Ex-Con Facing Foreclosure Accused Of Torching Home; Rejects Plea Deal

In Suffield, Connecticut, the Journal Enquirer reports:

• With more than two dozen felony convictions under his belt, Michael Paul Schook isn't unfamiliar with the criminal justice system. Yet, despite a Hartford Superior Court judge's warnings that he could face more than 20 years in prison if he's convicted of setting fire to his house to collect insurance money, Schook rejected a prosecutor's offer to serve just a fraction of that: eight years behind bars, and 10 years' special parole. Schook, 45, told Judge David P. Gold ... that he wants a trial. [...] A credit check of Schook showed the house was in foreclosure, his car repossessed, and he owed thousands to credit card companies, police say.

For more, see Longtime felon rejects plea offer in Suffield arson. yak

Foreclosures Keeping Animal Protective Services Agency Busy

Cleveland, Ohio television station Fox 8 reports:

• Family pets are fast becoming helpless victims of the foreclosure crisis in Northeast Ohio. The Portage Animal Protective League in Ravenna answers calls almost daily for pets left locked up in foreclosed homes. "I know our number of calls has increased," P.A.P.L. Director Sheila Vandergriff said. "We're now receiving calls from realtors, construction companies going in to work on homes where people have been evicted, calls from the sheriffs office."

For more, see Foreclosure Crisis Causing More Abandoned Pets.

Go here for more on pets and foreclosures.

Two Michigan Men Arrested For Passing Rubber Checks To Rent / Buy Property

In Clayton Township, Michigan, The Flint Journal reports:

• A Lansing man was being held on $900,000 in bonds for allegedly passing bogus checks at a local real estate office. Michael P. Klein, 31, was arraigned Wednesday on three felony counts of uttering and publishing. The judge set a $300,000 cash bond for each count. Township Police Chief Chuck Melki said Klein and a second suspect - a Flint man, 71 - were arrested Monday afternoon after passing three checks totaling more than $6,000 to rent or buy property. Police found more than $1 million in forged checks in their possession, along with a half-dozen credit cards under various names and multiple Social Security numbers, Melki said.

The men were arrested by local cops on Monday afternoon. The Flint man has yet to be charged. The FBI has been notified, and detectives have contacted Immigration and Customs Enforcement to determine whether Klein, a native of Germany and who has faced charges in at least two other states, is legally in the United States. For more, see Police arrest man on check charges.

10 Sentenced In Oklahoma Cash Back Mortgage Scam

In Oklahoma City, The Oklahoman reports:

• The remaining people convicted in a mortgage fraud involving homes in Edmond's upscale Oak Tree neighborhood — and prominent Realtor Ann Campbell — were sentenced to prison this week in U.S. District Court in Oklahoma City. [...] Campbell, 66, of Edmond, pleaded guilty in December to conspiracy to commit wire fraud and agreed to assist prosecutors.

According to the U.S. Attorney's Office, the following were sentenced this week after being found guilty after a 12-day jury trial in April:

• Brandon L. Baum, 32, of Joplin, Mo., (87 months in federal prison, 3 years supervised release, pay restitution - $511,735.23),
• Gayle L. Caldwell, 39, of Edmond, Ok., (18 months in federal prison, 2 years supervised release),
• Charles E. Caldwell Jr., 41, of Edmond, Ok., 18 months in federal prison, 2 years supervised release, pay restitution - $185,740.60),
• Joseph Conrad Therrien, 29, of Oklahoma City, (1 year and 1 day in federal prison, 2 years supervised release, pay restitution - $59,771.48),
• Teresa M. Therrien, 32, of Edmond, (1 month in federal prison, 90 days home detention while serving 2 years supervised release, pay restitution - $82,710.58),
• Rusty Real Therrien, 33, of Edmond, (18 months in federal prison, 2 years supervised release, pay restitution - $82,710.58).

The following defendants pleaded guilty in separate related cases, and testified in the trial against the above six defendants:

• Timothy J. McDaniel, 45, of Edmond, (6 months in federal prison, 2 years supervised release, pay restitution - $57,641.34),
• Anthony Jew, 38, of Edmond, (1 year in federal prison, 3 years of supervised release, perform 104 hours of community service, pay restitution - $13,700),
• Dalton Joe Alford, 35, of Oklahoma City, (8 months in federal prison, 2 years of supervised release, perform 104 hours of community service, pay restitution - $172,489.24),
• Toney Charles Mykel, 40, of Edmond, (pleaded guilty to misprision of a felony; 6 months in federal prison, 1 year of supervised release, perform 104 hours of community service, pay restitution - $263,489).

For a description of how the scam went down, see 10 sentenced in Oak Tree mortgage fraud.

Homeowners' Association Battles Resident Over Property Improvement

The Union Democrat (Sonora, California) reports:

• The Copper Cove and Lake Tulloch Owners' Association may have invited new legal action Wednesday by announcing it is imposing fines on a handicapped man who made a county-approved addition to his home in order to gain street-level access to his bedroom. Ken Gutman, 61, target of the fines, says he fears the association actually intends to use the levies as an excuse to take his home away or make him tear it down.

[...]

• The association stirred up a nationwide hornets' nest among homeowners in 2003 when it seized the Copperopolis home of Thomas and Anita Radcliff and sold it at public auction because the Radcliffs failed to pay $120 in homeowners fees. Ultimately, the Radcliffs bought their house back in 2005 and settled their differences with the association out of court. The California Alliance for Retired Americans has called nonjudicial foreclosures "a predatory business practice" used by some homeowner associations to collect tiny amounts of money.

For more, see Homeowner fined in Copper flap.

Connecticut Feds Charge Loan Officer With Mail, Wire Fraud In Alleged Mortgage Scam

In Waterford, Connecticut, TheDay.com reports:

• Jose Guzman, who is being sued by the Connecticut Attorney General’s office for mortgage fraud, was arrested late Thursday night at his Waterford home and charged with mail and wire fraud. U.S. Magistrate Judge Thomas P. Smith today scheduled a detention hearing for Oct. 17 and a probable cause hearing for Oct. 24. The U.S. Attorney’s Office has 30 days to file an indictment. The U.S. Attorney's Office considers Guzman a threat to flee. The Day first reported in May how dozens of individuals, many of them Hispanic, had faced foreclosure and ruined credit after they were approved for home loans based on false information.

For more, see:

• Waterford Man is Being Held On Fraud Complaint (Jose Guzman Detained In Connection With Alleged Real-Estate Scam),
• Waterford Man Faces Charges in Predatory Lending Scheme.

For story updates, see:

• Hearing on Loan Officer Canceled (A probable cause hearing, which likely would have revealed further details regarding the government’s case against former New London loan officer Jose Guzman, was canceled after Guzman waived his right to the hearing.) (The Day.com - 10-25-07),
• Detained Loan Officer Is Released From Prison (Guzman, Accused Of Fraud, Released To Wife's Care After Family Helps Him Make Bond). (The Day.com - 10-18-07)

For a related story on this case, see Promises Left Buyers Destitute, Suit Says.

Go here for other posts and links to media reports on, what the Connecticut Attorney General calls, "an extensive predatory lending scheme" led by mortgage broker Jose Guzman.

M&T Bank Foreclosing On Active Duty Servicemember In Apparent Disregard Of Federal Law

A recent opinion column in The New York Daily News describes a Brooklyn, New York homeowner with 20 years of service in the Army Reserve who reportedly fell behind on her mortgage payments after she got called in for active duty. Five months after being discharged, she was twice called back. M&T Bank currently has a foreclosure action pending against her. An excerpt from the column:

• All told, Foy was home for less than 15 months from October 2001 to December 2006 and, during that time, she lost two tenants. So, lacking rental income, she fell behind on payments again. M&T didn't want to hear about it. The bank piled on penalties - nearly $23,000 in fees - and initiated foreclosure proceedings. Foy remains at risk of losing her home. That's not how it's supposed to work. State and federal law specify that members of the armed forces are entitled to relief from civilian debts - not forgiveness, but a bit of understanding - when they run into trouble because of their military service.

For more, see A lousy way to treat a veteran.

Go here for other posts on the Servicemembers Civil Relief Act, the Federal law that provides protection for active duty servicemembers with financial difficulties arising out of their active duty. If they haven't already, servicemembers in this position should contact the U.S. military's legal officer who is assigned to their unit for consultation.

Countrywide Financial Boycott Goes National

The Boston Herald reports:

• Mortgage activist Bruce Marks yesterday unleashed a “national boycott” targeting Countrywide Financial, a campaign that comes as the giant mortgage company teeters financially. Marks, chief executive of Neighborhood Assistance Corp. of America, led dozens of protesters, many of them Countrywide borrowers facing foreclosure on high-interest, subprime loans, on protests outside three company offices in Boston. [...] “The reason we are going after Countrywide is that they are the biggest, the most aggressive and the most resistant to restructuring loans,” Marks said.

For more, see Activist group moves to push national Countrywide boycott.

See also, Countrywide Is Assailed in Protest of Policies (New York Times - 10-12-07), - "Thursday’s protest was the second this week organized by a borrower advocacy group and aimed at Countrywide. On Tuesday, ACORN, the Association of Community Organizations for Reform Now, organized a protest in eight cities."

(The community activist group ACORN demonstrated outside Countrywide's San Bruno, California office earlier ths week - see Bay Area Activists Protest Outside Countrywide Financial (Say Company Not Helping Enough)). countrywide pressure zebra

Minnesota Feds Bag 4th Conviction In Straw Buyer Scam Investigation Centered On Homebuilder; Appraiser Cops Plea

In another story on the New Prague, Minnesota mortgage fraud investigation centered around homebuilder Parish Marketing and Development, the Minneapolis Star Tribune reports:

• A real estate appraiser from Montgomery, Minn., admitted Thursday to inflating values on 74 homes in the southern Twin Cities suburbs in an alleged mortgage fraud scheme that authorities say bilked lenders out of $50 million. [...] Donald Todd Yeager testified that he inflated his appraisals by $50,000 to $100,000 each. Yeager said that he was paid only his standard $400 fee for each appraisal but that he went along with the alleged scheme to keep the business. [...] Yeager pleaded guilty Thursday to depriving lenders of his "honest services" as a certified appraiser, a felony.

The U.S. Attorney's office estimates the losses attributable to Yeager are between $2.5 million and $7 million and that there are between 10 and 50 victims. Parish Marketing is headed by Michael and Ardith Parish, according to public records. Neither has been charged. For more, see Montgomery, Minn., appraiser admits hyping values (Donald Todd Yeager testified that he inflated value of homes by $50,000 to $100,000 each).

Go here for other posts on Minnesota homebuilder Parish Marketing and Development.

Lawsuit Filed Alleging $40 Million Fleecing Of 800 PA Residents In Wrap Around Mortgage Scam; Class Action Status Sought

(originally posted 10-11-07)
Lancaster Online (Lancaster County, Pennsylvania) reports:

• A couple who say they were stung by a mortgage "Ponzi Corporation" is suing the lenders that bankrolled Personal Financial Management Inc.'s alleged $40 million fleecing of 800 customers. The lawsuit, filed [three weeks ago] in Berks County court, seeks to void 800 mortgage loans that skyrocketed for customers when Personal Finance Management and five subsidiary companies filed for bankruptcy last week. [... Wesley A.] Snyder owns Personal Financial Management, also known as OPFM Inc. and Image Masters, which had offices in Berks and Lancaster counties. [...] The defendants include big-name financiers such as Wells Fargo, GMAC, Countrywide, Citicorp, HSBC, Chase Home, Wachovia and Sovereign Bank.

The investment program that the Pennsylvania residents thought they were investing in was nothing but a "Ponzi scheme," according to the lawsuit. In a classic Ponzi, or pyramid, scheme, money from new investors is used to pay off earlier investors, usually at high rates of interest.

The suit claims that the mortgage lenders either knew or should have known that the program they participated in was a Ponzi scheme. It asks the court to rule that the lenders' conduct was unlawful or negligent and seeks that all mortgage notes held by the defendants are to be voided.

Representing the plaintiffs in this case is the law firm, O'Keefe & Sher, P.C., Kutztown, Pennsylvania.

For more, see Suit seeks to void 800 'Ponzi' mortgages.

See also, Judge Halts Higher Pa. Mortgage Bills (A judge has temporarily blocked higher mortgage bills facing more than 800 homeowners following last month's bankruptcy filing by a Berks County mortgage broker and its five subsidiaries; 10-11-07).

Go here for WGAL-TV Channel 8 News coverage.

For related documents from this case, see:

• OPFM / Wesley Snyder's 9-14-07 Letter To Participants in the Equity Slide/Wrap-Around-Mortgage program.
• Copy of Lawsuit - Jones vs. ABN Amro, et al.,
• Letter from O'Keefe & Sher, P.C., Attorneys at Law - to all potential victims,
• Copy of Preliminary Injunction, (Plaintiff's Emergency Motion & Court's 10-10-07 Order Granting Motion),
• MSFraud.org message board on this case,
• OPFM / Image Masters victims website.

Go here and go here for other posts and links to earlier media reports on the Pennsylvania Ponzi scheme involving Wesley Snyder, OPFM, Image Masters.

Illinois Prosecutor's Office Racking Up Real Estate Forfeitures

In Champaign County, Illinois, The News-Gazette reports:

• Since June, the Champaign County state's attorney's office has succeeded in taking from their owners three homes where drug dealing was going on. The homes are now the property of the Illinois State Police and will be sold, with the proceeds divided among law enforcement. [...] It's a way to send a message to those who use and distribute illegal drugs," said Champaign County State's Attorney Julia Rietz of her office's plan to seize the assets of criminals.

When the confiscated homes are ultimately sold, mortgages and other liens on the real estate are paid first. Anything left over is divided up amongst police agencies and prosecutors' offices, according to the story.

Reportedly, the prosecutor's office had its sights on a fourth home - of a man accused of juvenile pimping, because he was allegedly using the house in the commission of a crime. They promptly scrapped the idea, however, when they learned that the house was worth less than the outstanding liens. The bank foreclosed and got stuck with the house, instead. For more, see If you sell drugs out of your home, you could lose it.

North Carolina Regulators Investigate Broker's Ties To Builder; $Millions Paid In Undisclosed Bonuses?

The Charlotte Observer reports:

• The North Carolina Real Estate Commission has opened an investigation into Charlotte-area agency Realty Place, the commission's lead investigator said Wednesday. The moves were in response to an Observer investigation of Realty Place, which received millions of dollars in bonuses from home builders in exchange for finding buyers for their homes. Company records show - and former employees affirm - that Realty Place maintained a close relationship with home builders after vowing to protect clients from those builders. The company funneled buyers into low-priced starter-home developments, many of which are now plagued by foreclosure.

For more, see Commission investigating Realty Place agency (Also examined: If customers informed of bonuses).

For earlier article on The Observer's investigation, see Homebuyers in the dark? (N.C. rules may leave customers unaware of bonuses received by their agents).

Short Sales: A Pain In The Neck?

Mortgage News Daily describes the anectdotes being thrown around out in the field about the difficulties some are reporting in approaching and consummating a short sale. The problems all seem to focus on the slow turn-around time when dealing with the employees of the mortgage lender or loan servicer. For more, see What is happening out there?

Escrow Agent Gets 2 Years For Swiping $600,000+ In Company Checks

From the Maryland U.S. Attorney's Office:

• U.S. District Judge Deborah K. Chasanow sentenced Rebecca Biglow, age 35, of Upper Marlboro, Maryland, [October 1] to 24 months in prison followed by 5 years of supervised release for bank fraud, announced United States Attorney for the District of Maryland Rod J. Rosenstein. According to her guilty plea, Biglow used her employment as a loan funder at a settlement company in Greenbelt from June 2005 to May 2006 to gain access to settlement files and find checks payable to the creditors of the company’s clients that had not been negotiated or cleared. She would then void the checks, and reissue new checks in the same amounts drawn on a company account and made payable to herself or her creditors.

For more, see U.S. Attorney Press Release - Former Settlement Company Employee Sentenced to Two Years for Bank Fraud (Issued Over $600,000 in Company Checks to Pay Off Her Mortgage and Personal Expenses), and Upper Marlboro woman sentenced to two years for bank fraud (The Gazette).

For an escrow agent perspective on this story, see who the heck is watching the money????

Go here for more stories on "sticky fingered" escrow agents.sneaky slick escrow agents beta

San Diego DA Charges 2 In Alleged Felony Rent Scam Claiming Multiple Victims

In San Diego, California, KGTV Channel 10 reports:

• Anthony Zocoolillo, 30, pleaded not guilty to nine felony charges, including robbery, conspiracy to commit a crime, grand theft of personal property and accessing a computer to defraud. The charges against are in connection with a rental scam prosecutors said Zoccolillo ran with Robert Ramus. "They met with victims at the house and accepted money pretending they could rent houses. So far, we have information that they've taken $9,400 in cash," said Deputy District Attorney Jim Waters. [...] The group used computers at a Kinko's to access the Multiple Listing Service database used by real estate agents, documents stated. The men used an access code from a friend and got the lock box code numbers for two homes, including the Pacific Beach home. [...] Ramus pleaded not guilty to charges last Friday.

For more, see Alleged Rental Scam Ringleader Pleads Not Guilty.

For earlier Channel 10 stories on this case, see:

• October 5, 2007: Man Faces Felony Charges In Connection To Rental Scam,
• August 27, 2007: 10News Viewers Help I-Team Expose Man Behind Alleged Scam,
• August 24, 2007: 10News Investigates Craigslist Home Rental Scam.

See Tenant Victims Of Rent Scams I for other rent scam stories. unwitting tenant rent scam zebra

Albany, NY Feds Announce Guilty Pleas Of Two In "Straw Buyer" Mortgage Fraud Scam

In Albany, New York, EmpireStateNews.net reports:

• Federal authorities in Albany Tuesday announced that Anthony Anderson and his wife, Laura Anderson, both of Florence, Massachusetts, pled guilty Tuesday ... in Albany to felony charges in connection with their roles in a 2001-02 mortgage fraud scheme. Anthony Andersen, 53, pled guilty to submitting false statements to a federally insured financial institution for the purpose of influencing its action on loan applications and to money laundering involving causing monetary transactions over $10,000 to be conducted in funds derived from such specified unlawful activity. [...] Laura Andersen, 49, also pled guilty today to one count of making false statements to law enforcement and in connection with her participation in her husband's scheme.

For more, see Massachusetts couple pleads guilty to mortgage fraud in New York.

Go here for other posts on this mortgage fraud scheme.

Wisconsin State Lawmakers Propose Foreclosure Rescue Statute

In Milwaukee, Wisconsin, the Milwaukee Journal Sentinel reports:

• "Instead of a lifeline, they're tying a noose around homeowners," Rep. Jon Richards (D-Milwaukee) said. "We mean to stop them." Richards commented at a Milwaukee news conference, as he and Sen. Jim Sullivan (D-Wauwatosa) introduced the "Homeowner Protection Act," a legislative proposal that would make it a crime to obtain title to a property by deceit or lies. At issue are agreements commonly called foreclosure reconveyance contracts. Such contracts transfer the title from the homeowner to the "rescuer," generally along with a way for the debtor to recover the house. But often, the terms of the deal are insurmountable for the homeowner, such as high monthly payments or supposed violations of the condition of the property.

For more, see Bill seeks to halt foreclosure scams (Plan targets home 'rescuer' deals).

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.).

Family Victimized By Metropolitan Money Store Loses Home, Awaits Eviction

The Washington Post reports on the story of a Prince George's County, Maryland family who recently lost their home to a bank in a foreclsoure sale as a result of an alleged refinancing scam involving now-defunct foreclosure rescue operator Metropolitan Money Store. Reportedly, the homeowners weren't even in foreclosure when they went to the company to refinance their home to pay some debts and pay for some home repairs after seeing a spot on the Black Entertainment cable television station. According to the story:

• The couple said they didn't realize that they were signing over the deed of their home to the investor. Nor did they know they were signing away more than $100,000 in equity. The straw buyer hasn't made any mortgage payments on the [couple's] house, they said.

• And now, said the [couple's] attorney, Phillip Robinson, the house has been foreclosed on and was recently sold to a bank at auction. "They could be kicked out any day," Robinson said. "We've asked the judge to hold off until this other case [the class-action suit] is handled." Robinson said he has been working on a case-by-case basis to keep his clients from being evicted. He has asked Maryland's attorney general to order that no one involved in the lawsuit be evicted while the case is pending.

For more, see Trying to Hold Onto Home (Metropolitan Money Store Put Their House at Risk, Md. Couple Say).

Go here for other posts on Metropolitan Money Store.

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.). joy jackson

Countrywide Locks Its Doors As Housing Activists Protest Outside Its Offices

KGO-TV Channel 7 (San Francisco, California) reports:

• Bay Area homeowners barely hanging on because of the mortgage crisis, turned-up on the doorstep of one of the country's biggest lenders on Tuesday. They claim that with interest rates soaring Countrywide Financial is doing very little to help them keep their homes. The community activist group ACORN demonstrated outside Countrywide's San Bruno office. Countrywide responded by locking its doors. [...] Late on Tuesday Countrywide sent a response to ABC7 by saying: "Its concerned with the rising levels of delinquencies and foreclosures." They also said they are not only responding to customers, they are also reaching out to borrowers in distress. But lenders often have no authority to rework a loan by themselves. Most mortgages today are packaged and sold to investors on Wall Street in a process called securitization.

For more, see Bay Area Activists Protest Outside Countrywide Financial (Say Company Not Helping Enough). countrywide pressure zebra

Towns Taking A Beating From Foreclosure Boom

The following links are to recent stories on towns that are taking a beating as a result of the real estate bust / foreclosure boom:

• Suburban Phoenix, Arizona (Queens Creek): Boom, Bust in Area Beset by Foreclosures (The Associated Press - 10-6-07),

• Lawrence, Massachusetts: As foreclosures widen, a neighborhood erodes (Crisis tests many in north Lawrence) (The Boston Globe - 10-7-07),

• Cleveland, Ohio (Slavic Village): The Shadow of Debt (Slavic Village Is Fast Becoming a Ghost Town. It's Not Alone) (The Washington Post - 9-30-07) (if link expired, try here).

• New York City (Far Rockaway, Queens): Risky Loans Help Build Ghost Town of New Homes (The New York Times - 9-24-07) (if link expired, try here).

• Stockton, California: "Strange And Sad And Worrying" (CBS News Blog - 10-8-07) ("Houses that sold briskly as recently as a year ago for $400,000 to $600,000 now sit empty and abandoned. And there are lots of them.")

• Providence, Rhode Island: Foreclosures threaten Providence neighborhoods’ vitality (The Providence Journal - 10-14-07).

New York City Property Manager Cops Plea In Theft Of Co Op Funds

In Corona, New York, the Times Ledger reports:

• A former property manager for a Corona cooperative apartment building pleaded guilty to stealing $163,000 in co-op funds. He is slated to be sentenced Oct. 23. Michael Burak, 63, of Manhattan was charged with grand larceny, criminal possession of a forged instrument and falsifying business records, the Queens district attorney said. He entered his plea on June 26 and faces a maximum of 15 years in prison, according to the DA.

For more, see Corona co-op owner guilty of fraud.

Georgia Feds Indict State Magistrate Judge For Lying To Grand Jury, FBI

In Clinch County, Georgia, Daily Report reports:

• A magistrate judge from rural Clinch County has been charged with perjury in an indictment that says she lied to a federal grand jury investigating judicial corruption.
  Magistrate Judge Linda C. Peterson lied to grand jurors June 13 when she denied, under oath, ever suggesting to criminal defendants that they could use her own father as a bail bondsman, according to the indictment. The indictment says Peterson, after setting a $50,000 bond last year for a man arrested on marijuana charges, told the defendant that her father, Herman Corbitt, could act as his bail bondsman for a fee. The indictment says Peterson told the defendant, James E. Tucker, and other people "that she needed the fee that her father would charge for home remodeling." [The U.S Attorney's office] declined to comment on whether Peterson's indictment was related to a federal investigation of Superior Court Judge Brooks E. Blitch III, whose Clinch County office was searched by FBI agents in June.

For more, see South Ga. judge indicted on federal perjury charge. naughty judges

"KCRA 3-Triggered" FBI Mortgage Fraud Investigation Yields 5th Arrest

In Northern California, the Sacramento-area FBI mortgage fraud investigation triggered by a series of KCRA 3 television reports by Investigative Reporter Josh Bernstein has resulted in the arrest of a fifth suspect, according to a source close to the case.

25-year-old Sennett Swift was arrested Friday night at the Sacramento International Airport. In addition to his passport, he was found to have thousands of dollars in cash on his person and authorities believe he was trying to flee the country. Swift reportedly worked as a loan processor for VFM Investment Group and was trained by Jim Martin before leaving and setting up several companies on his own. Martin, along with three others, is currently under indictment for allegedly falsifying millions of dollars in mortgage loan applications so investors could qualify for loans they couldn't afford.

Swift is currently in custody and being held without bond on charges of bank fraud and money laundering. Arraignment is scheduled for today in a Sacramento Federal Court. Swift is considered a flight risk and will likely be remanded until he goes to trial. Authorities allege Swift began preying on the elderly after leaving VFM Investment Group in a similar scheme.

At least a dozen additional arrests in this investigation are expected. For KCRA 3 story, see Agents Believe Loan Officer Tried To Flee State (Man Was Former Employee Of VFM Investment Group).

See also, FBI: Man set up refinance scheme (The Sacramento Bee).

Go here for other posts on this investigation.

Candidate Clinton To Push Foreclosure Rescue Legislation

As she cruises around the state of Iowa on the presidential campaign stump, The Des Moines Register reports that Senator Hillary Clinton (D-NY) is promoting her plans to deal with the problems in the mortgage lending industry and with homeowners facing foreclosure, including Federal legislation to address the foreclosure rescue industry. Buried deep in the article are these excerpts:

• "To deal with problems in the housing market with families facing foreclosure, subprime mortgages, unscrupulous brokers, and mortgage lending abuses Clinton said she has three new plans. [...] The “Foreclosure Rescue Fraud Act” would crack down on con artists who charge hefty fees for bogus promises that they can help people avoid losing their homes. “Spread the word,” she said. “Don’t listen to anybody who calls you on the phone or knocks on the door saying they’ve got a great way of helping you save your home.”

For more, see Clinton focuses on middle class.

In addition, a press release issued yesterday by the Hillary Clinton presidential campaign contains this blurb on Federal foreclosure rescue legislation that she reportedly intends to push if elected President:

• The Foreclosure Rescue Fraud Act. An increasing number of people are seeking the aid of “foreclosure consultants” to help them avoid losing their homes. While some of these consultants are legitimate professionals, others are con-artists taking advantage of distressed homeowners. The fraudulent consultants take money from homeowners without providing any actual service, manipulate homeowners into transferring their property deeds to them, or strip the equity from people’s houses. Hillary will pass legislation that sets national, minimal standards of conduct for foreclosure consultants. The legislation would impose criminal penalties on violators, and allows victims to sue for damages. The law would also make $100 million available to states for prosecuting foreclosure rescue fraud and assisting homeowners who have been conned by foreclosure consultants.

For more, see Hillary Clinton Press Release - Clinton Unveils Plan to Rebuild Middle Class.

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.).

Torched Home In Foreclosure 'Ignites' Investigation; Alleged Straw Buyer, Flipping Scam Uncovered, Two Charged

KARE-TV Channel 11 (Minneapolis-St. Paul, Minnesota) reports:

• With the final touches nearly done on a major remodel project, a Brooklyn Center home is ready to hit the market. [...] The home was in foreclosure when authorities say someone set it on fire. That ignited an investigation, leading Hennepin County detectives to an elaborate scheme that swindled banks out of millions. [...] Edward Boler of Burnsville and Susan Newell of Minneapolis are now charged with racketeering and a dozen counts of theft by swindle. [...] In all Boler and Newell allegedly took banks for nearly $3 million and took more than $282,000 for themselves. Eleven of the 12 homes they helped purchase went into foreclosure. The buyer's credit was ruined. It was a big loss for banks and, authorities say, for neighborhoods.

For more, see Detectives bust alleged mortgage fraud scheme. Go here to watch KARE-TV Channel 11 video report.

For Minneapolis Star-Tribune story, see Two charged in $2.8 million mortgage scam (Prosecutors say they recruited straw buyers, got loans for more than the properties' worth and split the profits). foreclosure arson zebra yak

Home Builders Using 'Car Dealer' Tactics To Dump Unsold Inventory

In the Washington, DC area, The Washington Post reports:

• When the housing market began to weaken, builders responded with incentives such as money toward closing costs and low-interest loans through their mortgage arms, but they did so without cutting their base prices. Faced with a glut of unsold homes and canceled contracts, builders are now turning to tactics typical of car dealerships and department stores. What's even more unusual is that the deals are often accompanied by deep price cuts, which builders had been reluctant to do up until now. "It's a little odd thinking of homes being sold that way," said Dean Baker, co-director of the Center for Economic and Policy Research in the District. "You think of a sale for coffee or laundry detergent, but not really for a home."

For more, see Car Dealer Tactics on the New-Home Lot (To Sell in a Slow Market, Builders Slash Prices and Offer Financing Deals).

For a related story, see 'Betrayed by our builder' (San Jose Mercury News - 10-8-07), a story on a Northern California builder's intention to auction off brand new homes in one subdivision at "closeout" prices to unload its inventory. Current subdivision owners (former customers) who bought from builder at "full price" are up in arms.

Do Mortgage Servicing Companies Charge Excessive 'Attorney Fees' When A Homeowner Goes Into Default?

(revised 10-10-07)
For those who think that they may have been clipped by a mortgage loan servicer for excessive attorney fees being added to their account while their home mortgage was in default (a predatory practice), Excessive Attorney Mortgage Fees: “I Almost Lost My Home”, at LawyersandSettlements.com may be of some interest.

See also, Excessive Attorney Fees: Homeowner Robbery, at LawyersandSettlements.com.

Go here for more on Excessive Attorney Mortgage Fees, and mortgage servicer Mortgage Electronics Registration Systems, Inc. ("MERS"). Reportedly:

• "MERS allegedly retains attorneys to handle foreclosure actions at a stated price but when the attorneys’ fees are passed along to the borrowers, MERS charges the borrowers more than it pays the foreclosure attorneys. Between what it pays the attorneys and what it charges borrowers, MERS keeps the difference as a profit to itself."

The existence of this practice, if true, lends support to the proposition that, financially, mortgage loan servicers might be far better off driving homeowners into foreclosure, pocketing inflated foreclosure fees and costs in the process, rather than trying to help a homeowner modify or otherwise work out their home mortgage loan. (However, the company or mortgage investment trust - and their certificate holders - who actually own the mortgage might not be too happy about it - they are the ones who will actually take the financial beating when a home is foreclosed.)

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

Condo Speculators Looking To Back Out Of Purchase Contracts

The New York Times has a story on new construction condominium speculators from around the country who, during the height of the real estate boom a couple of years ago, entered into purchase contracts with builders and put down deposits on condominium apartments that were to be constructed. Now as the builders are completing construction on the buildings and are expecting the buyers to close on their purchase contracts, the buyers are having second thoughts on buying and are looking to either:

1. unload their contracts onto other buyers before they have to close, or
2. just back out of their deals altogether.

Some are reportedly hiring attorneys in an attempt to void their purchase contracts and seek a refund of their deposits. For more, see A Bank Bet on Condos, but Buyers Want Out (if link expires, try here or try here).

Go here for other stories on real estate speculators looking to back out of purchase contracts. zebra

Marc Dann - "Mortgage Cop"

The Wall Street Journal reports:

• One of the sharpest attacks on Wall Street these days is coming from the Midwest. That is where Ohio Attorney General Marc Dann assigns much of the blame for the state's record mortgage-foreclosure rate -- a mess he calls "the largest financial scam in American history." The 45-year-old Democrat has pursued several mortgage cases closer to home, delaying foreclosures involving New Century Financial Corp., a home lender now operating under bankruptcy-court protection. He has sued more than a dozen lenders and brokers for allegedly inflating home appraisals and engaging in other practices that misled troubled homeowners.

• Mr. Dann says he wants to "punish" not only out-and-out criminal fraudsters, but also deep-pocketed parties that benefited from the problem and helped enable it.

For more, see A New Mortgage 'Cop' (Dann, Ex-Footballer,Tackles Fraud Cases,Targets Wall Street) (or try here for link to story).

For some of the work done by AG Dann's office in the area of real estate / mortgage fraud, see:

• Ohio AG Gets Indictment Of Man In Alleged Refinancing / Deed Theft Scam,
• Ohio AG Conducts Foreclosure Rescue Sweep; Hauls Six Upfront Fee Operators Into Court,
• Ohio AG Aiming Regulatory Rifle At Credit Ratings Agencies,
• Ohio AG Sues Ten Companies Alleging Improper Pressure On Appraisers,
• Ohio AG Zeroes In On Wall Street Firms For Legal Action For Subprime Debacle.

Heirs Of Elderly Man File Suit In Alleged Reverse Mortgage / Home Repair Scam

Channel 8 News in Austin, Texas reports on a recent lawsuit filed against a reverse mortgage consultant and a home improvement contractor alleging fraud against a now-deceased local elderly homeowner. According to the story:

• The lawsuit states Elder Solutions, LP "solicited and exploited elderly homeowners." The suit claims the two companies use a "two-step scheme." First they "bait the homeowner with promises of cash and improvements" and then they "commence major demolition" - trapping the homeowner into selling their property to pay the debt.

Austin attorney Joe Marrs, with the law firm Jackson Walker L.L.P., is representing the elderly homeowner's survivors and says that among the alleged fraudulent conduct committed was the use of forged powers of attorneys. Trish McAllister of Volunteer Legal Services of Central Texas referred the case to Marrs. McAllister said this story is one of many she's heard involving reverse mortgages, mechanics liens, and foreclosures.

Another Austin-area resident said that the same thing happened to her father with Elder Solutions and the same home improvement company, Chaparral Ceiling and Wall, Inc. Attorney Marrs is reportedly in the process of filing a lawsuit on her behalf as well. For more, see Family sues local companies for fraud.

Go here for other posts on reverse mortgage problems.

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NYC Attorney Charged In Deed Theft Of Home Of Elderly Stroke Victim; Swindle Of Serviceperson's Home Sale Proceeds

In New York City, the Queens County District Attorney's office reports:

• Queens District Attorney Richard A. Brown [Thursday] announced that a suspended Richmond Hill attorney and a licensed Queens Village real estate broker have been charged with selling the house out from under an elderly Jamaica, Queens, man who had been hospitalized after suffering a stroke and then repeatedly flipping the property to drive up the price. [...] The District Attorney identified the defendants as attorney N. Stephen Sukhdeo, 41, ... and [real estate broker] Mohammed M. Keita, 48.

They both are presently awaiting arraignment on charges of second degree grand larceny, second-degree forgery, first-degree falsifying business records and first-degree offering a false instrument for filing. Attorney Sukhdeo is additionally charged with criminal possession of forged documents. If convicted, the defendants face up to fifteen years in prison.

In a separate criminal complaint filed against Sukhdeo, he is charged with participating with another real estate broker, Richard Persuad, in swindling almost $100,000 from an active duty serviceperson who was overseas at the time of the swindle in the sale of her home. Persaud, 36, was arrested on August 2, 2007, and is charged with second-degree grand larceny, first-degree falsifying business records and first-degree scheme to defraud.

For more, see Queens DA Press Release - Suspended Queens Attorney And Licensed Real Estate Broker Charged In Real Estate Fraud Schemes (Alleged Victims Include an Elderly Stroke Victim and U.S. Army Sergeant Serving Overseas).

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Mass AG Sues Fremont Alleging Unfair/Deceptive Lending & Loan Servicing Practices

(original post - 10-6-07)
From the Office of the Massachusetts Attorney General:

• Today [Friday], Attorney General Martha Coakley filed a lawsuit in Suffolk Superior Court against California-based Fremont General and Fremont Investment and Loan (“Fremont”), a subprime lender that originated thousands of loans in Massachusetts. The complaint alleges that Fremont engaged in unfair and deceptive conduct on a broad scale in connection with selling mortgage loans to Massachusetts consumers...

• The Attorney General’s Office is seeking civil penalties, restitution and an injunction, which would prohibit Fremont from selling or transferring any Massachusetts mortgages and from foreclosing on any Massachusetts loan without giving the Attorney General’s Office a 90-day opportunity to review the loan transaction and object to the foreclosure.

The lawsuit alleges unfair and deceptive conduct in connection with both the origination of mortgage loans, and the subsequent servicing of those loans. For more, see Attorney General Martha Coakley Files Lawsuit Against National Mortgage Lender - Fremont Investment And Loan (First Case Under 2004 Predatory Home Practices Act).

See also:

• Mass. AG sues subprime lender (The Boston Globe),
• AG Coakley sues big subprime lender Fremont (The Boston Herald).

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Miami-Dade Cops Haul in 11 - Seek 2 Others - In 3 Separate Alleged Mortgage Schemes

(original post - 10-6-07)
In South Florida, the Miami Herald reports:

• In the first roundup of suspects under a new campaign to crack down on home loan fraud in Miami-Dade County, 11 people -- brokers, borrowers, sellers and title agents -- were arrested in three separate mortgage fraud schemes, police announced Friday.

In one case, Mariana Navarrete, 44, owner of Confin Home Mortgage & Loan and United Consultants Group, allegedly enlisted an ex-husband and two sons to steal the identity of a former employee to purchase one of the son's homes, police said. Her ex-husband is Xavier Abelardo, 46, a mortgage broker and registered owner of Nexa Investments Group, which does business under the name Value Rate Mortgage. Both were arrested in this case, as were her sons, Javier Abelardo-Navarrete, 25, (a seller and broker's agent), Luis Navarrete, 21, (a closing agent), and her daughter-in-law Teresa Guillen, 24. Also implicated is Jose Rodriguez, 53, who is still at large, police said Friday.

The second case involved an alleged "cash back at closing" - straw buyer scam involving straw buyer Fernando Prado, 47, who worked with mortgage broker Tomas Tamayo, 39, and title agent Damaris Vallin, 36, to allegedly pull $75,000 in cash from a fraudulent closing. All three have been charged; the house is now in foreclosure.

The third case also involved an alleged cash back at closing scam. A homeowner tipped off cops when approached by a buyer with an offer of approximately $100,000 more than the asking price for his condo. The buyer allegedly wanted the money to be returned to him as cash back at closing, purportedly to make renovations to the property. Police arrested Nestor Camacho, 46, who allegedly acted as the buyer in the deal and title and closing agents David Rodriguez, 44, and Monica Zuluaga, 31. The mortgage broker allegedly involved, Jose Delgado, 26, has a warrant out for his arrest, police said.

For more, see 11 mortgage-fraud suspects arrested (Miami-Dade police rounded up 11 suspects who allegedly used stolen and falsified documents to commit mortgage fraud).

See also, 11 Arrested In Mortgage Fraud Schemes (CBS 4, Miami, FL) identity theft

A Perspective On The Mortgage Loan Servicing Business

A blogger on the Finance Blog at Conde Nast Portfolio.com offers this perspective on the mortgage servicing business:

• If you simply have a lender and a borrower, then often the servicing arm of the lender can be incredibly valuable to both sides: a good loan servicer will find a way to keep the borrower in their house, and maximize the value of the loan for the lender, which otherwise might have to write it off or go through a painful, expensive, and protracted foreclosure process.

• What happens, however, when the servicer is a for-profit entity not connected with the lender? Suddenly, there's a conflict between saving money for the lender, on the one hand, and making money for itself, on the other. A simple mortgage renegotiation is not very lucrative for a servicer; a fully-blown foreclosure, on the other hand, provides much more in the way of opportunities to profit.

(If true, this adds support to the proposition that a for-profit mortgage servicing company with no connection with the institutions and trusts that actually own the homeowners' mortgages, would be financially better off driving a homeowner into foreclosure than trying to arrange a loan modification or some other type of mortgage payment workout.)

For more, see Worrying About Mortgage Servicers' Fate.

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Wisconsin Lawmakers To Announce Proposals To Curb Foreclosure Rescue

In Milwaukee, Wisconsin, the Miwaukee Journal-Sentinel reports that two state lawmakers "plan to announce on Tuesday proposed state curbs on the industry whose members call themselves mortgage rescuers. These rescuers promise homeowners who have defaulted on their mortgage payments a way to save their homes - often only to fleece, in any number of ways, what little home equity their customers have left."

The proposal, called The Homeowner Protection Act, will be announced at a 10 a.m. press conference at the Milwaukee County Courthouse. The lawmakers said they're modeled after tough consumer-oriented provisions in Minnesota law. For more, see Evicting those foreclosure con artists.

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.).

Helen The Pig Update

The Express-Times ran an update today on the improving condition of Helen The Pig, the 5-year-old Pennsylvania pot-bellied pig who had been found living alone in a barn on a recently foreclosed farm.

• The farm's former owner had been returning to care for Helen and clean her stall. However, his uninformed care and liberal feedings bloated Helen to an unhealthy 120 pounds. Helen has been slowly losing weight since she was rescued by Pig Placement Network volunteers, who were contacted by the township after the finding ... .

While she has a way to go to regain her health, she is reportedly making progress and has revealed an endearing and sweet disposition to her new caretakers. For more, see Pot-bellied pig losing more of her pot belly.

For earlier post and stories, see:

• This little piggy gets some care,
• This not-so-little piggy cries wee, wee, wee on her diet,
• Helen The Pig Found Living Alone In Foreclosed Barn; Now Recuperating.

For more on potbellied pigs, see the North American Potbellied Pig Association (NAPPA).

For another story on the health problems of a pig who was allowed to get overweight, see Woman Claims Pet-Sitter Made Her Pig Fat (A woman wants abuse charges filed against an acquaintance who was pet-sitting for her potbellied pig and allowed the animal to get fat. Michelle Schmitz said her pig, Alaina Templeton, weighed 50 pounds when Schmitz left her with a co-worker who offered to care for the animal in February, when Schmitz went on medical leave to recover from ankle surgeries. Nine months later, the pig weighed 150 pounds and it took veterinarians 4 1/2 hours to surgically remove the animal's collar, the Winona Daily News reported.).

Go here for more on pets and foreclosures.

30,000 "Squatters" Convert Vacant Foreclosure Into Giant Beehive

In Cape Coral, Florida, NBC 2 News reports:

• Some unwanted guests are taking over the neighborhood in Northeast Cape Coral. A bee expert says there are about 30,000 bees calling one hive their home. [...] About a month ago, the bees took over a foreclosed home. When neighbors contacted the city of Cape Coral about the squatters, they found out their hands are tied. City officials say there is no program to use taxpayer money to remove the hive. So, it is left up to the bank that now owns the home to take care of it. We asked bee expert Keith Councell to take a look at the hive. He says he has seen a lot of similar hives on abandoned homes.

For more, see 30,000 bees found in foreclosed home.

More On The Problems With Vacant Houses

In Tracy, California, the Tracy Press starts a recent story about the kinds of problems that commonly accompany foreclosures, vacant and abandoned homes with this blurb:

• For the past six years, Paul and Elsa Kennedy have watched the house across the street from them deteriorate. A man and his elderly father lived there when the Kennedys moved in, Paul said. A local real estate company appeared to be ready to restore it a couple of years ago, but since then the only people who seemed to drop by were curious kids, drug users and copper wire thieves.

For more, see Code of conduct (The rise in foreclosures and vacant homes keeps code enforcement officials busy).

Go here for posts on copper & other metal thefts. copper metal theft zebra

Copper Thieves Thriving In "The Big Easy"

In New Orleans, Louisiana, The Times-Picayune reports:

• With prices for salvaged metals soaring, the sale of copper has become big business across the country, with bits and pieces bought and sold for about $2 and $3 per pound. The common metal used to plate pennies can be found everywhere: in pipes in homes, in electrical wiring, in air-conditioning units. And it is that teeming business that police say is sparking a tidal wave of property crimes. The number of copper-related thefts in New Orleans this year is through the roof, especially in the city's flood-ravaged regions. Businesses, schools, a synagogue, countless affluent homes and demolished houses all have been stripped -- some several times -- by sticky-fingered freelancers.

[...]

• A typical heist is a simple as this: Opportunists pop into a flood-ravaged house or an under-renovation home in a sparsely populated part of town. Head for the sink or air-conditioning unit. Kick in some wallboard and uproot the pipes. Grab the wares and bolt to a scrap-recycling yard, where copper becomes cash.

For more, see Police struggle to stop post-Katrina copper looters.

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Vacant Homes In Muncie Going Up In Flames

In Muncie, Indiana, The Star Press reports:

• Vacant houses continue to burn throughout Muncie, with a Tuesday-night blaze along South Liberty Street requiring every Muncie firefighter on duty to respond. "We have a lot of vacant houses, and it is obviously a concern," said Fire Chief Al Richards, who was on the scene of a fire that began at 1810 S. Liberty St., then damaged two other vacant houses next to it. All 29 on-duty firefighters responded to the general-alarm blaze, ...

[...]

• [T]here have been reports of youth smoking in vacant houses, setting them ablaze. In Industry, some neighbors reported crack cocaine users were frequenting a vacant house that burned last summer. The problem with vacant houses is that too many are left unsecured, [city fire inspector David] MIller said. And the number of vacant houses in inner city neighborhoods is growing with more foreclosures and fewer people living in Muncie.

For more, see Vacant house fires point to urban decline. arson

Arson Suspected In Home Fire Belonging To Texas Jurist; Foreclosure Filing A "Red Flag"

An Associated Press article in The Dallas Morning News reports:

• The Harris County Fire Marshal's Office said the fire that destroyed the home of Texas Supreme Court Justice David Medina this summer was "very suspicious" and is being investigated as arson. The fire broke out the night of June 28 in the garage of Medina's home near the Houston suburb of Spring, also destroying one neighboring home and damaged a third. Nathan Green, the lead investigator on the case, said a dog detected an accelerant at the fire scene. He said that doesn't always mean the fire was set on purpose, but "more times than not, the presence of an accelerant is indicative of an incendiary, intentionally set fire."

[...]

• A mortgage company filed to foreclose on the home in June 2006, according to public records. Medina and the mortgage company reached an agreement the following December, Green said. The foreclosure filing was a "very, very big red flag" for investigators, Green said. [...] Green said officials have subpoenaed cell phone and financial records of Medina family members and friends.

For more, see Fire marshal says justice's house fire was intentionally set (if link expired, try here).

For story update, see Fire at Texas Supreme Court justice's home ignites mystery (His lawyer says he is not a suspect; financial woes add to mystery) (10-12-07). zebra

Funeral Home In Foreclosure Burns Down, Feds Investigate

WXIA-TV (Atlanta, Georgia) reports:

• A funeral home that burned during a two-alarm fire in Griffin Monday night was in foreclosure and slated to be sold in October, 11Alive News learned Tuesday.The fire broke out about 6 p.m. Monday on the second floor of the historic antebellum home that housed the Watkins and Sons Funeral Home business. Griffin fire investigators returned to the scene Tuesday, along with federal investigators from the Bureau of Alcohol, Tobacco, and Firearms as well as the state Fire Marshal's Office.

For more, see Burned Funeral Home in Foreclosure. arson zebra