Frank Issues Frank Warning To Lenders At Mortgage Bankers Meeting

In Boston, Massachusetts, Reuters reports:

• A bill that would expand refinancings of risky mortgages by requiring voluntary lender write-downs is the industry's last chance to improve their market without more drastic regulation, U.S. House Financial Services Committee Chairman Barney Frank said on Monday. "If this program, this set of inducements, for people to avoid foreclosure doesn't make much difference, what you will face next year ... will be much tougher rules about the home mortgage industry in general," he said at a Mortgage Bankers Association meeting in Boston.

For more, see US's Frank warns mortgage lenders of drastic rules.

Feds Turn Up Heat In Criminal Investigation Of Mortgage Industry

The New York Times reports:

• Federal agencies are intensifying a criminal investigation of the mortgage industry and focusing on whether some lenders turned a blind eye to inflated income figures provided by borrowers. The Federal Bureau of Investigation and the criminal division of the Internal Revenue Service have formed a task force to examine mortgages that were made with little or no proof of the earnings or assets of borrowers, a government official who had been briefed on the matter said Sunday. The group also includes federal prosecutors in New York, Los Angeles, Philadelphia, Dallas and Atlanta, said the official, who spoke on the condition that he not be identified.

For more, see Government Intensifies Mortgage Investigation.

North Carolina AG Files Suit To Shut Down Upfront Fee Foreclosure Rescue Operator

In Raleigh, North Carolina, WNCN Channel 17 reports:

• A Lenoir County company that targeted distressed homeowners with false offers to help save them from foreclosure has been ordered to stop taking consumers’ money, officials said Friday. Attorney General Roy Cooper filed suit against Alphin Marketing Group, Inc., also known as Alphin Group. Cooper alleges that the company and its owner broke state laws and he is seeking to permanently bar them from offering foreclosure assistance and debt adjusting services in North Carolina. Cooper is also asking the court to cancel the company’s contracts with consumers and pay refunds.

For more, see Company Swindled Homeowners, Attorney General Says.

See also the North Carolina Attorney General (May 2, 2008) Press Release: AG Cooper shuts down foreclosure assistance scheme (Company promised to save homes from foreclosure, pocketed money instead).

Feds Describe Elaborate Alleged Flipping / Money Laundering Scam Involving Failed Minneapolis Condo Project

In Minnesota, The Minneapolis Star Tribune reports:

• Federal investigators have identified the majority development partner in the troubled Sexton condominium project as the central figure in a mortgage fraud scheme involving about one-quarter of the units sold in the downtown Minneapolis building. In an affidavit filed [last] week in U.S. District Court in St. Paul, IRS agents say Brett Thielen orchestrated a mortgage flipping scheme involving 13 units at the redeveloped commercial building at 521 S. 7th St.

***

• The Sexton has 123 units, but fewer than 50 were ever sold, according to Hennepin County property records. The affidavit says Thielen laundered proceeds from the scheme by having his lawyer, Ben Houge, wire money to a lawyer in Australia, who then wired the money back to Thielen and others taking part in the mortgage fraud.

For more, see Feds outline condo fraud scheme (Investigators describe an elaborate scam at the Sexton project in downtown Minneapolis that included laundering illegal profits through a lawyer in Australia).

Go here for other posts on the Federal mortgage fraud investigation involving The Sexton.

Attorney, Associate Accused Of $800K Rip Off Of Real Estate Clients; Failed To Apply Closing Funds Towards Payoff Of Existing Mortgages, Say Lawsuits

In New Jersey, The Times of Trenton reports:

• A Hamilton lawyer and his associate face allegations that they swindled real estate clients out of nearly $800,000 by pocketing funds that should have been used to pay off mortgages after home sales.

• Michael J. Feehan, a Lawrence man with law offices in Hamilton, and Jason M. Bloom, of Warrington, Pa., are accused of misappropriating nearly $460,000 related to the sale of a West Long Beach home, according to a civil lawsuit filed earlier this month in Superior Court in Monmouth County. The plaintiffs, Michael A. Mastapeter and Anthony Masters, didn't find out until they received a foreclosure notice on Feb. 14, according to Robert J. Stack, their Kinnelon attorney.

• Meanwhile, another lawsuit alleging a similar fraud was filed in March in Mercer County. In that case, a Superior Court judge ordered Bloom's bank accounts frozen after he allegedly diverted $354,000 to his own use, according to court records.

For more, see Attorney, associate accused in bilkings (Pair allegedly stole $800G) (no longer available online).

If a New Jersey attorney is representing you and screws you out of money or property through dishonest conduct, go to the New Jersey Supreme Court's Lawyers' Fund for Client Protection for more information. For other states and Canada, see:

• Directory Of Lawyers' Funds For Client Protection (American Bar Association);
• Check the USA Client Protection Funds Map;
• Check the Canada Client Protection Funds Map.

Go here, Go here, and Go here for other stories of trust account / escrow account theft of funds. sneaky slick escrow agents gamma

Significantly Declining Home Values Cause Bank Suspension Of Homeowners' HELOCs

In Mentor, Ohio, WKYC-TV Channel 3 reports:

• If you drive down Case Avenue in Mentor you'll find lovely homes with flowering trees in a beautiful stable neighborhood. Residents, Mac Mahaffee and his wife, Linda where shocked to learn that their lending institution had a different view of the value of their two story brick home. The Mahaffee's received a letter from AmTrust Bank telling them that their property on Case Street has experienced "significant declines in property values". Amtrust told the couple, "we have elected to suspend further advances or draws on your Home Equity Line of Credit", effective immediately.

***

• The Mahaffee's are from alone. In recent months, several other major banks across the country have shut off home equity loans to tens of thousands of people. [...] AmTrust Bank is joining a growing list of national banks that are critically reviewing all current HELOC's. There is a growing fear by many lenders that HELOC delinquencies could rise in 2008. Countrywide Bank has already suspended an estimated 122,000 lines, many in high-foreclosure-rate states. Bank of America, USAA, Citibank, and Chase are reportedly going to follow suit.

***

• Financial planners suggest that if your HELOC is in jeopardy and you need the credit to complete a home renovation project, you might consider pulling out a lump sum. Many experts suggest that you should only borrow as much as you need right now and put the remaining cash in a high-yield savings account or CD until the repair or renovation bills are due.

For more, see AmTrust Bank freezing Home Equity Lines of Credit for certain customers (read story) (watch video).

In a related story, see Bloomberg News: Countrywide Takes Away Home-Equity Credit Lines in Las Vegas.

Go here for other posts on Frozen HELOCs.

SW Florida Cops Cop $3.6M In Contraband In Statewide "Operation D-Day" Grow House Busts

In Southwest Florida, WBBH-TV Channel 2 reports:

• Forty seven counties, including Lee and Collier counties, participated in "Operation D-Day," a statewide initiative aimed at shutting down marijuana grow houses. The Lee County Sheriff’s Office did a sweep in Lehigh Acres and arrested ten people. Deputies checked 55 houses - 12 of those were grow houses. They seized 740 plants worth an estimated $3 million. The Collier County Sheriff’s Office shut down eight grow houses, all in Golden Gate Estates. They seized 200 plants worth an estimated $600,000 and arrested nine people.

For more, see $3.6 million in pot seized in Lee, Collier.

In a related story from the Florida Attorney General's office, see Attorney General Praises Passage of the Marijuana Grow House Eradication Act.

Go here and go here for other posts on Marijuana Grow Houses. pot grow ops beta

Florida Cops Bag 135 Suspects, $41M In Marijuana In Statewide Grow House Busts

Coordinated raids on suspected marijuana grow houses across Florida last week netted at least 135 arrests and seizure of high-potency pot plants worth an estimated $41 million on the street, law enforcement officials said Thursday. The raids took place Wednesday [...], from the Florida Keys to the Panhandle, and identified about 150 homes with indoor growing operations.

Brevard County: The Brevard County Sheriffs Office Special Investigations Unit dismantled a sophisticated indoor Marijuana grow operation after serving two search warrants. Sixty mature Marijuana plants were found to be growing and prepared for the cultivation harvest process. The Brevard County Sheriffs Office has dismantled 11 marijuana grow operations to date this year. See Deputies Dismantle Merritt Island Grow House.

Charlotte County: On April 30, narcotics detectives of the Charlotte County Sheriff's Office raided two marijuana grow houses in Prairie Creek Park, about 10 miles east of Punta Gorda this afternoon. These are the 9th and 10th grow houses raided so far this year in Charlotte County. A detective said there were 395 total plants seized in one home, and 123 potted plants in the other home, not counting numerous marijuana "clone" or starter plants which which were also found. See Two more marijuana grow houses discovered.

Indian River County: A statewide crackdown on marijuana grow houses found one in Indian River County this week, county sheriff's officials said Thursday. Last Wednesday, investigators allegedly found 91 marijuana plants, plus growing equipment, said one detective. During the statewide law enforcement operation that culminated Wednesday, officers found 9,249 marijuana plants in 150 homes and 135 people were arrested throughout Florida. See Grow house found in crackdown in Vero Beach.

South Florida: For the three populous South Florida counties, Miami-Dade had 50 grow houses, 49 arrests and more than 2,200 plants; Broward had nine houses, 10 arrests and more than 300 plants; and Palm Beach had 18 houses, 15 arrests and almost 1,000 plants. See Police Raid Alleged Marijuana Grow Houses In Statewide Operation (135 Arrested; Pot Plants Worth $41 Million Seized).

Columbia County: Law enforcement authorities raided three Columbia homes used as marijuana “grow houses” Wednesday night in area of upscale subdivisions and seized more than $500,000 worth of marijuana plants. The Columbia County investigations also led authorities to a home in Union County where more than 100 plants where seized. See Officials seize ‘grow houses’ worth an estimated $500,000 (Local raids were part of organized, statewide sting).

Sarasota County: Three Sarasota County homes were raided as part of a coordinated statewide crackdown at locations suspected of being marijuana grow houses. Two of the homes were in North Port and one was in Sarasota. Cops copped at least 200 marijuana plants. See Grow houses raided.

Marion County: One day after drug agents cast a wide net across the state, snuffing marijuana grow houses and uprooting plants, Marion County authorities added a fourth arrest to their tally. All together in Marion, agents found 507 plants at four separate grow houses. See Sweep halks up new drug charges.

Volusia County: Two smaller-scale grow houses were broken up on Thursday, one in Deltona and the other in Osteen. 24 plants were seized; no one was arrested. See 135 arrested, $41 million in pot plants seized in grow house raids.

Hernando & Pinellas Counties: A statewide crackdown by authorities on marijuana grow houses led to three operations being busted Thursday in Pinellas and Hernando counties. One bust resulted in the discovery of 276 marijuana plants in one house, the Pinellas County Sheriff's Office said. In Brooksville, Hernando County sheriff's deputies found 123 marijuana plants and about 8 pounds of loose pot in one home and seized 352 plants, about 29 pound of loose marijuana and various equipment in another. See Statewide Bust Bags Pot Grow Houses.

Clay & St. Johns Counties: About 650 marijuana plants were seized in Clay and St. Johns counties as part of a drug task force raid this week to cut down on grow houses. In Clay, the Sheriff's Office said authorities found 228 plants in four homes prompting the arrest of five people. In St. Johns, authorities found 429 plants, about a pound of processed marijuana and 11 firearms in seven homes, the Sheriff's Office said. Two people were arrested -and several arrest warrants were pending. See LAW & DISORDER: Task force seizes 650 plants in 2-county pot crackdown.

Pasco County: Pasco County Sheriff's Office Vice and Narcotics Unit say they have made an arrest in a marijuana growing operation. Officers say they found 117 marijuana plants amd $2,000 in cash. See Marijuana grow house bust in Pasco County.

Go here and go here for other posts on Marijuana Grow Houses. pot grow ops beta

Unpaid Water Bills Leave Tenants Without Running Water, Facing Eviction

In Ocala, Florida, the Ocala Star Banner reports:

• Unless unpaid water bills are resolved, residents of two local rental communities will soon face dry faucets - and eviction. Both communities - an unnamed, 16-unit subdivision along Northwest 12th Street and Northwest 13th Street, and the Green Oak Apartments off South Pine Avenue - receive water service through a master meter. This setup creates one bill and one account holder for the entire community. The account holders at both communities have neglected to pay their bills, leaving tenants in a precarious situation.

• This is a familiar conundrum for the city. The same scenario unfolded at Busbee Quarters six months ago when residents of the northwest Ocala rental community - mostly low-income and Section 8 assistance recipients - were forced to leave their homes after landlords could not work out issues with delinquent water bills. Now, most of these units sit vacant, many of their owners tangled in foreclosure.

***

• If these outstanding bills are not paid before their deadlines, the remaining residents at both communities will be required to relocate because living facilities without running water create sanitation concerns, [Ocala director of water and sewer Henry] Hicks said. Once the water is shut off in cases like these, it is not turned back on until the units are individually metered, he said.

For more, see City rental units at risk of losing water.

For other posts involving the problems tenants face in homes in foreclosure, go here, go here, go here, go here, go here, go here, and go here. SkimmingKappaRent

Central Florida Tax Delinquencies Double Over Last Two Years

In Orlando, Florida, WFTV Channel 9 reports:

• As Central Floridians still struggle to pay what many call out-of-control property taxes, Channel 9 has learned the number of tax delinquencies has more than doubled in the last two years. Orange County Deputy Tax Collector Sarah Whittington says more than 40,000 property owners have not paid up this year. The top 10 alone account for $3.8 million in revenue.

***

• In the end, local counties will get their money because state law allows someone else to pay unpaid taxes then charge the property owner's interest. The catch is the person who pays the back taxes can force a foreclosure just two years after purchasing what's called a tax certificate on a home, or in the case of the top 10, the high dollar properties like an unfinished International Drive resort.

• Whittington said, “They know the taxes will be paid and they know that they're safe for two years before anyone will do anything about the property or force a tax deed sale.” That could be the real reason behind the top 10 list. For big companies, not paying taxes really equates to a low interest, five-percent loan for those millions of dollars.

For the story, see Tax Delinquents Not Paying Millions To County.

Go here for the Orange County, Florida Tax Collector's top 10 list of tax stiffs.

Go here for other municipalities dealing with delinquent real estate taxes. delinquent tax problem

Brooklyn Courts "A Snakepit Filled With Bribery & Back-Room Political Deals"?

In New York City, the New York Law Journal reports (at Law.com):

• A Brooklyn judge has filed an unusual $10 million defamation suit against attorney Ravi Batra and the New York Daily News. [...] On Jan. 28, 2007, [Daily News columnist Errol] Louis wrote that the "complicated world of judicial corruption in Brooklyn -- a snakepit filled with bribery and back-room political deals" -- was on the verge of being "blown wide open."

For more, see N.Y. Judge Files $10 Million Defamation Suit Against Attorney, Newspaper.

For earlier posts involving the Brooklyn judiciary & court system, see:

• Ex-Brooklyn Judge Under Indictment For Stealing $160+K From Elderly Aunt Cops Misdemeanor Plea,
• Retired NY Judge Reportedly Left Homeless & Broke By Guardianship Process. knuckleheaded judges zeta

New Use For Vacant Foreclosed Homes: Stash Houses For Guns, Drugs?

In Cleveland, Ohio, The Cleveland Plain Dealer reports:

• As workers board up abandoned properties across the county, police, neighborhood activists and advocates for the homeless are seeing another ugly trend emerge in the foreclosure crisis: Gang members and criminals are using the homes as stash houses for their weapons and drugs. For gang members and street criminals, pitching a weapon or drugs in boarded-up houses is an easy way to avoid being caught with them. For the neighborhood, it's a hazard. The danger comes when neighborhood children use the houses as playgrounds or squatters make dangerous discoveries. [...] Authorities said it's impossible to get definitive numbers on how common the problem is, but they say the mere fact it's happening is worrisome. And it's not just in Cleveland.

• In February, Pittsburgh police told reporters they seized 30 guns and ammunition from abandoned homes in one gang- ridden neighborhood. In March, police in Trenton, N.J., recovered weapons during a search of boarded-up houses. [...] Other communities in Ohio see the same thing. In Summit County, drug detectives have found methamphetamine labs and stashes of cash. "These homes are a breeding ground for crime," said Lorain Police Chief Cel Rivera. In recent years, the department has investigated slayings and a rape at abandoned homes.

For more, see Criminals stash guns, drugs in foreclosed homes.

Collier County Cops Create Community Safety Teams To Control Crime Linked To Abandoned Homes

In Collier County, Florida, WBBH-TV Channel 2 reports:

• As the number of foreclosures increases, so does Collier County's crime rate. The sheriff's office says empty homes are attracting criminals. But they have a new campaign to fight crime and want to make sure people know how to keep their own neighborhoods safe.

• The abandoned houses you'll find scattered all over Collier County are more than just eyesores - deputies call them targets for criminals. "It has the potential to spiral out of control downward. We are not going to let that happen," said Collier County Undersheriff Kevin Rambosk. In both 2005 and 2006, banks foreclosed on fewer than 800 homes. It grew to more than 3,000 in 2007. And so far this year through March, there have been nearly 2,000 foreclosures.

***

• Deputies are now kicking off a new plan to stop the growing problem. The sheriff's office is creating community safety teams. Each team will be made up of deputies, representatives from homeowners associations, and neighbors.

For more, see Community safety teams expected to reduce crime.

See also, Collier Sheriff’s Office working with residents to clean up abandoned homes.

Foreclosed Sacramento Home Goes Up In Smoke; Insurance Fraud Suspected

In California, KOVR-TV Channel 13 reports:

• A Sacramento home went up in flames overnight and arson investigators think this may be an example of insurance fraud. The house caught fire around midnight and by the time fire crews were able to douse the flames, the home was nothing but a charred shell. Firefighters say the house was in foreclosure and the previous residents had been evicted recently. Investigators haven't proved this fire was set by the homeowners but they say they have seen a spike in arsons as the economy has taken a dive.

Source: Foreclosed Home May Have Been Burned For Insurance.

See also, News10.net: Investigators Call Fire at Foreclosed House Suspicious (read story) (watch video).

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

Dry Weeds, Brush Around Abandoned Homes, Unseasonably Warm Weather Pose Fire Threat

In Fresno, California, KFSN-TV Channel 30 reports:

• The foreclosure crisis is having a much more dangerous effect in some of our rural areas and the foothills. The unseasonably warm weather has dried out weeds. It's one thing for neighbors to deal with unsightly yards which haven't been landscaped. Some abandoned rural homes are much more dangerous because they're surrounded by dry weeds and brush. [...] The flood of foreclosures has left many homes abandoned. Some are more than just eyesores. They also pose fire hazards.

For more, see Foreclosure Crisis Adds to Fire Season Dangers in Rural Areas.

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

Massachusetts Fire Marshal Expresses Concern On Increase In Abandoned Buildings Going Up In Smoke

In New Bedford, Massachusetts, The Standard Times reports:

• Two vacant tenements in the North End were torched Sunday night, fire officials said, underscoring a growing concern among public safety officials that the rising number of abandoned, foreclosed homes are sitting targets for vandals or desperate homeowners looking to recoup their losses. The fires [...] occurred weeks after another apparent arson at [...] an abandoned apartment building the city had boarded up. That fire started inside the first floor, and there is evidence it was set by squatters, fire officials said.

• Similar blazes of uninhabited, foreclosed tenements have been reported elsewhere, including Boston and Brockton, and mirror the trend from the early 1990s, during the last major recession, when arson increased as the rate of abandoned buildings skyrocketed across Massachusetts.

• "The current foreclosure crisis has not existed long enough for us to have a good statistical basis, but it is my observation from the number of fires we're responding to at vacant buildings that there is clearly an increase in the number of fires in those types of structures," said State Fire Marshal Stephen D. Coan.

For more, see Arson in two vacant residential buildings highlights public safety risks of foreclosure crisis.

For story update, see Firefighters back on the scene of North Front Street fire.

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

Process Server Charged With Filing False Affidavits Attesting To The Service Of Legal Papers On Defendants In Lawsuits

From the office of the New York Attorney General:

• Attorney General Andrew M. Cuomo [this week] announced the arrest of an Erie County woman who allegedly filed false affidavits of service of legal papers with the Cattaraugus County Clerk, causing default judgments to be entered against unsuspecting individuals. The Attorney General’s Office alleges she claimed to serve papers on individuals when she had not, leaving those individuals with no notice of pending court actions against them. This led to default judgments that could include wage garnishment, the seizure of bank accounts and other assets or negative impact on credit ratings. “These victims had no idea that a court action had been brought against them, and because of that, were unable to defend themselves,” said Attorney General Cuomo.

***

• Annette Forte, 34, of Broadway in Alden was charged today in Little Valley Town Court in Cattaraugus County with two counts of Offering a False Instrument for Filing in the First Degree (class E felony) and one count of Scheme to Defraud in the Second Degree (a class A misdemeanor). The maximum sentence for Offering a False Instrument for Filing in the First Degree is 4 years in prison.

For more, see Erie County Process Server Accused Of Defrauding Court System Through False Affidavits (False filings of court documents led to punishment of innocent individuals).

Go here for other posts on alleged fraud in the serving of court papers.

Go here for other posts on process server screw ups. ScrewUpProcessServing SewerServiceAlpha

Florida Passes Laws Regulating Foreclosure Rescue; Awaits Governor's Signature

In Florida, The Miami Herald reports:

• [I]n an effort to protect the growing number of homeowners [in foreclosure], the state Senate approved a foreclosure fraud bill Thursday, reining in the growing field of consultants and equity purchasers offering home-saver services to delinquent borrowers. Some have been accused of duping homeowners into signing over their property and then selling for profit or charging them stiff fees to get it back -- a scheme sometimes called equity stripping.

For more, see Foreclosure fraud bill OK'd (State lawmakers passed a bill to protect delinquent borrowers from losing their homes and money to fraudulent foreclosure rescue services) (if link expires, try here or try here).

See also the Florida Attorney General's press release on the Foreclosure Rescue Fraud Prevention Act of 2008: Attorney General McCollum Commends Legislature for Passage of Mortgage Fraud Legislation.

Go here for the new Florida foreclosure rescue fraud law (CS/HB 643E1): (bill history) (bill text). Upon Florida Governor Charlie Crist's signing the bill into law, the new law will be found in Section 501.1377, Florida Statutes and will take effect on October 1, 2008.

Cleveland Feds Indict Ex-Cops In "Cash Back" Mortgage Scam

In Cuyahoga County, Ohio, The Cleveland Plain Dealer reports:

• Two former Lakewood police officers have been indicted on federal mortgage-fraud-related charges stemming from the purchase of 13 rental properties. Richard Alvarez, 38, of Medina, and Marcus Adkins, 32, of Lorain, are charged with conspiracy to commit wire fraud and wire fraud. Both resigned from the Lakewood Police Department last year for personal reasons. According to federal prosecutors, Alvarez and Adkins were partners in an enterprise that bought 13 properties - 11 in Cleveland, one in Garfield Heights and one in Toledo - in 2005 and 2006. All 12 properties in Cuyahoga County have since gone into foreclosure. The indictment alleges that they bought the properties at market value but inflated the purchase price on mortgage applications, claiming the money was for repairs. Title companies would then distribute money to the two men or to their company, Copper Properties Inc., the indictment said. The two men also are accused of misrepresenting the source of down payments, claiming there were false second mortgages made on the properties, and creating false leases and rental agreements.

For the story, see Ex-officers accused of mortgage-related fraud.

From the Cleveland-Area U.S. Attorney's office:

• Indictment - U.S. v. Alvarez, et al.
• Press Release.

Mortgage Bankers Begin Bellyaching Over Appraisal Code Of Conduct Agreed To By Fannie, Freddie In Settlement With NY AG

DS News.com reports:

• An agreement to establish a standard Code for home appraisals, which was recently proposed by the Office of Federal Housing Enterprise Oversight (OFHEO), the New York Attorney General's Office and Freddie Mac and Fannie Mae, is now drawing criticism from the Mortgage Bankers Association (MBA). The MBA sent a letter to OFHEO's director and to the leaders of Fannie Mae and Freddie Mac this week, saying the proposed Home Valuation Code of Conduct “must be modified to reflect MBA's concerns for safety and soundness, as well as operational and procedural complications.” The MBA urged OFHEO to reconsider provisions laid out in the proposed code and consider some of the procedural risks that could be created if the code is implemented “as is.”

For more, see MBA Not Happy with OFHEO's Proposed Appraisal Code.

Go here for other posts on the now-terminated investigation by New York Attorney General Andrew Cuomo of Fannie Mae and Freddie Mac that resulted in Fannie & Freddie agreeing to adopt the NY AG's appraisal code of conduct (effective 1/1/2009; agreed to as part of a settlement agreement between the NY AG and Fannie/Freddie to avoid a possible lawsuit and to end the NY AG investigation).

NY AG Out To "Hammer" Another Home Improvement Contractor

From the New York Attorney General's office:

• Attorney General Andrew M. Cuomo [last week] announced his office has filed suit against a negligent Delaware County home improvement contractor that repeatedly ripped off customers, performed shoddy work and didn’t complete projects outlined in contracts.
  Attorney General Cuomo’s lawsuit seeks to make Jeffrey McGowan of Delhi pay full restitution to consumers he defrauded, post a $100,000 performance bond before he continues any home improvement contract business, and pay additional costs and penalties. [...] McGowan operated his businesses, M & M Quality Contracting and Old Homes Friend, at an office on County Highway 16 in Delhi.

The Attorney General’s Office also found that McGowan failed to:

• place advanced payments into trust accounts as required by law,
• inform consumers of their legal right to cancel a signed contract within 3 business days, and
• include the estimated dates when work would begin and be completed in his contracts.

For the NY AG's press release, see Attorney General Cuomo Protects Southern Tier Homeowners From Negligent Home Improvement Contractor (Delaware County man repeatedly ripped off homeowners and performed shoddy work).

For other posts on homeowners left in the lurch due to actions by builders/contractors, go here, go here, and go here.

Go here for other posts on other home improvement contractors hammered by the NY AG. Cuomo hammers contractors contractors stiff subs customers yelbow

NYC Feds Indict Four On Mortgage & Insurance Fraud

In New York City, the North Country Gazette reports:

• Four individuals have been indicted in Manhattan federal court on charges of participating in an associated insurance fraud scheme. Dominick Devito, Robert Didonato, John Liscio and Louis Cordasco Jr. were each charged with insurance fraud and in addition Devito and Didonato where charged in a wide-ranging scheme to commit mortgage fraud. Devito is also charged with obstruction of justice.

• Prosecutors say that from January 2002 through November 2004, Devito was the leader of a fraudulent real estate investment scheme, which had as its primary objective the purchase of multimillion-dollar residential properties in various communities in Westchester County, including Purchase, with loans obtained through the submission of false and misleading information to banks and other lenders.

***

• In addition, from January 2003 through February 2005, the four allegedly engaged in a scheme to defraud insurance companies by submitting false and misleading insurance claims and supporting documents for water damage caused by broken pipes at several of the homes purchased as part of the mortgage fraud scheme. Liscio was a licensed insurance agent who sold insurance policies to the owners of the homes purchased in the scheme and helped Devito submit insurance claims for water damage.

For more, see Four Charged In Insurance, Mortgage Fraud.

Missouri Senator Prods State AG To Target Firms Engaged In Deceptive Reverse Mortgage Marketing Practices

In Springfield, Missouri, KYTV Channel 3 reports:

• U.S. Sen. Claire McCaskill wants more protection for senior citizens who are targeted by unscrupulous mortgage lenders. Specifically, she's concerned about lenders selling reverse mortgages. McCaskill is frustrated with companies sending misleading marketing materials that aim to rope elderly people into an expensive loan that can leave them penniless. [...] McCaskill [...] wants Missouri Attorney General Jay Nixon to do something about it. "He has authority to go after fraudulent marketing and we want him to make sure the whole story is being told and we are protecting the elderly people of our state,” said McCaskill. Specifically, she's targeting companies that market reverse mortgages as a government benefit, much like Social Security or Medicaid.

For more, see McCaskill urges Nixon to go after scam reverse mortgage marketers.

For a recent story on the New York Attorney General's office going after a firm engaged in deceptive reverse morgage marketing practices, see Attorney General Cuomo Protects Senior Homeowners From Misleading Reverse Mortgage Solicitations (Reverse mortgage company portrayed itself as community-based non-profit to mislead seniors into reverse mortgage product).

For stories related to Reverse Mortgage Problems, go here, and go here. reverse mortgage yak

Flood Of Foreclosure, Debt Related Lawsuits Put Strain On New Jersey Court System

In New Jersey, The Star Ledger reports:

• The economic struggles of New Jersey residents are putting a strain on the state's understaffed courts as foreclosure and debt-related cases surge, the court system's director told state lawmakers [this week]. Foreclosure filings for the first three months of the year exceeded 4,000 a month, a staggering 44 percent increase over the same period last year, Judge Philip S. Carchman told the Senate Budget and Appropriations Committee. They are on track to hit 49,000 cases by the end of the year, double the number from just two years ago. Debt cases, mainly from credit cards problems in which $15,000 or less is owed, are also spilling into the courts. Carchman said 621,000 are expected this year, 100,000 more than last year.

***

• Carchman said judges know by experience that family financial problems will also lead to an increase in the Family Court caseload. "Financial struggles tear families apart, possibly resulting in divorce, domestic violence, abuse or neglect of children or missed support payments," he said. "We may see the effects of increased financial strain in the criminal courts as well," he added.

• Carchman said the court system will be hard-pressed to manage and resolve the growing caseload "while at the same time reducing staff by 300 to meet our budget reduction of $27 million."

For more, see Courts are hard-pressed to deal with hard times.

For similar stories in Minnesota & Florida, see:

• [Minnesota] State's court system shows budget strain (More cuts aren't the solution in economic downturn),
• [Florida] Courts foresee staff reductions (30 percent of the workforce is at risk).

Go here for posts on other court systems being squeezed by foreclosures & budget cuts. state budget cuts courts

Law Enforcement Battles Against Indoor Pot Farms Span The Country

The Associated Press reports:

• Officers fighting networks of indoor marijuana factories took out what they called a major operation Wednesday in a secluded back room of a house [in Miami, Florida] where a nice older lady sold ice cream to kids. The raid targeted a sophisticated pot-growing operation that could net more than $300,000 a year, authorities said. [...] Law enforcement officials from Seattle to Miami are grappling with the spread of sophisticated indoor marijuana farms, often run by ethnic gangs, that produce hundreds of pounds each year.

***

• [The busts] are part of a coordinated local and federal law enforcement crackdown on indoor marijuana grow houses. Last week in Seattle, authorities arrested 15 people and raided two garden shops that were part of a Vietnamese drug trafficking group accused of operating at least 19 marijuana grow houses around Puget Sound. One San Francisco-based ethnic Chinese drug ring operated at least 50 marijuana grow houses in the Bay area that could produce pot valued on the street at $94 million, authorities claim. Major indoor marijuana rings have also been discovered recently in Atlanta, Houston and New England.

For more, see Quiet houses across the country hide pot-growing operations.

Go here and go here for other posts on Marijuana Grow Houses. pot grow ops beta

Massachusetts Extends Delinquent Borrower Cooling Off Period To 90 Days

In Boston, Massachusetts, The Associated Press reports:

• A new state law provides a 90-day cooling off period for Massachusetts homeowners facing the prospect of foreclosure. The law, which takes effect Thursday, requires that lenders give borrowers 90 days after a notice of delinquency to resolve their debt. The previous law required only 30 days notice.

For the story, see New Law Extends Foreclosure Notification Period (Law Takes Effect Thursday).

Se also, Massachusetts Attorney General Press Release:

• [U]nder the new law, Massachusetts homeowners facing foreclosure will now be entitled to a 90 day “right to cure” period. [... A] foreclosing lender must provide a notice of delinquency to the borrower and then provide 90 days to cure the delinquency. Previously, homeowners were only entitled to 30 days notice, and the lender did not have to give the homeowner an opportunity to pay the arrearage, cure the default, and avoid foreclosure. The new law applies to foreclosures initiated on or after May 1, 2008.

Feds File Civil Charges Against Ohio-Based Foreclosure Rescue Operator

The Federal Trade Commission announced earlier this week:

• The Federal Trade Commission has charged Foreclosure Solutions, LLC and Timothy A. Buckley with operating a nationwide mortgage foreclosure “rescue” scam that charged consumers as much as $1,200 to save their homes from foreclosure but failed to do so. The FTC seeks to bar them from further law violations and make them forfeit their ill-gotten gains. According to the FTC’s complaint, the defendants market their services through direct mail to consumers named in court records of foreclosure actions and through Internet Web sites, including www.program10.com and http://www.foreclosuresolutionsusa.net/ (if link expires, try here).

***

• According to the complaint, the defendants hire attorneys to respond to the foreclosure complaints filed against consumers. In many instances, the attorneys file the same form response to every complaint, usually without investigating consumers’ individual circumstances that might identify defenses or counterclaims unique to particular consumers.

For more, see FTC Charges Mortgage Foreclosure “Rescuers”.

To view the lawsuit and a copy of a sample solicitation (at pages 10-12 of lawsuit), see FTC v. Foreclosure Solutions, LLC, and Timothy A. Buckley.

California Man Gets 7 Years For Forging, Recording Phony Docs To Clear Title To Home

In Ventura County, California, the Ventura County Star reports:

• A judge Tuesday sentenced an unrepentant Simi Valley man to seven years in prison — the maximum sentence — after he was found guilty of five counts of filing and recording false documents and two counts of forgery. A defiant Abulghasen Ahmadpour told the judge that he was innocent, criticized the jurors and victims and wanted the prosecutor, Miles Weiss, investigated.

***

• Prosecutors say Ahmadpour was facing foreclosure on his Simi Valley residence after he defaulted on one of the loans used to finance the home. To clear the title so he could refinance the house, Ahmadpour allegedly recorded with the county Recorder's Office [...] a false reconveyance of trust deed, which contained the forged signatures of two people.

• One of the victims was awarded a judgment over a business dispute in Los Angeles County against Ahmadpour for $151,220. To clear the title to the house, Ahmadpour recorded false documents with the Recorder's Office [...] each containing forged signatures, according to prosecutors.

• In another business dispute, a third victim was awarded $113,900 against Ahmadpour at the conclusion of a civil trial. Another lien was filed against Ahmadpour's residence. Prosecutors said Ahmadpour recorded two false and forged satisfaction of judgment documents [...].

For more, see Judge sentences Simi Valley man to 7 years in fraud case (Defiant defendant criticizes jurors, victims).

See also, Ventura County District Attorney press release.

For earlier reports on this case, see:

• Multiple counts of fraud alleged in Simi man's trial,
• Man convicted of fraud is in custody.

California Man Gets 16 Months For Forging Elderly Mortgage Holder's Name On Subordination Agreement, Then Pocketing $110K From New Mortgage

In Fontana, California, The San Bernardino Sun reports:

• A Fontana man received a 16-month prison sentence Wednesday for forging a real estate loan agreement. Silvestre Cortez, 45, was also sentenced to three to four years on parole and must pay $5,000 restitution as part of his plea agreement, the San Bernardino County District Attorney's Office said.

• Prosecutors said Cortez borrowed $115,000 from an elderly woman for the purchase of her Rialto property [in 1997]. In 2000, he forged the woman's signature on a subordination agreement document, placing the loan in a secondary position. The man took out an additional $110,000 loan on the property. The victim discovered the forgery in 2006 when she learned her property was in foreclosure. Cortez was charged in July.

Source: Man sentenced in forgery case.

For the San Bernardino County DA Press Release, see Man Sentenced in Real Estate Fraud Scheme.

Homeowner Lawsuits Seeking To Undo Subprime Loans Pick Up Steam

American Association for Justice reports:

• Amid the subprime mortgage crisis, many people across the country—with both good and bad credit—have found themselves stuck with loans that are not what they anticipated. Mortgage lenders and related institutions are under intensifying scrutiny for a wide range of illegal conduct, including misrepresenting loan terms, adding bogus fees, inflating appraisals, committing securities fraud, and discriminating against borrowers based on their race and gender. Lawsuits allege violations of the Truth in Lending Act (TILA), the Fair Housing Act, the RICO statute, and state consumer protection laws, to name a few.

***

• The option ARM has proved especially problematic. “It’s a subprime product being marketed to everybody,” said Jeffrey Berns, a Tarzana, California, lawyer, whose firm has filed 60 federal class actions against major lenders over option ARMs. He noted that these clients range “from doctors and lawyers to field workers.”

***

• Paul Kiesel, a Beverly Hills, California, lawyer, also represents borrowers suing over option ARMs. His firm has filed 56 class actions, most of which revolve around TILA violations, all on behalf of borrowers who stand to lose their primary residences. He estimated that half had loans with low interest rates before signing up for the option ARMs. “They were eligible for far better mortgages than they got,” he said.

• If the terms are not adequately disclosed, a mortgage is rescindable, but the general public may not be aware of that, Kiesel said. He and his colleagues have built a consortium of firms to work together—which is necessary because “we have taken on the largest lenders in the United States, and they have unlimited resources,” he said. “We are facing such an imminent threat” of people being forced out of their homes that lawyers have a responsibility to take on this type of litigation.

***

• The problem is acute in Cleveland, where foreclosure rates are among the highest in the country. Cleveland lawyer Edward Kramer and his firm have more than 25 cases pending over predatory-lending practices, most arising from foreclosure actions. [...] More recently, the Cleveland-based public-interest law firm Housing Advocates, Inc., which Kramer directs, filed a complaint with the Ohio Civil Rights Commission against Argent Mortgage Co. for racial discrimination, claiming that the company offered loans that were likely to result in foreclosure in mostly African-American neighborhoods. The commission investigated and found that the evidence substantiated the alleged discrimination claim. [...] (Housing Advocates, Inc. v. Argent Mortgage Co., (CLE)H4(38066)05212007, 05-07-0938-8 (Ohio Civ. Rights Commn. Mar. 13, 2008).) A hearing is to follow. [...] The complexity of mortgage securitization—determining which company is doing what—makes things difficult for plaintiffs, Kramer said, because “no one’s taking personal responsibility.” [...] “It’s not an easy situation,” Kramer said, but “if we could get lawyers to take a case or two, we could have a tremendous impact in the community.”

For more, see Predatory-lending litigation looms.

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.

Go here and go here for other posts on alleged race bias in real estate transactions. race bias predatory lending undo mortgage loans TILA batallion

California Man Cops Plea In Mortgage Scam; Led House-Flipping Operation Involving As Many As 100 Homes, Say Feds

In Sacramento, California, the Stockton Record reports:

• A Stockton man accused by federal officials of spearheading a multimillion-dollar house-flipping scheme has pleaded guilty and faces a maximum prison sentence of 21/2 years, his attorney said. Iftikhar Ahmad, 36, admits he was wrong, but that he also was a symptom of a broken mortgage system failing people throughout the nation, San Francisco defense attorney John Runfola said, adding that Ahmad became the fall guy for powerful bankers and brokers who go unpunished.

***

• The guilty pleas of Ahmad and three associates come amid headlines calling Stockton ground zero for the housing mortgage crisis. In many Stockton neighborhoods, "For Sale" signs on front lawns are as common as mailboxes. He admitted to U.S. District Judge William Shubb his guilt Monday on two counts of mail fraud and one count of engaging in monetary transactions involving criminally obtained property.

***

• A probe into Ahmad's company, I&R Investment Properties, won prosecutors an indictment charging Ahmad in a scheme involving as many as 100 distressed Stockton-area homes that Ahmad bought cheaply and quickly sold at inflated prices. He amassed $8.6 million, they said.

Others already having pleaded guilty in the scheme are former Long Beach Mortgage loan coordinator John Ngo, 27, of San Ramon, straw buyer Manpreet Singh, 24, of Stockton, and straw buyer recruiter Jose Serrano, 44, of Stockton.

For more, see Stockton man, 36, admits to scam (He is 4th to plead guilty in scheme to flip houses).

From the U.S. Attorney's Office:

• Plea agreement - U.S. v. Ahmad,
• Go here for U.S. Attorney Press Release.

Go here for other posts on this investigation.

Statewide Proposal Targeting Foreclosing Lenders For $1000/Day Fine For Allowing Blight Makes Progress In California Legislature

In California, The Associated Press reports:

• Banks and mortgage companies face fines of $1,000 a day if they allow foreclosed homes to become run down and a source of neighborhood blight under a bill that passed the state Senate on Monday. California has one of the highest foreclosure rates in the nation. Many communities, particularly in the Central Valley, are riddled with homes that have been abandoned by buyers who could not afford their mortgage payments when they reset to higher rates. In many cases, the vacant properties are overgrown with weeds and shrubs and have become magnets for squatters and vandals. Swimming pools often become stagnant, turning into breeding grounds for mosquitoes. Under the bill by Senate President Pro Tem Don Perata, local governments could impose the fines on lenders after giving them 14 days' notice to fix the problems.

For more, see Fines Given For Run-Down Foreclosed Homes (Banks, Mortgage Companies Could Be Penalized $1,000).

Bankruptcy Judge Whacks "Assembly Line" Attorneys For $150K In Sanctions For Misrepresenting Ownership Of Promissory Note In Mortgage Foreclosure

The Wall Street Journal Law Blog reports:

• On Friday, two law firms — Buchalter Nemer and Ablitt & Charlton, along with name partner Robert Charlton — got whacked with a combined $150,000 in sanctions. In a decision regarding an order to show cause in the case, called Nosek v. Ameriquest, bankruptcy judge Joel Rosenthal found that, throughout earlier proceedings, lawyers at both firms, in representing Ameriquest, had continually represented that Ameriquest was the holder of Nosek’s mortgage, when in fact it had been assigned, at least twice, to other lenders.

• Judge Rosenthal held: “At a time when mortgages and notes are bought and sold at a pace so swiftly that the assignor and assignee cannot keep up with the paperwork, had the attorneys at the Ablitt firm checked the firm’s file, they would have seen that Norwest was perhaps the real party interest. . . . The firm cannot shield itself from institutional knowledge.” Rosenthal fined the firm $25,000, and attorney Robert Charlton another $25,000. (The Buchalter firm was fined the remainder, or $100,000.)

According to the court order, the lender/servicer and trustee involved, Ameriquest and Wells Fargo, were also clipped for $250,000 each in sanctions. Judge Rosenthal, however, declined to sanction the two associates who assisted Charlton in the case.

For more, see Judge Has Stern Words (But No Fine) for Associates at Sanctioned Firm.

See also, The Wall Street Journal: Wells Fargo Is Sanctioned For Role in Mortgage Woes:

• Joel B. Rosenthal, a Massachusetts federal bankruptcy judge, wrote in a decision that Wells Fargo "turned all responsibilities over" to the servicer but "turn[ed] a blind eye" to the servicer's mistakes. Had the company "shown even a modicum of oversight or review" of the servicer's behavior, "it should have been able to correct the misrepresentations" made to the court. He added: "This court will not allow Wells Fargo or any other [mortgage holder] to shirk responsibility by pointing fingers at their servicers." A Wells Fargo spokeswoman said in a statement: "We believe the judge failed to appreciate Wells Fargo's limited role as trustee in the servicing of the home loan. As a result, Wells Fargo plans to appeal the order."

For the relevant court documents in this case, see:

• Memorandum Of Decision,
• Order Sanctioning Attorneys.

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 beta ForeclosureMillAttorneysAlpha

Minnesota Homeowner In Foreclosure Duped By Religious Based Foreclosure Rescue Firm

In Minnesota, the Minneapolis Star Tribune reports:

• When Chantae Grandsberry of Brooklyn Center was looking for a company to help save her home, she thought she'd found the perfect partner: An Oklahoma firm that had biblical scriptures on its website and billed itself as a Christian-based foreclosure prevention specialist. "That was important to me and my husband," said Grandsberry, who is six months pregnant. "We didn't think that a Christian-based company would do anything wrong." But Grandsberry lost her family home last October after the company, American Foreclosure Specialists, failed to deliver -- even after collecting more than $1,200 in advance, which is a violation of Minnesota law, according to Minnesota Attorney General Lori Swanson. Earlier this month, Swanson filed suits against American and three other out-of-state companies, alleging they violated state law by collecting fees before completing the services they contracted to perform.

***

• The lawsuits were filed against American; National Foreclosure Relief, a Nevada corporation with a California business address; Lewis Loss Mitigation of Alabama, which also does business as Stop Foreclosure and Lewis and Associates Consulting; D.R. Financial Services of California, which also does business as D.R. Financial and Superior Home Loans; and Mortgage Default Assistance of Florida, and Home Assure of Florida.

For more, see Foreclosure 'help' ended up bringing more debt (Homeowners tell of dealings with companies that promised to prevent foreclosure but did nothing to help -- but charged them anyway).

Go here for the Minnesota AG Press Release announcing the lawsuits against the foreclosure rescue operators for alleged violations of Minnesota consumer protection laws.

Sacramento Loan Officer Gets 15 Months For Forging Signatures, Using Phony Docs In Mortgage Scam

In Sacramento, California, KCRA-TV Channel 3 reports:

• A former loan officer was sentenced to 15 months in prison for mortgage fraud. Sennett Swift was once employed as a loan officer with First Liberty Financial. He was also ordered to pay $8,000 in restitution. Prosecutors said Swift falsified loan applications and forged signatures without the borrowers' consent.

It was previously reported that Swift is a former employee of VFM Investment Group, the owners of which are currently under federal indictment on more than a hundred counts in an alleged scam involving defrauding investors and obtaining fraudulently obtained mortgages following a KCRA 3 investigation.

For more, see:

• Ex-Loan Officer Gets 15 Months For Fraud ($8,000 Payment Ordered),
• Agents Believe Loan Officer Tried To Flee State (Man Was Former Employee Of VFM Investment Group),
• U.S. Attorney's Press Release.

Go here for other posts on Sennett Swift, VFM, and its indicted owners.

Mortgage Broker, Attorney, Loan Officer Sentenced In South Florida Scam Resulting In $37+M In Fraudulently Obtained Mortgages

From the office of the U.S. Attorney - Southern District Of Florida:

• R. Alexander Acosta, United States Attorney for the Southern District of Florida, and Jonathan I. Solomon, Special Agent in Charge, Federal Bureau of Investigation, announced that defendants Richard Weldon Crowder, II, and Gary Mark Mills were sentenced today by United States District Judge Jose E. Martinez to 108 months’ and 46 months’ imprisonment, respectively. Co-defendant Karen Lynn Sullivan was sentenced yesterday to 50 months’ imprisonment. The defendants were sentenced for their roles in a multi-million dollar mortgage fraud conspiracy.

• Crowder is a former licensed mortgage broker and the former owner of America’s Best Mortgage Services, Inc., located in Coconut Creek, Florida. Mills is a former title attorney and the owner of Four Star Title Inc., located in Deerfield Beach, Florida. Sullivan is a former loan officer for Wachovia Bank. [...] In total, the defendants caused the fraudulent purchase of seventeen (17) different luxury condominiums at The Continuum on South Beach and at The Point in Adventura using more than $37,000,000 in fraudulently obtained mortgage loans.

For the details, see U.S. Attorney Press Release - Orchestrators Of Multi-Million Dollar Fraud Scheme Sentemced.

To view original criminal charges, see Charging Document (Criminal Information) - U.S. v. Crowder, et al.

Delinquent Property Taxes Putting Squeeze On Ohio County

In Richland County, Ohio, The Mansfield News Journal reports:

• Delinquent property taxes in Richland County have spiked sharply during the last four years, rising from $7.3 million to $11.2 million. County Treasurer Bart Hamilton believes the trend has not crested in an economy afflicted by the foreclosure crisis. "I think our delinquency will probably go up for about the next two years," he said.

***

• Deputy Treasurer Matt Finfgeld, delinquent tax collector for the county, said some loan providers, eager to work up new agreements, redesign loan arrangements so marginal customers with limited resources qualify. Borrowers then discover their property taxes -- which they believed the bank was taking care of -- are delinquent.

For more, see Rise in Richland County delinquent property taxes another sign of housing crisis.

Go here for other municipalities dealing with delinquent real estate taxes. delinquent tax problem

NY AG Seeks Jail For Buffalo-Area Home Improvement Contractor For Violating Court Order

From the New York Attorney General's office:

• Attorney General Andrew M. Cuomo [last week] announced his office is seeking a criminal contempt of court order against a Buffalo area man who willfully defied a court order by continuing to operate in the home improvement business after he was ordered not to. Ronald Timmerman, 30, of Sowles Road in Hamburg, faces criminal contempt of court for at least 10 violations of a prior court judgment by continuing to solicit business as a home improvement contractor. Each violation can carry a maximum jail term of 30 days and a $1,000 fine.

***

• According to court documents, an investigation by the Attorney General’s Office discovered that within a few weeks [of the court order], Timmerman – without paying any restitution – began working as a contractor while flouting the other aspects of the order.

For more, including examples of the allegations against Timmerman, see Attorney General Cuomo Seeks Jail For Home Improvement Contractor Who Repeatedly Defied Previous Court Order (AG Cuomo upholds orders to protect consumers, seeking criminal contempt of court to stop contractor from deceiving more homeowners).

Go here for details of Timmerman’s original scheme.

For other posts on homeowners left in the lurch due to actions by builders/contractors, go here, go here, and go here. contractors stiff subs customers yelbow Cuomo hammers contractors

Philly Foreclosure Diversion Program A Model For A Larger National Program?

An editorial in the Philadelphia Daily News opines:

• [P]hiladelphia is offering [city] homeowners and lenders caught in the crisis a practical route to resolution. A new program called the "mortgage foreclosure diversion program" provides court-sanctioned negotiations between lender and borrowers to try to resolve troubled loans to avoid foreclosure. What the program also avoids is the need for long-term foreclosure moratoriums, which provide relief for homeowners, but are legally problematic.

• This new program puts owner-occupied properties facing foreclosure on a special administrative track that would give homeowners access to housing counseling and pro-bono legal advice. [...] Part of the new program is a hot line - 215-334-HOME - that puts callers in touch with legal and other help. [... W]e're glad that the city has officially recognized this fact and is playing an important role on the committee. [...] This program may not only provide relief for Philadelphia homeowners, but could be a model for a larger program on a national scale.

For more, see New Hope On Foreclosures (Program Gives Time And Help To Homeowners).

For more on Philadelphia plan, see Philadelphia Implements Residential Foreclosure Diversion Program.

Bank Of America Vows To Modify $40B In Problem Loans

The New York Times reports:

• Bank of America will expand efforts to help Countrywide Financial borrowers avoid foreclosure on troubled mortgages, a top bank executive said Monday. The announcement came as members of the Federal Reserve Board convened two days of public hearings on Bank of America’s proposed $4.1 billion stock deal for Countrywide, based in Calabasas, Calif. The executive, Liam E. McGee, president of Bank of America’s global consumer and small-business banking operation, said the bank would modify at least $40 billion in problem loans from at least 265,000 borrowers over the next two years.

For more, see Bank of America Vows More Help for Countrywide Mortgage Debtors.

Congress To Investigate Allegations Of Mortgage Company Abuse Of Bankruptcy Court System

The New York Times reports:

• A Senate subcommittee plans a hearing next week to investigate whether mortgage lenders are abusing the bankruptcy court system and deepening the foreclosure crisis by levying dubious fees on troubled borrowers or moving to seize their homes improperly. Senator Charles E. Schumer, chairman of the Senate Judiciary Committee’s Subcommittee on Administrative Oversight and the Courts, said he hoped the hearing on May 6 would lead to legislation intended to protect borrowers from abusive practices. “What the hearing is going to show is what an ongoing, awful enterprise some of these companies ran, not just taking advantage of the terms of the mortgage, but when they control the mortgage how they continue to squeeze and squeeze and squeeze,” Mr. Schumer, Democrat of New York, said.

For more, see Panel to Look at Foreclosure Practices.

Federal Jury Convicts D.C. Scammer Of Stealing Houses From Dead Homeowners

In Washington, D.C., Examiner.com reports:

• A federal jury convicted a founder of a nonprofit on charges he forged the names of dead people to steal their houses. Duane McKinney, 35, president of Brotherhood of Men Inc., was found guilty on 11 counts of fraud, theft and illegal money transactions. He is scheduled to be sentenced July 15, and faces between seven and nine years in prison under federal sentencing guidelines, according to the U.S. district attorney for the District of Columbia. Prosecutors said McKinney used his organization to steal 14 properties and sell nine of them for a gain of $770,000.

• Co-defendant Joe D. Liles, a notary public in Maryland, was accused of notarizing the dead people’s signatures. Liles pleaded guilty in January and will be sentenced May 30.

For more, see Nonprofit leader found guilty in home scam.

See also, U.S. Attorney for D.C. press releases:

• Announcement of Conviction - District of Columbia man found guilty of theft, fraud, and money transaction offenses relating to forged property deeds,
• Announcement of Indictment - Federal grand jury charges two in scheme to steal D.C. area properties from estates ofdeceased persons and others.

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

More Victims Accusing Ohio Foreclosure Rescue Operator Come Forward

In Newark, Ohio, The Columbus Dispatch reports on a local couple who were allegedly screwed over by area foreclosure rescue operator Harry Blausey.

• The Newark man was indicted last month on 30 counts, including grand theft, securing writings by deception and engaging in a pattern of corrupt activity. Convictions could add up to 49 years in prison. Blausey is accused of conducting a foreclosure rescue scam, persuading more than 20 homeowners to sign over their property to him by promising to deal with the mortgage companies on their behalf. He then rented the properties but made no mortgage payments, according to court filings.

***

• It wasn't until Blausey was indicted and released on $50,000 bail that the couple realized they had been duped. They called their lender and discovered that no mortgage payments had been made and the company was seeking foreclosure. She said Blausey had told them to have no contact with their lender so the company would have to deal with him. [...] Blausey has [also] been sued in at least 17 civil cases in Licking County Common Pleas and Municipal courts since 2006. He was found guilty and placed on probation in 2006 on misdemeanor counts of aggravated trespassing and intimidating a witness.

For more, see Too good to be true (In a pinch, they trusted him; now he faces 30 charges in mortgage deal).

For story update, see (5-4-08) Motion seeks to stop Blausey from bidding on homes (Indicted former real estate agent has almost $450,000 outstanding on sheriff's auction properties).

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

Go here for criminal prosecutions of foreclosure rescue operators.

NY AG Forces Firm Peddling Reverse Mortgages To Reform Marketing Practices

From the New York Attorney General's office:

• Attorney General Andrew M. Cuomo [last week] announced his office has stopped a Syracuse-area reverse mortgage lender from preying on seniors statewide through false advertising and portraying itself to be a local non-profit organization. Under a settlement reached by the Attorney General’s Office, Upstate Capital, Inc. of Basile Rowe in East Syracuse, must reform its marketing practices and indicate that it is a registered mortgage/reverse mortgage broker. The company must also pay $20,000 in costs and penalties to the state.

***

• Starting in July of 2007, Upstate Capital sent flyers portraying itself as [a non-profit organization] to seniors statewide promoting a “new government program” that “protects seniors” by providing a monthly, tax-free income with no income or credit qualifications. The company also claimed that the “lifetime” program required no repayments. Consumers were directed to call the company to obtain a free packet of information on the program. They would then be contacted by an Upstate Capital representative “on behalf” of [the non-profit firm]. The solicitation, however, neglected to say that the source of the money was actually a loan, and that the product the company is peddling was actually a reverse mortgage.

For more, see Attorney General Cuomo Protects Senior Homeowners From Misleading Reverse Mortgage Solicitations (Reverse mortgage company portrayed itself as community-based non-profit to mislead seniors into reverse mortgage product).

For stories related to Reverse Mortgage Problems, go here, and go here.

Thanks to Bill Collins of Crossroads Abstract, Rochester, NY for the heads-up on this story. reverse mortgage yak

South Florida Feds Charge Three In Alleged Mortgage Scam Resulting In $6M In Fraudulently Obtained Loan Proceeds

From the office of the U.S. Attorney - Southern District Of Florida:

• R. Alexander Acosta, United States Attorney for the Southern District of Florida, [and a host of other law enforcement officials] announced that defendants Berry Louidort, Lauren Jasky, and Ralph Michel, of Palm Beach County, were charged in a Criminal Complaint filed in federal court on April 22, 2008. [...] The defendants are charged with bank fraud [...].

***

• [According to the criminal complaint], this investigation began with an audit conducted by the Florida Office of Financial Regulation into 24 sub-prime mortgage loans in the period November 2006 to June 2007. The initial audit showed that the loans included what appeared to be excessively large fees paid to defendants Berry Louidort and Ralph Michel. The fees, ranging from $29,000 to $650,000, were described as marketing and/or assignment fees. In reality, the fees were kickbacks to defendants Louidort and Michel based on inflated sales prices. The audit also revealed that the majority of the suspect loans were originated by defendant Lauren Jasky, Senior Vice President of Compass Mortgage Services, located in Boca Raton, Florida.

For more, see U.S. Attorney Press Release: Palm Beach County Residents Charged With Mortgage Fraud.

Go here for other posts on this alleged flipping scam.

Houston Homeowners Sue Builder For Allegedly Flawed Townhomes

In Texas, the Houston Chronicle reports:

• For years, neighbors in a stylish Montrose cul-de-sac named Hyde Park Crescent fought to get something out of the developer they claim failed to fix faulty windows, water-soaked balconies and defective roofs that spawned leaks, mold and rot in their nearly new $350,000 homes. Families alleged in a lawsuit that they were sold flawed town homes and then stuck with thousands of dollars in repair bills. They also contended that the men behind the company committed a kind of corporate identity fraud to avoid responsibility and keep right on building on other fertile ground in construction-friendly Houston.

• Over the years, the builder, and other companies associated with it, have left a trail of documented damages and unresolved consumer complaints involving at least four other Houston housing developments, according to documents reviewed by the Chronicle, including lawsuits and Better Business Bureau and government records. Texas laws offer minimal recourse for homeowners, and their complaints often drag on for years with disappointing results, advocates say. Some owners lose money fixing their homes or lose their homes because they can't afford to fix them.

For more, see Owners stuck with flawed homes (Families' costs mount, but state, builder give scant help, files show).

Ex-Brooklyn Judge Under Indictment For Stealing $160K+ From Elderly Aunt Cops Misdemeanor Plea

In Nassau County, Long Island, The New York Law Journal reports (at Law.com):

• Michael J. Garson, a former Supreme Court justice in Brooklyn, pleaded guilty [last] Tuesday to a misdemeanor with a promise of no jail time, resolving charges that could have landed him in jail for five years. County Court Judge John L. Case of Nassau County promised Garson no jail time on two conditions: that he resigns from the bar and that he pays the final $48,000 in restitution ordered by a Manhattan judge for his mishandling of an elderly aunt's finances.

***

• The district attorney three years ago unveiled an indictment accusing Garson, who was a Supreme Court justice for a full 14-year term ending in 2006, of stealing more than $160,000 from his aunt, Sarah Gershenoff, while managing her financial affairs under a power of attorney. [...] Under the power of attorney, both Garson and his first cousin, Gerald P. Garson, an ex-Brooklyn justice who is in prison on a three- to 10-year term for bribery, were authorized to manage Gershenoff's finances. Michael Garson, however, took primary responsibility for handling her money.

***

• With [last] Tuesday's $48,000 payment, Garson has repaid Gershenoff a total of $219,000, reflecting the $163,000 ordered by [the Manhattan judge] plus interest. Gershenoff, who was 94 when the indictment was issued in May 2005, has since died.

For more, see Former N.Y. Justice Avoids Jail With Misdemeanor Guilty Plea (Garson resigns from Bar, makes restitution).

For story update, see Ex-Judge Avoids Jail for Forgery (7-7-08).

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

For other posts on the questionable judgment exercised by some of the members of our esteemed judiciary, go here and go here. knuckleheaded judges zeta valedictorian