Use Of "Facebook" Approved For Serving Legal Notice, Rules Australian Court

In Canberra, Australia, The Associated Press reports:

• A court in Australia has approved the use of Facebook, a popular social networking Web site, to notify a couple that they lost their home after defaulting on a loan.

• The Australian Capital Territory Supreme Court last Friday approved lawyer Mark McCormack's application to use Facebook to serve the legally binding documents after several failed attempts to contact the couple at the house and by e-mail.

• Australian courts have given permission in the past for people to be served via e-mail and text messages when it was not possible to serve them in person.

For more, see Australia OKs Facebook for serving lien notice.

Downtown Chicago Condo Developers Stuck With Slow Moving Inventory Lean On Lenders' Leniency To Avoid Falling Into Default, Foreclosure

In Chicago, Illinois, Crain's Chicago Business reports:

• Chicago's downtown condominium developers got all the loans they wanted during the real estate boom. Now they're asking lenders for something else: time.

• A growing number of high-rise developers, including Donald Trump, have sought or already received extensions on construction loans coming due. Absent any breathing room from banks, developers that have been slashing prices but still sit on stacks of empty condos face loan defaults. Foreclosure may be unavoidable for the weakest projects.

For more, see High-rise headache.

Second Wave Of Mortgage Defaults On The Horizon?

CBS' 60 Minutes ran a story Sunday night reporting:

• [A]s correspondent Scott Pelley reports, it turns out the abyss is deeper than most people think because there is a second mortgage shock heading for the economy. In the executive suites of Wall Street and Washington, you're beginning to hear alarm about a new wave of mortgages with strange names that are about to become all too familiar. If you thought sub-primes were insanely reckless wait until you hear what's coming.

To watch the report (12:29), see A Second Mortgage Disaster On The Horizon? (60 Minutes: New Wave Of Mortgage Rate Adjustments Could Force More Homeowners To Default).

Go here to read the transcript of the 60 Minutes' story.

Ex-Pastor, Ex-Banker Charged With Mortgage Fraud, Forgery, Theft By Deception, Etc. In Alleged Scheme To Swindle Church Members

In Macon, Georgia, the Macon Telegraph reports:

• A former Macon pastor and a former Macon banker were indicted [last] Tuesday by a Bibb County grand jury on RICO charges stemming from an alleged scheme to swindle church members into taking out fraudulent loans totaling more than $600,000, according to court records. The indictment names Steven Pittman, a former employee of BB&T Bank in Macon and Jimmy Collins, former pastor of God’s Worship Center on Gray Highway.(1)

***

• Pittman and Collins allegedly used Pittman’s position as a bank officer to obtain loans and lines of credit for about 10 church members, according to the records. [...] Collins and Pittman provided false financial information about the church members in banking documents, submitted forged documents to the bank and misrepresented the true use of the loan funds, according to court records.

For more, see Ex-pastor, ex-banker hit with racketeering charges in Bibb County.

See also, Macon Telegraph: Victims in preacher scam indictment have faith that God will carry them through:

• As pastor of the church, Collins is accused of using his position and influence to identify potential borrowers who “lacked financial sophistication” to “assist” the church and its programs by taking out personal loans, according to court records.

(1) According to the story, the indictment charges Collins and Pittman with, among other things, violation of the RICO Act, bank fraud, residential mortgage fraud, forgery, theft, and theft by deception, according to court records. DeedTheftAlpha

Mosque Leader Gets 20 Years On Deed Theft Scam Targeting The Elderly & Deceased

In Miami, Florida, The Miami Herald reports:

• An officer at a Liberty City mosque was sentenced to 20 years in prison on Tuesday for his role in a housing scam that stole homes from the elderly -- and even from dead people. Sameer Muhammad, the vice president of Muhammad Mosque No. 29 [...] was convicted earlier this year of nine counts of grand theft, forgery, identity theft and using false identification.

***

• Investigators say Muhammad, 51, and a partner, Carolyn A. Murphy, targeted elderly residents who had liens on their homes. Murphy would file fraudulent deeds showing herself as the owner of the home, and Muhammad would then sell the homes through his real estate investment company, Bar None Properties Inc.

• In one case, investigators found a deed a couple purportedly signed, transferring their home to Murphy years after they had died. Murphy pleaded guilty last year and was sentenced to three years in prison in exchange for her agreement to testify against Muhammad.

For more, see Mosque leader jailed over scam targeting the elderly (A Liberty City mosque leader was given a 20-year sentence for stealing houses from the elderly). DeedTheftAlpha

Stolen Identities, Phony Documents Used In NYC Deed Theft; Leaves One Victim With Ruined Credit & Unwitting Widow Facing Foreclosure

In Jamaica, Queens, the New York Daily News reports on a scam where a con man was paid $1,000 by an alleged fraud ring to show up at a closing pretending to be a homeowner who has been dead for 19 years to sell a home from out from under the deceased homeowner's widow. A stolen identity, backed up with phony documents, was used by a purported buyer to obtain a $533,000 mortgage, which has since gone unpaid, leaving a widow facing the loss of her home of over 30 years, and the identity theft victim with her credit in shambles.

For the story, see Dead man gets mortgage worth whopping $533G. DeedTheftAlpha

Detroit Feds Bust Two Dozen Indoor "Purple Pot" Farms; I.D. Theft, Forgery, Phony Appraisals Allegedly Used To Get Mortgages On Some Of The Houses

In Detroit, Michigan, The Associated Press reports:

• A major marijuana ring in southeastern Michigan involved 22 people and two dozen homes where a potent variety of purple pot was secretly grown and sold, according to a federal indictment unsealed [last week].

• Brian Osburn, 33, of Belleville is accused of being the leader since 2002. He's charged with conspiracy, running a criminal enterprise and aiding mortgage fraud. The 24 grow houses were in Wayne, Oakland and Washtenaw counties. The indictment says some houses also were used to get mortgages through identity theft, forgery and phony appraisals.

For more, see Feds say dealer sold potent purple pot.

Go here and go here for other posts on Marijuana Grow Houses. pot grow ops beta

NYC Pro Bono Effort Taking Hold As Attorneys Answer The Call, Step Up To The Plate

In Brooklyn, New York, the Brooklyn Daily Eagle reports:

• [I]n Kings County, the Volunteer Lawyers Project is spreading. And despite the economic crisis that this country is facing, the project is expanding — perhaps even surging — with new attorneys willing to work for free.

***

• “It’s truly been an explosion of pro bono,” said Jeannie Costello, executive director of The Brooklyn Bar Association’s Volunteer Lawyers Project. “This has been an extraordinary year for the VLP.”

For the story, see Local Pro Bono Attorneys Forego Paychecks for Applause.

**************

In a related story, see The AmLaw Daily - Pro Bono Picks Up in Down Times:

• When the Association of the Bar of the City of New York hosted a session in mid-October to train commercial lawyers to handle pro bono foreclosure cases, they expected about 70 to 80 people to show up. "We ended up with 245," says Lynn Kelly, executive director of the City Bar Justice Center, the public interest arm of the city bar association. "It took us completely by surprise."

Long Island DA Announces Ongoing Mortgage Fraud Probe; Nets 27 Suspects To Date Involving $9M In Mortgages

In Hauppauge, New York:

• Suffolk County District Attorney Thomas Spota [last Thursday] announced the arrests of 27 suspects thus far in an ongoing investigation of mortgage fraud that has found nine million dollars in fraudulent mortgages and equity thefts secured with non-existent and overstated assets by scammers to obtain fraudulent mortgages.

Among those recently charged by the DA were mortgage brokers John Tuozzo, 43, of Merrick, and Steven Winick, 40, of Syosset and former Citibank employee Yvonne Rojas, 30, of Brentwood. According to the DA's press release:

• Tuozzo and Winick are alleged to have used false documents provided by Rojas, including phony verifications of bank balances, to get their clients qualified for mortgages. To date, DA Spota said, mortgage fraud unit detectives have found evidence involving Rojas in 96 fraudulent mortgage schemes and the issuance of false verifications of deposit for over a dozen different mortgage brokers. Rojas, Winnick and Tuozzo are charged with falsifying business records in the first Degree and issuing false financial statements.

For the Suffolk County DA's press release, see 27 arrests, nine indictments in ongoing Suffolk mortgage fraud probe.

Cleveland-Area Mortgage Fraud Task Force Bags Five Suspects Accused Of Scam Involving 18 Homes, All Ending Up In Foreclosure; One Victimized By Arson

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

• A Beachwood businessman and four other men were arrested Thursday and indicted in U.S. District Court as part of a wide-ranging mortgage fraud investigation.(1)

***

• All 18 homes - 17 in Cleveland and one in Cleveland Heights - wound up in foreclosure after Lesniak stopped making mortgage payments. The Bureau of Alcohol, Tobacco, Firearms and Explosives joined the investigation after one of [the] foreclosed homes was destroyed by arson.

For more, see Five indicted in mortgage fraud investigation.

(1) According to the story, Uri Gofman, 36, and Gennadiy Simkhovich, 51, are accused of fraudulently selling 18 Cleveland homes to Strongsville resident Paul Lesniak, 40, in 2005. They used fraudulent loans prepared by Dave Pirichy, 38, a loan officer for Central National Mortgage, and bogus settlement statements prepared by Howard Sieferd Jr., 57, a representative from Family Title Services, according to the indictment.

Fannie To Extend Moratorium On Foreclosure Evictions; Freddie Mum On Further Action

The Wall Street Journal reports:

• Fannie Mae is finalizing a national policy that will allow tenants to remain in their homes even if their landlord goes into foreclosure -- a landmark decision for tenants. The policy will be in effect Jan. 9, Fannie Mae said Sunday, and reflects growing pressure on the mortgage company from a legal-aid group that threatened to sue over recent evictions. The company said it will also ensure its current holiday moratorium on new evictions is being followed until the new policy takes effect.

***

• In late November Fannie Mae and Freddie Mac said they would suspend tenant evictions temporarily during the year-end holidays. [Connecticut legal aid firm] New Haven Legal Assistance said that despite the pledge, Fannie Mae was proceeding with more than a dozen new eviction cases in Connecticut. The advocacy group said the evictions would violate legislation passed earlier this year to rescue the two mortgage-finance giants that required them "to permit bona fide tenants who are current on their rent to remain in their homes under the terms of their lease."(1)

• In his letter Sunday to the New Haven group,(2) Fannie Mae General Counsel Curtis Lu wrote: "As far as we know, this will be the first nationwide program of its kind." [...] Freddie Mac hasn't announced a similar policy reversal, though a spokesperson said they are "currently evaluating additional actions."

For more, see Fannie Mae to End Tenant Evictions in Foreclosures.

(1) Section 109(b) of the Emergency Economic Stabilization Act of 2008 may require the U.S. Secretary of the Treasury to work with the F.H.F.A. and other government entities to permit tenants in foreclosed homes to remain in their apartments after foreclosure.

(2) Fannie Mae General Counsel Curtis Lu was responding to a December 8, 2008 letter sent by New Haven Legal Assistance, demanding that FNMA immediately cease violating Section 109(b) of the Emergency Economic Stabilization Act of 2008. ThetaTenantRentSkimming

Mass AG Obtains Injunction Against Upfront Fee Foreclosure Rescue Operator; 1st Lawsuit Invoking New State Regs Targeting "Home-Saving" Activities

In Essex County, Massachusetts, The Boston Globe reports:

• The office of Massachusetts Attorney General Martha Coakley said [Friday] that she has obtained a temporary restraining order against David Coleman, "a Methuen mortgage broker who allegedly preyed upon financially distressed homeowners by representing himself to be an attorney and a bankruptcy expert who offered to file bankruptcy petitions to save consumers’ homes from foreclosure."(1)

***

• A press release issued by Coakley's office said: "Coleman would target vulnerable homeowners on the brink of foreclosure by combing newspapers for victims’ contact information in foreclosure notices. He would then allegedly make unsolicited calls to the homeowners where he would offer to save their homes from foreclosure by assisting them in filing for bankruptcy in exchange for a $1,000 cash fee upfront."

For more, see Mass. AG sues mortgage broker.

Go here for the Massachusetts AG's press release: AG General Martha Coakley Obtains Restraining Order Against Methuen Mortgage Broker Who Deceived Homeowners into Believing He Could Assist Them in Saving Their Homes From Foreclosure (First Lawsuit Alleging Violations of Attorney General Coakley’s Regulations on Foreclosure-Related Services ).

(1) According to the story, the temporary restraining order that Coakley obtained in Essex Superior Court prohibits Coleman and his company, Mortgage Finders of New England, from contacting individuals to offer foreclosure related services or assisting individuals with filing for bankruptcy, Coakley's office said. loan modification

Central Florida Non-Profit Loan Modification Organization Leaves Legal Aid Attorney Concerned

In Daytona Beach, Florida, the Daytona Beach News Journal ran a story on the Helping Hands Foundation, reportedly a non-profit, 501(c)(3) organization with the mission of doing loan modifications for homeowners facing foreclosure.

• Foundation directors George and Daisy Raisler(1) gave a free foreclosure prevention/education public workshop this week in Daytona Beach with 20 attendees. They spoke of being able to form a team of experts to review "intake" packages and pick ones that may be successful in getting mortgages modified. They charged $200 for the packages and ask for a donation equal to one month's salary to try to negotiate loan modifications. [...] Anita Lapidus, an attorney with Community Legal Services of Mid Florida, sat through the 90-minute presentation and left concerned.

For more, see Mortgage fraud up as homeowners seek help.

(1) According to the story:

• Court records show Czech-born George Raisler, 41, pleaded guilty in 1996 in South Florida to conspiracy to commit mail fraud and income-tax fraud. He was ordered to pay partial restitution of $45,000 to insurance companies and served five years of supervised probation. That was extended a year after he violated the terms. He also voluntarily filed for bankruptcy in 1997, was ordered to pay $395 after losing a civil complaint in 1996 and in 2000, the Florida Department of Law Enforcement arrested him for grand larceny, trespassing and fraud. He was acquitted, according to court records. Raisler did not respond to telephone calls Friday, asking about his past.

Nix "Cash For Keys" Deals & Fight Lenders In Court Instead, Say Boston Law Students To Area Tenants Facing Foreclosure Eviction

In Boston, Massachusetts, The Harvard Crimson reports on a group of Harvard law students who are encouraging tenants in foreclosed homes to refuse "cash for keys" offers from lenders and fight foreclosure evictions in court instead.

• [W]orking at the Harvard Legal Aid Bureau, [third-year law students Nicholas J.] Hartigan and [David E.] Haller have long represented tenants against banks, but when they realized less than half of foreclosure [eviction] cases reached the courts, they knew they needed to go out and find the missing tenants.

• Along with Anthony B. Borich, a third-year Law School student, they started No One Leaves, an organization of individuals who canvass different zones of Boston. Each week this fall, they and an army of volunteers, including some College students, have been visiting foreclosed homes, knocking on doors, and telling residents to stay put. [...] “The idea is to give these people a heads-up before those damn cash-for-keys people get there,” Hartigan says [...].

***

• The bank that has seized the property must now go through the full eviction process. According to Hartigan and Haller, every tenant can expect a much larger payment through this process while staying in his or her home without paying rent.

***

• As members of the Legal Aid Bureau, Hartigan and Haller act as legal counsel to many tenants of foreclosed properties, sometimes winning settlements that represent a significant percentage of the property’s original price. Haller—who recently represented a tenant who lost heat, water, and access to his home after the bank changed the lock on the door—says that juries tend to be sympathetic to his clients. In this case, he was awarded over $50,000 for emotional distress and for the diminution of value of the property, and Haller says that there is a “good possibility” that sum will be doubled or tripled.

For more, see ‘No One Leaves’ Keeping People Put.

********************

In a related story, The Boston Globe reports:

• The administration of Governor Deval L. Patrick said [this week] that it has issued a brochure outlining the rights and responsibilities of Massachusetts renters living in foreclosed buildings.

For more, see New foreclosure brochure outlines renters' rights.

For the online version of the brochure, see Tenants Rights: What Tenants In Foreclosed Properties Need To Know.

See also, MassLegalHelp: If Your Building is Being Foreclosed, Don’t Fall for “Cash-for-Keys” Schemes.

Go here for more on the law students at the Harvard Legal Aid Bureau urging tenants in foreclosed homes to fight back against careless/reckless mortgage companies seeking illegal evictions. ThetaTenantRentSkimming

Largest Ponzi Scheme In History? Investors Belted For As Much As $50B

In New York City, a story getting intense coverage in the financial world on Wall Street over the last couple of days involves the uncovering of what could be the biggest Ponzi scheme in history.

While the story has nothing to do with this blog, it deserves mention as a handy reminder that it isn't only the poor, unsophisticated and otherwise vulnerable that are susceptible to being ripped off by people they place their trust in, as indicated by these excerpts from coverage in the New York Post:

• Panicked investors scrambled desperately [...] to determine whether their life savings had been wiped out after a Wall Street legend allegedly admitted blowing as much as $50 billion in what is emerging as the largest Ponzi scheme in history.

• Among several big-name investors who trusted former Nasdaq Chairman Bernard L. Madoff with their cash were New York Mets owners Fred Wilpon and Saul Katz, who may have lost as much as $500 million in the scheme, sources said (see New York Times: Wilpon’s Losses in Fraud Case May Affect Mets).

• New Jersey Sen. Frank Lautenberg also confirmed he had invested money from his charitable organization through the 70-year-old Madoff's company, though he did not say how much. [...] "This is a major disaster for a lot of people," said investor Lawrence Velvel, 69, dean of the Massachusetts School of Law who said he and friends had lost millions among them.

***

• Sources say Jerome Fisher, the founder of the Nine West women's shoe empire, was said to have lost $150 million, and Carl Shapiro, who founded the Kay Windsor garment company, reportedly lost $400 million. [...] Many victims were reluctant to speak out of shame. "They don't want to read their names in the newspaper. They're too embarrassed already," said a source who knew many of the victims.

A story by Reuters news service reports that one Boston charitable foundation was forced to fire its entire staff and immediately shut down because it was heavily invested in the Ponzi scheme (see Madoff losses ripple into Boston, shut foundation).

For more, see:

• Investor Furor Over '$50B Scam' (Fear Worst After Wall St. Big's 'Lie),
• Fla. Elite Loses Its Juice ('We Just Became Whole Lot Poorer').

Despite Intimidating Letters To The Contrary, NJ Tenants Have Protection From Foreclosure Eviction

In Jersey City, New Jersey, The Jersey Journal reports on the growing practice by real estate agents and others of sending intimidating letters to renters in foreclosed homes in attempts at forcing them to move, despite New Jersey law protecting them from foreclosure eviction.

• The notices the two renters received are typical of the shady "cash for keys" deals being pushed on tenants in foreclosed buildings throughout Hudson County. In each case, a lump sum is offered in exchange for the tenants agreeing to vacate the property [...].

• But when [the tenants] turned to Jorge Aviles, a former councilman and attorney for the Housing Resource Center in Jersey City, he told them they did not have to move because New Jersey law protects tenants from eviction in foreclosure actions.

• Aviles said the "marginally legal" notices are frightening people, especially seniors, who are not aware of their rights. [...] "This is an attempt to trick people into thinking the foreclosure has some impact on them," Aviles said, adding that in his 27 years as a lawyer, he's "never seen stuff like this."

For more, see Shady letters tell tenants to leave now.

See also: Officials acting to protect tenants:

• [T]he notices, which are popping up more often in Hudson County and other areas hit hard by foreclosures, tell the tenants they will be kicked out if they do not take cash to vacate their apartments, despite a state law that forbids such evictions. ThetaTenantRentSkimming

Inbox At Miami Courthouse Jammed With New Foreclosure Filings; Clerks Enjoy New-Found Job Security Working Overtime, Weekends Despite Budget Cuts

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

• In 2007 the clerk's office took in a record 25,000 foreclosure filings. This year they have already doubled that number. It's no surprise they're now open on weekends to handle these extra cases, and soon might open up a night shift as well.

• "It's unbelievable," said Wanda Hoskins, a clerk with the Civil Intake Division. "It's a wonder that anyone in Dade County has a house left." Inside the Miami-Dade Courthouse the paper is everywhere. All of it foreclosures, and it comes in all day long-- over the counter, in the mail, and lately by the case. [...] The county now auctions foreclosures three days a week. Next year they will add a fourth.

For the story, see Foreclosures Flood The Courthouse Inbox.

For WFOR-TV video, see Foreclosures Create Extra Shifts For Court Clerks.

San Bernardino County Man Charged In Theft Of Elderly Couple's Home; Allegedly Pocketed $250K In Subsequent Refinance

In Southern California, the San Bernardino County District Attorney's Office announced that investigators in its Real Estate Fraud unit arrested real estate agent Anthony Vargas, 34, at his office in Rancho Cucamonga, CA.(1) According to the DA's press release:

• [I]n February 2008, Vargas fraudulently acquired a property in Rancho Cucamonga that belonged to an elderly Rancho Cucamonga couple. Vargas completed a Grant Deed and forged the victims' signatures, granting the property into his name. Vargas recorded the Grant Deed with the San Bernardino County Recorder’s Office and became the owner of record of the residential property. The victims owned this property outright with no mortgage owed. Vargas immediately took out a loan on the property in the amount of $250,000. [...] During the loan process the property was appraised at $1,200,000.

For the press release, see Rancho Cucamonga Man Arrested for Real Estate Fraud.

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

(1) Vargas faces felony counts of Grand Theft (PC 487), Forgery (PC 470), Filing a False/Forged Document with the County Recorders Office (PC 115a) and Financial Elder Abuse (PC 368d), according to the DA's press release. Links are to the relevant sections of the California Penal Code. DeedTheftAlpha

Closing Agent Get 21 Months In Prison For Pocketing Escrow Cash Intended To Pay Off Existing Mortgages; Title Underwriter Takes $877K Hit

The U.S. Attorney for the District of Maryland announced Monday that Marny Arlen Bailey, age 35, of Highland, Maryland, was sentenced to 21 months in prison followed by five years of supervised release for wire fraud in connection with a scheme to steal real estate settlement funds which were intended to pay off the homeowners’ previous loans. She was also ordered to pay restitution of $877,000, to the title company who paid off the homeowners’ loans after the fraud was discovered. According to the U.S. Attorney's press release:

• Beginning in late 2007 or early 2008, Bailey used funds which were intended to pay off mortgage lenders for her own purposes. In early 2008, she diverted whole settlement amounts to her personal accounts, and started gambling in an attempt to recoup the amounts she had stolen. [... S]he stole settlement monies from as many as four homeowners, for a total of over $877,000.

For the press release, see Settlement Officer Sentenced For Diverting Funds Intended To Pay Off Mortgage Lenders (Stole Over $877,000 in Just Three Months).

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

Asphalt Supplier Stiffed By Contractor Slaps Lien On Paid-Up Homeowner

In Gresham, Oregon, KGW-TV Channel 8 reports:

• [A] local paving company has been hurting consumers because it's not paying bills. [Brian] Lee is one of those consumers. He was actually happy with asphalt work done by Gresham Paving at a duplex he owns, a job for which he paid $5,400 up front.

• Several weeks later, Lee started getting a series of lien notices from Knife River, the supplier of the asphalt. Gresham Paving didn't pay its asphalt bill so now Knife River has slapped a lien on Lees’ property.

***

• Officials with Knife River told KGW Gresham Paving owed them thousands of dollars. [...] For his part, Lee understands times are tough, but said it was ridiculous that he could be forced to pay twice.

For more, see Gresham contractor's unpaid bills thrust upon customers.

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

Three California Men Cop Pleas On Charges Of Purchasing Home With Stolen I.D.

In Southern California, the San Bernardino County District Attorney's office announced the sentencing of:

• real estate agent Jose Oliva, 33, of Fontana (grand theft, 180 days in county jail, 3 years probation);
• Gabriel "Carlos" Hernandez, 36, of Victorville (forgery, 180 days in county jail, 3 years formal probation for forgery); and
• real estate agent Luis Robles, 46, of San Bernardino, (forgery, county jail and 16 months state prison, suspended).

According to the DA's press release:

• In 2003 and 2004, the three conspired to steal the victim's identity for the fraudulent purchase of a home in Victorville. The victim discovered the fraud when he attempted to refinance his own Santa Ana residence. The victim found that his signature had been forged on numerous loan documents.

For the DA's press release, see Real Estate Agent Sentenced in Real Estate Fraud Scheme.

Court-Appointed Conservator Convicted Of Milking Elderly Man Of Assets, Leaving Him Facing Foreclosure

In Lakeport, California, Lake County News reports:

• Following a five-week trial a local woman has been convicted of felony financial elder abuse and neglect. On Wednesday, a jury convicted Glenhaven resident Shauna Michelle Brewster, 53, of one count of felony financial elder abuse and one felony count of elder abuse/neglect, according to Senior District Attorney Rachel Abelson [...].

***

• The crimes allegedly were committed over a year-and-a-half-long period against 75-year-old Glenhaven resident Lawrence Russell, for whom Brewster became private conservator in early 2003, said Abelson.

***

• The financial abuse came to light when Russell's medical bills, mortgage and other bills went unpaid, said Abelson. Russell's home had gone into foreclosure after payments were not made for seven months, and almost no money was left in Russell's checking account. Brewster, as Russell's conservator, had the authority and responsibility to control his finances for his benefit, said Abelson.

For more, see Jury convicts woman of financial elder abuse, neglect.

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

Another Fresno Man Sought For Allegedly Renting Out To Unwitting Tenants Vacant Foreclosed Homes Belonging To Others

In Fresno, California, KMPH-TV Channel 26 reports:

• Fresno police are warning valley residents of another foreclosure scam artist. At least three families have now come forward, saying they are out thousands of dollars after renting homes from a man named Joe Rodriguez.(1)

***

• Amanda and Jacob Jinapuck filed a report with Fresno Police on Saturday. That's when the Jinapucks found out the home they were renting didn't belong to the man they thought was the owner. [...] Police say two more families have filed complaints against Joe Rodriguez with the Fresno County Sheriff's Department.

For more, see Second Suspect Sought in Foreclosure Scam.

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

(1) Fresno man Sam Haley was arrested recently for allegations of similar conduct (see Fresno housing scam uncovered (Police say man rented homes to victims who didn't know he was not the owner)). PhonyLandlordScamZeta

Providence Housing Activists Threaten Foreclosed Home Blockades In Attempt To Halt Evictions

In Providence, Rhode Island, WPRI-TV Channel 12 reports:

• Housing advocates are threatening to begin blockading foreclosed homes if banks try to evict rent-paying tenants who live there.

For more, see Tenants to stage foreclosure protest (Threaten to blockade homes if bankstry to evict).

See also, The Providence Journal: Tenants protest eviction practices.

Rent Scams Hitting Northern Virginia

In Northern Virginia, The Washington Post reports:

• [I]n the past 18 months, the foreclosure debacle has pushed tens of thousands of area residents into the rental market, many with crippled credit and a desperate need for housing. Waiting for them is a new cast of swindlers, cheats and real estate sharks ready to prey on the weak and needy. Scams of various stripes are thriving in the foreclosure mess and flourishing at the margins of landlord-tenant laws.

***

• Collecting money on a property you no longer own or signing a long-term lease on a property headed for foreclosure could lead to felony charges of obtaining money under false pretenses, authorities said.

***

• In recent months, [Kristi] Cahoon, [an attorney with Northern Virginia Legal Services] said her office has been swamped with so many calls about rip-offs and scams, "they don't even faze me anymore." Police in the region do not specifically track fraud or theft cases that stem from rental housing, so the trend is difficult to chart.

For more, see Foreclosure Epidemic Infecting Rental Market (Tenants, Lenders Are Exposed to Various Scams). ThetaTenantRentSkimming

Rent Scams Target Landlords As Well As Tenants

In Santa Cruz County, California, the San Jose Mercury News reports:

• With foreclosures rising and affordable rentals hard to find in Santa Cruz County, scammers are teasing prospective tenants and landlords with offers on Craigslist that are too good to be true. "It's getting outrageous there are so many scams," said Robin Gysin of the Santa Cruz County District Attorney's Office. "There is no sheriff on the site -- it's buyer beware."

***

• Gysin related a situation where a tenant claimed to be a professor coming from Africa to teach at UC Santa Cruz. He sent the property manager a cashier's check for more than $8,000 to cover first and last month's rent and the cost of furnishing the empty house, then asked the manager to send him the unspent portion. All of their communications were by e-mail, and the property mangaer lost $5,000.

For the story, see For rent scams increasing in Santa Cruz; Craigslist shoppers beware. PhonyLandlordScamZeta

Alleged Arson Ring Charged With Scheming To Torch Homes For Insurance Cash

The U.S Attorney's Office in Miami, Florida recently announced that defendants Iraida Alvarez, Adiaris Figuerola, Alexis Perez, Erlin Oswaldo Perez, Carlos Stewart and Rosa Stewart, were charged in a criminal complaint with conspiracy to commit arson in connection with an insurance fraud scheme. An excerpt from the press release:

• According to the criminal complaint, the defendants worked together during the three-month period from August to October 2008, to plan to burn a home in Sunrise, Florida, to collect the insurance proceeds. The target home's coverage on the policy with State Farm Insurance Company amounted to almost $400,000.

• According to the complaint affidavit, the defendants claimed to have experience burning homes. Alexis Perez and Figuerola confirmed that they were efficient and competent at this scheme, and Figuerola bragged that they "do this all the time," and that some fires had been used to conceal other crimes, including murder.

• One defendant, Alvarez, even admitted to burning down her own home in June 2007 to walk away from the mortgage and to collect the insurance proceeds. As payment for their services, the defendants would receive a total of $6,000 plus 20% of the insurance settlement.

For more, see Six Defendants Charged In Arson Scheme To Collect On Home Insurance Policy. ArsonForeclosureAlpha

Major Builder Uses "Rent To Own" Program In Effort To Unload Unsold Inventory

Reuters reports:

• Toll Brothers Inc., the largest U.S. luxury builder, [last month] said it was expanding its rent-to-own program to Hoboken, New Jersey, across the river from Manhattan.

***

• Toll Brothers has a rent-to-own program in one of its Brooklyn condos and will start such a program in a Hoboken building as well, Chief Executive Robert Toll said during a company conference call. The company also has similar programs in Scottsdale, Arizona; Singer Island, Florida; Washington, D.C. and Pennsylvania, Toll said.

For the story, see Toll Brothers expands rent-to-own program.

Texas AG, State Legislator Propose Law Targeting Upfront Fee, Sale Leaseback Foreclosure Rescue Scams

From the Office of the Texas Attorney General:

• Texas Attorney General Greg Abbott and state Sen. Craig Estes (Wichita Falls) announced a legislative initiative that will help protect Texas homeowners from foreclosure rescue scams. If enacted, the proposal would enhance the Attorney General’s enforcement authority, provide new protections for homeowners, and place new restrictions on foreclosure prevention consultants.

For the rest of the press release, see Attorney General Abbott, Sen. Estes Propose Bill To Protect Texans From Foreclosure Rescue Scams (Foreclosure Rescue Fraud Prevention Act to strengthen penalties for scams).

Utah AG Raids Foreclosure Rescue Operator's Office, Home; Investigators Mum About What They're Looking For

In Midvale, Utah, KUTV Channel 2 reports:

• Investigators from the Utah attorney General's Office spent over nine hours searching inside the offices of Utah Financial in Midvale. What they were searching for, they would not say. The officers also searched a nearby building which houses Legends Title. The investigators removed several boxes of what appeared to be documents from both buildings.

• Utah Financial is reportedly owned by Brendan Cassity of Murray. The same state investigators spent about 2 hours searching his house Wednesday morning. They took bags of evidence from the home too.

***

• Customers and employees of Utah Financial were shocked to find the building closed by investigators. Customer Raul Leon said he was there to make a payment. Leon said that the company advertises heavily to Latinos, promising to help them avoid foreclosure.

• Leon says Utah Financial gave him a loan to help him keep his house. He showed documents and said he signed a Quit Claim Deed, then a lease agreement. He says he rents the house back from Utah Financial and they make the mortgage payments for him.

For the story, see Utah Mortgage Business Temporarily Shut Down By State Investigators.

For story update, see Utah Attorney General's press release: Midvale Mortgage Company Owners Charged With Fraud.

California Homeowner In Foreclosure Loses $1K To Purported Loan Modification Firm

In San Luis Obispo, California, New Times SLO reports:

• [Homeowner Donna] Scarpa said a self-described foreclosure prevention consultant with a company calling itself U.S. Foreclosure Freedom met with her and her husband in August. Scarpa paid $997 up front by credit card to save the house; that was originally scheduled to be in September. But later, Scarpa said, she had trouble contacting the representative and became concerned she wasn’t getting what she paid for.

***

• She said when she confronted her foreclosure prevention consultant, the representative grew defensive. Scarpa independently managed to get an extension on the foreclosure sale until Jan. 8. She’s still unnerved, however, and worries how much she’ll be able to accomplish in a month.

• The representative could not be reached for comment. The phone number for U.S. Foreclosure Freedom was disconnected, and an e-mail to the company bounced back as undeliverable. Messages left with another phone number Scarpa provided for the representative weren’t returned.

For more, see If it sounds too good to be true... (Experts warn that a rash of foreclosures is bringing consultants out of the woodwork • but not all of them are as much help as they promise).

Las Vegas Man Cops Plea In Foreclosure Rescue Scam

From the Office of the Nevada Attorney General:

• Nevada Attorney General Catherine Cortez Masto announced [...] that Mathew Marlon, age 64, of Las Vegas, pled guilty [...] to nine (9) gross misdemeanor counts of Making False Representations Regarding Title and one (1) gross misdemeanor count of Making a Fraudulent Conveyance in connection with a mortgage foreclosure rescue scam involving Las Vegas victims.

According to an earlier media story, Marlon was reportedly accused of getting the rightful owners out of their homes under false pretenses, and he would put renters in the houses in many cases. In the process, he falsely represented to the Recorder's Office that the sales were exempt from transfer taxes (see Accused foreclosure scam artist behind bars).

For the Nevada AG press release, see Attorney General Announces Guilty Plea In Mortgage Loan Scam.

For story update (2-17-09), see Man ordered to pay $130,000 in mortgage fraud case.

Disabled Michigan Woman Fighting Eviction After Being Screwed In A Sale Leaseback, Foreclosure Rescue Scam

In Sturgis, Michigan, Workers World reports the story of a disabled homeowner who is now fighting off eviction after being victimized by mortgage fraud when she attempted to save her home after she fell behind on payments due to medical expenses. From the story:

• A bogus mortgage company, which subsequently had its license revoked, tricked Brown into signing her house over to them. She continued making what she believed were the mortgage payments.

• Recently, after being served with eviction papers, Brown learned she had been scammed and the house was in foreclosure. She discovered she had lost her property rights and was only a tenant in her own home. She filed complaints with the FBI, police and the State Office of Financial Services.

For more, see Help stop eviction of disabled woman.

Are Attorneys The Target Of I.D. Theft By Rogue Operators Of Pirate Web Sites?

A recent article in The Florida Bar News describes a fake law firm whose operators have stolen the identities of real attorneys and include them in the bogus firm's website to perpetrate scams on the public. According to the article:

• [T]he Web site is part of the recent problem in which scam artists impersonate real lawyers to gain credibility. In this case, the site promoters attempt to get money by convincing people they have won sweepstakes, but need to pay various fees to collect the prizes. It’s a high-tech enhancement of a scheme that has popped up across Florida recently (See story in the October 1 Bar News.)

• The Bar became aware of the site because potential victims called the Attorney/Client Assistance Program. Those calls in turn generated an investigation by the Bar’s Unlicensed Practice of Law [UPL] Department, and the site also was reported to the Florida Department of Law Enforcement.

***

• Bar UPL Counsel Lori Holcomb said the scammers’ method of operation is to work outside the country, while claiming to be a Florida law firm, and then contact only potential victims in other states.

For more, see Con men steal identities, pirate attorney Web sites.

Another "Money Store" Defendant Falls; Maryland Feds' Tally Reaches Four In Equity Stripping, Foreclosure Rescue Scam Prosecution

From the Office of the United States Attorney (District of Maryland):

• Katisha Fordham, age 35, of Washington, D.C., pleaded guilty [yesterday] to conspiracy to commit mail and wire fraud in connection with a mortgage fraud scheme that falsely promised to help homeowners facing foreclosure keep their homes and repair their damaged credit, announced United States Attorney for the District of Maryland Rod J. Rosenstein.(1)

For the U.S. Attorney's press release, see Metropolitan Money Store Loan Processor Pleads Guilty In Mortgage Fraud Scheme (Under the Scheme Conspirators Took Title of Homes from Financially Distressed Homeowners and Secretly Used Home Equity for Personal Benefit).

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

Go here for criminal prosecutions of foreclosure rescue operators.

(1) According to the press release, Katisha Fordham is the fourth defendant to plead guilty in the Metropolitan Money Store mortgage fraud scheme. Richard Allison, age 37, of Camp Springs, Maryland, an attorney and employee of the U.S. Census Bureau; Clifford McCall, age 47, of Lanham, Maryland, president of Burroughs & Smythe Financial Services, Inc., based in Lanham and a director of the Fordham & Fordham Investment Group, Ltd., a foreclosure consulting and credit servicing business based in Lanham and Greenbelt, Maryland and Carlisha Dixon, age 31, of Hyattsville, Maryland, vice president and a director of Burroughs & Smythe Financial Services, Inc.; each pleaded guilty to the conspiracy and are facing a maximum sentencing of 30 years in prison. joyjackson

Lawyer Successfully Squeezes Settlement From Insurer For Client's Damage Claim From Unknown Meth Lab

In Loveland, Colorado, the Denver Daily News reports on a story of a local couple who rented out a basement apartment to their son-in-law, only to have their entire home subsequently condemned as a result of contamination caused by the son-in-law's clandestine meth lab operation on the premises. Local officials promptly kicked the couple out of their home because, until the the contamination could be remediated, the premises was deemed uninhabitable.

Reportedly, after having their insurance claim for the damage denied, and after having their case turned down by a number of attorneys unwilling to go after the insurance company, the homeowners found legal counsel willing to take the case and who successfully obtained a satisfactory settlement from the insurer for the meth lab damage.

An excerpt from the story regarding how to handle a meth contamination claim with an insurance company:

• The trick is showing that homeowners had been the victim of mischievous behavior or vandalism — an unknown meth lab would fall under that category, said [Attorney Brett A.] Buccheit [with the Denver-based Frankl Law Firm].

• “The contamination exclusion is solid, you can’t get around it. No amount of fancy lawyering is going to change the words of the policy,” he said. “But if the property is treated in a manner inconsistent with the homeowners’ rights, such as malicious mischief or vandalism, then that is covered.” [...] The [homeowners] say they were able to settle for an amount that paid most of their costs.

For the full story, see Lawyer fixes meth mess (Denver-based Frankl Law Firm aids family with no other options).

Go here and Go here for other posts on home-based methamphetamine labs. meth lab yak

Missouri Feds, State AG, Local Cops Raid "Contract For Deed" Operator; Firm Subject To Numerous Complaints; Company Issues Public Statement

In Springfield, Missouri, OzarksFirst.com reports:

• Springfield police, the FBI and the Missouri Attorney General's office raided the Springfield office of Greenleaf Companies Tuesday. The company, which has been accused of real estate fraud, acts as a go-between, between home buyers and sellers - some buyers say Greenleaf never submitted their payments to the seller, sending the homes into foreclosure.

For the story, see Greenleaf Offices Raided by FBI.

See also:

• Springfield News Leader (12-9-08): FBI, Attorney General's office investigating Greenleaf,
• Springfield News Leader (12-16-08): Arkansas agency investigating Greenleaf sales in that state (At least two dozen families reportedly facing foreclosure).
• Springfield News Leader (12-16-08): Greenleaf violated state laws, agency says (Secretary of State office's Securities Division seeks cease-and-desist order).

********************

Story update:

The Springfield News Leader reports that Greenleaf Companies and its sister company, The Real Estate Co., issued a statement Wednesday afternoon addressing Tuesday's search of their Springfield offices by the Missouri attorney general's office. For their statement, see:

• Greenleaf issues statement about attorney general's probe.

See also, Greenleaf defends business after authorities search its offices.

*********************

Go here for other "contract for deed" problems involving Greenleaf Companies. Arkansas

Texas AG Gets Permanent Injunction Against Upfront Fee Foreclosure Rescue Operator; Firm To Pay $1.55M

Buried in a recent press release is the following announcement from the Office of the Texas Attorney General:

• [A]ttorney General Abbott revealed the results of a recent enforcement action against a mortgage rescue fraud scheme. Arizona-based Abell Mediation, Inc., and its president and vice-president, Elizabeth Cory and Michael Cory, respectively, were charged with fraudulently claiming that their company could save homeowners from imminent foreclosure. Homeowners who were delinquent on mortgage payments responded to the defendants’ solicitation cards and Web site. The defendants’ cards claimed that “Abell Mediation, Inc. has saved over 7,000 homes from foreclosure,” boasted about a “staff of highly trained loss mitigation specialists” with established relationships with mortgage lenders and banks nationwide and promised to “achieve results that no one else can.”

• Under an agreement secured by the Attorney General, the defendants are permanently enjoined from conducting a foreclosure mitigation business in the future. The defendant is also required to pay a total of $1.55 million in fines, restitution and attorneys’ fees.

Go here for the Texas AG 12-10-08 press release.

Go here for the Agreed Final Judgment with Abell Mediation, Inc.. loan modification

Business Is Booming For Federal Prosecutors Targeting Mortgage Fraud; "We're Running Out Of Bodies To Handle These Cases!" Says One U.S. Attorney

The Associated Press reports:

• Investigations into the collapse of financial titans such as Lehman Brothers, Bear Stearns and Washington Mutual have attracted most of the attention in the ongoing unraveling of the nation's mortgage-backed security mess.

• Lost in the headlines are prosecutions proceeding quietly on the local level against smaller players. In dozens of jurisdictions around the country, federal prosecutors are charging hundreds of people with originating the bad loans that helped derail the world's financial markets.

***

• "We're running out of bodies to handle these cases," said [Sacramento-based U.S. Attorney MacGregor] Scott, calling on Congress to approve more money for investigators and prosecutors. "We're just being overwhelmed."

For more, see Mortgage fraud is booming business for prosecutors.

Recent South Florida Federal Mortgage Fraud Prosecutions

The U.S. Attorney for the Southern District of Florida has made the following recent announcements in connection with its prosecutions of mortgage fraud:

• December 4, 2008: Three Palm Beach County Residents Sentenced For Mortgage Fraud,
• November 19, 2008: Miramar Woman And Miami Man Sentenced On Mortgage Fraud Scheme,
• November 07, 2008: Former Palm Beach Resident Indicted In Bankruptcy, Mortgage And Structuring Scheme,
• October 30, 2008: Palm Beach County Man Sentenced To 240 Months On Mortgage Fraud And Tax Evasion Charges,
• October 21, 2008: Leader Of $10 Million Mortgage Fraud Scheme Pleads Guilty,
• October 15, 2008: Four South Florida Men Charged In Multi-Million Dollar Mortgage Fraud Schemes.

Ohio Homeowner Hits Jackpot; Lender Loses Right To Foreclose On Delinquent Mortgage Due To Violation Of Procedural Rule, Says State High Court

In Canton, Ohio, The Repository reports:

• A city man took his foreclosure dispute to the state’s highest court, and according to a ruling issued today, he won. What that means for Giuseppe Gullotta is that he gets to remain in his house without a mortgage. What it means for homeowners around the state remains to be seen.

• The case involved a rule that limits plaintiffs to one re-filing after a civil lawsuit has been voluntarily withdrawn. During a two-year period, U.S. Bank filed three foreclosure actions against Gullotta, [...]. The bank voluntarily dismissed the first two complaints.

• In 2005, it filed a third. Gullotta said that broke the re-filing rule, but the trial court and 5th District Court of Appeals said the foreclosure was legal. In March, the Ohio Supreme Court heard arguments. U.S. Bank argued that the third case wasn’t the same as the first two because it didn’t try to collect payments and interest owed before April 2005, which the other cases did.

• But Gullotta’s attorney said the complaints were essentially the same. The court justices agreed in a 5-2 vote.

According to the court decision, the amount owed at the time of the start of the foreclosure action was $164,390.91, plus interest at the rate of 7.35 percent per year.

For the story, see North Canton man wins foreclosure case in Ohio Supreme Court.

For the decision of the Ohio Supreme Court, see U.S. Bank Natl. Assn. v. Gullotta (2008-Ohio-6268, slip op., December 10, 2008). UndoMortgageLoans TILAdelta SloppyForeclosuresAlpha

Butler County Sheriff Puts The "Freeze" On Evictions Of Those Without A Place To Go

In Hamilton, Ohio, the Cincinnati Enquirer reports:

• Forced evictions in winter weather and during a recession are "just heartless," Butler County Sheriff Rick Jones says - and he's ordering his deputies to disregard eviction orders when people have nowhere else to live.

• "This is like serving a death sentence, when you're evicting someone from their home in the winter - and I'm not going to do it," Jones said Tuesday. "These situations are going to go back to the courts and be resolved some other way. ... There has to be a moratorium - please - before someone dies this winter."

***

• Jones is ordering his deputies to ensure that anyone who is evicted has a place to live. "If you determine that these persons will not have shelter, you are to halt the service of the forced eviction and return the paperwork to the courts," said Jones' order, issued Tuesday.

For more, see Cold evictions blocked (Jones tells deputies to ignore orders).

For story updates, see:

• Eviction refusals slammed (Butler Co. sheriff attracts criticism),
• Evictions straining deputies, residents.

Subprime Loans That Lenders Knew Or Should Have Known Were Unsustainable Are Illegal, Says Massachusetts High Court

The Boston Herald reports:

• The Bay State’s highest court has issued a landmark ruling tentatively declaring whole classes of subprime mortgages unfair under Massachusetts law. “Originating loans with terms that in combination would lead predictably to . . . default and foreclosure (is) within established concepts of unfairness,” state Supreme Judicial Court justices unanimously ruled yesterday. The decision upholds a lower-court injunction issued against subprime-lending giant Fremont Investment & Loan.

• Suffolk Superior Court Judge Ralph Gants handed down the injunction in February, declaring - apparently for the first time in state history - that some subprime-mortgage terms automatically violate Massachusetts law.

• Ruling in a lawsuit brought by state Attorney General Martha Coakley, Gants found that many of Fremont’s Bay State subprime loans seemed “doomed to foreclosure” from the start. The judge ordered Fremont to give Coakley’s office a chance to object before foreclosing on any of 2,700 Massachusetts subprime mortgages with terms Gants deemed “structurally unfair.”

• Last month, the judge issued a similar injunction against Option One Mortgage, which oversees another 8,000 questionable Massachusetts subprime loans. Although Gants’ rulings are preliminary, and subject to change as cases work their way through courts, experts still see yesterday’s SJC move as precedent-setting.

• “We think this is an important milestone not just for Massachusetts, but also for other states that want to use their consumer-protection powers against unfair and deceptive (mortgage) marketing,” Coakley said.

For the story, see High court hits subprime lenders.

See also:

• Massachusetts Supreme Judicial Court decision: Commonwealth vs. Fremont Investment & Loan (for a possibly easier to read version with all the footnotes appearing at the end of the case, try here),
• Massachusetts Attorney General press release,
• Massachusetts Lawyers Weekly: SJC restricts ‘subprime’ foreclosures,
• The National Law Journal: Mass. High Court Upholds Order Restricting Subprime Lender From Foreclosing.

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 SloppyForeclosuresAlpha

Loan Modification In Bankruptcy To Be On The Table If Foreclosure Frustration Continues: Frank

MarketWatch reports:

• House Financial Services Committee Chairman Barney Frank on Monday said that if foreclosures are not on the decline early next year he expects lawmakers to revive efforts to change bankruptcy law and let judges adjust the terms of mortgages.

• "If we come back in February and there is frustration that efforts at reducing foreclosure are not working, we can do bankruptcy law changes to get at the problem," Frank told participants in an Office of Thrift Supervision conference. "Bankruptcy cuts through that." [...] Should lawmakers consider the measure again, it would give judges the authority to modify mortgages such as reduce principal or interest rates or lengthen the amount of time to pay back the mortgages.

Source: Frank: Bankruptcy law changes could be on the table next year.

Three Face Criminal Charges In Las Vegas-Area Alleged Foreclosure Rescue Scam; Homeowners Paid Upfront Fees To Avoid Losing Homes, Says State AG

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

• One person is under arrest and two others are still at large for allegedly operating a foreclosure scam that bilked desperate homeowners out of money.(1)

***

• The alleged scheme involved the collection of upfront fees for the purpose of assisting the victims with avoiding foreclosure on their homes. The suspects, under the business of Federal Housing Aid, allegedly charged the victims between $899 to $1500 for foreclosure rescue services and offered a 100% money back guaranty, claiming their company would refund the money if the foreclosure could not be stopped. The state says the company did not follow up on its promises.

For the story, see Arrest Made in Las Vegas Foreclosure Rescue Scam.

See also, KTNV-TV Channel 13: Arrests Made in Foreclosure Rescue Scam.

(1) According to the story, Attorney General Catherine Cortez Masto announced that William Vargas has been arrested and warrants have been issued for Paula Luna, who is believed to be in California and Michael Sinclair who is believed to have fled to the Philippines. KTNV-TV Channel 13 reports, the three defendants are each charged with multiple felonies including: One (1) felony count of Theft of a Person 60 Years or Older; seven (7) felony counts of Theft by Material Misrepresentation; and eight (8) misdemeanor counts of Deceptive Trade Practice. loan modification

Central Florida Lawyer Gets 15 Years Probation For Stealing Foreclosure Surplus Funds From Clients

In Orlando, Florida, WFTV Channel 9 reports:

• An Orange County lawyer can no longer practice law and is on probation for 15 years after taking advantage of foreclosure clients. Investigators said Norman Sanders Moss took advantage of the foreclosure crisis and kept money from auctions of foreclosed homes.(1) Moss pleaded guilty to grand theft and offered one of his victims an apology.

***

• Moss was ordered to work 40 hours a week in order to pay the victim, Nicholas Cabrera, back the $31,000 he stole from him. However, the former attorney will have to obtain a job that doesn't allow him to handle money or practice law.

Source: Lawyer Apologizes For Stealing Victim's Money.

(1) This money, commonly referred to as Foreclosure Surplus Funds, are proceeds generated from the sale of a home at a foreclosure, trustee's, or sheriff ’s sale over and above the balance owed on the foreclosing mortgage. Where a foreclsoure sale yields such a surplus, the foreclosed homeowner may be entitled to the money, provided there aren't any secondary liens on the foreclosed property, in which case these lien holders could have priority in their claims to the surplus. In some cases, this surplus could total thousands of dollars, although in the current real estate market, the vast majority of foreclosure sales are not attracting third party bidders, are being acquired by the foreclosing lenders, and consequently, are not yielding surpluses.

Arizona AG: Complaints About Loan Modification Firms On The Upswing

From the Office of the Arizona Attorney General:

• The Attorney General’s Office has experienced a recent increase in complaints from consumers who have been contacted by individuals claiming to have "connections" and expertise in negotiating with mortgage lenders to reduce consumers’ monthly payments and/or prevent foreclosure. These individuals charge consumers high upfront fees and say they can modify mortgage terms to make them more affordable.

For more, see Terry Goddard Warns of Fraudulent Mortgage ‘Assistance’ Businesses.

South Florida Feds Nail Two Area Title Agents For Roles In Mortgage Fraud Schemes

In two separate cases, the U.S. Attorney for the Southern District of Florida recently announced:

• Title Agent Sentenced To 41 Months In Prison For Participation In Mortgage Fraud Scheme: Ishmett Nazario was sentenced to forty-one months in federal prison in connection with her participation in a mortgage fraud scheme. In addition, Nazario was ordered to pay restitution in the amount of $1,442,000. Nazario was arrested in July 2008 for her involvement in the fraudulent sale of residential property located in Coral Gables, Florida. The property was flipped three times within a one year period, almost doubling the price of the property from $780,000 to $1,400,000. Nazario served as the title agent in the third sale and, through her title company Blue Coast Title, fraudulently released the lender's funds from escrow to fund the straw buyer's down payment on the property.

• Broward County Title Agent Convicted On Fraud Charges: Howard Gaines, an attorney and licensed title agent, was convicted after trial on one count of conspiracy to commit mail and wire fraud and two counts of mail fraud. Gaines' conviction was the sixth conviction in this matter, following five guilty pleas by other conspirators in the case. According to the evidence presented at trial, Gaines was a licensed title agent at Your Title Choice, Inc, in Deerfield Beach. Gaines, as a title agent, aided co-conspirator Anthony Dehaney and others to close on fraudulent loans. Among the fraudulent documents presented at closings were HUD-1 Settlement Forms, which falsely represented that buyers were using their own money to close on the purchases. The evidence showed that Gaines helped Dehaney close more than $10,000,000 in loans during 2004, 2005, and 2006, including $5,000,000 in fraudulent mortgages.

City Of Memphis, Shelby County Consider Lawsuits Against Predatory Lenders

In Memphis, Tennessee, WHBQ Fox-TV Channel 13 reports:

• The city and county mayors are considering drastic action because of the area's foreclosure epidemic. The idea is still in the early stages, but Memphis and Shelby County leaders are heavily researching a plan to sue mortgage companies. Leaders blame these loans for Memphis having the highest foreclosure rate in the state.

• Similar lawsuits are underway in another part of the country. The City of Baltimore is overrun with foreclosed homes. Leaders there saw predominately African American neighborhoods with extremely high foreclosure rates. The situation is similar in Memphis, where 10 percent of some neighborhoods have foreclosed homes.

For more, see Local Leaders Consider Suing Mortgage Companies.

See also:

• The Memphis Daily News: Predatory Lending Suit Could Gain Traction,
• Memphis Commercial Appeal: Memphis, Shelby plan National lender lawsuit (City, county leaders vilify deceptive ploys).

For lawsuits alleging predatory lending filed by officials in Baltimore, Maryland, and the state of Massachusetts, see:

• Mayor and City Council of Baltimore v. Wells Fargo Bank, N.A., et al. (approx 9.74 MB),
• Commonwealth of Massachusetts v. H&R Block, Inc., et al. (approx 5.25 MB).