A Connection Between World Savings' Bad Loans & Bay Area Blight?

In Oakland, California, CBS 5 reports:

• It was one of the Bay Area's most trusted banks. Now some consumer advocates question its lending practices in certain East Bay neighborhoods. The bank was World Savings, bought by Wachovia in mid-2006. They were a popular lender. But now some advocates want to know why so many of their loans were made in some of Oakland's low-income minority neighborhoods.

• "It's very frightening, it's upsetting," said Annie McKenzie. "Our neighborhoods are becoming blight because of all the foreclosures," said Diane Busby. Welcome to zip code 94621, where homes are going vacant and residents are uneasy.

For more, see Bank Facing Questions Over E. Bay Mortgage Lending.

City Of Fort Lauderdale Accused Of Race-Based Selective Code Enforcement Against Homeowners

In Fort Lauderdale, Florida, the South Florida Times reports:

• A controversial program that fines and forecloses on unkempt properties in poor, predominantly black neighborhoods continues to draw fire from the homeowners and their attorneys. A lawsuit filed earlier this month alleged that the city violated the constitutional right of a property owner to due process under the law.

***

• City officials have said in published reports that they are simply enforcing laws designed to improve the appearance of neighborhoods in the city. [...] Legal Aid [Service of Broward County, Inc.] and the plaintiffs in the latest lawsuit, [...] , say the city unfairly targets black homeowners. The suit argued that the city’s foreclosures for unpaid code-enforcement fines are really an effort to remove people from their homes and make way for redevelopment.

For more, see Legal Aid challenges foreclosures. race bias predatory lending

Tenant Stuck In Middle Of Dispute Between Landlord Facing Foreclosure & Homeowners' Association; Refused Pass To Access Front Gate

In Palm Beach County, Florida, WPEC-TV Channel 12 reports:

• A Riviera Beach woman is caught in the middle of a dispute between a homeowners association and the condo owner she rents from. Kateshia Johnson is a single mom with four small kids. She rents a condo from a private individual at Thousand Oaks, a gated community [...]. She says the person who owns the condo at Thousand Oaks is going through foreclosure, and has stopped paying the association dues and mortgage.

• Because of that, Kateshia says the homeowners association won't issue a bar code decal for Kateshia's car to access the front gate. That means they won't let her car in and she and her kids have to park it outside the gate at Thousand Oaks and walk to and from their condo everytime they want to go somewhere. She has four children between the ages of twelve and three, and they live about three blocks from the gate.

For more, see Tenant Caught in the Middle.

19 Elderly Residents Face Threat Of Eviction As Lender Forecloses On Michigan Assisted Care Home

In Traverse City, Michigan, the Traverse City Record Eagle reports:

• Fears of eviction prompted tears and uneasiness for some local elderly assisted-living home residents, as well as for their friends, family and caretakers. French Manor Inn on Seventh Street was foreclosed this week after Irwin Union Bank rejected the business' restructuring plan under Chapter 11 bankruptcy. Owner Trish Gilroy hopes an interested buyer will purchase the facility and prevent it from closing. "I'm worried about how they're going to adjust to transition," Gilroy said of the 19 residents. "These people are fragile; there are a lot of women here in their 90s."

For more, see Assisted-living residents may face eviction.

June 1, 2008 update:

For story update, see WPBN-TV Channels 7 & 4: Assisted living home remains open (French Manor was set to close but after an emergency hearing on Friday, it's doors will remain open). Assisted Living

Some Homeowners In Foreclosure Loot Fixtures, Improvements Before Walking Away

Phoenix Business Journal reports:

• Some homeowners facing foreclosure are selling everything they can in their houses before the bank comes calling -- even the kitchen sink. Distressed, cash-starved homeowners are hawking everything from cabinets, kitchen and bathroom fixtures, and hardwood flooring to pool pumps, air conditioning units and water heaters before they lose their houses to foreclosure.

• Dozens of ads for such sales are posted on Internet classifieds such as Craigs­list. One ad from Goodyear offers 1,600 square feet of hardwood flooring for $500 and cherry cabinets for $10,000. Other ads ask $5,000 for maple cabinets that the seller says are worth $14,000, and $225 for a water heater.

Source: Pre-foreclosure homes gutted by owners seeking cash.

The Stresses Of A Housing Counselor On Front Lines In Foreclosure Fight

In Philadelphia, Pennsylvania, Philadelphia Weekly reports on the stresses experienced by a newly trained housing counselor who is working for a national non-profit group helping people save their homes from foreclosure.

• [O]fficially, the job of a housing counselor is to mediate between lenders and homeowners, always with the goal of averting the foreclosure. Unofficially, they’re part therapist, part best friend, part rescue worker. A day’s work involves calming down panicked homeowners, asking uncomfortable questions about finances and making pleading phone calls to unsympathetic lenders—knowing all the while the clock is ticking toward every foreclosure’s final destination, a sheriff’s sale.

For more, see “I’m All They’ve Got" (Dealing with the stress that comes with counseling people who could lose their home).

Military Town Foreclosure Rate Increase Quadruple U.S. Rate?

Bloomberg News reports:

• In the midst of the worst surge in mortgage defaults in seven decades, foreclosures in U.S. towns where soldiers live are increasing at a pace almost four times the national average, according to data compiled by research firm RealtyTrac Inc. in Irvine, California.

***

• Foreclosure filings in 10 towns and cities within 10 miles of military facilities, including Norfolk, Virginia, home of the Navy's largest base, rose by an average 217 percent from January through April from a year earlier. Nationally, the rate was 59 percent in the same period, according to RealtyTrac, which tallies bank seizures, auctions and default notices.

***

• The Servicemembers' Civil Relief Act protects soldiers and sailors from losing homes for nonpayment of mortgages only while on active duty and for 90 days after they return home. Members of Congress, including Senator Johnny Isakson, a Georgia Republican, and Representative Bob Filner, a Democrat from California, are trying to extend that to a year, saying three months isn't enough. Another flaw in the current law is it puts the burden on the soldiers, sailors or the families they left behind to come up with the paperwork and notify the bank, said Sullivan of the Washington Veterans' group. Unlike in other wars, members of the military often are able to telephone home or receive e-mails, creating a "morale problem" as they try to deal with foreclosure notices, he said.

For more, see Foreclosures in Military Towns Surge at Four Times U.S. Rate.

Go here for posts on the Servicemembers Civil Relief Act.

Editorial Note:

As I understand this story, it's not the foreclosure rate that's quadrupled, it's the foreclosure rate increase that's quadruple.

Fire-Damaged Home A Thorn In The Side For Community As Both Last Titleholder, Mortgage Holder Disclaim Ownership

In Rockford, Illinois, the Rockford Register Star reports on a:

• [s]ingle-family home that was destroyed when a garage on the property caught fire in May 2007. The grass stands about a foot high. The front yard is littered with debris, a fence around the backyard is falling apart, and neighbors say the backyard and rear porch are strewn with soiled clothes and fire-damaged items from the house.

Both the last owner of record and the mortgage company holding the loan deny being the current owner of the property, each claiming that the other is the current owner. The last owner claims that the bank has already foreclosed on the home; the bank denies the claim. Consistent with their claims, neither have stepped up to maintain the home.

For more, see Ownership squabbles prevent yard maintenance.

More On The Abandoned Home Decimation Of Slavic Village

In Cleveland, Ohio, National Public Radio reports:

• In Cleveland's Slavic Village, a neighborhood on the southeast side of the city, "termites" have decimated a house once occupied by a couple. The intruders haven't chewed through the wood or even destroyed the carpets. These termites, as Cleveland City Councilman Tony Brancatelli calls them, are vandals who've stripped the recently foreclosed house of its fixtures, plumbing pipes, windows and wiring.

For more, see In Cleveland, Foreclosures Decimate Neighborhoods.

Go here, go here, and go here for other posts on vacant homes leaving its mark on neighborhoods. neighborhood destruction from foreclosures zach neighborhood destruction from foreclosures kappa

Abandoned Homes A Problem In KC As City Bulldozes At Least Three A Week

In Kansas City, Missouri, The Kansas City Star reports:

• A front-loader loudly punches a huge hole through the old house. The structure shudders. In seconds it’s reduced to rubble, another victim of the nation’s vacant house epidemic. [...] “This is typical,” said Dalena Taylor, an officer with Kansas City’s dangerous buildings department. “It happens more than not — people abandoning a home when they can’t care for it anymore.” City officials estimate there are 6,000 abandoned homes, many of them in the urban core. But experts say the number is more likely twice that high.

***

• [W]hile the city demolishes at least three houses a week, Pare said, inspectors find hundreds more. If they have to be torn down, the cost and environmental cleanup can rise to $8,000 per structure — money the city tries to recover from the owners, if they can be found.

For more, see KC tackles problem of vacant homes (for story on one web page, try here). neighborhood destruction from foreclosures kappa

Abandoned Foreclosed Homes Keep Some Contractors Busy

In Jacksonville, Florida, The New York Times reports on a story featuring David Law and Trey McCallister, two local contractors who have had their hands full with business as a result of the ongoing Florida foreclosure mess. From the story:

• Mortgage companies hire contractors like these men to inspect and maintain houses that once-proud owners can no longer afford and no one else wants. These days, business is brisk.

• These contractors and thousands like them see first hand the detritus of the subprime era: peeling paint, gutted interiors, family dogs left behind to starve, overgrown lawns infested with snakes.

• In Florida, the crisis can seem overwhelming at times. It can take months, even years, for some homes to wind through foreclosure in the backlogged local courts. The longer a home sits vacant, the more vulnerable it becomes. After a few months, the Florida weather starts to takes a toll. Mold and mildew creep. Algae chokes forsaken swimming pools. Sometimes vandals strike. And sometimes wiring or plumbing just give out.

For more, see Abandoned Houses Are Keeping Contractors Busy. neighborhood destruction from foreclosures kappa

Vacant, Foreclosed Northern Virginia Homes A Boon For Local "Animal Kingdom"; As Weather Warms Up, "Opportunistic Wildlife" Get "Rocking & Rolling"

In Northern Virginia, The Washington Post reports:

• [I]t was a pastoral scene Carl Berry could do without. He lives two doors down from the [foreclosed] house, which he said was abandoned about six weeks ago by a family that used to keep the property tidy. Now there's a real estate agent's lockbox on the door, rain-sopped newspapers in the driveway and, until repeated complaints brought it down, uncut grass so unruly it was attracting other occupants. Such as rats. [...] He and his wife have seen snakes in the reedy thicket, too.

***

• As more people move out, the grass grows taller, the water puddles up and the wild things move in. Mosquitoes thrive in the empty swimming pools and junk piles that have been filled and refilled by the recent rains. Ticks flourish in the tall grass. So do rodents, which also like the shelter of dry, empty houses and whatever garbage they might contain. Then come the snakes, with the rest of the animal kingdom not far behind.

***

• "Anything that is not maintained creates a potential attraction for a lot of opportunistic wildlife," said Scott McCombe, general manager for Critter Control of Northern Virginia, an animal-removal agency that specializes in nonlethal methods. "And this is typically the season when things start to get rocking and rolling."

For more, see Shuttered Homes, Thriving Wildlife. neighborhood destruction from foreclosures kappa

Maricopa Public Health Officials Beg Delinquent Borrowers Abandoning Homes To Drain Pools Before Leaving In Battle Against Disease-Carrying Mosquitos

In Maricopa County, Arizona, The Arizona Republic reports:

• County health officials are bracing for an unprecedented surge in mosquito-infested swimming pools this summer, as home foreclosures and temperatures continue to rise. Complaints to the county about algae-laden "green pools" behind vacant or abandoned homes have leaped almost 250 percent since a year ago, increasing to 2,069 during the first five months of 2008 compared with 597 during the same period in 2007, said Johnny Dilone, spokesman for Maricopa County Environmental Services.

***

• Public-health officials are urging delinquent borrowers to drain swimming pools before surrendering their house keys to the bank. "It's easier for us to treat it if it's drained," said John Townsend, manager of the Vector Control Program in Maricopa County. Townsend's department is doing its best to respond to the foreclosure-fueled surge in green pools, which provide a handy nest for mosquitoes to lay their eggs.

For more, see Foreclosures lead to Valley health risks (Foreclosed-on homes lead to Valley health risks). neighborhood destruction from foreclosures kappa

Swarming Bees In Vacant Foreclosure Terrorize Tucson Neighborhood; Family Pet Succumbs To Injuries From 250 Stings

In Tucson, Arizona, KOLD-TV News Channel 13 reports:

• In one local Tucson neighborhood when the humans moved out, the bees moved in. These pests have become well established and are creating serious problems for the neighborhood. The owners walked away from their house a year ago. The bees are now terrorizing the entire area. The residents in the neighborhood say they feel helpless; they believe the homeowners association has just made it worse.

• Brandi Comeau was hit extra hard by the bees infesting her neighborhood, "my dog Stubby was here by the door covered in bees and being attacked. He died last night at 10:30 p.m. with over 250 stings."

For more, see Bees Buzz Tucson Neighborhood.

See also, Couple cites vacant home in fatal bee attack on dog.

For more on bees and foreclosures, see:

• Don't Let The Bees Be! (Charlotte County, Florida),
• Tens Of Thousands Of "Squatters" Swarm Into Vacant Foreclosed SW Florida Homes. neighborhood destruction from foreclosures kappa

Tenant Foreclosure Evictions Make No Distinctions In Economic Status

CNN reports on the individual stories of Southern California two tenants, each on different ends of the economic spectrum, who both face eviction on homes they are renting. In each case, their respective landlords have been pocketing their rent while stiffing their mortgage lenders out of their mortgage payments, thereby allowing the homes to go into foreclosure.

1. Charles Nelson has paid about $30,000 in rent since moving into a spacious four-bedroom home in August. He was stunned when a real estate agent knocked on his door recently and said the home was in foreclosure. His landlord had not paid the mortgage since he moved in and the bank is now demanding the house back. Nelson will also lose his $7,700 security deposit. [...] Nelson, the owner of PCH Auto Sales, lives in the upper-middle class enclave of Laguna Hills, south of Los Angeles, with his girlfriend and two sons from previous marriages.
.

2. More than 100 miles away in the working-class city of Palmdale, Fai Nomaaea -- a 35-year-old mother of eight -- can relate. The single mom was cleaning the yard when a man handed her a notice of foreclosure. Like Nelson, she had been paying her rent on time every month. She now lives in fear every day. "I don't know what's going to happen the next day," she said. "I don't know if they're going to come to the door and tell us that we have to move, and I don't have anywhere to go." For Nomaaea, getting booted from the home presents another hardship: She lives on a fixed income and can afford about $1,200 a month in rent. It also means finding a new school for her children.

For more, see Man pays $30K in rent, faces eviction.

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

Ohio Women Cop Pleas In Theft Of $65K From 81-Year Old Woman's Bank Account; Scam Disguised As Phony Land Sale

In Hamilton, Ohio, the Middletown Journal reports:

• Middletown sisters accused of bilking an elderly woman out of 64,900 in September have entered pleas to felony crimes in Butler County Common Pleas Court. Penny Shepherd, 45, and Christina Hensley, 35, were charged with theft, forgery, securing writing by deception and tampering with records.

• The victim, Orneda Hale, 81, wasn't aware the money was gone until her bank sent her a canceled check made out to Shepherd's husband, Harmon, along with an offer to purchase 7.6 acres of land south of Lexington, Ky., in September.

***

• Hale told police she is an elderly woman with no use for land in Kentucky and had not agreed to buy the property. She said Shepherd, who lives next door, sometimes came to her house to help care for her, according to police reports. Frank Schiavone, the sisters' lawyer, said Hale was competent and decided to purchase the property.

For more, see:

• Sisters admit stealing from elderly woman,
• Sisters' attorney: Land sale no scam (Women accused of bilking 81-year-old out of $64,900 in fradulent real estate transaction).

For story update, see Bilking elderly woman gets one sister 7 years in prison. elder financial abuse valedictorian

Gov. Crist Signs Florida Foreclosure Rescue Fraud Bill Into Law

From the Office of the Florida Attorney General:

• [Florida] Attorney General Bill McCollum [yesterday] applauded Governor Charlie Crist for signing The Foreclosure Rescue Fraud Prevention Act of 2008 into law. The legislation, which passed this session as HB 643 and was developed in part by members of the Attorney General’s Mortgage Fraud Task Force, will ensure that homeowners are properly informed about their rights before signing a contract with a foreclosure rescue entity in addition to other protections.

With regard to transactions involving repurchase agreements (ie. sale leaseback arrangements and the like that include a buyback right, option to repurchase, etc.):

• The repurchase price cannot exceed a certain threshold and the repurchase agreement is presumed to be a loan.

The Foreclosure Rescue Fraud Prevention Act of 2008 will go into effect October 1.

For more, see Attorney General McCollum Applauds Signing of Foreclosure Rescue Fraud Prevention Act into Law (New law provides important safeguards to help protect homeowners facing foreclosure).

Editorial Note:

While the Florida AG's press release enumerates all the nice things that foreclosure rescue operators now have to do to comply with the statute, the most powerful provision in the new statute (and that may initially go unnoticed) is found in Florida Statute Sec. 501.1377(6) which creates a rebuttable presumption that any foreclosure rescue transaction involving a lease option or other repurchase agreement is an equitable mortgage. See New Florida Law Treats All Foreclosure Rescue Deals Containing A Buyback Right As An Equitable Mortgage Unless Otherwise Rebutted.

In my view, this provision will treat practically every foreclosure rescue transaction involving a sale leaseback with a buyback right attached that otherwise falls within the scope of the new statute as a secured loan. No matter how well the Florida foreclosure rescue operators comply with all the other requirements of the law, if they can't overcome this rebuttable presumption (and based on the Florida case law, it's going to be tough, in my view), the deals will simply be treated as secured loans / equitable mortgages, subject to the Florida usury statutes, and subject to the same rules on foreclosure as any standard mortgage.

Congratulations to the able drafter of the new law who successfully slipped this provision into the statute.

Stiffed Mortgage Investors Look To Force Banks To Buy Back Bad Paper

The Wall Street Journal reports:

• Already burned by bad mortgages on their books, lenders now are feeling rising heat from loans they sold to investors. Unhappy buyers of subprime mortgages, home-equity loans and other real-estate loans are trying to force banks and mortgage companies to repurchase a growing pile of troubled loans. The pressure is the result of provisions in many loan sales that require lenders to take back loans that default unusually fast or contained mistakes or fraud.

***

• Many recent loan disputes involve allegations of bogus appraisals, inflated borrower incomes and other misrepresentations made at the time the loans were originated. Some of the disputes are spilling into the courtroom, and the potential liability is likely to hang over lenders for years.

For more, see Investors Press Lenders on Bad Loans (Buyers Seek to Force Repurchase by Banks; Potential Liability Could Reach Billions) (if full story is unavailable, go here - then click link for the story; you may also have to click the "Refresh" button on the web page to get to the story).

Brooklyn Feds Indict Eleven In Alleged Straw Buyer, Contract Flipping Mortgage Fraud Scam; $14M Fraudulently Obtained, Say Cops

In Brooklyn, New York, Newsday reports:

• Brooklyn federal prosecutors charged 11 people yesterday in a mortgage fraud scheme that ripped off more than $14 million from banks and mortgage companies using fake buyers, officials said. The 11 defendants include real estate agents, mortgage brokers and two attorneys, as well as a number of so-called "straw buyers," who were used as fronts to buy rundown properties through fraudulent mortgage applications, investigators said. According to the indictment unsealed in federal court in Brooklyn, the straw buyers were recruited by the alleged organizers of the scheme, Vijay Anand Khemraj, 29, and Robert Rodriguez, 28.

***

• The straw buyers did not make mortgage payments on the houses or even take possession of the dwellings, according to the indictment. [...] The indictment identified Frantz Metellus, 36, and Robert B. Baker, 41, as the two attorneys who allegedly allowed their trust accounts to receive the mortgage proceeds.

For more, see 11 people charged in $14M mortgage fraud scheme.

See also, U.S.Attorney Press Release.

Before Mailing In The Keys On A Home With An Unaffordable Mortgage, Make 'Em Produce The Note!

A recent article in Forbes reported that borrowers are increasingly viewing voluntary foreclosure (ie. walking away from the home) as a practical financial decision (see Deadbeat Homeowners Hit The Road). Such action would typically take place when the payments become unaffordable and /or when the homeowner owes more on the mortgage loan than what the home is worth.

Keep in mind that there is a decent chance that the mortgage lender or company servicing the home loan has lost the actual promissory note that was signed on the date the loan was closed. So, to anyone considering taking a hike and mailing in the keys, before you bolt (even if you are not yet in foreclosure), contact the lender and make 'em produce the note.

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

Mortgage Company Informs Borrower Current On His House Payments That It Lost The Promissory Note; Is The Lender Up To Something?

One reader recently wrote that he received a letter from his mortgage company saying that it lost his promissory note in connection with his home loan. The reader stated that he never missed a payment on his mortgage, and wonders whether this is something to be concerned about.

I can only think of two possibilities (arguably unlikely, but then again, maybe not) that a lender might be up to by placing the borrower on notice that the promissory note has been lost. Assume that the borrower does nothing to assert any legal rights that may arise in connection therewith and simply keeps making the mortgage payments. It may be that, in a possible future legal action to foreclose the mortgage, the lender might attempt to say that:

1. the borrower's inaction in asserting any rights that arose at the time he was placed on notice of the loss of the promissory note constitutes a "waiver" of those rights, thereby preventing the borrower from raising the issue, and


2. the borrower's continued payments on the mortgage loan after being placed on notice that the promissory note was lost possibly operates as an "estoppel" against the borrower (the borrower is estopped, or precluded, from raising the lost note as an issue).

Could the lender be laying the groundwork for a defense against having lost the promissory note in a possible future foreclosure action against the reader (and all other borrowers that it placed on similar notice)?

The only other possibility I can think of is that the reader was simply pulling my leg and never received a letter from the mortgage company in the first place.

Thoughts anyone??? missing mortgage foreclosure docs beta

Minnesota Lawmakers Pass One Year Moratorium On "Some" Home Foreclosures; Governor Has Until Monday To Sign Or Veto

In Minnesota, The Wall Street Journal reports:

• The Minnesota legislature's passage of a housing bill has created a dilemma for the man who could veto it: Gov. Tim Pawlenty, a Republican seen as a potential running mate for John McCain. The Minnesota Subprime Borrower Relief Act would allow borrowers to defer foreclosure sales until one year after the measure takes effect. It applies to some subprime and negative-amortization loans.

***

• The governor has criticized the plan to defer foreclosures and has said he would be inclined to veto it. He has until Monday to decide. If he doesn't sign the bill by then, it won't go into effect.

For more, see Foreclosure Bill Puts a Governor on Hot Seat (Pawlenty May Veto Minnesota Measure; On McCain Ticket?) (if full story is unavailable, go here - then click link for the story; you may also have to click the "Refresh" button on the web page to get to the story).

Repeated Attempts By Lenders At Collecting Discharged "Zombie" Mortgage Debt Forces Texas Consumer To Sue

In League City, Texas, the Houston Chronicle reports:

• Bankruptcy is supposed to get rid of bad pennies. Prince Ella Green thought so. She and her husband, James, who live in League City, fell on hard times and filed bankruptcy in 1995. The case was a Chapter 13, meaning the Greens submitted a plan for repaying most of their debt, which they did during the next five years.

• Some debt, including a mortgage on a home in Texas City that the Greens bought as an investment property and later lost to foreclosure, was discharged as part of the bankruptcy, according to court records. In other words, a judge ruled that the mortgage was debt the Greens were not legally responsible for paying.

• Tell that to Cenlar Federal Savings Bank and several other companies that have been trying to collect the debt ever since.

***

• Tired of battling the zombie debt for more than a decade, the Greens went on the offensive. In February, they sued all three mortgage companies that had attempted to collect the debt, accusing them of, among other things, deceptive trade practices and violating federal bankruptcy and debt collection laws.

• "I decided I'm not going to take this lying down," Green said. "It's not just me. It's happening all over America." As more Americans struggle with mounting debt, they're finding that, like bad pennies, sometimes the debt never goes away.

For more, see Zombie debts refuse to die.

Go here for other posts on zombie debt. zeta

Michigan Appeals Court Rules That Ownership Rights Under Unrecorded Equitable Mortgage Defeat Rights Of Subsequent Purchaser

A February 14, 2008 decision of the Michigan Court of Appeals provides an illustration of how the bona fide purchaser doctrine operates in the context of an equitable mortgage in a given case. For more, see Ownership Interest Under Equitable Mortgage Defeats Interest Of Subsequent Buyer; Lack Of Knowledge Not Enough To Sustain Bona Fide Purchaser Status, posted on the other blog.

For the court decision itself, Vernier v. Sipe, No. 276037, Mich. Ct. App. (February 14, 2008).

Group Seeks $1B To Buy, Recast, Refinance Delinquent Mortgage Debt

Bloomberg News reports:

• Lewis Ranieri, the mortgage bond pioneer trying to salvage a Texas bank crippled by faulty real estate loans, is seeking $1 billion in a separate venture to buy residential mortgages. Selene Residential Mortgage Opportunity Fund LP raised $151 million from investors in New York, Ohio and Pennsylvania as of April 15, according to a regulatory filing.

***

• "Our plan is to raise $1 billion and buy delinquent mortgages that we will recast and refinance and try to keep the borrower in the house without a foreclosure," said David Creamer, a Selene managing partner and former GMAC executive, in an interview.

For more, see Ranieri, Ex-GMAC Execs Plan $1 Billion Home-Loan Fund.

The Bellyaching Continues About NY AG Appraisal Agreement/Legal Settlement With Fannie, Freddie, OFHEO

Bloomberg News reports:

• Fannie Mae and Freddie Mac's agreement to restrict banks from using in-house appraisal companies may violate federal law, U.S. Comptroller of the Currency John C. Dugan said in a letter to the companies' supervisor.

• The two companies, which own or guarantee about 45 percent of the $12 trillion in U.S. home loans, made a deal in March with New York Attorney General Andrew Cuomo and the Office of Federal Housing Enterprise Oversight to stop buying mortgages from lenders that use in-house home appraisals for their loans.

• The agreement and new appraisal code "violate or conflict with federal law in fundamental respects" and should be withdrawn, Dugan said in a letter to Ofheo Director James Lockhart.

For more, see Fannie, Freddie Appraisal Agreement May Violate Law.

See also, The Associated Press (story appearing in The New York Times): Regulator Criticizes Appraisal Agreement.

Go here for other posts on the now-terminated investigation by NY AG Cuomo of Fannie Mae and Freddie Mac.

Formation Of NYC Lawyers’ Foreclosure Intervention Network Announced

In New York City, Crain's New York Business reports:

• The Federal Reserve Bank of New York and the City Bar Justice Center are joining forces to help New Yorkers in danger of losing their homes to foreclosure. The two organizations [yesterday] announced the formation of the Lawyers’ Foreclosure Intervention Network, a pro bono pilot program that will marshal the resources of the city’s legal community to assist residents facing foreclosure.

• The program aims to narrow the gap between the number of legal aid lawyers trained to deal with foreclosures and the growing number of distressed homeowners.

***

• Private lawyers rarely take on foreclosure cases because clients usually don’t have enough money to pay. The mounting crisis has stretched thin the few lawyers who work for nonprofit organizations that will take on such cases. The program will provide training to lawyers on ways to prevent unnecessary foreclosures. Lawyers will assist homeowners in assessing their options, negotiating with creditors and will represent them in court — if necessary.

***

• Training sessions will be held June 18 and 19 at the City Bar [1.5 Days of Free CLE Training]. The program is one of many sprouting up across the city to help struggling homeowners, including the Center for New York City Neighborhoods, a nonprofit organization started by the city and partners.

For the story, see New legal aid program to protect homeowners (The Lawyers’ Foreclosure Intervention Network, a pro bono pilot program created by the Federal Reserve Bank of New York and the City Bar Justice Center, will assist residents facing foreclosure).

See also, New York Fed press release: New York Fed Announces Formation of the Lawyers' Foreclosure Intervention Network.

Go here for other posts on the Lawyers’ Foreclosure Intervention Network.

Alleged Equity Stripping, Refinancing Scam Has California Real Estate Agent Facing Grand Theft, Forgery Charges As Victim Loses Home In Foreclosure

In Contra Costa County, California, the Contra Costa Times reports:

• Elias Escobedo, 41, lost his house earlier this month when it was foreclosed on, but not because he didn't pay his mortgage. Instead, he's the victim of a real estate agent who is accused of forging the deed to his home and embezzling $40,000 in a scheme to raise his credit score and pay his monthly mortgage payments, according to the Contra Costa County District Attorney's office.

***

• His agent was the same real estate agent that sold the home to Escobedo in 2004. Escobedo said that Bullard told him his credit was bad and he could come up with a way to clean it up and invest the money, he said. Using a straw buyer to hold the property, or someone paid to park the deed, they would refinance the home, take money out and pay the mortgage.

• The agent, Rodney Alonzo Bullard, has been charged with grand theft and two felony counts of forgery by the Contra Costa County district attorney's office.

For more, see Suffering From Foreclosure Scams.

Cal Feds, Local DA, State AG Bag Five In Alleged Foreclosure Rescue Scam Bilking 100s Of Homeowners; Suspects Face Both Criminal & Civil Charges

In Southern California, The Associated Press reports:

• Hundreds of homeowners lost the deeds to their houses and small fortunes in a scam that masqueraded as a strategy to help them avoid foreclosure, authorities said Thursday. Troubled homeowners most of them Hispanic immigrants in San Diego, Riverside, San Bernardino and Los Angeles counties were lured to foreclosure rescue seminars and conned into signing over title to their homes with the purpose of establishing their property as a federal land grant.

***

• Late Wednesday, FBI and investigators from the San Diego County district attorney's office arrested William Hutchings, 62, and Xiaoke Li, 43, both of San Diego; Edgar Martinez, 30, and Diego Gil, 38. It was not immediately clear where they lived. An arrest warrant was also issued for Shawna Landis, 29, of Sorrento Valley. All face multiple counts of conspiracy, grand theft and deceitful practices as foreclosure consultants, authorities said. Prosecutors have also taken steps to freeze the defendants' assets and bank accounts, while [California Attorney General Jerry] Brown's office on Thursday sought an injunction and penalties against the company through which the scam was operated.

***

• Homeowners who attended the foreclosure rescue seminars were told that they could keep lenders from taking over their properties if they signed over the grant deeds on their homes to one of the corporations, which then would record a land grant on the property, according to court documents. Some homeowners who fell for the scam paid up to $10,000 to place their home in a land grant. Others paid at least $500 up front and then made monthly rent payments to continue living in the property, authorities said.

For more, see Feds arrest four Calif. people, claim they conned homeowners.

See also:

• The Press Enterprise: Arrests cap land grant probe,
• San Diego County District Attorney press release: Home Foreclosure Rescue Scam Ring Broken Up, Leaving Approximately 400 Victims,
• KFMB-TV Channel 8: Five Accused In Home Foreclosure Scam Plead Not Guilty ("Martinez and Gil were arrested as they were giving a presentation to more than 50 prospective victims, District Attorney Bonnie Dumanis said"),
• voiceofsandiego.org: How Desperate Homeowners Got Caught Up in an Alleged Scam.

For more on the civil charges brought by the California Attorney General, see:

• Complaint - People v. FLG Company LLC, et al.,
• Memorandum of Points and Authorities (detailed narrative of alleged scheme, and citations to the applicable California law relating to issuing preliminary injunctions),
• AG Press Release (describes the alleged "federal land grant" scam; used seminars, which had up to 50 participants, to lure homeowners into lease back schemes in which the homeowners deeded over their property and then made monthly payments, purportedly for rent).

California Appeals Court Says Genuine Homeowner Signature On Instruments In Foreclosure Rescue Scheme Not A Bar To Scammer's Forgery Conviction

Last month, a state appeals court in California upheld the conviction of a foreclosure rescue operator on various counts relating to forgery arising out of a transaction where the financially strapped homeowner, in the belief that the operator was there to help her avoid foreclosure, had her sign a stack of documents purportedly to that end. Unbeknownst to the homeowner, buried in the stack of papers was a trust deed to one of the homes involved.

In addressing one of the forgery convictions of the operator ("Defendant"), notwithstanding the fact that he didn't actually sign the homeowner's ("Michiel") name on the instruments and that the homeowner's signatures appeared genuine, the court made these comments:

• Defendant contends that there was insufficient evidence to support his conviction for forging Michiel’s signature, because there was no evidence that her signature was not genuine and no evidence that he used any affirmative misrepresentations concerning the nature of the trust deed to procure her genuine signature. We disagree; there was evidence that defendant did make affirmative misrepresentations concerning the nature of the trust deed. In any event, he could be convicted of forgery even in the absence of any such affirmative misrepresentations.

***

• Defendant contends that there was insufficient evidence to support his conviction for forgery of Michiel’s signature because there was no evidence that he affirmatively misrepresented the nature of the trust deed to Michiel. There was no evidence that Michiel’s signature on the La Villa trust deed was not genuine. Michiel admitted that it looked like hers. She also admitted that defendant had had her sign a number of documents.

• Nevertheless, a forgery conviction can be based on a document with a genuine signature. “[F]orgery is committed when a defendant, by fraud or trickery, causes another to execute a . . . document where the signer is unaware, by reason of such trickery, that he is executing a document of that nature.” (People v. Parker (1967) 255 Cal.App.2d 664, 672.)

For more on this case, which was prosecuted by the California Attorney General's Office, see People v. Martinez, Cal App. Ct, 4th Dist, Div. II, (April 1, 2008) (.pdf version; for Word .doc version, go here).

Court decision available online courtesy of FindLaw.com.

Editor's Note:

In this case, included in the foreclosure rescue operator's convictions in the trial court were one count of forgery relating to the trickery in obtaining the homeowner's signature on an instrument, and another count of forgery for forging the notary public's signature on the same instrument.

Because these two forgery convictions related to the same instrument, the court, on its own motion, in effect ruled that the defendant is limited to one forgery conviction per forged instrument. Accordingly, it found itself compelled to vacate one of the two convictions that arose out of the one instrument and therefore proceeded to vacate the conviction (not on substantive grounds and presumably arbitrarily) relating to the homeowner's signature and let stand the forgery of the notary public's signature. ForgeryGenuineSignatureKappa

New York Court Decisions A Reminder That Viable Forgery Claim May Arise When Homeowner Is Tricked Into Signing Deed

Reported in another of today's blog entries on a California case is a reminder that, in California, tricking someone into signing a document may constitute forgery on the part of the scammer.

In addition, a decision of the New York Court of Appeals, recently cited in two 2007 state court decisions, serves as a reminder that, in New York as well, the act of forgery need not be done by the hand of the person being charged; fraudulently procuring the signature of another to an instrument which the signer has no intention of signing constitutes forgery on the part of the procurer. It is sufficient that the forgerer caused or procured it to be done.

The New York Court of Appeals decision in Marden v. Dorthy, 160 N. Y. 39 (NY 1899), a case over a century old, is the support for this proposition.

This case has been recently cited by a Brooklyn trial court in:

• Olympus Servicing, L.P. v Lee, 2007 NY Slip Op 50833(U), 15 Misc 3d 1124 (April 23, 2007),

and also by a New York state intermediate appellate court in:

• Ameriquest Mtge. Co. v Gaffney, 839 N.Y.S.2d 203, 41 A.D.3d 750 (App. Div. 2d Dept., 2007).

While over a century old, Marden v. Dorthy appears to still be valid precedent, based on the two recent cases citing it. Thanks to Jonathan Schloss for bringing the two 2007 cases to my attention.

***

It is unknown to me why New York authorities haven't raised this issue in the context of foreclosure rescue transactions (either in civil or criminal prosecutions) where financially strapped homeowners are unwittingly signing over the deeds to their homes, deeds that are, in many cases, intentionally buried in a stack of legal documents described to the homeowner as "refinancing papers". Perhaps it is a legal theory that should be given some thought.

For those outside New York and California who are having problems with foreclosure rescue operators scamming trusting homeowners, whether by cleverly sneaking instruments of conveyance into "stacks of papers" or otherwise, and getting the homeowners to unwittingly sign those papers, you might want to check your state's statutes and case law as it relates to forgery, criminal possession of forged instruments, securing writings by deception, and other similar sounding illegal acts to see if the law of your state is similar to that of New York and California in that an instrument containing an authentic signature can still be considered a forgery if the signer was somehow tricked into signing it. ForgeryGenuineSignatureKappa

NYC Equity Stripping, Foreclosure Rescue Scam Has Happy Ending For Victimized Homeowner

In New York City, National Public Radio reports on the story of Gloria Johnson, a homeowner in the Bushwick section of Brooklyn who was allegedly scammed out of her home equity by foreclosure rescue operator Home Savers Consulting Corp.

Unlike many of these stories, this one had a happy ending for Ms. Johnson. Jessica Attie, Ms. Johnson's lawyer and one of the co-directors of the Foreclosure Prevention Project [at South Brooklyn Legal Services], filed suit against Home Savers, challenging the bona fides of the transaction. Reportedly, Home Savers got scared and sent Johnson back her money and the deed, after which Attie arranged with a legitimate bank to refinance Johnson's house, cutting her mortgage payments in half.

For more, see Housing Pros Seen Working Foreclosure Scams.

***

To read the facts of the case, as alleged in the victimized homeowners lawsuit, see Complaint - Johnson vs. Home Savers Consulting Corp., Phil Simon, et al.

Go here for other posts on New York City-area foreclosure rescue operator, Home Savers Consulting Corp.

Go here for criminal prosecutions of foreclosure rescue operators.

For more on equity stripping, foreclosure rescue scams, generally, see DREAMS FORECLOSED: The Rampant Theft of Americans' Homes Through Equity-stripping Foreclosure 'Rescue' Scams (4.61 MB approx.).

Activist Group Lobbies Allegheny County Sheriff, Common Pleas Court To Adopt Philly Foreclosure Initiative

In Pittsburgh, Pennsylvania, the Pittsburgh Tribune Review reports:

• An activist organization hoping to stave off some of the impact of the housing/mortgage industry crisis is seeking a moratorium on home foreclosure sheriff's sales in Allegheny County. It hopes to convince the Allegheny County Sheriff's Office and Common Pleas Court to support the effort that would mimic an initiative that led to a one-month suspension of all residential foreclosures in Philadelphia. That action preceded an agreement that put foreclosure actions involving owner-occupied homes on a separate track for resolution. "Allegheny County is our next goal," said Ian J. Phillips, legislative director of the Philadelphia chapter of the Association of Community Organizations for Reform Now, known as Acorn.

For more, see Group hopes to buy time for homeowners.

Go here for posts on the Philadelphia foreclosure diversion program.

Ex-Bucks County Prosecutor Cops Plea To Swiping Mortgage Payments

In Delaware County, Pennsylvania, the Philadelphia Inquirer reports:

• A former Bucks County prosecutor who went to jail 10 years ago for embezzling real-estate settlement funds, admitted in court today that he used his job as a mortgage broker to steal from clients again. Joseph James Scafidi, 53, of Warminster, pleaded guilty in Delaware County Court to felony counts of theft and forgery for stealing mortgage payments, writing bad checks, and fabricating a phony order from a county judge. Scafidi, who worked as a public defender and a deputy district attorney in Bucks County before he was disbarred in 1996, faces up to seven years in prison and a $15,000 fine for each of six charges.

***

• Scafidi worked as an attorney for 16 years. In 1996, he was accused of embezzling $264,000 in real estate settlement fees from a Fort Washington title company and was disbarred.

***

• [In one case,] Scafidi persuaded [a] couple to refinance two homes [...] then pocketed subsequent mortgage payments totaling $15,000. When default notices went out, Scafidi forged a court order that included assurances that no action on the houses was imminent. He faced similar charges in Montgomery and Bucks Counties, which were consolidated with the Delaware County charges.

For the story, see Ex-prosecutor admits to theft and forgery.

For story update, see Jail time for mortgage scammer with long record (7-7-08).

Go here for other posts on Joseph James Scafidi.

Another Dead Homeowner The Target In Alleged Long Island Deed Theft

In Nassau County, New York, Newsday reports:

• A West Hempstead woman accused of stealing a house from a dead person was ordered held on $100,000 bond or $50,000 cash bail Friday after her arraignment on grand larceny charges, police said. A Roosevelt man also was charged in connection with the incident, but his court status was not immediately available.

• Barbara Hoist, 49, of 521 Champlain Ave., forged the deed to a single-family home on Underhill Avenue in Roosevelt and transferred ownership from the deceased owner to herself, Nassau police said. Hoist forged the deed to the Roosevelt house the day after Christmas in 2006 and then a few weeks later sold that house for $65,000 to the Roosevelt man, police said.

• That buyer, Ernest Pope, 48, of Roosevelt, resold the house in May 2007 for $190,000, police said. Pope, of 45 Jefferson Ave., was scheduled for arraignment Friday on a charge of grand larceny. Both face additional charges of falsifying business records, forgery and identity theft.

For more, see Two charged after sales of dead owner's house.

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

Alleged Mortgage Fraud Conspiracy Leaves 1st Time New Haven Homebuyers "Knee-Deep In Sewage — And Debt"; Law Students Take Case In Suit For Fraud

In Connecticut, The New Haven Independent reports:

• When they knocked on the door of L & S Mortgage, Delroy Reid and Debra Willoughby just wanted to buy a home. After getting lured into buying a broken-down house through an alleged mortgage fraud scam, they found themselves knee-deep in sewage — and debt. The unwitting first-time homebuyers have gone to court to try to recover.

***

• Reid and Willoughby claim they were lured into a conspiracy between a mortgage company that falsified their loan applications, sellers with family ties to that company, and an attorney who didn’t look out for best interests. The company that brokered the deal, L & S Mortgage, LLC, surrendered its mortgage broker license as of March after the state threatened to shut the company down for charges including taking false loan applications.

***

• With the help of the Jerome N. Frank Legal Services Organization at the Yale Law School, Reid filed suit in New Haven Superior Court against six alleged co-conspirators in the scam: L&S mortgage; CA-based lenders Fremont Investment; two sellers; an attorney who oversaw the sale; and Dolan & Luzzi, a New Haven law firm that has a $20,000 contract with the City of New Haven to do foreclosure work.

For more, see Struggling Couple Sues Over “Scam”.

To view lawsuit, see Reid v. L & S Mortgage, LLC, et al., a 26-count complaint alleging, among other things, fraud, negligence unconscionability, theft, breach of duty of good faith and fair dealing, malpractice as to attorney, mortgage broker and real estate appraiser; Connecticut Unfair Trade Practices Act violations (an MS Word .doc file).

Orphan Forced To The Brink Of Foreclosure On Inherited Home Fights Back As Child Protective Agency Pockets Juvenile's Monthly Death Benefit

In Guilford County, North Carolina, the Greensboro News Record describes the story of an:

• [u]nnamed orphan whose adoptive father died, leaving the child a small Habitat for Humanity house in east Greensboro — plus a $538 a month death benefit, more than enough to pay the $221 mortgage. Even so, [the orphan's] legal guardian — the DSS [Department of Social Services] — kept the full $538 to help defray his upkeep in foster care. That left the mortgage on the vacant home unpaid and on the brink of foreclosure.

Despite being hammered by the adverse rulings of a state trial judge, a state appeals court, and the North Carolina Supreme Court, the DSS has, according to the story, decided to continue its relentless pursuit of the kid's $538/month by filing a petition with the U.S. Supreme Court to have the case heard.

For more, see DSS makes a federal case of an orphan's house.

In an earlier media report on this story, see The New York Times: Welfare Agencies Seek Foster Children's Assets.

To view the decision of the North Carolina Court of Appeals, see In re J.M.G., No. COA06-752 (November 6, 2007) (go here for .pdf version).

Forged Deed To Deceased Grandfather's Home Creates Major Family Rift; Aunt Sues To Void Deed, Confirm Title To Rightful Heirs

In Chicago, Illinois, the Chicago Tribune reports on a story involving Raymond Washington, reportedly a convicted felon who is being sued for allegedly forging a deed to the home of his deceased grandparents, Wesley and Olivia Kimble, enabling him to take title, and then selling the home and pocketing the cash. The home subsequently went into foreclosure, leaving other relatives who lived in the home, facing eviction, including his disabled aunt, Barbara Ward. An excerpt from the story:

• Washington has had some trouble with the law. He has been arrested a dozen times, three of them for felony offenses.In late November 2003, Washington used a false name, Marcus Taylor, to purchase a new Mercedes-Benz, a vehicle retailing for $39,000, from Mercedes-Benz of Chicago. Washington was arrested on forgery charges on Jan. 22, 2004, just 11 days before he filed the documents transferring ownership of his grandfather's house to himself.

• Washington pleaded guilty to forgery in July 2004 and was sentenced to 30 months' probation. In a lawsuit filed in Cook County Chancery Court, Ward maintains that her nephew forged her father's name on the quitclaim deed. Even if it was her father's signature, Kimble was in no physical or mental condition to sign the deed, the suit says.

• Ward is asking Chancery Court Judge James Epstein to rule that the deed and the mortgage are "illegal and void and ordered to be canceled of record," court records show. She also is asking the court to confirm that the house is owned by the legal heirs of Wesley and Olivia Kimble.

For more, see A house divided, family seeks answers (Foreclosure on West Side two-flat touches off ownership battle and raises questions about sale's legality).

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

Elderly Connecticut Man Loses Rented Home Of 20 Years As Landlord's Mortgage Lender Forecloses

In Bridgeport, Connecticut, Hartford Business Journal reports:

• When a 70-year-old Bridgeport man returned to the third-floor apartment that had been his home for nearly two decades, the rental unit was locked and boarded up. His landlord had been foreclosed on. The blindsided renter was collateral damage.

• Attorney Richard Tenenbaum of Connecticut Legal Services declined to name his dispossessed client but said similar incidents are being played out nearly every day in Connecticut. “There are dozens, probably hundreds, of people being victimized because they don’t know what’s going on,” Tenenbaum said. “The number of evictions caused by foreclosures has probably doubled, at least, in the past few months.”

***

• After receiving a wave of phone calls from displaced families last summer, the NLIHC [National Low Income Housing Coalition] looked at foreclosure patterns throughout New England. In Massachusetts, 34 percent of foreclosures were on multi-unit properties. In Rhode Island, the rate was 41 percent. In more rural New Hampshire, multi-unit housing accounted for only 12 percent of foreclosures. “The majority of these foreclosures for multi-unit housing are for two-, three- and four-unit homes.” [NLIHC research director Danilo] Pelletiere said.

***

• But there are legal mechanisms that can protect [Connecticut] renters, including a six-month stay of execution on evictions if the tenant is not the cause of the notice, Tenenbaum said. But few tenants are aware that they have a legal right to contest being thrown out, he added.

For more, see Locked Out: Foreclosures Blindsiding Renters.

For the recent NLIHC study, see Properties, Units, and Tenure in the Foreclosure Crisis: An Initial Analysis of Properties at the End of the Foreclosure Process in New England.

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

Utah Woman Losing Decade-Long Battle To Reclaim Ownership Of Home Lost In Forced Sale Over $68 Dentist Bill

In Salt Lake City, Utah, ABC News reports:

• Can you imagine losing your home over a $68 dental bill? That's what happened to one Utah woman. Sonya Capri Ramos says her Salt Lake City home was sold out from under her in 1996 to pay a collections agency seeking payment for dental work performed on one of Ramos's daughters. And despite the fact that she had made three years of payments on a $51,000 mortgage, the title changed hands for just $1,550 at a sheriff's auction. But the story doesn't end there: Ramos, 41, said she didn't find out that her home no longer belonged to her until two years after the sale. To date, she hasn't moved out. Instead, she said she continues to make mortgage payments on the home and is fighting what has become a decade-long legal battle to reclaim ownership.

For more, see Woman Loses Home Over $68 Dental Bill (Utah Woman 'Dumbfounded' After Learning Her Home Was Sold Without Her Knowledge).

Foreclosure Problems Increasingly Creep Into Suburbs

Whether east or west, foreclosure problems are increasingly creeping into the suburbs. For three examples, see:

• New York State Capital Region: Scotia street exemplifies how foreclosures are hitting suburban areas, as mortgage crisis mounts (Daily Gazette),

• Maricopa, Arizona: Foreclosure crisis hitting town of Maricopa especially hard (KNXV-TV Channel 15),

• Manatee County, Florida: Neighbors also hurt by foreclosure (Bradenton Herald).

After 20+ Years, City Of Newbury Decides To Pursue Real Estate Tax Scofflaws

In Massachusetts, The Boston Globe reports:

• In Newbury, a town of roughly 7,000, about 150 are considered delinquent taxpayers. A few haven't dished out a cent in property taxes since the 1980s. Others owe close to $50,000. But the free ride for some property owners is over, according to Charles Kostro, Newbury's finance director/treasurer.

• Since last March, the town has pursued some $660,000 in back property taxes. Most recently, officials ratcheted up the process by hiring Boston-based D'Ambrosio Law Offices to put the top 10 tax delinquents into tax title, which, if taxes are still outstanding after six months, allows the town to foreclose on their properties.

***

• Things have already improved. The town has collected roughly 40 percent of the $660,000 in back taxes dating from the mid 1980s to June 2006.

For more, see Newbury hopes to collect $660,000 from tax delinquents (Effort is first time town has gone after debtors in 15 years).

Minneapolis Tenants In Dilapidated Foreclosed Building Get The Boot As City Says Place Is Uninhabitable; Belongings Out On The Street, Kids Homeless

In Minneapolis, Minnesota, KAAL-TV Channel 6 reports:

• Several Minneapolis families were without a place to live Thursday night after their apartment complex was boarded up after falling into foreclosure.

***

• While residents say they were given just a few moments warning, the city says the building was foreclosed on last summer and residents should have begun to look for a new place to live at that time. The building had no rental license, authorities said, and they set a May 1st eviction date.

• But the customary 72 hour grace period was extended to May 15th and then again until May 22nd - Thursday. The manager of the Problem Property Unit at the City of Minneapolis, Tom Deegan, told us the building had become "uninhabitable," with at least four units missing copper piping when authorities entered on Thursday.

For more, see Mpls. families evicted from foreclosed apartments.

See also, Minneapolis Star Tribune: North Side foreclosure upends lives (Black garbage bags stuffed with possessions covered the lawn of the north Minneapolis apartment building as its suddenly homeless residents milled around wondering where they would go next).

Lenders Becoming Reluctant To Intiate Foreclosure Actions?

In Central Florida, the Orlando Business Journal reports:

• Home foreclosure numbers continue to soar in Central Florida -- but some experts say the real, untold, figures are significantly higher. In a "normal" real estate market, homes typically are repossessed after the homeowner misses several payments.

• But now, anecdotal evidence shows that many lenders have yet to send foreclosure notices to scores of homeowners who've missed more than a year's worth of mortgage payments. The reason? Many lenders don't want the ever-growing number of foreclosed properties to become bank assets, says real estate consultant Jack McCabe.

• That's because homes aren't selling quickly these days, and banks and lenders would be stuck with these depreciating assets on their books, says Jeffrey Schimmel, an associate who does research on banks and real estate for Situs Cos. in Boca Raton.

For more, see Banks starting to postpone foreclosures (Experts: Lenders don't want more depreciating assets on their books).

Harris County Tax Collector Screws Up In Filing Delinquent Tax Foreclosure Suit Against Active Duty Servicemember; Law Firm Admits Error

In Houston, Texas, KHOU-TV Channel 11 reports on the story of U.S. Air Force Captain Jose Iraheta who, with his family, live in northwest Harris County. They own a home, but he doesn’t spend much time here as he spends most of his time overseas, flying planes high above places like Iraq and Afghanistan. He reportedly had a real estate tax issue that he recently had to deal with.

• [L]uckily for Capt. Iraheta, he knew about [...] a law in Texas that allows people on active military duty like him to defer paying their property taxes. They have until after they’re discharged or otherwise living back home. So Capt. Iraheta filled out the forms and postponed paying his taxes.

• But there was a problem, and the captain found out about it in a most troubling way. He said while he was off fighting a war, Harris County decided to sue him. “I got sued,” Capt. Iraheta said. The county sent him a citation, saying he owed $7,000 in back taxes plus $3,000 attorneys fees and penalties. To collect it, the county said it would sell his house in a foreclosure sale.

***

• Suing soldiers over property taxes is against Texas law, and so is trying to charge them extra fees. So how’d it happen? The mistake is traced to downtown Houston law firm Linebarger, Goggan Blair and Sampson. Harris County uses it to collect unpaid taxes, and the law firm now admits it was all a big mistake.

For more, see While serving his country, Air Force captain was sued by Harris County.

When Your Landlord's Stiffing The Bank, You Could Be The One In Trouble

Here are a number of links to stories from around the country on the apparent widespread prcatice of renting homes in foreclosure to unwitting tenants, and serve as a strong reminder that tenants need to be proactive in their investigation of the status of the property they are leasing:

Washington, D.C. - WTOP Radio 103.5 FM: Renters beware: Know your foreclosure rights,

Bakesrfield, California - KERO-TV Channel 23: Renters Step Into Foreclosed Home Danger (Local Family Loses Home, Deposit After Rented Home Foreclosed),

Orange County, California - The Orange County Register: House, condo renters latest victims of foreclosure crisis (People renting homes, condos and townhouses find themselves out on the street after the owners fail to pay the mortgage).

South Central Michigan - The Ann Arbor News:

• When your landlord's in trouble, you could be too,
• Vulnerable renters need stronger rights (Mortgage meltdown affects them, too),
• What renters should know about foreclosure,

Southwest Florida - The News Press:

• Lousy landlord hurts families,
• Owner defaults; tenants evicted,

Northern/Central Florida - Hernando Today: Renters Suffering From Foreclosure Crisis.

Kingman, Arizona - Kingman Daily Miner: Mortgage crisis hits renters (Landlords with adjustable-rate loans see payments skyrocket).

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