• "In another Los Angeles cul-de-sac, this one off Coldwater Canyon Drive near Beverly Hills, the neighbors have the opposite problem. Here's a foreclosed house that should be empty and isn't. The mansion in question was bought by a man in early 2005 for $1.4 million. By last fall he was gone and the property was in foreclosure. HSBC, a major lender that was carrying the biggest note on the house, asked Leo Nordine, a real estate agent who specializes in foreclosures, to represent it for sale. Nordine went to check out the property and realized that people were living there. He left them a polite letter on the kitchen counter. There was no response to that letter, nor to follow-ups that he mailed. Neighbors, who asked that their names not be used because they were worried about their safety, said the occupants were a group of men apparently in their 20s and 30s. The men take the trash out every week, but that was the only good thing the neighbors had to say. Nordine said that HSBC was pursuing a formal eviction but that it would probably take many months. The HSBC manager in charge of the foreclosure didn't respond to questions. On a recent evening, the front door was open. The inhabitants declined to respond to a reporter's queries. Authorities and real estate agents say similar problems arose during the wave of foreclosures in the 1990s, when houses stayed empty for months."

For more, see Blight moves in after foreclosures (Untended properties become eyesores. Then there are the uninvited guests: mosquitoes, vandals and squatters).

Go here for posts on vacant homes, foreclosures and squatters. squatter foreclosure zebra

How Flips & Scams Have Hurt One Southern California Neighborhood

Reuters reports the story of several homeowners who thought they bought their "dream home" in the recently constructed Towne Square development in the area of California known as the Inland Empire (50 miles east of Los Angeles), only to now find themselves stuck in a neighborhood "pocked with boarded windows and dead lawns -- homes now repossessed after buyers failed to make mounting mortgage payments."

In addition, it is reported that, in this development of 49 homes, "[t]he Corona Police Department said it was called about neighborhood disturbances on [one street] 35 times in 2006. The street that runs parallel ... received 28 complaints." Declining property values have left those existing homeowners not willing to "mail in the keys to the mortgage lender and walk away" from the neighborhood "locked in" to their current homes. For more, see Flips, scams blamed in California housing decline.

1400 "Tall Grass" Citations Since June For One Florida City

(revised 9-4-07)
Buried at the end of an article in the The News-Press is this blurb:

• "[A] report from [Cape Coral, Florida] City Manager Terry Stewart [stated] that overgrown, vacant, improved properties could cost the city $100,000 over the next few months with little chance of recovering money from the owners. The city is seeking bidders to mow the properties, he said. But the owners can’t be found or are not responding to notices, said City Attorney Dolores Menendez. They may be in foreclosure, said City Councilwoman Dolores Bertolini. The city has issued 1,400 code violation citations for overgrown grass since June 11, Stewart said. 'The cost is an issue that continues to concern me because it is going to continue to escalate,' Stewart said. 'We’re going to see over $100,000 over the next several months.' "

For more, see Cape loses $1.2 million after delays in permits.

See also, Costs to mow grow in Southwest Florida (County, cities wade into neglected-property complaints) (9-4-07).

New York Feds Charge Closing/Settlement Agent With Pocketing Escrow Funds

Newsday reports:

• "A mortgage escrow official surrendered to the FBI [last Wednesday] to face charges that he pocketed funds intended to pay off home loans, officials said Wednesday. Steven Leff, 44, a principal of National Settlement Agency, a firm that has offices in Melville and Manhattan, acts as a settlement agent handling real estate closings for a number of banks. He was released on a $1 million bond late Wednesday after appearing in federal court in Brooklyn, according to federal prosecutors."

For more, see Exec faces mortgage scam charges.

Go here for other posts on Steven Leff.

Go here for stories on other alleged escrow agent mishandling of funds. sneaky slick escrow agents alpha

Defunct Ohio Escrow & Title Closing Agency Owner Charged With Stealing $400K

The Newark Advocate reports:

• "A Granville woman faces 12 felonies after being accused of issuing “bad checks” from her company’s escrow account after loan closings. Donna Lemmon Perkins, 43, of Granville, was indicted Friday on multiple counts of theft, money laundering, and engaging in a pattern of corrupt activity. She is accused of stealing almost $400,000 from six area victims in 2005 and 2006. Lemmon Perkins was the owner of the now-defunct Lemmon & Associates Title Services. Upon closing the business in February 2006, it was discovered that money was missing from the title agency escrow account, Licking County Assistant Prosecutor Dan Huston said."

For more, see Granville woman indicted for theft, money laundering (no longer available online).

Go here for stories on other alleged escrow agent mishandling of funds. sneaky slick escrow agents alpha

California Mortgage Company Owner Gets 10 Years In Prison; Used Firm As Front For Identity Theft Scheme

In Southern California, the North County Times reports:

• "A Vista man who authorities say ran an identity-theft ring on behalf of a white supremacist prison gang pleaded guilty Wednesday in Orange County Superior Court to 24 counts of theft and forgery. Authorities say he may be just one of nearly 100 people involved in a larger criminal operation. Michael Alexander Hartsell, 50, owner of Vista-based First Choice Mortgage, faced 96 years in prison if convicted of all 187 counts against him ... [and] was sentenced to 10 years."

Reportedly, three of Hartsell's co-defendants have also entered plea agreements. William Andrew Padworski, 47, (2 years 8 months) of Oceanside, Patricia Ann Mcintosh, 42, (yet to be sentenced) of Vista, and Natasha Chiara DiLorenzo, 31, (2 years) of Oceanside, have received prison sentences. A fourth co-defendant, Laurrisa Laurrainne Ballow, 39, was a fugitive until her June 2 arrest on unrelated charges, and is currently in custody pending arraignment. For more, see Vista man gets 10 years in ID theft plea deal.

40 Of 67 Mortgages Totaling $67 Million Linked To One S. California Agent Now In Default

In western Riverside County, California, an investigative report by The Californian reports:

• "A group of more than 60 upscale tract houses purchased last year with 100 percent financing is falling one by one into foreclosure, leaving lawns brown, neighbors peeved, and a handful of renters answering late-night knocks at the door. The owners ---- individual investors who are nowhere to be found ---- began to default on their mortgages in May, triggering three-month countdowns to auction. At least five defaults have been recorded this month, bringing the total to 40 of the 67 local houses linked to Elias Ochoa, a real estate agent who ran the Corona branch of a mortgage brokerage until June. Neighbors said several of the other houses have been empty and unkempt for months, leading them to conclude that those, too, will soon default and eventually be seized by lenders. Several of the remaining houses are owned by investors who have already defaulted on other mortgages."

Reportedly, from early 2006 until June 2007, Ochoa was running the Corona branch office of Solco Financial Services, at which time he suddenly closed down the branch and just as suddenly cancelled his listings for 24 of the houses which he had been trying to sell. He reportedly started this month as an agent with a Temecula-based real estate brokerage that specializes in selling bank-owned properties, including several in the same neighborhoods where he once operated.

To date, there have been no criminal charges brought, nor have there been any civil lawsuits filed, against Ochoa or any possible straw buyers that may have been part of his investment group.

Ochoa's investor group, along with the group linked to Hendrix Montecastro, a Murrieta broker whose license was revoked by state regulators last month and faces additional problems in connection with an alleged $100 million mortgage fraud, are the largest two known to have resulted in mass foreclosures in Riverside County. In addition, several smaller groups also appear to have contributed to a local real estate bubble by buying up houses and leaving them empty, according to local agents and appraisers.

For more, see Real estate group guts neighborhoods.

Nebraska State Agency Issues Foreclosure Rescue Advisory

Southwest Nebraska News reports:

• "Nebraska Department of Banking and Finance Director John Munn issued a consumer advisory today urging Nebraskans facing the possibility of foreclosure on a home mortgage to be cautious when working with foreclosure rescue consultants and companies. Recent inquiries to the Department regarding foreclosure have prompted Department officials to warn Nebraskans of the potential risks associated with foreclosure rescue services."

For more, see Nebraska Department of Banking & Finance Issues Consumer Advisory on Foreclosure Rescue Services.

Postscript

One of the big foreclsoure rescue cases in recent years was litigated in Nebraska, going up to the Nebraska Supreme Court, which ruled in favor of about a dozen victimized homeowners against operator Mid-America Financial Investment Corp., which reportedly operated in the Omaha area. See Foreclosure Rescue Operator Ordered To Return Homes To A Dozen Victims.

Brooklyn Federal Judge Allows Alleged Race Based Predatory Lending Suit To Go Forward

(original post 8-24-07)
Law.com reports:

• "A series of federal lawsuits filed by eight black first-time homebuyers alleging that New York's United Homes targeted minorities as part of a conspiracy to sell over-valued, broken-down homes financed with predatory loans will go forward following a federal judge's rejection of the defendants' motions to dismiss."

• "As summarized by [Federal District Court Judge Raymond J.] Dearie, "Plaintiffs claim that defendants were part of a fraudulent property-flipping scheme. They allege that United Homes and its affiliated companies ... bought damaged properties at foreclosure auctions or estate sales[,] performed some cosmetic repairs and, shortly thereafter, sold the properties, often at double the purchase price." The buyers claimed that United Homes conspired with appraisers, mortgage lenders and lawyers "who facilitated the sales by preparing significantly overvalued appraisals and originating loans and mortgages that were correspondingly inflated." They claimed violations of the Fair Housing Act and other anti-discrimination laws, as well as a number of state-law violations."

Representing the plaintiff are the law firms Scarola Ellis LLP, of New York City, South Brooklyn Legal Services - Brooklyn, NY, and AARP Foundation Litigation, Washington, D.C.

For more, see Bias Claims Proceed Against Seller of 'Damaged' Homes.

For copy of lawsuit, see Barkley vs. United Homes, et al.

Go here and go here for other posts on alleged race bias in real estate transactions. race bias predatory lending

More On Maryland Man Who Paid Off Mortgage & Lost Home To Foreclosure Anyway

The Baltimore Sun reports:

• "Kwaku Atta Poku, the Columbia taxi owner who lost his family's townhouse to foreclosure despite making every mortgage payment, is moving to a new rental home, thanks to help from a community group using a new state program to help them recover. "With us moving to this place now, I feel a little bit better," Atta Poku, 55, said of the three-bedroom townhouse in East Columbia that Congregations Concerned for the Homeless has arranged for him to rent."

• "Atta Poku's lawyers, Gerald M. Richman of Ellicott City and Scott C. Borison of Frederick, are awaiting word on two court actions they filed after their attempt to have the Court of Special Appeals declare the foreclosure illegal failed in May. In June, they asked the Maryland Court of Appeals to rule whether it was right for the Court of Special Appeals to dismiss Atta Poku's case on what the lawyers said was a technicality. They've also asked the Howard County Circuit Court to award Atta Poku the proceeds from the sale of his home, plus punitive damages. No ruling has been made in either case."

For more, see Displaced by foreclosure, family finds rental home (State program, Howard nonprofit, customers come to aid).

Go here for prior posts on this story.

Abandoned Florida Homes In Foreclosure Haven For Rats, Snakes, Mosquitos

The South Florida Sun Sentinel reports on the problems facing code enforcement personnel throughout South Florida. Aesthetic nuisances like uncut lawns and dirty pools can lead to health hazards. Snakes and rodents love uncut lawns (Editor's Note: in the western parts of the counties, you may even find an occasional alligator in the tall grass). With the pools, the concerns are about mosquitoes and young children getting in them. Other concerns are rotting garbage dumped in the yard, problems of gang activity and prostitution in certain areas, homes getting broken into and getting vandalized or used for drug use. Mailboxes brimming with mail are reliable signals of vacant and abandoned homes. For more, see South Florida foreclosure trend leads to rise in unkempt homes (Foreclosure trend leads to increase in unkempt homes).

Florida Emerald Coast.com reports on a foreclosure problem affecting some residents of one neighborhood in Destin, Florida. The residents are complaining about an abandoned home in foreclosure with an unmaintained pool that is providing a comfortable haven for rats and mosquitos, and possibly snakes, as well. Reportedly, the owners moved out about a year ago, and the code enforcement people say they can't go on the premise without the owners consent. The mortgage lender has apparently yet to foreclose. For more, see Neighbors fed up with rats, snakes.

Teenage Kid Scams Homeowner Out Of $260

For anyone needing to be reminded that you should never do business with anyone showing up unsolicited at your front door, see Man warns of magazine scam (Potomac News).

Homeowner Caution Needed When Leasing Mineral Rights Underneath Your Home

For anyone interested in the kind of problems homeowners can run into when leasing the mineral rights to their property to a natural gas drilling company, see:

• Gas deals' fine print can be costly (Fort Worth Star-Telegram; 8-25-07),
• Leases trigger $10 million mortgages (The Intelligencer - phillyBurbs.com; 7-2-07),
• New York Attorney General Looks Into Tactics Used To Obtain Gas Leases (NY AG Press Release - 10-6-04),
• Residual Liabilites at the End of the Oil and Gas Lease: Who's to Pay? (You can run, but you can't hide) (World Services Group - 6-15-07).

The lesson here is (again), when some unknown person comes knocking on your front door unsolicited, and they want to buy or sell you something (home repair contractors, foreclosure rescue operators, mineral lease "landmen" wanting to lease the mineral rights underneath your home, teenage kids selling magazines, etc.), and if they just happen to have the necessary legal documents in their briefcase for you to immediately sign, just say no.

Go here for other posts on dealing with exploration companies over your mineral rights. MineralRightsAlpha

Never Buy At A Foreclosure Or Trustees' Sale (Unless You Know What You're Doing) - Part 2

In an earlier post, I referred to a media report describing the experience of a naive, young Ohio couple with absolutely no clue of what they were doing who went to a foreclosure sale and were the winning bidders on what they thought was going to be the home of their dreams (see New home turns into a Catch-22).

Now comes forward restauranteur Michael Acciardi, 47, of Saddle River, New Jersey who finds himself in a similar predicament. He's the guy (referred to in an earlier post) who bought the home next door to his at a foreclosure sale for $2.6 million before authorities found nearly two dozen dead cats and dogs, more than 100 live cats and mounds of feces inside (see Purchaser Of $2.6 Million Home At Foreclosure Sale Experiences Rude Surprise).

According to a story in The Bergen Record, Mr. Acciardi announced last Friday that he's now trying to back out of the deal. Reportedly, he said, "These are extenuating circumstances and I need to be relieved of this sale. [...] I'm not going to lay down on this. [...] I should have been told." He described the scene inside the home as an "atrocity" and said his attorney has filed to "unravel the sale."

I wish Mr. Acciardi luck in his attempt to get a judge to relieve him of the mess he got himself into. I suspect that Acciardi, an apparently successful businessman, will have great difficulty convincing a judge that he was a "poor, financially unsophisticated dupe" who was somehow "pressured" or "conned" into going to a foreclosure sale and buying a house for $2.6 million, thereby deserving some form of equitable relief from a court. On the other hand, given that Acciardi is a local resident who is apparently financially well-off, anything is possible in court if you have the right lawyer and get the right judge.

For the story, see Neighbor never saw 'disgusting' interior. See also:

• $2.6M Pig In A Poke (New York Post),
• Feces-soiled Mansion Sickens New Owner (Inside Edition) - reports that the home is so contaminated, it may have to be torn down - (no longer available online),
• Go here for other posts on this story.

Few Bidders At Foreclosure Sales

Business hasn't been too good for real estate investors who buy property at foreclosure auctions. The following summary are from stories around the country reflecting a dearth of good deals at these foreclosure auctions.

Alameda County, California - Of the 12 properties in foreclosure that went up for auction on one day, only one attracted any bidding interest. There were no bids on the remaining 11 properties, which meant they automatically became the property of the foreclosing mortgage lender. For the one property in which their was bidding interest, the holder of a second mortgage on the property was the successful bidder. Foreclosure auctions attract few bids (More homes go on the block, but low equity tempers bidder interest).

Orange County, Florida - More than a dozen potential investors showed up at the courthouse for the daily auction one day. All of them left empty-handed. Of the 12 properties up for auction Tuesday, a guy in shorts and sneakers and others representing the foreclosing mortgage lenders bought all 12 back without a single opposing bid. Gloomy times for profiteers of foreclosures (no longer available online).

Rock County, Wisconsin - In the entrance to the Rock County Courthouse [recently], the auctioneer stood with a list of 13 foreclosed homes - a big stack for one day. In front of a group of attorneys, potential buyers and the curious, he read the prices of properties. No one bid, and the homes all became the property of the foreclosing lender. County's civil process division stays busy even with assistance.

Blue Earth County, Minnesota - It’s a scene repeated regularly, and far more often, in the lobby of Mankato’s Law Enforcement Center: Deputy reads legal notice on a home mortgage foreclosure, bank representative makes a single bid (almost always without a challenging bidder) and someone’s dream of home ownership officially comes to an end. Statistics show mortgage squeeze in area (Attorney advises early response to deepening debt).

Palm Beach County, Florida - At a recent Palm Beach County foreclosure sale, the first thing that struck one attendee was how easy it was to find a seat. A year and a half ago, the room was brimming with eager investors. The second surprise was that no one among the 15 attendees was bidding. The banks took back every one of the 20 mortgage foreclosures on the block. In a conversation later with a regular foreclosure buyer, it was learned that investors are still stuck with property they bought months ago. Capital Sources (Beleaguered borrowers get help).

California - Reportedly, in California, 95% of all foreclosed homes sold at trustees' auctions (foreclosure sales) are being acquired by the foreclosing mortgage holder. For more, see (Editor's Note: disregard the potentially misleading title) Investors Buying More Homes at Auction in California (More current loans are coming into play at auctions of foreclosed homes).

Queens County, New York - At a July 13 foreclosure auction at the Queens County, N.Y., Supreme Court building, only four of the 18 properties auctioned that day attracted any bids from the public. The rest, observers said, ended up in the hands of their mortgage lender. Let the Home Auction Bidder Beware.

Metropolitan Phoenix - Reportedly, about 85 percent of the Valley homes foreclosed on in July went back to the lender. That means fewer investors bidding on foreclosure properties on the courthouse steps. It's deal time with 55,000 homes listed.

New Castle County, Delaware - Over the past year, banks have had to buy back more properties at foreclosure sales. Of the sixteen homes one bank attorney bid on in one recent auction, only one was sold to a third party -- and the bank let that one go because it was worth less than what was owed. Bargains can be found, but buyers beware (Sheriff's sales of foreclosed homes hold pitfalls for the novice).

Kern County, California - Regulars at public auctions have noticed a startling change of late in the bidding. Two years ago, 95 percent of homes were snagged by eager bidders, one auctioneer estimated recently. These days, about 90 percent go back to the bank. The second loans left from so-called 80/20 "piggyback" deals, which required no money down, typically get eaten. In one recent auction, for example, a house came up for auction, with $333,484 owed on the mortgage. The lender started bidding at $200,000. Still, no one nibbled, and the house went back to the bank. Foreclosure snapshot an eye-opener (Ninety percent of auctioned homes go back to the bank).

Washington State and Oregon - According to its Web site's statistics, 41 percent of the foreclosure auction sales tracked by USA-Foreclosure.com (a company that sells foreclosure information to investors) ended up in the hands of third parties. Meanwhile, in Oregon, 27 percent went to third-party purchasers. Foreclosure Auctions Up in Washington and Oregon.