NY Attorney Charged With Swiping $300K Of Clients' Money

On Long Island, New York, the Nassau County District Attorney recently made this announcement:

• Nassau County District Attorney Kathleen Rice announced today that Joseph Levine, a 59-year-old recently disbarred attorney from Hewlett, has been arrested and charged with stealing more than $300,000 from two clients he was hired to represent in legal matters during the past year. Mr. Levine is facing felony counts of Grand Larceny in the Second and Third Degrees, and two counts of Criminal Possession of a Forged Instrument in the Second Degree.

According to the allegations in one case:

Levine counseled one client to settle a personal injury lawsuit that awarded his client $300,000. He traveled to the Pennsylvania office of the insurance carrier to pressure the insurance company into cutting the check immediately because his client’s daughter was having heart surgery and needed the money. After being issued the $300,000 check by the insurance adjuster, Levine then forged the signatures of his client and her husband and deposited the check in his bank account. After three months of writing dozens of checks from his account, his balance on the account stood at a negative $139.44. To date, the client has not received any of the settlement proceeds.

Reportedly, The Lawyers Fund for Client Protection of the State of New York has reimbursed Levine’s client $250,000 since the theft. The fund was established in 1982 and serves as a reimbursement mechanism for client funds that are lost due to the dishonest conduct of lawyers licensed in New York State.

According to the allegations in a second case:

Levine received a $10,000.00 down payment on a home in May to hold on behalf of a client. The sale fell through and in response to the client's request for a return of the money, Levine suggested that he should hold on to the funds, in the hopes that he could resurrect the real estate deal. The client continued contact with Levine throughout the summer about the money but has yet to receive a refund.

For more, see DA: Lawyer Pocketed $300k from Clients (Levine stole personal injury settlement from a client trying to pay for her daughter’s heart surgery).

For those ripped off due to dishonest conduct by a New York attorney, see The Lawyers Fund for Client Protection of the State of New York.

For other states, see:

• Directory Of Lawyers' Funds For Client Protection (American Bar Association - July, 2007); or
• try this "Google" search.

Florida Attorney Disbarred; Mortgage Money Mysteriously Goes Missing While Acting As Closing Agent In Real Estate Deals

In Pinellas County, Florida, the St. Petersburg Times reports that the Florida Supreme Court has recently disbarred attorney Richard Joseph Da Fonte of Clearwater for "conduct involving dishonesty, fraud, deceit or misrepresentation" and "application of trust funds or property to specific purpose" in connection with his involvement in two real estate deals where money went missing. According to the story:

• In the first, he acted as the closing agent for the sale of a single-family residence. But instead of paying off two pre-existing mortgages on the property in accordance with the terms of the agreement, Da Fonte diverted $230,000 to an unknown third party, said Karen Lopez, an attorney with the Florida Bar. "We don't know where the money went," said Creston Nelson-Morrill, a Bar spokeswoman. The original mortgage holder filed for foreclosure, and while Attorneys' Title Insurance Fund managed to hold off the bank, the fund lost more than $300,000 as a result of Da Fonte's actions, according to the disbarment on consent signed by Da Fonte.

• In the second case, Da Fonte, working as an escrow agent and closing agent, failed to disburse $715,000 earmarked as loan proceeds. The deal didn't close even though the bank and buyer, who had begun making regular loan payments, believed it had.

For more, see Lawyer disbarred, two others are disciplined (Diverted mortgage funds led to the disbarment).

See Theft Of Escrow Funds I and Theft Of Escrow Funds II for other stories of trust account / escrow account theft of funds. sneaky slick escrow agents beta

Florida Attorneys Disciplined For Playing Fast & Loose With Clients' Cash

The North Country Gazette reports that, in Florida:

• The Florida Bar, the state’s guardian for the integrity of the legal profession, has announced that the Florida Supreme Court in recent court orders disciplined 29 attorneys, disbarring eight, suspending 13, emergency suspending two, placing three on probation and reprimanding five. Some attorneys received more than one form of discipline.

Of the 29, the following 12 have been disciplined for playing fast and loose with their clients' cash and/or property:

• Richard Charles Bagdasarian, Boca Raton, disbarred. Bagdasarian misappropriated client funds totaling more than $1.17 million from about 41 different clients and made material misrepresentations to his clients to conceal his misappropriation and conversion to his own use of the funds.

• Angelo Cappelli, St. Petersburg, disbarred. Cappelli was a trust officer in a bank and without the knowledge of or authorization from the bank opened an estate using a summary probate procedure. He then used his position to gain access to about $100,000 from a deceased customer’s estate and used about $75,000 of the funds.

• Richard Joseph Da Fonte, Clearwater, disbarred. Da Fonte served as the closing agent in one real estate transaction and represented the buyer as well as acted as closing agent and escrow agent in another. In one instance, funds were diverted that were intended to pay off two pre-existing mortgages. In the other, Da Fonte failed to tell his client or the bank making the loan that the closing had not occurred. When the bank learned that the transaction had not closed, Da Fonte failed to account for the loan proceeds and to return them to the bank.

• Chandra Parker Doucette, Boca Raton, suspended. Doucette was found in contempt of court for her failure to respond to subpoena issued by the Court, which ordered her to provide mandatory trust account records.

• Michael T. Kovach, Inverness, the subject of an emergency suspension, pursuant to an Oct. 31 court order. Kovach has failed to respond to three subpoenas commanding him to appear for a deposition and to produce trust account records. A Bar investigation indicated that he converted client funds from his trust account for his own personal purposes.

• Albert Scott Lagano, Melbourne, disbarred for 10 years. Lagano was found guilty of five counts related to trust fund shortages and the commingling of trust funds and operating funds of a number of clients. An audit found that, between August 2005 and November 2006, Lagano withdrew cash from his trust account or transferred to his office account a total of more than $1 million. He failed to maintain trust account records supporting these withdrawals and transfers.

• Peter Malo, disbarred. In August 2001, Malo was disbarred by the New York state bar based on charges of commingling and misappropriation of client funds or property.

• Joey Dean Oquist, St. Petersburg, suspended for two years. A bar auditor found evidence of shortages in Oquist’s trust account. It was determined that he failed to maintain the required cash receipts and disbursement journal and client ledger cards.

• Anthony Vincent Scalese, Pembroke Pines, suspended, until further order of the court. Scalese failed to produce trust fund records compelled by a subpoena issued in the course of a Bar investigation into the management of his trust account and was held in contempt of court.

• Marie Gilberte Thompson, Miami, disbarred. Thompson failed to comply with a subpoena for her trust account records. Records of a real estate transaction obtained from third parties showed that she received nearly $821,000 for payment of a mortgage loan. She failed to apply the trust funds to the specific purpose of paying off the mortgage and had insufficient funds to do so.

• Ruben Torrence Thompson, Miami, disbarred. Thompson failed to comply with a subpoena for his trust account records. Records of a real estate transaction obtained from third parties showed that he received nearly $821,000 for payment of a mortgage loan. He failed to apply the trust funds to the specific purpose of paying off the mortgage and had insufficient funds to do so.

• Kendrick Gerard Whittle, Miami, the subject of an emergency suspension, pursuant to an Oct. 23 court order. Whittle failed to produce bank and trust records in response to a subpoena. However, bank records show that he issued checks to himself totaling nearly $298,000 from client funds and used them to pay other clients and for personal matters such as rent, credit cards, Gables Sports Cars and Saks 5th Avenue.

Source: 29 Florida Attorneys Disciplined, Eight Disbarred. sneaky slick escrow agents beta

Freddie Mac Sued By Shareholder; Class Action Status Sought

Reuters reports:

• A shareholder sued Freddie Mac, its chief executive and others on Wednesday, alleging the No. 2 U.S. home funding company did not take adequate steps to protect itself from problems in the mortgage industry. Scott Reimer, a shareholder, said in the complaint filed in U.S. District Court in Manhattan that Freddie Mac, Chief Executive Richard Syron and some other executives did not adequately implement risk control measures to protect the company from acquiring billions of dollars worth of mortgages with poor underwriting standards. "Moreover, the company's procedures for appraisals led to many inflated appraisals, increasing the risk of defaults," it said. "Ultimately, the company has reported billions of dollars in losses, has been mentioned in investigations by the New York attorney general and announced it must raise new capital to meet regulatory requirements."

The suit seeks class action status. For more, see Freddie Mac sued over mortgage problems.

See also, News Gets Worse for Freddie As Shareholders File Lawsuit (Mortgage Firm Accused of Deception on Risk) (The Washington Post).

Ex-Detroit Cop Charged In Mortgage Fraud, Forgery

The Detroit Free Press reports:

• A fired Detroit police officer was charged ... with three felonies on allegations that he forged the signature of Wayne County Clerk Cathy Garrett to paperwork in an attempt to receive a mortgage loan. County officials announced forgery and other charges against D’Clarence Reynolds, 27, of Detroit, in a case that left Wayne County Sheriff Warren Evans baffled. “It’s hard to believe that anyone, particularly a former police officer, would forge the name of a county official and not think it would raise a red flag,” Evans said ... .

For more, see Former Detroit cop charged with fraud in mortgage scheme.

Phony NYC Lawyers Sentenced For Scamming Dozens In Real Estate Deals

In Staten Island, New York, the Staten Island Advance reports:

• Their claims to be lawyers were bogus, but what's very real are the lengthy prison terms and the $14.1 million that two Staten Island brothers must repay unwitting homeowners and lenders they bilked in real-estate deals in Nassau County. James LaForte Jr. and Joseph W. LaForte fronted a Mineola, L.I., law firm that acted as attorneys for banks in real-estate transactions. Along with their parents and other conspirators, they ripped off three dozen personal clients and lending institutions of more than $14 million over the 17 months ending in August 2005, prosecutors said.

For more, see 2 brothers head to jail for duping homeowners (LaFortes must pay back $14.5 million to victims of bogus-lawyer scam).

Three Philadelphia Men Face Charges Of Stealing Homes From Out From Under Homeowners

In Philadelphia, Pennsylvania, WCAU-TV Channel 10 reports:

• Three men involved in a real estate scam faced a Philadelphia judge [last] Friday. They're charged with forging deeds and stealing homes right out from under their owners. The NBC 10 investigators have been telling you about this unique city crime problem over the last couple of years. It's not hard to steal a house in Philadelphia. Often no one checks forged documents filed at City Hall. You say your brother gave you the house for a dollar and then take possession, NBC 10's Lu Ann Cahn reported.

***

• In court [last] Friday, [homeowner Susan] Thompson looked at Michael Crosby, Carl Fooks and a third suspect, Charles Faust and told the judge she had never seen the men before, even though somehow her deed said she sold her house to one of them "for a dollar," she said.

For more, see 3 Men Accused Of Forging Documents, Stealing Houses For $1.

Stealing Vacant Lots Gets Disbarred Lawyer 12 Years In Pen

In Chicago, Illinois, the Chicago Tribune reports:

• Phillip Radmer, a disbarred Berwyn attorney who created phony corporations and invented board members to steal the properties of poor churches, nonprofit groups and businesses, was sentenced Tuesday to 12 years in prison. "Mr. Radmer has ruined a lot of people's lives in this case," Cook County Circuit Judge Stanley Sacks said in imposing the sentence for theft and forgery. Representatives of six churches told the judge that the scheme forced them to spend scarce resources to untangle the mess left behind by Radmer over who rightfully owned the properties.

For more, see Ex-lawyer gets 12 years for lot thefts (Berwyn man faked real estate deals).

Go here for other posts on Phillip Radmer.

Arkansas Manufactured-Home Company Owner Gets 2+ Years On Mortgage Fraud, Tax Charges

The Associated Press reports:

• In addition to serving 30 months in federal prison, a Searcy woman who pleaded guilty to mortgage fraud and filing false income tax returns will have to pay $120,000 in restitution to victims. Federal Judge Susan Webber Wright sentenced 54-year-old Debby Cossitt [Monday].

Reportedly, Cossitt was owner, manager or operator of several manufactured-home sales companies in Searcy, Batesville, Jonesboro and Harrison who admitted falsifying mortgage-loan application documents to increase her business, including inflating bank balances of those buying homes, the size of down payments, and incomes. For more, see Sentence for mortgage fraud includes restitution.

Minnesota Man Again A Target In Mortgage Fraud Prosecution

In Minneapolis, Minnesota, the Minneapolis Star-Tribune reports:

• A Minneapolis man sentenced on a federal mortgage fraud charge in 2001 now faces Hennepin County charges involving at least $1.2 million in mortgages that stretched from Bloomington to Blaine. Larry D. Maxwell, 52, was charged Monday with 10 counts in the alleged mortgage fraud, including racketeering. Also charged with nine counts of forgery, identity theft and theft by swindle was Realty Executive Advantage Plus Group. The real estate brokerage was operated from Maxwell's north Minneapolis riverfront condo.

***

• The complaint against Maxwell lists four other uncharged conspirators in the racketeering count. They are Vickie Cox-Maxwell and Larry Scott, his wife and son and both agents of Realty Executive, mortgage broker Terrece Large of Worldwide Mortgage, Inc., where Maxwell was a loan officer, and Halisi J. Edwards-Staten, listed as the real estate broker for Realty Executive.

For more, see A second time around on mortgage fraud charges (A Hennepin County investigation continues with four others named as uncharged conspirators in the case).

Tennessee Trio Facing Federal Fraud, Conspiracy Charges In Alleged Mortgage Scam

In Middle Tennessee, Tenessean.com reports:

• An almost two-year joint federal and state investigation has resulted in the arrest of three Sumner County men in an elaborate mortgage fraud scheme involving the purchase of 22 luxury homes in Hendersonville and Gallatin by unqualified “straw” buyers. Harold Stafford of Hendersonville and Miles Jackson Black and Jeffrey Dunn Hatchcock of Gallatin, were each charged with one count of conspiracy, 21 counts of wire fraud and three counts of bank fraud following a two-year investigation. In addition, Stafford faces 25 counts of money laundering.

***

• According to the indictment, Stafford, the owner of Stafford Lease Group, Stafford Holding Group and Keys to Success, agreed with the builders and sellers of the 22 luxury homes to find buyers who would purchase the homes at prices that were $10,000-$165,000 more than their original asking prices. [...] The builders and sellers agreed to pay Stafford any amount of the sale that exceeded the original asking prices of the homes, federal court records show. Stafford recruited seven unqualified straw buyers with good credit histories to apply for first and second mortgages on multiple properties where the purchase price was greater than the seller’s original asking price, according to the indictment.

For more, including a detailed timeline of the alleged scam activities, see Mortgage fraud scheme results in three arrests.

For the U.S. Attorney's press release, see Three Sumner County Men Indicted For Mortgage Fraud Scheme.

The American Dream Shattered: The Dream of Homeownership and the Reality of Predatory Lending

From the Massachusetts Attorney General's office:

Attorney General Martha Coakley has released a report about new consumer protection regulations governing mortgage lenders and brokers. “The American Dream Shattered: The Dream of Homeownership and the Reality of Predatory Lending,” is a summary report of statewide hearings held on proposed mortgage regulations that the Attorney General’s Office held in September. The report includes an analysis of the concerns of residents and businesses of Massachusetts as well as state, local and federal officials who are also considering remedies to address the foreclosure crisis. The report also briefly discusses the reasons that stronger consumer protection regulations are necessary in making the mortgage lending marketplace more transparent and fair.

Read the report, "The American Dream Shattered: The Dream of Homeownership and the Reality of Predatory Lending".

Elderly Chicago Woman Victimized In Predatory Lending Scam; Brings RICO Charges Against Lenders

New York Times' Op-Ed Columnist Bob Herbert recently recounted the story of an elderly Chicago, Illinois woman who is facing the loss of her home in an alleged predatory lending scam:

• Like vultures, the mortgage lenders began circling the single-family house with the tiny front lawn on Merrill Avenue. They knew that the woman who owned the house was old and sick and that her two aging daughters were struggling with illness and poverty as well. That was all to the good as far as the lenders were concerned. The predator’s mission is to home in on the vulnerable. “The people that wanted to put through the loan called me about a hundred times,” said Rosa Dailey, who is 65 and going blind and needs an oxygen tank at times to help her breathe. “I kept telling them no, because I didn’t think we could afford it. But they kept saying how it was to our advantage. So I finally said: ‘All right, let’s see what we can do.’ ”

For more, see A Swarm of Swindlers (may require registration; if no registration, try here).

Ms. Dailey's mother and older sister are now dead and she is facing the loss of her home. Chicago, Illinois Attorney William Spielberger has taken up Ms. Dailey’s case by filing a federal Racketeering (RICO) lawsuit on her behalf in September against Citi Residential Lending, a subsidiary of Citigroup that acquired Argent Mortgage, as well as WM Specialty Mortgage, a subsidiary of Washington Mutual, and (the curiously named) Integrity First Mortgage.

Judge's Aide Cops Plea To Federal Tax Charge; Admits Role In Eliasof North Jersey Flipping Operation

In Newark, New Jersey, The Star-Ledger reports:

• A legal assistant to Garfield's long-time municipal court judge pleaded guilty yesterday to federal tax fraud charges in connection with a widespread mortgage scam tied to the judge. Melanie Gebbia, 33, of Wanaque waived indictment and admitted preparing fake mortgage settlement documents in exchange for more than $50,000 in cash and checks that she never reported on her income tax returns.

• The subprime mortgage deals involved the sale of more than a dozen ramshackle residential properties in Paterson that were quickly sold at inflated prices to buyers with no money. Most of the houses ended up in foreclosure, leaving banks holding worthless loans. Gebbia worked for William Colacino Jr., an attorney who has served as Garfield's municipal court judge for more than 20 years. He has not been charged in the case and was only identified in court papers by his initials as an unindicted co-conspirator. However, a separate civil fraud lawsuit spelled out Colacino's role as the closing attorney in the sale of at least five of the Paterson properties.

The guilty plea was a result of an ongoing criminal investigation that has so far led to the indictment of several housing enforcement officials and caseworkers in Paterson on charges of bribery and conspiracy, and has also resulted in last week's guilty plea by local real estate agent Michael Eliasof, 63, of Mahwah to money laundering in orchestrating a series of fraudulent mortgages that netted him and others between $1 million to $2.5 million. For more, see Garfield judge's aide admits subprime mortgage fraud (no longer available online).

See also, Involved in Paterson real estate scheme (Herald News - 11-21-07) (no longer available online).

• "Well-known New York City criminal defense attorney Ronald L. Kuby said Gebbia had entered into a standard agreement to cooperate with the government in which the more the defendant produces for prosecutors, the greater the likelihood her sentence will be reduced. "Her job now is to produce evidence against others. The most likely 'other' here is the judge (Colacino)," Kuby said. "I'm not suggesting the judge has done anything wrong. I am suggesting that it sounds like the government thinks the judge did something wrong. You don't deal with the legal assistant so she can implicate the janitor. "If I were the judge (Colacino), I would start scraping together bail money." "

Editorial: Look what greed wrought (Herald News Editorial, 11-20-07) (no longer available online).

Go here for other posts on this ongoing investigation.

Two (Now Disbarred) Florida Attorneys At Center Of Real Estate Scam Accusations

In South Florida, the Miami Herald reports:

• As expected, following Nov. 13's Action Line on land sales involving unlicensed broker Daniel Stephen, (if link expired, try here) his company, First Loan Solution, and the firm of lawyer Marie Estime-Thompson, we received calls from additional readers who said they were victims of unscrupulous dealings. Yvonne Walker of Pembroke Pines said she paid Stephen and Estime-Thompson's firm about $20,000 in 2005 for acreage in Taylor County (along the Panhandle) to which she never received legitimate title. Calls to the Thompsons' firm in North Miami rang either busy or disconnected.

• Merlyn McKenzie of Miramar called in a similar complaint, saying she paid Stephen and the Estime-Thompson firm $9,250 as a down payment for a lot in Madison County.
  What we didn't expect was to hear from family.

• Between them, Marie Estime-Thompson and her husband, Ruben Thompson (also a lawyer), have to their names five Miami-Dade properties; all are in foreclosure. One of them, ... , in downtown Miami, is a historic building in the heart of Overtown that, until March 30, 2005, belonged to Brenda Killens Evans, a cousin of Ruben Thompson's.

***

• Evans ... filed a complaint with the Florida Bar. In response to Bar inquiries, Thompson disputed Evans' allegations and claimed she had sold him the property. Then, on Oct. 18, both he and his wife were disbarred, at their request, which shut down the Bar's investigation.

For more, see Bad real estate deals dash family dreams. (no longer available online).

To file a complaint against a Florida attorney, go to The Florida Bar's Attorney Consumer Assistance Program (ACAP) for more information.

If a Florida attorney is representing you and screws you out of money or property through dishonest conduct, go to The Florida Bar's Clients' Security Fund for more information.

For other states, see the Directory Of Lawyers' Funds For Client Protection (American Bar Association - July, 2007); or try this Google search.

NYC Real Estate Appraiser Faces 397 Count Indictment For Bogus Valuations; Stealing Other Appraisers' I.D.

From the office of the Queens County District Attorney:

• In a 397-count indictment, D & T National Appraisals, Inc., and its CEO, Donato Odato, 54, ... , have been variously charged with second- and third-degree forgery, criminal possession of a forged instrument, first- and second-degree falsifying business records, first- and third-degree identity theft, first-degree scheme to defraud and fifth-degree conspiracy. Odato faces up to seven years in prison if convicted. The corporate defendant faces a fine of up to $10,000 for each felony count conviction or double the amount of the illegal gain.

• [A]ccording to the indictment, Odato ... recruited licensed appraisers over the Internet and offered them positions with his company as part of a ruse to steal their personal identity information. Thereafter, it is alleged he would forge the names of the prospective job seekers on numerous appraisals that he filed in connection with residential mortgage applications.

• It is further alleged that Odato took advantage of the Internet’s anonymity, as well as his own background as a former licensed assistant appraiser, to fraudulently induce lenders and other real estate professionals to use his company’s claimed appraisal services. It is alleged that instead of actually doing the appraisal work, Odato would simply concoct information on real estate values from various sources and then inflate the values to match mortgage applications.

For more, see the Queens County DA Press Release - Queens Real Estate Appraisal Firm And CEO Indicted In Alleged Scheme That Inflated Real Estate Values (Allegedly Stole Identities of Other Appraisers As Part of Scheme).

First American To Fork Over $5 Million In Alleged Kickback Racket

In Florida, the St. Petersburg Times reports:

• Florida's second-largest title insurance company will pay $5-million to settle charges that it ran an elaborate kickback scheme to build its business, state and federal officials said Friday. Regulators say that First American Title Insurance Co. illegally paid real estate agents, mortgage brokers, banks and home builders for referrals by making them partners in sham title companies. Eighty-four of these companies were created to funnel business to First American and payments to those making the referrals, authorities said.

For more, see Title company to pay $5M (First American says it did nothing wrong but agrees to close partnership companies).

Go here for other posts involving legal issues related to title insurance. title insurance legal issues

Campaign Against Foreclosure Rescue, Sale Leaseback Deals Intensifies In UK

In the United Kingdom, U.K. Personal Loan Store posts:

• Over recent months sale and rent back scheme have been hitting the headlines on a regular basis, and have not been viewed in a good light by many officials and campaigners. With more and more people facing repossession in the UK due to higher interest rates and repayments these firms have crawled out of the woodwork offering these vulnerable consumers a chance to stay in their homes and eliminate the risk of repossession. This is through selling their home to the company and then renting it back from them.

• However, campaigners state that these firms are paying way below market value on the properties, with some sellers receiving just 60% of the actual value of the property. Then there is no guarantee with regards to how long the former homeowner will be able to stay in the property beyond the first six or twelve month tenancy. Campaigners and groups are now urging the government to act on this problem to stop any more consumers suffering at the hands of sale and rent back companies.

For more, see Campaign over sale and rent back schemes increases.

For a related post, see Foreclosure Rescue, Sale Leaseback Deals "An Unregulated Free-For-All" In Great Britain.

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.).

Houston Courts Handing Out Stiff Sentences In Mortgage Fraud Prosecutions

In Houston, Texas, the Houston Chronicle reports on the stiff sentencing going on in mortgage fraud cases. According to the story:

• As the meltdown of the subprime mortgage market plays itself out in Houston, prosecutors are getting some stiff sentences fighting fraud that grew from weaknesses in the industry.

***

• The mortgage-fraud defendants are winding up with more severe sentences than the Enron crew ... . The highest penalty meted out in Enron was the 24-year sentence for ex-CEO Jeff Skilling. But in the last month in Harris County courts, three people have been sentenced to 25 years in prison for mortgage fraud, and a fourth received a 40-year sentence.

For more, see Mortgage fraud cases yield tough sentences (Man received 40 years in prison for his role in skimming scheme).

Pennsylvania Man Cops Federal Plea In House Flipping Operation; Investigation Focusing On About 200 Deals Continues

In Erie, Pennsylvania, the Erie Times-News reports:

• [Robert L.] Dodsworth -- a central figure in [an] ongoing federal mortgage-fraud investigation in Erie -- pleaded guilty in U.S. District Court in Erie on Monday to felony conspiracy and money-laundering charges related to the probe. With the plea, Dodsworth, 60, became the first and, so far, only person to admit wrongdoing in the mortgage-fraud investigation, which the FBI, Internal Revenue Service and other agencies initiated in 2004.

• Dodsworth admitted to working with others to falsify mortgage applications for homebuyers, most of them poor and unsophisticated, who otherwise would have been unable to afford mortgages and buy houses.

• The investigation that included Dodsworth has focused on the sale of nearly 200 Erie homes. The FBI and other agencies have been looking at whether the sales involved inflated appraisals or other fraudulent information that led those buyers to pay far more than market value for their homes. Most of the sales occurred in low-income Erie neighborhoods, and most of the financing was arranged through subprime mortgages ... .

For more, see Guilty as charged (Restitution part of plea in mortgage-fraud case).

For more on this scam, see Money from suburbs helped finance inner-city fraud.

For story update, see Fraud probe figure seeks lawyer (Court appoints public defender for businessman) ("Another local businessman has been connected to the federal criminal probe of suspected mortgage and housing fraud in Erie. Several low-income homebuyers claim the businessman, Keith A. Rice, acted as an ad-hoc real estate agent when they purchased their properties. Rice, 49, last week requested that a federal public defender be appointed to represent him as part of a criminal case in U.S. District Court in Erie.").

Go here for other posts related to this story.

Pennsylvania AG Files Civil Suit Against Man For Bilking Consumers In Unlicensed Real Estate / Mortgage Activity

The Pittsburgh Post-Gazette reports:

• Pennsylvania Attorney General Tom Corbett yesterday said he would ask federal prosecutors to open an investigation into a North Hills real estate broker and his associates, saying James C. Platts and his company, Easy Realty Solutions, flagrantly violated state and federal laws. "This guy's a con artist. He just keeps shifting schemes," said Mr. Corbett, whose office had previously won fines against a Platts-operated rent-to-own scam.

• This time, investigators say he moved on to a wide-ranging home sales operation that falsified incomes to enable unqualified buyers to obtain mortgages, filed fraudulent liens against homes he was selling to extract money from the sellers, created fraudulent second mortgages and practiced law without a license. The liens, known as "lis pendens," were used to guarantee Mr. Platts a profit on sales because his real estate license had been revoked several years ago and he would not have been permitted to collect a sales commission.

The Pennsylvania AG filed a 54-page, 13-count complaint against Platts which noted that his deals frequently included duplicate and conflicting settlement papers, called HUD-1s. The suit asks the court to declare more than $1.2 million in second mortgages void; void an estimated 159 lis pendens that Platts recorded against various properties; and force Platts to refund defrauded parties in an estimated 115 home sale deals since 2004. The suit asserts that Platts engaged in the unlicensed practice of real estate and mortgage brokerage.

For more, see State going after real estate broker.

See also:

• Bradford Woods businessman accused in real estate scam (Pittsburgh Tribune-Review),
• Pensylvania AG Press Release - Attorney General Corbett announces lawsuit in Pittsburgh area real estate and mortgage fraud case,
• Man Charged In Pittsburgh-Area Mortgage Scheme (WTAE-TV Channel 4, Pittsburgh),
• State accuses real estate company president of W. Pa. scam. (The Associated Press).

For earlier reports on Platts, see:

• Confusion reigns in murky house sale,
• The impossible loan: The murky path to a couple's dream home,
• Company under investigation in Pa. seems to have a twin in Florida (Realty pitch sounds familiar),
• Pennsylvania AG Investigating "Short Sale" Flipping Scam.

Two Sentenced For Selling Elderly Couple's Home Out From Under Them

In Louisville, Kentucky, The Courier-Journal reports:

• Two of the four people involved in a scheme to sell a Cherokee Triangle home they did not own have been sentenced in U.S. District Court. Freddie Johnson, 39, and Marilyn Rainey, 60, both of Chicago, had pleaded guilty to aggravated identity theft and mail fraud in connection with two fraudulent loans on the home of Russell and Sally Riggs ... last November. The group managed to sell the Riggses' home -- without the couple's knowledge -- twice within a week. The Riggses have lived in the century-old home since 1966. Johnson was sentenced to more than six years in prison, and Rainey received more than two years in prison, according to U.S. Attorney David Huber's office.

***

• Russell Riggs, who is retired from a large law firm, and his wife were able to clear up the property's deed with the help of a few legal associates who contacted him after the story was in the local media.

For more, see 2 sentenced in home-selling scheme.

Upstate NY Man Sells Elderly Parents Home Out From Under Them

In New Windsor, New York, the Times Herald-Record reports:

• It took just five months for Paul Tartaglia Jr. to be arrested, spill his guts to police and shuffle off to state prison for selling his parents' house out from beneath them. Now comes the hard part for Paul Tartaglia Sr. and his wife, Angela: getting back their house.

• When their son took a plea-bargain in September, he pleaded guilty to grand larceny, which covered the money from the bogus home sale and money he took from a former girlfriend who bore him a son. Between all his victims, Tartaglia's on the hook for $338,000. But Tartaglia's plea didn't provide an explanation for how he stole the money. He didn't explain the sale of his parents' house.

• That leaves Paul and Angela Tartaglia mired in a civil suit with, among others, their son, a mortgage company, a bank, a title insurance company and a Bronx man who somehow received legal authority — called power of attorney — to act on behalf of the Tartaglias and sell the house on a placid block in New Windsor, where they've lived for nearly 40 years.

• Paul Tartaglia Sr. says he found out about the sale by accident earlier this year, when he went to Town Hall to pay a water bill and discovered it had already been paid by a complete stranger. The Tartagalias also found out that someone had taken out a new mortgage on their house.

For more, see House-selling scam leaves parents in bind.

For story update, see Fake legal form tangles case of home-sale scam (Times Herald-Record - 11-24-07).

Go here , go here , and go here for other posts on elder financial abuse.

Go here for other deed theft posts. deed theft zorro yak

Convicted Disbarred Lawyer Land Swindles Another While In Jail, Says Report

In Chicago, Illinois, the Chicago Tribune reports:

• A disbarred Berwyn lawyer awaiting sentencing for selling vacant lots that belonged to a Chicago church pulled off a similar scam while incarcerated in Cook County Jail, according to records and interviews. In the latest bogus transaction, Phillip Radmer sold property on the city's West Side that belonged to Providence-St. Mel School -- without the school's knowledge -- to a savvy real estate investor and developer.

***

• A Tribune investigation last year disclosed a series of complicated real estate transactions in which Radmer created dozens of sham corporations and phony buyers to steal more than 60 vacant lots from poor churches, non-profits and corporations. Following the reports by the Tribune, Radmer was arrested in June 2006 at his Berwyn home and has been in County Jail since.

For more, see Records show land swindler at it again -- from jail (Ex-lawyer sold lot belonging to school).

See also, Land swindler pulls off another scam while jailed.

For an earlier story on the theft of lots, see Report: Land Sold Without Church's Permission (cbs2chicago.com).

Go here for story update on Phillip Radmer.

Buyers Of Condo Conversions In Aging Buildings Beginning To Have Nightmares

In South Florida, the Miami Herald reports:

• Their first home should be their joy. But Michelle Fernandez and her fiancé, Efrain Uribe, are bitterly regretting buying a place from a developer converting a high-rise apartment complex into condos in North Miami Beach. Now, they say, they're stuck with shaking elevators, exposed pipes, badly stained hallway carpets, a flooded laundry room and even mold in the couple's air conditioning closet.

***

• Others who have bought condo conversions have discovered they're on their own to fix code violations, an aging infrastructure and faulty equipment. In some cases, that means the new condo associations are levying thousands of dollars in special assessments for repairs.

***

• Some new owners complain cities don't find code violations in converted buildings until after the developers have sold all the units, says state assistant condo ombudsman Bill Raphan. In fact, some developers did little more than cosmetic work while converting aging apartment buildings, he says.

• One woman [said] that she had to take out a $15,000 line of credit to pay a special assessment for repairs after she moved into her converted unit -- only to discover that her new condo association was planning another assessment to cover more work.

Once the condo owners in these old buildings (at least those who financed 70% or more of the purchase price) figure out that they now have little or no equity to salvage in their units, I suspect many will opt for "mailing in the keys" to the mortgage holder rather than having to foot the bill for stiff repair assessments. The mortgage holders will once again be left holding the bag; my condolences to those unit owners who paid cash.

For more, see New condo conversions bring broken promises (Unhappy owners are complaining about units in disrepair and faulty equipment) (when link expires, try here).

Go here for other posts related to the Miami condo market problem.

Notorious Scam Artist Cries In Court As Federal Judge Comes Down On Him With Both Feet

In Atlanta, Georgia, WXIA-TV Channel 11 reports:

• The now-infamous, confessed scam artist Matthew Cox, who once fancied himself sometimes as Robin Hood and other times as the evil Mr. Burns from “The Simpsons,” using elaborate mortgage fraud and identity theft schemes to bilk more than 100 homeowners and lenders in eight states out of millions of dollars, wept in US District Court in Atlanta Friday as he apologized to his victims and hoped for a merciful sentence. Instead, Cox was sentenced to more time than similar fraudsters receive -- 26 years in federal prison.

***

• Cox would steal a homeowner’s’ identity, and steal others’ identities, fraudulently obtain multiple mortgage loans on the same home, then take the money and run. The legitimate homeowner would lose his or her home and never get a dime in sales proceeds. The homeowner would also start receiving foreclosure notices. And multiple lenders would suddenly be coming out of the woodwork, all trying to take possession of the same house that they thought was security for the fraudulent loans each had given to Cox.

***

• Matthew Cox still hopes to make one more deal. Because he is cooperating with the feds in other mortgage fraud cases, he will be eligible to apply for a reduced sentence once those cases are adjudicated.

Go here to view the WXIA-TV Channel 11 video coverage. To read the online story, see Scam Artist Weeps, Gets 26 Years.

See also, Swindler Cox gets 26 years (Matthew Cox used stolen identities and mortgage fraud to reap millions). ("In his crime rampage through five Southern states, the 38-year-old rose to the top of the U.S. Secret Service list, committing so much fraud the FBI had trouble keeping an inventory of it all. In Tampa, it amounted to $8.6-million, involving 77 properties, mostly in Tampa Heights and Ybor City. In Tennessee, it totaled $2.35-million on 22 properties. Millions more were added to the tally in Georgia and the Carolinas.").

Go here for other posts on Matthew Cox.

Long Island Loan Originator At Center Of A Foreclosure Controversy

On Long Island, New York, Newsday reports on Aaron Wider, a Garden City mortgage banker who finds himself in the middle of a controversy involving over a dozen former customers who now find themselves facing foreclosure. According to the story, the:

• [h]omeowners say Wider sold them homes at inflated prices and arranged mortgages they could never afford. Of three cases examined by Newsday, two buyers were first-time homeowners. The third closed on a house while his wife was in a coma. She died the next month. In all three cases, the buyers -- motivated by a combination of optimism, naivete and desperation to own a home -- placed their financial future in the hands of someone they barely knew.

• In an interview, Wider said the homes were worth what the buyers paid for them and that he was serving his community by lending in an area, East Massapequa, that is underserved by mainstream banks. "Banks will not lend to the minorities in the neighborhood," Wider said. "Nobody will lend in that area." However, two of the three buyers interviewed by Newsday are white; one is Hispanic.

The story describes how a couple of the homeowners came about getting involved with Wider. In addition, at least in one case, what seems to be a technique not uncommon in foreclosure rescue and other real estate scams is reportedly used - the use of a "chaotic closing" - in which the homeowners being scammed feel pressured and intimidated by two or more of those present at the closing / settlement table into signing a pile of papers without reading them and, if represented by an attorney, the attorney representing them is provided to the homeowner by the alleged scammer.

For more, see Loan was too good to be true (if link expires, try here).

For a more extensive Newsday investigative report on some of Aaron Wider's real estate transactions, see Homeowners entangled in loan scheme (if link expires, try here).

For more on Aaron Wider, see GreenPoint Bank Lawsuit For $15 Million Claims Federal Bank Fraud ("International Mortgage Center Inc. and its CEO, Aaron Wider have filed a lawsuit in the Supreme Court of the State of New York/County of Queens against GreenPoint Bank seeking relief in the amount of $15 million ...").

Los Angeles Retiree Alleges Fraud In Suit To Unwind Foreclosure Rescue Deal

The Los Angeles Times reported some time back on the story of one victim of a foreclosure rescue deal. The story reports:

• When Eddie Baker Jr. retired in 2000, he found himself struggling to make the $1,100 monthly payments on his three-bedroom Los Angeles home and eventually fell behind on the $205,000 mortgage. Facing foreclosure, Baker, a devout Christian, prayed for assistance. And in June 2005, his prayers seemingly were answered in the form of an offer to help save him from foreclosure and credit ruin. But that offer turned into a nightmare instead. In May of this year, attorneys for Baker, 69, filed a civil suit in Los Angeles Superior Court against several co-defendants, alleging fraud related to the retired photo technician losing title to his home.

***

• [A]ccording to the court documents filed in May, defendant Timothy Barnett would assume Baker's home loan, pay the outstanding mortgage debts, maintain and restore Baker's credit and advance him $12,000. For doing this, Barnett would take control of the property and hold title for three years. In return, Baker agreed to pay Barnett about $1,000 a month for three years. Baker said Barnett promised to transfer the title back to him at the end of the third year, the documents assert. [Baker's attorney] said her client unknowingly signed away the rights to his home and his most valuable asset (currently valued at about $600,000, according to online valuation provider Zillow.com) to Barnett for $226,000.

Court documents stated that Barnett represented himself as a "man of God." Over time, trust was built, so when Barnett allegedly asked him to sign and initial the mountainous stack of documents, the trusting retiree signed without question.

According to Baker's attorney, Barnett then sold the home for $285,000. The home was then subsequently sold twice more between October 2005 and March 2007, once for $440,000 and once for $560,000, and refinanced multiple times without Baker's knowledge, despite Baker's right to buy back the property. At last check, the home is in foreclosure.

The following area Los Angeles-area consumer advocates commented for the story:

• Maritza Gutierrez, a supervising investigator for the Los Angeles County Department of Consumer Affairs' real estate fraud unit, said that from April to June, her section recorded about 50 cases involving alleged foreclosure scams.

• Cynthia Reed, Baker's attorney, said Public Counsel has about a dozen cases of alleged foreclosure fraud pending. "Two years ago, maybe we had one," she added. The pro bono group provides free legal services to residents who can't afford private representation.

• Equity thieves will offer people facing foreclosure a short-term loan to cover their debts or agree to refinance the loan, said Manuel Duran, an attorney with Duran & Flanagan in Los Angeles who has served as prosecutor in foreclosure scam cases. [...] "Many of my clients say they heard about foreclosure scams on TV but trusted the guy anyway. But when this happens, their equity gets stolen. In many cases, we can unwind the loan," Duran added.

Reportedly, Barnett pleaded no contest in 1997 to multiple felonies and was sentenced to state prison for defrauding over 20 people out of their money and their homes over a period of eight years. Most were elderly. For more, see It's scam season (Scrambling to avoid foreclosure, more owners are falling prey to rescue fraud).

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.).

Bond Revoked For Los Angeles Area Foreclosure Rescue Operator Facing Criminal Charges; Allegedly Engaged In More Stripping Scams While Awaiting Trial

(original post 11-16-07)
After being released on bond and awaiting trial (originally scheduled for November 13, 2007) on criminal charges relating to an alleged foreclosure rescue, equity stripping scam that allegedly victimized more than 100 homeowners by stripping them of at least $12 million in home equity, Southern California foreclosure rescue operator Maria Juarez (aka Maria G. Juarez), has been charged again for allegedly engaging in additional equity stripping scams of homeowners facing foreclosure.

She was initially charged back in 2006 by being added as a defendant in a grand jury indictment that was originally handed up in 2005. She was facing charges along with the following four confederates (all from California): Martha Rodriguez, of Downey, Edward Seung Ok, of Torrance, Cynthia Valenzuela, of Downey, Vladimir Stefanovic, of Lancaster. By the summer of this year, her four confederates had agreed to plea guilty and were awaiting sentencing, pending Juarez' November 13 trial (presumably, they were all cooperating with prosecutors and prepared to testify against her).

A superceding indictment adding additional equity stripping charges against Juarez involving transactions occurring after she was released on bond was filed on November 1. Needless to say, she is now in the custody of the U.S. Marshal and is being held with no bail; her November 13 trial has also been postponed. Go here for earlier posts with links to media reports & FBI press releases relating to the initial charges.

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.).

Another Ohio Federal Judge Demands Docs In 27 More Foreclosure Cases; Warns Attorney "Don't Do It Again!"

(original post 11-17-07)
The New York Times reports:

• After the recent dismissal of 14 foreclosure cases by a federal judge in Cleveland, another federal judge in Ohio has given lenders 30 days to prove that they own the properties they intend to seize from troubled homeowners in 27 other cases. The second judge, Thomas M. Rose of Federal District Court, in Dayton, ruled Thursday that while the lawyer filing 26 of the cases had claimed his clients owned the properties at the time the foreclosures began, he had not submitted the necessary proof to the court.

• “Failure in the future by this attorney to comply with the filing requirements,” Judge Rose said, “may only be considered to be willful.” [ie. Do it again and I'll scorch you!].

***

• A recent study of 1,733 foreclosures by Katherine M. Porter, an associate professor of law at the University of Iowa, found that 40 percent of the creditors foreclosing on borrowers did not show proof of ownership. Such proof gives a creditor standing to foreclose against a borrower and is required by law. Judge Rose cited Ms. Porter’s study in his ruling.

For more, see Judge Demands Documentation in Foreclosures.

For other posts that reference the failure of some mortgage lenders and their attorneys to file the required loan documents when starting foreclosures, Go Here, Go Here, Go Here and Go Here. missing mortgage foreclosure docs alpha

More On "Hijacking" Of Foreclosure Process By Mortgage Lenders

(original post 11-17-07)
Cuyahoga County, Ohio (Cleveland and surrounding municipalities) is one area that is reportedly taking a tremendous beating when it comes to its residents losing their homes to foreclosure. So when word got out that Federal Judge Christopher Boyko slammed Deutsche Bank National Trust Co. in a court ruling recently for attempting to foreclose on Cleveland-area homes without being able to provide the legal documentation demonstrating that it actually owned the mortgages, the Cleveland Plain Dealer chimed in with several pieces that ran in its publication. For those interested, see:

• Federal judge accuses mortgage lenders of hijacking foreclosure system for profits (Criticism joins wave of dismissed cases ),
• Judge's order trips up banks trying to foreclose (Judge insists on key document),
• Excerpts from Judge Boyko's comments on mortgage lenders,
• Judges are right to make lenders follow the rules before foreclosing on peoples' homes (an editorial) (Cleveland federal judge's ruling puts lenders on notice that the rules apply to them as well as to borrowers).

Some of the highlights from the Plain Dealer coverage:

• Boyko's colleague, Judge Kathleen O'Malley ... , threw out 32 foreclosure cases this week for the same reason.

• Stephen Bucha, chief magistrate of Cuyahoga County Common Pleas Court, has dismissed hundreds of foreclosure cases for not having paperwork. He said it can be time-consuming and expensive for lenders to produce and record the documents, adding, "They wait until they have to do it." Bucha said judges in his court, which has about 10,000 pending foreclosure cases, are studying ways to adopt the federal court's rule.

• In an interview Friday, U.S. District Judge Dan Polster said he expected more foreclosure cases dismissed in federal court, including from his own docket. [...] Polster said the court has become more vigilant in foreclosure cases because they are too one-sided. Many homeowners do not contest the foreclosure, so the lenders face no defense lawyers in court proceedings. "It's up to us to supervise it," said Polster. "When you're taking people's homes, it falls to the integrity of the court."

• It's true, even now, that the banks are free to refile the cases. But the symbolism of Boyko's well-reasoned and well-written ruling is huge. It puts investment banks on notice that although many of them suspended careful lending practices and other rules in the rush to buy and pool subprime loans into junky bonds and drive up profits at almost any cost, the courts won't be taking such holidays from their rules.

• In the frenzy to underwrite and sell these bonds, lenders got sloppy. It's inevitable that some won't be able to hand over the proper documentation showing which mortgages they legally hold. That means thousands of foreclosure suits stand a good chance of getting tossed out or at least delayed.

Go here to view Judge Boyko's Court ruling.

For other posts that reference the failure of some mortgage lenders and their attorneys to file the required loan documents when starting foreclosures, Go Here, Go Here, Go Here and Go Here. missing mortgage foreclosure docs alpha

Federal Court Dismisses 14 Foreclosure Cases; Deutsche Bank Fails To Provide Proof Of Mortgage Note Ownership

(original post 11-16-07)
In Cleveland, Ohio, The New York Times reports:

• A federal judge in Ohio has ruled against a longstanding foreclosure practice, potentially creating an obstacle for lenders trying to reclaim properties from troubled borrowers and raising questions about the legal standing of investors in mortgage securities pools. Judge Christopher A. Boyko of Federal District Court in Cleveland dismissed 14 foreclosure cases brought on behalf of mortgage investors, ruling that they had failed to prove that they owned the properties they were trying to seize.

***

• [T]he Ohio ruling indicates that the intricacies of the mortgage pools are starting to create problems for lenders as well. Lawyers for troubled homeowners are expected to seize upon the district judge’s opinion as a way to impede foreclosures across the country or force investors to settle with homeowners.

***

• Saying that Deutsche Bank’s arguments of legal standing fell woefully short, the judge wrote: “The institutions seem to adopt the attitude that since they have been doing this for so long, unchallenged, this practice equates with legal compliance. Finally put to the test, their weak legal arguments compel the court to stop them at the gate.”

***

• Because most foreclosures proceed without challenges from borrowers, few judges have forced trustees like Deutsche Bank and Bank of New York to prove ownership by producing a mortgage note in each case. Borrower advocates cheered Judge Boyko’s ruling.

• The plaintiff’s argument that “‘Judge, you just don’t understand how things work,’” the judge wrote, “reveals a condescending mindset and quasi-monopolistic system where financial institutions have traditionally controlled, and still control, the foreclosure process.” The cases could be filed again in state court, however.

The court made clear that Deutsch Bank can refile these foreclosure cases with the appropriate documentation establishing proof of ownership of the mortgages and mortgage notes they are attempting to foreclose (assuming, of course, that they can actually find the physical paperwork - ie. the actual mortgage notes, assignments, affidavits, etc.; no photocopies).

For more, see Foreclosures Hit a Snag for Lenders (may need subscription; if no subscription, try here).

See also, Court Challenges Trust on Foreclosures (Federal Judge Tells Trust to Show Clear Mortgage Documentation in Foreclosures) (if link expires, try Federal judge tells trust to show clear mortgage documentation in foreclosures - same story, different headline).

Go here to view the Federal Court ruling.

For other posts that reference the failure of some mortgage lenders and their attorneys to file the required loan documents when starting foreclosures, Go Here, Go Here, Go Here and Go Here. missing mortgage foreclosure docs alpha

Home In Foreclosure Goes Up In Flames; Purchased With 100% Financing Less Than Year Ago

In Lathrop, California, News 10 reports:

• Less than a year ago, the house at 16671 Ore Claim Trail in Lathrop sold for $650,000, but neighbors say they never saw anyone move in. Three weeks ago, the lender filed a notice of default against the owner. And on Monday night, an unusually violent fire blew out the windows of the home before the first firefighters arrived. Inside, they found the body of an unidentified man. [...] Property records show the house is owned by Emmanuel Sibug, who owes about $100,000 more than the home is worth.

***

• The fire appears to be the second bit of misfortune to strike the same family in the same neighborhood this year. On January 12, federal drug agents raided an indoor marijuana growing operation at 700 Pioneer Avenue, less than a half mile away. The former pot house is owned by Jesus Sibug. It remains vacant and still shows signs of the raid ten months ago. Both houses were purchased at about the same time using the same lender with 100 percent financing. News10 tried contacting members of the Sibug family. A woman who answered the phone at a Sibug listing in Mountain View said Emmanuel and Jesus are brothers.

For the story, see Lathrop Foreclosure Fire Leads to Homicide Investigation; go here for News 10 video (no longer available online).

See also, Answers sought on fire, dead body (Man discovered during blaze at foreclosed Lathrop home) ("Like many of the homes on the block, the home was empty and in the foreclosure process.")

For more on fires & foreclosures, go here and go here. foreclosure arson yak

Compensation For Those Ripped Off By NJ Attorneys May Go Up To $400K

According to a story in the publication New Jersey Lawyer, the New Jersey Lawyers' Fund for Client Protection is sitting on a record $18 million surplus. The fund represents money that is available to victims who have been ripped off by a New Jersey attorney. The fund is financed by clipping the estmated 50,000 New Jersey attorneys $50 per year in assessments. Reportedly, the New Jersey State Bar Association for years has pressed unsuccessfully to eliminate the annual assesment of its members. According to the story:

• Since 1996, the fund's payouts to clients ripped off by unscrupulous lawyers have been limited to $250,000 per victim and a total $1 million per lawyer. Currently, the New Jersey Supreme Court, at the fund's request, is considering increasing the caps to $400,000 and $2 million.

***

• "As long as the fund is telling people who've been hurt by a lawyer that they can't get all their money back, the notion of removing the assessment is simply misguided," [Kenneth J. Bossong, the fund's director] said.

For more, see Fat surplus but no break for lawyers.

For those ripped off by New York attorneys, see The Lawyers Fund for Client Protection of the State of New York.

For other states, see:

• Directory Of Lawyers' Funds For Client Protection (American Bar Association - July, 2007); or
• try here (for a "Google search").

Atlanta, GA; Elk Grove, CA Neighborhoods Among Many Dealing With Crime, Public Safety Concerns That Follow Foreclosures

The Associated Press reports:

• Eighty-five bungalows dot the cul-de-sac that joins West Ontario Avenue and East Ontario Avenue in Atlanta. Twenty-two are vacant, victims of mortgage fraud and foreclosure. Now house fires, prostitution, vandals and burglaries terrorize the residents left in this historic neighborhood called Westview Village. [...] "They've seen a lot of prostitution in the area, vagrants wandering in and out of the empty houses and drug activity," said Officer Dakarta Richardson of the Atlanta Police Department. "Some people that I talked to are afraid to walk out of their homes at night."

***

• In the Franklin Reserve neighborhood of Elk Grove, Calif., full of subdivisions with half-million dollar homes, homeowners are fighting inner-city problems like gangs, drugs, theft and graffiti. During the boom, the suburb just south of Sacramento sprouted 10,000 homes in four years, attracting investors from the San Francisco area. Now many houses stand empty, weeds overtaking lawns, signs lining the street: "Bank Repo," "For Rent," "No trespassing -- bank owned property." A typical home's value has dropped from about $570,000 to the low $400,000s.

***

• The homeowners sometimes have no options but to accept any renters they can get, said Norm Schriever, a local real estate and loan agent. "You get some bad renters in there and the weeds start growing and a few windows are broken and it starts descending into a feeling of chaos," he said.

• Thieves also have looted some empty homes, stripping them of electrical appliances or valuable copper wiring and pipes that can be sold as scrap, he said. Banks aren't watching foreclosed properties closely, said Modesto, Calif., Police Chief Roy Wasden. "As it gets colder, (squatters) will start building fires in these structures and it's quite dangerous," he said.

• Franklin Reserve resident Susan McDonald said two of the homes on her block were turned into indoor marijuana farms. Both caught fire last summer after the pot growers tapped into the city's electric grid with faulty wiring.

For more, see Empty Houses Home to Crime As Loans Fail (Neighborhoods Suffer As Crime Follows Foreclosures Into Vacant Houses).

Go here for posts on vacant homes, foreclosures and squatters. squatter foreclosure zebra pot grow ops alpha

Foreclosures Squeezing Tenants, Cops, City Governments

In Minneapolis, Minnesota, The Associated Press reports:

• Homeowners who can't keep up with their mortgages aren't the only ones being hit by the foreclosure crisis. City governments and city officials are losing time and money to the problem, too. [...] A bright orange notice on the front door [of one tenant] warns that the water will be shut off unless the landlord pays a bill of $117. The duplex is also in foreclosure, so either way [the tenant] has to find new housing.

Among the enumerated consequences of foreclosed homes for municipalities are:

1. Unoccupied houses don't use utilities such as water, sewer and garbage service, meaning the costs have to be spread among fewer people citywide,
2. Cops spend more time chasing people out of foreclosed properties,
3. Inspectors spend more time citing properties for uncut grass or unshoveled snow,
4. Government property appraisers have a tougher time calculating fair market value of homes for tax assessment purposes.

In nearby New Prague, the city has to decide whether or not to foot the bill for electricity to keep sump pumps running to a pocket of foreclosed homes in one subdivision. If they don't, the risk of possible water damage to the homes will make them tougher to sell and keep them off tax rolls longer. For more, see Cities, tenants also feel foreclosure effects.

Go here for other municipalities getting squeezed by foreclosures. delinquent tax problem