Fannie: No Comment On Affect Of New Federal Protections For Tenants in Foreclosed Homes

In Hartford, Connecticut, the Hartford Courant reports:

• Fannie Mae still won't comment on how it will be affected by new federal protections for tenants living in some foreclosed properties, but the mortgage giant said Tuesday that it already tries to help renters who face the loss of a place to live. [...] Fannie Mae's policies on evictions jumped into the spotlight last week after Greater Hartford Legal Aid challenged the agency's move to evict Evelyn Colon, a single mother living in a recently foreclosed property on Marshall Street in Hartford.

***

• Legal Aid lawyers invoked a provision in the $700 billion financial services bailout legislation that protects tenants in foreclosed properties that are under the control of federal agencies.(1)

For more, see Fannie Mae: Goal Is To Avoid Evictions (if link expires, try here).

For earlier information on this story, see:

• Hartford Tenant Fights To Stay In Home After Foreclosure,
• Connecticut Renter Facing Foreclosure Eviction Invokes New Bailout Law In Attempt To Fight Off Fannie.

(1) Section 109(b) of the Federal bailout bill may require the U.S. Secretary of the Treasury to work with the F.H.F.A. and other government entities to permit tenants like Evelyn to remain in their apartments after foreclosure. BetaTenantRentSkimming

"Spooky" Foreclosures To Force Trick-Or-Treaters To Other Neighborhoods

In Detroit, Michigan, The Detroit News reports:

• [I]n several Metro Detroit neighborhoods battered by home foreclosures, the spookiest thing this Halloween is the dramatic numbers of empty homes and "For Sale" signs. With as many as 63,453 homes now for sale in Wayne, Oakland, Macomb and Livingston counties -- many of them empty -- once-well-lighted houses now sit vacant, and some parents say they'll be seeking greener trick-or-treating pastures elsewhere. Several of those who stay behind are stocking fewer bags of candy.

• Venturing to other neighborhoods for better candy is nothing new, but safety concerns now are sending parents to neighborhoods far away from the scatter of dark, empty homes. [...] Real estate agents say that the safety concern is real. Empty homes have had reports of break-ins, vandals looking for copper or whatever may have been left behind. Authorities advise that parents steer their children clear of them.

For more, see Foreclosures scare off trick-or-treaters (Worried parents opt to drive kids to other areas).

Foreclosure Free-For-All Evolving Amidst The Mortgage Delinquency Disorder

From the suburbs of Washington, D.C., The Washington Post reports:

• Among the many harsh lessons for mortgage lenders in the housing bust is this one about evictions: Selling a house is far easier than taking it back. Clever opportunists and struggling families have figured this out, too, and the result is a rapidly evolving free-for-all coursing through the Washington region's worst foreclosure-racked suburbs.

***

• Defaulting homeowners are taking advantage of banking chaos to live mortgage-free for six months or longer, dragging out the eviction process, according to lenders and real estate agents. Unscrupulous landlords are collecting rent but withholding mortgage payments, leaving a rude surprise for their tenants when repossession comes. And banks are so eager to avoid the hassle of eviction that they are paying occupants $5,000 or more simply to hand over the keys and move out without a fight.

• Then there are the illegal squatters, appliance thieves and miscellaneous animals -- wild and domestic -- that abound amid the disorder.

For more, see Foreclosures Open Door To Disorder (Vermin, Crooks Exploit Housing Market Crisis).

Kansas City Feds Indict 17 In Alleged "Cash Back" Mortgage Scam That Helped Local Builder Unload Unsold Inventory; 25 Homes, $12.6M Loans Involved

From the U. S Attorney's Office in Kansas City, Missouri:

• John F. Wood, United States Attorney for the Western District of Missouri, announced that a real estate agent and two former loan officers in Lee’s Summit, Mo., are among 17 defendants(1) indicted by a federal grand jury today for their roles in a $12.6 million mortgage fraud scheme that involved 25 residential properties in Lee’s Summit and Raymore, Mo.

***

• According to the indictment, the defendants were involved in buying and selling new homes in the Raintree and Belmont Farms subdivisions of Lee's Summit and the Eagle Glen subdivision in Raymore. Buyers allegedly purchased the homes at inflated prices, obtaining mortgage loans by providing false information to mortgage lenders, then keeping the extra proceeds. Buyers created shell companies for the purpose of receiving those kickbacks from builder Jerry Emerick, doing business as Ty Construction and Residential Contracting LLC, the indictment says, with kickbacks ranging from $60,000 to $125,000 on each house. Emerick will be charged separately for his role in the scheme.

For more, see U.S. Attorney (Kansas City, Mo.) press release: Real Estate Agent, Loan Officers Among Those Indicted For $12.6M Mortgage Fraud Conspiracy (Involved New Upscale Homes In Lee's Summit, Raymore).

See also, The Kansas City Star: 17 indicted in upscale mortgage fraud case (U. S. Attorney Wood noted that many of the 25 houses now are vacant and in foreclosure).

(1) Angela R. Clark, 40; James F. Simpson, 39; Cynthia D. Jordan, 41; and Stefan M. Guerra, 30; all of Lee's Summit; Ronald E. Brown Jr., 39, of Gladstone, Mo.; Enrico J. McClain, 36, of Kansas City; Daryle A. Edwards, 37, and Leon T. Jones, 42, both of Olathe, Kan.; Gerald D. Williams, 47, and his wife, Judith E. Williams, 47, both of Omaha, Neb.; Willie Charles Cadenhead, 38, of Grandview, Mo.; Jerome Shade Howard, 39, of Anaheim, Calif.; Michael Conrad Smith, 47, of Lancaster, Calif.; Cheryl Ann Romero, 50, of Santa Fe Springs, Calif.; Anahit Nshanian, 29, of Long Beach, Calif.; Mark Whitney Jackson, 48, of Woodland Hills, Calif.; and Steven M. Salas, 35, of Hacienda Heights, Calif. were charged in a 34-count indictment returned by a federal grand jury in Kansas City.

Tennessee AG, Memphis Legal Services Firm File Suits Against Upfront Fee Foreclosure Rescue Operator

In Nashville, Tennessee, WTVF-TV Channel 5 reports:

• The Tennessee Attorney General filed suit Tuesday against a company suspected of charging consumers for services it and its principals have not provided. The lawsuit filed against Tennessee Housing Protection Agency, Inc., alleges violations of consumer protection laws.

• "With foreclosures in Tennessee going up, we are concerned that homeowners across the state may turn to ‘foreclosure rescue' operations such as this that in some cases offer only false hope," said Tennessee Attorney General Bob Cooper, in a news release.

• The lawsuit also alleges that the Memphis-based company's name is misleading and deceptive to consumers. The name sounds similar to an agency authorized by the state. The company is not a government agency and is not affiliated with the state.

• The Memphis Area Legal Services also filed lawsuits against the company and its principals.

Source: AG Files Suit Against Foreclosure Rescue Company.

Go here for the WTVF-TV Channel 5 video.

See also:

• Tennessee AG's press release: Attorney General Files Suit Against Tennessee Foreclosure Rescue Company,
• Memphis Commercial Appeal: Home-loan help agency faces suit (Foreclosure rescue 'unfair, deceptive,' customers say).

Lien Stripping Of Subordinate Home Mortgages In Bankruptcy Gaining In Popularity?

In Las Vegas, Nevada, the Las Vegas Business Press reports:

• Homeowners upside down in their mortgages and facing foreclosure may have a new recourse. The relatively new practice of "lien stripping" is becoming a popular way to get out from under double mortgage payments and sometimes save homes. Not everyone, however, is praising the practice.

• The lien removal business has increased in recent months as property values continue to sink. At least a handful of local bankruptcy attorneys are performing lien stripping for clients. One is making it a focal point of her practice.

For more, see That LIEN AND HUNGRY LOOK (Mortgage 'stripping' becomes marketing tool for bankruptcy attorneys).

For other posts on homeowners using Federal & state consumer protection statutes to try and undo bad mortgage loans, Go Here, Go Here, and Go Here. UndoMortgageLoans TILAdelta

Lenders' Problem Of Proving Promissory Note Ownership In Foreclosures Continues

In Sarasota, Florida, a recent column in the Herald Tribune describes the story of a local couple facing foreclosure that illustrates the problem some lenders are having proving in court that they have right to bring a mortgage foreclosure action, because of an inability to present proof of ownership of the promissory note secured by the mortgage.

• Though there was apparently good cause to foreclose, and though Wells Fargo was represented by a Tampa firm that specializes in mortgage cases, Judge Paul Logan has dismissed the case. Why?

• [The homeowners' attorney Nina] Perry hadn't claimed the couple had made the payments or soon would. She said that the plaintiff hadn't been able to show it had the right to sue, because there was no proof it owns the mortgage. Such proof isn't always easy now, when so many mortgages have been packaged as securities and sold and resold in bulk to various financial institutions that are often confused themselves about what they own.

• Perry says the Bradenton case isn't necessarily over. The foreclosure could be filed again, with new evidence or maybe with a new plaintiff. But in the meantime, the owners haven't been kicked out and it may have become a better time for the right plaintiff -- if found -- to choose to make a deal.

For more, see Proving who owns a mortgage isn't easy.

For posts that reference the failure of some mortgage lenders and their attorneys to prove ownership of the promissory note when starting foreclosure actions, Go Here, Go Here, Go Here, and Go Here. missing mortgage foreclosure docs gamma

Prince George's County Mortgage Foreclosure Fraud Unit Intent On Criminally Prosecuting Scammers

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

• [I]n the last two months and on several occasions, [Prince George's County] State's Attorney Glenn Ivey has emphatically stated his intent to aggressively surface and prosecute mortgage scammers who have defrauded new homeowners. "Not in this county, not in this state," is the mantra under which the new Division operates, said its staff.

***

• [The Economic Crimes Unit of Ivey's office] is screening more than 10 calls a day, making a distinction between bad financial decisions vs. fraud for theft and fraud for profit and then investigating and prosecuting the most egregious first.

• While Montgomery County's State's Attorney's office is also prosecuting mortgage fraud, Prince George's is the only jurisdiction with a dedicated unit, said Assistant State's Attorney Doyle Niemann, also of the Division, some weeks ago.

For more, see Briefing sheds light on mortgage fraud.

State Regulatory Probe Reveals $45M Mortgage Fraud Scam; 88 Of 105 Homes Involved Ended In Foreclosure; Brokers, Buyers Pocketed $8M In Kickbacks

In Denver, Colorado, the Rocky Mountain News reports:

• A $45 million Front Range mortgage fraud scheme involving 105 home sales in 2006 resulted in 88 foreclosures after $8 million was kicked back to buyers and brokers, a state probe has found. "It's certainly the biggest case we have ever investigated," said Zachary Urban of the Colorado Division of Real Estate. "We would hope there isn't something bigger out there that we don't know about."

***

• About three dozen real estate agents were involved in the suspect transactions. About a dozen of them have received sanctions from the real estate division, ranging from the revocation of their real estate licenses to small fines and requirements to complete education classes.

***

• Erin Toll, director of the Division of Real Estate, has turned over information from the investigation to federal authorities including the FBI, the IRS, U.S. Postal Service and the Secret Service. "Our fight song is 'be the best at being first.' All we can do is take their licenses and impose fines," Toll said. "Other groups can bring criminal charges."

For more, see Colorado mortgage fraud probe uncovers kickbacks ($8 million wound up in pockets of buyers, brokers).

See also, The Denver Post: Builders untouchable in probe (State real estate agency explores mortgage fraud; IRS, FBI involved).

More Praise For Philly's Residential Mortgage Foreclosure Diversion Program; Now Getting International Attention

In Philadelphia, Pennsylvania, the Philadelphia Daily News reports:

• A local program created this year to help homeowners avoid foreclosure and sheriff's sales is attracting international attention and study from other municipalities who may use the idea.

• U.S. Sens. Arlen Specter and Bob Casey Jr. held a hearing in City Hall [Friday] to learn more about the [Philadelphia] Residential Mortgage Foreclosure Diversion Program and the people it has helped. Specter praised the effort, saying it helps borrowers and lenders while preventing the proliferation of abandoned homes and keeping city property taxes flowing.

***

• Philadelphia Common Pleas Court Judge Annette Rizzo, who helped develop the program, told the senators that a television crew from Sweden was in town this week to learn more about the effort.

For more, see Pols praise mortgage program.

Nantucket's "Joe The Plumber" Sues Lenders To Back Out Of Bad Loans

On Nantucket Island, Massachusetts, The Inquirer and Mirror reports:

• [A]fter falling behind on his home mortgage last month, Joe Ciarmataro, an island plumber, has sued two mortgage companies in Nantucket Superior Court, claiming they knew he could not afford the $790,000 loan he took out to purchase a condominium on Witherspoon Drive in 2007.

• The lawsuit alleges “unfair and deceptive acts and practices” by Connecticut-based Master Key Mortgage as well as a Texas corporation, American Home Mortgage Servicing, and that Ciarmataro was defrauded by the two companies.

• Filed last week in Nantucket Superior Court, the lawsuit is illustrative of the national debate over whether predatory lenders or irresponsible borrowers are more responsible for the meltdown in the housing market and the dramatic rise in foreclosures.

• Ciarmataro is seeking to have a judge rescind the mortgage altogether, in addition to compensation for losses, interest costs and attorney’s fees.

For more, see Nantucket’s own “Joe the Plumber” sues mortgage co. for unfair practices.

Long Island Landlord Faces Homicide, Mortgage Fraud Related Charges As 4 Year Old, Two Adults Die Of Carbon Monoxide Poisoning In Dilapidated Home

In Suffolk County, New York, the Suffolk County District Attorney recently announced:

• A Dix Hills landlord is charged with three counts of criminal negligent homicide for causing the deaths of three tenants found dead of carbon monoxide poisoning last November in his illegal, dilapidated two-family home on Sunrise Highway in West Babylon.

• In addition to the three criminal negligent homicide charges, [Landlord Wilson Milord, 48, of Dix Hills] is charged with four counts of second degree grand larceny, three counts of third degree grand larceny, three counts of first degree offering a false instrument for filing, two counts of second degree forgery, and one count of scheme to defraud.(1)

***

• The victims, Tanishia Armstrong, 25, her four-year-old daughter, Talani Johnson, and their downstairs neighbor, Ricardo Pearce, 27, died Nov. 20 from fumes from Milord’s generator running inside his rental property at 437 Sunrise Hwy. in West Babylon.

***

• On Nov. 20, 2007, the day 4-year old Talani Johnson, her mother Tanisha Armstrong and tenant Ricardo Pearce died in the squalor of the defendant’s unheated Sunrise Highway house, Milord had run out of money. “Mr. Milord financed his lifestyle by refinancing his rundown rental properties and taking the cash. To cover his ever-growing monthly mortgage payments,” [Suffolk County District Attorney Thomas] Spota said, “our investigation found he would add rental units, squeeze more tenants into his rental properties, and flagrantly ignore town codes.”

For more, see the DA's press release: Landlord indicted for criminal negligent homicide for role in deaths of 4- year old and two adults (Grand larceny, forgery and other charges related to mortgage fraud).

See also, WCBS-TV Channel 2: Notorious Long Island Slumlord Arrested, which reports that the West Babylon house has been foreclosed.

(1) The district attorney said the counts in the indictment charging Milord with grand larceny, forgery, and filing a false instrument are connected to Milord’s scheme to defraud lending institutions to secure or refinance mortgages for his West Babylon building and additional rental properties he owned in Central Islip, Brentwood, and Wheatley Heights, according to the story.

State Democratic Party Accuses Lawmaker Of Pocketing $437K From Virginians Facing Foreclosure Before Elected To Congress

In Norfolk, Virginia, The Hill reports:

• The Virginia Democratic Party (VDP) hammered Rep. Thelma Drake (R-Va.), a licensed real estate agent, for turning a profit on three properties she bought in foreclosure before being elected to Congress. [...] The VDP press release called attention to three properties in Norfolk, Va., off of which Drake was able to make $437,000 by buying them at low prices due to foreclosures. Drake has sold one of the properties and has continued to rent the other two.

• “This is a serious conflict of interest,” said Jared Leopold, communications director for the VDP. “While Virginians struggle to hold onto their homes, Thelma Drake has turned their struggles into her personal profit. Thelma Drake has serious questions to answer for Virginians about who she truly represents.”

For more, see Dems accuse Drake of profiting from foreclosures.

Forgery Charged In Case Involving 94 Year Old Woman Allegedly Cheated Out Of Home By Son, Daughter-In-Law, Lawyer

The Belfast Telegraph reports:

• A Northern Ireland solicitor has denied involvement in a £100,000 fraud in which a 94-year-old woman was allegedly cheated out of her home by her son and daughter-in-law. Co Down solicitor Ann Ervine is accused of falsely claiming to have witnessed pensioner Annie Martin sign over her Saintfield home to her son George Ignatius Martin and daughter-in-law Mary Martin.(1)

For more, see Lawyer accused of cheating woman (94) out of her home.

For story update, see Belfast Telegraph: Son admits defrauding his mother of her home.

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

(1) During an arraignment at Belfast Crown Court last week, Ervine (51) pleaded not guilty to forgery and using false Land Registry forms with intent; and was joined in the dock by husband and wife George Ignatius Martin and Mary Martin, who both pleaded not guilty to obtaining property by deception, forgery and using false land registry forms with intent, according to the story. DeedTheftAlpha FinancialAbuseOfElderlyAlpha

Cleveland-Area Straw Buyer Among 8 Indicted In Alleged Cuyahoga Mortgage Scam

In Cuyahoga County, Ohio, The News Herald reports:

• A Wickliffe man is one of eight people indicted this week for mortgage offenses involving seven houses located in Cleveland, Cleveland Heights, Lyndhurst, Moreland Hills and Pepper Pike. The homes totaled approximately $3 million in fraudulent loans. Roy Williams Jr., 59, is scheduled to be arraigned Nov. 4 in Cuyahoga County Common Pleas Court for his alleged role in the scheme. According to the indictment, Williams was a “straw buyer” who falsified his assets, income and bank account information.

***

• Williams has been charged with engaging in a pattern of corrupt activity, conspiracy, theft by deception, telecommunications fraud, securing records by deception, forgery and receiving stolen property.

For more, see Wickliffe man indicted in mortgage fraud scheme.

See also, Cuyahoga County Prosecutor press release: Eight Individuals, Six Companies Indicted for Mortgage Fraud.

Hip Hop Artist Alleges Forged Deed To Property In Baltimore Bankruptcy Court Proceeding; Seeks To Void Title Transfer

In Baltimore, Maryland, The Associated Press reports:

• Usually you wouldn't think of a member of Salt-N-Pepa being shy at all in front of an open mic. But when the mic is on a witness stand at a court in Baltimore and the issue is money, you can understand why Sandra "Pepa" Denton said she was a little nervous. The judge told her to "take a deep breath and relax" to calm her nerves.

• Denton was in court in a case that pits her against her ex-husband and his new wife over a property sale. She claims Emora Horton bought the home in Baltimore after a friend forged a signature on a deed. Denton wants the property returned to her. The defendants deny taking part in any fraud or forgery. A ruling is expected in January.

Source: Member of Salt-N-Pepa in Court.

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

See also, The Maryland Daily Record, which reported:

• Whether Denton will get that property back, with or without liens, turns on the legal distinction between fraud and forgery, lawyers in the case say. “It really lives or dies on the forgery issue,” U.S. Bankruptcy Judge Robert A. Gordon said to Denton’s attorney, J. Michael Broumas.

***

• Attorneys for the entities that made loans [secured by the property] argue [the deed signer's] actions instead constitute fraud [as opposed to forgery], since [the deed signer] signed his own name and made no attempt to conceal his identity. Under such a scenario, the property might still be Denton’s but would come with the lenders’ considerable liens, Broumas said. [...] Judge Gordon said his own research centered on a case out of the District of Columbia, McNairy v. Baxter, in which a forged limited power of attorney document made a subsequent deed ineffective.

For more, see:

• Rapper ends hearing with hugs, tears (Property still at issue, but Pepa lets ex-rival’s debt go); and
• Singer claims ex-husband pushed her into investing in Baltimore property.

Go here, go here, go here, go here, and go here for other posts related to deed or refinancing scams by forgery, swindle, etc. KappaDeedTheft

Michigan Man Cops Plea In Alleged Home Theft From Elderly Couple

In Wayne County, Michigan the Detroit Free Press reports:

• A Grosse Pointe Woods man accused of defrauding an elderly couple in a real estate scheme pleaded no contest in Wayne County Circuit Court on Wednesday. [...] According to the Wayne County Prosecutor's Office, in February 2004, [John] Matouk, who owned half a property [...] in Dearborn with the couple, forged a quitclaim deed from the couple that transferred the entire property to his company, LM Investments of Dearborn LLC.

• Matouk then allegedly obtained a $650,000 mortgage on behalf of LM Investments and spent the money on himself. In September 2007, the couple discovered the scheme and reported it to authorities.

Source: Man takes plea in real estate case.

For story update (11-27-08), see Real estate scam means probation.

For earlier story on this case, see Man charged in Dearborn land swindle case.

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

Illinois Woman Charged With Scamming Motivated Home Seller Out Of House Payments, Say Cops

In Mokena, Illinois, the Southtown Star reports:

• Linda Novelli moved with her four children from Mokena to Atlanta this summer to be closer to her relatives. Last month, she moved back, angry and $40,000 poorer. In between, Novelli claims, a woman named Kathleen Dangman turned her life upside down, bilking her out of payments after she bought Novelli's Mokena home.

• Dangman, 38, is in Will County Jail awaiting trial on six counts of felony forgery in two separate cases. Her next hearing is Tuesday. Mokena police say Dangman ran a "sophisticated operation" in which she bought homes, struck deals with the original homeowners to pay them directly and then paid with fraudulent checks or money orders.

***

• In December, [Mokena Police Cmdr. Chris Surdel] said, homeowners in [an unrelated case] told police Dangman was leasing their home and bouncing checks. Dangman was arrested on two counts of forgery in January. She was out on bond when she moved into Novelli's home this summer, Surdel said.

For more, see Mokena woman caught up in home-buying scam.

Fraud, Forgery Account For About 20% Of Its Losses, Says Title Insurer

Reuters reports:

• The shares of major U.S. title insurers tumbled on signs the nation's housing crisis will lead both to higher claims and to reduced demand for insurance that homeowners need to protect themselves and their lenders.

***

• [Fidelity National Financial Inc.] said fraud and forgery cases have grown more numerous, and now account for about 20 percent of claims.

Source: Title insurers tumble on housing woes.

California Woman Wins Race To Prosecutor's Office; Cops Plea In Upfront Fee Foreclosure Rescue Scam; Agrees To Testify Against Two Alleged Co-Scammers

In Monterey County, California, the Salinas Californian reports:

• One of three defendants in a Gonzales foreclosure scam made a plea deal Friday to charges including felony conspiracy to defraud, the Monterey County District Attorney’s Office said. All three defendants were accused of scamming more than 55 people in Monterey County of at least $100,000.

• Maria de Lourdes Ponce of Gonzales and Santa Cruz residents Fabian Olivares Casillas and Melissa Garcia were arrested in August, said John Hubank, a deputy district attorney with the consumer and environmental protection unit, on suspicion of taking thousands of dollars from homeowners after promising to save their homes from foreclosure.

Source: Plea deal in foreclosure scams against 55 Monterey County residents.

See also, The Monterey County Herald: Guilty plea in fraud case.

For the Monterey County DA's press release announcing the original charges, see District Attorney files felony charges filed against foreclosure scam artists.

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

Reports Of Hedge Fund Threats Against Loan Servicers Making Loan Modifications Outrage Lawmakers

In Washington, D.C., Politico reports:

• Barney Frank is not happy with hedge funds. Specifically, he and other top House Democrats are “outraged” that some hedge funds are telling mortgage service companies not to modify distressed mortgages with the help of the government program Frank helped craft.

• The New York Times reports that at least two hedge funds told servicers they might take action against them if the servicers participated in the government program to help homeowners avoid foreclosure. The program, which became law in July, just took effect at the beginning of October.

• Frank (D-Mass.) and four other Democratic members of his Financial Services Committee wrote an angry letter to the CEOs of the hedge fund companies named in the article, Braddock Financial Corporation and Greenwich Financial Services. The lawmakers wrote that they “strongly urge” the companies to reverse their position on the modification issue and informed each CEO that they’re scheduling a Nov. 12 hearing at which both will be asked to testify.

For more, see Frank threatens financial industry, calls hearing.

See also:

• House Financial Services Committee press release: Lawmakers Demand Hedge Funds Drop Opposition to Foreclosure Prevention,
• Letter to Braddock Financial Corporation,
• Letter to Greenwich Financial Services,
• Letter to Managed Funds Association. MortgageServicingIssuesAlpha

Poconos Mortgage Suit Set For Trial; 100+ Home Buyers Allege Being Defrauded By Lender, Builder

In Harrisburg, Pennsylvania, The Morning Call reports:

• A federal lawsuit filed six years ago(1) alleging that more than 100 home buyers were defrauded by JP Morgan Chase Bank and a Poconos builder will finally go to trial in February. U.S. District Judge Christopher C. Conner on Friday set a Feb. 2, 2009 trial date in Harrisburg. Conner scheduled the trial date after denying yet another bid by Chase to dismiss the case, saying the record supports the conclusion that Chase aided the alleged scheme.

***

• The suit claims that Chase took part in the alleged scam by ignoring its usual underwriting guidelines in approving mortgages for [homebuilder Gene] Percudani's customers, many of whom were people with poor credit from the New York area.(2) [...] Saddled with mortgages higher than the real value of their homes, many of the home buyers were unable to sell or refinance their mortgages and were forced into bankruptcy and foreclosure while others suffered financial hardships, according to the suit.

***

• Chase Manhattan Mortgage, a division of JP Morgan Chase, denied the allegations, saying in court documents that Percudani was a rogue builder who duped Chase into making the loans.

For more, see Poconos mortgage suit set for February (Lawsuit alleges 100 buyers defrauded by bank and builder).

(1) Filed in 2002, the suit alleges that Tannersville homebuilder Gene Percudani, Chase Manhattan Mortgage, Stroudsburg appraiser Dominick Stranieri and several others engaged in widespread fraud by selling homes in Monroe County at inflated prices through several of Percudani's companies, including Raintree Homes, Why Rent? and Chapel Creek Mortgage; according to the story.

(2) According to the story, the mortgages, once approved by Chase, were quickly sold to the secondary market, typically Freddie Mac and Fannie Mae. After learning of the alleged fraud in 2001, Freddie Mac investigated and subsequently forced Chase to repurchase its Percudani mortgages. Freddie Mac also placed Percudani on its ''exclusionary list,'' which barred Percudani from doing business with Freddie Mac.

Feds, 23 States Join In "Operation Clean Sweep" In Attempt To Nail Credit Repair, Loan Modification, Debt Relief Operators

From the Florida Attorney General's Office:

• Attorney General Bill McCollum [last week] announced Florida’s participation in a collaborative effort targeting credit repair operators, many of which deceptively claim they can remove any and all negative information from consumers’ credit reports.

• The Federal Trade Commission (FTC) and 23 states joined forces in Operation Clean Sweep, a nationwide initiative to address this consumer protection issue. “Whether through credit repair, debt management, debt settlement, or interest rate reduction schemes, it is unacceptable to deceptively convince consumers facing financial distress to part with their money,” said Attorney General McCollum. Collectively, the FTC and the states took actions against 36 companies engaged in potentially deceptive or misleading conduct.

For more, see Florida Joins FTC, States Targeting Credit Repair Operations in "Operation Clean Sweep."

See also: Palm Beach Post: Claims of debt fraud soaring (Until he can persuade lawmakers to impose rules, Florida Attorney General Bill McCollum hopes lawsuits his office has filed and its investigations "send a message to this industry that preying on consumers in financial distress will not be tolerated.").

For the Florida AG's recent press release on a recent civil suit filed in this regard, see Broward Foreclosure Debt Mitigation Company Sued for Deceptive Practices.

Mortgage Loan Modification Companies Beginning To Draw Attention From Feds, Lawmakers

In Modesto, California, The Modesto Bee reports:

• The Justice Department is gearing up to probe potential scams targeting distressed homeowners in the San Joaquin Valley. On Friday, Rep. Dennis Cardoza, D-Merced, urged Attorney General Michael Mukasey to investigate mortgage-reduction schemes marketed in the region.(1)

• For an upfront fee, homeowners are being told their monthly mortgage payments can be renegotiated. At best, the homeowners may end up paying for work that's available for free. At worst, they'll pay for work that isn't done at all.

***

• The questionable solicitations come in different ways. Phone calls offering mortgage negotiation services have been ringing through the San Joaquin Valley for several months. [...] Official-looking letters are arriving in valley mailboxes, some citing congressional bill numbers or phone numbers for a "loss mitigation department."

• And Thursday in Modesto, some homeowners attended a workshop in which they were asked to pay $3,500 to get their mortgage woes resolved. Typically, the companies offer to renegotiate a mortgage in exchange for an upfront fee amounting to one month's mortgage payment, or more.

For more, see Loan-help schemes scrutinized (Claims to fix mortgages for fee set off red flags for the feds and Cardoza) (may require free registration).

(1) It may be that, in California, the services marketed by these operators may already be regulated under the state law regulating the conduct of foreclosure rescue operators who provide mortgage consulting services to financially distressed homeowners. The law, among other things, specifically prohibits the collection of an upfront fee. For the law, see California Mortgage Foreclosure Consultants Act - Section 2945 through Sction 2945.11 of the California Civil Code, as recently amended this year by AB 180, Mortgages: foreclosure consultants.

Arizona BBB Warns Of Possible Loan Modification Scams

The Better Business Bureau of Greater Arizona reports:

• In today’s economy, most homeowners would welcome a lower interest rate on their mortgage, which could result in a lower monthly payment. This has opened the door for loan modification companies to take advantage of consumers more than ever.

• Better Business Bureau is receiving reports from concerned Arizona consumers who are being solicited by unknown companies offering to help them reduce the interest rate on their mortgage loan.

• “The majority of the consumers being targeted by phone tell us they have never been late on their payments and are not even close to facing foreclosure,” said Matthew Fehling, President/CEO of BBB. “Consumers are being advised by these companies to stop making their mortgage payments and negotiate a lower interest rate. This is a definite red flag,” added Fehling.

For more, see BBB Warns Consumers about Loan Modification Phone Calls.

L.A. Official Calls For Stop To Illegal Foreclosure Evictions; Lender Accused Of Stiffing Booted Tenants Out Of $7K "Relo Fee" Required By City Law

In Los Angeles, California, CBS 2 reports:

• Los Angeles City Council President Eric Garcetti called Friday on Countrywide Home Loans to stop the practice of evicting tenants from apartment buildings that have gone into foreclosure. The councilman pointed to the case of Johnny Lee, who lives in a triplex in Echo Park. Following foreclosure, Countrywide allegedly pressured Lee to leave the apartment and offered him a $2,000 relocation fee. City law requires a $7,000 fee in such cases, according to Garcetti.

• A representative for Countrywide was not immediately available for comment. "It's really frustrating, and I feel like I was duped," Lee said. "I had no idea that this was illegal and that I had a right to stay or to a minimum amount of money. In fact, I was told I would have to be out within 30 days and didn't have the right to any money, even my security deposit," he said. "I encourage others in this situation to learn more about their rights as tenants."

• In a letter to Countrywide, Garcetti said the Calabasas-based company attempted a similar eviction earlier this year in South Los Angeles. "Months later, it appears that Countrywide and its agents continue to violate city law by illegally pressuring tenants to vacate foreclosed properties and offering relocation fees below what is required by law," Garcetti wrote. "I am writing to ask that your company cease and desist illegal foreclosure-related eviction practices immediately. In addition, Countrywide must bring its eviction practices and guidelines into compliance with the city's Rent Stabilization Ordinance."

Source: Councilman To Countrywide: Stop Illegal Evictions.

See also: Countrywide to EP tenants: get moving. BetaTenantRentSkimming

Connecticut Renter Facing Foreclosure Eviction Invokes New Bailout Law In Attempt To Fight Off Fannie

In Hartford, Connecticut, The Hartford Courant reports:

• Four days after Evelyn Colon paid the September rent for her Hartford apartment, a U.S. marshal knocked on the door. He handed her a notice that she had to be out in a month. Fannie Mae, the huge mortgage financier, had foreclosed on her building and was evicting Colon and two other tenants.

• Colon is now fighting her eviction in what her attorneys believe is the first court challenge in the country to use a provision(1) deep within the government's $700 billion bailout legislation to seek protection for renters facing eviction after foreclosure. She will be able to stay in her apartment while the case is litigated.

***

• Colon's attorneys at Greater Hartford Legal Aid Inc., an agency that helps low-income clients, are arguing that Fannie Mae became a federal agency when it came under the control of the Federal Housing Finance Agency Sept. 7 and is therefore bound by the financial services bailout legislation.

For the rest of the story, see Hartford Tenant Fights To Stay In Home After Foreclosure (if link expires, try here or try here).

See also, WTNH-TV Channel 8: Renter fights back against foreclosure:

• "Basically we've asked the court to throw this case out, the eviction, out of court, or, if the court doesn't feel comfortable doing that, to kind of put things on pause until the Treasury or another federal agency, perhaps the F.H.F.A. (Federal Housing Finance Agency), issues a policy statement saying what does the language in the Bailout Bill mean," said Stephanie D'Ambrose from Greater Hartford Legal Aid.

(1) Section 109(b) of the Federal bailout bill may require the U.S. Secretary of the Treasury to work with the F.H.F.A. and other government entities to permit tenants like Evelyn to remain in their apartments after foreclosure. BetaTenantRentSkimming

War Stories From the Predatory Lending Battlefield

The Chicago Sun Times recently published four stories on Chicago homeowners who have been allegedly ripped off by predatory lenders and who have taken to the courts to save their homes. For the stories, see:

• Alleged mortgage scam lands in Obama's backyard (Tommie and Louise Harris, who live behind the Obamas, say they're victims of a mortgage repair scam that nearly cost them their Kenwood home of 44 years. They recently won a federal court settlement against a broker who they say sweet-talked them into taking on mortgage debt that rose from $142,000 to $500,000 in less than a year);

• Loan to fix garage leaves her owing $154K (Alzheimers' patient Rosa Dailey, 66, has filed a federal lawsuit against CitiMortgage, a subsidiary of CitiResidential, which bought out Argent Mortgage. She's fighting foreclosure on the home her parents bought in 1972);

• How she wound up $125K in debt (At 90, Anna Nelson has spent some of her last months worrying about paying a mortgage on a home she has lived in for more than 40 years. Her lawyer, William Spielberger, said she has been targeted because of her trusting nature -- and age. "The fact is that there was a great deal of money that was loaned, and she never got it," Spielberger said);

• Predators target minorities, elderly ('VICIOUS CYCLE' Before they know it, they're buried in debt -- but a federal court ruling offers new hope; Dorothy Davis, 76, has taken her case to federal court, where a judge just ruled she can sue Wells Fargo -- the bank that bought her loan -- on the claim that she was targeted because she's minority).

String Of Suspected New Haven Arsons In Foreclosed Homes Raises Concerns For Mayor

In New Haven, Connecticut, WTNH-TV Channel 8 reports:

• Desperate times lead to desperate measures, as the saying goes, and the city of New Haven is worried home foreclosures may have some people turning to arson. [...] "My fear, frankly, is if you get a block front full of vacant houses, if out don't intervene you'll soon have 6 or 8 vacant houses on that block and they become targets of theft, and then they become targets of arson," [Mayor John DeStefano] said.

• Three suspected arsons in as many weeks at houses in foreclosure [...] have the city concerned if foreclosures numbers continue to rise arson rates will too.

For more, see Mayor fears foreclosures may lead to arson. ArsonForeclosureAlpha

Party Crews Using Vacant Foreclosures To House Teen Bashes

In San Bernardino County, California, the Victorville Daily Press reports:

• Foreclosed homes have been linked to a multitude of problems, including mosquito-infested pools and ponds. They have become targets of metal thieves and squatters. Now, authorities have seen the vacant homes turned into party spots.

• “We have had reports of party crews throwing parties inside empty houses,” said Roxanne Walker, spokeswoman for the San Bernardino County Sheriff’s Department Hesperia station, but stated that the number of reports are down in recent months. Other law enforcement agencies, though, are still dealing with the problem that empty homes have become places for teens to congregate and throw parties.

For more, see Vacant homes attract partyers.

Go here for other posts on vacant homes being used for teen beer bashes, keg parties, etc. teen parties vacant homes

Two Active Duty Marines Lose Rented Home While Overseas As Landlord Succumbs To Foreclosure

In Imperial Beach, California, KGTV Channel 10 reports:

• A South Bay home is where two servicemen used to live. While they were overseas, they kept paying rent to a homeowner whose property was under foreclosure. [...] The property owner said she accepted the [Marines' rent] payments because she believed the bank would negotiate a new loan. However, Realtor Marilyn Swartz said the tenants were never notified. "Unfortunately, these young men were not made aware of that because the previous owner did not contact them," said Swartz. [...] The two Marines are still on active duty in Iraq and Afghanistan.

For the story, see Are Some Renters Paying Rent On Foreclosed Homes? BetaTenantRentSkimming

Cash-Strapped Pennsylvania Woman Cops Plea To Embezzling $300K+; Used Money To Pay Mortgage In Foreclosure, Other Expenses, Says DA

In Norristown, Pennsylvania, The Reporter Online reports:

• Faced with a pending mortgage foreclosure and rising credit card bills, a woman embezzled more than $300,000 from the Plymouth medical supply company for which she worked. Linda Faye Smith, 46, [...] pleaded guilty in Montgomery County Court to felony charges of theft of movable property, theft by failure to make required disposition of funds received and forgery [...]. At the time of the theft, Smith's home was threatened with mortgage foreclosure, according to authorities.

• "She used the money to pay her mortgage, credit card bills, car insurance and other personal expenses," alleged Assistant District Attorney Robert Sander. [...] "This is the type of case that we're seeing more of lately, where people in positions of trust in companies violate that trust and embezzle from them," said Sander, who prosecutes economic crimes.

For more, see Woman pleads guilty to embezzlement.

Beware Of Mother Nature As She Poses Threat To Vacant, Foreclosed Homes

In Rochester, Minnesota, KAAL-TV Channel 6 ran a story that should serve as a reminder to lenders and mortgage servicers nationwide that, as the cold weather season approaches, they should begin winterizing (dumping anti-freeze into the plumbing pipes, among other things) all the vacant, foreclosed homes they're stuck with and haven't been able to unload before Mother Nature begins to wreak havoc on them by freezing up and destroying all the copper plumbing pipes(1) contained in these houses (and likely to be followed by flooded basements, moldy drywall, soggy carpets, etc. after the thaw).

• The calls [plumbing contractor] Paul Link and his team are getting are mainly from bankers and realtors...hiring him to winterize foreclosed properties in the area. "If the house is not heated, it's going to freeze up and all the pipes will freeze and break and even if the water is shut off the water in the pipes will still freeze and break,” says Link.

For more, see Winterizing Foreclosed Homes.

Go here for more on freezing pipes in vacant homes.

(1) Assuming the copper thieves haven't already gotten to them. frozenpipetheta

100 Madagascar Hissing Cockroaches, 3 Turtles Among Pets Found During Foreclosure Eviction

In Las Vegas, Nevada, KLAS-TV Channel 8 reports:

• [W]hile serving an eviction notice, a constable stumbled upon 15 dogs, eight cats, three turtles and to top it off, 100 Madagascar hissing cockroaches -- a first-time seizure at the Lied Animal Shelter. "It's unusual. It looks like somebody abandoned a pet store," said Jim Seitz with The Animal Foundation.

***

• Neighbors won't miss the constant barking and foul odor coming from this house, "We've called animal control before on them for having too many dogs. I heard they had 11 dogs or what not, and it smells all the time -- every single day, horrible smells." Some animal control officers say they could barely tolerate the home's strong smell of urine, feces and mold.

For more, see Sad Sight Found at Foreclosed Home (read story) (watch KLAS-TV video) (watch slideshow).

Go here and go here for other posts on police incidents during home evictions. DeputyEvictionTheta

Medical Examiner Called In To Assist In Eviction At Foreclosed Funeral Home

In Pontiac, Michigan, The Associated Press reports:

• Even the dead can't escape foreclosure in suburban Detroit. Five bodies and the cremated remains of 22 people have been removed from the House of Burns Memorial Chapel, a funeral home in Pontiac. They were delivered to the Oakland County medical examiner's office for storage early Friday. The medical examiner's administrator, Robert Gerds, said some of the cremated remains date to the 1990s.

Source: No rest for dead at foreclosed Mich. funeral home.

See also, USA Today: Bodies removed from foreclosed funeral home. SheriffDeputiesForeclosureAlpha

Texas Man Sues To Void Deed In Alleged Land Swindle

In Beaumont, Texas, The Southeast Texas Record reports:

• A Jefferson County man has filed suit against a Beaumont couple and the woman's mother, claiming their conspiracy against him has forced him to lose property that belongs to him. Glen Ray Waldrop claims he is the owner of 3.27 acres located [...] in Beaumont.

• He entered into what he believed to be a contract for deed with Jeff Allen and Theresa Ann Theal in May 2001, according to the complaint filed Oct. 21 in Jefferson County District Court. In the contract for deed, Waldrop believed the Theals would purchase the property through monthly installments, the suit states.

***

• In fact, the document Waldrop signed was a general warranty deed, transferring ownership of the property to the Theals, he claims. [...] Waldrop knew nothing about the general warranty deed or [the mother's] role until the Theals ceased their monthly payments in April 2007, the suit states.

For more, see Disabled man claims he was swindled out of property by local couple.

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

Iowa Widow Seeks To Stop Foreclosure, Void Deed & Mortgage; Claims Now-Deceased Husband Forged Her Signature On Legal Documents

In Polk County, Iowa, the Des Moines Register reports:

• Ed Boesen's widow says she has rights to two commercial properties because her husband forged her signature on a loan document and a property transfer document. Maureen Boesen is asking a judge to clear the titles on two properties despite more than $5 million worth of defaulted loans on them.

• Lawyers for Maureen Boesen, as well as James Monroe, attorney for the Boesen estate, made the claim in Polk County District Court in response to two lawsuits filed by lenders against Boesen's estate. The lawyers contend Ed Boesen forged his wife's signature on a mortgage document on one of the properties and on a deed transfer on the other.

• "Maureen Boesen asserts she owns the property and that the signatures on documents are without her authority," a motion filed last week by her lawyers says. As a result, neither loan is valid, the lawyers claim.

For more, see Boesen widow alleges forgery.

Go here to compare Mrs. Boesen's actual signature with those that were allegedly forged.

For story update (2-5-09), see Foreclosure on Boesen property to proceed.

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

Trashouts, Brown Grass, Green Pools & Other By-Products Of The Foreclosure Crisis

From the Inland Empire in Riverside County, California, KCET.org reports:

• SoCal Connected tracked down some surreal sights associated with the [foreclosure] crisis - a company that specializes in removing whatever people leave behind in their foreclosed homes. The process is called a “trashout” - a term the company came up with because it perfectly describes what happens. Everything that’s left is dumped in a trailer and taken to the landfill.

• Then there’s the guy who started a business to spray-paint dead lawns. That’s right. He paints brown lawns green. We also tag along with a couple of code enforcement officers who are spending more and more of their time having to drain slimy, abandoned pools.

• Finally, we meet a typical couple who bought their first home, thinking it was a great investment and tax write-off. Now the place is worth only half of what they paid for it and their neighborhood has almost as many vacant homes as occupied ones.

• One of the code enforcement guys sums up the problem in a single sentence - “You know you’re in trouble when the lawns are brown and the pools are green!”

For the story and the accompanying video report, see Foreclosure Alley.

Thanks to Bill Collins of Crossroads Abstract, Rochester, NY for the heads-up on an interesting video.

Apparent I.D. Theft Victim Dragged Into Court As Home Titled In Her Name Is Subject To Foreclosure, Code Enforcement, Criminal Charges; FBI Probe

In Louisville, Kentucky, WAVE-TV Channel 3 reports:

• A long-time eyesore in the Highlands is tied up in the foreclosure process, a civil lawsuit, criminal charges and a FBI investigation. Monday, the woman whose name appears on the title of the Highland Avenue property appeared in court. [... H]er attorney says she is an innocent victim of fraud, tangled up in this legal mess.

• Portia Rankin appeared with her attorneys in Jefferson District Court Monday afternoon. While it is her name that appears on the title for the property at 1308 Highland Avenue, one of her attorneys, Matt Stein, says she doesn't own the property. In fact, Stein says she has never even seen it.

• Stein says Rankin is an innocent victim of fraud and has been left holding the bag with the home in foreclosure and inspection fees and fines piling up.

For more, see Attorney says woman on title of dilapidated home doesn't own property.

"Eviction-Proof" NYC Tenants Warned Against Cash-Strapped Corporate Landlords Looking To Force Them Out & Replace Them With The More Affluent

In New York City, Columbia University's Columbia Spectator reports:

• For years, the Mirabal Sisters Cultural and Community Center has led workshops to teach local tenants to organize and take landlords to court for harassment. But at a convention last week, the usual presentations on tenants’ rights and navigating city agencies took on new urgency.

• As the financial crisis moves north from Wall Street to West Harlem and Washington Heights, Garrett Wright of the Urban Justice Center reminded attendees of the tactics landlords used to replace lower-income tenants with “white, yuppie residents” during the housing market’s peak in the last few years, such as neglecting repairs and attempting to evict rent-stabilized tenants.(1)

• Activists told tenants to brace themselves for more of the frivolous lawsuits and harassment experienced during the housing boom. Landlords are beginning to default on loans they took out to purchase their buildings, and today, unlike in recent years, “they really need the money,” organizer Rolando Rodriguez said.

For more, see Wall Street Crisis Impacting Rent-Stabilized Housing.

(1) Rent-stabilized tenants are those tenants in New York City rent-regulated apartment buildings who, so long as they use their apartments as their primary residence, don't sublease to another, and basically don't destroy the place, can for all practical purposes stay in their apartments for the rest of their lives, subject to what most landlords feel is a modest annual rent increase (the determination of which is made by a third party and completely out of the landlord's control). For those tenants whose rent is way below market value, this presents a great deal for them and, accordingly, make them targets for some landlords looking to force them out and replace them with higher paying tenants.

After Losing Son In Iraq War, NYC Mom Fights To Keep From Losing Home To Foreclosure Of Alleged Predatory Mortgage; Media Probes Into Loan Servicer

In Queens Village, New York, American News Project reports:

• Last week, ANP reported on the foreclosure of Jocelyn Voltaire in Queens Village, NY and the impending auction of her house. Since the report aired, a national grassroots effort to save her home was launched. In this piece, we report on the outcome of said initiative and delve deeper into a connection between Jocelyn's mortgage company [Litton Loan Servicing] and Goldman Sachs.

For more (video only), see Foreclosed Mother Keeps Home ... For Now.

See also:

• How a Victim of the Housing Crisis Was Saved from the Brink of Eviction,
• Foreclosed Home Front: One Mother’s Struggle,
• After Losing Son in Iraq, NY Mother Faces Loss of Foreclosed Home,
• Queens Woman Fights To Keep Home.