Final Conspirator Goes Down In "MKL Financial Diet" Equity Stripping Foreclosure Rescue Scam

From the Office of the U.S. Attorney in Maryland:

• Earnest Lewis, age 52, of Takoma Park, Maryland, pleaded guilty [Wednesday] to conspiracy to commit wire fraud arising from a scheme in which he and his conspirators offered to help financially vulnerable individuals save their homes from foreclosure, and instead defrauded homeowners and mortgage lenders, announced United States Attorney for the District of Maryland Rod J. Rosenstein.

***

• Earnest Lewis, Michael Lewis and Winston Thomas specifically targeted individuals who owned and had equity in their homes, but were facing foreclosure on their homes because of their inability to make monthly mortgage payments. The co-conspirators fraudulently represented to the homeowners that their “lease/buy-back program” would help the homeowners to keep their homes.

• Michael Lewis and Winston Thomas, a senior loan officer with a mortgage lender, told the homeowners that the “good credit” of Earnest Lewis would be used to temporarily refinance their homes, that they had to sign their homes over to Earnest Lewis and that they could repurchase the homes in roughly one year, or once they regained their financial footing. During the interim, they could remain in their homes by paying “rent” and fees to Earnest Lewis by having their bank accounts directly debited by an account belonging to co-conspirator Cheryl Brooke’s company “In the House Technologies.”(1)

For the entire press release, see Fourth Conspirator Pleads Guilty and Agrees to Forfeit $2 Million in Mortgage Fraud Scheme Targeting Victims with TV Ads.

(1) Earlier this week, Cheryl Brooke, age 52, of Upper Marlboro, Maryland, and Winston Thomas, age 43, of New Carrollton, Maryland and Michael K. Lewis, age 57, of Takoma Park, Maryland all pleaded guilty in connection with the scheme.

Head Of Maryland Equity Stripping Foreclosure Rescue Scam Cops Plea; Bogus Sale Leaseback Deals Used To Rip Off Victims' Home Equity

From the Office of the U.S. Attorney in Maryland:

• Michael K. Lewis, age 57, of Takoma Park, Maryland pleaded guilty [Tuesday] to conspiracy and bankruptcy fraud arising from a scheme in which he and his conspirators(1) offered to help financially vulnerable individuals save their homes from foreclosure, and instead defrauded homeowners and mortgage lenders, announced United States Attorney for the District of Maryland Rod J. Rosenstein.

• “Michael Lewis led a group of conspirators who stole the homeowners’ equity by inducing financially vulnerable homeowners to sell their properties and convert the sale proceeds to the use of the conspirators,” said U.S. Attorney Rod J. Rosenstein. “The mortgage fraud conspiracy cases that we are prosecuting in Maryland should serve both to hold criminals accountable and to warn homeowners about the many smooth-talking con artists who take advantage of people who fall behind on their mortgage payments.”

***

• According to his plea agreement, from at least 2004 until May 2008, Lewis aired television advertisements that targeted financially vulnerable individuals, representing that he could improve their credit, save their homes from foreclosure and assist them with bankruptcy.

***

• Lewis specifically targeted individuals who owned and had equity in their homes, but were facing foreclosure on their homes because of their inability to make monthly mortgage payments.

For the entire press release, see Leader of Mortgage Fraud Scheme Confesses and Agrees to Forfeit $2 Million for Targeting Victims with TV Ads.

See also, WBAL-TV Channel 11: Michael K. Lewis Pleads Guilty To Fraud Charges.

(1) On April 13, Cheryl Brooke, age 52, of Upper Marlboro, Maryland, and Winston Thomas, age 43, of New Carrollton, Maryland pleaded guilty to their participation in the scheme. See Senior Loan Officer and Conspirator Plead Guilty in Mortgage Fraud Scheme That Targeted Victims Through Local TV Ads (Defendants Agree to Forfeit Over $2 Million). No word on the case status of Lewis' brother, Earnest, who was the fourth member of the group charged.

Maryland Feds Bag Two Guilty Pleas In Alleged "MKL Financial Diet" Equity Stripping, Sale Leaseback, Foreclosure Rescue Scam

From the Office of the U.S. Attorney in Maryland:

• Cheryl Brooke, age 52, of Upper Marlboro, Maryland, and Winston Thomas, age 43, of New Carrollton, Maryland pleaded guilty [Monday] to their participation in a scheme(1) in which they offered to help financially-vulnerable individuals save their homes from foreclosure, and instead defrauded homeowners and mortgage lenders, announced United States Attorney for the District of Maryland Rod J. Rosenstein.

***

• Thomas, who was then a senior loan officer with a mortgage lender, and Brooke specifically targeted individuals who owned and had equity in their homes, but were facing foreclosure on their homes because of their inability to make monthly mortgage payments. The defendants fraudulently represented to the homeowners that their “ lease/buy-back program” would help the homeowners to keep their homes. The homeowners were told that the “good credit” of another co-conspirator would be used to temporarily refinance their homes, that they had to sign their homes over to such co-conspirator and that they could repurchase the homes in roughly one year, or once they regained their financial footing. During the interim, they could remain in their homes by paying “rent” and fees to the co-conspirator by having their bank accounts directly debited by an account belonging to Brooke’s company “In the House Technologies” (IHT). Brooke allowed the IHT account to be used to deposit the proceeds of the equity-stripping scheme.

For the entire press release, see Senior Loan Officer and Conspirator Plead Guilty in Mortgage Fraud Scheme That Targeted Victims Through Local TV Ads (Defendants Agree to Forfeit Over $2 Million).

For the Statement of Facts contained in the Defendants' guilty pleas, see:

• U.S. v. Thomas,
• U.S. v. Brooke.

(1) The alleged scheme was referred to as the "MKL financial diet" purportedly headed by Michael K. Lewis, who is also currently under indictment. See Michael K. Lewis and Three Others Indicted in Mortgage Fraud Scheme - Allegedly Targeted Victims Through Local TV Ads.

MERS Was Set Up By Lenders To Handle Predatory Loans & Keep Their Hands Clean, Says Reno Attorney

In Reno, Nevada, KOLO-TV Channel 8 reports:

• A local woman wins an 11th-hour temporary restraining order halting the foreclosure on her home. Her attorney says her case could be the key to keeping thousands more in their homes.

***

• [Attorney Bob] Hager says the real significance of this case is that, in addition to Executive Trustee Services and GMAC Mortgage, it exposes and names MERS...the Mortgage Electronic Registration System which he says was set up by mortgage banks and AIG to handle predatory loans while keeping their hands clean. "It was set up to conceal from the public, regulators and the courts the actual owners of these deeds of trust. When they figured out how to make money off of bad loans, they brakes were off and they started writing these bad loans as fast as they could so they could get them into the hands of investors without worrying about the risk associated with these loans going into default. They needed MERS to do that."

• Now Hager says MERS is the important target. "If these MERS deeds of trust are unlawful as we contend in lawsuits here, and in Arizona and California, we could stop 70 percent of the foreclosures across the country." A hearing on [his client's] suit is set for April 27 in Reno Federal Court. In the meantime, she can breathe a little easier, but relaxing is still a long court fight away.

For more, see Foreclosure Stalled, Attorney Says a Win for Thousands More (read story) (watch video).

Attorney, Justice Of The Peace Held Liable For Damages In Now-Deceased Husband's Forgery Of Wife's Signature To Refinance Home

In New South Wales, Australia, On Line Opinion reports:

• [W]hen [Kaylene] Hall's husband found himself in financial difficulties, he told a friend he would refinance the family home to pay his debts. His wife was the only obstacle. If she found out how badly he was running his tank manufacturing business, their marriage would be over. However, he confided to his friend, he would solve this problem by forging his wife's signature and not telling her anything. The friend warned him not to do this, or Mr Hall would go to jail. Mr Hall ignored this advice and went not to jail, but to his grave. He died two years after carrying out his wicked plan and obtaining a private mortgage-secured loan [...].

***

• Mr Hall had at the time instructed Ben Gelin, a Bathurst-based solicitor, to act for him and Mrs Hall in effecting [the lender's] mortgage and supervising its registration. When the solicitor explained that both Halls would have to sign documents with him, Mr Hall said his wife was dying of cancer and could not go to the solicitor's office. When Mr Hall then offered to take the papers away for her signature, Mr Gelin said he would need to talk to Mrs Hall. Mr Hall replied that his wife would not agree to this because she was still bitter about how he, Mr Gelin, had behaved when he previously acted for a creditor against Mr Hall. Mr Gelin believed Mr Hall's lies, and had no contact with Mrs Hall. She did not have cancer. She knew nothing of her husband's financial difficulties, the mortgage loan or of her husband's visit to Mr Gelin.

In addition to finding Gelin liable to Mrs. Hall for his negligence, a court found that Justice of the Peace David Graham breached the duty of care he owed Mrs. Hall when he purported to witness forgeries of her signature on the mortgage documents without knowing her or seeing her sign. The court ruled that he had to pay 40 per cent of Mrs. Hall’s damages while 60 per cent fell to Mr. Gelin because of his failings.

For the entire story, see Thou shalt not bear false witness. DeedZetaTheft

Caregiver Charged With Manipulating Stroke Victim Into Refinancing Home, Misapplying Proceeds For Personal Expenses

In Stamford, Connecticut, The Advocate reports:

• A 50-year-old Stamford woman is charged with scamming $66,000 from a former co-worker who was recovering from a stroke, police said, though the victim lost about $100,000 more in the alleged scheme. Bridget Gleason-Paniccia [...] was arrested after an investigation that began in 2007, when Stamford police received a complaint from the victim, now 57, who reported that 13 fraudulent credit card accounts worth $72,273 were opened in her name while she was hospitalized with a severe stroke in 2003, Sgt. Peter diSpagna said.

***

• Gleason-Paniccia moved into the victim's home weeks before a stroke put her into a hospital for two months, police said. During the victim's hospital stay, Gleason-Paniccia allegedly racked up thousands in credit card bills and convinced the victim it was her debt, police said. The stroke left the victim with several physical ailments and brain injuries, police said. When the hospital released her, Gleason-Paniccia became her care-giver, police said.

***

• Gleason-Paniccia allegedly manipulated the victim into refinancing her mortgage to pay off the credit card bills, police said. The victim got a $163,000 loan and paid off the credit card bills, but Gleason-Paniccia allegedly convinced her to open a joint bank account to keep the remaining $88,000, police said. [...] Gleason-Paniccia withdrew $66,000 from the account in increments, police said.

• It took four years for the victim to realize the extent of the scam. As she regained her awareness and mental capabilities, the victim turned to police and handed them 82 checks forged in her name, diSpagna said.

For more, see Stamford woman charged with scamming stroke victim. DeedZetaTheft

I.D. Theft Suspect Convicted Of Swiping Property Title From Fellow Inmate To Post Bail, Then Fleeing Country With Girlfriend

In Southern California, The Orange County Register reports:

• A Tustin man who had tried to flee to Mexico was convicted [last week] of committing a $2.8 million fraud by stealing the identities of more than a dozen people who hoped to invest in real estate. Gene Anthony Franklin Jr., 34, held himself out as a legitimate real estate investor to secure his victims' personal information, then used the data to buy a home, obtain credit cards and pay his bills, said Deputy District Attorney Yvette Patko. He also illegally transferred properties from a fellow jail inmate to post his own criminal bail and flee the country, prosecutors said.

***

• While in custody [on identity theft charges], he was rooming in jail with Marvin Vernis Smith, who was convicted of killing his wife. Franklin became friends with Smith, and learned that Smith had transferred one of his properties to his daughter so she could pay for legal fees, prosecutors said. Franklin forged property transfer documents that showed that his ex-girlfriend – Iris Orozco – owned three of Smith's properties, valued at almost $2 million, around October 2007, prosecutors said.

• Using one of the properties as collateral, Franklin posted his $1 million and fled to Mexico with Orozco, prosecutors said. He was caught in March 2008, and brought back to Orange County.

For more, see Ex-fugitive is convicted in $2.8 million identity theft (Gene Anthony Franklin of Tustin duped convicted murderer so he could post bail, prosecutors said).

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

Foreclosed Texas Homeowner Accuses Loan Modification Firm Of Taking Money, Doing Nothing

In Fort Worth, Texas, the Fort Worth Star Telegram reports:

• First the mortgage payments went up after he refinanced; then he broke his collarbone and was out of work for months during rehab. When the bills began to mount and Ramiro Diaz found himself behind on the mortgage in August 2006, he contacted Your Mortgage Solutions in North Richland Hills. A representative promised Diaz that the company would intercede to help prevent the lender from foreclosing on the family home, Diaz said.
  "I paid him $1,500," Diaz said. "He said, 'I got you covered.’"

• Instead, like other homeowners across the country, the North Richland Hills man and his family lost their house to foreclosure in what appears to be a nationwide outbreak of mortgage "rescue" operations that aren’t rescues at all.

***

• A Your Mortgage Solutions representative rebuts Diaz’s complaint, saying Diaz did not complete necessary paperwork or submit a separate attorney’s fee on time. "They can’t just send the paperwork back without the attorney’s fee," said Duane Hatchett, YMS’ director of operations.(1) "He [Diaz] knows he didn’t send it back."

For more, see Beware of foreclosure 'rescue' outfits, feds say.

(1) Non-attorneys that solicit, advertise or otherwise offer legal services to homeowners for mortgage foreclosure defense and/or foreclosure-related rescue services, collect legal fees on behalf of an attorney, and/or make a business to solicit or procure legal business for attorneys is generally illegal in other states. I suspect Texas may have a similar law.

Investment Program Promoted By Condo Conversion Marketer To Unload Unsold Inventory Leaves Investors Holding The Bag

In San Diego County, California, The San Diego Union Tribune reports:

• [Frances] Greenspan is one of a number of investors across California who said they agreed to effectively trade their good credit for a promise of $5,000 to $10,000 per mortgage they took out. They understood that the homes purchased on their behalf would be quickly transferred out of their names, and gone would be any financial obligation.

• Instead, their names stayed on the deeds, and they remained on the hook for hundreds of thousands of dollars in loans. They claim they were lured to this scheme by James McConville, of Diamond House Development, a Fremont company whose corporate status is listed as suspended by the secretary of state.(1)

***

• Investors say they were recruited by McConville to buy into three condo conversion projects in North County [...]. In all, roughly 80 units were involved in purchases that buyers allege were arranged though McConville, and nearly all of them are in the process of being foreclosed on by lenders. Many of the condos are rented out, with some units scheduled to be auctioned off in a matter of days.

• Some investors say they recently discovered disturbing details about their transactions, based on final settlement agreements provided them by VoiceofSanDiego.org. The statements show that 3 Mac Asset Portfolio – a company with the same address as McConville's home – received a substantial “marketing fee” on individual sales.

• In several cases shared with The San Diego Union-Tribune, the fee was $180,454 on a two-bedroom unit purchased for $310,000. A more routine six percent real estate commission on a $310,000 sale would be $18,600.

For more, see Investors are duped in condo scheme (Investors say they were recruited to buy into three condo conversion projects in North County, one of which was the the 112-unit Sommerset Woods in Escondido).

For another part to this story, see Renters become unwitting victims in condominium mortgage scheme.

(1) According to the story, Greenspan said one of the investors has contacted the District Attorney's Office in Alameda County where McConville is based to report what had occurred. That office would not confirm whether an investigation is ongoing. However, Senior Deputy District Attorney William Denny reportedly said McConville was convicted of grand theft and sentenced in 1998 to five years probation. He was ordered to pay $242,000 in restitution to two lenders after admitting he diverted insurance funds owed them in connection with a fire that destroyed a hotel McConville owned in the city of Richmond, according to the story.

Arizona Feds Indict Pair In Alleged Scheme Using Homeowners Facing Foreclosure, Abusing HUD "Short Sale" Program To Pocket Illegal Profits

From the Office of the United States Attorney (Arizona):

• A federal grand jury in Phoenix returned a 19-count indictment [Wednesday] against Kenneth D. Perkins, 51, and Robert Lee Burdiak, 66, both of Gilbert, Ariz. , alleging wire fraud and false statements to the government and to financial institutions. The indictment alleges that from May 2003 through June 4, 2004, Perkins and Burdiak defrauded the Department of Housing and Urban Development (HUD).

***

• Perkins, operating through Virtual Realty Funding Corporation and Virtual Realty Company, found homeowners in default and arranged for their participation in the [HUD Pre-Foreclosure Sale Program] as their realtor. But instead of marketing their properties, he purchased them at a discount of as much as 82% of their appraised value utilizing Burdiak as a straw-buyer. The homes were then sold for a profit, sometimes on the same day. Perkins and Burdiak concealed from the lending institutions, and thus HUD, the fact that the properties had not been marketed by submitting false documents to them. Perkins acquired approximately 20 properties at a discount which resulted in HUD paying an additional sum of a substantial amount to lenders in order to cover the shortfall in the mortgage balances.

For the entire U.S. Attorney press release, see Foreclosure-Rescue Schemers Indicted.

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

In an unrelated story from the U.S. Attorney's Office in Arizona:

• On April 8, 2009, Dustin Michael Thompson, 30, and Sean Paul McLaughlin, 29, were indicted on four counts of Wire Fraud and one count of Conspiracy to Commit Wire Fraud as a result of their involvement in a cash back mortgage fraud scheme. Thompson and McLaughlin submitted mortgage loan applications on behalf of buyers, that included friends and family members, containing false information. Following the funding of the loans, Thompson and McLaughlin received cash back that they used for personal expenses and to perpetuate the scheme. Most of the homes purchased during the conspiracy have foreclosed.

For the entire press release, see Real Estate Investor And Loan Officer Indicted For Mortgage Fraud.

Obama Administration Big Shots On The War On Foreclosure Rescue, Loan Modification Scams

U.S. Treasury Secretary Timothy F. Geithner, Attorney General Eric Holder, and Secretary of Housing and Urban Development Shaun Donovan issued a joint press release last week on combatting foreclosure rescue and loan modification scams:

• [I]n a major step [last] week, the Department of the Treasury, the Department of Justice, the Department of Housing and Urban Development and the Federal Trade Commission announced a new joint effort that cuts across federal and state governments and the private sector to combat foreclosure rescue scams. Led by the Treasury's Financial Crimes Enforcement Network, this effort creates an advanced targeting process to streamline investigations and prosecutions and provides financial institutions with a new advisory to spot and report questionable loan modification schemes.

• For American homeowners, this means that fraudulent companies will be shut down more quickly; companies that otherwise would have gone unnoticed will be identified and investigated; and the government's ability to identify and prosecute anyone involved in mortgage rescue scams will be bolstered.

For more, see Crackdown on fraud.

See also, The Washington Post: 'We Will Find You and We Will Punish You':

• There was tough talk out of Washington [last week] aimed at loan-modification scammers. Attorney General Eric Holder had this message for people and companies ripping off homeowners on the verge of foreclosure: "If you prey on vulnerable homeowners with fraudulent mortgage schemes, or discriminate against borrowers, we will find you and we will punish you."

Some Loan Modification Firms Have Their Own Financial Baggage

In Hampton Roads, Virginia, The Virginian Pilot recently did a story on some of the upfront fee loan modification firms that have recently sprouted up locally. The owner of one firm who was interviewed for the story reportedly described her business model as one where she charges from $500 to $1,500 upfront, collects basic information from the homeowner, and then passes along the file to an attorney who then tacks on an additional fee for handling the actual negotiation. When asked how many homeowners she has helped obtain successful loan modifications, she told the reporter that because her buisness was new, she hadn't helped any yet (which reportedly contradicts the testimonials from satisfied customers that appear on the firm's website).

Before she opened her loan modification firm, she owned a now-defunct subprime mortgage business that currently is a defendant in a civil mortgage fraud lawsuit, according to the story. She claimed that the suit was due to the actions of an employee and that she had no knowledge of those actions. In addition, she apparently was unable to reach successful loan modifications on her own distressed real estate, as the story reports that her recent bankruptcy filing indicates that three houses she owned were repossessed by banks, and that she offered to give up three additional properties as she liquidated her assets in a Chapter 7 bankruptcy.

For the story, see As mortgage services pop up, regulators warn of scams.

B.C. Appellate Court Sides With Victims Who Lost Homes In Deed/Refinance Scams Involving Use Of Forged Documents; Duped Lenders End Up Holding The Bag

In Vancouver, British Columbia, The Canadian Press reports:

• The B.C. Court of Appeal wants the province to come up with stricter laws forcing lenders to do a better job of vetting mortgage applicants to ensure they aren't securing property that's been stolen. In a ruling issued [last] Monday, the Court of Appeal concluded that it shouldn't be good enough for anyone lending money for a mortgage to rely only on a title search to show who is the rightful owner of a property.

• But under the B.C. Land Title Act as it is currently written, the court found that lenders have only to do a search. A lower court judge concluded that if the property shows no liens and a lender gives out a mortgage based on that search, the lender has a valid mortgage and is entitled to be repaid. In other words, even if the rightful property owners get their property back, they are still stuck paying for mortgages they didn't take out, according to the lower court ruling.

• The Court of Appeal disagreed and instead concluded that the lender — not the rightful property owner — is the one out of luck in a fraudulent mortgage scheme.

***

• The Court of Appeal was examining two cases(1) where people fraudulently had their property transferred to someone else without their knowledge. Mortgages were obtained on the properties after the fraudster went to some people for a loan based on the equity in the property. The lenders advanced the money after doing a titles search and finding no liens on the properties.(2)

• But then the fraudster disappeared and the crime was discovered after the lenders began foreclosure proceedings. The victims of the frauds went to court(3) to have the mortgages declared void, but the lower court ruled the lenders followed the rules and the owners were out of luck. However, the Court of Appeal concluded lenders must ensure their mortgages are valid by taking steps to ensure that the registered owner obtained title to the property legally.(4)

For the story, see B.C. Court of Appeal overturns ruling on mortgage fraud.

See also,The Lawyers Weekly: Fraudulent mortgages nullified by British Columbia’s top court.

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.

(1) Gill v. Bucholtz, 2009 BCCA 137 (April 6, 2009); Re Oehlerking Estate, 2009 BCCA 138 (April 6, 2009).

(2) The story and the cases are silent as to whether the lender obtained a title insurance policy to insure its interest in the property. (Could it may be that no such insurance is available in British Columbia? Is it possible that the burden is on the homeowner to obtain insurance covering against the risk of having the title to his/her home stolen?) In the United States, the risk that title was obtained by forged documents is generally referred to as an "off-record risk" or "hidden hazard" that is typically covered by a title insurance policy. In the case of a mortgage company that lends money on a title acquired by forgery, having acquired a title policy to insure its interest would generally entitle it to indemnification for its loss, leaving the title insurer holding the bag. For a list of 35 off-record risks, or hidden hazards, that a title insurance policy generally protects a homeowner and mortgage lender against, see Title Insurance: What Risks Does It Protect A Property Owner Against? (footnote 1).

(3) It is important to note that the victimized homeowner has the burden in these types of cases to go to court (preferably with a real estate attorney who knows what he/she is doing) and file a civil lawsuit seeking to void the forged deed and mortgage. Failure to do so will likely result in a loss of the home. For an example of what could happen when the victim fails to go to court to void the forged deed and mortgage, see Oshawa mother faces eviction after alleged mortgage scam. For a story of a victim with legal bills piling up in his effort to get back the title to his home after he had it stolen out from under him, see Scam artists steal house (Richmond RCMP are investigating what is believed to the city's first-ever case of house theft).

(4) A little over a year ago, an Ontario Superior Court addressed a similar situation - one where a then-88 year old man had his home stolen from out from under him through the use of a forged power of attorney. The scammer subsequently pocketed the proceeds from a fraudulently obtained mortgage. The Superior Court decided the case in his favor, ruling that the mortgage lender should rightfully be left stuck holding the bag. For more on this story, see:

• Reviczky v. Meleknia, et al., (2007), 88 O.R. (3d) 699 • (2007), 287 D.L.R. (4th) 193 • 2007 CanLII 56494 (ON S.C.);
• The Toronto Star: Man, 90, off hook for loan: Court (Landmark ruling lifts $300,000 burden);
• Law Times: Bank didn’t take proper steps (Mortgage fraud decision will impact real estate industry);
• The Toronto Star: House fraud decision rocks industry (Bank `did not take steps to scrutinize the power of attorney,' judge rules). DeedZetaTheft

Evicted Homeowner Claims Loan Modification Firm Collected Loan Payments, Let Mortgage Go Into Default, Bought House At Foreclosure Sale

In Ogden, Utah, KTVX-TV Channel 4 reports:

• [Ron Chavez] was evicted from his home after twenty two years. Last year he fell behind on his mortgage. [...] He turned to a loan modification specialist. [...] "I talked to an attorney who was supposed to help us out and I got offered a brochure to contact these people,” Chavez said. Chavez entered into an agreement with the company. He was told to continue paying the mortgage, but the company put the money into an escrow account. He said the company let the house go into foreclosure and then bought it below market value. For a small fee, the company [would resell] it to Chavez at a reduced price. And Chavez was supposed to get a lower mortgage payment, but he never got a chance to buy it back. He was evicted.

For the story, see Homeowners facing foreclosure duped.

Feds Begin "Lampoon" Attack On Firm Offering Free Credit Reports With Parody Advertising

The Washington Post reports:

• If you watch television, chances are you've seen the jingles where the young guy sings a campy song about his troubles with identity theft, in a bid to pitch a site called freecreditreport.com.

• Well, now the Federal Trade Commission is getting in on the act, running a series of hilarious public service announcements to point out that such services often are not free at all, and instead pointing consumers to annualcreditreport.com, a site mandated by Uncle Sam and probably the only place online consumers can truly go to get a free copy of their credit reports from each of the three major credit reporting bureaus.

Source: FTC Takes on Freecreditreport.com.

For the videos, see:

• AnnualCreditReport.com "Restaurant" public service announcement,
• AnnualCreditReport.com "Apartment" public service announcement.

Homeowner Faces Foreclosure For Continued Refusal To Use Leash When Walking Dog

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

• Robert Wirth Jr. may lose his house — all because of walking his dog in a deed-restricted community without a leash. What seems like a relatively minor infraction has snowballed into a protracted court battle that he claims has cost him more than $100,000 in legal fees.

***

• It all started more than seven years ago because Wirth insisted on walking his black Labrador, Cole, regularly without a leash. In January 2003, the River Watch Homeowners Association fined Wirth and his wife, Sandra L. Blaker, $1,000 for doing so. The couple didn't pay. So the association filed a lien and in April of that year foreclosed on their home to collect the debt. The case has dragged on for years. Last year, a circuit judge ordered Wirth and his wife to pay the fine, plus interest, attorney fees and other costs or the house would be sold. Wirth now owes more than $40,000, he said.

***

• Wirth remains adamant about his case and is not backing down. [...] Wirth admits he still walks Cole without a leash. [...] Meanwhile, Wirth's frustration has escalated. He said that he would shoot and kill one of the board members if things don't go his way.

***

• Foreclosure cases like Wirth's are "unusual, but not unheard of, " said Gary W. Lyons, a Clearwater attorney whose specialties include real estate law. Lyons is also aware of foreclosure proceedings that stemmed from painting homes the wrong colors or improper shingles on roofs.

For more, see Foreclosure looms over Tarpon Springs man who walked dog off leash.

See also, Tarpon Springs dog owners knew the leash rules and defied them.

Chinese Drywall Problem A "Sleeping Beast" In Thousands Of Bank-Owned Condos, Houses?

The Associated Press reports:

• At the height of the U.S. housing boom, when building materials were in short supply, American construction companies used millions of pounds of Chinese-made drywall because it was abundant and cheap. Now that decision is haunting hundreds of homeowners and apartment dwellers who are concerned that the wallboard gives off fumes that can corrode copper pipes, blacken jewelry and silverware, and possibly sicken people.

***

• Dozens of homeowners in the Southeast have sued builders, suppliers and manufacturers, claiming the very walls around them are emitting smelly sulfur compounds that are poisoning their families and rendering their homes uninhabitable. "It's like your hopes and dreams are just gone," said Mary Ann Schultheis, who has suffered burning eyes, sinus headaches, and a general heaviness in her chest since moving into her brand-new, 4,000-square foot house in this tidy South Florida suburb a few years ago. She has few options. Her builder is in bankruptcy, the government is not helping and her lender will not give her a break. "I'm just going to cry," she said. "We don't know what we're going to do."

***

• In another cruel twist, some of the very communities that have been hit hardest by the collapse of the housing market and skyrocketing foreclosure rates are now at the epicenter of the drywall problem. [Construction consultant Michael] Foreman warns of a "sleeping beast" in the thousands of bank-owned condos and houses across the country, with no one in them to complain.

For more, see AP IMPACT: Chinese drywall poses potential risks (Chinese drywall imported during housing boom causes corrosion, possible health risk).

See also, ABC News: Some China-Made Drywall Causing a Stink (Homeowners Have Complained of Sulfur Smells and Corroding Metals).

Go here for other posts on Chinese drywall.

Go here for links to recent media reports on the problems with "Chinese drywall."

Madison Man Mad That Someone Else Now Owns His Foreclosed Home Torches Premises, Say Cops; Now Faces Arson Charges

In Madison, Wisconsin, the Wisconsin State Journal reports:

• Upset that someone else was living in the town of Bristol house where he once lived, a Madison man stuffed a rag into a vehicle gas tank in the garage and set it ablaze, according to court documents. Derek C. Hightower, 24, only intended to burn the garage [...]. Instead, according to a criminal complaint filed Thursday, the fire spread and destroyed the garage, the house and three vehicles. Hightower was charged with arson. [Current owner] Irma Smith told police she bought the house in December from an investment firm after it had been in foreclosure. She intended to move in this summer.

For the story, see Prosecutors: Accused arsonist was mad someone else lived in his former home. ForeclosureHomeVacantBeta

Orlando-Area Cops Bag Suspect In Phony Landlord Scam; Accused Of Breaking Into Vacant House, Changing Locks, Renting Premises To Unwitting Tenant

In Orlando, Florida, WFTV Channel 9 reports:

• A home for rent was the perfect price in the perfect place, but there was just one problem. The landlord didn't really own it. Detectives said the self-proclaimed landlord broke into a vacant home and changed the locks. He then rented it out to a single mother. He would have gotten away with it, too, if neighbors living near the home [...] didn't get suspicious.

• Detectives said the home may not be the only vacant house the guy was using. In fact, they're concerned he may be running a similar scheme on renters all around Central Florida. It's simple enough. Put your own locks on the doors of empty homes, hand out the new keys to renters and take off with the money. Paul Mosher, 60, wouldn't say a thing about the $1,500 he swindled from an Orange County single mother. He rented her a stately Waterford Lakes home he never even had permission to enter. [...] The real owner is allowing the family to stay rent-free for another month, but that does little to calm the victim's rattled nerves.

For more, see Single Mom Swindled By Fake Landlord.

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

Ocean City Cops Warn Against Phony Landlord Rental Scam Promoted On Craigslist

In Ocean City, New Jersey, WPVI-TV Channel 6 reports:

• Police in Ocean City, New Jersey are warning of a real estate scam. Investigators say the scammers will copy online listings for legitimate real estate sales, and then re-post them on the website Craigslist as a rental. Then, they collect rental applications, along with fees. Investigators say the contact for these listings is from a foreign country. Anyone who has information about this internet scam, or feels they have been victimized, should contact the Ocean City Police Detective Bureau at (609)399-9111.

Source: Police warn of online rental scam.

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

More Homeowner 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:

• Port St. Lucie, Florida: Treasure Coast homeowners should be wary of mortgage modification scams. Mateo Avila was watching a Spanish language network when he saw a commercial for Miami-based Lincoln Lending Services, which claimed to specialize in loan modifications for homeowners. He called the toll-free number in January and did exactly what the company asked. "They told me, don't pay for the house," said Avila, who stopped paying his two home loans with Aurora Bank and Countrywide in October. "They (Lincoln Lending) took $3,000, two checks for $1,500 to do a modification." After handing over the money, Avila couldn't get any straight answers from Lincoln Lending. When his lenders foreclosed on the home last month, he soon realized he'd been scammed and contacted the Mortgage Fraud Task Force of Florida Attorney General Bill McCollum. [...] Gifford resident Elizabeth McGriff got a pamphlet in the mail from The Foreclosure Relief Group and called the company after her husband's work hours were cut. State records show the company is owned by Brian Nierenberg in Fort Lauderdale. McGriff said the company told her to pay $1,995 to start a loan modification and also asked her to pay them $550 a month until the loan was modified. Nierenberg claims his business is simply a lawyer referral service and collected fees go to attorneys.

• Orlando, Florida: Warning About Foreclosure Rescue Companies. Jackie Day is struggling to pay the mortgage on her Orlando condo so she wanted to lower her monthly mortgage payments. Jackie saw an ad for "The Home Savers," a California company that by phone told her it would cut her payments. But she says Home Savers wanted her to stop making mortgage payments to qualify. "What I would have to do---is not pay my mortgage for three months. I was to send $1,500 payments." A Home Savers spokesman said the upfront fee is an attorney's retainer and is a legal charge.

• Jacksonville, Florida: Southside Foreclosure Firm Accused of Scamming Homeowners. "I thought these folks had more knowledge and different avenues to approach our mortgage company," Royce Belle, a Jacksonville homeowner who enlisted the help of National Foreclosure Counseling Services, said. "They did not." Belle's story is one state investigators say is being told and re-told all over the country by homeowners contacted by NFCS. "We recieved a letter from National Foreclosure Services stating that they were able to help us lower our payments," he tells WOKV. "The said they'd charge us $2,044 to get our mortgage modified." Belle admits he took the bait; paying the fee and hoping to clear up rising mortgage payments and keep his home. But weeks turned into months, and Belle says he never heard from NFCS. Eventually, he says, NFCS presented a re-financing plan that actually raised his monthly mortgage payment a dollar. "We told them that doesn't make any sense," he said. "Nothing changed. We told them they didn't actually do anything for us." When Belle decided to cut ties with the company and demand a refund, he claims NFCS threatened to bankrupt him. He's now suing the company in small-claims court.

• Lake Ronkonkoma, New York: Mortgage modification mess. Back in January, homeowner Jim Gentile paid $3000 to Hope Now Modifications and a south Jersey law firm to get his mortgage modified. Jim says they told him, "We can get you a fixed rate for 5 years. (And reduce it) down to 5.25% (interest rate) which is great, cuts my mortgage in half." But Jim says all Hope Now Modifications did was tell him to stop paying his mortgage. He fell three months behind on his payments. Jim says his current mortgage company said it had never even heard of Hope Now Modifications. Jim says Hope Now Modifications led him to believe they were a non-profit agency.

• Omaha, Nebraska: Mortgage Middleman Almost Costs Couple Their Home (Attempt to refinance leads to foreclosure). An Omaha couple decided to pay a middleman to help them negotiate a better rate. What they got instead was a mortgage mess. When their variable house payment jumped, the hardworking Booker family didn't think the big mortgage company would listen to them so they paid a middleman, but the first piece of advice was ill-advised. After making five payments totaling $3,000 to First Universal of Florida, which was supposed to negotiate a fixed rate with their mortgage company, the Bookers instead received notice of default from an attorney. Their house was on the brink of foreclosure.

• Indianapolis, Indiana: State targets foreclosure consultants. Homeowners are hiring foreclosure consultants to prevent banks from seizing their homes, only to find themselves swindled. Vivienne Daniels paid $392 to a company called Capitol Foreclosure (for the Indiana AG's lawsuit, see State of Indiana v. Capitol Foreclosure). "I was behind. My mother died," she said. But according to Daniels, "they did nothing." Last year, the attorney general's office took four foreclosure consultants to court. The attorney general's office won judgments against three of the companies. A fourth is awaiting trial. Vivienne Daniels got an attorney, lost some money, but kept her home. "I was real lucky. I lost about $400. It would have been bad to lose your home," Daniels said.

• Long Island, New York: Housing advocates question loan modification firms. At a recent ACORN protest of AmeriMod loan modification company in Uniondale, homeowner Claudette Broderick said the firm got her only a forbearance from her lender. Usually under forbearance, the loan is taken off the delinquency rolls and the late payments are added on top of the regular monthly ones. Broderick, laid off as a nursing assistant, said she couldn’t afford the regular $3,100 monthly bill and the forbearance would have pushed the monthly bill to about $3,600.

Another Banquet Hall In Foreclosure Shuts Down, Sending Engaged Couples Scrambling To Salvage Wedding Plans

In Holland, Michigan, WZZM-TV Channel 13 reports:

• A Holland banquet hall that WZZM 13 On Your Side investigated in March for reneging on a refund has closed. Raleigh Woods Catering and Conference Center on James Street is closed and is in foreclosure. Now, several couples who are getting married are trying to find another place to have their receptions.

• On Thursday, Tracy Kirgis and Philip Paauwe were busy looking for a caterer for their wedding. It's in five weeks. "Panicked and horrified that there isn't going to be anything else open on such short notice", says Tracy. She and her fiancee are one of several couples who had weddings booked at Raleigh Woods. [...] Tracy and Philip put down a $2,400 deposit. At this point, they're not expecting to get it back.

For more, see Holland reception hall closes.

For other stories on banquet hall foreclosures screwing up wedding plans, see:

• Intentional Torching Of Historic Inn Facing Foreclosure Forces 14 Brides To Can Wedding Reservations,
• Bride jilted by foreclosed venue (Reception hall closed just months before nuptials),
• Gorge hotel's closure puts lovebirds, creditors in limbo,
• Couple says Abbey left them stranded.

Ohio Man Facing Foreclosure Barricades Himself In Home In Standoff With Cops

In Lucas County, Ohio, the Toledo Blade reports:

• A Springfield Township man who barricaded himself in his home during a standoff with authorities that lasted three hours was indicted Tuesday by a Lucas County grand jury. Michael Swiergosz, 46, [...] was charged with two counts of felonious assault, each with firearm specifications. The grand jury did not indict him on a charge of inducing panic. Authorities said the March 10 incident was sparked by financial concerns. Mr. Swiergosz's home was in foreclosure and had been set for sheriff's sale.

For the story, see Springfield Twp. man indicted over standoff.

Go here and go here for other posts on the encounters of police and sheriff's deputies involving foreclosures and evictions. DeputyEvictionTheta

Owner Of Now-Defunct Title Company Admits Swiping Closing Proceeds Intended To Pay Off Existing Mortgages, Leaving Homeowners Facing Foreclosure

In Louisville, Kentucky, WHAS-TV Channel 11 reports:

• In an exclusive interview with WHAS11 News, the former owner of a Louisville title company admits to misappropriating mortgage money. His actions could cost a number of people their homes.

• Wavy Curtis Shain appeared in federal court Tuesday, but the court did not accept his guilty plea, pending a better explanation of the charges by the U.S. Attorney’s Office. Shain, 26, operated Derby City Title first as a title search company from 2001 to 2003, then as a closing agent from 2003 to 2007. Shain tells WHAS11’s Joe Arnold that the “money was misappropriated to keep the business open.”

***

• When Nancy Mitchem refinanced her home through Shain, she says he kept that payout for his own use -- failing to pay off her first mortgage -- setting her up for foreclosure. [...] Homeowner Joe West adds, “We can’t even go rent an apartment because our credit scores are demolished and it’s all because of what he did.”

For the story, see Former owner of Louisville title company admits misappropriating money.

Go here for interview with Wavy Curtis Shain.

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

Tennessee Mobile Home Park Residents Temporarily Dodge Eviction As Lender Cancels Landowner's Foreclosure

In Ringgold, Tennessee, WTVC-TV Channel 9 reports:

• Dozens of families in Catoosa County are breathing a sigh of relief Tuesday after a foreclosure and auction on their mobile home park is cancelled. Last month we visited the Pine Forest Mobile Home Park in Ringgold which was planned to be auctioned off because of foreclosure - leaving many residents with no where to go.

***

• After speaking with residents in March we learned many own their trailer but pay $170 monthly rent for the lot, trash and water service. They told us moving a trailer costs between $2,500 and $4,000, along with a $500 permit. They said that kind of money to move would be very difficult, if not impossible to raise since many are retired or disabled on fixed incomes. That makes residents like Anthony Lance feel "very vulnerable, most of us can not pull up stakes and move in 30 days, nobody in here is making great money."

For the story, see Trailer Park Saved, For Now At Least.

Mobile Home Park In Foreclosure Shut Down By Authorities As Unpaid Bill Results In Water Shutoff Leaving Premises Uninhabitable; Residents Get Boot

In Southport, New York, the Elmira Star Gazette reports:

• Chemung County and multiple agencies [Tuesday] are assisting displaced residents of a Southport mobile home park on Sherman Avenue after their park became uninhabitable. The town of Southport code enforcement officer and the Chemung County Environmental Health Department said the property was uninhabitable [Tuesday] after the Elmira Water Board shut off its water, according to a news release from Chemung County.

• The property, managed by White Tigers LLC of Poughkeepsie, failed to make payments to the Elmira Water Board for several months and has indicated it will be unable to pay and is facing bankruptcy and foreclosure, the news release said. The park is unlikely to reopen, the news release said. The park has 28 units with approximately 25 homes occupied, the release said.

Source: Officials scramble to help residents of Southport mobile home park.

Feds Take Closer Look At Tax Resolution Companies As Complaints Parallel Those Leveled Against Loan Modification Firms

WebCPA reports:

• The Internal Revenue Service has suspended an enrolled agent from practicing before the agency after his clients complained that he did little to help them settle their tax disputes. The IRS’s Office of Professional Responsibility suspended Richard Hargus, who worked in California for two separate, now defunct companies that specialized in tax resolution services, including the submission of offers in compromises ["OIC"] to the IRS.(1)

• Multiple taxpayers paid the companies for Hargus to resolve their income tax liabilities through the OIC program. An OIC is an agreement between a taxpayer and the IRS that settles the taxpayer’s tax liabilities for less than the full amount owed. In many instances, however, Hargus’s clients either did not receive the services for which they paid him or received very little assistance with resolving their tax issues, the IRS said. [...] After an IRS investigation, Hargus admitted a lack of due diligence in these taxpayers’ situations. The IRS suspended Hargus on Monday from practice for at least 18 months.(2)

• The IRS said that it is taking a closer look at tax resolution companies, and is also litigating known OIC abuses to ensure that tax professionals fulfill their legal and ethical obligations to their clients in dealing with IRS tax matters. The IRS’s parent agency, the Treasury Department, also announced on Monday an initiative to crack down on companies that claim to help people with foreclosure prevention services, but instead charge them up front while performing few services on their behalf.

For the story, see Practitioner Suspended for Bilking Taxpayers.

For a related post on dealing with unpaid federal tax problems, see IRS To Ease Up On Squeezing Financially Stressed Taxpayers Owing Back Taxes.

(1) According to the story, Tax practitioners are subject to the regulations issued under Treasury Department Circular 230, the IRS pointed out. Circular 230 provides that a practitioner must exercise due diligence in preparing or assisting in the preparation, approval and filing of tax returns, documents, affidavits and other papers relating to IRS matters.

(2) For an IRS advisory warning taxpayers to beware of promoters’ claims that tax debts can be settled for “pennies on the dollar,” see IR-2004-17: Check Carefully Before Applying for Offers in Compromise.

Grand Theft Probe Triggered By Report Of $1M In Missing Fixtures, Appliances Stripped From Foreclosed Mansion

In Encinitas, California, the San Diego Union Tribune reports:

• After a high-profile foreclosure, the county's largest and possibly most luxurious bank-owned home is missing an estimated $1 million worth of fixtures, from antique doors to top-of-the-line toilets. So far, no suspects have been named in a grand theft probe the Sheriff's Department launched in March.

• “It's like a car up on blocks,” sheriff's Detective Steven Ashkar said. “It's been stripped.” The 16,000-square-foot Spanish hacienda-style house on 1.24 acres in rural east Encinitas cost $13 million to build and furnish. In February, it failed to sell at a bank foreclosure auction with a starting bid of $2.3 million. [...] On March 26, the bank's real estate agent [...] filed a police report citing missing “doors, windows, fixtures, toilets, cabinets and appliances,” Ashkar said.

For more, see $1 million worth of fixtures vanish from foreclosed home.

See also, ABC Good Morning America: Million-Dollar Foreclosure Theft (Recession Victim: A Vacant California Mansion Stripped of $1 Million in Fixtures).

For the Good Morning America video, see Foreclosed Homes Attract Thieves.

Go here for other posts on pre-foreclosure homeowner fixture stripping. foreclosure fixture stripping apple

Landlord Rents Home In Foreclosure To Tenant, Then Strips The Place Of Appliances, Fixtures

In Las Vegas, Nevada, KTNV-TV Channel 13 reports:

• Imagine signing a lease, moving in, and weeks later your landlord takes all your appliances. The dishwasher ripped out, refrigerator snagged and even the toilet is gone. "I don't understand this, but they took all the shelving units from inside the pantry," Melody Hosp says. This is all evidence a house in foreclosure. [...] "Evidently the property is in foreclosure and he came to remove all his appliances and all his belongings from the house. We still live here," Hosp says. Melody just moved in this month.

For more, see Woman still renting house when landlord comes in and takes appliances.

Go here for other posts on pre-foreclosure homeowner fixture stripping. foreclosure fixture stripping apple RentSigmaSkimming

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:

• WRTV Channel 6: State Cracks Down On Foreclosure Rescue Companies (5 Companies Targeted In Initial Round Of Lawsuits),
• The Indianapolis Star: Indiana files lawsuits against 5 out-of-state foreclosure consultants (5 new lawsuits say out-of-state companies ignored laws governing how they do business).

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:

• 24 people indicted in mortgage fraud plot ($11 million netted in S.D.-area scheme),
• Links emerge among figures accused in scam (83-page indictment lays out loan scheme).

(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.