Wednesday, February 06, 2008

Freddie Reissues "YouTube" Foreclosure Rescue Video In Spanish

Freddie Mac announces:
  • Freddie Mac has re-edited the custom made video it posted to YouTube(TM) for Spanish-speaking homeowners in an effort to warn more delinquent borrowers about a widespread form of foreclosure fraud. The new Spanish language version of Freddie Mac's anti- fraud video can be found at http://www.youtube.com/AvoidFraud.

For more of Freddie's announcement, see Mortgage Fraud: Freddie Mac Releases Spanish Language Version of Foreclosure Scam Video on YouTube(TM).

For a direct link to the video, see Evitar el fraude.

Suspect Forged POA To Swipe $360K Of Mother-In-Law's Home Equity, Says Queens DA

(original post 2-3-08)
In New York City, the Queens County District Attorney's Office announces:
  • Queens District Attorney Richard A. Brown [Friday] announced that an international businessman who resides in Manhattan has been charged with using a forged power of attorney to unlawfully obtain a $360,000 mortgage on his mother-in-law’s condominium in the Little Neck section of Queens. [...] [T]he defendant is accused of perpetrating an elaborate scheme to drain the equity from his mother-law’s Queens condo – allegedly going so far as duping her to believing he knew someone in the Manhattan District Attorney’s Office who could help her when she became aware of the mortgage swindle.

***

  • The District Attorney identified the defendant as Shih Siang Shawn Liao, 31, of [...] Manhattan. [...] Liao, [...] was arraigned [...] on charges of second-degree grand larceny, second-degree criminal possession of stolen property, second-degree criminal possession of a forged instrument, first-degree identity theft, first degree falsifying business records and third-degree unlawful possession of personal identification information.

For more, see the Queens DA news release: Manhattan Man Charged With Stealing $360,000 By Surreptitiously Taking Out Mortgage On mother-In-Law's Queens Condo (Faces Up To 15 Years In Prison).

Go here and go here for other posts on deed theft by forgery, swindle, etc. deed theft yahtzee

Refinancing Scam Lands Trio In Jail; Leaves Elderly Woman Facing Foreclosure

In Denver, Colorado, the Rocky Mountain News reports:

  • Denver District Attorney Mitch Morrissey has charged three men accused of stealing thousands of dollars in a mortgage scam from an elderly woman who is now facing foreclosure. The charges were filed last week; the defendants surrendered and were booked Monday and released on $50,000 bonds. The three charged are Scott Steven Richardson, Thomas Sarantinos and Anthony Sarantinos. Each has been charged with theft from an at-risk adult. Richardson, through his company, Northglenn-based Absolute Lending Solutions, offered to refinance the woman's home to help lower her monthly payment, according to the district attorney's office. Instead, Richardson allegedly refinanced the home to take out nearly $30,000 that he and the Sarantinoses split.

Source: Three face charges in mortgage scam.

See also, The Denver Post: Trio scams at-risk adult, DA says (no longer available online):

  • The charges against the trio allege that Richardson added Anthony Sarantinos to the property title and refinanced the home, taking out about $30,000 in cash that was split among the suspects. Prosecutors also suspect Richardson of giving phony mortgage payment coupons to the victim, who was making monthly payments to Absolute Lending Solutions. The payments didn't go toward paying off the home, however, and the victim now owes nearly twice as much on her mortgage. She faces monthly payments nearly double her original loan and is facing foreclosure.

See also, CBS4, Denver: DA: Grandmother Hit By Mortgage Scam (read story) (watch video).

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

Go here and go here for other posts on deed theft by forgery, swindle, etc. deed theft yahtzee whale foreclosure rescue

Lender Violates NYS Predatory Lending Law; Judge Halts Foreclosure, May Void Mortgage

In New York City, the Staten Island Advance reports on a lawsuit filed by an area couple, who were first-time homebuyers, against a mortgage lender alleging a violation of a predatory lending provision in the New York State Banking Law when the loan was originated. According to the story:

  • In what is likely to be a precedent-setting decision in New York, state Supreme Court Justice Joseph J. Maltese agreed with the [homeowners], recently telling the bank that it could not foreclose on the couple's [Staten Island] townhouse and that it may have to pay them damages for their troubles and void the $355,000 mortgage on their [...] home. In his 11-page decision, Maltese rips the original lenders and brokers for making the high-cost loan to the [homeowners] without checking to see if the couple could repay the mortgage -- a violation of the 2002 predatory lending provisions of New York State banking law.

  • It's the first time in the state that a judge has invoked those predatory lending provisions against a lender, and it could signal a shifting tide in how foreclosures are handled, experts note. James Tierney, director of the National Attorneys General program at Columbia Law School, said trial judges across the country are beginning to question banks seeking to foreclose on homeowners in similar situations. "What I am seeing is a number of trial judges saying, 'Enough is enough, fraud is fraud.' They are kind of taking a stand," said Tierney.

***

  • At a hearing Feb. 28, the judge is expected to decide whether the mortgage should be voided and damages granted to the homeowners. [...] It's unclear if [the mortgage holder] will appeal Maltese's decision. [...] Margaret Becker, director of the Homeowner Defense Project at Staten Island Legal Services in St. George who represents Islanders in cases of alleged predatory lending, said many others don't have attorneys and don't challenge foreclosures. "It's good to hear a success story," she said of Maltese's decision. "It is very encouraging that judges are clearly taking the issue of predatory lending in the subprime market seriously and are willing to enforce laws to protect people from these kinds of pernicious practices."

The homeowners were represented by Cilmi & Associates PLLC, of New York City.

For more, see Stuck with a bad loan, a Staten Island family fights back.

See also, ABC News: Fighting Back Against Foreclosure (New York Judge Denies Foreclosure Based on Alleged Predatory Lending).

To view the trial judge's decision, see LaSalle Bank, N.A. v Shearon, Supreme Court, Richmond County, 2008 NY Slip Op 28032 (January 28, 2008).

Go here for other posts on homeowners using Federal & state consumer protection statutes to try and undo bad mortgage loans. undo mortgage loans TILA alpha

Western Pa. Mortgage Fraud Task Force Nails 24 With Criminal Charges

In Western Pennsylvania, the Pittsburgh Tribune Review reports:
  • Last week, investigators nabbed Marlin Sprouts Jr., 52, a middle school teacher and newly elected Uniontown councilman, as part of what U.S. Attorney Mary Beth Buchanan called a four-person mortgage fraud and property-flipping scheme. Sprouts -- whose daughter pleaded guilty in a scam that cheated financial institutions out of $1 million to $2.5 million -- was charged with conspiracy for his role in the scheme, documents show.

***

  • Sprouts' case was one of several Buchanan cited [last week] as she initiates the Western Pennsylvania Mortgage Fraud Task Force. The task force includes officials from Buchanan's office, the FBI, Internal Revenue Service, state Attorney General's Office and state Department of Banking. [...] The 24 people charged for scams last week represent $13 million in mortgage fraud, Buchanan said. Authorities are working on at least 50 investigations, she said.

For more, see Mortgage fraud targeted by task force.

See also, KDKA-TV Channel 2 video report: Mortgage Fraud Probe Nets 24 Arrests, Indictments.

More City Of Baltimore Suits Against Lenders May Be Looming

In Baltimore, Maryland, the Baltimore Examiner reports:
  • As foreclosures continue to mount in Baltimore City, officials said [last] Thursday that more lawsuits against mortgage lenders may be in the offing. “We become aware through our research of other lenders engaging in practices that may be actionable,” said City Solicitor George Nilson. “There are other lenders that we may be filing lawsuits against.” Nilson said future lawsuits would be similar to the city’s lawsuit against Wells Fargo Bank. “It will be the same with a twist,” he said, declining to provide further details. City officials filed a lawsuit in federal court on Jan. 7, claiming mortgage lender Wells Fargo engaged in a practice called “reverse redlining,” where neighborhoods of predominantly minority homeowners are targeted with high-price loans.
For more, see Baltimore eyes more lawsuits against mortgage lenders in foreclosure fiasco.

To view last month's Wells Fargo lawsuit:

Representing the City Of Baltimore is the Washington, D.C. law firm Relman & Dane.

Go here for prior posts on the Baltimore City fair housing predatory lending lawsuits. fair housing Baltimore

Homebuilder Stiffs Subs, Leaving Recent Homebuyers Facing Foreclosure

In Elk Grove, California, The Sacramento Bee reports:
  • Sukhwinder "Suki" Kaur bought the wrong house at the wrong time. Within months of her July closing on the two-story home in Elk Grove, work in the new subdivision stopped and the builder's parent company, Dunmore Homes, filed for bankruptcy protection. Kaur, who is paying on a $430,000 mortgage, has become the target of two lawsuits and 28 liens from unpaid subcontractors and suppliers. More than a dozen other individuals in the Monterey Village development are in similar predicaments.

***

  • Some homeowners are exploring the possibility their title insurance policies will pay the liens. But Kaur contacted Stewart Title Guaranty Co. and didn't get good news. A Jan. 8 letter from a Stewart Title field office says her coverage does not extend to liens filed after the policy was issued. Stewart Title issued a statement Friday saying it is working with its policyholders to "ensure … they receive the benefits of their policy."

For more, see Lien times hit Elk Grove (Lawsuits jolt new subdivision's residents).

For other posts on builders & contractors accused of stiffing customers & subcontractors, go here and go here. contractors stiff subs customers zeta

Homebuilder Stiffs Customer, Then Files Lien & Starts Foreclosing On Lot, Says Property Owner

In Palm Coast, Florida, the Daytona Beach News-Journal reports:
  • Brenda Shakes said she has, at times, felt lucky to only be out $40,000 to two Palm Coast builders facing charges of grand theft and organized fraud involving other homebuyers. She fired Herbert Heron and Noel Richardson, owners of Canterbury Estate Homes, because she said the builders weren't doing any work on her home and had not disclosed that they owned the title company that closed the loan. But now, they're after her land, Shakes said.

  • "Instead of them apologizing and trying to make things right by us, they still want to continue to put us through hell, emotionally and financially," Shakes said in an e-mail. She said she was shocked when the men filed a lien against her land and started the foreclosure process, citing breach of contract.

  • Heron, 58, and Richardson, 54, were arrested in September and accused of bilking customers and subcontractors out of more than $400,000, investigators said. They were also named in multiple related civil lawsuits that are still pending. Heron and Richardson were released from jail Oct. 4 after each posted $100,000 bail.

For more, see Woman says Palm Coast builders put her 'through hell'.

Go here for earlier posts on criminally implicated homebuilder Canterbury Estates Homes.

For other posts on builders & contractors accused of stiffing customers & subcontractors, go here and go here. contractors stiff subs customers zeta

Tuesday, February 05, 2008

Ohio State Judge Rejects AG's "Real Party In Interest" Argument; Allows Foreclosure To Continue

In Hamilton County, Ohio, The Enquirer reports:
  • Ohio Attorney General Marc Dann suffered his first setback Monday in a novel effort to slow foreclosure filings in the state – and in doing so had his ethics questioned by a Hamilton County magistrate. Dann argues that lenders can’t foreclose unless they can prove they own the mortgage they say is in default. Paperwork proving ownership often lags behind as lenders buy and sell mortgages. The result is that foreclosing lenders don’t always have the paperwork to prove that they’re the mortgage owners. Traditionally, courts have allowed the foreclosures to proceed anyway. [...] Monday, however, Common Pleas Court Magistrate Michael Bachman rejected Dann’s argument.

***

  • Monday’s decision comes in case filed by Deutsche Bank National Trust Co. against Telisa Barnes. She bought a $128,000 home in Northside a year ago with the help of a mortgage from Equifirst Corp. Five months later, Deutsche Bank filed to foreclose, saying she owed $127,892 – plus interest. The state of Ohio had an interest in the property because Barnes put the house up as part of a $20,000 bond in an aggravated menacing case against another defendant. Dann argued that Deutsche Bank was not a “real party in interest” because it didn’t own the mortgage paper when it filed its foreclosure case. The magistrate ruled federal precedents don’t apply because federal courts have limited jurisdiction in foreclosure cases, while state courts are required to take them.

For more, see AG's foreclosure gambit shot down.

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

Twin Cities Lawsuit Seeks To Void / Halt MERS Foreclosures For Failure To Record Assignments

In Hennepin County, Minnesota, the Minneapolis Star Tribune reports:

  • A complaint by some borrowers that they can't learn who owns their mortgages turned into a full-blown effort to halt a substantial share of Hennepin County's foreclosures [late last month]. A Legal Aid lawsuit contends some pending and recent foreclosures don't meet requirements of state law. [...] Although Hennepin County Sheriff Rich Stanek is named as a defendant for his office's role in selling foreclosed property, the real target is a national mortgage registry formed by lenders and known as Mortgage Electronic Registration Systems (MERS). The lawsuit contends the registry hides who really owns a mortgage, creating difficulties for borrowers or their advocates trying to negotiate with lenders.

***

  • A 2004 change by the Legislature was intended to make clear that the registry could legally be listed as the holder of mortgages filed in courthouses. But the registry also needs to file assignment of the mortgage to new owners, said Amber Hawkins, lead attorney for the lawsuit. [...] Besides pending foreclosures, the suit also seeks to void recent Sheriff's Office sales in which the registry has initiated foreclosure. That measure would apply if the borrower is still living in the house up to six months after foreclosure, as permitted by state law. It asks damages for those who already have lost a home in a foreclosure brought by the registry.
For more, see Lawsuit seeks to block some foreclosures (Hennepin County is swept up into an action targeting lenders).

See also, Minnesota Public Radio: Lenders sued for rushing through foreclosure process.

Go here for updated posts on this story.

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

Maryland Lawmakers To Consider Slow Down In Foreclosure Process; Ban On "Rescue" Deals

In Baltimore, Maryland, WMAR-TV Channel 2 reports:
  • Maryland's rising foreclosure rate is a top concern for state lawmakers this year and a Senate committee will consider several bills aimed at easing the trend. The Senate Finance Committee will consider proposals to extend the time before a foreclosure can become final. They'll also look at tougher requirements for becoming a mortgage broker and a ban on so-called "rescue" deals, where homeowners behind on mortgage payments are encouraged to sign away their home on the promise a lender will fix their mortgage problems.

Source: State Lawmakers to start Looking at Foreclosure Bills.

Two Seattle-Area Homeowners Unwittingly Snagged In Sale Leaseback, Equity Stripping Scheme

In Seattle, Washington, KOMO-TV Channel 4 reports on the stories of two area homeowners facing foreclosure and how they lost over $125,000 in home equity when entering into sale leaseback, equity stripping transactions with foreclosure rescue operator Godsend Security Funding.

After lawsuits were brought against Godsend, a private settlement was reportedly reached in one case and is currently being negotiated in another. Representing one of the homeowners, area attorney Melissa Huelsman commented that it was the third lawsuit that she personally filed against Godsend.

In the Washington state legislature, House Bill HB 2791 and its companion bill, Senate Bill SB 6431, are being considered by state lawmakers as ways to curb the abuses by foreclosure rescue operators.

To view the KOMO-TV Channel 4 video, see Attempts to avoid foreclosure could cost you more (go here to read transcript).

Elderly Blind Oregon Homeowner Loses Home In Equity Stripping, Foreclosure Rescue Deal; Reportedly "Made Whole" Thru Legal Settlement

In Portland, Oregon, Willamette Week recently reported that the Oregon state legislature will be considering a proposed bill targeting foreclosure rescue scams this week. Buried at the end of the article is the story of one elderly homeowner for whom the proposed bill, if passed, won't help.
  • The bill comes too late, however, for Evelyn Allen, a 73-year-old Northeast Portlander. According to a civil lawsuit last year, Jason Larry Somera and Mark Caravia saw Allen’s name on a foreclosure list. Allen owed $26,000 against a property assessed at $156,000. They offered to “lend” her $40,000 against her property, with no payments due for two years. But Allen—who is described by her attorney as “completely blind”—actually signed away her property for $40,000.

  • Defendants knew Allen was blind and took advantage of her blindness to fraudulently obtain her signature signing the title of her home over to them,” Allen’s attorney, Erin Olson, wrote in the lawsuit. Although the men refinanced the Allen’s house for $180,000 and sold it to a third party, Olson was able to get her client “made whole” as part of settling the lawsuit. Charlie Williamson, the attorney for Somera and Caravia, says his clients “could have done things better,” but adds “I don’t think they broke the law and I don’t think they defrauded this lady.” Olson disagrees. “This was really egregious behavior and extremely stressful for my client,” Olson says. “I hope the Legislature will make it more difficult for this to happen.”
For more, see Rescue Me (A Portland Cop is targeting foreclosure vultures. Next week, the Legislature will, too).

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

Class Action Suit Alleges Conspiracy To Squeeze Bankrupt Homeowners In Foreclosure; Fidelity An Alleged "Secret Puppetmaster" Of Creditors' Lawyers

In Houston, Texas, The Associated Press reports:
  • Homeowners have sued Fidelity National Information Services Inc., a giant financial data-processing company, accusing it of raising the price that cash-strapped consumers must pay to avoid foreclosure of their homes. The lawsuit, filed Jan. 16 in the U.S. Bankruptcy Court in Houston, contends that Fidelity has conspired with mortgage-servicing companies and law firms to "add to the indebtedness" of homeowners by tacking on secret fees that remain undisclosed for years.

  • "The fees the Fidelity-controlled law firms charge in Chapter 13 bankruptcies are inflated by 25 percent to 50 percent," the lawsuit asserts. The law firms, it says, then "kick back" the extra amount to Fidelity under a formal agreement under which the law firms' fees are set. "Fidelity keeps its role, as well as the kickback, hidden from the courts as a matter of systematic policy."

***

  • Fidelity counts Washington Mutual and Bank of America among the biggest clients of its default-management services. The company says it handles default mortgage servicing for 22 of the top 25 residential mortgage servicers, and 13 of the top 25 subprime servicers.

For more, see Suit claims Fidelity abuses homeowners.

Editor's Note:

The lawsuit also describes Fidelity's alleged role as follows (page 5, paragraph 21 of lawsuit):

  • [F]idelity’s “comprehensive” role is really that of secret puppetmaster of the law firms that appear in [the Houston Bankruptcy] Court on behalf of mortgage servicing lenders. These law firms (in the Harrises’ case, Mann & Stevens, P.C.) collect their fees by tendering their bills through Fidelity and then on to the mortgage servicer – in this case Saxon, which then charge debtors, like the Harrises, without ever obtaining this Court’s
    approval.

To view the entire lawsuit, see Harris vs. Fidelity National Information Services Inc.

Go here to download Misbehavior and Mistake in Bankruptcy Mortgage Claims, a recent report on the conduct of some lenders in court proceedings when homeowners file for bankruptcy protection (by Katherine M. Porter University of Iowa - College of Law).

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

Arson Investigators Focus On Ex-Con Landlord In Foreclosure In Recent Fatal Blaze, Previous Fires; Tenant Dies In Attempt To Save Pet

In Gloversville, New York, the Schenectady Daily Gazette reports:
  • A December fire on Park Street that killed 39-year-old Debra Morris was deliberately set and Morris’ death is a homicide, Fulton County District Attorney Louise K. Sira said [last] Wednesday. Sira, flanked by numerous local and state investigators at an afternoon news conference, declared the landlord, Jeffrey E. Alnutt, who was residing in the downstairs apartment that night, a person of interest in the investigation. She said the fire started in that apartment and was incendiary in nature. She declined to elaborate on what caused the fire and she urged anyone with information about the fire to contact police or her office.

  • Morris and her boyfriend [...] rented the upstairs apartment. When the fire started shortly before midnight Dec. 21 the couple escaped but then Morris returned to rescue a cat, officials said. Her body was found on the second floor and an autopsy determined she died from smoke inhalation.

  • Sira said a number of agencies are now involved in the investigation, which will also focus on 2002 and 2004 fires that occurred at apartment houses owned by Alnutt. [...] Records kept on file in the Fulton County Hall of records show Alnutt owns nine properties in the Gloversville-Johnstown area and that a number are targets of foreclosure actions.

For more, see Death in fire called a homicide (Officials say landlord a ‘person of interest’ in fatal December blaze).

See also, Man linked to fatal fire in Gloversville has record (Landlord spent time in prison).

For other stories on fires & foreclosures, go here , go here , and go here. foreclosure arson xerox

Monday, February 04, 2008

Twin Cities Considering Legal Action Against Subprime Lenders

In Minnesota, the Minneapolis Star Tribune reports:
  • City leaders in Minneapolis and St. Paul are exploring legal action against the subprime lenders who financed the cities' explosion of foreclosed properties. While the Minneapolis Civil Rights Department is weighing action that alleges racially discriminatory lending patterns, the city attorney's office is researching lawsuits that other cities have filed against subprime lenders. St. Paul also is exploring its legal options for dealing with boarded-up housing.

  • Cleveland and Baltimore last month sued lenders, setting off what could be a wave of such actions. Baltimore alleged that Wells Fargo made predatory loans in black neighborhoods, which the lender denied.
For more, see Cities consider going after lenders (The rise in foreclosures brings calls for St. Paul and Minneapolis to follow other cities that are suing subprime lenders for damages).

Pa. Suit Alleging Title Insurance Premium Homeowner Ripoff Now Certified As Class Action

In Pennsylvania, The Legal Intelligencer (reported at law.com) reports:
  • A federal judge has certified a consumer class action suit against Commonwealth Land Title Insurance Co., brought by homeowners who claim they were overcharged for title insurance when they refinanced, because they were never told that they qualified for a discounted premium. The ruling [...] in Alberton v. Commonwealth Land Title Insurance Co. joins a growing list of courts that have certified similar class actions in Florida, Maryland, Minnesota, New York and Ohio. At issue in all of the cases are claims by the homeowners that their entitlement to a statutorily discounted premium should have been detected by the insurer during its title search.

For more, see Consumer Class Action Certified Against Title Insurance Company.

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

Virginia-Based Flipper CM Development Back In The News

In Portsmouth, Virginia, The Virginian-Pilot reports:
  • The "idea man" behind one of Hampton Roads' worst housing fraud cases may be headed back to prison because of his recent connections to CM Development. Jacques McEntee's probation officer has petitioned a U.S. District Court Judge to revoke McEntee's three-year probation because last year he solicited investors for money to help his brother's struggling company, CM Development.

  • CM Development, a Virginia Beach-based housing company, once owned more than 250 properties across Hampton Roads, many of which were left vacant and in disrepair. It is now under investigation by the FBI.

For more, see Role in CM development prompts call to revoke probation.

Go here for other posts on the CM Development flipping operation. Cary McEntee

Stockbroker Found Liable For Peddling Unsuitable Mortgage Backed Investments To Unsophisticated Investors

In West Palm Beach, Florida, The Miami Herald reports:
  • A civil jury has found Hillsboro Beach stockbroker Jamie Solow liable for running a fraudulent bond trading scheme that led to the collapse of two brokerages and caused millions of dollars in losses to hundreds of small investors. [...] The verdict, following a nine-day trial in federal court in West Palm Beach, is the latest wrinkle in the sweeping national credit crisis that is best known for costing investment banks billions in losses and putting many mortgage holders at risk of losing their homes. This time, the losers were individual investors who bought mortgage-backed investments for their retirement accounts.

***

  • Solow, 46, who lives in a $7 million oceanfront home on a stretch of A1A known as Millionaires' Row, got into trouble peddling arcane investments called inverse floating collateralized mortgage obligations (CMOs). Those so-called inverse floaters are highly volatile bonds typically intended for institutional investors like banks.

For more, see Jury: Stockbroker liable for fraud scheme (The SEC said it will ask a judge to take steps to kick a Hillsboro Beach stockbroker out of the securities industry) (if link expires, see if this link works.).

Sunday, February 03, 2008

Pennsylvania Attorney Gets 5 To 10 For Torching Family Home

In Pittsburgh, Pennsylvania, The Associated Press reports:

  • A 57-year-old attorney has been sentenced to five to 10 years in prison for setting fire to his family home, critically injuring his bedridden daughter. Samuel Pontier says he is remorseful and that he never intended to set his house on fire or harm his daughter, who has cerebral palsy. Pontier pleaded guilty in November to aggravated assault, arson and other charges. Pontier's attorney says the former O'Hara Township councilman was suffering from manic depression and abusing alcohol and prescription drugs when he set the Dec. 29 fire. Pontier's 17-year-old daughter Kristin suffered smoke inhalation and burns to her esophagus. Pontier's estranged wife and their other daughter were not at home when the fire started.

Source: Lawyer gets prison term for setting family home on fire.

For earlier articles on this story, see the Pittsburgh Tribune Review:

Ohio Judge Knocks $2M Off Akron-Area Fraud Suspect's Still Unaffordable Bond

In Summit County, Ohio, the Akron Beacon Journal reports:
  • A Summit County judge reduced the bond Friday to $1 million cash for former Evergreen Corp. President David B. Willan, but afterward Willan's lawyer told the court there still was ''no possibility'' that he could pay that amount to get out of jail. Willan, 37, has been held at the county jail on a $3 million bond since his Dec. 19 arrest. [...] Willan, the principal figure in a 147-count indictment alleging widespread Akron-area mortgage fraud, is charged with multiple first-degree felonies that potentially could mean incarceration for 54 to 319 years, [Common Pleas Judge Thomas A. ] Teodosio noted.

For more, see Bond is reduced for Willan (Former Evergreen executive still can't afford $1 million, lawyer says).

Foe story update, see Evergreen leader fails to raise cash for bond (Lawyer says mortgage-fraud suspect lacks funds, might stay in jail through trial).

Go here for other posts on David Willan and the Akron-area 147 count mortgage fraud indictment.

"A Parent's Love Being Taken Advantage Of" Results In Federal Fraud Indictment, Claims City Councilman

In Uniontown, Pennsylvania, The Associated Press reports:

  • A new city councilman took part in a mortgage fraud scheme run by his daughter, federal authorities charged. Marlin Sprouts Jr., 52, a substitute teacher in Uniontown, was charged Friday with conspiracy to commit bank fraud. Sprouts blamed the arrest on a failed real estate venture and vowed to clear his name. He said the charges stem from "a parent's love being taken advantage of." Tiffany Lynn Sprouts opened a brokerage firm several years ago and forged loan applications, tax returns and appraisals to help straw purchasers get more than $2.4 million in loans, authorities say.

For more, see Uniontown councilman charged in fraud.

See also:

Phoenix-Area Vacant Land Buying Spree Triggered As Builders Unload Lots

In metropolitan Phoenix, Arizona, The Arizona Republic reports:
  • Home sales are down, but there's a mini land-buying spree going on in metropolitan Phoenix. Home builders are selling off land that they can't sell homes on in the near future. Investors are buying home lots for bargain prices, which lets them hold onto the properties until the demand for homes picks back up. In the last few weeks of 2007, as many as 8,000 vacant but finished home lots ready for construction sold in the Phoenix area, according to Scottsdale-based land brokerage and consulting firm Nathan & Associates.

***

  • [M]any builders who operated primarily as manufacturers and not long-term land developers in the past, need to get the dirt off their books. [...] RL Brown, publisher of the Phoenix Housing Market Letter, tallied 61,000 finished lots sitting empty across the Valley.New-home buyers may not want the lots now, but investors do. The trend is also playing out in other parts of the country where builders loaded up on land during the boom. "A lot of the investment bankers have determined metro Phoenix is one of the safest place to invest based on correction figures," Nathan said.
For more, see Slump fuels home-lot sell-off.

Suspicious Flips Hurting Hernando Beach

In Hernando Beach, Florida, the St. Petersburg Times reports:
  • [S]uspicious sales have made "mortgage fraud" a buzzword in Hernando Beach the past two years. Though fraud cannot be proved without a criminal investigation, evidence of improper dealings during this period has been steadily mounting. By analyzing property records, the St. Petersburg Times found dozens of what the FBI calls indicators of mortgage fraud. These include houses, such as the one on Hibiscus, that began to slip into foreclosure almost immediately after their purchase.

***

  • [T]he most direct consequence is to the local real estate market. Disinterested, absentee owners often neglect their properties, bringing down the real worth of nearby houses. At the same time, fraudulent prices artificially inflate local property values and discourage buyers. [...] Dishonest investors apparently targeted Hernando Beach because its waterfront houses were expensive enough to hide inflated prices, said county Property Appraiser Alvin Mazourek.
The Times investigation found four area homes that most closely fit the pattern the FBI describes as evidence of mortgage fraud.
  • Transactions on these properties, all of which are now in foreclosure, began with a purchase by a Spring Hill investor named Kathy Schmidt or one of her companies - Soni Homes Inc. or Gulf Coast Instant Equity Inc. Schmidt then resold them to someone associated with a now-defunct Tampa company, Real Estate Exchange Partners Inc. People involved with that company included president Steven Michaelson and Robyn Michaelson, both of whom face foreclosure on properties throughout the Tampa Bay area. Though their relationship is not clear, they list several common addresses in property records. Neither could be reached by the Times at any of the several telephone numbers listed in public documents.

For more of the St. Petersburg Times investigative report, including the recent sales history of the four suspicious flips decribed in the story, see When the price is wrong (Sometimes, a sudden jump in the price of a house could indicate mortgage fraud).

See also, St. Petersburg Times Editorial on the suspicious Hernando Beach real estate transactions: Time to check rumors about mortgage fraud.

Suing A Mortgage Servicer? 20 Reasons For Having Them Fork Over The PSA

In The Bankruptcy Litigation and Consumer Rights Blog, consumer bankruptcy litigation attorney Max Gardner writes:
  • Every time I file a civil action against a mortgage servicer the very first document I want is a copy of the “Pooling and Servicing Agreement.” This is the legal document that creates the securitized trust of mortgage loans and also strictly provides for the duties of all entities who are assigned the responsiblity of servicing loans for the Trust.
For 20 of the reasons you need to request through formal discovery in any mortgage-related lawsuit the PSA Agreement and why it is relevant, see Max Gardner’s Top Reasons for Wanting a Pooling Servicing Agreement.

Go here for more posts on homeowners and their attorneys who are using Federal & state consumer protection statutes to try and undo bad mortgage loans. undo mortgage loans TILA alpha questionable mortgage servicing practices tactics yak

Saturday, February 02, 2008

Erie, Pa. Federal Mortgage Fraud Probe Yields More Charges; New Arrest

In Erie, Pennsylvania, the Erie Times News reports:
  • A second key figure in the ongoing federal investigation into suspected mortgage fraud in the city of Erie looks to be poised to plead guilty to fraud and money-laundering charges. The U.S. Attorney's Office in Erie on Thursday filed criminal charges against Frank Kartesz II. Kartesz, 39, of Harborcreek Township, is accused of one count each of mail fraud and criminal conspiracy to commit mail fraud, wire fraud and bank fraud. The government alleges Kartesz was part of a scheme in which he and others bought run-down houses and sold them at artificially inflated prices. Most of the buyers were low-income people who knew little about the home-buying process.

***

  • Kartesz is the second person charged in the federal probe so far. His business partner in K&D Enterprises, Robert L. Dodsworth, pleaded guilty to fraud charges in November. [...] Most of the sales under investigation occurred in low-income Erie neighborhoods, and most of the financing was arranged through subprime mortgages.
For more, see New arrest in fraud case.

Go here for earlier posts on this Federal mortgage fraud probe.

Straw Buyer/"Cash Back" Mortgage Fraud Suspect Survives Suicide Attempt; Gets 5 Years In Federal Pen

In Minneapolis, Minnesota, the Pioneer Press reports:
  • The co-owner of LHS Mortgage Inc., the defunct Burnsville brokerage at the heart of a major Twin Cities mortgage fraud scheme, was sentenced Thursday to five years in prison. Ronald Joseph, 49, of Prior Lake, is the fourth and last person to be sentenced in connection with a large fraud operation involving straw homebuyers, sham loan documents with inflated sale prices and kickback payouts to various players. [...] The LHS scandal gained wider attention last year when a closing agent, Jill Lehn, 40, also of Prior Lake, was arrested and then wrote an article entitled "Tips On How To Ruin Your Life" as a cautionary tale. Lehn and two other defendants in the LHS Mortgage scheme already have been sentenced.

  • In court Thursday, Joseph discussed his recent suicide attempt with U.S. District Court Judge Donovan Frank. According to his attorney, Joseph Friedberg, his client was so despondent over his actions that he drank antifreeze while out on bail about a month ago so that his wife and children could collect on a $1 million life insurance policy. Friedberg said he intervened.
For more, see Mortgage scheme leads to jail (LHS co-owner Joseph gets 5 years for homebuying fraud operation).

See also:

For earlier posts on this story, go here , and go here.

Homeowner/Victims Get Payment Extension In Wraparound Mortgage, Pennsylvania Ponzi Scheme

In Lancaster County, Pennsylvanis, Lancaster Online reports:
  • At the urging of state and federal officials, 14 lenders have agreed to continue accepting lower payments from victims of the Personal Financial Management mortgage scam. The original deal reached in October by the lenders and attorneys for the victims was to expire at midnight Thursday. But the state Banking Department announced late Thursday afternoon that 13 lenders had agreed to extend the relief through May. [...] A 14th lender[...] agreed to extend the relief through February. While that's only about half of the 27 lenders involved, those participating lenders are dealing with four-fifths of the victims — 650 of 811."This agreement gives homeowners time to work out permanent solutions," said Secretary of Banking Steve Kaplan in a prepared statement.
For more, see Deal extended in mortgage scam.

Go here and go here for other posts and links to earlier media reports on the Pennsylvania wrap around mortgage Ponzi scheme involving companies operated by WesleySnyder.

Seniors Tapping Home Equity With Reverse Mortgages On Upswing

The Florida Times-Union ran a story recently on the increase in senior citizens using reverse mortgages to access the accumulated equity in their homes. For those seniors considering a reverse mortgage, you may want to check out Mortgages work in reverse (Homeowners who take out loans based on their equity are multiplying).

For other posts related to reverse mortgages and potential pitfalls to avoid when getting one, go here , and go here. reverse mortgage yak

Friday, February 01, 2008

Oregon Cop Targeting Foreclosure Rescue Operators; Calls Scams "Aggravated Theft"

In Portland, Oregon, Willamette Week reports:

  • Detective Liz Cruthers, who investigates white-collar crimes for the Portland Police Bureau, says she’s spending much of her time learning the intricacies of what law enforcement officials term “mortgage rescue fraud” and chasing down the perpetrators.

  • Cruthers says many “foreclosure consultants” are, in fact, scammers trying to dupe panicked homeowners out of the equity in their homes. “My contention is that ‘mortgage rescue’ is really aggravated theft,” says Cruthers. “What these people are doing is a crime.” She has helped lawmakers prepare a bill for the upcoming legislative session that would shut down one of the most common scams—vultures who assume a delinquent home loan and rent the property back to the original homeowner.

Reportedly, the Oregon Legislature will be taking up a bill addressing foreclosure rescue when its monthlong session begins Feb. 4.

  • Shane Jackson, a lobbyist for the Oregon Coalition of Mortgage Originators, says his group and others in the lending industry favor the bill because it cracks down on rescue scams.

For more, see Rescue Me (A Portland Cop is targeting foreclosure vultures. Next week, the Legislature will, too).

Go here for Portland Police Bureau's Fraud detail.

Go here and go here for other posts on deed theft by forgery, swindle, etc. deed theft yahtzee

Loan Officer Cops Plea In Equity Stripping Of Unwitting Elderly Couple's Home

(Original post 1-31-08)
In Cumberland County, Pennsylvania, The Patriot News reports:
  • Former midstate banker Constantine "Dean" Gekas' scheme to cheat an elderly West Shore couple out of their home fell apart in a Cumberland County courtroom Monday. Moments before he was to be tried on fraud charges, Gekas pleaded guilty to theft by unlawful taking and two counts of false swearing in exchange for a 2-year probation sentence. The plea deal struck with Senior Assistant District Attorney Daniel Sodus also requires Gekas, 44, [...], to sign over the East Pennsboro Twp. home he tried to steal from the late Chester and Lois Jasek. Sodus said the deal is designed to make the Jasek estate financially whole.

***

  • Investigators said the Jaseks unwittingly signed the deed to their home over to Gekas [...] in July 2004 when he provided them with a $103,000 personal loan. At the time, the value of the Jaseks' home [...] was conservatively estimated at $260,000, Sodus said.

  • Sodus said the fraud began when the Jaseks sought a bill consolidation loan through Integrity Bancorp Mortgage Co., where Gekas was a loan officer. Their loan request was approved, Sodus said, but Gekas told the couple it had been denied. Gekas then told them he could provide a loan, Sodus said. He said that while closing on that loan, Gekas had [Mr. & Mrs.] Jasek, who were in their late 70s and early 80s, respectively, sign the deed over to him. Only later did the Jaseks, who had to pay $500 a month on the loan, realize Gekas owned their house, Sodus said.

  • Investigators said [Mr.] Jasek sent Gekas a $103,000 check to try to pay off the loan in April 2005, but Gekas refused to accept it. The Jaseks stopped making the loan payments, and Gekas filed a landlord-tenant action to evict them.

  • Sodus said the false swearing charges are based on statements Gekas made during hearings on that civil complaint [...] during which he denied trying to deceive the Jaseks. The plea deal requires Gekas to sign over the house to a third party to be chosen by the district attorney's office, who will sell the property, Sodus said.

  • He said Gekas, who said he now works for a financial firm in Scottsdale, Ariz., will receive $98,000 from the sale to satisfy some liens against the house. Defense lawyer George Matangos said Gekas must pay off an additional $60,000 in liens. All remaining sale proceeds will go to the Jasek estate, which is pursuing a lawsuit against Gekas, Sodus said.

Reportedly, between the time of the July, 2004 scam and the time of Gekas' sentencing, the elderly Mr. and Mrs. Jasek passed away. For the story, see Man takes deal for probation in house theft (no longer available online).

See also, Former banker pleads guilty in fraud case.

For more on Dean Gekas, see (March 2. 2008) Council approves plan for luxury apartments (no longer available online):

  • In May 2006, the council approved a $2.5 million plan for five 4,000-square-foot town homes that project developers Constantine "Dean" Gekas and Scott Kuhn expected to sell in the $650,000 price range. But then Gekas, formerly of Wormleysburg, was charged with defrauding an elderly couple of their West Shore home. In January, Gekas pleaded guilty to theft by unlawful taking and two counts of false swearing in Cumberland County Court. He was sentenced to 2 years' probation.

Editor's Note:

According to the story, Gekas still has to fork over $60K as part of his criminal case. Since he is now on probation, and reportedly working for a "financial firm" and living in Arizona, a state with many elderly retirees, let's keep our fingers crossed and hope this guy doesn't scam another elderly couple to come up with the $60K.

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

Go here and go here for other posts on deed theft by forgery, swindle, etc. deed theft yahtzee whale foreclosure rescue

Abrupt Shutdown Of Property Management Firm Triggers Police Probe Into Possible Embezzlement; Tenants & Landlords Left In Lurch

In Montpelier, Vermont, The Times Argus reports:
  • Many tenants, landlords and contractors who worked with a Montpelier property management company under police investigation said Tuesday they saw problems going back as far as eight months ago. A series of interviews and e-mails received this week has revealed that Parkside Property Management, which oversaw and managed scores of properties in Vermont and New Hampshire that included low- to moderate-income tenants on fixed incomes and sometimes disability payments, stopped paying bills, wrote checks that bounced, neglected basic maintenance on many of its properties and became increasingly more difficult to reach – by phone, e-mail or in person – up until it closed its doors abruptly fewer than two weeks ago.

  • Members of the local law enforcement community are trying to determine why the four-year-old company closed, and who is responsible for a crisis that has put many absentee landlords, some located as far away as South Carolina, Texas and Florida, into the hot seat to find alternate means of collecting rents and tending to tenants.

  • Montpelier police have opened an embezzlement investigation, and have named a suspect employed at Parkside, James Pumpelly of Barre. Police have declined to comment on the specifics of the investigation. However, no arrests have been made, and so far no charges have been filed.

For more, see Montpelier property management firm, under probe by police, had extensive problems.

Next Two Years' Foreclosures To Remain Higher Than Usual, Treasury Official Tells Senate

Reuters news service reports:
  • Treasury Undersecretary Robert Steel said on Thursday that foreclosure rates on American homes will be higher than usual for the next two years as will the number of homeowners facing hardship. In prepared remarks to the Senate Banking Committee, Steel noted the risks a housing downturn poses to growth, but said the U.S. economy was basically strong.

For more, see Foreclosures to stay high: Treasury's Steel.

Super Bowl Bailing Out Some Arizona Homeowners Facing Foreclosure?

Conde Nast Portfolio.com reports on how some Arizona homeowners are looking to this Sunday's Super Bowl being played in Glendale, Arizona as a way to help relieve current financial burdens:
  • Hoping to stave off foreclosure or losses, some in the Phoenix area are renting out homes for high prices—or whatever they can get. [...] Searching for a bailout, [Phoenix-area homeowner Danielle] Sullivan found a website that promised to rent her house to cash-flush Super Bowl fans. A week later she held a check for $3,200—four nights’ rent for a place twenty miles away from the University of Phoenix stadium in Glendale, Arizona, where the big game will be played Sunday.
Not all property owners have had the same luck, however:
  • It’s not a way out, but a way to stop some of the bleeding,” [investor Mike Roberts] says. Roberts began asking $10,000 for [a] rental, then lowered it to $7,000 with no results. Now, he says, he’ll let it go for a mere $3,500. But by midweek, he hadn’t even had one call on the property. “I can’t sustain too much more. If I don’t get it rented we’re looking at just a few months.”

For more, see Arizona Homeowners Eye Super Bowl as Lifeline.

Pittsburgh-Area Firehouse Faces Foreclosure; Threatens Shutdown

In Carnegie, Pennsylvania, the Pittsburgh Post Gazette published another story on the continuing financial problems facing the Carnegie Volunteer Fire and Rescue Bureau:
  • From the onset of last Thursday's town hall meeting, Carnegie Council President Bob Kollar made it clear that the session's purpose was to figure out how to save the financially troubled Carnegie Volunteer Fire and Rescue Bureau. However, after three intense hours it was clear there are no easy answers and a lot of exasperation on all sides.

  • Three months behind on its mortgage and facing an annual payment on a pumper truck, fire and rescue bureau officials have threatened to close unless the borough comes through with an infusion of money. The firemen, who asked for a dedicated fire protection tax of up to two mills in summer 2006, contend they've been ignored. At the meeting, they stood along the rear wall of the room in a show of unity.

For more, see Carnegie desperately seeking funds to help fire, rescue bureau survive.

Go here for earlier posts on the Carnegie, Pa. Fire and Rescue Bureau.

Add Horses To The List Of Those Losing Their Homes To Foreclosure

In Minnesota, the Minneapolis Star Tribune reports:
  • The ever-worsening story of foreclosures in America now counts among its victims the family dog, the pet cat and even the farmer's horse. [...] "I'm getting skinny horses in here that people have walked away from," said Drew Fitzpatrick, director of the Minnesota Hooved Animal Rescue Foundation, based in Zimmerman, Minn. It used to be that for every abandoned horse there was a story of mental illness, divorce or cancer of its owner, said Fitzpatrick. "Now it's bankruptcy and ARM foreclosure. Rural America is really starting to get punched."

***

  • The problem has been exceedingly acute for horse owners, who were already facing high feed costs because of rising commodity prices and the recent elimination of horse slaughterhouses in America. That market -- a federal ban recently closed the last three such slaughterhouses in the United States -- once provided horse owners with an option that paid about $600 per horse, when there was nowhere else to turn. Reports have cropped up of horses wandering the Florida Everglades and coal mines in Kentucky, where owners too poor to care for them have set them free to forage on their own. A horse owner recently euthanized more than 80 horses, most of them Shetland ponies, in Grey Eagle, Minn., northwest of St. Cloud, because of rising feed costs and her own poor health. [...] Fitzpatrick, of the Hooved Animal Rescue Foundation, said she took a call this week from the sheriff in Morrison County in central Minnesota, who reported a herd of horses running free in the area. "He just said it looks like another foreclosure," she said.

For more, see Four walls no more for 4-legged friends (As more Minnesotans lose their homes to foreclosure, many are finding they're also forced to give up their pets and livestock).

See also, Pioneer Press: All the Dying Horses: Neglect cases soaring in Minnesota (Horse neglect and starvation are on the rise in Minnesota, the result of a suddenly sour economy. Some experts call it the Hobby Horse Syndrome. Drew Fitzpatrick, who devotes her life to rescuing the animals, is less polite) (when this link expires, try here) for the same story).

For more on foreclosures and family pets, go here, and go here. petsII and foreclosures

Thursday, January 31, 2008

Current FBI Subprime Probe Of 14 Firms May Expand

Reuters news service reports:
  • The FBI's investigation of 14 corporations in a crackdown on improper subprime lending could expand to other companies, but the complex probes may take some time before any charges are brought, a federal law enforcement official said on Wednesday. "Like any white-collar crime investigation, these are very complicated, time-consuming investigations involving the examination of numerous records and interviews of various people. They don't happen in a short period of time," the FBI official said. FBI officials told a briefing on Tuesday the investigations covered corporations across the financial services industry, ranging from mortgage lenders and investment banks to developers and subprime lenders.

***

  • [FBI spokesman Bill] Carter said the FBI around the country has 34 mortgage fraud task forces and working groups that include other federal agencies and state and local law enforcement officials.

For more, see FBI's subprime crackdown may expand to more firms.

See also, The New York Times: F.B.I. Opens Subprime Inquiry.

California Legislature Nixes Proposed Foreclosure Bill

In California, The Associated Press reports:
  • California's state senate narrowly defeated a bill Wednesday that targeted the growing problem of foreclosed homes sitting vacant for months, drawing squatters and creating blight. Lenders would have been fined $1,000 a day for not maintaining vacant properties, and they would have had to give four months' notice before mortgage payment increases of 10 percent or more. "The purpose of this bill is very simple: to keep people in their homes," said the bill's sponsor, Don Perata, a Democrat from Oakland and the Senate leader.

***

For more, see California Foreclosure Bill Fails.

Feds vs. NY AG: Lending Fraud Probe Turf Battle Emerging?

The Wall Street Journal reports:
  • Tensions are beginning to rise between state and federal authorities as the number of agencies investigating mortgage fraud continues to grow. New York Attorney General Andrew Cuomo is in a tussle with the Office of Federal Housing Enterprise Oversight, the federal regulator that oversees mortgage giants Fannie Mae and Freddie Mac. Their dispute is over who should be the investigating allegations of fraudulent appraisals and mortgage fraud.

  • The interaction of state and federal oversight has long been a political hot potato. Friction is expected to increase as rising number of participants -- including the Justice Department and Securities and Exchange Commission -- probe the mortgage area.
For more, see Tensions Rise in Lending Probes (subscription may be required - if no subscription, go here). OFHEO

Another Subpoena For Countrywide; Florida AG Probes Servicing Practices, Possibly "Sticking People" In Bankruptcy, Lending Practices

The Wall Street Journal reports:
  • Countrywide Financial Corp. confirmed yesterday that it received a subpoena from the Florida attorney general seeking information on its business practices. The subpoena adds to the problems for the Calabasas, Calif., lender, which has drawn the ire of bankruptcy judges, borrowers and consumer groups for months. Florida Attorney General Bill McCollum is seeking information on how Countrywide handles borrower payments as well as materials related to sales practices and standards for making loans. Mr. McCollum is also investigating whether Countrywide has charged excessive fees to borrowers in the foreclosure process. In an interview, he noted that even bankruptcy judges have flagged these fees and expressed concern that Countrywide "may be sticking people at the end of the process."

For more, see Subpoena Deepens Countrywide's Woes (subscription required; if no subscription, try here, then click link for story, then "refresh" browser if needed).