Wednesday, September 17, 2008

90 Day Foreclosure Moratorium Declared On Ike-Affected FHA Borrowers

The U.S. Department of Housing and Urban Development announced Monday:
  • HUD is granting immediate foreclosure relief - In certain storm and flooded ravaged counties, HUD granted a 90-day moratorium on foreclosures of FHA-insured home mortgages and strongly recommended that loan servicers take such actions as special forbearance, loan modification, refinancing, and waiver of late charges.(1)

For more, see HUD Announces Disaster Assistance In The Wake Of Hurricane Ike (Foreclosure protection offered to displaced families in Texas and Louisiana).

(1) Foreclosure relief is available for FHA-insured families living in the following counties:

TEXAS
Angelina, Austin, Brazoria, Chambers, Cherokee, Fort Bend, Galveston, Grimes, Hardin, Harris, Houston, Jasper, Jefferson, Liberty, Madison, Matagorda, Montgomery, Nacogdoches, Newton, Orange, Polk, Sabine, San Augustine, San Jacinto, Trinity, Tyler, Walker, Waller, and Washington Counties.

LOUISIANA
Acadia, Beauregard, Calcasieu, Cameron, Iberia, Jefferson Davis, Sabine, St. Mary, Vermilion, and Vernon Parishes.

Freddie Reminds Loan Servicers Of Disaster Relief Options For Hurricane Ike-Affected Borrowers

In McLean, Virginia, Freddie Mac announces:

  • Freddie Mac today reminded its servicers of the disaster relief options available to borrowers with Freddie Mac-owned mortgages who were affected by Hurricane Ike.

***

  • Servicers can offer relief under Freddie Mac guidelines to borrowers whose homes were damaged or destroyed, as well as borrowers who may be unable to make their mortgage payments because they were evacuated to avoid the storm. Servicers should assess each case individually to determine if relief is warranted and which option best fits the homeowner's circumstances.

  • In addition, Freddie Mac gives servicers the discretion to reduce or suspend mortgage payments or foreclosure proceedings for up to 12 months for borrowers with Freddie Mac-owned mortgages in federally declared major-disaster areas where individual assistance was provided. For more information, see freddiemac.com/singlefamily/relief.html.

For Freddie's press release, see Freddie Mac Extends Mortgage Relief T Borrowers Affected By Hurricane Ike.

DOJ Asked To Weigh In On Michigan Foreclosure List Flap

In Michigan, The Michigan Messenger reports:
  • A group of 14 U.S. Senators including Democratic presidential nominee Barack Obama signed a letter to the United States Department of Justice and specifically to Attorney General Michael B. Mukasey to calm fears that people who have undergone or are undergoing a foreclosure will not be allowed to vote. All of the senators who signed the letter are Democrats, and all of the Democrats on the Senate Judiciary Committee signed the letter. The controversy arose after a story on Michigan Messenger last week in which the Macomb County Republican Chair James Carabelli indicated that foreclosure lists will be used to challenge voters. The Republican Party of Michigan has since denied the story.

For more, see Obama, other Senators ask Attorney General to weigh in on foreclosure list controversy.

See also, The Wall Street Journal Blog: Voting-Rights Conflicts Intensify.

Go here for other posts on this story.

Developer Accused Of Stiffing Subs; Mechanics' Lien Lawsuit Threatens Title To Buyers' New Homes

In Dayton, Nevada, Nevada Appeal reports:
  • In a development that is happening again and again in Dayton, homeowners who purchased new homes are facing mechanic’s liens and possibly the loss of their homes through no fault of their own. Five Dayton families are being sued because the developer of the subdivision they live in didn’t pay the contractors who built the homes.

  • Reynen & Bardis, which is facing three complaints lodged with the Nevada Contractors’ Licensing Board, including one for failure to pay bills, has not paid contractors who worked on five homes in the Riverpark subdivision.

***

  • All the homeowners paid Reynan & Bardis for the homes before construction, all used First American Title Co. and all deals for the homes, priced in the low- to mid-$200,000s, were closed.

For more, see Liens continue to vex Dayton homeowners.

Convicted Wall Street Securities Fraudster, Wife Get Bagged In Florida Straw Buyer, Mortgage Fraud Scam Involving 37 Homes, $27M+ In Loans

In Cape Coral, Florida, the Naples Daily News reports:
  • A decade ago in New York, where Wall Street held the promise of riches, Ronald Luczak started selling securities. He ended up in jail instead. [...] By the summer of 2005, he was on supervised release and settled with his family in Southwest Florida. This time the promised riches were in real estate.

  • With his wife, Lisa Luczak, who opened Cape Coral Equity and Development Group that fall, real estate ended up being his trade. But he continued his previous profession, too.
    Fraud allegations came the following year, and [last] Wednesday, he and his wife both pleaded guilty in federal court to fraud counts related to a mortgage fraud scheme in Cape Coral that involved at least 37 properties and more than $27 million in home loans.(1)

  • In his plea agreement, Ronald Luczak admitted to contracting to buy homes at one price, then having the home appraised for a higher amount — often bumping the price up by about $150,000 — and pocketing much of the difference as an “assignment fee.” In a year and a half, his wife’s company received $5.8 million in those fees.

For more, see Couple may face prison time in Southwest Florida real estate scam.

(1) According to the story, Sandra Mainardi, a New Jersey resident who helped process loan applications with the Luczaks for 100 percent financing of inflated sales prices, pleaded guilty last month to one count of wire fraud; and Alex Nelson Gonzalo, a former Cape Coral police officer and real estate agent, pleaded guilty earlier this year to accessing an FBI database without authorization.

3 Suspects Charged In Alleged Indianapolis Flipping, Rent Skimming Scam Involving As Many As 400 Properties

In Indianapolis, Indiana, WISH-TV Channel 8 reports:
  • Three Carmel residents are facing a number of charges in connection with a possible housing scam.(1) Prosecutors said the three purchased as many as 400 homes in Central Indiana, 200 of which are now in foreclosure.

***

  • "This company owned almost 400 homes...we're talking about TD Assets, owns 400 homes in Marion and surrounding counties that have a value of about $40 million. And of those 400, 209 of them are in foreclosure," said [Marion County Deputy Prosecutor Barbara] Crawford. The result is neighborhoods that are trying to stay stable end up littered with empty houses.

For more, see 3 arrested in alleged housing scam.

(1) According to the story, the trio appeared in court Friday where they were charged with 13 felony counts related to welfare fraud and theft. If convicted on all of the charges, they could spend up to 10 years in jail.

Home Mortgage Foreclosures & Cancellation Of Debt Income

Syndicated personal finance columnist Michelle Singletary includes this comment in a recent story on an income tax issue that may be causing problems for many homeowners who have lost their homes in foreclosure:
  • [W]hen an individual or business borrows money and the debt is canceled, the borrower generally must include the amount of the canceled debt in gross income. Last year, Congress passed a law giving temporary tax relief to homeowners who had mortgage debt canceled.

  • Here's the problem. The tax relief isn't given automatically. You have to file IRS Form 982 "Reduction of Tax Attributes Due to Discharge of Indebtedness," and the form has to be attached to the federal tax return. Many people entitled to this tax break aren't filing the form. Olson said she wants to work with the IRS to get the word out to more people.

For the story, see To-Do List For IRS.

See also IRS Publication 4681: Canceled Debts, Foreclosures, Reposessions and Abandonments. short sale

Tuesday, September 16, 2008

Obama Campaign, DNC File Suit Over Controversy Involving Alleged Michigan GOP Use Of Foreclosure Lists To Squeeze Out Certain Voters

In Michigan, The Michigan Messenger reports:

  • The Obama campaign and the Democratic National Committee have filed a lawsuit in federal court in Michigan over the Michigan GOP’s plan to use foreclosure lists to challenge voters at the polls, as first reported by the Michigan Messenger. Bob Bauer, general counsel for the Obama campaign, and Mark Brewer, chairman of the Michigan Democratic Party, announced the lawsuit in a conference call with reporters this afternoon. It was filed on behalf of the campaign, the party and three Michigan residents who have had their houses foreclosed upon in recent months. Bauer called the GOP plan to use foreclosure lists “a new and especially repellent version of caging.”

For more, see Obama campaign files suit over “voter-foreclosure” plans.

See also:

Go here for other posts on this story.

Nevada High Court OKs $1M+ Damage Award To Homeowner Due To Mortgage Company Misidentification Of Home In Foreclosure

In Las Vegas, Nevada, the Las Vegas Review Journal reports:
  • Gerald and Katrina Thitchener lost nearly all their material possessions thanks to an arrogant error by Countrywide Home Loans officials. They weren't just stripped of their furniture and clothing when a mistake by Countrywide in 2002 set in motion a foreclosure procedure that resulted in their condominium being "trashed out."

***

  • The Thitcheners lost a lot back in 2002, including some of their faith in the system; but on Thursday the Nevada Supreme Court determined that their losses, and the actions of the mortgage giant, deserved compensation in the approximate amount of $2 million.(1)

For more, see Sometimes little people come out on top against arrogant big shots.

For the Nevada high court decision, see Countrywide Home Loans v. Thitchener, 192 P.3d 243; 2008 Nev. LEXIS 79; 124 Nev. Adv. Rep. 64 (September 11, 2008).

Go here for other posts on foreclosure screw ups involving improperly changed locks, removal of belongings, etc.

(1) A somewhat conflicting report in the Las Vegas Sun says the total compensation was only $1.29 million, which includes $968,070 in punitive damages. For more, see Court reduces $3 million judgment in wrongful foreclosure case. ForeclosureLockOuts

Foreclosure Fraud Getting Attention Fron San Bernardino DA

In San Bernardino, California, the San Bernardino County Sun contains this blurb on the work of the local district attorney's office in its fight against foreclosure fraud:
  • Foreclosure fraud is the [real estate fraud] unit's latest buzz, [lead deputy district attorney of the unit Larry] Roberts said. Foreclosed homeowners are claiming they paid $2,000, $3,000 or more to companies promising debtor relief, only to find they were stabbed in the back. From July 2007 to July 2008, the 10-person district attorney's unit received almost 460 formal complaints from residents across the county claiming they were burned by mortgage or foreclosure fraud. The suspects are based all over Southern California. That number could grow by leaps and bounds over the next year, but there's a fair chance Roberts' staff size will remain the same.

  • A bill that would provide more funding to county real-estate fraud units statewide made it to Gov. Schwarzenegger's desk, but the state's budget impasse is getting the spotlight right now. Still, Roberts presses onward. "We're here to hurt offenders," he said. "We represent the interests of the people of the state of California."

For the story, see Fraud monsters.

Florida Closing Attorney Cops Plea To Pocketing Almost $3M In Client Escrow Funds; Allegedly Took Money Intended To Satisfy Existing Mortgages

From the U.S. Attorney's Office for the Southern District of Florida:
  • R. Alexander Acosta, United States Attorney for the Southern District of Florida, and Jonathan I. Solomon, Special Agent in Charge, Federal Bureau of Investigation, announced [last week] that defendant Joseph J. Weisenfeld, a local real estate attorney, pled guilty to a one-count Information charging him with wire fraud in connection with a scheme to misappropriate almost $3 million in client funds purportedly held in escrow for authorized real estate transactions and related expenses.

***

  • According to the Information, Weisenfeld, a licensed attorney, represented individuals and/or entities, mostly buyers, in real estate transactions. As the closing agent in many of these transactions, Weisenfeld would collect funds from buyers and lenders, and would represent to the parties engaged in the transaction that these funds were being held in escrow to be disbursed for various specified purposes, including the satisfaction of pre-existing mortgages. In fact, however, Weisenfeld misappropriated the escrowed funds for his use and benefit. Over the course of the scheme, Weisenfeld misappropriated almost $3 million in client funds from his attorney trust account.

For the U.S. Attorney's press release, see Attorney Pleads Guilty To Wire Fraud Charge.

For the original criminal charges filed in this prosecution, see Information - US v Weisenfeld.

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

Financial Industry-Supported Changes In Consumer Bankruptcy Rules Now Hurting Mortgage Lenders

BusinessWeek reports:
  • The latest lesson for lenders from the housing crisis: Be careful what you wish for. Banks and other financial outfits spent eight years and $40 million lobbying for sweeping new bankruptcy rules that would limit their losses from deadbeat debtors. But it turns out those changes, enacted in 2005, are forcing more troubled borrowers to walk away from their homes—even those who didn't take on risky mortgages in the first place. And that's bad news for lenders, which suffer financially every time they have to take a troubled property on their books.

For more, see Tougher Bankruptcy Laws Bite the Lenders (How tough new laws on resolving personal debts are burning lenders—not just cash-strapped Americans).

No Payment Hikes For Up To 3 Years On Certain NJ Mortgage Loans With Interest Rate Resets, Says Governor

In Trenton, New Jersey, PolitickerNJ.com reports:
  • Legislation [...] sponsored to extend foreclosure protection to thousands of New Jersey families caught-up in the recent mortgage market upheaval was signed [yesterday] by the governor. The bill (A-2780), the “Save New Jersey Homes Act of 2008,” offers direct aid to homeowners and borrowers affected by the growing mortgage crisis who are facing foreclosure or are in danger of facing foreclosure because of mortgage rates that are about to reset.

  • Under the new law, the homeowner continues making their lower mortgage payments while staying in their home; the lender receives monthly revenue; homes aren’t abandoned; families don’t have to suffer stress from relocation and no taxpayer dollars are appropriated. Homeowners with introductory rate mortgages who are facing an interest rate reset are afforded the opportunity to continue their payments at the much lower pre-reset interest rate for up to three years.

For more, see ‘Save New Jersey Homes Act Of 2008' Signed By Governor (Measure Provides Three-Year Reprieve from Foreclosures; Gives Families More Options to Stay in Their Homes).

Certain Loans Secured By 1-4 Family Homes Now Subject To New Rules In New York

In New York, the New York Law Journal (appearing at law.com) reports:
  • [Recent New York mortgage legislation], signed into law on Aug. 5, 2008, is complex legislation, imposing obligations on lenders making certain types of loans to natural persons on the security of one-to-four-family dwellings.

For more, see New N.Y. Mortgage Foreclosure Legislation.

Monday, September 15, 2008

Suspects In Alleged Fractional Interest Deed Transfer, Foreclosure Rescue Scam Cop Plea

In Alameda County, California, The Mercury News reports:
  • Two women who ran a Livermore foreclosure rescue company each face as many as 16 months in state prison after taking a plea deal that forces them to pay full restitution to their victims. Prosecutors say the women preyed on owners of more than 20 different properties in Alameda County. The women, Sonia Alburez, 37, owner of the Community Home Saver Program, and her employee, Verena Silva, 42, of Union City, were found guilty of two felony counts each of foreclosure rescue fraud and grand theft, according to a release from the Alameda County District Attorney's office.(1)

***

  • Victims, whose names and contact information the defendants obtained from public records in the County Recorder's office, were solicited by direct mailings from Community Home Saver Program. Victims were each told to process grant deeds and to pay monthly fees to the Livermore company of $1,500 to $2,500 so they could stall the foreclosure process as well as help pay down their mortgage and repair their credit.

***

  • The women would tell clients to transfer a portion of the interest in their properties to various holding companies. They were told those companies would file a petition with the U.S. Bankruptcy Court to forestall foreclosure. Unbeknownst to the homeowners, the holding companies were fake.
For more, see Two found guilty in foreclosure rescue scam.

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

(1) According to the story, the District Attorney's press release said the women were originally charged with the following felonies:
  • filing false grant deeds with the Recorder's Office,
  • receiving money as a foreclosure consultant before fully performing all services,
  • grand theft by false pretenses,
  • fraudulent conveyance of land with intent to delay creditors, a misdemeanor,
  • because Silva went into the home of a victim to solicit the real estate fraud scheme, she was charged with first-degree residential burglary, a felony.

Homeowners Facing Foreclosure Demand Refunds From South Florida Foreclosure Rescue Operator

In Fort Lauderdale, Florida, WFOR-TV Channel 4 reports:
  • Dozens of South Florida homeowners are caught in the middle of a blame game. They say a company that promised to help them fight foreclosure blatantly took their money. The company, however, says they are the victim. People in Ft. Lauderdale have been lining up demanding their money back. This company [Outreach Housing] is blaming their former attorney for the problems. Both sides are filing reams of paperwork in court, accusing the other, and while they argue it's the little guy -- the homeowner who is getting hurt.

***

  • CBS4 News has learned the Florida Attorney General and the Margate Police Department are investigating Outreach Housing. Meanwhile the lawsuit is still before a judge, and many of these homeowners are desperately trying to save their homes.

For more, see Homeowners Say "Outreach" Housing Didn't Reach Out.

More On Florida's Favorable Business Climate For Mortgage Fraudsters

In Florida, The Miami Herald reports:
  • Florida, now saddled with the nation's highest level of mortgage fraud, once offered a program to reimburse people scammed by rogue mortgage brokers -- the money coming from licensing fees. Today, those fees total $24.7 million -- but victims of mortgage fraud can't get a penny of it.

  • State regulators killed the victim program with no public debate more than a decade ago -- despite warnings that mortgage fraud was on the rise -- leaving borrowers in Florida among the most vulnerable in the country, The Miami Herald found. While 47 states have protections for people who are scammed, including guaranty funds and insurance that covers fraud, Florida has no such provisions.

  • That means thousands of people fleeced by mortgage brokers are left to fend for themselves, despite millions of dollars in the state's regulatory trust fund -- money that goes to cover salaries and benefits for regulators, including trips to conferences at five-star resorts.

For the rest of the story, see No help for mortgage fraud victims (Florida no longer reimburses consumers defrauded by mortgage brokers -- even though $24.7 million raised through licensing fees sits untapped).

For The Miami Herald's three part investigative report (published earlier this summer) on mortgage fraudsters running rampant in Florida, see Borrowers Betrayed.

NY AG Indicts Niagara Falls Man For Allegedly Using Online Ads To Sell Homes He Didn't Own Or Provide Title To

From the New York Attorney General's Office:
  • Attorney General Andrew Cuomo [last week] announced the indictment of a Niagara Falls man who allegedly sold properties to a buyer from England and never provided the titles to the properties. Joseph Furan, 39, of [...] Niagara Falls, was indicted by a Niagara County Grand Jury on the charge of grand larceny in the third degree (class D felony).

***

  • According to the felony complaint, between January and March of 2007, Furan allegedly sold two Niagara Falls properties over the Internet to a buyer from England. Furan then allegedly failed to provide the titles to the properties and used the money from the sales to pay off various debts.

***

  • Earlier this year, it was discovered that Furan – in direct violation of [a] previous court order – had again placed ads on the Internet site Craigslist and faked his credentials in an attempt to flip properties he didn’t own to unsuspecting investors. It was during this time that the alleged grand larceny took place. Because of these violations, the Attorney General’s Office sought and obtained criminal contempt of court charges on August 15.

For more, see AG Cuomo Announces Indictment Of WNY House-Flipper For Stealing $39K From Unsuspecting Investor (Niagara Falls man allegedly sold property that he didn’t own over Internet; Sold another without providing title).

Another Mortgage Loan Servicing Horror Story

For those with an interest in mortgage loan servicing horror stories, a recent story in Metro Santa Cruz set in California and involving the loan servicing company Ocwen might be worth a look.

For more, see Borrowed Time. questionable mortgage servicing practices tactics xero

Sunday, September 14, 2008

Milwaukee Court Reverses Home Foreclosure Over $50 Parking Ticket

In Milwaukee, Wisconsin, the Journal Sentinel reports:
  • The City of Milwaukee won’t keep the house of a disabled man who failed to a pay a parking-related fine, after all. The city on Wednesday agreed to have the court reverse its foreclosure on Peter Tubic’s property after a prominent local attorney paid the fine, which had escalated to $2,697.10 over the years.

For more, see Court to reverse foreclosure over parking-related fine (Attorney pays Milwaukee the $2,700 owed by disabled man).

See also: Attorney who paid fine in foreclosure case talks.

Real Estate Agents Eligible For Combat Pay? Squatters In Vacant Foreclosures Increase The Hazards In Showing Homes

In Contra Costa County, California, The Mercury News reports:
  • [S]elling homes in East Contra Costa these days seems tough enough without walking into a squatter's den or break-in party pad. But that's what brokers say they find more often lately with the huge glut in bank-owned and vacant homes — raising safety fears among some agents and possibly crimping home values even further.

  • Agents at one East County real estate office now tote pepper spray on walk-throughs and showings, in case they come across a belligerent dweller. More than a dozen agents have signed up for self-defense training, said Kirsten Amodeo, a Realtor with Coldwell Banker who is organizing the classes. During the Labor Day weekend alone, Amodeo said, she entered four houses to find destruction or signs of squatting.

  • "It's absolutely absurd. Theft and vandalism and squatters. It's all over the place. The holiday weekend was the worst," she said, armed with a canister of pepper spray on a visit to one house. "I'm not trying to be a vigilante. I'm pretty tired of going into these houses and wondering. We don't know what's on the other side of the door."

For more, see Squatters in abandoned homes raise fears among East County Realtors.

Go here for posts on vacant homes, foreclosures and squatters. squatter foreclosure zebra

Outgoing Tenant On Verge Of Eviction Cops Plea To Pretending To Be Landlord While Pocketing Rents & Security Deposits From Unwitting Rental Prospects

In Sacramento, California, The Sacramento Bee Crime Blog reports:
  • A Sacramento man is facing a year in jail and hefty fines after conducting a real estate scam using the popular Craigslist Web site. Michael Eugene Blair, 28, pleaded guilty Wednesday to multiple counts of theft by false pretense, Sacramento police Sgt. Matt Young said. Blair was arrested in May by the department's Real Estate Fraud Unit after they learned he was renting out a property he didn't own.

  • Blair used the Craigslist Web site to advertise that he was renting out a north Natomas condominium. Blair had lived in the condo and was being evicted, Young said. The man pretended to be the property's owner and collected thousands of dollars in security deposits and rent from at least four victims. He was in the midst of defrauding other people when he was arrested.

For more, see Rental scam results in jail time, restitution for Sacramento man.

Go here and go here for posts on tenant victims of rent hoaxes. unwitting tenant rent scam yacht

Court Clerk Warns Against Illegal Upfront Fee Foreclosure Scams In North Carolina

In Davidson County, North Carolina, The Dispatch reports:

  • Local residents have recently been targeted by companies promising to save homes from foreclosure, said the Davidson County Clerk of Superior Court. Clerk Brian Shipwash said that while presiding over foreclosure hearings, he learned that several homeowners were contacted by companies offering help to save their homes for an up-front fee, which is illegal in North Carolina. "These companies would promise these people the world, so they'd walk into a hearing thinking everything was taken care of," Shipwash said.

  • According to North Carolina law, anyone acting as an intermediary in a foreclosure proceeding is prohibited from charging a fee up front. While there is nothing illegal about helping people in debt, Shipwash said the companies were promising far more than what was possible to deliver. Locals contacted by the companies were quoted from $1,400 to $1,800 up front, and asked to sign a waiver. In return, the company claimed it would communicate with the lender on the mortgage-holder's behalf.(1)

For more, see Beware of scam promising foreclosure help.

(1) According to the story, Shipwash said the three companies - Nationwide Modification Agency and HomeAssure in New York and Davis Foreclosure Assistance in New Jersey - contacted residents by mail, offering to negotiate with the lender to stop foreclosure.

Tapping Home Equity Without Borrowing?

Syndicated real estate columnist Kenneth R. Harney writes:
  • Improbable as it sounds at a time when American homeowners have lost billions in equity holdings, a new industry is taking shape to help them tap portions of their equity wealth without incurring traditional mortgage debt or making interest payments.

  • Three companies with sophisticated capital market backers — Rex & Co., Equity Key and Grander Financial — are offering cash to owners who agree to cut them into some of the future appreciation of their properties. The cash typically represents a fraction of the current market value of the home and rises with the percentage of future appreciation the owner is willing to share.

For more, see A New Way to Tap Home Equity.

Saturday, September 13, 2008

Maryland's "De Facto" Foreclosure Moratorium Slows New Actions By 20%+

In Maryland, The Washington Post reports:
  • The number of foreclosure events in Maryland has fallen more than 20 percent since the state enacted legislation to address the housing crisis, state officials told members of the Board of Public Works yesterday. But Thomas E. Perez, secretary of the Department of Labor, Licensing and Regulation, warned that foreclosures are expected to rise in the near future as a "de facto temporary moratorium" that extended the foreclosure period from 15 to 150 days ends for many homeowners.

For more, see Foreclosure Events Decline in State (But Officials Warn That Number Should Rise as Moratorium Ends).

Minneapolis Moves Forward With Dilapidated Vacant Home Demolition Program

In Minneapolis, Minnesota, Minneapolis Public Radio reports:
  • As the number of home foreclosures continues to rise, so does the number of properties that are vacant and boarded. The city of Minneapolis has started demolishing 100 of the most dangerous, and residents in neighborhoods with mulitple vacant homes are welcoming the sight of bulldozers.

***

  • Vacant homes like these are easy targets for vandalism. Copper thieves make off with the wiring, causing gas explosions and water leaks. And the longer they sit empty, the more hazardous they become. That's why Tom Deegan, who runs the demolition program, said they've got to come down.

For more, see Minneapolis clears vacant, dilapidated homes to curb dangers. ForeclosuresDestroyNeighborhoodsApple

Tracy Cops Score 392 Pot Plants In Grow House Bust

In Tracy, California, the Tracy Press reports:
  • Three months of surveillance netted police 392 marijuana plants and three suspected growers during a [...] morning raid on a Tracy house [last week]. Four undercover and three uniformed officers closed in on a home at 1999 Monique St. at about 10 a.m. after the suspects tried to drive away from the house.

***

  • Tracy city spokesman officer Matt Robinson said the suspects had put a lot of time and effort into their operation. "The electricity had been circumvented to bypass the electrical box," Robinson said. "They had quite the setup."

***

  • Mold could be seen on the windows and on the walls as well as a grow light through an upstairs window from the side of the house. [A] neighbor also said a strong smell of mold drifted out of the house when police opened the windows after the raid. "It’s probably a hazard right now," the neighbor said.(1) "But we had no idea, that’s for sure. We had never seen any activity at the house."

For the story, see Pot bust perp walk.

(1) Condolences to the lucky lender stuck holding the mortgage on this home.

California Budget Crisis Creates Financial Crunch For Central Coast Non-Profits

In Santa Maria, California, KSBY-TV Channel 6 reports:
  • The budget situation in Sacramento is causing problems for some nonprofit service providers on the Central Coast. Good Samaritan Services is a nonprofit that helps the homeless and needy in Santa Maria. However no budget, means no funding, and fewer programs for those who need help now more than ever. For Good Samaritan Services in Santa Maria, functioning without a state budget means program cuts could be on the way. "We're here to really serve those who are in need and it would be devastating," Executive Director Sylvia Barnard said.

***

  • The current is not helping, shelters are packed with people facing foreclosure and families with nowhere else to go. "We actually have more and more families coming through our doors than we've ever seen before, so the economy is really effecting the services we provide," said Barnard.

For more, see State budget crisis creating tough times for nonprofits on the Central Coast.

Add Abandoned Arizona Tortoises To List Of Four-Legged Foreclosure Victims

In Phoenix, Arizona, KNXV-TV Channel 15 reports:
  • Pet tortoises are now the latest victim of the Valley's foreclosure crisis. Officials at the Herpetological Society in Phoenix said they've taken in 25 tortoises just in the past two weeks -- a number they normally see in six months. "We're finding them abandoned, dumped or brought to us," said Daniel Marchand who serves as curator. "Or they call and say they're going to lose their house at the end of the month and have to get rid of their tortoise." Marchand said 80 percent to 90 percent of the tortoises his sanctuary receives are there because of home foreclosures. [...] The Phoenix Herpetological Society finds homes for tortoises it takes in, reminding people not to release a tortoise since it can't fend for itself.

Source: Abandoned Valley tortoises are latest foreclosure victims.

For other posts on foreclosure pets, go here, go here, and go here. ForeclosurePetsAlpha

Friday, September 12, 2008

Foreclosure Lists To Be Used In Vote Supression Effort?

On Wednesday, The Michigan Messenger reported:

  • The chairman of the Republican Party in Macomb County Michigan, a key swing county in a key swing state, is planning to use a list of foreclosed homes to block people from voting in the upcoming election as part of the state GOP’s effort to challenge some voters on Election Day.

  • We will have a list of foreclosed homes and will make sure people aren’t voting from those addresses,” party chairman James Carabelli told Michigan Messenger in a telephone interview earlier this week. He said the local party wanted to make sure that proper electoral procedures were followed.

For more on this story, see Lose your house, lose your vote (Michigan Republicans plan to foreclose African American voters).

For follow-up reports on this story, see:

Go here for other posts on this story.

Bloomberg: Loan Payments On 15%+ Of Securitized Alt-A Mortgages Made Since 2006 Are At Least 60 Days Late

Bloomberg News reports:
  • [H]omeowners lured by low introductory rates to Alt-A mortgages, which typically require little or no proof of a borrower's income, may fuel the next wave of foreclosures and further delay a recovery from the worst housing decline since the 1930s. Almost 16 percent of securitized Alt-A loans issued since January 2006 are at least 60 days late, data compiled by Bloomberg show. Defaults will accelerate next year and continue through 2011 as these loans hit their three- and five-year reset periods, according to RealtyTrac Inc., an Irvine, California-based foreclosure data provider.

For more, see Alt-A Mortgages Next Risk for Housing Market as Defaults Surge.

Illinois Feds Charge Man In Alleged Refinance Scam, Used Land Trust In Purported Foreclosure Rescue, Say Authorities

In McHenry County, Illinois, the Daily Herald reports:
  • Federal authorities Wednesday took over the case against a Lake Barrington Shores man accused of scamming the elderly and the unsuspecting out of their homes and property. In the process, the feds added numerous accusations against Charles H. Landwer Jr., 45, alleging he preyed on no fewer than 17 people, taking a total of $2.4 million in assets.

***

  • Federal authorities did not itemize Landwer's alleged swindles, but detailed one Kendall County scheme in which Landwer, using his company Accurate Financial Group of Bloomingdale, led a pair of Yorkville homeowners to believe that he was helping them refinance their home to avoid foreclosure. Landwer then convinced them the home needed to be put in trust while he worked out the financing with the mortgage holder. In fact, the complaint alleges, Landwer controlled the trust and then transferred the home to his name before refinancing it and trying to take out $230,000 in equity.

For more, see Lake Barrington man led massive swindle, feds say.

Maryland Lawmaker Violates State Foreclosure Rescue Law, Says Judge

In Maryland, The Annapolis Capital reports:
  • A judge last week ruled Del. Tony McConkey violated state law in 2006 when he bought the home of a Pasadena woman facing foreclosure. Circuit Court Judge D. William Simpson, a retired judge from Wicomico County who was assigned to this case to avoid any conflict of interests, said the Severna Park Republican was acting as a foreclosure consultant to 44-year-old Teresa Milligan and was therefore not allowed to buy her house.

  • "The whole purpose of (the Protection of Homeowners in Foreclosure Act) is to make such actions unlawful," Judge Simpson said Friday in the county courthouse on Church Circle. "I find his obtaining the title was illegal and against public policy."

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  • Judge Simpson declared Mr. McConkey's deed to the house null and void, but left open the question of how much Ms. Milligan should be paid in damages. A jury trial is scheduled to begin Nov. 18, 2008. That jury will rule on additional allegations of fraud and misrepresentation and determine final damages.

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  • Mr. McConkey, who was elected to the House of Delegates in 2002 and is a member of the Judiciary Committee, settled a similar lawsuit in January 2006.

For more, see Judge says McConkey violated state law (Jury to determine damages in suit against delegate).

North Carolina AG Shuts Down Alleged Real Estate Investment Scam

From the Office of the North Carolina Attorney General:
  • A Fayetteville real estate investment scheme has been shut down after leaving dozens of unsuspecting consumers with loans they cannot afford and rental properties that are worth far less than what they paid for them, Attorney General Roy Cooper announced [this week].

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  • Cooper contends that Jenkins and the other defendants told consumers they could help them make a profit by purchasing houses and renting them out without having to pay any money down. Jenkins funded his scheme by misrepresenting the value of the properties he sold to consumers and by causing consumers to take out mortgages and lines of credit for more than the properties are worth.

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  • According to Cooper’s complaint, the defendants promised to manage the rental properties and cover consumers’ monthly mortgage payments, taxes, and insurance on the homes as well as to pay them $500 profit a month per house. However, the defendants did not charge enough rent to cover all of the promised payments. In some cases, houses were not rented at all or were too damaged to be inhabitable.

For more, see Cooper unravels Fayetteville property investment scheme (Scheme left consumers deep in debt on overvalued properties) (Press release date: Sept.10, 2008).

12 Confessions Of A Home Mortgage Collector

In an interview with The Consumerist, a loan servicing employee lists what are described as the confessions of a home mortgage collector.

For more, see 12 Confessions Of A Home Mortgage Collector.

Virginia Man Gets 2+ Years In Equity Stripping, Refinance Scam

In Henrico County, Virginia, the Richmond Times Dispatch reports:
  • Raymundo Geraban pitched a familiar spiel, promising that he meant to pay back tens of thousands of dollars lost in mortgage deals he arranged. But [this week], Geraban, 37, was talking to Henrico Circuit Judge George F. Tidey, a solemn, white-haired figure with fragile patience, instead of a distressed, unwary homeowner. The judge didn't buy the pitch and sandbagged defense pleas that Geraban be spared prison time; the restaurant waiter turned investment adviser will serve 2½ years.

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  • Geraban pleaded guilty in July to charges of grand larceny, conspiracy and making false statements in a loan application in connection with properties he handled in Henrico. He would pay homeowners a few thousand dollars and would promise to refinance their homes after taking control of the deed, [Henrico Commonwealth's Attorney Wade] Kizer said. Kizer said Geraban did not keep up the mortgage payments and allowed the homes to go into foreclosure, in at least one case plundering the equity value of the home for his own use.

For more, see Judge sentences man to prison for defrauding struggling homeowners.

Thursday, September 11, 2008

Scammers Prosecuted In Mortgage Fraud Scheme Involving 24 Homes, Despite Fact Property Values Increased & Defrauded Lender Ended Up Paid In Full

In Covington, Kentucky, the Cincinnati Enquirer reports:
  • A 54-year-old Middletown man was sentenced Monday for his involvement in a scheme to defraud Countrywide Financial. Gregg Russell was sentenced to three years probation. U.S. District Judge Danny Reeves also ordered Russell to spend three months of his probation in a halfway house and pay a $5,000 fine.

  • He had previously pleaded guilty to one count of conspiracy to commit wire fraud. The scheme involved the sale of 24 rental units four years ago in Kettering, Ohio. Russell loaned the down payment money to the buyers, Georgia Bowling and her son William Bowling Jr., without disclosing that to Countrywide.

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  • Assistant U.S. Attorney Ben Dusing said what made the case unusual is that the rental units appreciated in value. He said the buyers were able to resell all 24 properties for an amount in excess of the inflated loan amount and that Countrywide got paid back in full. “We are pleased that there were no losses incurred by Countywide, as the ultimate foreclosure sale resulted in payment in full,” Rubenstein said. Dusing compared the fraud to a teller stealing money from the bank, betting on a horse at the track, having the horse come in first and applying the winnings back to the bank. “No one lost money, but it is still fraud,” he said.

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  • The Bowlings will be sentenced on Oct. 27 to charges of conspiracy to commit wire fraud.

For the story, see Man gets probation for fraud.

See also, Middletown Journal: Local Realtor gets fine, probation in mortgage fraud scheme (Judge says Gregg Russell played 'minor' part).

Southern California Man Gets 7+ Years For Forgery, Grand Theft, Filing Phony Deeds, Rent Skimming In Real Estate Scam Operation

In San Fernando County, California, My Fox-TV Channel 11 reports:
  • A Mission Hills man who masterminded a real estate foreclosure and investment fraud was sentenced Monday to seven years and eight months in state prison. San Fernando Superior Court Judge Alice Hill imposed the maximum term on James Anthony Rojas, 51, according to Deputy District Attorney David Fleck. Jurors deliberated about an hour before convicting Rojas on Aug. 11 of 14 felony charges of grand theft, forgery and attempting to file false or forged grant and trust deeds. He also was convicted of three misdemeanor counts of rent skimming.
For more, see James Anthony Rojas Sentenced in Real Estate Fraud Case.

Go here for earlier posts on James Anthony Rojas.

New Jersey Moves To Minimize "Foreclosure Surplus" Scams

In New Jersey, The Jersey Journal reports:
  • [A] common [foreclosure] scam involves urging a homeowner to transfer a property deed for a minimal payment in exchange for a few thousand quick bucks and a promise to transfer the deed back after some conditions are met. The con artist can then let the home go to a foreclosure sale and collect surplus funds, the difference between the sales price and what is owed to the mortgage holder.

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  • New state court procedures involving foreclosures went into effect Sept. 1 and should offer additional protection to homeowners. The state Office of Foreclosure will now handle applications for surplus funds itself, according to Tammy Kendig, a spokeswoman for the state courts. "That's going to give us a better assurance that the person applying for funds is actually the person they say they are," she said.

For the story, see Beware of scams offering to 'help'.

NJ Man Files Suit Claiming Bank Falsely Reported Him Delinquent To Credit Bureaus On Fully Paid Off Home Loan

In Branchburg, New Jersey, MyCentralJersey.com reports:
  • For township resident Nikolaos Renieris, his one-man legal fight against one of the country's largest banks is a matter of both principle — and interest. Renieris [...] recently filed a lawsuit [...] against Bank of America. Renieris, representing himself in the case, is claiming the bank libeled him by falsely reporting to credit agencies that he was in default on a home loan that he had already paid in full. Because of those reports, Renieris said his credit score has been damaged and he is assessed 2 to 2.5 percent more in interest on loans and credit cards.

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  • Renieris said he decided to file the lawsuit after repeated unsuccessful attempts to have the bank correct the mistakes. Renieris said he suspects the "bureaucratic" mix-up could be connected to the title company in the property transaction.

For more, see Branchburg man represents self in suit against bank.