Novice Maryland Real Estate Operator Learns "Tricks Of The Trade" From Local Investment Seminar; Now Being Sued By Homeowner

in Prince George's County, Maryland, The Maryland Daily Record reports on a local financially strapped homeowner who was allegedly screwed out of the equity in her home and is now suing to stop the resale of the house.

The main focus of the story, however, is the promotion of the real estate seminars that are teaching the techniques to the novice real estate investors who pulled off the alleged scam in this story.

• [Homeowner Monica] Hill’s story might be just another tale of a financially troubled homeowner entering into a bad deal, were it not that the investors involved in the deal are linked to a pair of real estate investment teachers who have taught their techniques to, by their own account, hundreds of people.

• Consumer lawyers say they suspect that many of the people running foreclosure rescue scams and home-equity thefts are coming out of real estate investment programs, but it is usually difficult to connect individual investors with the people who taught them.

• In this case, however, the woman who bought Monica Hill’s house, LaKisha White, testified in court that she had learned how to be an investor from Lloyd and Vicki Irvin, a Prince George’s County couple who run a program called Maryland Real Estate Secrets and bill themselves as the King and Queen of Real Estate Investing [...].

***

• Del. Doyle L. Niemann, D-Prince George’s, said he considers real estate seminars and the investors they train to be a real problem in his district. [...] Both [executive director of Civil Justice Inc. Phillip] Robinson and [director of research and policy Robert J.] Strupp of the Community Law Center, represent scammed homeowners. Though they cannot usually make a connection between the perpetrators and real estate investment schools, they believe many of those defrauding or misleading people learn from seminars. [...] Strupp and Robinson said the real estate investment programs they have seen generally involved instructors recommending real estate professionals — Realtors, settlement agents, title lawyers — who will look the other way while shady deals are done.

For more, see Lessons in loss.

Addendum:

A representative from Maryland Real Estate Secrets has been in contact with The Home Equity Theft Reporter and has advised that it had absolutely no dealings with LaKisha White as it related to her handling of Monica Hill's property, it never provided Ms. White with any advice regarding any deal with Ms. Hill, and further, that it lost track of her shortly after her attendance at one of the seminars.

Georgia Legislature Attempts To Address "Mortgage Note Ownership" Issue In Home Foreclosures

In Georgia, an opinion article in the Atlanta Journal Constitution addresses the confusion taking place with home foreclosures in the state where the company bringing the foreclosure action doesn't own the promissory note being enforced:

• The General Assembly is attempting to reduce the confusion by requiring clear proof of mortgage ownership before a foreclosure can proceed. But its efforts have been stymied by banks reluctant to come clean on ownership, and there are suggestions the Legislature may put off definitive action until next year.

***

• "We want to be able to be certain that our clients are being foreclosed on by the legal entity that has standing," says William Brennan, director of Atlanta Legal Aid's Home Defense Program. "And we want to know who to talk to about the foreclosure. Now, we often don't know who holds the note."

***

• Even if 5,000 investors own a piece of a mortgage, the mortgage owner is considered to be the trustee bank that manages the pool. But rather than have to deal with desperate homeowners, those banks prefer to let contractual servicers —- companies that collect the monthly payments or record the deeds —- become the public face of foreclosure while they lurk in the shadows. Those servicing agencies have no incentive to negotiate with borrowers. Lawyers have complained to the Legislature that they can't even get a live person on the phone to talk about a pending foreclosure, leaving homeowners stranded.

For more, see Owning up to a crisis (Georgians faced with foreclosure have a right to know who exactly holds their mortgage) (if link expires, try here or try here).

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, Go Here, Go Here, and Go Here. missing mortgage foreclosure docs beta

Ranks Of Attorneys Willing To Represent Homeowners In Predatory Lending Cases On The Upswing

In New York City, the Staten Island Advance reports:

• [T]he legal landscape is changing and more local lawyers are willing to represent homeowners against banks that made high-interest, problematic subprime loans. "Their ranks have been growing. Over the last two weeks, we've gotten several more private attorneys calling to say they can handle cases," said Margaret Becker, director of the Homeowner Defense Project at Staten Island Legal Services in St. George.

***

• A Harvard Law School graduate who said she was once misled on the interest rate she received on a home equity line of credit, Ms. Becker recently conducted a course on foreclosure defense for members of the Richmond County Bar Association.

• She makes a point of telling attorneys that they can win back their fees and expenses from banks if they are successful in their claims against those lenders. That's important because most people in default don't have the money to pay for lawyers, and proving mortgage fraud can be a complex and costly process.

• One legal recruit is Robert Brown, an Annadale resident and retired New York City police captain who graduated from St. John University's Law School in 2000. Brown is carving out a niche bringing violation of truth-in-lending claims on behalf of the clients he represents, [...].

For more, see New legal arsenal to battle bad loans.

For a story involving a Staten Island couple who recently obtained a favorable court decision against a mortgage lender for violating a New York State anti-predatory lending statute, see:

• Staten Island Advance: Stuck with a bad loan, a Staten Island family fights back (if link expires, try here),
• ABC News: Fighting Back Against Foreclosure (New York Judge Denies Foreclosure Based on Alleged Predatory Lending),
• For the court decision itself: LaSalle Bank, N.A. v Shearon, Supreme Court, Richmond County, 2008 NY Slip Op 28032 (January 28, 2008),
• Kelley Drye & Warren LLP newsletter: LaSalle Bank v. Shearon: A Harbinger of Things to Come (New York Supreme Court Rules in Favor of Borrower on Defensive Claims Under State’s Anti-Predatory Lending Law).

For other posts on homeowners using Federal & state consumer protection statutes to try and undo bad mortgage loans, Go Here and Go Here.

Editorial Note:

The significance of attorney "fee shifting" statutes, which are commonly a part of Federal and state consumer protection statutes, anti-unfair labor statutes, civil rights cases, etc. and allow for attorneys to win back their legal fees and expenses from the losing party in a successful case, can't be emphasized enough. For an example of one case where the lawyers representing aggrieved parties were allowed to win back their legal fees as a result of such a "fee shifting" statute, see NY BigLaw Leader Scores $1 Million Fee in Pro Bono Case (or go here for the actual court decision itself).

Colorado Home Builder Indicted By Local Prosecutor In Alleged Mortgage Fraud Scam Leaving New Homebuyers Facing Foreclosure

In Weld County, Colorado, the Grand Junction Sentinel reports:

• [M]ark Strodtman was indicted last week by a Weld County grand jury in a mortgage fraud case that caused homeowners to go into foreclosure. According to the indictment, Strodtman and another man, Dean Juhl, who was indicted for mortgage fraud last year, bought a group of land parcels in Greeley in 2004 and received financing to build homes on the lots. Strodtman then deceived buyers to purchase homes owned by his real estate company, JS Real Estate LLC, and lenders to buy loans for the land. Buyer’s incomes, assets, rents, employments, bank records and outstanding loans were falsified, the indictment said. Strodtman is charged under the Colorado Organized Crime Contract Act with 11 counts of theft, 11 counts of forgery and one count of racketeering. He faces up to 48 years in prison if convicted.

For more, see Developer accused of swindling homebuyers.

Victims Of Newark, Ohio Foreclosure Rescue Operator Coming Forward

In Licking County, Ohio, The Newark Advocate has recently run a number of stories on the alleged victims of the now-indicted foreclosure rescue operator, Harry Blausey. For the stories, see:

• Some Licking County residents dealing with the foreclosure blues (Family could lose home, blame indicted suspect),
• Instead of finding helpers, homeowners found predators (Foreclosure fears became worse than imagined),
• Recorder raised suspicions 2 years ago,
• Local Realtors, lenders search for solutions to crisis.

Go here for other posts on foreclosure rescue operator Harry Blausey.

Profits, Scrutiny Mount For "The Foreclosure Machine"

According to a column in The New York Times:

• Nobody wins when a home enters foreclosure — neither the borrower, who is evicted, nor the lender, who takes a loss when the home is resold. That’s the conventional wisdom, anyway.

• The reality is very different. Behind the scenes in these dramas, a small army of law firms and default servicing companies, who represent mortgage lenders, have been raking in mounting profits. These little-known firms assess legal fees and a host of other charges, calculate what the borrowers owe and draw up the documents required to remove them from their homes.

• As the subprime mortgage crisis has spread, the volume of the business has soared, and firms that handle loan defaults have been the primary beneficiaries. Law firms, paid by the number of motions filed in foreclosure cases, have sometimes issued a flurry of claims without regard for the requirements of bankruptcy law, several judges say.

***

• Law firms and default servicing operations that process large numbers of cases have made it harder for borrowers to design repayment plans, or workouts, consumer lawyers say. “As I talk to people around the country, they all unanimously state that the foreclosure mills are impediments to loan workouts,” [one consumer advocate] said.

For more, see Foreclosure Machine Thrives on Woes (if no subscription, try here).

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

Elderly Ohio Widow A Victim Of Equity Stripping

In Licking County, Ohio, The Newark Advocate reports on now-former homeowner Reathel Patterson, who reportedly wound up being screwed over by someone purportedly willing to help save her home in a foreclousre rescue situation, but who merely stripped the equity from the home and allowed it to go into foreclosure.

• "He came in and said he'd buy the mortgage if I'd let him buy 40 acres of my land," Patterson said. "He'd redevelop it and give me, I believe, 34 percent of the proceeds." The man from northern Ohio was not Harry Blausey, charged two weeks ago with 30 counts related to an alleged mortgage fraud scheme, but some of Patterson's allegations from two years ago appear similar to current claims.

• Patterson's "savior" did not make the mortgage payments he said he would and used her home to borrow $180,000, Patterson said. She lost her home of 31 years, most of her belongings and all 60 acres of land. The bank resold her home and property for $284,000, she said. "I thought it was all legal, but he lied so much," Patterson said.

• "The bank made us get out right now. I've cried and done everything but kill myself." Patterson, 69, who now lives at Newark Healthcare Centre, said she tried to enlist the help of an attorney, but he wasn't interested.

For more, see Instead of finding helpers, homeowners found predators (Foreclosure fears became worse than imagined).

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

Countrywide Facing Fight With U.S. Trustee After "Missteps" With One Georgia Homeowner In Bankruptcy

In Georgia, The Atlanta Journal Constitution reports on the story of a Cherokee County couple, Robin & John Atchley, who reportedly lost their home after a fight with Countrywide Home Loans.

• Unlike many families caught up in the mortgage meltdown, the Atchleys did not lose their house because they couldn't make their mortgage payments. They lost it because of the expense and frustration of trying to force Countrywide to comply with bankruptcy laws that are supposed to offer a safe harbor to committed homeowners.

• The massive California-based lender and its Atlanta law firm, McCalla Raymer, went to bankruptcy court twice within three months seeking permission to foreclose, claiming the Atchleys had not paid the mortgage. But the Atchleys' lawyer produced receipts in both cases proving that the Atchleys had indeed made their payments.

• The problems didn't end there. The family says that Countrywide repeatedly billed them for inappropriate fees and charges that pushed the cost of the mortgage beyond their reach. About the time their children hesitated to ask for lunch money, Robin and John Atchley decided enough was enough.

• They sold the house and paid Countrywide a balance that they thought was well above what they really owed. Their children got in the car with their suitcases and the family moved in with Robin's parents until they could save enough money to rent a house nearby.

***

• The Atchleys moved on months ago. But someone with considerable resources decided recently to take up the fight. The Justice Department's United States Trustee in Atlanta attracted national attention in late February by going to court asking for sanctions against Countrywide for its actions in the Atchley case.

For the rest of this lengthy article, see Couple lose home in Countrywide dispute, but may yet win (Feds seek sanctions, say lender abused bankruptcy laws).

Go here, Go here and Go here for more on recent Countrywide problems with consumers.

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

Out Of Cash & Unable To Finish Custom Homes, Some Builders Stick The Bank With The Deed & Take A Hike

In Cedar Hill, Texas, WFAA-TV Channel 8 reports on some local builders walking away from unfinished custom homes:

• "He just gives the deed back and says: “Listen, I can’t do it,” gives it back to the bank, and then the bank has to turn around and sell it," said Connie Zetterlund, realtor. It's happened quite a bit in the Lake Ridge development of Cedar Hill. Several dozen large, custom, lake-view homes have been abandoned by builders. Some of them were originally projected to be worth more than a $1 million.

***

• Banks and realtors aren't the only ones affected by abandoned homes. Neighbors also worry about the affect on property values. The problem's even more acute if the existing home's for sale are next to a warped, weather-beaten shell.

For more, see Homes abandoned in Cedar Hill (Builders unable to complete homes simply left them).

Go here for other posts on vacant homes leaving its mark on neighborhoods. neighborhood destruction from foreclosures I

Humane Society Establishes Foreclosure Pets Fund

From The Humane Society of the United States:

• To help keep families and pets together through foreclosures and financial crisis, The Humane Society of the United States has created a new grant program for shelters and rescue groups. Pets have been among the voiceless victims of the current economic downturn. Animals have been left behind in foreclosed homes, and shelters are reporting that families are struggling to keep and feed pets. To ease the current hardships, The HSUS is offering grants to animal shelters, non-sheltered rescue/adoption groups and animal care and control agencies to help establish, expand, or publicize services or programs that assist families in caring for their pets during the current economic crisis.

For more, see The HSUS Launches Grant Program to Help Families Care for Pets Through Tough Financial Times.

Moratorium On Water Shut-Offs For Tenants In Foreclosed Homes To Continue In East Bay

From the East Bay area of Northern California, the San Francisco Chronicle reports:

• The East Bay's largest water agency agreed Tuesday not to shut off service to tenants in foreclosed apartment buildings for the time being, but stopped short of authorizing liens on the property for bills their landlords have not paid. The Board of Directors of the East Bay Municipal Utility District unanimously agreed to continue a moratorium begun last month on water shut-offs to multi-family buildings whose owners stopped paying the water bill.

***

• The board's action was criticized by Just Cause Oakland, a tenants-support group that had lobbied for a permanent end to water shut-offs where tenants are not at fault for unpaid bills. [...] The board agreed that it would revisit its policy for multi-family buildings in three to four months. [...] Advocates for tenants and some Oakland officials have complained that the surge in foreclosures has caused a sharp increase in attempted illegal evictions in foreclosed rental properties.

For more, see EBMUD won't leave tenants high and dry. equity skimming unwittingly epsilon

CBS Evening News On Tenants Losing Their Homes In "No-Fault Foreclosure Evictions"

The CBS Evening News recently ran a story on tenants facing evictions due to rent skimming landlords who are facing foreclosure of their investment properties. Featured in the story is an Oakland, California area woman who is shortly expecting to give birth and has been given 30 days to vacate the premises. According to the story, thirty-eight percent of foreclosures now involve rental properties, estimated to be at least 168,000 households nationwide. In states as Nevada, Illinois and New York, the numbers are closer to 50%.

For the story, see Renters Caught Up In Foreclosure Crisis (38 Percent Of Foreclosed Properties Are Rentals, And Most Banks Won't Allow Tenants To Stay) (read story) (watch video).

For other posts involving the problems tenants face in homes in foreclosure, go here, go here, go here, go here, and go here. equity skimming unwittingly epsilon

Methuen To Consider Requiring Vacant Home Registration By Foreclosing Lenders

In Massachusetts, The Eagle Tribune reports:

• The city of Methuen hopes a new foreclosure registration proposal could help officials prevent vacant buildings from falling into disrepair or being targeted by vandalism, crime or arson. The mayor wants to require banks and mortgage companies to register foreclosed properties and pay a fee to the city. He will present his plan to city councilors and the public at a workshop April 2 at 6:30 p.m. at City Hall. The city of Lawrence recently passed a similar law. The Boston City Council is also working on a similar proposal. [...] "The biggest problem with foreclosure is there's no one for us to talk to," said Councilor Joseph Leone. "The rules make somebody accountable. These buildings have to be controlled."

For more, see Proposal will make banks register foreclosed buildings.

New Hampshire Attorney Guilty Of Extortion For Threatening To Sue Hair Salons, Then Pocketing Cash To "Settle Claims"

In New Hampshire, the Concord Monitor reports:

• A Manchester lawyer who threatened to sue a Concord salon for pricing haircuts differently for men and women and then took money to settle the matter was found guilty of theft by extortion. A jury took about 1½ hours to convict Daniel Hynes, 27, [earlier this month]. Assistant Attorney General Elizabeth Baker said Hynes sent letters to at least 19 salons in the state.

• One arrived Dec. 20, 2006, at Claudia's, the North Main Street hair salon owned by Claudia Lambert. In the letter, Hynes said prices should be based on the time a cut takes or on the length of hair, instead of on gender. He wrote: "I demand payment in the amount of $1,000 in order to avoid litigation," according to court documents. Lambert's husband, Ben Nardi, contacted the attorney general's office. He also contacted Hynes. After Hynes came to collect $500 at Nardi's Manchester real estate office, the police arrested him. The misdemeanor conviction carries a maximum sentence of one year in jail and a $2,000 fine. Hynes said yesterday that he plans to appeal.

***

• [NH Ass't. AG] Baker said that if Hynes wanted to push the salons to change their pricing, he could have sent the letters without demanding money. "It was an effort by an attorney to seemingly use his position as an attorney to demand money that he was not legally entitled to and to make threats of a bogus lawsuit," she said.

For more, see Lawyer guilty of salon extortion (He says conviction violates free speech).

Bank Fraud Investigator Gets 3+ Years For Squeezing Suspects, Pocketing $1.5M In Underreported Recoveries

In Portland, Oregon, The Associated Press reports:

• A former U.S. Bank fraud investigator has been sentenced to more than three years is prison for embezzling $1.5 million he recovered from people accused of defrauding the bank. David A. Shelofsky, 39, of West Linn was the manager of the bank's asset forfeiture and recovery section when he stole the money between 2002 and 2005. He pleaded guilty in October 2006 and was sentenced Thursday by U.S. District Judge Garr King. Shelofsky went after bank customers and employees who had written bad checks or stolen the bank's money. He then negotiated with the suspects to recover assets or cash. Prosecutors said Shelofsky's scheme involved underreporting his recoveries to the bank.

For more, see Bank fraud investigator accused of stealing $1.5M.

Investigation Of Neighborhood Stench From Boarded Up Bank Foreclosure Reveals Remains Of 50 Cats

In New Haven, Connecticut, the New Haven Independent reports:

• As the skeletal remains of 50 abandoned felines were removed from a foreclosed-upon Quinnipiac Avenue house Thursday, City Hall’s Andy Rizzo vowed that his anti-blight agency will take lessons from the episode as it confronts a new wave of abandoned homes. Rizzo, director of New Haven’s Liveable City Initiative (LCI), spoke at a press conference one day after neighbors alerted TV stations to an overpowering stench that led to the mound of cat remains in a basement apartment of the boarded-up house at 467 Quinnipiac Ave. The bank that foreclosed upon the house earlier this year sent a cleaning crew to remove the remains Thursday, Rizzo said. LCI had received repeated calls and emails from neighbors about the stink coming from the house, beginning last fall.

***

• This isn’t the first cat-overrun hovel [police department’s animal control officer Stephani] Johnson has encountered. In the summer of 2007, for instance, she was called to a Girard Avenue home where 94 cats were living. She had them removed.

For more, see LCI: We’ll Learn From Cat-House Disaster.

For more on "foreclosure pets", go here and go here. petsII and foreclosures

State Anti-Predatory Lending Statute May Provide Effective Weapon For New York Homeowners Seeking To Undo A Bad Loan

A client newsletter from the law firm Kelley Drye & Warren LLP contains a discussion of a recent court decision by a New York State trial judge which applied a state anti-predatory lending statute in favor of the borrower and which potentially can leave mortgage lenders holding loans that were originated in violation of this statute holding the bag. The discussion begins as follows:

• In an opinion that may well mark a rise in predatory lending claims and an expansion in the scope of lender liability, the New York Supreme Court recently found in favor of a homeowner who, in defending a motion for summary judgment in a foreclosure action, alleged that he was the victim of predatory lending practices prohibited by New York Banking Law §6-L. The court, in LaSalle Bank,N.A. v. Shearon, No. 100255/2007, 2008 WL 268449 (N.Y. Sup. Jan. 28, 2008), denied LaSalle’s motion and granted summary judgment for the homeowner based on his defenses under the state’s anti-predatory lending law. A hearing on damages is pending.

For more, including the reasons why the article's author believes the court’s decision in Shearon is noteworthy, see LaSalle Bank v. Shearon: A Harbinger of Things to Come (New York Supreme Court Rules in Favor of Borrower on Defensive Claims Under State’s Anti-Predatory Lending Law).

To view the trial judge's decision, see LaSalle Bank,N.A. v. Shearon, No. 100255/2007, 2008 WL 268449 (N.Y. Sup. Jan. 28, 2008).

For a February 3, 2008 media article from the Staten Island Advance reporting this story, see Stuck with a bad loan, a Staten Island family fights back (if link expires, try here).

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

For other posts on homeowners using Federal & state consumer protection statutes to try and undo bad mortgage loans, Go Here, Go Here, and Go Here.

Editor's Note:

For those unfamiliar with the New York judicial system, the "New York Supreme Court" is simply what the state calls its trial courts, not to be confused with the state's highest court - the New York Court of Appeals. So, while this case could potentially have significant ramifications, it is simply one decision by one trial judge which has yet to be reviewed by a state intermediate appellate court or the state high court. While there may be cause for celebrating this case in the future, consumer advocates who have already begun wild celebrations may well consider "putting the cork back in the champagne bottle" for the time being. undo mortgage loans TILA batallion

Nashville-Area Foreclosure Rescue Operator Reportedly To Return Home Signed Away By Owner In Sale Leaseback Arrangement

In Nashville, Tennessee, Newschannel 5 reports on an experience that homeowner Thomas McKissack had with foreclosure rescue operator Sean Queen in a purported sale leaseback transaction in which McKissack, who was facing foreclosure, unwittingly signed away his home.

• The letter [offering foreclosure help] came from Sean Queen, who owns a local real estate business. NewsChannel 5 Investigates found court papers that show Queen has been sued at least two different times for what's known as sale lease/back transactions. Court documents show Queen sent letters like the one McKissack received to people on the verge of foreclosure. They would sign a series of papers thinking they were getting a loan -- but in fact they signed away ownership of their home and agreed to become renters.

***

• "I think we are going to see more of these scams," says Sharmila Murthy, an attorney with Leiff, Cabraser, Heimann and Bernstein. Murthy has represented several clients who unknowingly signed away the deed to their homes in an effort to avoid foreclosure.

***

• [A]fter NewsChannel 5 Investigates began questioning the deal Queen agreed to give McKissack his home. Queen's attorney is drawing up papers to transfer ownership back to McKissack. [...] As for Sean Queen, he says he is no longer in the real estate business. The McKissacks have hired an attorney and they say they are reviewing paperwork that would give Thomas McKissack the deed to his home once again.

For more, see Homeowners Unknowingly Sign Away Property (read story) (watch video).

Go here for an example of the type of letter Queen has been alleged to have sent to homeowners facing foreclosure (see page 2).

For a post involving a related story involving Sean Queen, see Tennessee Federal Court Invokes Equitable Mortgage Doctrine In Denying Motion To Dismiss Foreclosure Rescue Litigation.

Some Homeowners Facing Loss Of Homes Engaging In Another Form Of "Foreclosure Stripping"

The Wall Street Journal reports:

• [T]hese days, bankers and mortgage companies often find that by the time they get the keys [to a recently foreclosed home] back, embittered homeowners have stripped out appliances, punched holes in walls, dumped paint on carpets and, as a parting gift, locked their pets inside to wreak further havoc. Real-estate agents estimate that about half of foreclosed properties to be sold by mortgage companies nationwide have "substantial" damage, according to a new survey by Campbell Communications, a marketing and research firm based in Washington, D.C.

• The most practical way to ensure the houses are returned in decent shape, lenders and their agents say, is to pay homeowners hundreds or even thousands of dollars to put their anger in escrow and leave quietly. A ransom? A bribe? "Yeah, somewhat," says John Carver, an agent specializing in foreclosed homes for Prudential Americana Group in Las Vegas. But "you lose a house, and then you get some financial help -- it's a good thing...It's a win-win for both parties."

For more, see Buyers' Revenge: Trash the House After Foreclosure.

See also:

• St. Petersburg Times: In home foreclosure, if it's not nailed down ... (Twenty percent of owners strip houses before banks take them back),
• New Form Of 'Foreclosure Stripping' Scam Rearing Its Head?
• Homeowner In Foreclosure Charged For Trashing House Days Before Public Auction.

All Philadelphia Home Foreclosure Sales For April Are Hereby Cancelled!!!

In Philadelphia, Pennsylvania, the Philadelphia Inquirer reports:

• With housing advocates predicting that the subprime mortgage crisis will hit the city hard in 2008, Sheriff John D. Green yesterday suspended sales of foreclosed properties for April and said he would seek court approval for an even longer moratorium. His announcement came about 30 minutes after City Council unanimously passed a resolution calling on him to freeze sheriff's sales.

• "We are excited about having a partnership with City Council," Green said in a news release, noting that he did not have the same support when he unilaterally imposed a 30-day moratorium in 2004. Green said the reprieve would give his office more time to identify predatory-lending victims and to help struggling home owners. Lenders caution that any moratorium could drive some mortgage bankers out of the city, making loans costlier and more difficult to obtain for everyone.

For more, see Phila. sheriff's home sales suspended.

See also:

• Reuters: Philadelphia suspends sales of foreclosed homes,
• Philadelphia Daily News: Subprime crisis spurs sheriff to postpone foreclosure sales ("Green said he will ask Common Pleas President Judge C. Darnell Jones for permission to halt sheriff's sales for six months.") diversion program

Lists Of Foreclosed Homes For Sale Beginning To Attract Interest From Copper Thieves?

It was only a matter of time before a story like this came along, although it apparently isn't the first such incident. In Cleveland Heights, Ohio, The Cleveland Plain Dealer reports:

• Police broke up an organized copper-theft ring Wednesday that used foreclosure lists to pinpoint targets. The burglars' information on what houses to hit came from unlikely but official sources: the Department of Housing and Urban Development and the Cuyahoga County Sheriff's Office, according to Police Chief Martin Lentz. "We suspected that it was more than random targeting of houses," Lentz said. "We didn't know how sophisticated it was until we started getting these lists."

***

• It's the second time in three months that Cleveland Heights police have broken up a copper-theft ring using foreclosure lists - which are public records and are available on the Internet. On Dec. 24, police arrested three people involved in a more-sophisticated copper-theft ring that used a computer to track foreclosed homes. [...] They had an 11-page printout of mortgage and bank foreclosures from HUD, Lentz said.

***

• The theft of copper, brass and aluminum continues to escalate. The illicit market is fueled to a large degree because of China's growing demand for metals. Copper sells for as much as $3 a pound.

For more, see Copper theft ring worked from foreclosure lists, Cleveland Heights police say (Suspects relied on foreclosure lists, Heights police say).

See also, WKYC-TV Channel 3: Copper thieves used foreclosure list to target homes.

For other stories on stolen copper, see Copper Thefts I and Copper Thefts II. copper metal theft yak

Illinois AG Reaches Settlement With Florida Upfront Fee Foreclosure Rescue Operator, Firm To Cease Operating In State

Announcement this week from the Idaho Attorney General's Office:

• Mortgage Assistance Solutions, LLC, a Florida foreclosure rescue company that sent advertisements to consumers claiming their homes were in foreclosure, can no longer do business in Idaho, Attorney General Lawrence Wasden said. Mortgage Assistance Solutions entered into a settlement agreement with the Attorney General that prohibits the company from advertising or engaging in any transaction involving an Idaho consumer or property in Idaho.

***

• Mortgage Assistance Solutions made claims it could negotiate a better deal with a homeowner’s mortgage lender than the homeowner can by dealing directly with the lender. However, the company required a $1,200 payment before it would discuss possible options with the consumer.

• Under the settlement agreement, if Mortgage Assistance Solutions is found doing business in Idaho, it is subject to a $10,000 civil penalty. The company reimbursed the Attorney General $1,700 in attorney fees and costs. The company did not admit any liability under the agreement.

• Mortgage Assistance Solutions is operated by Michael Stoller, an attorney in Beverly Hills, California.

For the Idaho AG press release, see Wasden Bans Florida Foreclosure Rescue Company.

Go here to view a solicitation an Idaho consumer received from Mortgage Assistance Solutions.

Go here for other posts on Mortgage Assistance Solutions.

Elderly Among Those Targeted In Recently Busted Alleged "Bait & Switch" Refinancing Scam Ring

In Los Angeles, California, the Los Angeles Daily News reports:

• For Charles and Patricia Simmons, the offer seemed like a boon as they coped with extra medical costs: lower monthly payments on their $550,000 Inglewood home, reduced interest rates and $25,000 in cash. Instead, the couple ended up with no cash, a $5,600 monthly mortgage payment, deeper debt, much of their savings lost - and facing the potential loss of their longtime home. "Please, please, do something to help us and others like us," Patricia Simmons said Wednesday at a Los Angeles City Hall news conference. "There are so many crooked mortgage dealers that are hurting the elderly who are facing the loss of their homes like myself."

• Investigators say the Simmonses are among people throughout Southern California who were defrauded - apparently out of millions of dollars - in what officials call an elaborate bait-and-switch scheme operated by a San Fernando Valley group.

For more, see Elderly fear home loss in loan scheme.

For earlier post on this story, see California Authorities Bust Up Alleged "Bait & Switch" Predatory Lending Scam Operation, Thousands Victimized.

Worcester A Recent Example Of Growing Trend To Turn To The Courts In Dealing With Vacant Foreclosures

In Worcester, Massachusetts, Reuters reports:

• Like many cities in the United States where the home vacancy rate has scaled its highest since records began in 1956, the former textile mill city of Worcester in Massachusetts is turning to the courts to fight back. Their target: banks who abandon properties and who leave behind a glut of empty, dilapidated houses that draw crime, cut tax revenue and depress nearby property values in a market already in a tailspin.

***

• In February, [city manager Michael O'Brien] began asking judges to assign property managers to buildings at the expense of the mortgage companies. The idea is to stop tenants from being abruptly tossed out of a foreclosed home and to provide enough basic maintenance to keep it from getting condemned.

Reportedly, other cities are pursuing even more radical measures. For more, see Cities grapple with surge in abandoned homes.

Go here for other posts on vacant homes leaving its mark on neighborhoods. neighborhood destruction from foreclosures I

More On Florida AG Suit Against South Florida Foreclosure Rescue Operator Allegedly Offering Deceptive Sale Leaseback Arrangements

In Broward County, Florida, the South Florida Sun Sentinel ran a story on foreclosure rescue operator Jack Moussa and his Florida Housing Council, who are among the targets of a civil lawsuit brought by Florida Attorney General Bill McCollum for violations of the Florida Deceptive and Unfair Trade Practices Act:

• In interviews with the Sun-Sentinel last year, several homeowners said Moussa came into their homes and promised to help them avoid Foreclosure. Some said Moussa hurried them into signing documents, including complicated trust agreements and deeds that gave all the control of their properties to the housing council. Homeowners were often charged various fees for signing the trust agreements even though no actual services were provided, the suit said. In many cases, Moussa told homeowners that the housing council was a federally funded agency that helps homeowners in financial distress.

The story includes anectdotes from two financially strapped homeowners who did business with Moussa and who subsequently brought their own lawsuits against his companies. Florida attorney David Silverstone, who represents one of the homeowners and who has represented other homeowners in suits filed against the housing council, praised McCollum for taking the action.

For more, see State attorney general targets 3 mortgage companies (when link expires, try here or try here).

For a copy of the lawsuit and the Florida AG's allegations filed in Fort Lauderdale, see Office of the Attorney General - State of Florida v. Florida Housing Council, et al.

Go here for other posts on Florida foreclosure rescue operator Jack Moussa and the Florida Housing Council.

Go here , go here , and go here for one blogger's random thoughts on Jack Moussa.

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Some time ago, the CNN business program Open House with Gerri Willis featured a Florida couple facing foreclosure and their experience when they unwittingly signed over their home to a title-holding land trust in a deal arranged by foreclosure rescue operator Jack Moussa and his Florida Housing Council. To watch the video, see Rescue or Ripoff?

Two Oakland-Area Women Face 36 Felony Charges In Alleged "Fractional Interest Deed Transfer" Foreclosure Rescue Bankruptcy Scam

In Northern California, the San Jose Mercury News reports:

• Alameda County District Attorney investigators arrested two women in Livermore on Wednesday for allegedly running a real estate scam targeting homeowners facing foreclosure. Sonia Alburez, 37, owner of the Community Home Saver Program, and her employee Verena Silva, 42, of Union City, are facing 36 felony counts in at least 14 incidents throughout Alameda County. In the alleged scam, homeowners paid a fee -- between $1,500 and $2,500 each -- to have the women stall the foreclosure, but ended up losing their homes anyway.

***

• According to the District Attorney's office, the suspects would have property owners transfer a fractional interest of their property to fictitious company names via a grant deed. These companies had no real assets nor did they do any legitimate work. These company names were then added to the deeds at the recorder's office and the two women would file a petition with the U.S. Bankruptcy Court. The petitions would automatically stall foreclosure proceedings. But what the homeowners didn't know was that the banks that held the liens on the home would go to the bankruptcy court, get the grant deed overturned and foreclose the home anyway. Prosecutors believe there may be more victims.

For the story, see Women accused in alleged loan scam (Women reportedly said they'd stall foreclosure, but victims still lost their homes).

See also: San Francisco Chronicle: 2 arrests in Alameda County foreclosure scam.

For story update, see Alleged real estate scammer arraigned (Woman hit with eight felony counts after duping homeowners who still wound up in foreclosure).

Editorial Note:

As reported in an earlier post, some who are allegedly pulling this scam are actually putting the fractional ownership interest in the home facing foreclosure in the name of an unwitting person who recently filed for bankruptcy. The perpetrators are getting the names of recent bankruptcy filers in far away places by simply checking online bankruptcy resources and selecting individuals' names at random. For more on this, see Texas AG, Judge Slam Mortgage Rescue Operators In Fractional Interest "Foreclosure Delay" Bankruptcy Scam.

Go here for other posts on fractional interest deed transfer, foreclosure rescue bankruptcy scams.

Florida AG Slams Firm Offering Foreclosure Rescue, Sale Leaseback Programs In Civil Suit; Alleges At Least 38 Homeowners Screwed Over

(original post - 3-27-08)
The Florida Attorney General's Office has filed another civil lawsuit against a foreclosure rescue operator offering allegedly sham sale leasebacks to homeowners facing foreclosure. Excerpts from the Florida AG announcement follow:

• Attorney General Bill McCollum [Wednesday] announced that his office has sued three Broward County companies and their owners for their alleged roles in a foreclosure rescue scheme. The lawsuit names Florida Housing Council, LLP; Equity Investment Capital Management, Inc.; Star Enterprises, LLC, and Jack Moussa and Rose Moussa as the participants in a deceptive operation that defrauded hundreds of thousands of dollars in home equity from numerous homeowners in the foreclosure process.

• Florida Housing Council allegedly identified homeowners in the foreclosure process and sent them an advertising mailer telling them to contact Florida Housing Council immediately to avoid foreclosure. Representatives of the companies would then persuade homeowners to sign documents, including complicated trust agreements and deeds, which conveyed the titles to their properties to trusts controlled by Florida Housing Council. The complaint states consumers were often charged various fees for signing the trust agreements even though no actual services were provided. According to the lawsuit, Jack Moussa also occasionally misrepresented to consumers that Florida Housing Council was a government entity.

• Once the deeds were transferred, Florida Housing Council would allegedly charge the homeowners rent, and if rent was not paid, the homeowners would be evicted from their homes. Jack Moussa would supposedly either keep the homes or sell them for a profit. At least 38 homeowners in Florida have been affected and hundreds of thousands of dollars in homeowner equity has been taken.

***

• Consumers who believe they may have been victimized by any of these defendants may contact the Attorney General's Office at 1-866-966-7226 or online at http://myfloridalegal.com to file a complaint.

For the Florida AG press release, see Broward Companies, Couple Sued for Foreclosure Rescue Scam (Scheme victimized more than 30 families, defrauding them out of hundreds of thousands of dollars in home equity).

For a copy of the lawsuit and the Florida AG's allegations filed in Fort Lauderdale, see Office of the Attorney General - State of Florida v. Florida Housing Council, et al.

Go here for other posts on Florida foreclosure rescue operator Jack Moussa and the Florida Housing Council.

For another recent civil lawsuit by the Florida AG against another foreclosure rescue operator, see:

• Office of the Attorney General, et al. v. National Foreclosure Management, Inc., et al.,
• Florida AG Tags Foreclosure Rescue Operator, Title Agency, Others With Civil Suit In Alleged Sale Leaseback Scam; State "Rescue" Statute Proposed.

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.).

Illinois AG Alleges Deceptive Lending Practices/Refinancing Scheme In Suit Against Mortgage Broker

From the Illinois Attorney General's Office:

• As part of her ongoing efforts to fight mortgage fraud, Attorney General Lisa Madigan [yesterday] filed a lawsuit in Cook County Circuit Court against a Chicago-based mortgage broker for engaging in deceptive lending practices that have resulted in the loss of at least one consumer’s home.

• Madigan’s lawsuit, filed against Advantage Mortgage Consulting, Inc. and President Robert Enright, alleges that the defendants employed a variety of schemes to convince consumers— including many on the brink of foreclosure—that they would pay lower monthly mortgage payments when, in fact, their monthly rates later increased significantly. Specifically, the defendants used deceptive refinancing schemes, padded loans with higher than stated fees, failed to disclose prepayment penalties and brokered adjustable rate mortgages with consumers who believed they were agreeing to fixed-rate mortgages, according to the complaint.

• “Advantage Mortgage Consulting deceived consumers, convincing them to enter unknowingly into mortgages they simply could not afford or did not need,” Attorney General Madigan said.

For the entire Illinois AG press release, see Madigan Files Suit Against Chicago Mortgage Broker For Deceptive Practices.

See also, Chicago Sun Times: Attorney general's lawsuit alleges deceptive lending practices by mortgage broker.

More On Downtown Miami Condo Market Doldrums

In Miami, Florida, Miami Today reports:

• The Brickell Avenue condo market continues to struggle, and experts say it's not likely to turn a corner before all the buildings under construction are completed. Brickell Avenue condo units account for 86 of the 223 distressed properties east of I-95 in Miami-Dade County listed in the Vultures Database maintained by CondoVultures.com. That's the largest number of any one market in the county.

For more, see Brickell condos distress grows.

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

Legal Attacks Against Countrywide Continue; Accused Of Running Up Late Fees, Misrepresnting Terms Of Forbearance Agreements

In Orange County, Texas, the Southeast Texas Record reports:

• Jason Byrd of the Snider & Byrd law firm has filed two new suits against Countrywide Home Loans in Orange County District Court. After Hurricane Rita cut a swath through Southeast Texas, Countrywide granted several Golden triangle residents a reprieve from making monthly mortgage payments. Now more than two years later, Countrywide is seeking to collect on those back payments. Orange County residents Alton and Susan Pursley along with Joey and Jennifer Bergeron claim Countrywide misrepresented the conditions of the payment suspension program and is now unfairly requesting a lump sum payment plus additional late fees.

***

• The home owners in the suit allege Countrywide's actions are not only in violation of the Texas Deceptive Trade Practices Act [DTPA] and a breach of contract, "but are patently deceptive."

For more, including a list of violations of DTPA allegedly committed by Countrywide, see Suits against Countrywide for charging late fees piling up.

For other stories on Texas lawsuits against Countrywide by the same law firm, see:

• (4-14-08) Countrywide sued again for allegedly misrepresenting payment program,
• (4-02-08) Another Jefferson County resident sues Countrywide for misrepresenting payment program.

Go here, Go here and Go here for more on recent Countrywide problems with consumers.

Another California City Passes Ordinance Requiring Registration Of Vacant Foreclosures; Violators Face Fines, Criminal Prosecution

In Indio, California, The Desert Sun reports:

• The abandoned, foreclosed home on Caribe Street looked OK from the outside. Inside, it was obvious that squatters - homeless people who stay the night in vacant houses - had invaded. Plates with crusted food, empty beer cans and pillows were strewn throughout the home. Used, wadded-up toilet paper piled high in the bathrooms.

***

• It's a scene that's starting to crop up in neighborhoods across the valley - a byproduct of skyrocketing foreclosures. Indio, with nearly 1,500 homes in foreclosure in the city's limits, is leading valley cities in taking a stand. A new law goes into effect April 4 targeting abandoned homes with overgrown landscaping, stagnant pools and other eyesores that scream "empty" to squatters. The law requires that abandoned properties be registered with the city and maintained. If not, the owner - usually the bank in foreclosed situations - could face fines or criminal prosecution. [...] Other Coachella Valley cities are following.

For more, see Negligent owners in Indio could be fined (As foreclosure rates hit all-time highs, valley cities explore ways to keep empty houses from attracting vagrants).

Go here for other posts on vacant homes leaving its mark on neighborhoods.

Go here for posts on vacant homes, foreclosures and squatters. squatter foreclosure zebra neighborhood destruction from foreclosures I

ABC World News Tonight On Foreclosure Rescue Scams

ABC World News Tonight with Charles Gibson ran a story Monday night on the spike in foreclosure rescue scams around the country. It featues a victim who was screwed out of the equity in her Richmond, Virginia home. An excerpt:

• [The homeowner] says they [the foreclosure rescue operators] told her they would buy the house and let her live in it for a year rent free until she could rebuild her credit and buy it back. She says she signed off on their paperwork, but instead of honoring their agreement with Fowler, she says they sold the house to another party and Fowler was forced out. After the property was sold, Fowler says the mortgage company kept all the equity out of the home.

• As part of the FBI investigation into the scheme, a Virginia woman, Anna Essex Thorne, pleaded guilty to conspiracy to commit wire fraud in connection with the mortgage documents she executed to buy the home. [... The homeowner] hopes to someday see the restitution money the defendant in the case is supposed to pay her as part of the plea agreement.

For more, see 'Mortgage Rescue' Scams Hit Close to Home (Authorities Report a Spike in Scams Targeting Homeowners Facing Foreclosure). (read story) (watch video).

For additional background on the federal prosecution of Anna Essex Thorne for conspiracy to commit wire fraud in connection with a foreclosure rescue scam, see:

• Criminal Information - U.S. v. Thorne (sets forth the charges against Thorne),
• Plea Agreement - U.S v. Thorne,
• Summary of the [Admitted] Facts.

Texas AG, Judge Slam Mortgage Rescue Operators In Fractional Interest "Foreclosure Delay" Bankruptcy Scam

From the Texas Attorney General's office:

• Texas Attorney General Greg Abbott's Bankruptcy and Collections Division successfully intervened in a federal bankruptcy involving an illegal residential foreclosure rescue scheme. In that case, Judge Stacey G.C. Jernigan sharply criticized fraudulent mortgage rescue schemes, which she referred to as “a new cottage industry of bottom feeders.”

***

• The case involved two fraudulent companies promising to stave off residential foreclosures: North American Foreclosure, L.L.P., of California, and Jireh Capital Services, L.L.C., a Dallas-area affiliate. Jireh and its operator, David Curtis, who cooperated with the Attorney General’s investigation, appeared in court and were ordered to pay a $48,000 civil penalty and $10,000 in attorneys’ fees. [...] Judge Jernigan ordered the North American and its president [Jeremy Mitchell a/k/a Jason Mitchell] to pay $100,000 in punitive damages as well as $48,000 in state civil penalties, attorneys’ fees and restitution [...].

***

• Curtis convinced the [homeowners] to convey one percent of their home’s value to an out-of-state person who was in bankruptcy, or would agree to file “bankruptcy.” The [homeowners] were told that by transferring a fractional ownership interest in their home to a third person in bankruptcy, they could automatically postpone their foreclosure date. [...] Under the “client agreement,” the [homeowners] were to pay North American $650 per month for as long as its “services” were needed.

The judge also referred North American and Jireh Capital to the U.S. Attorney’s Office for an investigation into potential criminal violations. For more, see Bankruptcy Judge Condemns Mortgage Rescue Scheme, Applauds Attorney General Abbott's Efforts (Calling defendants ‘bottom feeders,’ judge exacts punitive damages).

See also Texas couple taken advantage of in bankruptcy case, judge says.

For the related Federal Bankruptcy Court court documents setting forth all the underlying facts in this case, see:

• Final Judgment and Permanent Injunction,
• Summary of Facts, Judge's opinion and order (recommended reading for anyone wanting some perspective on "fractional interest" home title transfers on the eve of foreclosure, use of backdated deeds for this purpose, conveyances to unwitting debtors in bankruptcy in far away places, the frequency of use of this scam, and other interesting points).

List Of Aggrieved People About Indicted Ohio Foreclosure Rescue Operator Begins To Grow

In Newark Ohio, the Newark Advocate reports:

• Margie Bradley and her family were struggling to keep their Deer Run Road home when they found a self-proclaimed "go-to-guy" to help them avoid foreclosure. Bradley said she had her doubts Harry W. Blausey, who was indicted last week on 30 felony charges, was running a legitimate operation, but he was so charismatic and seemed so knowledgeable about working with mortgage companies.

***

• Soon Bradley and her husband would learn they were part of a growing segment of the community allegedly asked by Blausey to relinquish their ownership rights to their home and to either move out or pay rent, according to several people who have had dealings with Blausey. Not only would he not take over payments to mortgage companies as promised, but Blausey would oversee the sales of the homes for far less than their appraised values, erasing thousands of dollars of equity built up in the homes, those former and current homeowners allege.

***

• What led to the point was a story shared by 18 alleged victims in the indictment and what appears to be an increasingly growing list of aggrieved parties unknown to investigators. "I can't give you a number," Licking County Prosecutor Ken Oswalt said Monday afternoon of additional potential victims. "I've received phone calls here at the office myself. I've told my staff to keep a list -- name and number -- to pass on to investigators."

For more, see More area residents come forward about foreclosure case.

For other stories, see:

• Newark Advocate: Recorder raised suspicions 2 years ago (Licking County Recorder Bryan Long said his office was skeptical of documents submitted by Harry Blausey as far back as 2006),
• Newark Advocate: Instead of finding helpers, homeowners found predators (Foreclosure fears became worse than imagined),
• Newark Advocate: Man indicted in foreclosure fraud scheme (Former real estate agent also facing civil court complaints),
• WBNS-TV Channel 10: Real Estate Agent Accused In Foreclosure Scheme.

For other criminal prosecutions involving foreclosure rescue and other deed scams, see:

• Criminal Prosecutions Of Foreclosure Rescue Operators II, and
• Foreclosure Rescue - For Criminal Prosecutors Only.

Online Ad On Craigslist For Oregon Rental Home A Scam

In Salem, Oregon, the Statesman Journal reports:

• Salem resident Angela Shrabel checks the latest posts on Craigslist every morning as part of her efforts to find a bigger home. And on Thursday, she spotted it — a four-bedroom, two-car-garage home in southeast Salem, at an ideal rent of $1,040 per month. Shrabel quickly dashed off an e-mail to the Craigslist user and drove that morning to see the home. But when she arrived, she found fliers posted by Northwest Pacific Property Management announcing a rent of $1,600 per month. When Shrabel called the Salem company, Northwest Pacific property manager Pat Gorham told her that the Craigslist ad was a scam.

• Gorham said he fielded nearly 30 calls in two days about the bogus online ad. Northwest Pacific Property Management is the only property manager of [the home], Gorham said. Gorham said he e-mailed the Craigslist ad poster and was asked to fill out an application and send money to a South Carolina address. Then he would receive the keys to the home via FedEx. Gorham has reported the posting as a possible fraud to Salem Police Department and Craigslist.

For more, see Online rental ad revealed as scam (Company behind Craigslist posting might not exist).

Go here for other posts on tenant victims of rent hoaxes. unwitting tenant rent scam zebra

More On Use Of Water Service "Shut-Offs" To Illegally Evict Tenants From Foreclosed Homes

In the California Bay Area, the San Francisco Chronicle reports:

• Faced with reports of landlords and banks in foreclosure cases who stop paying water bills as a way to illegally evict tenants, the East Bay Municipal Utility District is considering a proposal to place liens on landlords' property to collect the unpaid charges.

***

• "It's really kind of an epidemic in Oakland and Berkeley," said Anne Omura, executive director of Oakland's Eviction Defense Center, a nonprofit legal-aid group helping poor renters. "I've never seen a time like this in terms of these foreclosure evictions. The cases are heartbreaking. We have a lot of elderly and disabled clients whose landlords have been foreclosed on."

• Several cities - including Oakland, Berkeley and San Francisco - have "just cause" eviction laws that allow tenants to remain in rental properties that are sold unless the new owner intends to move in or convert its use.

• Omura said it's difficult to determine whether landlords and banks stop paying utility bills as a deliberate strategy to evict tenants, but her agency is seeing attempted eviction cases where the taps have run dry. A property owner is legally required to keep rental units habitable. [...] "Based on the evidence we are seeing in the city attorney's office, a large number of evictions resulting from bank foreclosure are deceitful, unjust and flagrantly illegal under local and state law," [Oakland City Attorney John Russo] said.

For more, see EBMUD considers helping renters in foreclosure.

For other posts involving the problems tenants face in homes in foreclosure, go here, go here, go here, go here, and go here. equity skimming unwittingly epsilon

Sacramento Feds Bag 19 Suspects In Alleged Nationwide Foreclosure Rescue, Equity Stripping Scam; Over $12+M Pocketed, 100+ Homes Involved -- So Far

(original post - 3-24-08)
In Sacramento, California, media reports from KNXV-TV Channel 15 (Phoenix) and KCRA-TV Channel 3 (Sacramento), as well as an announcement by United States Attorney McGregor Scott (Eastern District, CA) report that foreclosure rescue operator Charles Head and his brother, Jeremy Michael Head, the alleged ringleaders of what prosecutors describe as a nationwide straw buyer, equity stripping, foreclosure scam operation involving over 100 homes, have been indicted along with 17 others. The alleged scam involved targeting financially strapped homeowners and screwing them out of their home equity by offering bogus sale leaseback arrangements involving their homes that was purportedly design to save the homes from foreclosure.

According to Assistant United States Attorneys Laura Ferris, Rob Tice-Raskin, and Ellen Endrizzi, who are prosecuting the case, the charges are broken out into two separate indictments, "Head One" (2-28-08) and "Head Two" (3-13-08).

Reportedly, investigators have said that more indictments could soon be on the way, increasing the number of homes to more than 300 nationwide. The case, known as Operation Homewrecker, included an investigation by the FBI and IRS.

The following defendants were charged in the Feb. 28 "Head One" indictment:

1. Charles Head, 33, of Los Angeles
2. Jeremy Michael Head, 30, of Huntington Beach
3. Elham Assadi, aka Elham Assadi Jouzani, aka Ely Assadi, 30, of Irvine
4. Leonard Bernot, 51, of Laguna Hills
5. Akemi Bottari, 28, of Los Angeles
6. Joshua Coffman, 29, of North Hollywood
7. John Corcoran, aka Jack Corcoran, 52, of Anaheim
8. Sarah Mattson, 27, of Phoenix, Ariz
9. Domonic McCarns, 33, of Brea
10. Anh Nguyen, 36, of Los Angeles
11. Omar Sandoval, 32, of Rancho Cucamonga
12. Xochitl Sandoval, 29, of Rancho Cucamonga
13. Eduardo Vanegas, 28, of Phoenix
14. Andrew Vu, 39, of Santa Ana
15. Justin Wiley, 28, of Irvine
16. Kou Yang, 32, of Corona.

In the March 13 "Head Two" indictment, in addition to Charles Head, John Corcoran, Kou Yang and Dominic McCarns, who were all charged in "Head One" -- the following additional defendants were charged:

1. Keith Brotemarkle, 42, of Johnstown, Pennsylvania
2. Benjamin Budoff, 41, of Colorado Springs, Colorado
3. Lisa Vang, 24, of Westminster.

Friends and family members were recruited as straw buyers in "Head One," -- in "Head Two" the defendants recruited strangers via the Internet to act as the straw buyers.

For more, including the Arizona connection in this story, see KNXV-TV Channel 15: Mesa elementary school teacher indicted for federal fraud.

Go here for a U.S. map giving the location of the homeowners who were screwed over.

For the KCRA-TV Channel 3 story, see 19 Accused Of Mortgage Scheme (Struggling Homeowners Victimized, Officials Say).

For the U.S. Attorney's press release, see Indictments Announced In Major Mortgage Fraud Scheme.

For the criminal indictments, see:

• U.S. v. Head, et al. - Head #1,
• U.S. v. Head, et al. - Head #2.

Go here for earlier posts as well as available updates on the Head nationwide foreclosure rescue operation.

Thanks to Josh Bernstein and Tim McDaniel for the "Heads-Up" (so to speak) on this story.

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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.).

For other criminal prosecutions involving foreclosure rescue and other deed scams, see:

• Criminal Prosecutions Of Foreclosure Rescue Operators II, and
• Foreclosure Rescue - For Criminal Prosecutors Only.

More On Sacramento Equity Stripping, Sale Leaseback, Foreclosure Rescue Bust

In Sacramento, California, The Sacramento Bee reports on the announcement of the indictment of foreclosure rescue operator Charles Head, his brother Jeremy Michael Head, and 17 others for allegedly screwing over homeowners facing foreclosure from Maine to Hawaii with "sale leaseback" home equity scams:

• The case – the largest equity-skimming scam in the country – affected about a half-dozen Sacramento-area residents and came to an FBI agent's attention when a North Highlands victim reached an FBI economic crimes agent who was taking calls from the complaint line. "(The agent) called Head, and based on call the agent believed there was something to this," Assistant U.S. Attorney Ellen Endrizzi said.

***

• The defendants reached out to people on the brink of foreclosure, offering them the chance to keep their homes and pay rent for them while repairing their credit. Those who agreed were presented with a hefty pile of paperwork that included blank spaces that were filled in later, giving a "straw buyer" title to their homes.

***

• Kevin Carlin, a New Jersey attorney who has spoken with about 70 victims of Head's alleged fraud, said the scam targeted elderly and disabled people facing financial strain after job loss and illness. "I trust that some people will be leaping for joy today," Carlin said. "Even if they lost title to their house, Mr. Head may be required to pay for it with his liberty." Carlin said one of Head's former employees testified in a deposition that Head took an entire office full of workers to Hawaii. [... Ass't. U.S. Attorney Endrizzi] said Head faces about 30 civil lawsuits filed from Hawaii to New Jersey.

For more, see 19 indicted in massive mortgage fraud case (Indictments allege massive mortgage fraud targeting homeowners near foreclosure).

For others stories, see:

• Reuters: Charges laid in alleged nationwide mortgage scam,
• Press Enterprise: Calif. prosecutors indict 19 in mortgage fraud scheme,
• Los Angeles Times: Houses stolen in mortgage fraud, indictments allege (reports that prosecutors said they found victims of the mortgage scam in California, Oregon, Washington State, Nevada and at least 14 other states. Also reports that Jeremy Michael Head's court-appointed attorney, Christopher Haydn-Myer, described his client as making a modest living at an auto maintenance shop. He said Head rides to work by bicycle because "he doesn't even own a car.")

84 Year Old Widow Loses Home In Foreclosure In Alleged Home Improvement/Serial Refinancing Scam; Three To Stand Trial

In Bradenton, Florida, the Bradenton Herald reports:

• Bob and Ruth Dane knew something was wrong. In the fall of 2001, they watched construction workers habitually pop in and out of their neighbor Shirlee Sassani's home [...]. The 84-year-old woman got a new roof, which she needed. But the additions, repairs and renovations that followed over the next five years were unnecessary, according to Manatee County sheriff's detectives who last year arrested four men they say scammed Sassani. Three of them are set to stand trial this fall. Repeatedly, the suspects told Sassani she needed [additional] work done to her home.

***

• Prosecutors say none of the [additional] work was needed, and that the scheme eventually cost Sassani her home. During the unnecessary construction, authorities say, Arbor Construction and Class A Construction workers helped facilitate nine separate refinances on Sassani's home. By December 2006, her mortgage was $303,000, and her lenders foreclosed on the home because she couldn't afford the payments. She has moved to New Jersey to live near relatives.

For more, see Three to stand trial in fraud case.

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

Cleveland-Area Mortgage Broker Found Guilty, Two Others Cop Pleas In "Cash Back" Fraud Prosecutions

From the office of Cuyahoga County, Ohio Prosecutor Bill Mason:

• Cuyahoga County Prosecutor Bill Mason announced that James Sims and his mortgage broker company, County Home Mortgage of Ohio, were found guilty after a three-day bench trial for mortgage fraud offenses involving a house [...] in Solon that was fraudulently purchased with a $490,000 loan. [...] Sims is a co-defendant in another mortgage fraud case involving another Solon home that is set for trial on May 5, 2008.

• Just before the Sims trial, two other co-defendants, both mortgage brokers and their companies, pled guilty for their involvement in the Solon house and four other houses fraudulently purchased. Mortgage broker, Fred Watkins, of Premier Mortgage Ohio, pled guilty to three fourth degree felonies for three houses: two in Solon; and one in Pepper Pike. In addition, he agreed to plea guilty to 20 felonies for 20 other properties located in Solon, Glenwillow, and Cleveland. He faces a maximum sentence of 35.5 years in prison for these 23 houses which had a total loan value of $9,818,000. His loan officer/loan processor, Floyd Patterson, pled guilty to four misdemeanors involving 4 properties.

Watkins, along with title agency owner Shirley Rodgers, local builder Ed Emery, and straw buyer Eloise Anderson, all recently convicted for their involvement with Sims, testified against him.

For more, see Cuyahoga County Prosecutor's press release: Mortgage Broker Sims Guilty; Watkins Pleas Guilty to 23 Houses.

See also, Cleveland Plain Dealer: Mortgage broker James Sims is convicted; Frederick Watkins pleads guilty (Mason says they knew debtors couldn't pay).