Chicago Evictions Resume Today; Sheriff To Halt Process Again If Necessary

In Chicago, Illinois, the Chicago Tribune reports:

• After suspending all evictions related to mortgage foreclosures in Cook County, Sheriff Tom Dart announced he would resume those evictions starting today. The reversal came Thursday, after a week of discussions with the court officials responsible for handling mortgage foreclosures to create language that would ensure the rights of good-standing tenants in foreclosed buildings. "After these extensive discussions, we've been assured that we're not going to be asked to evict innocent tenants," Dart said. "But if we find it going on again, we will halt evictions again if necessary."(1)

For more, see With new court procedures, Cook County to resume evictions (Sheriff Tom Dart seeks and gets assurances that tenants in foreclosed buildings are notified).

(1) According to the story, Dart suspended all mortgage-foreclosure evictions Oct. 9 because his sheriff's deputies, who are responsible for evictions, were showing up at properties where tenants had not been informed that the buildings they were renting in were in foreclosure. As a result, the deputies were doing the work of notifying tenants that their buildings were in foreclosure, a procedure that Dart said should have fallen on banks, and was costing the taxpayers money. The new order will require banks to document the names of all tenants in a foreclosed building as well as when they were notified about impending foreclosure proceedings. The new order, drafted by Dorothy Kinnaird, the presiding judge of the Cook County Chancery Division, does not create new laws. Instead, it is formalizing those laws and offers another measure to make sure that the proper procedure is followed when it comes to tenant notification.

Florida AG Files Civil Suit Against Foreclosure Rescue Firm Promising To Find Errors In Homeowners' Loan Docs, Then Fight Lenders

In Fort Lauderdale, Florida, the South Florida Sun Sentinel reports:

• Fort Lauderdale-based Outreach Housing calls itself a grass-roots organization with "a groundbreaking initiative" to help South Florida homeowners threatened with foreclosure. But the Florida Attorney General's Office said Thursday that behind that promise of mortgage relief is a company engaged in deceptive practices that have left a trail of at least 50 complaining homeowners.

• The state filed a consumer protection lawsuit against Outreach Housing, asking a Broward Circuit Court judge to issue an injunction preventing it from engaging in any aspect of the real estate business. Also named as defendants in the suit are Blair L. Wright and Bryan Berry, the two men the state says own the company.

• Outreach Housing promises to help imperiled homeowners by finding inaccuracies in lending documents and then fighting mortgage companies to prevent foreclosure and obtain financial restitution, according to its Web site.

• The Attorney General's Office said Outreach Housing instructed clients to stop paying their mortgages and instead pay the company about 60 percent of what their monthly mortgage payment would be. Customers complained that Outreach Housing took their money, but they didn't receive any relief in return, the Attorney General's Office said.

• In addition, the company engaged in the unauthorized practice of law, according to the lawsuit filed Monday.(1)

For more, see Lauderdale firm didn't deliver mortgage relief, state suit alleges (Lauderdale company denies wrongdoing and says it was let down by law firms it trusted to help individuals).

For the Florida attorney general's press release, see Broward Foreclosure Debt Mitigation Company Sued for Deceptive Practices (Their investigation revealed that more than 600 homeowners had signed up for the company’s services).

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According to their website, "Outreach Housing has dedicated sufficient resources to provide relief for $1.2 Billion in residential properties. Through the efforts of Outreach Housing, a dedicated network of professionals will pursue restitution for thousands of homeowners faced with foreclosure by outlining the TILA and RESPA violations that occurred at the lenders level—bottom-line this effort will allow the homeowner to stay in their home."

(1) Go here and go here for other posts on issues relating to attorneys, loan modifications, and the unlicensed/unauthorized practice of law. UnauthPractOfLawKappa UndoMortgageLoans TILAdelta

Forensic Loan Review Firms Begin To Pop Up Offering To Find Errors In Loan Docs For Homeowners Fighting Foreclosure

A syndicated column in the Los Angeles Times reports:

• Homeowners who are having difficulty getting the attention of their lenders to discuss their troubled mortgages might want to obtain a forensic loan review to determine if their lenders made any mistakes when the mortgage was issued.

***

• In a forensic loan review, a legal pathologist scours your loan documents looking for errors in, among other things, the truth-in-lending statement the lender provided shortly after you applied for your mortgage and the lender's annual percentage rate calculation so you could compare loan costs. If the truth-in-lending statement doesn't match the HUD-1 closing-cost sheet you received at closing, if the APR is off by just a hair, you might have cause for legal action against the lender.

For more, see Errors in loan documents can save strapped homeowners (Even small mistakes in the paperwork may give borrowers the legal leverage to persuade lenders to rework their mortgages).

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For a recent story of a foreclosure mitigation company which offers to audit and find errors in loan documents and promises homeowners help in fighting foreclosures, and which is now being sued by the Florida attorney general for alleged deceptive practices and the unauthorized practice of law, see:

• Lauderdale firm didn't deliver mortgage relief, state suit alleges (Lauderdale company denies wrongdoing and says it was let down by law firms it trusted to help individuals),
• Broward Foreclosure Debt Mitigation Company Sued for Deceptive Practices.

Go here and go here for other posts on issues relating to attorneys, loan modifications, and the unlicensed/unauthorized practice of law. UnauthPractOfLawKappa UndoMortgageLoans TILAdelta

The Scavengers Are Invading The Magic City

In Miami, Florida BusinessWeek reports:

• [S]outh Florida is in the throes of a truly hellish real estate bust. Home prices are down 24% in the past year, with many places changing hands for less than half their height-of-bubble values. The region has seen foreclosures on more than $14.2 billion worth of property this year—a record.

• Developers can't sell enough units to pay construction loans. Condo boards are trying to keep the stairwells of their half-empty buildings clear of vagrants. Landlords are renting out units at daily rates to makers of porn films.

• The bleak tableau is exactly what vulture investors have been waiting for. Having sat out the bubble, they're flocking to the Magic City to make lowball, often all-cash offers for numerous properties at once. Some members of this motley assortment of foreign professionals, U.S. money managers, and retired corporate executives learned how to prey by picking through the detritus of the U.S. savings and loan bust. Others earned their stripes in emerging- market financial crises. They differ in their tactics; what unites them is their absolute insistence on paying bottom dollar.

For more, see Vultures in Miami's Real Estate Market (They're flocking to the city to make lowball, all-cash offers for batches of properties).

Upside Down Unit Owners, Lenders Stiff Condo Associations On Maintenance Fees, Leaving Complexes "In A Death Spiral," Says City Official

In Miami Beach, Florida, The Miami Herald reports:

• He frequents the pool at The Venetia condo building. He leaves his Jaguar with the valet. He uses the gym. He's also behind on his mortgage and isn't paying his condo association fees. Neither is his lender, and the association's board worries the bank is delaying foreclosure to avoid paying dues as well.

• Sharon Dodge, president of The Venetia's association, angrily told a crowd of South Florida condo dwellers at a meeting this week that 134 units were not paying maintenance fees in the 382-unit building. Of those, at least 35 are in the hands of lenders who aren't playing fair.

***

• Mortgage lenders are drawing the wrath of condo owners as catalyst and culprit of the fallout. ''We are in a death spiral,'' said Miami Beach Commissioner Jerry Libbin, who hosted Wednesday's meeting with state Reps. Julio Robaina and Luis Garcia. ''It's the foreclosures that are not happening, the banks that are not taking the actions that they should be taking that are causing additional assessments to be foisted on good condo unit owners,'' Libbin said.

For more, see Condo boards want banks' 'free ride' to end (Condo owners and local politicians who accuse banks of delaying foreclosures on units to avoid association fees want to change state law in order to stop it).

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In a related story on another Miami Beach condo facing similar problems, the Miami Daily Business Review recently reported that a Miami trial court judge ordered a foot-dragging lender to foreclose & take title to condo unit or start paying the association's maintenance fees. See:

• Desperate times call for desperate measures for condo associations for the story,
• Go here for the condo association's Motion To Compel the lender holding the delinquent mortgage to foreclose,(1)
• Go here for Miami Judge Daryl E Trawick's order compelling the lender to foreclose or start forking over the periodic maintenance fees to the condo association.(2)

(1) In the condo association's motion to compel (at paragraph 12), the Florida court decision in F.D.I.C. v. Venture Corp. of Sarasota, Inc., 622 So. 2nd 581, 582 (5th DCA 1993) is cited as precedent in support of the proposition that in Florida, a trial court exercising its equitable powers can compel a mortgage holder to either proceed with a foreclosure sale or to pay the condominium association's monthly assessments.

(2) In his order compelling the lender to foreclose, Judge Trawick scribbled in the citation to Venture Corp. of Sarasota as the controlling authority in the case before him (See Order, paragraph 1).

Foreclosure Rescue Victims May Have Been Scammed Again By Woman Accused Of Unauthorized Practice Of Law

In Central Florida, the St. Petersburg Times reports:

• [L]ike dozens of other Hispanic residents across Florida, they faced eviction because of their dealings with now-closed mortgage company 4 Solutions of Tampa. And like many of those 4 Solutions customers, they called Barbara Hernandez of Orlando after reading an ad in Spanish newspaper El Nuevo Dia where she offered to help people involved with the company.

• The residents say that she promised they'd get their houses back. That she said she'd lead them in a class-action lawsuit. That for only $50 a month, she'd help them file papers and go to court with them. About 80 families turned to her. The problem? She isn't a lawyer.

***

• Roberto Cruz, an attorney with the [non-profit law firm] Legal Advocacy Center of Central Florida, recently filed the [Florida Bar] complaint against Hernandez alleging unlicensed practice of law.(1) Cruz of Sanford represents several residents hurt in deals worked out by 4 Solutions.

For more, see Victimized homeowners' advocate is not a lawyer.

(1) Go here and go here for other posts on issues relating to attorneys, loan modifications, and the unlicensed/unauthorized practice of law. UnauthPractOfLawKappa

Indianapolis Builder May Have Recruited, Paid Straw Buyers To Purchase Homes It Built As Part Of Investment Program: Investigative Report

In Indianapolis, Indiana, the Indianapolis Business Journal reports:

• Charter Homes recruited and paid buyers to take out inflated mortgages on dozens of central Indiana homes it built, promising to manage the properties as rentals and make payments for the owners, current and former Charter business partners say. The 3-year-old local company took advantage of eager real estate investors by offering them a cash bounty for each home purchased, along with checks from Charter to cover down payments.

• But as lax credit markets tightened and home values reversed course, the scheme began to crumble, an IBJ investigation has found. Lenders now are foreclosing on at least 20 homes in five Charter subdivisions in the Indianapolis area. The lenders say they haven’t received payments since May, even though Charter continues to collect rent.

• Charter also is facing numerous liens and more than a dozen lawsuits from unpaid contractors. And its 50 or so home buyers are facing bankruptcy.

For the rest of the story, see Mortgage scheme unravels (Lenders foreclose on at least 20 Charter Homes properties).

In a related Indianapolis Business Journal story on local builder Charter Homes, see Special Report: Mystery at Charter Homes (King Park builder draws scrutiny for odd sales claims, multiple liens).

WaMu Files Suit Accusing Indiana Man In Straw Buyer Scam; Lender Claims It Was Duped Out Of Million$

In Fort Wayne, Indiana, The Journal Gazette reports:

• A large national bank has sued a local man, alleging he is at the center of a large mortgage fraud scheme that has led to a number of abandoned homes throughout Fort Wayne. Washington Mutual Bank and its subsidiary, Long Beach Mortgage Co., filed suit in Allen Circuit Court [last month] accusing Jeffrey L. Radabaugh of spearheading the complicated scheme, which the bank said cost it millions of dollars.

• According to court documents, Radabaugh and other “real estate insiders” deceived Washington Mutual into making millions of dollars in under-secured loans, submitting more than 100 fraudulent mortgage loan applications based on falsified appraisals indicating the properties were worth far more than the market value.

***

• Eventually, the purchasers of the property stopped making mortgage payments to Washington Mutual and most, if not all, the loans are now in default, with the property worth far less than the amount of the loan, according to court documents.

For more, see Local man accused in loan scheme.

For an earlier post related to this alleged scheme, see Indiana AG Sues Investor For "Flipping Options" Without A Real Estate License.

Court-Based Foreclosure Prevention Program Based On Philly Plan Coming To Pittsburgh Area

In Allegheny County, Pennsylvania, The Associated Press reports:

• Judges, lawyers, social services advocates and bankers are working to create a regional program that will offer free legal services and counseling to homeowners facing foreclosure, allowing them to cut a deal with lenders and remain in their home.

• The program was outlined Friday before Sens. Arlen Specter and Bob Casey at a special hearing of the Senate Judiciary Committee that was held in a Pittsburgh courtroom. The plan is based on a similar program that began in Philadelphia in June and has allowed many homeowners to put off foreclosure and remain in their homes.

• Allegheny County President Judge Joseph James said officials are resolving the final issues, including funding, and hope to have the program up and running in the Pittsburgh area within weeks.

For more, see Pittsburgh outlines foreclosure-prevention program (if link expires, try here).

Another Pa. County Looks To Borrow Philly Foreclosure Diversion Plan To Keep Local Homeowners In Place

In Delaware County, Pennsylvania, The Daily Times reports:

• Delaware County Sheriff Joseph McGinn is hoping to have a program in place by the beginning of next year to help countians in owner-occupied residences find a solution that will aid them in staying in their homes and avoid foreclosures during these difficult financial times. McGinn made his comments Friday after a handful of activists from the Association of Community Organizations for Reform Now (ACORN) were outside the courthouse, led by Leah Sheppard, who charged that McGinn has been unresponsive to the group’s plea to have a moratorium on all sheriff sales.

***

• [H]e said he has met with Delaware County Council and county President Judge Joseph Cronin and is also studying a program in effect in Philadelphia to determine if it could be modified for the county.

For more, see Delco Sheriff eyes ways to help out homeowners.

County Recorder Implements Free Monitoring Service To Detect, Prevent Deed Theft

In Monticello, Indiana, The Herald Journal reports:

• [W]hite County Recorder Paula Lantz wants to make sure that no one in her constituency falls victim to property fraud by calling attention to a free monitoring service now provided at no charge to local landowners.

***

• Lantz explained that a fraud perpetrator can record a fraudulent deed at her office, using false documents. Items like out-of-state notarizations and paperwork make it impossible to verify each and every transaction, even if her office had the ability to do so. "Unfortunately it has become all too easy for a criminal to record a fraudulent deed, making it appear as if they own your home," she lamented.

***

• The process to sign up for Property Fraud Alert is simple: go to a Web site, chose "White County" and fill in some basic name and contact information. [...] For more information, visit www.propertyfraudalert.com.

For more, see County Recorder Lantz warns of property fraud (Officials wants to make sure local residents are informed about growing problem). deed theft xenon

"No One Leaves Campaign" Takes To Boston Streets As Students Spread Word To Protect Tenants From Illegal Practices In Foreclosure Evictions

In Boston, Massachusetts, The Boston Globe reports:

• Today, 106 Boston law and college students plan to join community activists to walk the streets of Dorchester, Hyde Park, and South Boston, to advise tenants to stand their ground and stay in their homes. Calling it the "No one leaves campaign," students aim to advise tenants of their legal rights to stay in their homes, even after foreclosure. That will help slow abandonment and blight in vulnerable neighborhoods. They are focusing on the 28 zones in Boston and Chelsea with the most foreclosures.

• "Tenants have an amazing amount of rights and a lot of ability to fight these evictions," said Harvard Law School student Nick Hartigan, 25, one of the main organizers. "Banks should do the responsible thing and allow people to stay."

***

• [Tracie Tyler, a 47-year-old administrative assistant fighting her eviction] is energized to have student involvement in what she sees as the important quest of getting the news out. "They are young, they are vibrant, they inspire us older folks," Tyler said. "There are people that are afraid who don't know where to go."

For more, see Students take to the streets to aid displaced tenants.

See also, Harvard Law Record: Harvard Law's foreclosure taskforce tackles housing crisis (Legal Aid Bureau leads effort to stop eviction of tenants in foreclosed properties). BetaTenantRentSkimming

Saginaw County Cops Warn Against Scammers Posing As Tax Collectors Approaching Delinquent Homeowners Demanding Payment

In Saginaw County, Michigan, The Saginaw News and Newhouse News Service report:

• [P]olice and Saginaw County sheriff's deputies have received at least three reports of people approaching home owners whose taxes are in arrears and asking for payments of Saginaw County taxes, sheriff's Lt. Mark Garabelli said.

***

• Investigators have yet to obtain a description of the man-woman duo in Saginaw County. Police only know that they are white, and they show up at residences that have unpaid tax balances. [...] "It sounds like they are telling the people that if they don't have the full amount owed, just give them some of the money and they will not foreclose right now," Garabelli said.

For more, see With ailing economy, scammers target homeowners.

90 Jacksonville Tenants Face The Boot In Foreclosed Apartment Complex As Renters Receive Eviction Notices

In Jacksonville, Florida, First Coast News reports:

• "I found this notice here on my door. Basically it's saying that we have 15 days to move," says Jasmine Taylor. Wednesday night, Taylor found out she had less than a month to find a new place to live, and she's not the only one. About 90 other residents of Watermark Marina Apartments at 2039 Niblick Drive, got their own letters saying the complex was shutting down.

• According to management staff, back in August, the complex owned by South Fork out of California, went into foreclosure. For the last two months, Heritage Bank of North Florida has had direct contact with the apartment management, but management also says this comes as a shock to them.

For the story, see Residents of A Westside Apartment Have 15 Days To Move Out. BetaTenantRentSkimming

Lenders At Foreclosed Home Auction Stiff Winning Bidders; Refuse To Sell, Claiming Highest Bids Weren't High Enough

In Salt Lake City, Utah, local media stories report:

• It drew hundreds of spectators and willing buyers, but it turns out, a recent real-estate auction was a bust. The bank turned down offers from the highest bidders, even though the properties were foreclosures. There is no reason to believe it was a scam, but there is some evidence that perhaps the banks got really nervous and disappointed a lot of buyers. For more, see Bidders Won't Get The Properties They Won At Auction.

***

• An auction that netted $7.5 million in bids on 56 distressed Utah properties fell through last week after the owners -- three banks and two private lenders -- decided they may get a better deal by holding out for the government's bailout plan. [...] "This has never happened before. In the 25 years we've conducted lender-owned auctions, we've consistently closed over 95 percent of all high bids," [an auction company rep] said. "The stock market's historic drop last week and the bailout plan are some of the main reasons why the lenders rejected the bids," he said. For more, see Utah foreclosure auction flops.

Fire Problems In Homes Facing Foreclosure Continue

The following stories report fires in foreclosed homes from around the country:

• Marion, Ohio: A firefighter was injured when responding to a fire in a vacant home on the north side of the city Sunday evening. Firefighter Mike Crabtree was injured and taken to the Marion General Hospital Emergency Room for a neck injury when part of the ceiling fell on him. He was treated and released. The home was believed to be in foreclosure and listed CitiMortgage as the owner. Damage is estimated at $50,000. "We've had more than our share [of vacant house fires," Fire Chief Al Gruber] said. See Firefighter injured from collapsed ceiling.

• New Haven, Connecticut: A powerful explosion and fire destroyed a Fair Haven home overnight Thursday, the third fire in the neighborhood in just over a week. Fire officials are calling all three suspicious. [...] All three houses that burned since last week were in various states of foreclosure. [...] Heat from the fire was so intense it melted vinyl siding on two nearby houses, including one across the street and about 40 feet away. See Blast, fire destroys 3rd foreclosed home in just over a week.

• Sedona, Arizona: A house fire in Sedona is being treated as a crime scene after flames broke out twice in the empty house this weekend. The home at 200 El Camino Drive was valued at $1.2 million, but had been foreclosed upon. See Arson suspected in foreclosure house fire.

• Flint, Michigan: [Gordon] Yoesting had been squatting inside the house with his cat Mustard for the past 10 months but he had hopes it would soon be his. But that dream went up in flames Wednesday morning when fire engulfed the small home near Lewis Street, trapping Yoesting inside. Yoesting had been living in the home since December after the owner [...] decided it was too costly and let it slip into foreclosure. See Flint fire kills Gordan Yoesting, squatter in foreclosed home.

• Fort Wayne, Indiana: A 36-year-old Fort Wayne man admitted Tuesday to setting his foreclosed home on fire. [...] The house was to have been sold April 17 because of the foreclosure, according to court documents. [The fire was set April 15]. See Homeowner admits to arson.

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

Chicago-Area Foreclosure Evictions To Resume Monday; Court System Implements Added Procedural Protections To Address Sheriff's Concerns

In Chicago, Illinois, the Daily Herald reports:

• Cook County Sheriff Tom Dart said Thursday he will resume evictions at foreclosed homes and apartment buildings beginning Monday, confident that he and the court system have put adequate protections in place to protect renters' due process. "We've been given adequate assurance that we're not going to be asked to evict innocent tenants," said Dart in announcing the move.

***

• Dart said that even though representations [by foreclosing lenders] were sometimes made that notice had been given [to tenants], it often wasn't. [...] To illustrate how untruthful some of the representations had been in the past, Dart displayed a picture of a piece of property from which he was court-ordered to evict tenants. When his deputies arrived, they discovered the property had burned down five years ago, unbeknown to bankers or the court.

***

• Dart believes the problem has been addressed because Cook County Chancery Division Presiding Judge Dorothy Kinnaird worked with him to provide new forms that must be sworn to by bank representatives or their lawyer before an eviction can begin. The new form, says Dart, gives him what he wanted: "somebody who signed a piece of paper (who has) something to lose."

For the story, see Sheriff says he's changed the system, will restart evictions.

For a description of the new requirements imposed on lenders involved in foreclosure actions in Cook County, Illinois, see Cook County Sheriff's press release: Safeguards Added to Eviction Process (Cook County Judiciary introduces protections for tenants, taxpayers). BetaTenantRentSkimming

Washington State AG Settles Civil Charges With Florida Foreclosure Rescue Operator

The Office of the Washington State Attorney General announced earlier this week:

• [T]he Attorney General’s Office accused United Home Savers, LLP, of Clearwater, Fla., and owners Stephanie and Darin Dietschy, of Belleair Beach, Fla., of violating Washington’s Consumer Protection Act, Credit Services Organization Act and Commercial Telephone Solicitation Act.

• The company is now out of business. Owners did not admit any liability, but agreed to a consent decree that prohibits them from engaging in alleged violations in the future. According to the state’s civil complaint and the settlement, filed [Wednesday] in Spokane County Superior Court, United Home Savers advertised to Washington homeowners that the company can rescue homeowners from foreclosure. The company charged $1,200 or more up front and promised a refund if their services weren’t successful.

• But Assistant Attorney General Jack Zurlini said the majority of homeowners received little or no help, and the company routinely refused or failed to refund money. [...] United Home Savers is also under fire from the Federal Trade Commission in a lawsuit filed in U.S. District Court for the Middle District of Florida.

For more, see Attorney General says United Home Savers is a misnomer (Florida company accused of charging homeowners for empty promises).

Con Man Gets 5+ Years For Victimizing Widow, Pocketing $2M In Refinance Scam

In San Francisco, California, The Recorder reports:

• Michael Edison, a con man who stole $2 million from the widow of a legendary law firm founder, has agreed to spend more than five years in jail. [...] Michael Edison admitted targeting Jean Phleger, widow of Brobeck, Phleger & Harrison founder Atherton Phleger, in a financial swindle. Originally introduced to Phleger by her son-in-law, the actor Don Johnson, Edison agreed to refinance Phleger's house, pay down her old mortgage, and use $2 million in leftover cash to pay Phleger's bills. But Edison instead used the money for a private jet, a boat docked in Malta, cars, and goods at Kmart, Foot Locker and other stores, according to court filings.

For more, see Con Man's Plea May Spare His Wife.

For earlier story announcing the indictment, see the San Francisco Chronicle: Man indicted in $2 million fraud.

Three Indicted In Alleged Cleveland Mortgage Scam Involving 78 Homes; Nearly All Ended Up In Foreclosure

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

• Indictments have been filed against three people accused of being responsible for $5.8 million in fraudulent loans on 78 properties. The Cuyahoga County Mortgage Fraud Task Force annnounced the indictments against Beverly Cody, and Antoinece Boyd, and licensed mortgage loan officer Mark Kellogg, called "the poster child for mortgage fraud in America" by Cuyahoga County Prosecutor Bill Mason.

***

• Charges in the 73 count indictment include theft, forgery, receiving stolen property, telecommunications fraud, tampering with records, money laundering, theft by deception, securing writings by deception, and falsification. The three are also charged with engaging in a pattern of corrupt activity, a first degree felony.

• Nearly all 78 homes in the Slavic Village area eventually ended up in foreclosure as a result of the activity of those indicted, according to the charges. [...] Prosecutor Mason accused Kellogg of "causing the demise of this once proud community," and creating "carnage" in Slavic Village.

For the story, see Prosecutor: Three indicted for Slavic Village mortgage fraud.

See also, The Cleveland Plain Dealer: 3 charged in mortgage fraud that involved Slavic Village homes (Councilman helped unravel scheme involving 78 homes).

Go here for more on the decimation of Cleveland's Slavic Village from mortgage fraud scams.

Foreclosing Lenders Stiffing Condo Association Adds To Financial Squeeze On Non-Defaulting Unit Owners In One Miami-Area Building

In Surfside, Florida, WFOR-TV Channel 4 reports:

• [Carlisle on the Ocean condominium association president Colin Hendrick] says 60 percent of the unit owners are being forced to pay 100 percent of the [maintenance] fees. And there's another problem: getting the banks to pay up. Hendrick and the association have been forced to file liens against the banks, who are supposed to pay six months of condo fees if a unit owner falls into foreclosure. "The banks, who created the problem, are the biggest defaulters on paying condo fees and they are just making what was a bad situation a nightmare."

For more, see Condo Owners Find Themselves Paying Extra Fees.

For WFOR-TV video, see Banks Make Good Condo Owners Worse (45 out of 115 units are delinquent or have been foreclosed).

In a related story, see The Miami Herald: Condo boards want banks' 'free ride' to end (Condo owners and local politicians who accuse banks of delaying foreclosures on units to avoid association fees want to change state law in order to stop it).

North Carolina Attorney Disbarred For Swindling Clients; Among Victims Was Homeowner Who Paid $7K To Defend Foreclosure & Lost Home Anyway

In Charlotte, North Carolina, WCNC-TV Channel 36 reports:

• Charles Alston, Jr., can no longer practice law in the state of North Carolina, and there are dozens of clients he allegedly swindled who are cheering the news. [...] One woman lost her home [...] after paying Alston more than $7,000 to handle her foreclosure.

For the story, see Attorney disbarred for stealing from clients.

"Sewer Service" One Reason Why Unwitting Tenants Unaware Of Foreclosure Proceedings?

In New York City, a story in Metro New York suggests one possible reason why tenants unwittingly renting homes in foreclosure are unaware of the ongoing legal proceedings, only to get caught by surprise when sheriff's deputies show up at their front door to carry out an eviction:

• [S]ome [tenants] don’t even know their landlords are in foreclosure until the bank brings them to court. Three notices are supposed to be served before eviction, but many tenants never receive papers. “A lot of buildings have problems with mail, and there is ‘sewer service,’” [lawyer and director of the City-Wide Task Force on Housing Court Louise Seeley] said, referring to unscrupulous process servers who dump papers instead of delivering them.

Source: Beware broke landlords (Foreclosure crisis leading to more renters dealing with evictions).

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

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

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

Texas Man Faces Theft From Elderly Charge; Allegedly Conned Dementia-Suffering Widow Into Signing Away Deed To Home For Less Than 15% Of Value

In Houston, Texas, FOX 26 reports:

• Joseph Kelly Lecureux, 39, is charged with theft from the elderly; authorities are accusing him of trying to take advantage of an elderly widow whose home was on the verge of foreclosure. [...] According to Marian Rosen, [the homeowner's] attorney, the elderly widow was suffering from dementia when she signed the deed to her home over to Lecureux, selling it for less than 15 percent of it's value.

According to the FOX 26 video coverage, the widow's attorney filed a successful civil suit voiding the deed and restoring title to the home in the name of the widow. Sometime thereafter, local law enforcement authorities filed the criminal charges against Lecureux.

For more, see Man Faces Theft From Senior Charge (read story) (watch FOX 26 video report).

Go here, go here, and go here for other posts related to deed theft by forgery, swindle, etc.

Go here, here, here, here, here, and here for other posts on elder financial abuse. FinancialAbuseOfElderlyAlpha deed theft xenon

Four Month Foreclosure Moratorium, Mediation Program Looming In Miami?

In North Miami, Florida, WFOR-TV Channel 4 reports:

• Miami-Dade County is dubbed the foreclosure capital of the state, and now the county could be taking on the most drastic housing relief effort to date. If Miami-Dade's chief judge approves this moratorium, it could stop all foreclosures for four months, starting as soon as November 1st. It's a measure that could eventually be adopted in all counties across the state.

***

• [North Miami Mayor Kevin] Burns wants a countywide moratorium on foreclosures, oddly enough one that even the banks could support. The program is mirrored of what Philadelphia started this summer that has remarkably saved 80% of their homes in foreclosure.

• "If they can do it in Philadelphia, the City of Brotherly Love, I think they can do it the City of North Miami but also in Miami-Dade County," said Burns. "And I assure you that if the Chief Judge approves it here in Miami-Dade County, they'll do it throughout the state of Florida."

• The plan is pretty simple: There would be a 120 day halt to all existing foreclosure filings, and new filings would be sent to mediators within 45 days of the filing. Essentially banks and homeowners would be forced to meet to work something out.

For the story, see North Miami Mayor Proposes Foreclosure Moratorium.

26 Buyers Sue Attorney/Escrow Agent For Unrefunded Deposits In Failed Condo Project

In West Palm Beach, Florida, The Palm Beach Post reports:

• More than two dozen buyers trying to recover deposits on the failed Palladio Terrace condo have filed a $2.5 million lawsuit against the Gunster Yoakley law firm, claiming the firm failed to properly guard their cash when it served as the condo's escrow agent.

• Merco Group of the Palm Beaches, Palladio Terrace's developer, abandoned plans to build the West Palm Beach luxury condo two years ago, but it has not returned all $10 million in deposits it obtained from would-be buyers. These and other buyers have lobbed lawsuits against Merco, seeking the return of their money. Some judgments have been reached but not paid by Miami-based Merco.

• Now, 26 would-be Palladio Terrace buyers are pointing the finger at Gunster Yoakley, saying the firm was negligent in releasing their money to Merco in the first place.

For more, see 26 sue law firm over West Palm Beach condo money.

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

Two Victims Of Maryland Mortgage Payment Scheme Ensnared In Another Allegedly Bogus Plan

In Prince George's County, Maryland, The Washington Post reports:

• It's happened again. Some of the same people who lost money last year to the Metro Dream Homes mortgage-payment scheme lost tens of thousands of dollars more to another debt-payment plan before it was shut down by the Maryland securities commissioner this month. The commissioner has ordered Edward Offutt and his Offutt Group companies, located in Silver Spring, to cease and desist from selling securities and engaging in investment advisory activities pending a hearing. Calls to Offutt's offices were not returned.

***

• Two people who invested in Offutt's plan told me they did so because they were trying to avoid foreclosure on homes they bought in Prince George's County -- at inflated prices -- through the Dream Homes plan, run by a Laurel company, Metropolitan Grapevine, which doesn't appear to be associated with Offutt.

For more, see Another Losing Proposition for Homeowners.

Chicago-Area Sheriff Moves Closer To Resuming Foreclosure Evictions

In Chicago, Illinois, the Chicago Sun Times reports:

• Cook County Sheriff Tom Dart said he's a step closer to ending his prohibition on foreclosure evictions, a move that grabbed national media attention last week. Cook County judges on Tuesday began using a new court document for foreclosure evictions that specifically names tenants living at the foreclosed property and states how long they are allowed to remain in units -- the length of their lease or 120 days, which ever is shorter -- before deputies haul out their belongings.

• The new language in court eviction orders aims to quell Dart's concern that renters might not get proper notice their landlord had lost the property in foreclosure.

For more, see Dart a step closer to resuming evictions.

Another Upfront Fee Foreclosure Rescue Operator Faces The Heat As Ohio AG Files Civil Suit Alleging Violations Of Multiple State Laws

In Wood County, Ohio, WNWO-TV Channel 24 reports:

• In a continuing effort to fight consumer fraud fueled by the mortgage foreclosure crisis, the Ohio Attorney General filed a lawsuit Monday to stop a mortgage rescue scam from victimizing consumers in Auglaize, Hancock and Wood counties.

• The action alleges that Dwelling Assurance, Inc., and its owner, Nancy Schmidt of Lima, violated Ohio’s consumer protection laws by engaging in unfair and deceptive practices. The complaint alleges violations of the Ohio Consumer Sales Practices Act, the Credit Services Organization Act, the Debt Adjusters Act, and the Home Solicitation Sales Act [sections 1345.21 to 1345.28 of the Ohio Revised Code].

• The lawsuit is based on consumers who complained that Schmidt and Dwelling Assurance led them to believe that they could help save their homes. Instead, the complaint alleges the defendants took the homeowners’ money up front, without performing any services to stop the foreclosures.

For more, see Attorney General sues mortgage rescue company.

To view the lawsuit, see State of Ohio v. Schmidt.

Minnesota Feds Probe Alleged Mortgage Scam Involving Condo-Converted Buildings That Left Straw Buyers Holding The Bag

In Minnesota, the Minneapolis Star Tribune reports:

• Federal officials are investigating a Hastings couple in a new twist on mortgage fraud -- converting apartment buildings in Rochester, Sauk Rapids and Spicer into condominiums and then allegedly using phony buyers and bogus bank records to secure more than $5.5 million in financing.

***

• The leaders of the alleged scheme, James and Teresa Hoffman, are accused by the FBI of selling dozens of condos "at substantial profit" to a handful of buyers who never intended to live there and never really had to pay for them.

• Instead, the couple supplied the buyers' downpayments, propped up their bank accounts and falsified their mortgage applications, the FBI alleges. They then used rent from the condos to cover the straw buyers' mortgage payments, according to a search warrant affidavit filed in federal court.

For more, see New twist on mortgage fraud: Did rent money 'prop it all up'? (The FBI is investigating mortgage fraud that allegedly left straw buyers of condominiums holding the bag. No one has been charged).

Sacramento Feds Indict Two In "Cash Back" Straw Buyer Scam Involving $11.3M+ In Fraudulently Obtained Loans, 16 Homes

In Northern California, The Sacramento Bee reports:

• A "cash back" mortgage swindle involving in excess of $1 million in stolen funds and more than $11.3 million in fraudulently obtained loans on 16 homes in the Sacramento region was alleged Friday in a federal indictment. Derek Davis of Sacramento, described in court records by those who have dealt with him as a smooth-talking con artist, and Dino Rosetti, a Roseville mortgage broker, are charged in the indictment. They are accused of inflating purchase prices, securing 100 percent financing with bogus paperwork, and then kicking back part of the money to straw buyers.

***

• The kickbacks were either concealed from the mortgage lenders or falsely disclosed as credits meant for improvements to the properties, the indictment states. The kickbacks ranged from approximately $42,000 to nearly $138,000 and totaled "in excess of $1 million," [Assistant U.S. Attorney Courtney] Linn said.

For more, see Fraud charged in home loans in three counties.

See also, U.S. Attorney press release: Two Indicted In "Cash Back" Mortgage Fraud Scheme.

Thanks to Tim McDaniel for the heads up on the story.

Monthly Payments For Criminal Restitution In Minnesota Developer's Straw Buyer Scam Could Go On For 660 Years

In Minneapolis, Minneosta, the St. Paul Pioneer Press reports:

• A federal judge Thursday ordered five people and a defunct corporation to pay more than $5.4 million to victims in what has been called the state's biggest mortgage fraud case. Under the plan set up by U.S. District Judge Ann Montgomery, though, it'll take 660 years for the defendants to pay the restitution if each makes the minimum $150-a-month payment.

• The money is a fraction of the $20 million to $50 million the government says the defendants scammed in the four-year con. The restitution amount — $5,467,705, to be exact — represents the total in claims filed by victims in the case.

• Officials believe the scheme involved $100 million in fraudulent financing for 240 homes currently in some stage of foreclosure. The brains behind the scam were Michael Alan Parish and Ardith Ann Parish, a couple who lived in Eagan. Their company, Parish Marketing and Development Corp., had become one of the metro area's most highly regarded homebuilders.

For more, see Judge orders mortgage scammers to pay $5.4 million (Restitution set for five in massive mortgage fraud).

See also, Minneapolis Star Tribune: Judge orders Parish fraud ring to pay victims.

Go here for earlier posts on the now-defunct Eagan, Minnesota homebuilder Parish Marketing and Development.

Another Florida Court Moves To Mitigate Foreclosures; Creates Procedural Rules For Mediation / Loan Modification

In West Palm Beach, Florida, The Palm Beach Post reports:

• [T]he pace of foreclosures prompted [Palm Beach County's] Chief Judge Kathleen Kroll to consult with judges, clerks, attorneys, lenders and housing counselors. On Friday, Kroll signed an order intended to make foreclosures on homesteaded property less painful and more efficient. The order goes into effect on Nov. 1.

For more, see New rules aim for smoother defaults.

For the court order, see 15th Judicial Circuit of Florida: Administrative Order No. 3.305 - 10/08 - In Re: Homestead Foreclosure Actions By Institutional Lenders.

Philly Uses Door-To-Door Program To Get Out Word On Foreclosure Diversion Program

In Philadelphia, Pennsylvania, The Philadelphia Inquirer reports:

• [A]rmed with a list of homes headed for sheriff's sale, [Emily Carlson and Edith Dixon] the two community organizers from Southwest Community Development Corp. went door to door, escorted for safety by Philadelphia police officer Joseph Young. They handed out information about the city's new program to forestall foreclosures. Homeowners who've missed payments can get legal counseling and go to a court session aimed at working something out with their mortgage companies. [...] The city started the door-to-door program in May. It's making the extra effort, in part, to protect neighborhoods from blight.

For more, see Spreading hope for homeowners.

Firefighters Find Homeowner In Foreclosure With Gunshot Wound While Responding To House Fire; Detectives Are Treating Case As A Possible Suicide

In Pasadena, California, the San Gabriel Valley Tribune reports:

• A Pasadena woman distraught over the pending foreclosure of her home may have lit her house on fire and killed herself, police said. Neighbors reported smoke coming from a home in the 1000 block of North Wilson Avenue shortly before 5 a.m. Monday morning. Firefighters arrived and found [the homeowner], 53, in her bed suffering from a gunshot wound. "Some of the neighbors said she was going to be evicted this weekend," said Lt. John Dewar, the detective investigating the case. "We're looking at this as possibly a reason this tragedy occurred."

For the story, see Woman distraught by foreclosure may have killed self, burned home.

See also, Los Angeles Times: Pasadena woman facing eviction may have killed herself.

Go here for other posts on foreclosures and suicide. suicide homeowner foreclosure zeta

Flint-Area Sheriff Declares Two Week Eviction Moratorium; Expresses Concern Over Unwitting Tenants Renting From Landlords In Foreclosure

In Flint, Michigan, WJRT-TV Channel 12 reports:

• Amid a national mortgage meltdown, Genesee County's sheriff is taking an unusual step to fight foreclosure. Sheriff Robert Pickell says renters won't be evicted for the next two weeks. The eviction moratorium is drawing fire from landlords and praise from tenants.

***

• Last week, the sheriff in Chicago announced a similar moratorium. [...] Pickell says his deputies evict 50 to 60 families a week. About five of those, he says, are renters who have paid their bills on time.

For the story, see Local sheriff puts halt on evictions (Controversial moratorium will last two weeks).

See also, The Flint Journal: Foreclosures prompt Genesee County Sheriff Robert Pickell to call off evictions of renters.

For story update, see Genesee County moratorium on evictions scaled back to include only renters in foreclosed homes. BetaTenantRentSkimming

State Attorneys General Urge Lenders To Follow Countrywide Loan Modification Model

Legal Newsline reports:

• Attorneys general from 10 states are coordinating efforts to shore up the country's mortgage crisis following news that the rate of foreclosures continue to rise. On Wednesday, a task force - The State Foreclosure Prevention Working Group -- that includes attorneys general from Illinois, California, Arizona, Ohio, Texas, Iowa, North Carolina, Colorado, Massachusetts, Michigan issued a letter to 16 mortgage lending companies urging them to follow the loan modification model put forth in the multi-state settlement with Countrywide Mortgage Corp., announced on Monday.

For more, see Foreclosure workouts not working, AGs tell banks.

Foreclosing Lenders Getting Hammered In Chula Vista; Fines From Blight-Prevention Ordinance Soar; Law May Be Nat'l Model As Other Cities Follow Suit

In Chula Vista, California, the San Diego Union Tribune reports:

• [O]ver the past year, the [Chula Vista blight-preventio, foreclosed home] ordinance written by [city code-enforcement manager Doug] Leeper has become a national model for communities overwhelmed by spikes in foreclosures, analysts say. Hit hard by the mortgage market meltdown, Chula Vista has taken a strong stance against lenders and loan servicers who allow abandoned houses to become neighborhood eyesores.

***

• So far, the city has levied $850,000 in fines and penalties and collected a little more than $200,000. In addition, Chula Vista has brought in about $77,000 through vacant-home registration fees imposed by the ordinance. Uncollected fines become liens against foreclosed properties, payable at resale.

***

• Leeper said more than 300 jurisdictions nationwide have contacted him to learn more about the ordinance over the past year. Although most are in California, inquiries have come from such distant cities as Boston, Milwaukee and Dallas.

For more, see Blight-prevention law emerges as a national model (Chula Vista forces lenders to maintain foreclosures).

Maryland Builder Charged With Pocketing $1M+ Of Customer Money & Failing To Construct Homes

In Prince George's County, Maryland, The Gazette reports:

• Three people were indicted Thursday on charges of accepting more than $1 million for homes in Upper Marlboro that were never built, according to the Office of the State's Attorney for Prince George's County.

***

• [Leon and Emma Coleman, who ran a company called Opportunity Investment Group] face 57 counts of theft over $500 and charges of violating the state's Homebuilder Act, [...]. Kathy Ridley of Ellicott City, who allegedly vouched for the Colemans' reliability and helped their clients secure bank loans, faces 13 counts of theft and conspiracy [...].

***

• The Homebuilder Act requires builders to keep clients' payments in escrow accounts that are separate from their personal accounts and to hold the funds in trust for their clients. "This is our first foray into the homebuilder stuff from the criminal side," said [Assistant State's Attorney Doyle] Niemann. "We prosecute somebody who mugs somebody on the street for $50. Here these people lost a million."

For more, see Homebuilders, broker indicted for not developing Upper Marlboro lots (Duped homebuyers left with thousands in debt and no house to show for it).

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

Utah Builder Gets Three Months In Jail For Stiffing Subs, Resulting In Construction Liens Being Slapped On Customers' New Homes

In Salt Lake County, Utah KUTV Channel 2 reports:

• The Salt Lake County developer who was accused of jilting both homeowners and a contractor is spending 3 months in jail. The sentence brings to an end our investigation after calls to Get-Gephardt from home buyers. [...] Calls came from people who had closed on mortgages to move into their brand new homes on South Mountain...only to find out contractors were charging them again because construction bills were not paid.

For the rest of the story (video only), see Jail for a contractor accused of bilking homeowners.

See also, Utah Attorney General press release: Home Developer Sentenced To Jail:

• [J]udge [Judith] Atherton ordered [developer Brian K.] Brady to send $3,000 each month to the Attorney General's Office until the victims are made whole. The largest amount----$262,745---will go to the [Utah Residence] Lien Recovery Fund, a fund set up by the state to pay subcontractors and material providers when a general contractor fails to make payments for services and material for a home. Brady also must pay $61,506 to three subcontractors who could not recover from the Lien Recovery Fund.

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

Stiffing Subs In Wisconsin Can Land Builders In Jail, State High Court Holds

In June of this year, the Office of the Wisconsin Attorney General announced the decision of the state Supreme Court in a case involving the state's "theft by contractor" law.

• State v. Angela and Matthew Keyes [2008 WI 54] involves the interpretation of Wisconsin’s theft by contractor law. Under the law, money paid to a prime contractor by an owner for work on a building contract is held “in trust” by the prime contractor until all “claims” by subcontractors have been paid. If the funds held in trust by the prime contractor are insufficient to satisfy the subcontractors’ claims, he must satisfy those claims proportionally. Any “use” of the trust fund by the prime contractor before all claims have been paid in full or proportionally in cases of deficiency is considered “theft” by the prime contractor under Wisconsin law.

• “The Keyes decision reiterates the basic principle that both owners and subcontractors are to be protected by the occasional self-dealing of unscrupulous prime contractors,” said Wisconsin Attorney General J.B. Van Hollen.

For the Wisconsin AG's press release, see Prime Contractor Commits Theft By Contractor If Payments Made By The Project Owner Not Used To Satisy Subcontractors First, Wisconsin Supreme Court Holds. StiffingContractorsZeta