Thursday, April 09, 2009

Indiana AG Files Civil Charges Against Five Loan Modification / Foreclosure Rescue Firms

From the Office of the Indiana Attorney General:
  • Indiana Attorney General Greg Zoeller today filed lawsuits in Boone, Clark, Delaware, Grant and Marion counties against five foreclosure consultant companies alleging violations of state laws. [...] Foreclosure consultants target homeowners threatened with default and foreclosure and receive payment for services to allegedly stop or postpone the foreclosure.

  • The lawsuits filed today cite violations of three laws including the Deceptive Consumer Sales Act, Credit Services Organizations Act and the Mortgage Rescue Protection Fraud Act.

The five lawsuits filed today targeted the following companies:

  1. Foreclosure Assistance, LLC, Scottsdale, AZ,
  2. Homeownership Preservation Group, LLC (also known as Stop Foreclosure Save My Home), Melbourne, FL,
  3. You Walk Away, LLC, Carlsbad, CA,
  4. American Mitigation Group, Inc., Del Mar, CA,
  5. Foreclosure Relief Agency, LLC, Monarch Beach, CA.

For the Indiana AG's press release, see Indiana Attorney General Greg Zoeller files suit against Foreclosure Consultant Companies.

See also:

24 Suspects In Alleged Street Gang Member-Led Mortgage Fraud Scam Could Face Hard Time As California Feds Bring RICO Charges Against Group

In San Diego, California, voice of san diego.org reports:
  • Federal prosecutors on Tuesday announced unprecedented charges against individuals involved in an alleged mortgage fraud ring involving 220 properties in San Diego County, with total purchase prices topping $100 million. The 24 defendants were all charged with participating in a "corrupt enterprise" under a federal law created by the Racketeer Influenced and Corrupt Organizations (RICO) Act, which allows for charging multiple defendants with extended penalties for their participation in an ongoing crime ring.

***

  • The indictment describes a network of individuals allegedly masterminded by defendant Darnell Bell, or D-Bell.(1) Bell is a documented member of the Lincoln Park street gang and had already been serving time for about a year for narcotics charges when he was arraigned on the racketeering charges in federal court [Tuesday] morning, [U.S. Attorney Karen] Hewitt said.(2)

***

  • By recruiting members of their organization to cover every piece of the real estate transaction -- from appraiser to escrow to real estate agent to buyer -- the organization allegedly obtained millions of dollars in cash back and fraudulently obtained commissions and fees, according to the indictment.

***

  • Because prosecutors decided to fuse the alleged actions of all 24 defendants into the overarching racketeering charge, the individuals could each face up to 20 years in prison and fines of $250,000. The alleged racketeering activity includes charges of bank fraud, money laundering and wire fraud.

For more, see Mafia-Esque Charges Brought Against Alleged Mortgage Fraud Ring.

For the Federal indictment, see U.S. v. Bell, et al.

See also the San Diego Union Tribune:

(1) Besides Bell, the lead defendants in the case reportedly are:

  • Michael Ivy, 43, of San Diego, who prosecutors say negotiated the property transactions;
  • Stanley Gentry, a 49-year-old licensed local real estate broker, who allegedly allowed the organization to use his broker's license to facilitate the purchases, in exchange for $10,000 a month and a cut of the commissions and fees on each deal; and
  • Billie Bishop, 49, of La Mesa, an escrow officer who allegedly enabled the organization to purchase more than 100 properties.

The other defendants include several real estate professionals: Diana Jaime, 33, a public notary; Jorge Cortez, 39, a licensed real estate agent; Esteban Valenzuela, 28, a licensed real estate appraiser; Anton Ewing, 38, a CPA; and Randolph Hirsch, 43, and Dennis Tapia, 49, both registered tax preparers. Prosecutors said defendants Latashia McKinney, 35, and Marcus Dozzell, 34, rounded up some of the straw buyers. Lorena Callu, 52, worked for the organization and allegedly helped to prepare and submit loan applications. Prosecutors also name several straw buyers as participants in the corrupt enterprise: Desiree Holiday, Dexter Holiday, Keith Holiday, Gerard Holiday, Ray Logan aka Jack Nasty, David Lewis, David Lewis, Joseph Lewis, Stevie Frazier, Jorge Magana, Nicoele Watson and Daniel Williams. All of them fraudulently obtained mortgages and purchases properties on behalf of the organization, according to the indictment.

(2) According to the indictment (beginning at page 6, line 26), Bell "used his status as a long-standing member of the Lincoln Park street gang to recruit some of the "straw buyers" and to maintain discipline within the enterprise."

Manhattan DA Charges Brooklyn Man Of Using Forged POA Revocation, Bogus Deed & Mortgage In Attempt To Swipe Harlem Brownstone From Deceased Owner

From the Office of the New York County District Attorney:
  • Manhattan District Attorney Robert M. Morgenthau announced [Monday] the indictment of a Brooklyn man for filing a forged deed and other fraudulent documents in an attempt to steal a Harlem brownstone. The defendant, ENRIQUE CASTILLO, also known as ENRIQUE FERNANDEZ, 52, was indicted on charges of attempted grand larceny, offering a false instrument for filing, and criminal possession of a forged instrument.

***

  • [Carolyn] Todd, who died at age 57 in March 2005, was the lifelong owner of the Harlem brownstone. In January 2005, her health failing, Ms. Todd gave power of attorney to [her cousin, James] Bryant, who was then caring for her at his home in Ohio. A short time later, she conveyed the brownstone to him and his wife Debbie as joint tenants with right of survivorship. Mr. Bryant subsequently filed the deed conveying the property to him with the City Register.

  • The investigation began when Mr. Bryant contacted the District Attorney’s Office in June 2008 after learning of [a] false mortgage and “Revocation of Power of Attorney.” When he was arrested in December 2008, CASTILLO was in possession of a forged social security identification card.

Go here for the Manhattan DA's entire press release.

Go here, Go here, Go here, Go here, Go here, Go here, and Go here for other posts related to deed or refinancing scams by forgery, swindle, power of attorney abuse, etc. DeedZetaTheft

Honolulu Feds Raid Four Houses, Seize Evidence In Probe Into Alleged "Royal Hawaiian Treasury Bond" Foreclosure Rescue Scam

In Honolulu, Hawaii, the Honolulu Advertiser reports:
  • The FBI [Tuesday] raided four Maui homes as part of its investigation into allegations that several local companies bilked homeowners out of more than $300,000 on O'ahu, the Big Island and Maui with false promises to help them avoid foreclosure. The FBI executed search warrants yesterday at a home [...] in Wailuku, another [...] in Waikapu and two other locations on Maui. Agents seized computer records, boxes of files and other evidence.

***

  • Officials said the homeowners, many of whom are Native Hawaiian, were charged between $2,500 and $10,000 to attend seminars or counseling sessions on avoiding foreclosure, and were told they would receive bonds worth $1 million that could be used to pay off the outstanding balance of their mortgage.

***

  • After attending the seminars, homeowners are told that a $1 million "Royal Hawaiian Treasury Bond" will be sent to their bank with a letter explaining that it will cover the outstanding balance of their mortgage.

For more, see Homes raided in bond probe (FBI gathering evidence in scheme that targeted folks facing foreclosure).

IRS To Take Careful Look At Loan Modification Outfits Filing Bogus Applications For Non-Profit, Tax-Exempt Status

The Chronicle of Philanthropy reports:
  • The Internal Revenue Service is working to help “protect the trust and confidence” in nonprofit organizations during the current economic crisis and will be watchful of possible abuse, says Lois G. Lerner, who oversees the IRS office that monitors charities and foundations. [...] “We are trying to stay ahead of the curve to curtail predatory abuse of tax-exempt organizations,” she said.

  • For example, Ms. Lerner said, the IRS is seeing “a number of” applications for tax-exempt status from organizations that offer mortgage-foreclosure counseling and assistance. Ms. Lerner noted that the revenue service in the past has cracked down on many organizations that counsel people who amass big credit-card debts.

  • Based on our experience with abusive credit-counseling organizations, we are concerned that some of these [mortgage counseling] applicants may be using the guise of an exempt organization to profit from individuals who have been harmed by financial upheaval,” said Ms. Lerner. “Consequently, we are looking very closely at applications from new organizations, and at activity being conducted by established organizations.”

For more, see IRS Watches for Potential Abuses as Charities Grapple With a Bad Economy, Agency Official Says.

State Regulator Orders Loan Modification Firm To Cease Business Activities In Idaho

From the Idaho Department of Finance:
  • The Idaho Department of Finance has issued a cease and desist order against a Nevada-based business, Your Credit Angel, LLC, which purports to assist distressed homeowners in avoiding foreclosure by offering mortgage loan modification services.

  • "A person engaged as a third party in mortgage loan modification activities in Idaho must be licensed as a credit counselor," said Gavin Gee, director of the Idaho Department of Finance. Gee said the unlicensed activities of "Your Credit Angel" were brought to the department’s attention by an Idaho customer who reported paying an upfront fee of $1,495 to that company. The customer could not obtain a refund and reported that he got nothing for his money. In the cease and desist order, the director ordered "Your Credit Angel" to immediately stop offering mortgage modification services in Idaho without a license.

For the entire press release, see Las Vegas Mortgage Modification Company Ordered To Cease And Desist (Address is Nothing More Than a Mail Drop Box).

For the cease and desisit order, see State of Idaho v. Your Credit Angel LLC, a division of Coronwa Investments, LLC.

Oregon AG Fielding More Complaints Against Loan Modification, Foreclosure Rescue Operators

In Portland, Oregon, The Oregonian reports:
  • Complaints in Oregon about [mortgage and foreclosure repair] operations are way up, according to Attorney General John Kroger's office. [...] So far this year, Kroger's office has received 209 contacts from consumers -- most of them complaints -- about mortgage repair services, department spokeswoman Jan Margosian said on Monday. That's on pace to easily surpass last year's total of 277.

  • "It is mostly lack of proper disclosures, practicing law without a license and just taking folks money and not producing anything," Margosian said about the complaints. In September 2008, the office was given jurisdiction over "foreclosure consultants" and "foreclosure equity purchasers" and has opened the following investigations under that new authority: Smith & Jordan, Inc., National Homeowners Assistance Services, Turning Point Equity Group, Oregon Home Savers, LLC, and Capital Securities Mortgage, Inc.

Source: Mortgage and foreclosure repair scams in Oregon.

Wednesday, April 08, 2009

Brooklyn Hotline For Victims Of Deed, Mortgage, Other Real Estate-Related Fraud

In Brooklyn, New York, the Kings County District Attorney announced:
  • Kings County District Attorney Charles J. Hynes [...] announced the creation of a telephone hotline victims can use to contact the District Attorney’s new Mortgage Fraud Unit. The 12-person unit will investigate deed fraud, mortgage fraud, predatory lending and other real estate-related fraud. The number is (718) 250-2311.

Source: Kings County District Attorney Announces Real Estate And Mortgage Fraud Hotline.

Go here, Go here, Go here, Go here, Go here, Go here, and Go here for other posts related to deed or refinancing scams by forgery, swindle, power of attorney abuse, etc. DeedZetaTheft

Some Law Firms Begin Temporarily Farming Out High-Priced, Surplus Junior Attorneys By Placing Them On Loan With Public Interest Practices

The Associated Press reports:
  • [A]cross the country, the junior end of the law firm hierarchy has been taking the brunt of layoffs, pay freezes and furloughs as business shrinks and firms trim their payrolls. Summer associate programs are being scrapped or reduced, and many spring law school graduates who were promised positions for the fall are being asked to delay their start date for as long as a year.

  • But one silver lining is the altruistic use to which some firms are putting their surplus lawyers, seconding them to defend the poor, champion worthy causes or provide full-time pro bono lawyering.

***

  • Public-interest work fellowships are being offered to a handful of associates in Los Angeles and Chicago as the firm searches for productive ways of weathering the economic downturn, said Anne E. Rea, managing partner of the California offices of Sidley [Austin LLP], a global firm with 1,800 lawyers.

For more, see Law firms give associates a chance to build skills while doing good (Rather than lay off junior lawyers, some firms are lending them to public interest practices where they can handle weightier issues and gain courtroom experience).

NC Central's Foreclosure Prevention Project Offers Free Legal Counsel To Homeowners Facing Loss Of Home

In Durham, North Carolina, The Herald Sun reports:
  • Homeowners facing foreclosure should know they can get free legal representation that is among the best available for their types of problems, says the leader of the Foreclosure Prevention Project at the N.C. Central School of Law.

For more, see Free legal help available to those facing foreclosure.

Indiana AG To Announce Civil Charges Against Five Loan Modification Firms

In Indianapolis, Indiana, The Associated Press reports:
  • Indiana Attorney General Greg Zoeller says he will sue five foreclosure consultant companies for collecting fees in exchange for promises to keep state residents out of foreclosure.The attorney general's office said Tuesday that Zoeller will announce details of the legal action at a news conference Thursday at the Statehouse.

Source: State plans to sue 5 foreclosure consultants.

Missouri AG Files Lawsuit Against California Firm Allegedly Peddling Bogus Loan Modification Services

The St. Louis Business Journal reports:
  • Missouri Attorney General Chris Koster filed a lawsuit Tuesday against an Anaheim, Calif., company that allegedly defrauded Missourians looking for help avoiding mortgage foreclosure. Koster said the company, U.S. Foreclosure Relief, took money from victims but did not provide any help.

  • The suit, filed in Kansas City, seeks an injunction to stop the company from continuing to defraud consumers as well as restitution and penalties. In most instances, U.S. Foreclosure Relief charged homeowners a fee of $1,850 for its services, along with a processing fee of $500. The company also demanded payment upfront, Koster said. He urged victims of fraudulent mortgage-relief companies to call the state consumer hotline at 800-392-8222.

Source: Koster sues company over alleged foreclosure scam.

See also, Missouri Attorney General press release: Attorney General Koster files lawsuit to stop company from cheating consumers facing mortgage foreclosure.

50+ Unit Owner-Investors Accuse Condo Converter Of Pocketing Rent, Using Apartments As Loan Collateral Without Consent

In League City, Texas, The Galveston County Daily News reports:
  • More than 50 investors, most from Israel, went to court last week in attempt to save condominium units from foreclosure as they sue a group of companies and people they say defrauded them in a real estate venture. The lawsuit claims the defendants kept revenue generated by the venture that should have gone to pay debt and used property owned by the plaintiffs as collateral in obtaining a loan of almost $23 million that benefited the defendants. The investors together own 114 units in Fairways at South Shore, 3045 Marina Bay Drive, in League City.(1) The former 432-unit apartment complex was converted into condominiums about three years ago.

For more, see Condos embroiled in litigation.

(1) Reportedly, the investors never intended to live in the units but instead were seeking to generate income by renting them to others, according to the lawsuit. Through agreements, the units owned by the investors were put in a rental pool managed by the defendants, according to the lawsuit.

Slow-To-Foreclose Mortgage Lenders Creating Havoc For Condo, Homeowner Association

In a column in the Naples Daily News, Florida attorney Rob Samouce writes:
  • Under the current real estate economic client in Florida, many banks and other financial institutions holding first mortgages are contributing to the delinquency of condominium and homeowners’ associations’ assessment funds by stalling to initiate foreclosure actions and then by failing to timely complete their foreclosures once their cases have been filed.

***

  • During this whole process, units or homes are either being trashed or run down by the delinquent owner or tenant, or are sitting empty with the possibility of being turned into mold factories because of utilities not being paid.

  • In addition, no assessments are being paid by anyone on these units. This puts a financial strain on associations operating the condominium or homeowner association as most of the associations’ expenses are constant; meaning the remainder of the unit owners will be forced to pick up the assessment delinquency slack.

For more, see Banks contributing to the delinquency of associations.

Another Mortgage Servicer Screw-Up Throws Tennessee Woman's Home In Foreclosure, Despite Proof Of Payments

In Wilson County, Tennessee, WSMV-TV Channel 4 reports on another case of a mortgage lender/servicer screw-up that resulted in a homeowner being thrown into foreclosure, despite the fact that she was current on her payments and had her bank statements to prove it. Channel 4 tried to intervene in the case; however, phone calls to the lender, Saxon Mortgage, and the attorneys handling the case, Johnson and Freedman, were not returned.

For the story, see Woman's Home Foreclosed, Sold By Mistake (Mortgage Statements Show Payments Current) (read story) (watch video).

Go here and go here for other posts on foreclosure screw ups involving improperly changed locks, removal of belongings, etc. ScrewUpsLockOutsInForeclosure

Tuesday, April 07, 2009

FTC Announces New Lawsuits Against Upfront Fee Loan Modification Firms

On the heels of yesterday's "declaration of war" (see 'We Will Find You and We Will Punish You') by the Federal government against loan modification scams, the Federal Trade Commission announced the filing of three new lawsuits against firms it accuses of making false representations in conncetion with the improper clipping of homeowners for upfront fees, only to do little or nothing with regard to modifying their home loans. The new lawsuits involve:

  • Federal Loan Modification Law Center(1) (FedMod). FedMod markets mortgage loan modification and foreclosure relief services to homeowners who are in financial distress, delinquent on their mortgages, or in danger of losing their homes to foreclosure. In radio advertisements, the FTC alleges, FedMod induces homeowners to call its toll-free number by misrepresenting that it is part of or affiliated with the federal government, although it is not.

For the lawsuit, filed in Los Angeles, California, see FTC v. Federal Loan Modification Law Center LLP, et al.

  • Bailout.hud-gov.us. According to the FTC’s complaint, defendant Thomas Ryan used a foreign Internet registrar to falsely register two sites – bailout.hud-gov.us and bailout.dohgov.us. The sites were used to entice financially strapped consumers to seek mortgage loan modification services under the guise that the services were associated with, or were actually, the U.S. government, including HUD and the Treasury Department.

For the lawsuit, filed in the District of Columbia, see FTC v. Ryan.

  • Home Assure d/b/a Expert Foreclosure.(2) In this case, the FTC alleges that the defendants promise consumers facing imminent home foreclosure that they can stop the foreclosure, regardless of the amount the consumer owes his or her lender. The defendants are charged with falsely claiming that they have special relationships with lenders, have helped thousands of consumers avoid foreclosure, and will provide a 100 percent satisfaction money-back guarantee. They typically charge consumers an up-front fee of $1,500 to $2,500 but, the FTC alleges, do little or nothing to help them avoid foreclosure and fail to give refunds when foreclosures are not stopped.

For the lawsuit, filed in Tampa, Florida, see FTC v. Home Assure, LLC, et al.

The FTC press release also contained a reminder of two additional lawsuits filed at the end of March against New Jersey outfits Hope Now Modifications LLC (go here for lawsuit) and New Hope Property LLC d/b/a New Hope Modifications LLC (go here for lawsuit), alleging that the defendants misled consumers about their ability to provide mortgage loan modification and foreclosure relief, and misrepresented that they were affiliated with or part of the HOPE NOW Alliance, the non-profit, HUD-endorsed organization that is a broad-based coalition of credit and home ownership counselors, lenders, and other mortgage market participants. These are the same two firms that were also recently sued by the New Jersey Attorney General for similar allegations.

The FTC notes:

  • This brings to 11 the number of loan modification and mortgage foreclosure rescue scams brought by the FTC in the last year. More than 20 state law enforcers also have taken actions against companies engaged in these types of deception, including 22 brought by Illinois Attorney General [Lisa] Madigan.

  • The FTC also announced [yesterday] that it has sent warning letters to 71 companies who may be deceptively marketing mortgage loan modification or foreclosure rescue services. The FTC identified these companies through a nationwide review of Internet and other advertisements and warned these companies that their ads may violate federal law. State law enforcers also have sent warning letters to companies that are potentially engaging in such illegal practices, including more than 60 warning letters sent by Attorney General Madigan.

For the entire FTC press release, see Federal and State Agencies Crack Down on Mortgage Modification and Foreclosure Rescue Scams (FTC, State Enforcers Sue Scammers, Warn Others; Announce Education Campaign Designed to Reach Borrowers Directly).

(1) The defendants in this case are: Federal Loan Modification Law Center LLP doing business as Federal Loan Modification Law Center and under other various other names; Anz & Associates, PLC; LegalTurn, Inc.; Federal Loan Modification LLC; Boaz Minitzer, Nabile "Bill" Anz, and Jeffrey Broughton.

(2) The defendants in this case are: Home Assure, LLC, B Home Associates, LLC, doing business as (dba) Expert Foreclosure, Michael Grieco, Michael Trimarco, Nicholas Molina, and Brian Blanchard. The defendants also have been the subject of law enforcement actions or investigations by the Minnesota, North Carolina, and Florida Attorneys General, according to the FTC press release.

Illinois AG Files Civil Charges Against Two More Loan Modification, Foreclosure Rescue Operators; Lawsuit Tally Now Up To 24

From the Office of the Illinois Attorney General:
  • Attorney General Lisa Madigan has filed two lawsuits in Cook County Circuit Court against Chicago-area mortgage rescue fraud schemes seeking temporary restraining orders to immediately stop the defendants from providing mortgage rescue services. Madigan made the announcement as part of a press conference [yesterday] in Washington, D.C., with U.S. Treasury Secretary Timothy Geithner, U.S. Attorney General Eric Holder, Federal Trade Commission Chairman Jon Leibowitz and U.S. Housing and Urban Development Director Secretary Sean Donovan, to discuss a coordinated effort by federal and state authorities to protect at-risk homeowners from mortgage foreclosure rescue fraud.

***

  • Madigan filed complaints against Centurion Loss Mitigation Group, a Chicago-based operation and its owner Carlos A. Gomez, and Cash VIP, a Melrose Park, Ill.,-based operation and its owner Fernando Rios, also known as Fernali Ferrice.(1) With these new filings, Madigan has brought lawsuits against 24 mortgage rescue fraud schemes. Of those, the Attorney General, to date, has received judgments in nine cases, including more than $1.8 million in restitution for homeowners.

For the entire Illinois AG press release, see Madigan Files Two Mortgage Rescue Fraud Lawsuits, Seeks Immediate Ban on Companies' Operations (Illinois Attorney General Joins U.S. Treasury Secretary, U.S. Attorney General, Federal Trade Commission and HUD Leaders in Coordinated Plan to Protect At-Risk Homeowners).

(1) In the Cash VIP lawsuit, Madigan alleges the defendants sell credit and foreclosure “orientation” services, which require consumers to enroll in a one-year “membership club” and pay an upfront $575 application fee, $50 enrollment fee and a monthly fee of $69-89, as well as a final “success fee” that ranges from one to two percent of the loan amount, according to the AG's press release.

Massachusetts AG Tags Four With Civil Charges In Alleged Loan Modification Scam

In Boston, Massachusetts, the Boston Business Journal reports:
  • Attorney General Martha Coakley’s Office filed a lawsuit and obtained a temporary restraining order against four defendants for their alleged involvement in a foreclosure scam.

  • The complaint, filed Monday in Suffolk Superior Court, alleges that Loan Modification Group Corp., Mitigation LLC, the company’s principal Daniel H. Fox and Web site operator Chris Fuelling sought to capitalize on the foreclosure crisis and prey upon Massachusetts residents facing the loss of their homes.

  • In the lawsuit, Coakley’s Office alleges that the defendants offered services to assist homeowners as “loss mitigation specialists” who are able to negotiate loan modifications to avoid foreclosure. The complaint further alleges that the defendants’ business practices were unfair and deceptive, in violation of the Massachusetts Consumer Protection Act, because they solicited fees in advance of services, failed to disclose the precise details of the services offered and how they would assist homeowners in avoiding foreclosure, and would guarantee a loan modification that would improve the homeowner’s financial situation dramatically and save the home from foreclosure.

For more, see AG files suit against foreclosure scams.

For the Massachusetts Attorney's press release, see AG Coakley Obtains Temporary Restraining Order against Perpetrators of Loan Modification Scam; Warns Public About Scams Targeting Homeowners:

  • [D]efendants would claim to be attorney-based, loan modification experts that could guarantee drastically reduced interest rates. In one telephone solicitation, a representative claimed that Fox’s firm was one of fourteen law firms recruited by the government to help people avoid foreclosure and help them stay in their home, when that was not the case.

Lack Of "Hard Time" On Conviction Lures Some Street Gangs Away From Drug Trade, Into Deed & Refinance Scams

Buried in a recent story in The Journal Gazette (Fort Wayne, Indiana) is this excerpt on deed and refinancing scams where perpetrators use forged deeds, stolen I.D.s, crooked notaries (or an unwitting notary and a stooge) to swipe homes, borrow against them, pocket the proceeds, and walk away undetected:
  • [T]he scam is so lucrative in Chicago that street gangs found it preferable to dealing drugs, the Chicago Tribune reported. Those schemes became so sophisticated that the gangs would reportedly hire title researchers and notaries for their efforts and either invent identities for the mortgages, steal identities from others or con people into signing documents. They also found that while drug sales brought hard time if they were caught, white-collar crime such as mortgage fraud often does not.

  • Why get locked up for selling drugs when you can get involved in a mortgage, get your money and walk away?” asked Askia Abdullah, spokesman for Eugene Moor, Cook County recorder of deeds. “They had active teams doing this.”

For the story, see Mortgage fraud: It’s so simple, it’s scary.

Sleazy Practices By Process Servers Wreak Havoc On Consumers In Debt Collection Lawsuits

A June, 2008 report by MFY Legal Services, Inc. of New York City shines some light on questionable practices engaged in by process servers when serving notices of debt collection lawsuits (many brought by "debt scavengers" on debts purchased for pennies on the dollar that are beyond the statute of limitations) on defendants that, arguably, are leaving them without the properly required notification of suits against them, and offers some recommendations with regard to improving the system. An excerpt from the summary of the report's findings:
  • In 2007, MFY Legal Services provided advice, counsel and representation to more than 350 clients who were being sued in debt collection cases. Of these, none had been served properly with a summons and complaint and most did not know that a lawsuit had been filed against them until their bank accounts had been restrained.

  • Default judgments due to improper service wreak havoc on the lives of many of MFY’s clients, most of whom have low-income wages or rely solely on Social Security, SSI, Veterans Benefits or pensions for support.

  • The civil justice system is based on the principle that defendants will have an opportunity to be heard in court before a judgment and action to collect on a purported debt is taken against them. It appears that nine out ten New Yorkers who are sued in the Civil Court of the City of New York are being denied their right to be heard because of possibly illegal process serving practices.(1)

For the entire report, see Justice Disserved (A Preliminary Analysis of the Exceptionally Low Appearance Rate by Defendants in Lawsuits Filed in the Civil Court of the City of New York).

Go here and go here for other posts on lawsuits involving faulty notifications to property owners; and here for posts on "sewer service" (a reference to the illegal process server practice of filing a sworn affidavit of proper service in court when none was actually made).

(1) According to the report, MFY staff examined a random sample of 91 consumer debt collection court files to determine the method of service. In a preliminary test, they reviewed court files of cases filed in Queens and Kings counties. Because collection companies tend to purchase a large number of index numbers at a time, they attempted to look at multiple cases handled by the same process serving company. MFY picked three process serving companies at random.

The files indicated that personal service was rarely made. Service to a person of suitable age and discretion accounted for 54 percent of the cases, while “nail and mail” service was the standard practice in 40 percent of the cases, and personal service comprised only 6 percent. Notably, process servers for two of the companies did not make personal service on any defendants, while one company managed to do so only in 18 percent of cases. Further, the type of service effected by one company in 93 percent of its cases was by “nail and mail,” while another process server company served defendants by leaving the summons and complaint with a person of suitable age and discretion in 83 percent of cases. foreclosure faulty notice SewerServiceAlpha

Monday, April 06, 2009

Feds To Announce Joint Effort To Attack Loan Modification Scams

The Washington Post reports:
  • The Obama administration will announce [today] a multi-agency effort to combat loan modification scams. As the country's foreclosure rate rises, companies have popped up offering to help borrowers save their homes. But banks and consumer advocates complain that the fees, which can reach thousands of dollars, do not translate into results and many of the programs are scams.

***

  • According to a government statement, the effort will align responses from federal law enforcement agencies, state investigators and prosecutors, civil enforcement authorities and the private sector to protect homeowners.

For more, see Government to Offer Plan to Fight Home Loan Scams.

For story update, see Government Rolls Out Plan to Fight Loan Scams:

  • [S]ometimes, these scams use names similar to legitimate groups offering help. For example, many companies use the word "Hope" in their title, similar to Hope Now, an alliance of mortgage lenders, and Hope for Homeowners, a foreclosure prevention program run by the Department of Housing and Urban Development, according to federal officials.

Florida AG Continues Cranking Out Lawsuits Against Upfront Fee Loan Modification Firms

In Fort Lauderdale, Florida, the South Florida Sun Sentinel reports:
  • Attorney General Bill McCollum sued a South Florida loan modification firm and its affiliated companies this week, alleging they violated state law by charging fees for foreclosure rescue services. The civil lawsuit was filed in Broward County Circuit Court on Thursday, against Keep Your Property, its owners William R. Colon and Carlos A. Hernandez, and Centro de Prevencion y Educacion Corazones Unidos H.I. Visida Inc., a nonprofit organization, and Economic Alliance Group.

  • The suit alleges they violated state laws prohibiting deceptive and unfair trade. Colon and Hernandez couldn't be reached to comment. Consumers told state investigators that they paid an upfront fee of $2,200 and monthly fees of $550(1) after the company guaranteed to file all the paperwork required to prevent foreclosure action or lower mortgage payments.(2) But many consumers found later that the company failed to contact lenders and take any action on behalf of homeowners.

Source: State sues South Florida home loan modification firm over fees.

For more from the Florida Attorney General's Office, see:

(1) The lawsuit alleges that the fee was for “membership” with KEEP YOUR PROPERTY, INC. This “membership” fee is a device by which Defendants seek to evade the requirements of Florida Statute §501.1377, according to the suit. See Lawsuit - paragraph 27.

(2) The lawsuit also alleges that Defendants’ business in offering legal services to the public directly, or indirectly through Florida licensed attorneys which Defendants engage or otherwise involve and/or compensate, constitutes the unauthorized practice of law in accordance with the principles of the Florida Supreme Court pursuant to The Florida Bar v. Consolidated Business and Legal Forms, Inc., 386 So.2d 797 (1980); and that Defendants solicited, advertised or otherwise offered legal services to Florida homeowners for mortgage foreclosure defense and/or foreclosure-related rescue services, and made it a business to solicit or procure legal business for attorneys, in violation of Florida Statutes, §877.02(1). See Lawsuit - paragraphs 31-36. UnauthPractOfLawTheta

Eight Down, Two To Go In Metropolitan Money Store Foreclosure Rescue Scam As Maryland Feds Get Another Guilty Plea

From the Office of the U.S. Attorney (Maryland):
  • Kurt Fordham, age 39, of Ft. Washington, Maryland, pleaded guilty [Friday] 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)

  • Kurt Fordham ripped off homeowners and mortgage lenders by submitting fraudulent paperwork to support over $13 million in loans that were never intended to be repaid,” said U.S. Attorney Rod J. Rosenstein. “Instead of helping financially distressed homeowners keep their homes as promised, he stole their home equity and used it to buy luxuries for himself, including art, cars, domestic and international trips, and to pay gambling expenses and over $800,000 on his luxury wedding.”

For the press release, see Eighth Metropolitan Money Store Conspirator Pleads Guilty in over $35 Million Mortgage Fraud Scheme (Fordham Personally Responsible for Over $13.5 Million in Losses to Mortgage Lenders and Used Over $800,000 of Fraudulently Obtained Proceeds to Pay for His Wedding).

For the indictment, see U.S. v. JoyJackson, et al.

(1) According to the press release, Kurt Fordham is the eighth defendant to plead guilty in the Metropolitan Money Store mortgage fraud scheme. Joy Jackson, age 41, and Jennifer McCall, age 47, both of Ft. Washington, Maryland, a chief executive officer of Metropolitan Money Store and owner of JC and JC Investments LLC; Katisha Fordham, age 35, of Washington, D.C., a loan processor at the Metropolitan Money Store; 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; Carlisha Dixon, age 31, of Hyattsville, Maryland, vice president and a director of Burroughs & Smythe Financial Services, Inc.; and Chandra Jones, age 31, of Lanham, Maryland, the daughter of co-defendants Jennifer and Clifford McCall, each pleaded guilty to the conspiracy and are facing a maximum sentencing of 30 years in prison. Two defendants remain scheduled for trial on July 7, 2009.

Deed, Refinancing Scams By Forgery Has County Recorders Seeking Help To Protect Property Owners

In Fort Wayne, Indiana, The Journal Gazette reports:
  • It took The Journal Gazette less than an hour to “steal” the 300-foot-tall Lincoln Tower. With a little research, a typewriter and an $8.99 form from a local office supply store, the newspaper was able to prepare a deed transferring ownership of the city’s most iconic building from its current owners to the city’s most iconic citizen, John Chapman, better known as “Johnny Appleseed.”

  • The deed was not recorded, so ownership of the building was never in jeopardy. But Allen County Chief Deputy Recorder Anita Mather examined the notarized deed and said her staff would have no choice but to accept and record it, even though the reporter who signed the document had no right to transfer ownership in the 79-year-old art deco building and no money changed hands.

***

  • Why would someone want to steal a building? Experts say thieves are not interested in the property at all – they’re interested in showing ownership so they can get a fraudulent loan and disappear with the money. That can leave the true property owner holding the bag, and it has county recorders asking for help to prevent the practice.(1)

For more, see Mortgage fraud: It’s so simple, it’s scary.

Go here, Go here, Go here, Go here, Go here, and Go here for other posts related to deed or refinancing scams by forgery, swindle, power of attorney abuse, etc.

(1) Reportedly, local officials fear a wave of scams where senior citizens lose their homes before anyone knows what happened. It could be possible for someone to never know what had taken place until the house they had paid off years ago is threatened with foreclosure. Technically, the bank that made the loan would be the victim, but the homeowner would first have to prove that the “sale” was fraudulent and have it voided. For a story where a homeowner claimed to have her home equity ripped off from out from under her through forged documents, and then still lost her home to foreclosure when the payments on the allegedly forged mortgage went unpaid, see Oshawa mother faces eviction after alleged mortgage scam. DeedGammaTheft

Now-Defunct Title Company Accused Of Failing To Pay Off Existing Mortgage On Refinance; Owner Now Left Facing Foreclosure With Two Home Loans

In Cincinnati, Ohio, WKRC-TV Channel 12 reports:
  • A local homeowner who refinanced his mortgage two years ago appears to be the victim of fraud and is now facing foreclosure. The man afraid he'll lose his home even though he's been faithfully paying his new mortgage company. Rodney Everson is afraid he'll lose his Forest Park house because someone stole the money that was supposed to pay off his first mortgage company when he refinanced. This happened in October 2007, after he contacted a local mortgage broker to get a new loan.

***

  • The title company, Preferred Choice Title, was to have paid off that loan. But a month later the lender called to say it never got the money. [...] Local 12 has learned the title company that was supposed to pay off the mortgage, Preferred Choice Title, was closed down late last year after it took the money but failed to pay off another $100,000 mortgage.

***

  • Unfortunately, although the new lender required Everson to buy title insurance to protect it, he failed to buy his own policy to protect him. And now, as a result, he may end up losing the house.

For the story, see Forest Park Man Believes He Is Victim of Mortgage Fraud.

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

Sunday, April 05, 2009

Northern California DA's Office "Blown Away" After Meeting With Realtor Group On Mortgage Scams; Will Seek Approval For Real Estate Fraud Unit

In Shasta County, California, the Redding Record Searchlight reports:
  • [L]ast month, state Attorney General Jerry Brown reported mortgage fraudsters are using the forged letterhead of major lenders to con vulnerable individuals into paying thousands of dollars for bogus loan modification services. [...] On Tuesday, the Shasta County District Attorney's Office will ask supervisors to approve what would be the county's first-ever real estate fraud unit.

  • Shasta County District Attorney Jerry Benito realized the need for such a program after meeting with north state real estate agents. "We were blown away with the comments we heard," Benito said of his meeting with the Shasta Association of Realtors. "There was a large contingent of victims of frauds over the years, and they were extremely vocal about frauds occurring in Shasta County."

For more, see Mortgage scams on the rise.

Florida AG Joins Illinois, Minnesota Counterparts In Tagging Jacksonville Upfront Fee Loan Modification Firm With Suit; Alleges Deceptive Practices

In Jacksonville, Florida, WJXT-TV Channel 4 reports:
  • Florida's attorney general has sued a Jacksonville company, claiming it's defrauding homeowners who are facing foreclosure. According to the lawsuit, National Foreclosure Counseling Services targeted homeowners and charged them up-front fees to modify their loans, in violation of Florida law.(1) The Attorney General's office said the company collected an average of $2,000 in up-front fees, and charged $125 an hour. The lawsuit also claimed that the company failed to perform the services following payment.

  • State investigators also said the company lured homeowners using mailings which implied they were coming from a government agency. The mailings claimed the consumers had been selected for special programs by "Government Insured Institutions," and stated the mailings were a last attempt to assist the homeowners before foreclosure.(2)

  • The Attorney General also requested the Duval County Circuit Court issue an injunction against the company, requiring it to immediately stop demanding up-front fees from customers before providing services. The company offers services nationwide and has already been sued by the attorneys general of Illinois and Minnesota.

Source: State Sues Foreclosure Rescue Company.

For more from the Florida AG's office, see:

(1) Also named as defendants in the lawsuit are: Raymond Paulk, Robert V. Dallavia, and American Foreclosure Counseling Center.

(2) In addition, the lawsuit alleges that, since October 1, 2008, the defendants "required homeowners who want their services to sign statements asserting that they are not "IN ANY WAY CONFUSED ABOUT ANY PART OF THE WORKING AGREEMENT," that they are not victims of the Defendants under the Florida Deceptive and Unfair Trade Practices Act, that they are "CONFIDENT THEY [ARE] NOT BEING VICTIMIZED ... IN ANY WAY WHAT-SO-EVER" and that the defendants are "NOT ATTEMPTING TO DUPE, MISLEAD, SWINDLE OR CHEAT" them." (Obviously, a not-so-subtle attempt to get the homeowners facing foreclosure to waive their legal rights under the statute.) The suit also alleges that the defendants "employ a sales force of approximately 140 persons and bringing in approximately $500,000 in fees each month." See Lawsuit - paragraph 26-27.

The lawsuit also alleges(at paragraphs 28-33) that the defendants' mailings:

  • give the impression they come from a government agency,
  • refer to the Defendants as "housing counseling community service[s],"
  • state that the homeowner's property "has been selected for special programs by the Government Insured Institutions,"
  • tell the recipients to contact an "Advisor for Duval County" or another Florida county, and that a representative for Duval [or other] County is available" to talk to the homeowner,"
  • state that they are an "urgent notification" and constitute a "last attempt to assist you,"
  • state that the property in question "qualifies" for loan modification.

Tampa Foreclosure Defense Seminar Attracts Lawyers, Judges From All Over State

In Tampa, Florida, the St. Petersburg Times reports:
  • At the start of class, April Charney makes one thing clear. "This is very dense, complicated work,'' she warns. "If you don't get it, raise your hand and ask questions because the chances are others don't get it either.'' Charney pauses for emphasis. Casually dressed, dark hair streaming down her back, she could be a high school teacher introducing a bunch of kids to physics and calculus.

  • But these are lawyers and judges from all over Florida. And they've come to this seminar in Tampa to learn from the woman many consider the nation's foremost expert on fighting fore­closure.

For more, see Lawyer has strategy to fight foreclosures, and shares it.

Indiana Chief Justice Speaks On Statewide Training Effort For Lawyers, Judges Handling Foreclosure Cases

In Indianapolis, Indiana, WISH-TV Channel 8 reports:
  • More attorneys, judges and mediators are being trained on how to handle mortgage foreclosure cases. It's a statewide effort to help families who are on the brink of losing their homes. The Indiana Supreme Court has already co-sponsored two previous training sessions. Indiana Supreme Court Chief Justice Randall Shepard was on Daybreak Friday morning to talk about the need for more training.

For the story and link to the interview with Chief Justice Shepard, see Lawyers, judges trained on foreclosures (A statewide effort to help familiesin jeopardy).

San Diego DA Seeks Realtor Help In Fight Against Loan Modification Scams

In San Diego, California, the San Diego Union Tribune reports:
  • San Diego County District Attorney Bonnie Dumanis [last week] urged members of the San Diego Association of Realtors to help track down and prosecute cases of real estate fraud. Foreclosure consulting and loan modification scams are rising as distressed borrowers struggle to keep their homes, Dumanis said during the Realtor group's annual expo and trade show. About 1,500 people attended the one-day event at the Town and Country Resort and Convention Center. “We can't do it all,” Dumanis told a group of about 70 attendees during a 90-minute training session on real estate scams. “You are our eyes and ears. We have gotten many of our tips from real estate agents and escrow agents.”

For more, see Dumanis asks Realtor group to help her office fight fraud ('We can't do it all,' D.A. says at session).

Saturday, April 04, 2009

Central Florida Loan Modification Firm Agrees To Fold After State AG Probe Into Complaints Of Alleged Deceptive Trade Practices

In Orlando, Florida, the Orlando Sentinel reports:
  • Organizers of Orlando-based Homestead Protection Services LLC have agreed to disband the operation and pay more than $25,000 to settle a state investigation into suspect "foreclosure-rescue" services, state authorities said Friday. Homestead's owners also agreed to refrain from future violations of the state's deceptive-trade-practices law, according to the Attorney General's Office. The company will pay $20,000 in restitution to consumers and $5,000 to cover the costs of the probe. State investigators said Homestead charged up-front fees ranging from $997 to $3,500 to help consumers try to get out of mortgage trouble. The state also found Homestead misled consumers about refund policies and the services that it would actually provide. Investigators fielded a number of complaints about false promises and refund denials by the company.

Source: Foreclosure-rescue firm disbands.

For the Florida Attorney General's press release, see Settlement Obtained in Orlando Mortgage Fraud Case.

South Florida Region Leveled By Hurricane Andrew Now Being Devastated By Foreclosures

In Homestead, Florida, The Associated Press reports:
  • Seventeen years after Hurricane Andrew leveled much of southern Miami-Dade County, a different kind of storm is devastating households here: foreclosures. In certain ZIP codes in places like Homestead and Florida City, around 25 percent of the homes are in one stage of foreclosure or another. Countless others were built by developers and sit vacant in ghostly subdivisions, with not a buyer in sight.(1)

For more, see Disaster: Homestead, Fla., hit by foreclosures (if link expires, try here).

(1) The "Chinese Drywall" problem with some of the recently-constructed homes only adds fuel to the fire. See:

Connecticut Contractor Charged With Defrauding Couple Out Of $66K For Home Improvement Work

In Trumbell, Connecticut, The Connecticut Post reports:
  • A Monroe contractor has been charged with defrauding a local couple of $66,000 for a home-improvement project. Jeffrey Picataggio, 40, of Countryside Drive, surrendered to police Monday after being told there was a warrant for his arrest. He was charged with two counts of second-degree forgery and released from custody after posting $10,000 bond.

  • According to police, Picataggio, owner of Pic's Carpentry Design, was hired Jan. 8 by a local couple to add a second-floor room to their Church Hill Road home. Picataggio, however, allegedly submitted duplicate bills for work he never performed, including electrical work, and did work that violated building codes. At one point, police said, he drilled holes in the roof of the couple's home and then told them it was leaking in an attempt to sell them a new roof.

  • The couple ended up paying Picataggio $66,000 and then another $35,000 to another contractor to fix the work Picataggio was supposed to have done, police said.

Source: Man charged in home fix-it scheme.

Contractor Charged With Home Improvement Fraud As Katrina Victims Say They're Out Thousands

In Lafourche Parish, Louisiana, WWL-TV reports:

  • Close to a dozen homeowners struggling to rebuild after Hurricane Katrina said they are out hundreds of thousands of dollars because of the work – and lack of work – by one contractor who is now sitting in jail.

***

  • Jennifer Solar, an investigator with the Lafourche Sheriff's Department, charged [contractor Don Fisher] with home improvement fraud, which is a felony, and exploitation of the infirmed, which is taking advantage of someone over the age of 60. Solar said subcontractor Dave Schwab filed a forgery charge against Fisher. Solar said Fisher fraudulently used Schwab's name to get a building permit for the Lutz home.

For more, see Contractor accused of fraud now in jail.

Washington Real Estate Agents Gain Limited Exemption From State Foreclosure Rescue Statute

In Seattle, Washington, the Seattle Post Intelligencer reports:
  • Local Realtors are lauding new changes to Washington's year-old distressed-property law. Last year's law aimed to protect people in danger of losing their homes to foreclosure from getting ripped off by people offering to help. But real estate agents said the rules subjected them to all sorts of unfair liability. The new law, which Gov. Chris Gregoire signed earlier this week, exempts agents from the definition of "distressed home consultant" when doing their normal jobs.

For more, see Realtors hail exemption to distressed-property law.

Screw-Ups, Alleged Fraud Leave Two Homeowners Facing Loss Of Homes

In two separate stories, carelessness on the part of a loan servicer and alleged fraud leave two homeowners under the threat of losing their homes.
  • Yuma, California: It's a story that echos all across the country. Homeowners are fighting foreclosure. One local woman says she's been making her house payments, but her mortgage company is threatening to put her out on the street. For more, see Local Woman Gets Mortgage Run-Around, Fears Foreclosure.

  • Louisville, Kentucky: All Angela Porter wanted was a first house for her family. Now facing eviction, what she got was a nightmare, set into motion when she met Wavy Curtis Shain. For more, see Local family caught in mortgage mess.

Bay Area DA, Assessor Target Loan Modification Scams Pocketing Large Fees For Worthless Services

In San Francisco, California, the San Francisco Chronicle reports:
  • Hucksters and con men seeking to cheat beleaguered homeowners with fake mortgage refinance schemes face increased likelihood of prosecution, according to a new campaign announced Wednesday in San Francisco.

  • "Vulnerable residents desperate for relief should not be preyed upon," said District Attorney Kamala Harris, speaking to a room of seniors at the Bayview Multi-Purpose Senior Center. [...] Harris and assessor Phil Ting said they had put together a public education program to distribute leaflets and deliver lectures to community groups about the growing problem of door-t0-door hustlers who claim to be able to avert foreclosures but do nothing but pressure residents into large fees for worthless services.

For more, see S.F. moves to crack down on mortgage fraud.

Ohio Loan Modification Scam Purports To Be Part Of State's "Save The Dream" Program To Clip Homeowners Seeking Mortgage Help

In Cleveland, Ohio, The Plain Dealer reports:
  • ESOP, a Cleveland nonprofit that helps homeowners avoid foreclosure, says it has received word of a new foreclosure rescue scam. In this one, the scammer claims to be a staffer in Gov. Ted Strickland's Save The Dream program. The scammer tries to charge homeowners $1,500 for foreclosure rescue help.

Source: Foreclosure rescue scam steals Ohio's "Save the Dream" name.

Friday, April 03, 2009

Second Mortgages A Major Sticking Point In Effort To Help Homeowners Avoid Foreclosure As Subordinate Lienholders Fight To Keep From Getting Stiffed

The Wall Street Journal reports:
  • The Obama administration's $75 billion effort to help troubled homeowners avoid foreclosure has hit a stumbling block: a fight over how to aid borrowers who have more than one home loan. The Treasury Department, scrambling to address the problem, is trying to persuade lenders to forgive or greatly reduce so-called second liens. But that effort has sparked a fight between investors who own securities backed by first mortgages and banks that hold second mortgages over how losses should be shared.

For more, see Homeowner-Aid Plan Caught in Second-Loan Spat.

State Orders Unlicensed/Unauthorized Loan Modification Firm To Stop Performing Services

In Sacramento, California, Central Valley Business Times reports:
  • A Fair Oaks-based company called 2nd Chance Negotiations Inc. has been ordered by the California Departments of Corporations and Real Estate to stop performing loan modification services. [...] The company solicited financially stressed borrowers, and, in exchange for an upfront fee, promised them they would negotiate with the borrower’s lender to modify the terms of the borrower’s loan. However, the joint investigation established that 2nd Chance Negotiations was not licensed and/or legally authorized to perform the promised services or collect advance fees, the state says.

***

  • In general, and with limited exceptions, only licensed real estate brokers and California attorneys operating as lawyers within the scope of their license, may collect advance fees. Real estate brokers must have their advance fee agreement reviewed and sanctioned by the DRE prior to its use.

For the story, see Central Valley firm ordered to stop loan modifications.

California Man Says "Prove It" To Multiple San Diego-Area Mansion-Stealing, Deed Theft Allegations; Local Authorities Notice Phony Deed Filing Trend

In San Diego, California, XETV Channel 6 reports:
  • A 43-year-old man pleaded not guilty [last week] to numerous counts in an alleged real estate fraud case in which the perpetrators allegedly filed deeds under the guise of a religious order. Terry Lee Herron, 43, was charged with conspiracy to file false documents and conspiracy to commit forgery, said Deputy District Attorney Marlene Coyne.

  • Herron also faces 12 counts of filing false documents and six of forging documents, Coyne said. The original defendant in the case, Maurice Antoine Simmons, 31, was also charged with two conspiracy counts, Coyne said. Simmons was accused last year of taking blank grant deeds and filling them out as if he owned the properties -- a condominium in San Diego and five homes in Chula Vista, according to Coyne. She said three properties were owned by banks and two by private individuals.

  • Authorities said they have noticed a trend in which people claim ownership of properties by filing bogus grant deeds. The fraudulent owners then move people into the vacant or distressed homes. Investigators said the perpetrators claim to be immune from prosecution because they file the deeds under the guise of a religious order known as the Sovereign Solomon Brothers Archbishop Corporation Sole.

  • Herron, who was ordered held on $40,000 bail by Judge David Szumowski, is also known as King Solomon II, according to Coyne. "He's part of the sovereign movement, which doesn't recognize government authority," Coyne said.

For more, see Plea Entered in Mansion Stealing Scheme.

Go here, Go here, Go here, Go here, Go here, and Go here for other posts related to deed or refinancing scams by forgery, swindle, power of attorney abuse, etc. DeedGammaTheft

Customer Complaints On Loan Modification Firms From Around The Country

The following links are to stories on financially strapped homeowners reporting problems with loan modification companies they hired to help resolve their mortgage problems:
  • Mansfield, Ohio: More foreclosures means more scams, experts warn. Anson and Michelle Hare were behind on their mortgage payments last spring. Organizations contacted them, vowing to save theme from foreclosure. The Hares responded to one.
    "We had to come up with $900 and had 30 days to do so," said Michelle, 40, of Butler. "Scraping our pennies, we didn't know it was a scam. Their having an attorney made it (seem) legit." Several months passed, and the Hares got the runaround from the mortgage specialist. Nothing was done, and their money was gone. Tracy Bond, a foreclosure prevention advocate with Empowering and Strengthening Ohio's People, said fraud is rampant -- by phone and by mail. She cited a recent example of a scammer claiming to be a staffer with Gov. Ted Strickland's Save the Dream program, who tries to charge homeowners $1,500 for its services.

  • Souderton, Pennsylvania: On the House: Home-loan modifier was no help. As the mortgage payment grew from $948 a month to more than $1,150, Morissa P. Wiley sought help on the Internet and contacted New Hope Modifications of Bellmawr, which promised to work to modify her loan and save her house. For $1,800 up front. "They kept telling me that everything was OK, that they were working with my lender, and not to worry," she said. "They never called me; I always had to call them, and I started getting suspicious." Shortly after the last reassurance from New Hope, she found a notice that her house was destined for sheriff's sale. "I got on the phone and called New Hope," Wiley said. "I wanted to know if they were really working with my lender or if I should start looking for an apartment for me and my children." Her contact "was always off or out on leave." A supervisor declined to return the money she had sent.

  • West Sacramento, California: BBB Says Loan Modification Company Is Scam (Roseville-Based Company Issued Desist & Refrain Order). The Better Business Bureau of Northern California is warning consumers about bogus loan modification companies that make empty promises about helping borrowers modify their mortgage loans. The BBB said one such company is ShortRefiNow.Com, based in Roseville. Fourteen people filed complaints with the BBB. They said they paid between $2,600 and $5,300 up front to ShortRefiNow.com to get their loan modified, but the company did not perform or refund their money. ShortRefiNow.com told KCRA 3 by phone it is looking for licensed attorneys to take on their existing clients and they are not taking on any new clients.

  • Kirkland, Washington: Investigators: Loan mod offers bring even more mortgage troubles. The interest on Della Lorenzen's adjustable rate mortgage was about to soar and her payment on her home in Roy was about to balloon by $500 a month. Then MCA Consulting of Kirkland called and offered to negotiate a loan modification with her bank. [...] "I don't believe they had any thoughts of helping me at all," Lorenzen said. Lorenzen says MCA refused to refund her $3,500 fee and says her home is now on the brink of foreclosure. [...] A state license is required to perform loan mods and regulators confirm MCA is under investigation for unlicensed work. Lorenzen was required to pay her fee up front, which authorities say is illegal and a big red flag.

  • Fresno, California: Foreclosure Fraud, Phony "Rescue Firms." After years of renting, the Mizer family bought a house in 2005 for nearly 88-thousand dollars. Two years later, Kari and her husband Roger saw the rate on their adjustable mortgage shoot up way beyond what they could afford. They looked for refinancing from more than 40 lenders with no success. Then they got a letter from a mortgage restructuring firm that claimed to have a "95-point-5 percent resolution success" rate in stopping foreclosures. The company charged more than 13-hundred dollars upfront and said it would handle everything. But the Mizers say that's the last they heard. A month later their bank started foreclosure proceedings, telling them it had never been contacted by the company.

State High Court Orders Pennsylvania Attorneys To Ante Up Add'l $25 In Registration Fees In Support Of Legal Aid System

The Administrative Office of Pennsylvania Courts announced:
  • The Pennsylvania Supreme Court [Thursday] ordered a $25 increase in the annual registration fee for Pennsylvania lawyers, the first such adjustment in eight years. Funds from the increase are to be used for legal aid programs to assist individuals unable to afford legal services.

***

  • Chief Justice of Pennsylvania Ronald D. Castille said the fee increase in its entirety will be used to bolster the Interest on Lawyers' Trust Account program, known as IOLTA, which distributes funds for civil legal assistance to Pennsylvanians unable to afford lawyers. [...] Since mid-December when Federal Reserve rates dropped nearly to zero, IOLTA's revenues have fallen to critically low levels. Similar programs in other states are experiencing the same problem with the result that legal aid programs across the nation are being cut back. At the same time, growing numbers of indigent people with legal problems are seeking legal help.

For the press release, see Annual Registration Fee for Lawyers to Increase.

Foreclosure Mediation Begins To Takes Hold On Staten Island

On Staten Island, New York, the Staten Island Advance reports:
  • [A] new state law that went into effect late last year is changing how courts handle the foreclosure crisis by requiring judges to schedule mandatory settlement conferences between lenders and homeowners who received subprime and exotic mortgages -- the kinds of loans that triggered a national and global economic crisis. Legal Services of Staten Island provides counseling for homeowners who can't afford to bring an attorney to the foreclosure conference, and the Richmond County Bar Association has offered help.

***

  • "We are now dealing with this problem as soon as the [foreclosure] case is filed," said Justice Philip G. Minardo, administrative judge for Staten Island state Supreme Court, whose office has scheduled about 200 conferences since starting the process in January. "The court can't force a settlement but the court's presence can assist in bringing the parties together in an attempt to reduce the large number of foreclosures on subprime mortgages."

For more, see Court mediates in Staten Island foreclosures (Court fosters deals between banks and struggling homeowners).