Putnam County, Ohio Now Offers Free Legal Assistance For Qualified Homeowners Facing Foreclosure

In Ottawa, Ohio, LimaOhio.com reports:

• Putnam County Common Pleas Judge Randall Basinger and the Putnam County Bar Association have announced the formation of a referral system to provide free legal assistance for homeowners facing foreclosure in Putnam County. The Putnam County Bar Association will be working with the existing Putnam County Foreclosure Task Force to provide free legal advice to individuals unable to afford counsel after a foreclosure has been filed. [...] Homeowners may contact the task force at 419-523-6200.

For more, see Putnam group forms system to avoid foreclosures.

NYS Bar To Make Foreclosure Defense Training Seminar Available Online

In connection with a recent foreclosure defense training seminar for attorneys recently held in Queens, the New York State Bar Association announced:

• [F]or attorneys who were not able to attend, the program will be recorded, and course materials will be made available both online and to all local bars and legal service offices throughout the state to help train more attorneys to handle residential foreclosure cases.(1)

The NYSBA also issued this reminder:

• A new law that took affect on September 1, 2008 entitles all New York homeowners with subprime loans in foreclosure to mandatory court settlement conferences that provide a forum for the lender and the borrower to meet together with a mediator with the ultimate goal of achieving a workable resolution to avoid foreclosure.

For more, see NYSBA press release: State Bar Association Program Increases Number Of Pro Bono Attorneys To Assist Homneowners Facing Foreclosure (Free Continuing Legal Education Seminar Provides Training for 250 Volunteer Attorneys to Help Represent Homeowners in Foreclosure Settlement Conferences).

(1) For the cost conscious and/or CLE-obsessed, the recent Queens seminar was free, and attendees pocketed 8 continuing legal education credits, according to the press release.

Florida Legal Aid Attorney Earning National Reputation For Foreclosure Defense Both As Advocate For Clients & Trainer For Other Lawyers

In Jacksonville, Florida, MSNBC.com reports:

• [April] Charney, a lawyer with the Jacksonville Area Legal Aid agency, is quickly developing a national reputation as a champion of homeowners facing foreclosure and a serious adversary for those attempting to take possession of those homes. Her encyclopedic knowledge of contract law, debt-collection practice, securitized mortgages, the trusts that hold them and the agreements that govern the trusts have put her at the forefront of the rapidly expanding specialty of foreclosure defense.

• While carrying her own load of 70 to 100 foreclosure cases as a legal aid attorney, Charney, 51, also has become one of the nation’s top trainers of other lawyers eager to learn how to serve the growing clientele spawned by America’s mortgage meltdown.(1)

For more, see 'Angel' of foreclosure defense bedevils lenders (Florida attorney trains hundreds of others to help troubled borrowers).

(1) According to the story, about 1,500 lawyers have attended her daylong classes on foreclosure law so far, 80 to 200 at a time. She has taught in Ohio, California, Minnesota, South Carolina, Missouri and throughout Florida. She offers the classes at cost with the help of local bar associations and aid groups and requires that all students perform 20 hours of pro bono legal work in their communities.

Upstate NY Foreclosure Rescue Operator Files For Ch. 11 Bankruptcy Protection; Over 40 Current Sale Leaseback Deals Listed On Petition

In Albany, New York, the Daily Gazette reports:

• Geoffrey Goldman over the past two years portrayed himself as a savior in the foreclosure crisis. He made a living by buying homes from cash-strapped owners who wouldn’t be kicked out after sales closed and could even buy the properties back under leaseback agreements. “We’re helping more people than ever,” Goldman said in an April 2007 press release.(1)

• Now Goldman is in need of help. Two of his real estate leaseback businesses filed Tuesday for Chapter 11 reorganization in U.S. Bankruptcy Court. His Rivertown Investments and its real estate holding company, Momentum Properties, recently closed after falling victim to downturns in the housing and credit markets, according to documents filed with the Albany court.

***

• The liquidation of those assets could cast into limbo the former homeowners who entered leaseback agreements with Rivertown. Rivertown lists in its Chapter 11 petition more than 40 leaseback agreements in New York, New Jersey and Pennsylvania.

For more, see Real estate leaseback company files for bankruptcy.

See also, Albany Times Union: Lease-back plan for homes fails (Owner of dozens of properties files for bankruptcy protection).

For story update, see Rivertown bankruptcy case dismissed.

(1) The article reports that under Rivertown’s leaseback program, according to the 2007 press release, homeowners sold their homes because they were on the verge of foreclosure or too far behind on payments to reinstate their mortgages. Sellers used proceeds from the sale to pay off their mortgages, then made rental payments to Rivertown so they could continue living in their homes, which they ultimately hoped to buy back. Rivertown Financial

Minnesota Men Convicted In Straw Buyer, Home Flipping Mortgage Fraud Scam Involving $100M In Fraudulently Obtained Loans

In Minneapolis, Minnesota, the Minneapolis Star Tribune reports:

• Two metro-area men have been found guilty of racketeering and multiple counts of theft in Hennepin County District Court for their role in one of the state's largest mortgage fraud cases, worth approximately $100 million. Shinon Lindberg, of Greenwood, and Scott R. Rosenlund, of Chaska, were convicted by a Hennepin County jury Thursday. [... Mortgage broker Celeste] Skaar pleaded guilty this spring to one count of racketeering.

For more, see Two guilty in mortgage fraud (The scheme used straw buyers to purchase homes in the southwest metro at inflated prices).

For story updates, see:

• 2-20-09: Chaska man is sentenced seven years in mortgage scheme (He ends up jailed right away after heated hearing over appeals. Sentencing for cohort was delayed until early March),
• 3-4-09: Partner gets 7 years in mortgage fraud case (The judge sentenced a second defendant in the $6 million scheme involving the 10Spring Homes).

Go here for earlier posts on this story.

"Money Store" Suspects In Sale Leaseback, Foreclosure Rescue Scam Continue To Fall

In Greenbelt, Maryland, The Associated Press reports:

• A Fort Washington woman has pleaded guilty in a scheme to defraud homeowners facing foreclosure. Jennifer McCall, 47, pleaded guilty in federal court Thursday to conspiracy to commit mail and wire fraud.

• McCall was the chief executive officer of Metropolitan Money Store, a company that claimed to provide help to people in danger of losing their homes. But prosecutors say the company left homeowners worse off by draining equity out of the properties and imposing exorbitant transaction fees. Prosecutors say McCall is responsible for a loss of more than $16 million dollars.

McCall is the fifth defendant in this case to cop a guilty plea.

Source: Md. Woman Pleads Guilty In Mortgage Fraud Scheme.

See also, U.S. Attorney (Maryland) press release: CEO Of Metropolitan Money Store Pleads Guilty In Mortgage Fraud Scheme (Conspirators Took Title of Homes from Financially Distressed Homeowners and Secretly Used Home Equity for Furs, Jewelry and Other Personal Benefits, Defendant Caused Over $16 Million in Losses).

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

Utilities Shutoff In Rental Building Facing Foreclosure Force Tenants To Take Over Landlord's Unpaid Bills

In Miami, Florida, The Miami Herald reports:

• [M]ore than once over the past year, tenants of [a recently abandoned and in foreclosure] 11-unit Liberty City complex had come home to find the water shut off. Eventually, they stopped paying rent and took the matter into their own hands, forming a kind of rudimentary condo association to manage the property at 1575 NW 69th St.

• South Florida's foreclosure crisis is creating unique hardships for renters in some apartment buildings. Unlike tenants of condos and houses, apartment dwellers rely on landlords to collect garbage, keep up the premises and make repairs. The cost is included in the monthly rent.

• So when a landlord enters foreclosure, those services often stop, leaving residents without vital utilities and sometimes in unsafe conditions. They may be forced to move. Low-income renters sometimes have nowhere to go.

For more, see Foreclosure crisis creates unique hardships for apartment renters (South Florida apartment renters can face grim living conditions when their landlords enter foreclosure and stop paying bills. Some are taking matters into their own hands). ThetaTenantRentSkimming

Ist Mortgage Loan Modifications May Hit Road Block When Second Mortgages, HELOCs Are Involved

Dow Jones Newswires reports:

• Abu Hafizuddin inthe Village of Huntley, Ill., has applied to get his mortgage modified after missing payments. But more flexible terms may still not save him from foreclosure. The problem is that he's behind on another set of payments tied to his property: his home-equity loan.

***

• Home-equity loans are a stumbling block in efforts to stall or prevent foreclosures, a crucial step in halting the downward spiral of the financial crisis. Loan modifications to prevent foreclosure require the cooperation of owners of the loans. Investors in home equity loans can have conflicting interests from those that hold the first or primary mortgage, so getting both sets of investors to agree on modifying loans is a challenge.

For more, see Home-Equity Loans Are Stumbling Block In Mtge Modifications.

See also:

• The Boston Globe: Mortgage practice hindering recovery (Piggyback loans pose big problem for housing sector),
• Bloomberg News: ‘Piggyback’ Mortgages May Cut Modifications, Fed Says.

"No-Deficiency" Laws Give Homeowners "Get Out Of Jail Free" Card When Walking Away From Unaffordable Mortgages In Some States

The Associated Press reports:

• Mortgage law experts say the incentive to walk away from a home loan is highest in states that have anti-deficiency statutes, which prohibit lenders from suing borrowers for additional funds after foreclosure.

• "These anti-deficiency laws make a huge impact on foreclosure rates because they are basically 'get out of jail free' cards," said Todd Zywicki, a law professor at George Mason University [...].

• This handful of non-recourse mortgage states includes the high-foreclosure states of California and Arizona, which not coincidentally also are leaders in the numbers of mortgage walkaways.

For the story, see Walkaways highest in 'non-recourse' states.

Active Servicemembers Entitled To Waiver Of Prepayment Penalty On Home Mortgages In Some Cases As DOJ Completes Homecomings Probe

From the Civil Rights Division of U.S. Department of Justice:

• The Justice Department [Monday] announced the resolution of its investigation of Homecomings Financial, LLC (Homecomings), under the Servicemembers Civil Relief Act (SCRA). The SCRA suspends or modifies certain civil obligations of individuals serving on active duty in the military.(1)

***

• Homecomings and GMAC Mortgage, LLC now will waive prepayment penalties upon request on residential mortgage loans obtained by active duty servicemembers who receive permanent change of station orders to bases 30 miles or more from their current residences.(2)

For the DOJ press release, see The Justice Department Resolves Investigation Under Servicemembers Civil Relief Act of Homecomings Financial, LLC.

(1) According to the DOJ press release, the Civil Rights Division has reviewed numerous allegations of SCRA violations (ie. foreclosure on home mortgage loans without court orders, waivers of prepayment penalties on home mortgage loans, termination of residential lease agreements), has brought one suit under SCRA, and has resolved a number of allegations without the need for litigation. Servicemembers and their dependents who believe that their SCRA rights have been violated should contact the nearest Armed Forces Legal Assistance Program office. Please consult the military legal assistance office locator at http://legalassistance.law.af.mil and click on the Legal Services Locator.

(2) According to the press release, this modified policy applies to all loans on owner-occupied properties serviced by Homecomings or GMAC Mortgage, LLC with respect to which one of the following entities retains the contractual right to receive the prepayment penalty: Homecomings or GMAC Mortgage, LLC or either entity's affiliates, including, but not limited to, the Residential Funding Company, LLC and GMAC Bank.

NY Governor Stiffs State Court Judges On Pay Raise Despite Sharp Spike In Caseload; Legal Aid Programs Also Get The Shaft

In Albany, New York, the New York Law Journal reports:

• Governor David A. Paterson praised the Judiciary for making an austere spending request even while the courts confront an influx of foreclosure, personal debt and other cases related to the "greatest economic and fiscal challenge of our lifetime."

• However, Mr. Paterson did not include [in the state budget] a raise for judges, whose salaries have not increased since January 1999, in the spending plan he submitted yesterday to the Legislature.

***

• The budget [also] does not contain money, other than that to be provided by the Interest on Lawyer Accounts (IOLA) program, for civil legal services for the poor.

For the story, see Paterson Praises Courts' Budget, Passes on Judges' Raise.

Colorado Slaps Subpoenas On 13 Loan Modification Firms; Creating Fear To Squeeze Cash From Consumers Concerns State Regulator

In Denver, Colorado, The Denver Post reports:

• The Colorado Division of Real Estate has issued subpoenas to 13 mortgage loan-modification companies in Colorado, California and Arizona.(1) "Our concern is that there appear to be fly-by-night operations that are soliciting Colorado consumers who appear to be in trouble," said Erin Toll, director of the division. [...] "This is a brand-new cottage industry. These loan-modification companies are springing up like wildfire."(2)

***

• Toll said many solicitations are misleading. At the top of one company's solicitation is "Notice & Demand" in large type, making it appear to be an official document. Some solicitations appear to be from the U.S. Department of Housing and Urban Development until the small print at the bottom of the page. "What we're hearing from consumers is they feel threatened when they get these notices," Toll said.(3)

Toll added that it's illegal even to solicit Colorado residents for loan modifications without being a state-licensed mortgage broker.

For more, see Loan-modification firms subpoenaed.

For story update (12-19-08), see The Denver Post: 3 more loan-modification firms subpoenaed (All are based in California. Such companies may be preying on desperate homeowners).

(1) According to the story, among the paperwork the division wants are documents used for marketing to Colorado consumers; lists of borrowers who have attempted loan modifications and the status of their cases; bank statements; copies of checks; and lists of mortgage lenders or mortgage services the companies have worked with.

(2) Problems occur, Toll said, when the companies or individuals charge large up-front costs, usually one month's mortgage payment, plus a fee of several hundred dollars, then fail to return the borrowers' money when they are unable to renegotiate the loan.

(3) Using written communications that simulate either official court documents, or documents issued by a Federal or state government agency, for the purpose of extracting money from a consumer are the types of deceptive practices that have been declared illegal when done in the debt collection context. See Fair Debt Collection Practices Act, § 807(9), § 807(13). The false representation or implication that a company is vouched for, bonded by, or affiliated with the United States or any State has also been declared to be an illegal practice in the debt collection context. FDCPA, § 807(1). It sounds to me that some of the loan modification people using these types of deceptive practices may be grifters formerly in the debt collection industry who have simply "grifted" into a new line of work.

Cook County Chief Judge Seeks Cash For Courts As Chicago-Area Foreclosure Filings Skyrocket; Current Funding To Process Cases Falling Short

In Chicago, Illinois, WBEZ Radio 91.5 FM reports:

• The sky-rocketing number of home foreclosure cases has the Chief Judge of the Cook County Circuit courts trying to muster up more cash. Judge Tim Evans is looking for an extra $8 million to run the court system next year [...].

***

• Evans says some of the requested money would pay 7 new support staff to help judges dealing with home foreclosure cases. EVANS: "I have had to reassign 14 of our judges to full time duties just dealing with foreclosure cases alone." Evans says in 2005, there were about 16,000 foreclosure cases in Cook County. This year there have been almost 44,000.

For the story, see Evans: Cash for Courts?

State Budget Cuts Leading To "De Facto" Foreclosure Moratorium?

In Tallahasse, Florida, The Associated Press reports:

• Florida courts already are jammed with more criminal and foreclosure cases due to the sagging economy, but the backlog will get only worse if their budgets are cut again, judges told lawmakers Wednesday.

***

• Courts have cut back on support personnel such as clerks, security and staff lawyers. Prosecutors and public defenders also are short-handed. Circuit Judge Belvin Perry of Orlando, chairman of the Trial Court Budget Commission, said that has resulted in backlogs for civil dockets as courts must give priority to criminal cases, particularly those involving violence. Criminal defendants also have the right to demand speedy trials, so judges must put aside other cases to do those first, Perry said.

• He said a [Governor-requested] 10 percent cut would mean that "all civil cases in the state of Florida would virtually be suspended."

For the story, see Judges: More Fla. budget cuts mean court backlogs.

FTC, Pennsylvania Lender Settle Race Bias Charges; Borrowers' Credit Risk Didn't Warrant Higher Loan Costs, Say Feds

In Horsham, Pennsylvania, the Philadelphia Inquirer reports:

• Gateway Funding Diversified Mortgage Services L.P., a Horsham mortgage lender, has settled federal allegations that it charged African Americans and Hispanics higher prices for loans than it did white borrowers, the government said yesterday.

• "We are not admitting that we did it," said Bruno Pasceri, president and chief executive officer of Gateway. "I can tell you we certainly do not discriminate against anybody. I'm glad it's over."

***

• The FTC found that Gateway loan officers charged several thousand African American and Hispanic consumers more - in higher interest rates and higher up-front charges - than was warranted, given the borrowers' credit risk.

• The settlement payment was set at $200,000, even though the FTC had alleged $2.9 million in damages to consumers. The FTC said it allowed the lower payment because of Gateway's "inability to pay."

***

• Irv Ackelsberg, a consumer attorney with Langer, Grogan & Diver P.C. in Center City, said millions of borrowers were paying more than they should be, feeding the nation's foreclosure problem.

For more, see Horsham lender settles discrimination case.

From the Federal Trade Commission in the matter of FTC v. Gateway Funding:

• Complaint For Permanent Injunction and Other Equitable Relief,
• Stipulated Final Judgment and Order For Permanent Injunction and Other Equitable Relief,
• FTC News Release.

Go here, Go here, and go here for other posts on alleged race bias in real estate transactions. DiscriminationPredatoryLendingAlpha

Disbarred Lawyer Convicted Of Forging Lien Release, Satisfaction Of Mortgage On Loans Secured By His Property Wins Termination Of Sentence

In Naples, Florida, the Naples Daily News reports that, after serving 3 years of house arrest, a disbarred real estate attorney has been relieved of having to serve the 12 additional years probation originally contained in his sentence in connection with a January, 2005 no contest plea to two counts of grand theft of more than $100,000 and forgery. The ruling allows David Szempruch to reapply for his license to practice law. With respect to these charges, the story recounts:

• [S]zempruch was first criminally investigated after a complaint from a woman who loaned him $130,000 for a real estate investment. Under an agreement, Szempruch gave Dorothea Cardin the mortgages on two properties he owned and she received an initial check for $1,650, but it bounced. She then determined he’d forged a partial release of her mortgage and the satisfaction of a mortgage for another woman, Jeanne Lyster.

• Investigators determined Szempruch used part of the $130,000 loan to cover a $190,000 shortfall in his escrow account, which was supposed to contain funds for a [...] condominium closing.

• He’d taken out two mortgages on property he owned [...] after borrowing $200,000 from Lyster, securing about $148,000 of that by making Lyster the mortgage lienholder. But prosecutors said he forged her signature on paperwork he filed with the Clerks of Courts that said those mortgages had been satisfied.

For the story, see 'Humiliated' and disbarred Naples attorney pays off debt, judge ends his probation.

Mass AG: Firm Agrees To Remove Mechanics Liens On Houses; Resolves Complaints By Paid-In Full Homeowners Of Improper Squeezing By Contractor, Supplier

From the Office of the Massachusetts Attorney General:

• Attorney General Martha Coakley’s Office has entered into a settlement agreement with [...] National Lumber Company resolving a civil investigation into National Lumber’s placement of liens on the homes of at least ten Massachusetts consumers totaling approximately $260,000, as well as National Lumber’s business relationship with Taunton-based home improvement contractor Dennis Bartel (“Bartel”) and Bartel’s companies New Dimensions Construction Services and New Dimensions Construction, LLC . [...] National Lumber has agreed to remove all liens placed on Massachusetts residential properties where National Lumber was seeking to recover monies for labor and/or materials it had supplied to Bartel and New Dimensions.

***

• The Attorney General’s Office began investigating Bartel in 2005, after receiving complaints from Massachusetts consumers alleging, among other unfair conduct, that Bartel, through his home contracting businesses, executed contracts and took payments for home improvements and failed to either commence or complete the projects. Bartel allegedly also failed to pay National Lumber for the materials for which the consumers had prepaid.

***

• The Attorney General’s Office received complaints that National Lumber, a subcontractor for Bartel, was placing liens on the homes of Massachusetts consumers to assist Bartel in leveraging payments from these consumers even though the consumers claimed not to owe additional monies to Bartel.

• The Attorney General’s Office also investigated allegations that National Lumber's liens exceeded the amount owed for materials and that National Lumber extended credit to Bartel, despite his payment delinquency, with the intention of placing these liens to recover from the consumers the monies due from Bartel.

For more, see the Mass AG press release: AG Coakley Reaches Agreement with Lumber Company to Remove Liens Placed on Consumers’ Property for Monies Owed by Contractor.

For a similar sounding alleged scam in Illinois, see Attorney General Madigan, State's Attorney Alvarez Sue Chicago Lien Filing Service For Fraudulent Practices.

Go here for other posts on suspected mechanics lien scams. StiffingContractorsTheta MechanicLienScamTheta

IRS To Stop Dragging Its Feet On Subordination, Discharge Requests Involving Homeowner Federal Tax Liens In Attempt To Speed Up Loan Mods, Short Sales

From an Information Release issued by the Internal Revenue Service:

• The Internal Revenue Service [this week] announced an expedited process that will make it easier for financially distressed homeowners to avoid having a federal tax lien block refinancing [or modification] of mortgages or the sale of a home.

• If taxpayers are looking to refinance [or restructure an existing mortgage] or sell a home and there is a federal tax lien filed, there are options. Taxpayers or their representatives [...] may request that the IRS make a tax lien secondary to the lien by the lending institution that is refinancing or restructuring a loan [known as subordination]. Taxpayers or their representatives may request that the IRS discharge its claim if the home is being sold for less than the amount of the mortgage lien [ie. short sales] under certain circumstances.(1)

• The process to request a discharge or a subordination of a tax lien takes approximately 30 days after the submission of the completed application, but the IRS will work to speed those requests in wake of the economic downturn.

For the rest of the information release, see IR-2008-141, IRS Speeds Lien Relief for Homeowners Trying to Refinance, Sell, Dec. 16, 2008; or go here to listen to audio file - Tax Lien Relief.

(1) To apply for a certificate of lien subordination, people must follow directions in Publication 784, How to Prepare an Application for a Certificate of Subordination of a Federal Tax Lien. There is no form but there must be a typed letter of request and certain documentation.

To apply for a tax lien discharge, applicants must follow directions in Publication 783, Instructions on How to Apply for a Certificate of Discharge of a Federal Tax Lien. There is no form but there must be a typed letter of request and certain documentation.

Requests should be mailed to one of 40 Collection Advisory Groups nationwide. See Publication 4235 for address information.

"Hope for Homeowners" A Hopeless Program?

NBC Nightly News ran a story tonight on the "Hope for Homeowners" program created by Congress this summer to help those financially strapped individuals facing the loss of their homes. Reportedly, the results of this program so far have been dismal.

For the story (video only; running time, including 30 second commercial, about 3 minutes), see Foreclosure fix bogus, HUD says.

Missouri "Contract For Deed" Operator Hit With C&D Order By Securities Regulator, Preliminary Injunction By State AG

In Springfield, Missouri, the Springfield News Leader reports:

• The Missouri Securities Division [yesterday] issued a cease-and desist order against Greenleaf Companies of Springfield, its subsidiary and owners Eric Gagnepain and Scott Dasal prohibiting them from offering their real estate investment program, said Ryan Hobart, spokesman for the Missouri Secretary of State’s office.

***

• Greenleaf came under public scrutiny after many of the houses the company brokered recently were lost — or threatened to be lost — to foreclosure.

***

• Greenleaf commissioned the construction of hundreds of investment houses and solicited investors — both in Missouri and out of the state — to take out loans and purchase those homes. In exchange for the use of their good credit, Greenleaf promised the investors at least $10,000 in returns after three years.

• Greenleaf hoped to sell the homes to those with blemished credit histories, letting them move in first on a contract for deed. Greenleaf would collect monthly payments and forward enough to investors to cover their monthly obligations, such as loan principle, interest, taxes and insurance.

• Without enough buyers and adequate income, Greenleaf has been unable to pay its investors, who in turn are defaulting on their mortgages, triggering foreclosures not only in Greene County but Branson, northwest Arkansas and south of Kansas City.

For the story, see State orders Greenleaf to cease and desist operations.

See also:

• Attorney General files preliminary injunction against Greenleaf Companies,
• Greenleaf Companies responds to Attorney General’s injunction,
• State unravels Greenleaf Cos. 'investment scheme'.

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

Solicitors For Loan Modification Firms "Loitering" At Free Foreclosure Prevention Seminars Seeking New Business Get The Boot

Buried in a recent story on loan modification firms in The Sacramento Bee is this blurb on how some of the companies are reportedly attempting to drum up business:

• [L]ast week, vendors passed out postcards for modification firms at a free Hope Now foreclosure-prevention workshop in Sacramento. State and Consumer Services Secretary Rosario Marin said solicitors always stalk such free events "and we boot them out."

For the story, see Beware of mortgage rescue solicitors.

Foreclosure Rescue Scammer Convicted On State Charges Now Faces Federal Bankruptcy Fraud Allegations Involving Fractional Interest Deed Transfers

In Oakland, California, the San Francisco Chronicle reports:

• A Livermore business owner is facing federal charges for allegedly taking advantage of the mortgage crisis by running an elaborate foreclosure rescue scam, court records show. Sonia Alburez, 37, [...] is accused of inducing homeowners desperate to avoid foreclosure to transfer an interest in their properties to what turned out to be sham companies. She was charged Friday with four counts of bankruptcy fraud in U.S. District Court in Oakland.(1)

***

• She claimed that her company, Community Home Saver Program, could delay or stop foreclosure proceedings so long as homeowners transferred an interest in their properties as a gift to one of several companies and paid fees, authorities said.

• But her customers didn't realize that the companies in question were fictitious and bankrupt, authorities said. Alburez is accused of filing fraudulent bankruptcy petitions for properties in Fremont, San Ramon, Vallejo and Modesto from January to March to delay foreclosure proceedings.

For more, see Livermore woman charged in foreclosure scam.

See also: this report on the use of abusive bankruptcy court filings in connection with foreclosure rescue scams.

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

(1) According to the story, Alburez and Verena Silva pleaded no contest earlier this year in Alameda County Superior Court in a similar case. Prosecutors said the women bilked more than a dozen homeowners of $1,500 to $2,500 a month in exchange for a plan the two allegedly said would save homes from foreclosure. Instead, the victims still lost their homes, as well as the money they paid Alburez and Silva. According to an earlier story, they were found guilty of two felony counts each of foreclosure rescue fraud and grand theft. loan modification

Washington Woman Faces Forgery, Theft Charges In Alleged Refinancing Scam; Accused Of Using Stolen Notary Stamp, Abusing POA In Scheme To Pocket $32K

In Bremerton, Washington, the Kitsap Sun reports:

• A Bremerton woman was charged with forgery and theft [...] after an investigation found she'd stolen a notary stamp and taken more than $32,000 through refinancing schemes where she served as a power of attorney, according to documents filed in Kitsap County Superior Court.

• Ebony L. Washington, 33, was found by a Bremerton police detective to have refinanced an Arsenal Way duplex twice with power of attorney given to her by a 46-year-old Bremerton man.

For more, see Woman Accused of Pocketing $32K in Refinancing Schemes.

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

Legal Aid Effort In Connecticut Has Nationwide Effect As Fannie Persuaded To Reverse Course On Foreclosure Evictions; Freddie Expects To Follow Suit

In Hartford, Connecticut, The Hartford Courant reports:

• What began with a single mother in Hartford fighting her eviction has led to a policy change by Fannie Mae allowing renters to remain in their homes after their landlords are foreclosed on, a switch that could help thousands of renters across the country.

***

• Legal Aid lawyers in Hartford — and subsequently, New Haven — began fighting tenant evictions by Fannie Mae in Housing Court after Congress passed a financial market bailout bill containing provisions protecting tenants in good standing from eviction.

***

• The [Emergency Economic Stabilization Act of 2008] applies to federal agencies that control mortgages. Legal Aid lawyers argued that provisions in the law(1) pertained to both Fannie Mae and Freddie Mac because they were taken over by the federal government. The policy change — Freddie Mac said Monday it expects to follow suit — will have vast implications for renters because Fannie Mae and Freddie Mac guarantee or own half of the country's residential mortgages, which apply to buildings that house one to four families.

For the story, see Hartford Renter's Fight Leads To Fannie Mae Policy Change (Renter Wins Fannie Mae Fight) (if link expires, try here).

See also:

• New Haven Independent: Foreclosure Evictions Halted.
• The Wall Street Journal: Fannie Mae to End Tenant Evictions in Foreclosures.

(1) See Section 109(b) of the Emergency Economic Stabilization Act of 2008, which, they argue, requires Fannie Mae "to permit bona fide tenants who are current on their rent to remain in their homes under the terms of their lease." ThetaTenantRentSkimming

Cleveland Housing Non-Profit Files Suit Stalling Sales Of 36 Foreclosed Homes; Seeks Order Directing Lenders To Either Repair Or Demolish Structures

In Cleveland, Ohio, The Cleveland Plain Dealer reports:

• A Cleveland nonprofit group thinks it has found the legal tool needed to stop banks from dumping dilapidated, foreclosed properties back into the real estate market for pennies on the dollar.

• Cleveland Housing Renewal Project Inc., a subsidiary of Neighborhood Progress Inc., sued Deutsche Bank and Wells Fargo Bank in Cleveland Housing Court on Monday to prevent the banks from selling 36 foreclosed homes in Cleveland.

• The complaints accuse the banks of creating a public nuisance for having failed to maintain the homes, all of which are vacant and in poor condition, after taking them at sheriff's sales.(1)

• The lawsuit asks that the banks be ordered to either repair the homes to make them livable or demolish them. Housing Court Judge Raymond Pianka granted the group's request for a temporary restraining order that stops the banks from selling the homes for at least two weeks.

For the story, see Cleveland Housing Renewal Project sues Deutsche, Wells Fargo banks over sale of foreclosed homes (Judge halts sales of foreclosed homes) (if link expires, try here).

(1) According to the story, attorneys for Cleveland Housing Renewal say Deutsche Bank, Wells Fargo and other banks have sold several thousand dilapidated, foreclosed properties here in the last few years, some for as little as $1,000. Most of these sales have been made to out-of-town buyers who have done nothing to improve the properties before selling them again. BetaVacantForeclosure

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