Foreclosure Of Unbuilt 1,712-Acre NW Vegas Development Good News For Slow Growth Advocates

In Las Vegas, Nevada, the Las Vegas Review Journal reports:

• For northwest Las Vegas residents in favor of slowing growth, there is a silver lining in the recession-driven foreclosure of Kyle Canyon Gateway. Wachovia Bank foreclosed on the 1,712-acre development owned by Focus Property Group and several homebuilders on Sept. 23. The land is located off U.S. Highway 95 near Highway 57, the turnoff to Mount Charleston and the Spring Mountain National Recreation area. Focus and its partners purchased the land for $150 million at a Bureau of Land Management auction in 2005.

For more, see Kyle Canyon Gateway foreclosure slows northwest development.

MBA Report: 10% Of Mortgaged Homeowners 30+ Days Late On Loan Payments

Bloomberg News reports:

• One in 10 American homeowners fell behind on mortgage payments or were in foreclosure during the third quarter as the world’s largest economy shed jobs and real estate prices tumbled. The share of mortgages 30 days or more overdue rose to a seasonally adjusted 6.99 percent while loans already in foreclosure rose to 2.97 percent, both all-time highs in a survey that goes back 29 years, the Mortgage Bankers Association said in a report [Friday].

For more, see Mortgage Delinquencies, Foreclosures Rise to Record.

See also Mortgage Bankers Association press release.

Fear Of Investor Lawsuits Impede Loan Modification Efforts

In Bradenton, Florida, a column in the Bradenton Herald offers a view on why mortgage lenders are so reluctant to offer loan workouts on delinquent home mortgages:

• [T]hat's because most lenders sold their mortgages, which were soon packaged with others and the packages sold in shares. Now, ownership and securitized stakes in the expected profits are in the hands of multiple institutions and retirement funds and such.

• According to April Charney, a lawyer who teaches other lawyers about this stuff, some institutions don't even own what they invested in. It is a huge problem for our country that, systemically, a Ponzi scheme was at work as, she said in an e-mail, "originating lenders failed to legally transfer notes and mortgages, leaving the investors in these trusts (us, our states, our schools, our pensions, the Bank of China, etc.) owning air. Sliced and diced air."

• That ownership web can make it hellish to find anyone who dares restructure a mortgage. Often no one is sure who has authority to make a deal, let alone thousands of deals. Mortgage servicers fear being sued by investors if they exceed contractual authority, and the contracts with different investors vary.

For more, see Why won't the lenders try to cut a deal? missing mortgage foreclosure docs gamma MortgageServicingIssuesAlpha

Report: Mortgage Company VP Tutored Brokers On The Art Of Fraud; $550M+ In Florida Loans Originated; More Than 1 In 3 Ended In Foreclosure

The Miami Herald reports:

• Orson Benn, once a vice president at the nation's largest subprime lender, spent three years during the height of the housing boom tutoring Florida mortgage brokers in the art of fraud. From his office in New York, he taught them how to doctor credit reports, coached them to inflate income on loan applications, and helped them invent phantom jobs for borrowers.

***

• The Miami Herald found that Benn's network approved more than $550 million in home loans from Tampa to West Palm Beach to Miami, according to an analysis of court records. In Miami-Dade County alone, Benn's office approved more than $349 million in loans on 1,913 homes -- more than one in three have since fallen into foreclosure, the analysis shows.

***

• With so many of Benn's loans now in foreclosure, Miami-Dade County is littered with still more empty homes. Squatters inhabit some; crack dens occupy others. At least one has been stripped to the ground, leaving only the foundation.

Benn has recently begun an 18-year prison sentence.

For more, see Exec had mortgage racket down to an art (Orson Benn has gone to prison for falsifying applications, but a former associate in Homestead still sells mortgages).

Feds, State Authorities Bust Global I.D. Theft Ring For Allegedly Hijacking Homeowner HELOCs; Millions In Equity Drained Out Of Homes

The Washington Post reports:

• Federal authorities [last month] announced a series of arrests and convictions in connection with a global identity theft ring that stole millions of dollars by hijacking home-equity lines of credit issued to thousands of consumers.

***

• The cases highlight what the FBI calls an "emerging scheme" afflicting the struggling real estate and mortgage market. In such crimes, thieves target people with good credit and large, untapped home-equity lines of credit, digging through public records -- such as property deeds and mortgages -- as well as publicly available Internet databases to obtain credit applications, credit reports and victim signatures.

• "Home-equity lines of credit are an expanding front in the battle against mortgage fraud," said New Jersey U.S. Attorney Christopher J. Christie. "Homeowners should carefully review their statements to make sure their hard-earned equity is not disappearing from under their noses."

For more, see Thieves Stole Identities to Tap Home Equity.

Atlanta-Area County Marshal Continues Annual Tradition - Declares Moratorium On Holiday Evictions

In Fulton County, Georgia, WABE Radio 90.1 FM reports:

• Fulton County will suspend forced evictions over the holidays. Starting December 19th, through January 5th, the County Marshal has said he will not execute writs of possession.

• Fulton County Marshall Antonio Johnson says the holiday moratorium has become an annual tradition over the last several years. But considering how much the foreclosure rate has risen, he says more families will benefit from the temporary relief this year.

Source: Fulton County Suspends Evictions over Holiday.

AZ R/E Agent Admits Forgery On Subordination Agreement Making Seller-Held Note Junior To New Financing; Both Loans Now In Default

From the Office of the Arizona Attorney General:

• Attorney General Terry Goddard [last week] announced that former real estate agent Roy Keith Fife, 47, of Tucson, pleaded guilty to fraud and forgery charges at a hearing in Pima County Superior Court [...].

• At the hearing, Fife admitted forging the signature of a client for whom he served as a residential real estate sales agent. Fife forged the signature on loan documents to facilitate the sale of the client’s property. Through this sale, Fife obtained a commission of more than $100,000.

• As a result of Fife’s forgery, his client’s carryback loan was made junior to a million-dollar equity loan taken out by the buyers. The seller specifically required in the sales contract that his carryback would be in first position. The buyers of the property have since defaulted on both loans.

For the press release, see Tucson Real Estate Agent Pleads Guilty to Fraud, Forgery.

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

Forged Deed & Subsequent Refinance Leaves Bronx Homeowner Facing Foreclosure, I.D. Theft Victim's Credit In Ruins

In The Bronx, New York, the New York Daily News reports:

• Phillip Powell, who lives in Baldwin, L.I., never even laid eyes on a house on E. 215th St. in the Bronx when one day he learned that he owned it. He received mail saying he owed payments on a $370,000 mortgage he had taken out on the single-family home.

***

• Paula Penrose, who lives at the east Bronx property that she bought in 2002, was equally shocked when she learned Powell owns her home.

***

• In a classic case of deed theft, someone stole Powell's identification and forged a deed transferring ownership from Penrose to Powell.

• Then, the person pretending to be Powell used the forged deed to take out a $370,000 mortgage from New Century Mortgage Co. on the E. 215th St. home. Because neither the real Powell nor the fake Powell were making monthly mortgage payments, New Century began foreclosure proceedings against the property, and Penrose and her family face eviction.

For more, see You own a house - but we're taking it. DeedTheftAlpha

San Antonio Feds Charge Foreclosure Rescue Operator For Allegedly Pocketing Upfront Fees & Allowing Clients' Homes To Be Lost In Foreclosure

In San Antonio, Texas, the San Antonio Express News reports:

• On Thursday — almost 15 years after she first was put on notice over alleged fraud — FBI agents arrested [Rosario Castro - aka Rosie] Divins on charges she ran a foreclosure-rescue scam that swindled [Isaac and Christina Vela](1) and at least three other families out of thousands of dollars and sometimes vehicles. All lost their homes to foreclosure.

• A federal grand jury Wednesday indicted Divins on four counts of mail fraud and four counts of criminal contempt for disobeying bankruptcy court orders(2) instructing her to stop her misrepresentations.

***

• Janie Anderson, 58, feels the Velas' pain. Anderson, who was diagnosed with cancer, and her husband, Rene Rodriguez, who needed an operation, turned to Divins in 2006 during their medical crises to help them avoid foreclosure. They're out almost $10,000, Anderson said. Not a penny of it went to pay the mortgage debt, the indictment said. The couple, like the Velas, haven't seen any of their money returned.

For more, see Local woman is arrested in foreclosure scam.

(1) Reportedly, court records show that the Velas gave Divins $6,800, but she never made a payment to the mortgage company.

(2) Since 2000, Divins has been warned by bankruptcy judges to stop sending out fliers claiming that she could “stop” foreclosures, according to the story. loan modification

More Trouble For Missouri "Contract For Deed" Operator As Homeowners File Federal Suit Seeking $60M In Damages

In Springfield, Missouri, the Springfield News Leader reports:

• A Nixa couple and a Nixa man sued by Greenleaf Cos. of Springfield for not paying rent have in turn sued Greenleaf and its affiliates in federal court, saying they have engaged in real estate fraud and conspiracy.

• Timothy and Marcia Thompson, as well as Donald Wright, filed separate suits Monday in the U.S. District Court Western District of Missouri. The Thompsons are seeking $10 million in punitive damages against the defendants, while Wright is demanding $50 million.

***

• Both the Thompsons and Wright bought their homes in Nixa from Greenleaf on a contract for deed. [...] In their lawsuit, the Thompsons say they bought their home from Greenleaf in December 2007 only to find out accidentally that the home belongs to [alleged straw buyer] Robert Marti. In June, the Thompsons learned of an impending foreclosure on their home, according to court documents. [...] Wright made similar allegations in his lawsuit.

For more, see Greenleaf sued for millions in new cases (Company partner says legal action groundless).

Go here for other "contract for deed" problems involving Greenleaf and The Real Estate Co.

For more on problems with "Contract for Deed," "Rent To Own", and "Lease / Option" real estate deals, go here and go here. Arkansas

Widow Faces Foreclosure As Lender Claims Coverage On Husband's Mtg. Life Policy Expired, Despite Continued Acceptance Of Premiums

In Tallahasse, Florida, the Tallahassee Democrat reports:

• Eight months after her husband Ralph's death, retiree Joyce Aiello is facing the loss of the couple's Tallahassee home — something they had taken deliberate steps to avoid. [...] Vanderbilt Mortgage and Finance Inc. of Maryville, Tenn., has the loan on the couple's double-wide mobile home. In checking with the company, [Joyce] found out that the 10-year term life insurance policy on Ralph had reached its time limit. She wasn't actually covered, even though the couple had been paying the $11.25 premium each month since 1997.

***

• Vanderbilt continued, however, to take her monthly insurance premium of $11.25 for a year and four months after the term had ended. They said they applied the money to the principal balance on the loan, Joyce said she was told by the company.

For more, see Tallahassee woman fighting to keep her home.

For story update, see Facing foreclosure, Tallahassee retiree able to keep home for holidays.

City Kicks 53 Residents Out Of Residential Hotel In Foreclosure As Power Shutoff Creates Fire Hazard; At Least 24 Kids Among Those Getting The Boot

In St. Petersburg, Florida, the St. Petersburg Times reports:

• When the electricity in their residential hotel was turned off the morning before Thanksgiving, Mary Mix and her three children scraped together money to buy candles. During the next few nights — some of the most frigid this winter — they piled under blankets to stay warm.

• Then on Monday, city officials shuttered the hotel that Mix and more than a dozen other families, including at least 24 children, had called home. City officials said the lack of electricity [...] created a fire hazard. The hotel's water also was about to be shut off. Officials said the hotel owners owe $90,000 in back utility bills.

• A total of 53 people were forced out. They had to be gone by 5 p.m. Wednesday. Most of the last dozen or so families to leave were single mothers and their kids. Instead of focusing on preparing for the holidays, they were scrambling to find a new place to live.

For more, see No heat, no lights, then no home in St. Petersburg.

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

Unconventional Miami-Area Housing Activist Comes Up With "Bailout" Plan; Gets Homeless Off Streets By Moving Them Into Vacant Foreclosed Homes

In Miami, Florida, The Associated Press reports:

• [Max] Rameau is an activist who has been executing a bailout plan of his own around Miami's empty streets: He is helping homeless people illegally move into foreclosed homes. ''We're matching homeless people with people-less homes,'' he said with a grin.

• Rameau and a group of like-minded advocates formed Take Back the Land, which also helps the new ''tenants'' with secondhand furniture, cleaning supplies and yard upkeep. So far, he has moved six families into foreclosed homes and has nine on a waiting list.

For more, see Miami Activist Moves People Into Foreclosed Houses.

For other media reports on this story, see:

• Miami New Times: Squatters Fight for Rights (A homeless mom wants her stuff back) (Thousands of homes in South Florida are in foreclosure, squatters are taking up residence, and when said squatters get booted, they demand a proper eviction notice),

• WPLG-TV Channel 10: Homeless Woman Takes Shelter In Vacant House (Housing Advocate Breaks Into House, Moves Woman In). Go here for the WPLG-TV Channel 10 video.

Thanks to attorney Donald Marritz of Regional Housing Legal Services in Pennsylvania for the heads up on the Associated Press story.

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

Detroit Firefighter Loses Life Battling Arson Blaze In Abandoned House

In Detroit, Michigan, the Detroit Free Press recently reported:

• [Walter] Harris, 38, of Sterling Heights was killed Nov. 15 when a roof collapsed on him as he fought a fire at [an] abandoned house. The father of six was a 17-year veteran of the department and spent his career at the station on East Grand Boulevard that houses Rescue Squad 3 and Engine Co. 23.

For more, see At house where firefighter Walter Harris died, ex-cop's sign protests arson.

See also:

• Detroit Free Press: The fire was nearly gone, but then came the crash,
• The Detroit News: Site of fatal fire to be demolished (Building where firefighter died is one of many in Detroit to draw complaints). ArsonForeclosureAlpha

Group Of Teenaged Arsonists Suspected In Central Florida Serial Torchings Of Vacant Homes

From Zellwood, Florida, Central Florida media outlets have reported:

• A serial arsonist has residents in one Orange County neighborhood living in fear. Two overnight fires near Round Lake Road in the Zellwood area were set on purpose and it's the same area where Eyewitness News reported someone set five fires last month. Investigators do believe the fires are connected. [...] Fire investigators say an arsonist is torching homes in the Zellwood area. The two home fires overnight were started in less than a 10-minute time period. Both homes were vacant and one was in foreclosure. See Serial Arsonist Has Neighborhood On Edge.

• Orange County Fire Rescue officials believe a group of teens set two homes on fire in Zellwood overnight Monday. [... F]or the past month, five other abandoned houses have also been set up in flames. The [fire] Marshals office says they have leads indicating it’s a group of neighborhood teens setting the fires just for fun. See Fire officials believe teens set Zellwood homes on fire.

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

Long Island Attorneys Volunteer Help To Poor In Landlord/Tenant Court

In Hempstead, New York, Long Island Business News reports:

• The second floor of the Nassau County District Courthouse in Hempstead is ground zero for the mortgage and foreclosure crisis on Long Island. That’s where Judge Scott Fargrieve presides over landlord/tenant court, typically the final step for evictions, disputes and post-foreclosure proceedings.

• It is also where the Nassau/Suffolk Law Services Committee’s Volunteer Lawyers Project is set up with a stream of attorneys who stop by each day to help those who can’t afford the monthly note, never mind the attorney. [...] Volunteer lawyers [...] receive Continuing Legal Education credits for the pro-bono time they log with the project.

For more, see Volunteer lawyers work to ease foreclosure pain.

In New York City, go here for Volunteer Lawyers Project (Housing).

More On The Continuing Squeeze On Non-Profit Legal Aid Programs

The squeeze on the country's non-profit law firms continues as demand for services increases while funding hits the skids.

• Federal funds rate fiasco for legal aid: Three of Ohio’s six legal aid groups could be forced to cut their staffs next year because of measures the Federal Reserve has taken to shore up the nation’s struggling economy and keep credit flowing.

• Free legal help for low-income residents drying up: 20,000 low-income residents of Massachusetts will lose their free legal help at a time when demand is growing. The funds from interest-bearing accounts for client deposits are drying up, forcing legal aid groups not only in Massachusetts, but Connecticut, New Jersey, Pennsylvania and the District of Columbia to cut back on the number of residents who receive free legal services.

• Nonprofit Legal Agency Sees Spike In Calls For Help (Agency Says Economic Troubles Hurting Low-Income People): Legal Action of Wisconsin Inc. provides free legal help for the poor from six offices statewide. It says its office phones have been ringing off the hook as more people seek free legal help getting food stamps, medical care or housing support, including avoiding eviction and, more recently, home foreclosure. Requests for services has increased by more than 75 percent over the last year.

• Without funding, non-profit group's free legal services in jeopardy: Connecticut Legal Services funding is tied to real estate market, with interest-bearing accounts used to temporarily hold money for people purchasing property providing two-thirds of the organization's funding. The accounts are called Interest on Lawyer Trust Accounts (IOLTA) accounts, and with the downturn in the real estate market, those funds have dwindled. Plus, interest rates on the accounts have decreased, so it has been a "double whammy" for the nearly 40-year-old provider, CLS Executive Director Steven Eppler-Epstein said. Last year, he said, the organization reaped $20 million from IOLTA accounts. This year, the organization gained about $4 million from the accounts. See also Legal Assistance For Poor Takes A Hit.

• Lawyers urged to help the poor (Chief justice says too many forced to tackle legal troubles on their own): The state's top judges are asking every attorney in the state to help in the face of a mounting crisis in the legal aid system. Tennessee Supreme Court Chief Justice Janice Holder sounded the alarm Friday, saying only one in five low-income Tennesseans will get the legal assistance they need. This new initiative comes at the urging of the Tennessee Bar Association, Legal Services and a raft of other legal groups to call for more access to civil legal aid for those Tennesseans who need it most. More than 1 million Tennesseans live in poverty who are eligible for civil legal aid, but there are just 75 legal aid attorneys in the entire state, one for every 13,000 people.

Miscellaneous Stories Connected To Ongoing Foreclosure Mess

The following links are to an assortment of stories that caught my eye that may be viewed as small, peripheral pieces of the "foreclosure mess" puzzle:

• Arson for copper: This is what it's come to?: People are burning down buildings in New Bedford, Massachusetts to get at the valuable copper wire inside their walls. Reportedly, there are now more than 300 abandoned buildings in the city sitting in various stages of disrepair - three-story time bombs, ticking away right next door to their low-income neighbors, poor people trying to scratch out a living. It's not any wonder that Mayor Scott Lang is terrified about literally seeing his city go up in flames.

• Corpse in 'old lady clothes' found inside North Hollywood home (Police believe it had been there at least a year): Los Angeles police find the mummified remains of the 80+ year old previous owner of a now-foreclosed home that was stuffed halfway to the ceiling with trash and inhabited by a 48-year-old man (the deceased owner's son), 26 cats, three opossums and a raccoon.

• Family Worries About Losing Foster Child During Foreclosure: Family in foreclosure worries what might happen to an 11-year old foster child living with them if they lose the house. Reportedly, the local Department of Social Services says the state does not have any rules specifically regarding foreclosures and foster care.

• Code Enforcement Overwhelmed, Asks For Additional Funding: Vacant, abandoned homes in foreclosure are draining Orange County, Florida code enforcement budget. Says it needs $1 million more to handle the 17,000 homes in foreclosure.

• Dogs, cats need homes for the holidays: The Gulf Coast Humane Society in Ft. Myers, Florida has a four-month wait list of people wanting to surrender their pets. Many people on the list are in foreclosure, and choose not to wait. "We have a lot of animals that just get tied to the gates. I mean the number has tripled from last year," says one Humane Society employee.

• The Condo Crunch (Sales Are Slow, Prices Are Falling, Dues Are Overdue. How Are Associations Coping?): The challenges facing Washington D.C. condos are mounting. Sales prices are falling and are not expected to stabilize soon. The number of condo owners not paying their association fees is rising along with foreclosure rates, creating a budget crunch weighing down many communities.

• Ogden home fire ruled suspicious: A suspicious fire in a vacant foreclosed home sustained approximately $150,000 in damages. The interior had just undergone repairs for recent vandalism. Neighbors' homes on each side of the house received a total of about $20,000 in damage due to radiant heat and melting vinyl siding.

• Cold Weather Leads To More Arsons: Cincinnati's fire department says the cold weather is bringing more arsons in vacant homes. Fire investigators are asking you to keep an eye on abandoned homes in your neighborhood before a firebug strikes. The Cincinnati Fire Department says arsons in vacant homes around the city is a big problem. Neighborhood leaders say the foreclosure crisis has also played a big role in the number of arsons in vacant homes.

• Firefighters Battle Fires In Foreclosed Homes: Firefighters are working hard to protect neighborhoods with abandoned homes. Like many communities, Lynn, Massachusetts has seen a surge of foreclosed homes, and fire officials want to make sure they don't become a hazard.

• Family Goes From Foreclosure To Skid Row: Andy Bale, the director of Skid Row's Union Mission in Los Angeles, has never seen this before: In just the last few weeks, he has admitted a half-dozen two-parent families, many of who have lost their homes to foreclosure. Bale says the face of Skid Row's homeless is changing quickly.

• Foreclosure looms for owners of Duncanville's Cherry Pit swingers club: The owners of Duncanville's Cherry Pit swingers club face foreclosure on the home where they have hosted sex parties for hundreds of Dallas-area swingers. The foreclosure hints at the owners' financial difficulties stemming from a slew of legal trouble that began last year when the city of Duncanville approved an ordinance outlawing the sex club operation. ArsonForeclosureAlpha

NYC Prosecutors Call For System Changes To Address Deed Theft After Empire State Building "Heist" By Reporter For Local Paper

In New York City, The Daily News reports:

• The city's top prosecutors called for sweeping changes in the system that let a Daily News reporter "steal" the Empire State building with a fake deed (see: It took 90 minutes for Daily News to 'steal' the Empire State Building). The News' "theft" of the $2 billion Fifth Ave. icon was carried out to reveal a gaping loophole in the city's system for recording property transactions. The loophole: Clerks in the city office of the register are not required to verify information on deeds and mortgages.

For more, see Daily News probe revealing scandalous property loopholes has prosecutors urging change.

Fresno Cops Foil Fake Landlord Rent Scam; Charge Suspect With Renting Vacant Homes In Foreclosure Belonging To Others

In Fresno, California, The Fresno Bee reports:

• An elaborate scam taking advantage of the mortgage crisis unraveled, authorities say, when Kristen Ables found another family living in her Fresno house. "It was a mixture of disbelief and anger" that she felt on learning that she had been victimized, Ables said Wednesday as Fresno police announced the arrest of Sam Haley, 66.

***

• Police allege that Haley, who they said lost his real estate license in 1979 because of fraudulent business practices, carried out the scam at least 13 times -- and was likely to keep doing it if the unexpected visit by Ables hadn't uncovered the scheme.

• Fresno police detective Donnie Dinnell uncovered evidence at Haley's home and business, Capital Investments Inc., that indicated he had people lined up to rent 19 other houses, police Chief Jerry Dyer said. Dinnell also found evidence that Haley had identified up to 126 other homes that he could possibly use in the scheme, Dyer said.

Reportedly, the cops said that Haley pocketed $26,000 over the seven months he allegedly ran the scam and faces felony theft charges.

For more, see Fresno housing scam uncovered (Police say man rented homes to victims who didn't know he was not the owner).

Go here, go here, and go here for posts on phony landlord rent scams. PhonyLandlordScamZeta

Upstate NY Couple Forced Into Court To Stop Lender's Collection Attempts, Foreclosure Threats On Paid-Off Mortgage

In Voorheesville, New York, WNYT-TV Channel 13 reports:

• Georgianne Crabill's phone wouldn't stop ringing. "At work, they were relentless! They wouldn't let me off the phone!" Debt collectors demanded that she and her husband Bill - pay up.

• The Crabills had re-financed their home, and CitiFinancial insisted they owed nearly $20,000 on their original mortgage. Bill and Georgianne insisted they didn't owe it. They were threatened with foreclosure.

***

• For the Crabills, the calls went on for years. The stress was nearly unbearable. But they had one thing in their favor: they did not owe the debt CitiFinancial was trying to collect. They fought back in court. "Finally after we counter-sued them, they admitted they they had done something wrong and figured it out and cleared everything up. But if we hadn't done that, we wouldn't have our house today."

For more, see When Debt Collectors Go to the Extreme.

Florida Developers Cop Plea To Grand Theft Charges; Accused Of Pocketing $475K Of Customer Cash, Failing To Deliver

In Vero Beach, Florida, TC Palm reports:

• Two developers of an unfinished subdivision north of Vero Beach pleaded no contest to criminal charges of first-degree grand theft of $475,000 in deposits from customers at the Indian River Courthouse on Wednesday.

• Developer Richard Rendina of Palm Beach Gardens agreed to pay $80,000 in restitution in addition to serving five years probation. [...] Stephen Siegel of Boca Raton agreed to pay $388,936 in restitution — to be paid out of his cash bond of $500,000 — in addition to five years probation.

***

• Construction of Eagle Trace Phase II was stopped last year, leaving empty lots and unfinished concrete block walls. Prosecutors allege they improperly took deposits from 11 customers who paid on homes, according to court files.

For more, see Eagle Trace developers plead no contest to grand theft charges, agree to pay restitution.

For more on homeowners left in the lurch due to actions by builders/contractors, go here, go here, go here, go here, and go here. StiffingContractorsTheta

More On Abandoned Unfinished Residential Developments

The problem of abandoned residential developments languishing in an unfinished (and unwanted) state is described in these two Florida media reports:

• Central Florida: Some New FL Subdvisions are Awful Lonely (A couple hundred unfinished housing developments pockmark the region with empty lots and paved roads leading to nowhere. The construction crews and their trucks are gone. The collapsed housing and credit markets have left few new-home buyers. County property appraisers in Seminole, Orange, Osceola, Volusia and Lake reported 155,835 vacant residential lots this year. Most are lots in new subdivisions approved during the peak of the housing boom in late 2005 and early 2006.),

• Palm Beach County, FL: Even luxury real estate projects falling into foreclosure (Receivers are becoming an increasing presence in Palm Beach County housing communities. Appointed by a judge, they help keep developments functioning while lenders and developers duke out their legal battles in court.).

No "Miracle On 34th Street" As Empire State Building Victimized By "Deed Theft;" Reporter Easily "Swipes" Historic Midtown NYC Edifice Valued At $2B

On 34th Street in New York City, the New York Daily News reports:

• In one of the biggest heists in American history, the Daily News "stole" the $2 billion Empire State Building. And it wasn't that hard.

• The News swiped the 102-story Art Deco skyscraper by drawing up a batch of bogus documents, making a fake notary stamp and filing paperwork with the city to transfer the deed to the property. Some of the information was laughable: Original "King Kong" star Fay Wray is listed as a witness and the notary shared a name with bank robber Willie Sutton.

• The massive ripoff illustrates a gaping loophole in the city's system for recording deeds, mortgages and other transactions.

***

• Of course, stealing the Empire State Building wouldn't go unnoticed for long, but it shows how easy it is for con artists to swipe more modest buildings right out from under their owners. Armed with a fraudulent deed, they can take out big mortgages and disappear, leaving a mess for property owners, banks and bureaucrats.

Reportedly, the Daily News returned the storied structure back to its rightful owners the day after the heist, which they pulled off on Monday.

For more, see It took 90 minutes for Daily News to 'steal' the Empire State Building.

For a copy of the deed to the stolen structure, see:

• Deed of Empire State Building sale (Page 1),
• Deed of Empire State Building sale (page 2),
• Fake notary stamp. DeedTheftAlpha

Use Of Lease Option Arrangement As Exit Strategy For Overextended Landlords Looking To Stiff Mortgage Lender & Pocket Some Walking Away Cash Continues

In Washoe County, Nevada, KOLO-TV Channel 8 reports:

• A Sparks couple is just a step away from being homeless, after they say they were "ripped off" by their landlord. Shanna Mayer and Clinton Conroy leased a home in hopes of buying it ... but it turns out, the bank was already a step ahead.

***

• Mayer and Conroy moved their family to Sparks in June. When they signed a lease, with an option to buy contract on a Wingfield Springs home, they thought the deal was too good to be true. "Then we came back here and signed a lease agreement and everything. He shook our hands and said 'congratulations on the purchase of your new home," said Mayer.

• But nearly $15,000 dollars later in down payment fees and rent, Mayer says she received a foreclosure notice on the doorstep of her dream house. That's when she confronted the homeowner.

***

• When [KOLO-TV Channel 8] looked up Mayer's home, it turns out, the seller is headed to foreclosure on Mayer's home, plus 16 other properties he owns in the Reno-Sparks area.

For more, see Sparks Couple is "Ripped Off" By Landlord.

For more on problems with Lease / Option, Contract for Deed, and Rent To Own real estate deals, go here and go here. rent to own lease purchase option scams yellowstone

Missouri Couple Sues "Contract For Deed" Operator For Allowing Home To Fall Into Foreclosure

In Republic, Missouri, the Springfield News Leader reports:

• A Republic couple who made monthly payments but nearly lost their home is suing Greenleaf Cos., accusing the Springfield company of breach of contract and questionable business practices.

***

• In the lawsuit, [David and Susan] Foster say they bought a house from Greenleaf in August 2007 for about $252,000 on a contract for deed. The house, located [...] in Republic, belongs to Talya Finn of Marionville.

• As the middleman, Greenleaf was expected to collect money from the Fosters and pay Finn enough to cover her mortgage payments. But, without enough income, Greenleaf officials have said the company could not pay Finn and other investors.

• In their petition, the Fosters say they made all the payments as agreed on time but had their house threatened with foreclosure when Greenleaf failed to ensure the loan on the house was properly paid. The Fosters say foreclosure proceedings were initiated but canceled when Greenleaf "made arrangements to remedy the deficiency."

Reportedly, the Fosters are seeking punitive damages of at least $100,000 and a release from their contract.

For more, see Couple takes Greenleaf to court (Lawsuit questions company's real estate program).

For Greenleaf's side of the story, see Greenleaf partner describes homeowner lawsuit as ‘frivolous’ (Greenleaf partner Scott Dasal said the story and other recent Greenleaf stories have hurt his business, because more and more Greenleaf clients began to question whether they should pay. “They have come out of the woodwork, and people don’t want to pay,” he said).

For story update (12-30-08), see Republic couple drops lawsuit against Greenleaf:

• [D]avid and Susan Foster of Republic has filed a voluntary dismissal with prejudice, which would allow them to sue the defendants in the future. [...] Foreclosure proceedings were initiated, but they were cancelled when Greenleaf “made arrangements to remedy the deficiency,” the Fosters said.

Go here for other "contract for deed" problems involving Greenleaf and The Real Estate Co.

For more on problems with "Contract for Deed," "Rent To Own", and "Lease / Option" real estate deals, go here and go here. rent to own lease purchase option scams yellowstone Arkansas

Trump "Convinces" Deutsche Bank To Fork Over $13.2M In Construction Cash To Finish Off Chicago Skyscraper

Buried in a recent Between The Bricks column in the New York Post is this blurb on the recent $3 billion lawsuit filed by Donald Trump against Deutsche Bank, in which (according to a recent Wall Street Journal article) the latter was accused of, among other things, "compromis[ing] the senior construction loan by selling pieces off to so many institutions, banks, junk bond firms, and virtually anybody that seemed to come along, that the lending group is unable to come to a consensus on how to deal with the matter":

• In one closely-watched bank stand-off, Donald Trump just got a worried Deutsche Bank to blink - and fork over $13.2 million in construction funds towards his soon to be completed spectacular Chicago hotel and condo tower.

• The lender filed a $40 million suit against him after he slapped them with his own $3 billion lawsuit. Trump claims they damaged his brand by ceasing funding after he invoked his specially worded "force-majeure" clause due to events and circumstances that "are not reasonably" within his control.

Source: Banks Threaten Foreclosures.

In a related story, see The New York Times: Trump Sees Act of God in Recession.

Rhode Island Closing Agent Cops Plea To Pocketing Escrow Cash Intended For Payoff Of Existing Mortgage Loans; Title Underwriter Takes $1.3M Hit

In Providence, Rhode Island, the Office of the U.S Attorney announced:

• Angela Raposa, who owned Title America Closing Services, pleaded guilty today to a federal fraud charge, admitting that she used about $1.3 million from her company’s escrow account to pay for personal expenses.

***

• Proceeds of real estate transactions were deposited into the escrow account and were supposed to be used to be disbursed at real estate closings, primarily to pay off existing mortgages. Stewart Title served as an underwriter for Title America and discovered Raposa’s fraudulent scheme in February 2007. As the underwriter, Stewart Title had to pay off mortgages totaling $1,301,826 from five real estate transactions.

For the press release, see Title company president admits $1.3 million fraud.

Go here, Go here, Go here, and Go here for other stories of trust account / escrow account theft of funds. EscrowRipOffAlpha

Environmental Issues Arising At Abandoned Unfinished Developments; Insolvent Builders, Lenders Afraid To Foreclose Both Disclaim Responsibility

In Cartersville, Georgia, The Gainseville Times reports:

• The foreclosure crisis has been devastating to the U.S. economy, and now it appears the environment is suffering as well. Bert Langley, manager of the Georgia Environmental Protection Division’s Mountain District in Cartersville, said he’s seen numerous cases where a developer or builder abandoned a property, leaving no one to monitor erosion control at the site.

• "It’s a situation we’ve never dealt with before," he said. "We have cases where massive amounts of sediment are going into streams."

***

• Environmental attorney Jimmy Kirkland said the situation is creating yet another headache for banks. "It’s an issue that all lenders are facing now, having to take back properties that are partially constructed," he said. "Banks aren’t accustomed to dealing with environmental permits. They need legal advice, but they also need assistance from consultants on developing plans for stormwater and erosion and sedimentation control." [...] Environmental problems occur when a developer clears and grades a property, but then abandons it before most of the construction is done.

***

• [Senior soil erosion inspector for Forsyth County Simon] Wilkes said the owners of those properties have claimed to be bankrupt but have not entered into foreclosure. A site only becomes the bank’s responsibility once it is foreclosed on. "We can’t get the developers or the banks to go out and take care of the property," said Wilkes. "(The banks) refuse to foreclose. They’re just letting it sit in limbo. They don’t want to spend the money to stabilize it."

For more, see Foreclosures leave erosion problems (Finding responsible party for damage not always easy).

Go here for other posts on problems associated with real estate in legal limbo. responsibility code violations foreclosure

One Week "Moratorium" On Ft. Lauderdale-Area Foreclosure Sales As Busted Water Pipe Floods Courthouse, Forcing Facility Shutdown

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

• The Broward County Courthouse will be closed for most purposes through Friday after severe flooding knocked out the phone system and soaked reams of legal papers, court officials decided [Tuesday].

***

• On Sunday evening, a 2-inch pipe burst in the Clerk of Court's Office, flooding the first and second floors of the courthouse. The burst blew a hole in the wall and ruined the building's communications center and thousands of court files.

For more, see Broward County Courthouse closed through Friday.

NYC Lawmakers Urged To Establish Right To Counsel In Eviction, Foreclosure Proceedings

In a letter urging the City Council of New York City to pass laws which would establish a right to counsel in eviction and foreclosure proceedings for low income persons, Ann B. Lesk, President of the New York County Lawyers' Association, reminds us of the inherent unfairness in the results emanating from a judicial system where only one party is represented by counsel:

• [T]he backbone of our judicial system is the concept that adversarial proceedings produce just results. For an indigent person facing eviction or foreclosure, this is a very theoretical proposition. Numerous studies have documented the unsurprising fact that having a lawyer improves the outcome for a litigant. In [New York City] Housing Court, 90 percent of tenants are not represented by a lawyer (in contrast, less than 10 percent of landlords are unrepresented). Unrepresented litigants face a complex set of procedural and substantive rules. They may have defenses of which they are not aware.

For more, see Don't Just Pass The Senior Citizen Right To Counsel Bill - Expand It.

Attorneys At Upcoming St. Paul Legal Clinics To Provide Free Mortgage Document Review For Homeowners Facing Foreclosure

In St. Paul, Minnesota, MinnPost.com reports:

• Three free legal clinics for homeowners worried about foreclosure will be held in St. Paul. Homeowners can have their mortgage documents and related foreclosure notices reviewed by an attorney for free and get connected to a housing counselor. Those attending should bring all of the mortgage documents they received when buying the house and any related foreclosure notices.

The clinics will be held:

• Thursday, 6 to 8 p.m., at the Summit-University Planning Council, 665 Selby Ave., St. Paul,
• Saturday, 1 to 3 p.m., and Jan. 29, 6 to 8 p.m., at the Greater Frogtown Community Development Corp., 533 Dale St., St. Paul.

For contact information, see Free legal clinics offer help to homeowners worried about foreclosure.

Lenders Warming To Idea Of Bulk Sales As Way To Unload Foreclosed Inventory

The Wall Street Journal reports:

• As the glut of foreclosed homes swells, banks and other lenders are starting to warm to the idea of selling some of the homes in bulk to investors, a departure from the practice of selling homes one at a time.

• For the past year, investors have been eager to buy large numbers of homes from lenders at knockdown prices. Lenders have generally resisted that idea, but now some are trying it out on a small scale.

For more, see Lenders Tiptoe Into Bulk Sales (Glut of Foreclosed Homes Spurs Some Trial Runs) (may require subscription; if no subscription, go here - then click link for story).

Non Profit Lawyers Save Day For 80+ Year Old New Mexico Couple Facing Foreclosure Over $2 In Late Payments

In Albuquerque, New Mexico, the Albuquerque Journal reports:

• Dixie and Paul Williams have much to be thankful for -- to wit, not being thrown out of their South Valley home for $2 in late mortgage payments. And they're thankful to the lawyers at the Senior Citizens' Law Office who helped make that happen.

• Senior Citizens law office executive director Angelica Allen said that an order dismissing the foreclosure action against the couple, who are in their 80s and not in the best of health, has been filed in state district court. This time, she said the bank accepted the $4 in mortgage fees that it had previously rejected as payment.

***

• The couple, who live on Social Security, had pledged their house as collateral on a Small Business Administration loan in the 1970s and arranged an extension with a new mortgage payment of $1 a year when Paul Williams became ill. The terms of the legal arrangement say the house will revert to SBA or its successor bank upon the deaths of the Williams.

• The paperwork had changed hands, and the Williams never got any notice of where to send the $1 mortgage payment, legal documents said. The new mortgage holder filed a foreclosure lawsuit against the couple earlier this year when it failed to receive the $1 payments.

For more, see Couple Won't Lose Home Over $2: Order Dismisses Foreclosure Action (subscription required; if no subscription, try here).

Shorthanded Legal Aid Offices Bursting At The Seams With Foreclosure Defense Cases

National Public Radio reports:

• Everyone accused of a crime is entitled to a lawyer, whether they can afford one or not. But in civil cases, such as home foreclosures, there is no right to an attorney. Legal aid attorneys say some people being kicked out of their homes might have been able to stay if they'd had legal help — help that isn't there for everyone.

***

• Nationally, "half the people coming to the office at least are being turned away at the door," says Don Saunders, director of civil legal services at the National Legal Aid & Defender Association. That statistic does not count those who never make it to legal aid offices.

• "The other side has a lawyer," Saunders says. "The bank and the foreclosure process is being brought by a lawyer, and the playing field is clearly not a level one."

For more, see Foreclosures Overwhelm Legal Aid Programs.

B'klyn Foreclosure Sale Set Aside, Judgment Vacated As Process Server Screw-Up Leaves Court With No Personal Jurisdiction Over Defaulting House Owner

A case decided last month in a Brooklyn, New York trial court serves as a valuable reminder to defaulting homeowners (and their attorneys) that, in cases where a foreclosure judgment has already been entered (and even if a foreclosure sale has already taken place), it is still possible to void the sale and the judgment if the process server failed to properly serve the property owner with the lawsuit upon commencement of the legal action.(1)

In this case, service of process upon the defaulting property owner was purportedly effected by resorting to what is referred to as "nail and mail service" (a form of substituted service that apparently is still allowed in New York) whereby the process server affixes one true copy of the the summons and foreclosure lawsuit on the door of the property owner's "actual dwelling place or usual place of abode." Service is completed when a second true copy is mailed to the property owner.

Unfortunately for the process server and the foreclosing lender, the two locations at which the nail and mail service was attempted (at the house that was the subject of the foreclosure action and at a second location) were not the property owner's "actual dwelling place or usual place of abode." In addition, the three affidavits of service that were filed in court by the process server relating to service on the delinquent property owner conflicted with each other.

The property owner (through counsel) presented an unrebutted affidavit to the court stating that she never lived at either of the two locations, and, for an 18 year period that included the dates on which service was purportedly attempted, she lived at another address.

In reaching his decision setting aside the foreclosure sale and vacating the judgment, Kings County Supreme Court Justice Martin Schneier reminds us of this basic, fundamental precept of law:

• It is "axiomatic that the failure to serve process in an action leaves the court without personal jurisdiction over the defendant, and all subsequent proceedings are thereby rendered null and void" (McMullen v. Arnone, 79 AD2d 496, 499 [2d Dept. 1981]), irrespective of the question of merit. [emphasis added in bold]

For the decision, see HSBC Bank USA, N.A. v Fleurimond, 2008 NY Slip Op 52320(U), Sup Ct, Kings County (November 18, 2008).

Go here and go here for other posts on foreclosures involving faulty notifications to property owners.

Go here for other posts on process server screw ups.

(1) As simple as serving a defendant in a lawsuit may appear to the unitiated, the statutes that apply (other than in cases where the process server actually hands an individual defendant the summons and complaint in a face to face encounter) can be somewhat nuanced (particularly when a corporate defendant is involved). It may be a good idea for foreclosure defense counsel to review the statutes regulating service of process and, (in my view) more importantly, take the time to familiarize oneself with some of the case law applying the service of process statutes to become aware of the types of facts and circumstances that have resulted in a finding of faulty service. Such instances can open up opportunities for counsel to void a foreclosure judgment and, where a foreclosure sale has already taken place, void said sale, thereby forcing the foreclosing lender to go back to "square one" of the legal action and start over again.

In my humble judgment, process servers screw up (either innocently, or intentionally - ie. "sewer service") more often than many may think. Accordingly, the careful scrutiny of the process server's actions (reviewing the affidavits of service for errors & inconsistencies, eliciting oral testimony under oath from the process server) is something deserving of serious consideration. SewerServiceAlpha foreclosure faulty notice ScrewUpProcessServing

Retired Maine Attorney Joins Fight Against Foreclosures; Volunteers Services With Local Legal Aid Program

In Portland, Maine, the Morning Sentinel reports:

• When Maine National Bank collapsed during the recession of the early 1990s, Tom Cox's job was to collect money from businesses that had borrowed from the failed bank.

***

• Nearly two decades later, as Mainers face a new economic crisis, the 64-year-old retired lawyer has emerged on the flip side of debt collection. Cox volunteers several hours each week in a program called Maine Attorneys Saving Homes. It was developed over the past year within the Volunteer Lawyers Project, a division of Pine Tree Legal Assistance. The program provides free legal help to individuals and families on the brink of foreclosure.

***

• This past spring, just as the Maine Attorneys Saving Homes program was getting started, Cox made a telephone call and offered to help. "It felt like a gift from heaven," said Juliet Holmes-Smith, director of the Volunteer Lawyers Project.

• Holmes-Smith had about 20 lawyers who had taken preliminary training on foreclosure and were ready to take some cases. But the program didn't have anyone with the expertise of Cox. And it didn't have a volunteer willing to come into the office, analyze the case files and farm them out to the lawyers across the state. Cox stepped easily into that role.

For more, see Volunteer lawyer helping save homes (Group's members negotiate new terms, go to court for homeowners caught by economic woes).

More On Hedge Fund Suit Against Countrywide Over $8.4B Bank Of America Loan Modification Settlement

For those interested in reviewing the lawsuit filed in this matter, see:

• New York State Supreme Court (New York County) - Index # 650474-2008: Greenwich Financial Services Distressed Mortgage Fund 3, LLC v. Countrywide Financial Corporation.

Go here for links to Exhibits A through G of the above lawsuit (be sure to type in the letters you see in the picture, then click submit - you'll be taken directly to the links):

• Exhibits A & B - representative examples of the pooling & servicing agreements involved;
• Exhibits C & D - lawsuits against Countrywide filed by California & Illinois;
• Exhibit E - Multistate Settlement Term Sheet regarding the settlement of the accusations of the Attorneys General against Countrywide;
• Exhibit F & G - copies of the California and Illinois judgments.

For some of the media reports on this story, see:

• The Wall Street Journal: Mortgage-Bond Holders Get Voice (Greenwich Financial's William Frey Challenges Loan Servicers Like BofA) (subscription may be required; if no subscription, try here, then click link for story),
• The American Lawyer (at Law.com): Class Action Demands Countrywide Repay Hedge Funds for Losses,
• Bloomberg News: Countrywide Sued by Fund Over $8.4 Billion Loan Deal.

Hedge Fund Sues Countrywide Over $8.4B Bank Of America Loan Modification Settlement Of Predatory Lending Charges With State AGs

In New York City, Bloomberg News reports:

• Countrywide Financial Corp., the home lender acquired by Bank of America Corp., was sued by Greenwich Financial Services Fund over claims an agreement to reduce payments on mortgages by $8.4 billion would hurt investors.

• The hedge fund claims investors will be harmed by Bank of America’s settlement, reached on behalf of Countrywide, with 15 state attorneys general. The value of trusts that bought 400,000 mortgages will decline under the deal, the fund said.

• In the proposed class action, or group lawsuit, the Greenwich, Connecticut-based fund demands a declaration that “Countrywide must purchase at par every mortgage loan that it sold to any of the 374 securitization trusts,” David Grais, a lawyer for the fund said today in an e-mailed statement. Grais said Countrywide could owe the trusts $80 billion.

For more, see Countrywide Sued by Fund Over $8.4 Billion Loan Deal.

See also:

1) The Wall Street Journal: Mortgage-Bond Holders Get Voice (Greenwich Financial's William Frey Challenges Loan Servicers Like BofA) (subscription may be required; if no subscription, try here, then click link for story):

• [T]he new lawsuit, filed in New York state court, doesn't take issue with the actual settlement but focuses instead on who should bear the costs. Noting that the attorneys general accused Countrywide of "widespread predatory lending," the lawsuit alleges that Countrywide plans "to pass most or all" of the cost of the settlement to investors.

2) The American Lawyer (at Law.com): Class Action Demands Countrywide Repay Hedge Funds for Losses.

3) Summons & Complaint: Greenwich Financial Services Distressed Mortgage Fund 3, LLC v. Countrywide Financial Corporation. MortgageServicingIssuesAlpha

Alleged Hampton Roads Equity Stripping Scam Operation Leaves Homeowners Out On The Street, Straw Buyers Holding The Bag

In Hampton Roads, Virginia, The Virginian Pilot reports:

• [T]he alleged scammers presented themselves as saviors of financially distressed - often first-time - homeowners, promising to repair their credit and save their homes. Instead, they recruited straw buyers to purchase the properties - in the process taking out bigger mortgages - and walked away with the proceeds. That left two classes of victims in the dust: dispossessed homeowners and empty-handed straw buyers stuck with inflated mortgages.

***

• The figure at the center of the operation [...] is Shanita Lacy, owner of a Virginia Beach-based company called Clean Slate Financial Services. Settlement documents indicate that she pulled out more than $750,000 in equity from the nine properties identified so far.

For more, see Deals with Beach company put some owners out of homes.

For story update (12-5-08), see More report losing homes to 'credit repair' deals.

Investigative Report Reveals Blight-Inducing Tampa House Flipping Operation; 35 Homes Ended Up In Foreclosure (And Counting)

In Tampa, Florida, an investigative report by the St. Petersburg Times describes an apparent blight-causing, straw buyer, house flipping operation involving what it refers to as "a constellation of 90 homes stretching across Tampa, all bought and sold in the past four years by a 34-year-old tattoo parlor owner."

• Most of the homes Sang-Min Kim [aka Sonny Kim] sold are empty now. Many have code violations, and are clustered in impoverished neighborhoods such as Belmont Heights and Sulphur Springs.

• The trail of foreclosures and blight is lined with the bad mortgages approved or assigned by Wachovia, Washington Mutual, Bank of America, National City Bank, Lehman Brothers, Fannie Mae, Freddie Mac and Wells Fargo.

***

• Dissect any of the 35 sales involving homes that ended up in foreclosure after they were sold by Sonny Kim, and it's hard to believe that lenders made any attempt to verify anything.

Reportedly, Sonny Kim politely declined any comment for this story.

For more, see A case study in housing collapse.

Washington State Victim Of Alleged Sale Leaseback Foreclosure Rescue Scam Goes To Court To Save Home Of 35 Years

In Bellevue, Washington, KING-TV Channel 5 reports:

• Karen Handlin has been narrowly saved from eviction – for now. She’s filed a first-of-its-kind lawsuit in Western Washington to save the house her family has owned for 35 years. Handlin almost lost it to foreclosure and then, she says, to a company called Alternative Investors, which claimed it could rescue her from foreclosure.

For more, see Investigators: Alleged foreclosure rescue scam goes to court (read text) (watch KING5 video).

360 Unit Owners Dragged In As Defendants In Mechanics Lien Lawsuit Between Contractor, Condo Developer

In Northern Virginia, Washington Business Journal reports:

• As the sun set over Potomac Yard on Nov. 7, owners at The Eclipse condominium community came home to an unpleasant surprise. Nearly three-quarters of the units had a two-inch-thick stack of legal papers on their doorsteps, notifying the owners that every one of them was being pulled into a lawsuit between their developer and the construction company that built the 465-unit project just south of Reagan National Airport.

• The owners’ predicament is just one more wave in the economic undertow that has swept up banks, developers, builders and homeowners alike. For the owners — some of whom took a risk in buying a unit in a troubled building in the first place — the lawsuit was yet another setback.

For more, see Condo owners caught in crossfire of builder dispute. StiffingContractorsTheta