Wednesday, June 18, 2008

Central Florida Students To Get Boot As Sarasota Home Used As College Residence Faces Foreclosure Sale

In Sarasota, Florida, the Sarasota Herald Tribune reports:

  • Despite its lack of central air conditioning and the unfortunate ratio of seven bedrooms to two bathrooms, a two-story house on a shaded corner of 47th Street has maintained a certain allure, even as the city around it modernized. "The 47th Street House," as it is known, was built in north Sarasota by a New College student for New College students with a minimalist joie de vivre. But today, the place where scores of New College students and alumni have lived communally for more than 15 years is scheduled to be sold in a public auction, after the landlord defaulted on the mortgage.

***

  • Current owner Carmen Palomino says she could not afford the mortgage after her homeowners' insurance went up. Palomino bought the house from [the original owner, a former New College student who built the place in the early 1990's] in 2006 for $190,000, according to property records.

For more, see Tradition goes to highest bidder.

For story update, see:

Homeowner, Straw Buyer Settle Suit In Sale Leaseback Foreclosure Rescue Deal

In Northern New Jersey, The Star Ledger reports:

  • Two years ago, Florine Williams, a nurse's aide, feared losing her Bloomfield duplex after falling behind on payments for the $259,000 mortgage. So, Williams went to a nearby business service company, which referred her to a mortgage broker. It was the beginning of the end for Williams, who became ensnared in an elaborate mortgage fraud scheme that left her broke and forced her out of her dream home.

***

  • Williams arranged through an agent of A&E Mortgage to temporarily sell her home to attorney Novlet Lawrence, who agreed to sell it back to Williams for $350,000 after a year, as long as Williams paid enough to cover the mortgage, taxes and insurance for the property. As part of the $350,000 price, Williams agreed to pay Lawrence $18,000 at closing and to give $16,200 to A&E Mortgage for fees and commissions.

  • Williams tried to purchase the home back in March 2007, but got an eviction notice instead because Williams had stopped making monthly payments a few months earlier when rent increased from $3,500 to $3,860 to cover flood insurance. Lawrence, who recently settled a lawsuit filed on behalf of Williams by Essex-Newark Legal Services, said "the allegations are false" but declined further comment.

For the story, see Lawsuits target mortgage fraud (State AG announces cases against 3 firms).

NJ AG Files 3 Civil Suits Against 36 Alleging Straw Buyer Use, "Bait & Bump" Tactics, Bogus Foreclosure Rescue & Rent To Own Deals, Rent Skimming, Etc

From the New Jersey Attorney General's Office:

  • Attorney General Anne Milgram filed mortgage fraud lawsuits against 36 defendants charging consumer fraud and civil racketeering by various mortgage brokers, real estate entities and others throughout New Jersey.

  • The unrelated complaints accuse defendants of inducing consumers to buy property on the basis of false promises and misrepresentations, and of taking out mortgage loans on the basis of grossly inflated property values. The defendants include mortgage brokers, real estate appraisers, title companies, straw buyers and sellers, and promoters. Filed in state Superior Court in Essex, Camden and Passaic Counties, the three complaints allege violations of both the New Jersey Consumer Fraud Act and the New Jersey Racketeer Influenced and Corrupt Organizations (RICO) Act involving 25 properties and more than $5 million in fraudulent loans.
For a summary of each case, see the New Jersey AG press release: Attorney General Announces Mortgage Fraud Lawsuits (Defendants Allegedly Violated Consumer Protection, Civil Racketeering Acts).

To view each lawsuit, see:

35%+ Of Cleveland Vacant Home Torchings This Year Were In Foreclosure

In Cleveland, Ohio, The Cleveland Plain Dealer reports:
  • Arsonists have torched nearly 100 vacant homes this year in Cleveland, and the blazes are stressing the Fire Department's budget. More than a third of the houses were in foreclosure, leading investigators to believe the blazes may involve some sort of mortgage fraud. Ninety-eight vacant homes were burned through June 10. Of these, at least 35 of the homes set on fire were in foreclosure, according to a Plain Dealer analysis of fire and court records.

***

  • Nearly 25 percent of the torched homes have been in the North and South Broadway neighborhoods, which have one of the highest concentrations of foreclosed homes in the country. Councilman Anthony Brancatelli, who represents the area, said most of the 25 homes that were burned in those two neighborhoods had been boarded up before they were set on fire.

For more, see Arsonists burn 98 vacant houses in Cleveland; 35 in foreclosure (More than a third of homes hit by arsonists were in foreclosure Investigators suspect fraud in a growing number of arsons).

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

Go here, Go here, Go here, and Go here for other posts on vacant homes leaving their mark on neighborhoods. ForeclosuresDestroyNeighborhoodsApple foreclosure arson whale

Tucson Man Gets Two Years In Prison In $13M Straw Buyer Mortgage Scam Involving 23 Fraudulently Obtained Home Loans

In Tucson, Arizona, the Tucson Citizen reports:
  • A Tucson man was sentenced Monday to two years in prison, three years on probation and must pay more than $1 million in fines after he pleaded guilty to a $13 million mortgage scam. [...] Padilla and another Tucson man, Carlos Bent, were indicted on 59 charges including conspiracy, wire fraud and engaging in illegal monetary transactions in amounts greater than $10,000. Padilla pleaded guilty to conspiracy to commit wire fraud. Bent, who pleaded guilty to the same charge, will be sentenced Aug. 11.

***

  • The men [targeted and] told [...] homeowners [whose properties had gone unsold on the market for months] that the properties were worth more than their listed prices and they would sell them for more and pocket the difference, according to the indictment. The men paid outsiders to pose as buyers and got 23 mortgage loans by providing false information. Minimal or no payments on the mortgages were made and the properties became at risk of foreclosure.

For the story, see Tucson man sentenced to federal prison in mortgage scam.

See also, The Associated Press: Mortgage scam nets man prison sentence, probation, $1M fine.

Foreclosure Defense On Agenda For Maryland Legal, Housing Advocates

The Maryland Institute for Continuing Professional Education of Lawyers Inc. is co-sponsoring with other groups a foreclosure defense program for Maryland attorneys who represent financially strapped homeowners facing the loss of their homes. Among the topics to be discussed, as listed in the seminar brochure, are:
  1. Loss Mitigation: Practical Strategies and Tools,
  2. An Overview of the New Maryland Foreclosure Law & Legislative Intent: SB 216/HB 365,
  3. Legal Defenses and "Issue Spotting", and
  4. Leveraging Pro Bono into Attorney Fee Awards.

For more, see The New Nuts & Bolts of Foreclosure Defense - A First Look at Maryland's New Foreclosure Law.

Title Company Owner, Two Others Convicted In Cleveland-Area Mortgage Scam Involving Nine Properties; Await Trial In Another Case Involving 28 More

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

  • The owner of a real estate title company, her mother and a mortgage loan officer were convicted [last week] in Cuyahoga County for their roles in a fraud scheme involving nine houses. Clarissa Foster, 35, of Macedonia (44 counts); her mother, Bettie Simpson, 60, of Macedonia (2 counts); and Corritha Wells (20 counts), 41, of Cleveland, are scheduled to be sentenced Aug. 11.

***

***

  • The property sellers have already pleaded guilty to related charges. Foster, Simpson and Wells await trial on charges related to a similar scheme involving 28 other properties.

For more, see Three convicted in Cuyahoga mortgage fraud scheme (Nine properties in Cuyahoga County).

For the Cuyahoga prosecutor's office press release, see Mortgage Broker and Two Title Company Officials Found Guilty.

Tuesday, June 17, 2008

Shaq Gets 1000+ E-Mails In Response To Orlando Foreclosure Help Plan

In Orlando, Florida, the Orlando Sentinel reports:
  • Shaq is used to facing down the NBA's most intimidating players, but is Orlando's mortgage mess too much for him? A week after Shaquille O'Neal told the Orlando Sentinel that he's working on a plan to rescue Central Floridians facing foreclosure, he has learned just how widespread the problem is. "He has two or three thousand e-mails," said Curtis Cooper, an Orlando Realtor and mortgage broker working with O'Neal on the project. "There have been a lot of calls from talk shows and radio shows."

For more, see Thousands in Orlando want Shaq to help with mortgages.

For last week's report on this story, see Shaq: I can help homeowners fight off foreclosure.

75 Of 122 Sales By One Realty Agent Fall Into Foreclosure

In Vista, California, the North County Times reports:
  • Working as a real estate agent, insurance dealer, income tax preparer and credit repair specialist, Miguel Romero has helped Latinos buy 122 homes since 2004, becoming one of his firm's best salesmen. But his customers have not been so fortunate ---- at least 75 of the homes Romero sold have fallen into foreclosure. The company caters almost exclusively to Spanish-speaking customers.

  • Romero's sales practices, and the stories of some clients, provide a window into industry excesses that analysts say contributed to the region's foreclosure crisis: (1) Latino families who signed documents they say they didn't understand; (2) mortgage brokers who may have reaped excessive fees exploiting the language barrier; and (3) homeowners who used high-risk loans to chase riches in a booming real estate market. There are no public allegations that Romero, who through an attorney declined to comment, broke the law.

***

  • Nine additional homes engaged in so-called shortsales, where the lender agreed to sell the house for less than the mortgage in an effort to avoid foreclosure. Also, tax records show that Romero worked with or employed a network of real estate agents who sold an additional 63 homes since 2005, 21 of which entered foreclosure. Put another way, 69 percent of Romero's sales and 33 percent of his agents' have resulted in foreclosure or ShortSale.

***

  • One of Romero's former employees said homeowners have filed several complaints with the [California Department of Real Estate] concerning Romero's conduct. The complaints do not become public until the department has completed an investigation, so the department could not confirm any complaints against Romero or his company, said Tom Pool, spokesman for the department. Some of the clients who filed complaints declined to comment for this story after receiving what they said were threatening phone calls from Romero. At least two clients say they filed harassment complaints with the sheriff's office because of the phone calls.

For more, see Families say real estate agent led them into crisis (Of 122 sales, 75 went back to lenders amid some allegations of misleading sales practices).

Minneapolis-Area Straw Buyer Operation Involving At Least 220 Homes The Subject Of FBI Probe; May Be Largest Scheme In State History

In Eagan, Minnesota, the St. Paul Pioneer Press reports on a straw buyer operation allegedly run by 33-year-old Michael Prieskorn:
  • The former Plymouth resident and his companies remain the subject of a federal investigation, according to [Eagan police Detective Rich] Evans and several buyers. If allegations prove true, it would be the largest mortgage fraud scheme to surface in Minnesota.

  • Prieskorn allegedly arranged the sales of at least 220 new homes, but Evans suspects the total is closer to 340 or more and could involve as many as 90 local buyers, according to [a search warrant] affidavit, which is partially based on business records and a spreadsheet Prieskorn's employees turned over to Evans. Prieskorn may have grossed as much as $20 million from the hefty fees he took, the affidavit says, though some of that may have been spent paying mortgages.

***

  • The case now is in the hands of the FBI and the Internal Revenue Service, according to Evans, but it's unclear whether they are actively looking for Prieskorn or whether any of his circle of industry contacts are part of the probe. No charges have been filed. No investor-buyers appear to have sued, although lenders have named Prieskorn in three open foreclosure cases in Collier County, Fla.

For more, see Mortgage scam snagged scores (Company left trail of foreclosures from Twin Cities to Florida).

For a Pioneer Press editorial on the subject of this story, see Foreclosures Get square, beware.

Lender/Servicer's Failure To Report Prompt Payments To Credit Bureaus Leaves Refinance-Minded Homeowners Facing Roadblock

In Fort Worth, Texas, the Fort Worth Star Telegram reports on a story on three different homeowners who are having problems with their subprime mortgages held by one lender. The problems faced by the homeowners in two of the cases is that, despite making timely payments on their mortgages for an extended period of time, the lender/servicer never bothered reporting those prompt payments to the credit bureaus. Consequently, the homeowners' ability to refinance their existing subprime home mortgages with lower, fixed rate, prime mortgages based on their prompt payment history has been greatly impaired.

For more on their stories, see The foreclosure crisis hits home, over and over again (if link expires, try here).

Maryland Chief Judge Urges Attorneys To Step Up Pro Bono Efforts To Level Playing Field For Homeowners In Foreclosure

In Maryland, The Daily Record reports:
  • The chief judge of Maryland’s highest court is calling on lawyers to lend a hand to people facing foreclosure. According to Court of Appeals Chief Judge Robert M. Bell, Maryland is one of the 10 states hardest hit by the foreclosure crisis, with 11,000 foreclosures anticipated for 2008. Meanwhile, the General Assembly changed the foreclosure procedures this year, but borrowers may not be aware of their rights. “Lawyers can help level the playing field,” Bell said. “Lawyers are uniquely qualified to help homeowners assert their rights under the new legislation.”

***

For more, see Lawyers urged to help distressed homeowners (Bell tells attorneys to level the foreclosure playing field by volunteering) (if link expires, try here).

For more on foreclosure defense in Maryland, see The New Nuts & Bolts of Foreclosure Defense - A First Look at Maryland's New Foreclosure Law.

Central Florida Woman Who Lost Home To Foreclosure Rescue Now Fights To Regain Possession

In Manatee, Florida, The Bradenton Herald reports:
  • Kim Holloway's efforts to avoid foreclosure ended up costing her ownership of her home - and, she says, nearly her life. She says Brandon-based Home Savers Plus of Tampa Bay Inc. promised to rescue her from foreclosure, but instead stole her Bradenton home, which sits on land that's been in her family for more than a century. She says the company conned her and her daughters into signing away the deed, then sold the house to a Georgia woman who's now suing to evict them.

  • Holloway is fighting in court to regain possession of her home, but says the ordeal has been so stressful that she attempted suicide. "After I found out what was going on, I really didn't want to live," Holloway said. "I almost killed myself in October - OD'd (on prescription drugs). I just wanted to die."

For more, see 'Rescue' scams: Homeowners try to save homes, end up signing away their rights. foreclosure rescue

Servicemembers, Vets With At-Risk Mortgages Urged To Contact VA Loan Counselors

A report on Military Update, and appearing in Stars and Stripes, reports:

  • The Department of Veterans Affairs [...] is encouraging military members, veterans and surviving widows with at-risk loans to seek advice from VA loan counselors even if their loans are not VA-guaranteed. VA loan experts lack authority to restructure or renegotiate loans not backed by VA. But they can advise veterans on their options and on how they might negotiate with mortgage holders to avoid default.

  • VA’s effort to reach mortgage holders in distress now includes a help line — (877) 827-3702 — that automatically directs callers the nearest of nine VA regional loan centers.

For more, see VA, Congress assist veterans in mortgage mess. Servicemembers Civil Relief Act

Monday, June 16, 2008

Victims In Alleged Metropolitan Money Store Foreclosure Rescue Scam Speak Out

(originally posted 6-14-08)
In Maryland, The Baltimore Sun features a story of two area homeowners who were victimized in the alleged Metropolitan Money Store equity stripping scam in which Federal prosecutors indicted eight suspects this week. The alleged scam resulted in over $35 million in fraudulently obtained mortgages and over $10 million in stolen home equity, say authorities.

  • "They hurt a lot of people," said [homeowner Nadine] Bostic, who is a plaintiff in a class-action civil suit against some of the federal defendants. "I never thought I'd ever say I wanted someone to be in jail, but I do. They need to be put underneath the jail. Not on top, not inside - underneath." [...] "When I was told they [arrested the alleged perpetrators], I didn't know if I should jump for joy or what," she said. "It was a strange feeling. I never thought anyone was going to do anything."

***

  • With her father serving in Iraq and money tight at home, [another victim, Jeanette] Meadows, 19, sounded less pleased about the arrests than weary of the whole affair yesterday as she described how her family became a target of the alleged mortgage schemers."They're backstabbers who can't be trusted," Meadows said from her home on Glenarm Road in Northeast Baltimore, a property that has avoided foreclosure only because a lawyer for the family last month asked a Circuit Court judge to invoke a federal law [the Servicemembers Civil Relief Act] that exempts active-duty military personnel from being forced from their homes.

For more, see Relief, anger follow arrests in mortgage loan scheme (Homeowners express emotions in alleged fraud that victimized them).

To read the Federal indictment of the alleged perpetrators, see U.S. v. JoyJackson, et al. (available online courtesy of the consumer protection attorneys at The Holland Law Firm, P.C. and the Legg Law Firm).

For more on the class action lawsuit filed against Metropolitam Money Store, go here to read the class action complaint; and for updates, check with the Metropolitan Money Store Class Action website.

Go here and go here for other posts on the alleged Metropolitan Money Store foreclosure rescue scam.

Go here for posts on the Servicemembers Civil Relief Act. joyjackson

New Jersey Upfront Fee Foreclosure Rescue Operator Cops Plea To Stiffing 77 Homeowners

In Mount Holly, New Jersey, the Burlington County Times reports:
  • A Mount Laurel man who operated a mortgage consulting firm has pleaded guilty to stealing $105,000 from homeowners who hired him to help save their properties. Peter Rogers, 65, of St. David Drive admitted in court Friday that he intentionally took money from 77 victims and did little or no work to help them. Some of those victims ultimately lost their homes or had to declare bankruptcy, authorities said.

  • Rogers pleaded guilty to theft by deception before Superior Court Judge John A. Almeida. [...] He reached out to homeowners he found [...] through foreclosure notices in the newspaper and “created the impression that he would save their home.” Rogers was paid between $400 and $3,700 by each homeowner, authorities said.

Rogers also faced charges of forgery and securing execution of documents by deception which, as part of the plea bargain, are expected to be dismissed at a June 24 hearing.

For more, see Mt. Laurel man admits mortgage-fraud guilt.

For an earlier story on this case, see Judge says businessman will face two trials.

Go here for earlier posts and available updates on this case.

Florida AG Cracks Down On Foreclosure Rescue Scams In Civil Suits

In Central Florida, The Bradenton Herald reports:
  • [Florida] Attorney General Bill McCollum is suing four foreclosure rescue companies, accusing them of fraud and/or deceptive and unfair trade practices. Civil suits are pending against A Realty Rx, Florida Housing Council, Law & Associates and National Foreclosure Management.

  • McCollum's mortgage fraud task force also is investigating 17 others, spokeswoman Sandi Copes said. Seven have ties to the Tampa Bay area: EMC Mortgage Corp.; Florida Foreclosure Prevention & Assistance Program; Garco; Home Assure; Law & Associates; Mortgage Assistance Solutions (also known as Fresh Start); and U.S. Mortgage Crisis Center.

  • The investigations stem from the nearly 2,100 foreclosure fraud complaints, [...] Copes said. "The problem appears to be widespread throughout the state," Copes said.

***

  • Given the focus on rescue schemes, it's likely there will be more prosecutions, authorities indicate. "We are gearing up and looking into complaints of mortgage fraud, but until we have charged someone we can't discuss ongoing investigations," said Steve Cole, spokesman for the U.S. Attorney's Office in Tampa.

  • While the number of rescue-scheme prosecutions might rise, it's likely that such scams are on the wane, said [Michael] Wasylik, the attorney representing [four] Sarasota County homeowners [who were screwed over by one foreclosure rescue scam group]. "I think the market is going to be taking care of a lot of the problem because the incentives are going away," he said. For one thing, there's less equity to steal. Just as the runup in prices during the housing boom artificially inflated equity values, the decline in prices is reducing it, he said.

For more, see McCollum, Legislature crack down on fraud.

Recent Criminal Prosecutions Of Florida Foreclosure Rescue Scams

The Bradenton Herald reports on three recent criminal prosecutions of foreclosure rescue scams in Central Florida - two completed successfully and one currently pending:
  • A federal [...] jury in Tampa found five Tampa-area residents guilty in 2007 of stealing more than $2 million in equity from homeowners in central and South Florida. [...] The scheme's principals - Kamal Moumneh; his brother, Ramzy Moumneh; and Chuong Dam, all of Tampa - were sentenced to between one and five years in prison. Four others who were convicted or pleaded guilty in the scheme received lesser sentences.

  • Tampa Police arrested Carmen Maria Oliveri, 48, of Seffner, on felony grand theft and organized fraud charges in June 2007. She and her husband, Jose, are accused of scheming to defraud a Tampa homeowner by not telling him that he was signing over his home as part of a foreclosure rescue transaction, then selling the house without his knowledge. Carmen Oliveri is awaiting trial but Jose Oliveri remains a fugitive, court records show. They were principals in 4 Solutions Inc., a defunct Tampa-based foreclosure consulting firm [...].

For more, see Recent foreclosure scam cases in Florida.

Go here for other criminal prosecutions of foreclosure rescue operators.

Ohio High Court Establishes Foreclosure Mediation Program Model

As part of the effort to help financially strapped Ohio homeowners save their homes from foreclosure, The Supreme Court of Ohio has created an eleven step Foreclosure Mediation Program Model, which is designed for individual Ohio trial courts to use and modify based on their own needs, resources and community.

For more, including links to the entire model, recommended forms, resources, training, etc., see Foreclosure Mediation Program Model, courtesy of The Supreme Court of Ohio.

FBI Investigates Michigan Man With "Habit Of Overpaying For Houses" As Three Dozen Homes End Up In Foreclosure

In Kalamazoo, Michigan, a Kalamazoo Gazette published an investigative report on Rodney Hixon, a local man who, according to the Gazette, "has a habit of overpaying for houses." According to the story:
  • [Hixon r]outinely overpaid for the homes -- on average 68 percent more than tax assessments would suggest the properties were worth, based on Gazette calculations and review of tax records from the cities of Kalamazoo and Portage and Kalamazoo Township.

***

  • [Hixon h]ad 36 foreclosures in 2007 in Kalamazoo County, 15 more than [two others], who had the next highest total. All 38 of Hixon's homes were repossessed by the lending institutions that held the unpaid mortgages.

Reportedly, the FBI is investigating Hixon for possible mortgage fraud, according to a May 21 e-mail from Kalamazoo's Community Planning & Development Department that was obtained by the Gazette under the Freedom of Information Act.

For more, see FBI investigating Kalamazoo man for possible mortgage fraud.

In a related story, see Officials starting to look for foreclosure irregularities (State can't probe mortgages from out-of-state lenders) (story no longer available online).

Sunday, June 15, 2008

Chicago Court "A Frenetic Debt Collections Machine" As 119K+ Cases Clog System; Sloppy Practices, "Zombie Debt" Affect Consumers

In Chicago, Illinois, a story in the Chicago Tribune makes apparent that mortgage foreclosures are not the only cases that are clogging the court system:

  • Cook County Circuit Court has been turned into a frenetic debt collections machine, a reflection of easy credit gone sour and a collections industry determined to get paid. More than 119,000 civil lawsuits against alleged debtors are clogging courtrooms, and at least half will result in judgments that debt collectors will use to dock wages, seize bank accounts and file liens against homes, compounding the woes of troubled borrowers.

  • But because debt collectors operate on volume—pushing through lawsuits based on little more than lists of names, addresses and alleged amounts due—there are also plenty of instances of mistaken identities, cases where debts are alleged when the bills have been paid and even situations where people have fallen behind and tried to work out repayments only to be hauled in to court. "The system is out of control," said Michelle Weinberg, a supervisory attorney at the Legal Assistance Foundation of Metropolitan Chicago.

***

  • A new breed of collector has transformed the industry in the last decade, purchasing distressed debt from credit card issuers, retailers and other consumer lenders. Debt buyers usually only pay pennies on the dollar for packages of unpaid bills that include limited electronic information about the borrowers.

***

  • Consumer groups say the high number of default judgments can mask flaws with the lawsuits. Credit agreements and payment histories are often not included when suits are filed. Instead, debt collectors file an affidavit attesting to the validity of the debt, and it's not unusual for that affidavit to be erroneous, said Bob Hobbs, deputy director of the National Consumer Law Center. [...] In New York, an Urban Justice Center study in 2006 found that in 99 percent of a sampling of default judgments that the evidence used to obtain the judgment did not meet the state's legal standards.

The experience of one consumer victimized by the sloppy practices of a purported creditor and the creditor's attorney was reportedly described as "a perfect example of zombie debt. You pay it, and it comes back to life."

For more, see Debt collectors pushing to get their day in court (More aggressive strategies fill court dockets, result in mistaken identities) (if link expires, try here).

Go here for other posts on zombie debt. zeta

Ohio Couple Facing Foreclosure Petitions State Judiciary For Constitutional Right To Free Court Appointed Counsel

In Cincinnati, Ohio, The Enquirer reports:

  • A Westwood couple faced with losing their home of 22 years through foreclosure has asked the Ohio Supreme Court to declare that they have a constitutional right to a court-appointed lawyer to represent them.

  • The petition came after Hamilton County Common Pleas Judge Beth A. Myers ruled Tuesday that William and Mary Hill were not entitled to a free lawyer because the case involved property rights, not individual liberty.

  • Attorney Robert B. Newman, who represents the Hills, argues that too many homeowners in foreclosure lose hope and abandon their homes, even if they have valid defenses, because they can't afford a lawyer. The Legal Aid Society of Southwest Ohio has supported his argument, saying its lawyers are overburdened with foreclosure cases and have had to turn away homeowners.

Source: Homeowners demand lawyer.

Mortgage, Economic Woes Threaten Ranks Of Volunteer Firefighters

In Genesee County, Michigan, The Flint Journal reports:

  • Accepting the resignation of a firefighter at a recent Mt. Morris Township Board meeting was just a formality. He'd already relocated out of state days earlier. But District Fire Chief Rick Johnson saw it as an ominous sign that the mortgage lending crisis was knocking on the door of yet another house - this time the fire house. "He left out of our district because he was losing his house, and I'm afraid this is the first of many," Johnson told township trustees. [...] The township lost another firefighter because his car was repossessed.

***

  • Volunteer firefighters are being affected by the same things hitting everyone else: skyrocketing gas prices, layoffs and foreclosures. [...] "Having an on-call force depends on people who live in the community. When they start losing houses and vehicles, it makes it hard."

For more, see Genesee County fire departments face another tough battle: losing firefighters because of economic woes. foreclosure arson whale

Budget Cuts May Force San Bernardino Fire Department To "Fire" Diesel The Arson Dog

In San Bernardino, California, the Redlands Daily Facts reports:
  • Looming budget cuts mean that Diesel's job could be on the line. Diesel is the playful "goldador" (a mix of golden retriever and Labrador) the Fire Department sometimes takes to fire scenes to sniff out evidence of possible arson. But Diesel's services may be a bonus that San Bernardino can't afford. A $20 million deficit is forcing all city departments to make cuts; in the Fire Department's case, Fire Chief Michael Conrad said there's not enough money available to keep Diesel in the department.

***

  • "The program to me is just valuable," [canine fire investigator Michael] Koster said. "We look at people who set fires to structures and use accelerants and they forget we have a dog who can sniff accelerants." Koster said he expects the increasing number of foreclosures will give fire investigators a lot more work to do in the near future. "The arson fires are going to start increasing. It's known," he said.
For more, see Arson dog could lose job (if link expires, try here).

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

Saturday, June 14, 2008

Florida Appeals Court Nixes Foreclosure "Sale Of The Century" Of $500K Home For $1000

In Martin County, Florida, The Palm Beach Post reports:
  • It might well have been the sale of the century. But then came the lawsuit. On Wednesday, a state appeals court nixed a 2007 foreclosure sale in which a company paid $1,000 for a Martin County home worth 500 times as much. According to the order of the 4th District Court of Appeal, the home's mortgage company was the "innocent victim of the mistakes of its attorneys and agents."

  • A sales agent for Long Beach Mortgage Corp. attended the May 2007 sale, but she didn't make a bid because she lacked instructions, according to a synopsis in the court ruling. An employee of a law firm was preparing those details, but she thought the sale didn't start until 11 a.m., an hour later than its actual start time.

For more, see Court tosses $1,000 sale of $500,000 Martin home.

For the decision of the Florida appeals court, see Long Beach Mortgage Corporation v. Bebble (#4D07-3100; 4th District Court of Appeal, June 11, 2008).

--------------------

For other unusual foreclosure sale stories, see:

  • $6.5 Million Property Bought At Foreclosure For $2,000 (a California case where the represenative for the foreclosing lender got stuck in traffic, and arrived late to the sale. By the time of arrival to the auction, the subject property had already been sold for $2K. A California appeals court upheld the sale. No word if the foreclosing lender's attorney had his malpractice/errors and omissions insurance policy paid up),

KC To Explore Shifting Maintenance Responsibility For Abandoned Homes In Legal Limbo To Lenders

An editorial in the The Kansas City Star observes:
  • Normally, when real estate isn’t properly maintained local officials hold the owner accountable. But if the owner has halted payments and moved out, finding a responsible party can be difficult — especially if the lending institution is dragging its feet on foreclosure. As a recent Star story reported, that’s happening to a lot of homes in Kansas City, which seem to exist in a legal limbo. Some neighborhoods are suffering as abandoned homes become eyesores.

***

  • The City Council is examining ways to lessen the problem, including an ordinance that would more clearly move the maintenance responsibility to lenders. The legal issues may prove to be complex, but the council is right to explore this approach. [...] Some lenders reportedly may be holding off on foreclosure to avoid taking additional losses on their books.

For more, see Dealing with the problem of homes in legal limbo (no longer available online).

Go here for other posts on the problems associated with homes in legal limbo; when the foreclosing lender fails to complete foreclosure or fails to record its deed after foreclosure sale. responsibility code violations foreclosure

More On Fires & Foreclosures

The following links are to recent stories on homes in foreclosure that are going up in smoke:

  • Grayson County, Texas: Homeowner facing a foreclosure sale in a month gets five years after being found guilty of torching home. She had recently renewed the insurance policy on the home after the policy had lapsed for non-payment. See Pottsboro woman sentenced in arson conviction; see also district attorney press release;

  • Owings Mills, Maryland: Homeowner faces charges of arranging to have someone set fire his home in foreclosure for $10,000, so that he could collect the insurance. The home was burned and a firefighter who responded to the fire was injured when he fell through the floor into the basement. See Owings Mills Man Charged In The Arson Of His Home (U.S. Dept. of Justice press release),

  • Deltona, Florida: A $2,500 reward is being offered for information on a Deltona fire that destroyed a house in foreclosure. It took 17 firefighters to knock down the flames Friday night. One was even hurt during the firefight. Investigators said arson and foreclosure is becoming a critical issue across Central Florida and say increasingly, arson is where area homeowners are turning. See Rise In House Fires Could Be Attributed To Foreclosure Rates,

  • New Bedford, Massachusetts: In one South End neighborhood last month, four vacant tenements were torched. The South End tenement fires occurred weeks after four vacant apartment buildings in the North End also were destroyed or heavily damaged in apparent cases of arson. Officials said the arson problem is worsening as the rising number of abandoned, foreclosed homes become sitting targets for vandals or desperate homeowners looking to recoup their losses. See Arson becoming growing problem for police, fire as foreclosures continue,

  • Salinas, California: Possible arson is being investigated as the cause of a fire that destroyed an unoccupied house, firefighters said. Salinas fire battalion chief said the estimated cost of damages to the recently foreclosed home is $100,000. See Suspicious cause in fire in east Salinas home.

Torching property in an attempt to escape unaffordable loan payments is not limited to homes, as this story illustrates:

  • Baltimore, Maryland: Two local residents with unaffordable payments on their auto notes each arranged to have their cars torched and collected on the insurance. One, a former Maryland Transit Authority cop, got a year and a day in prison plus three years supervised release; the other, an ex-MTA bus driver, got two years probation. Both were also ordered to do community service. The torcher that they hired, also a former MTA cop, got five years in prison. See Former MTA Police Officer And Bus driver Sentenced In Arson And Insurance Fraud Scheme (U.S. Dept. of Justice press release).

For anotherstory on the Maryland cases, see WBAL-TV Channel 11 (Baltimore, Maryland): Arsons Due To Foreclosures Increasing, Experts Say (Bail Set For Md. Man Accused Of Arson At His Home)- if link expires, try here for the same story.

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

Friday, June 13, 2008

State AG, Housing Advocates Advise Western New Yorkers Of Foreclosure Rights, Options

In Rochester, New York, the Rochester Democrat and Chronicle reports:

***

  • Panelists urged consumers to open their bills, discuss issues with their lenders and seek help if needed. But they also warned people to avoid foreclosure-rescue scams, which pose as help. Carlos Rodriguez, deputy attorney general, said rescue scams tell borrowers not to talk to lenders or lawyers. They then ask for money and fees and ask the homeowners to sign over their deeds. "Tell consumers not to sign any paperwork that has to do with the property deed," Rodriguez told the Monroe County Bar Association audience.

For more, see Foreclosure crisis looming in western New York, experts say.

Feds Charge Eight In Alleged Metropolitan Money Store Equity Stripping, Foreclosure Rescue Scam; Indictment Says $35M+ In Fraudulent Loans Involved

(originally posted 6-12-08; modified 6-13-08)
In Greenbelt, Maryland, The Associated Press reports:

  • Federal prosecutors have charged a Maryland mortgage foreclosure rescue company in a fraud scheme that allegedly involved more than $35 million worth of fraudulent loans and mortgages. Joy Jackson, the president of the former Lanham-based Metropolitan Money Store, and Jennifer McCall, the company's CEO, are among eight people named in an indictment released Thursday in U.S. District Court on charges that include conspiracy, mail fraud and money laundering. Metropolitan was a foreclosure rescue operation that claimed to help strapped homeowners at risk of losing their homes.

  • It allegedly convinced homeowners to sign over their homes to people with strong credit to keep the homes from foreclosure. Homeowners were told that they could keep their homes and repair their credit, get better mortgages and eventually buy back the homes. But prosecutors allege once it took control of the homes, Metropolitan would borrow heavily against the properties, sucking out any equity the original homeowners had built up. Many couldn't buy back the homes. Prosecutors say homeowners lost more than $10 million in equity.

Source: Feds file charges in Md. foreclosure rescue scheme.

See also, The Washington Post - Prince George's Woman Arrested in 'Massive' Mortgage Fraud:

  • [Joy J.] Jackson, 40, and [her husband, Kurt] Fordham, 38, both of Fort Washington, were charged with conspiracy to commit mail and wire fraud, six counts of money laundering and 15 counts of mail fraud to obtain money and property from homeowners and lenders.

  • Also arrested today were Jackson's business partner, Jennifer McCall, 46, and her husband, Clifford McCall, 47, McCall's daughter, Chandra Jones, 30, Wilbur Ballesteros, 32, all of Lanham; and Fordham's sister, Katisha, 35, and Ronald Chapman, both of Washington. All are facing mail and wire fraud charges, and Jennifer and Clifford McCall and Jones are each charged with one count of money laundering.

Go here for other posts on the alleged Metropolitan Money Store foreclosure rescue scam.

Go here for criminal prosecutions of foreclosure rescue operators.

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

More On The Alleged Metropolitan Money Store Foreclosure Rescue Scam

(originally posted 6-12-08; modified 6-13-08)
The following video clips are from TV reports on the alleged Metropolitan Money Store equity stripping, foreclosure rescue scam. These clips were televised months ago, and not in connection with Thursday's announcement of the indictment of eight individuals implicated in the alleged scam, among whom are company head Joy Jackson and her husband, Kurt Fordham:

  1. Former Stripper Joy J. Jackson Ran Foreclosure Rescue Scam (story of one victim of alleged foreclosure rescue scam; WMAR-TV Channel 2 (Baltimore, Md) - posted on website, Daily Motion; go here for the transcript of the report),
  2. Vulnerable homeowners target of scams (contains clips of Joy Jackson and Kurt Fordham's reported $800K wedding) (NBC Nightly News),
  3. Homeowners sue mortgage company (NBC Nightly News),
  4. Some Homeowners Fall Victim To Foreclosure Scams (CBS Evening News).

For the Maryland U.S. Attorney's press release announcing this week's indictment in the alleged Metropolitan Money Store foreclosure rescue scam, see Eight Indicted In Major Mortgage Fraud Scheme (Obtained Over $35 Million in Fraudulent Loans and Mortgages).

See also: WBAL-TV Channel 11 - Group's Mortgage Fraud Scheme Duped 100, Feds Say (Feds Say 8 Used Mortgage Fraud Profits Lavishly).

For updates on a previously filed Federal class action lawsuit against these foreclosure rescue operators, check with the Metropolitan Money Store Class Action website.

Go here for criminal prosecutions of foreclosure rescue operators.

Go here for other posts on the alleged Metropolitan Money Store foreclosure rescue scam.

Formal Plea Entered In Baltimore Tax Sale Bid Rigging Investigation; Target Agrees To Cooperate With Feds In Continuing Probe

In Baltimore, Maryland, The Baltimore Sun reports on the winner of the race to the Maryland Federal prosecutor's office in connection with an ongoing probe into alleged monkey business at the county tax sale auctions:
  • A veteran Baltimore real estate investor could serve up to 18 months in prison for conspiring to rig bids at Maryland tax sale auctions under a plea deal that obligates him to cooperate with a continuing criminal investigation of the auctions. Steven L. Berman, in a plea agreement filed yesterday in U.S. District Court in Baltimore, admitted to a single felony count of bid rigging. Berman, 50, also agreed to pay a $750,000 fine.

***

  • The bid-rigging case is the first to stem from a broad federal investigation that became public knowledge in August. [...] Though Berman is the sole investor charged in the case, FBI agents in court filings have identified other subjects of the investigation as Baltimore County attorney Harvey M. Nusbaum, 70, and his longtime business partner Jack W. Stollof, 73, of Stevenson. Both men have denied wrongdoing through their attorneys.

***

  • The tax sales often ensnare the same low-income homeowners as has [the local] ground rent [system]. Both collection systems, some critics argue, can force homeowners into costly court battles to keep from losing their homes, sometimes over a few hundred dollars of delinquent taxes, water and sewer fees or bills for sidewalk and alley repairs.

For more, see Investor admits rigging tax sale bids (Plea deal could bring 18-month sentence for Pa. businessman).

Go here for other posts related to the problems associated with the Baltimore tax sale system.

Thanks to Lance Gay for the tip on the story. baltimore tax sale bidding

Northern California Prosecutors Continue Uncovering Victims In Busted Upfont Fee Foreclosure Rescue, Fractional Interest Transfer, Bankruptcy Scam

In Northern California, the Lathrop-Manteca Sun Post reports:

  • Two women were arrested in Livermore on March 26 on suspicion of defrauding 14 homeowners in Alameda County, and prosecutors say they are continuing to uncover victims from counties throughout the Bay Area and the Central Valley.

  • Victims of the scam are told they can stop their foreclosures if they pay a few thousand dollars in up-front fees followed by smaller monthly payments, according to Alameda Deputy District Attorney David Lim, who filed the charges.

For more, see Foreclosure scam snares local homeowners.

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

Long Island Closing Agent Cops Plea To Pocketing $13M+ In Refinancing Proceeds Intended To Pay Off Existing Mortgages

In Central Islip, New York, Reuters reports:

  • A former president of the National Settlement Agency pleaded guilty on Thursday to charges of stealing $13 million in refinanced mortgage loan proceeds, the U.S. Justice Department said.

  • Steven Leff, acting as a settlement agent for numerous FDIC insured banks, embezzled the proceeds of several refinance loans, which should have been used to pay off the outstanding principal amounts on the prior mortgages, the Justice Department said.

  • "Leff was entrusted with large sums of money intended to be disbursed to others in the refinancing process. In simple terms, he stole much of it," FBI official Mark Mershon said in a statement. As part of his guilty plea entered in federal court in Central Islip, New York, Leff admitted that, in total, he stole more than $13 million in refinanced loan proceeds. Leff, 45, faces a maximum sentence of 30 years in prison.

Source: Settlement agent guilty in mortgage fraud scheme.

Go here for other posts on Steven Leff.

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

Blunt Signs Missouri Mortgage Fraud Bill Into Law

In Missouri, the Springfield Business Journal reports:
  • Gov. Matt Blunt on Wednesday signed a bill that tightens laws against mortgage fraud. House Bill 2188, sponsored by Rep. David Pearce, creates civil and criminal penalties for fraudulent mortgage practices and makes consumers more aware of the mortgage process.

***

For more, see Gov. Blunt signs mortgage fraud bill.

Thursday, June 12, 2008

Homeowners Beat Banks To Court As South Florida Attorney Files 25 Federal Suits Alleging Fraud, Violations Of Lending Laws; Seeks To Undo Lousy Loans

In South Florida, The Miami Herald reports:
  • Some South Florida borrowers who are in default on their home loans aren't waiting around for their lender to begin foreclosure. They have beaten their lender to the courthouse by filing lawsuits that allege the institutions committed fraud and violated federal lending laws by overstating the borrowers' incomes to qualify them for loans, changing the loan terms just before closing, and failing to disclose the loan costs.

  • ''These [borrowers] are basically sheep among the wolves,'' said Frank J. Ingrassia, a Margate lawyer who last week filed about 25 lawsuits on behalf of the borrowers against various lenders in U.S. District Court in Miami and Fort Lauderdale.

  • The suits mark the latest salvo against the subprime lending industry, which consumer advocates contend recklessly extended loans to borrowers and fed a buying frenzy that led to the real-estate bust.

***

  • Legal Services of Greater Miami is taking a similar tack -- alleging lenders committed fraud -- in defending homeowners in some foreclosure cases, said Carolina Lombardi, a senior attorney for the agency.

For more, see Troubled borrowers sue mortgage lenders (Some South Florida homeowners have sued their mortgage lenders, alleging the institutions committed fraud in making loans that borrowers couldn't afford to pay) (if link expires, try here).

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. undo mortgage loans TILA batallion

FBI Orders Shift In Resources To Focus On Mortgage Fraud Probes

Bloomberg News reports:

  • The U.S. Federal Bureau of Investigation, confronting a surge in mortgage fraud, has ordered more than two dozen of its field offices to stop probing some financial crimes so agents can focus on the subprime crisis. Kenneth Kaiser, chief of the bureau's criminal investigative division, issued the directive late last week on a video conference call with the heads of 26 offices in areas where mortgage crime is rampant, said Bill Carter, an FBI spokesman in Washington.

  • Carter said the shift was made after an analysis of how agents are spending their time. The FBI traditionally has moved investigators to address urgent needs, he said. About 150 agents were working on more than 1,300 mortgage cases before the change.

For more, see FBI Halts Some Financial Cases to Investigate Mortgage Fraud.

Victims Of The Southern California Foreclosure Rescue Land Grant Program Come Forward

In Southern California, voiceofsandiego.org reports on the stories of a couple of homeowners who were scammed by a group that was allegedly running a foreclosure rescue, land grant program. Legal action, both criminal and civil, was brought against the alleged members of the group about three weeks ago. A description of the scam:
  • Under the alleged scam, homeowners in foreclosure attended seminars and filled out paperwork to deed over their homes to the defendants' companies -- Federal Land Grant Co., Land Grant Services and KBS Resources. Under the banner of an old land grant program last used during the Mexican-American war, the agents allegedly promised to help homeowners facing foreclosure to keep their homes. The agents said signing the homes over to a government program would shield them from the banks and, in four years, the homeowners could reclaim their homes, according to prosecutors. All the while, they'd be able to stay in the homes.
For the victims' stories, see How Desperate Homeowners Got Caught Up in an Alleged Scam.

Homeowner "Buy & Bail" - The New Housing Scam?

The Wall Street Journal reports:
  • Next month, Michelle Augustine plans to walk away from her four-bedroom house in a Sacramento, Calif., subdivision and let the property fall into foreclosure. But before doing so, she hopes to lock in the purchase of another home nearby. "I can find the same exact house as what I live in right now for half the price," says Ms. Augustine, 44 years old, who runs a child-care service out of her home.

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  • In markets hit hardest by falling home prices and rising foreclosures, lenders and brokers are discovering a new phenomenon: the "buy and bail," in which borrowers with good credit buy a new home -- often at a much lower price -- then bail out of the "upside down" mortgage on their first home.

  • Homeowners are able to pull off this gambit -- which some lenders and real-estate agents call mortgage fraud -- by taking advantage of mortgage-lending practices that allow them to buy a new primary residence before their existing residence has been sold. And with the lending industry in disarray as it tries to restructure millions of mortgages, some boast they are able to pull off the strategy with ease.

***

  • While buy-and-bail is on the rise, the practice doesn't appear to be widespread.

For more, see Some Buy a New Home to Bail on the Old (Fannie Plans Rules To Avoid Practice Described as Fraud).

Go here for other posts on "Buy and Bail" home purchases. BuyAndBail

Hidden Cameras Now In Use In Deed Theft Battle Against Recording Phony Title Transfers

In Michigan, The Detroit News buries in a recent article the following note on a new method being used in fighting deed theft by Ruth Johnson, Oakland County's clerk and register of deeds:
  • [J]ohnson's office installed hidden cameras to record everyone who files deeds and created a way for residents to check if anyone has filed fake deeds or documents against their property. Last year, there were 39 formal complaints and this year, Johnson said, they're on pace to exceed that number. "It's the new street hustle," she said.

For more, see Mortgage fraud high in Mich., FBI says (Group wants Attorney General Cox to resign over effort on foreclosures).

JALA To Utilize Foreclosure Diversion Model

In Jacksonville, Florida, The Florida Times Union has this note buried at the end of a recent story:
  • Jacksonville Area Legal Aid consumer attorney April Charney also works alongside families in the trenches every day. At any given time, Charney might be handling 100 foreclosure cases. And while Charney said "anything done is a worthy effort," she wishes [Florida Attorney General Bill] McCollum's task force had discussed better ways to deal with people facing losing their home. "We would have liked to have a foreclosure moratorium to set up an alternate resolution process," Charney said.

  • Next month, Charney said, Legal Aid will have its own diversion model: a panel of pro bono lawyers trained to help with the deluge of foreclosure cases. The volunteer group begins organizing next week.

Source: Report: Florida, Georgia saving homes (Each state is grading high for its attorney general's effort to prevent foreclosures). undo mortgage loans TILA batallion

Loan Officer Cops Plea In Alleged $25M Mortgage Fraud, Kickback Scam Involving 200+ Home Buyers

In Columbus, Ohio, The Columbus Dispatch reports:
  • A Michigan woman admitted [yesterday] that she approved fraudulent mortgage loan applications for Columbus homes and might have been responsible for as much as $1 million in losses. Kenyatta Johnson, 28, pleaded guilty in U.S. District Court in Columbus to conspiracy and wire fraud in connection with a $25 million mortgage scam that affected more than 200 home buyers.

  • In a plea agreement, Johnson admitted that, as a loan officer for a bank in Ann Arbor, Mich., she approved loans brought to her by Dwayne L. Carter of Reynoldsburg that she knew included inflated, fraudulent employment information. In exchange, Carter wired her kickback money.

  • Johnson is the seventh of nine defendants to plead guilty in the conspiracy case. [...]
    The nine are accused of using bogus appraisals of more than 500 properties to obtain mortgages beginning in 2002.

For more, see Woman admits she Ok'd fraudulent loan applications in Columbus mortgage scam.