Tuesday, December 15, 2009

Minnesota Couple Faces Foreclosure, Ruined Credit After Now-Disbarred Closing Attorney Swipes Refinancing Proceeds, Leaving Existing Loans Unpaid

In Forest Lake, Minnesota, the Pioneer Press reports:
  • When Julie Tarlizzo and Reed Erickson refinanced their home and cabin mortgages in April, the transactions should have been routine. [...] But shortly after the closing, the couple received a jolt from the mortgage company that arranged for the refinance: The lender said more than $400,000 wired to an escrow account to pay off the old mortgages had been stolen. Eight months later, the matter has not been resolved and Tarlizzo and Erickson fear they might lose their homes.

  • Despite a seemingly endless series of phone calls and e-mails to lenders, regulators and politicians, the couple remains in a precarious situation because the old mortgages still haven't been paid off. Meanwhile, there's no word of criminal charges against the attorney who allegedly stole the money — even though state Supreme Court records show he was disbarred in the summer after admitting to improperly withdrawing more than $2 million in escrow funds.(1)

For the whole story, see Forest Lake couple mired in mortgages (A Forest Lake couple decided to refinance mortgages on their home and cabin to take advantage of low interest rates. But escrow funds disappeared and the lenders and a title company claim they're victims of fraud, just like the homeowners).

(1) According to the story, the state Supreme Court disbarred attorney Jason E. Fischer, an owner of Real Source Title, in July following a petition for disciplinary action from the court's Office of Lawyers Professional Responsibility, according to court records.

"In connection with the operation of the mortgage closing business (Fischer) received funds that were to be deposited into an escrow account and used to pay off mortgages and other expenses related to residential real estate closing," the petition stated. "Starting in 2006 and continuing through April 2009 respondent improperly withdrew over $2 million in funds from the Real Source Title escrow account and converted them to his own use." In a stipulation that Fischer signed June 30, he unconditionally admitted the allegations of the petition and noted that he self-reported his misconduct to the lawyer discipline group and to the U.S. Attorney, the story states. EscrowRipOffKappa

Loan Mod Firm Facing FTC Charges Continues Leaving Customers Hanging, Say Unhappy Homeowners; Outfit Changes Name & Continues Operating: Feds

In Bradenton, Florida, WFTS ABC Action News Channel 28 reports:
  • The Vanderford's weren't living beyond their means. They have a modest house in a working class Bradenton neighborhood where they've lived for 16 years. But 18 months ago, Tammy [Vanderford] lost her factory job and her husband's hours were cut at his. They could not longer pay their mortgage and they needed help. So the Vanderford's turned to Miami based loan modification company Truman Foreclosure Assistance, which, as it turned out, resulted in matters going from bad to worse.

***

  • At first there were weekly calls, regular status reports. [...] But then, the Vanderford's say, the updates stopped. The run around began. Their calls were no longer returned. Finally came word Truman was out of business.

***

  • [T]he Florida Attorney General's office says it received 68 complaints in the past two years against the company, resulting in action by the Federal Trade Commission.(1) But here's another all too common story. According to the FTC, it turns out the owners of Truman didn't go out of business. They simply changed the company's name to the Franklin Financial Group and moved their office to another part of Miami.(2)

For the story, see INVESTIGATION: Loan modification program leaves family with nothing.

In a related story on Truman Foreclosure Assistance, see WTVJ-TV Channel 6: Miami Mortgage Rescue Firm's Vanishing Act (Truman Foreclosure Assistance accused of taking money and skipping town).

(1) The FTC also named Truman Mitigation Services, LLC, Franklin Financial Group, US LLC, Eli Hertz, Benzion Jack Itzkowitz a/k/a Jack Itzkowitz, and Richard Zafrani a/k/a Rick Zafrani as additional defendants in their lawsuit. The FTC alleged that the individual defendants formulated,directed, controlled, had the authority to control, or participated in the acts and practices of the Truman Foreclosure Assistance/Truman Mitigation common enterprise (FTC lawsuit, paragraph 12).

(2) See FTC lawsuit, paragraph 13.

Maryland AG Charges Mortgage Broker With Felony Theft; Accused Of $100K+ Ripoff Of Proceeds From Client's Home Refinance

According to the Office of the U.S. Attorney in Maryland, the Maryland Mortgage Fraud Task Force members recently highlighted their progress in a press conference, including the filing of criminal, civil, and regulatory actions against more than 250 individuals and companies in 2009, including this recently filed case:
  • On December 8, 2009, the Maryland Attorney General’s Office charged David Young Park, age 43, the former President of Capital City Financial Group in Ellicott City, with theft in Baltimore County Circuit Court. In June of 2007, Park was allegedly working as a mortgage broker and assisted the victim with the refinance of her home. The victim intended to use the more than $100,000 in equity to purchase a commercial condo for her business. Following settlement, Park allegedly obtained the victim’s proceeds from the title company without the victim’s knowledge, deposited them into his escrow account and spent the money on various personal and business expenses over the course of two weeks.

Source: Maryland Mortgage Fraud Task Force Announces Progress And Plans (State of Maryland v. David Young Park). EscrowRipOffKappa

Maryland Regulator Suspends Mortgage Originator's License In Connection With Alleged Bogus Sale Leaseback, Foreclosure Rescue Equity Stripping Scam

The Maryland Department of Labor, Licensing and Regulation's Office of the Commissioner of Financial Regulation recently announced enforcement actions against entities and individuals accused of illegal activities that victimized Maryland homeowners, including an outfit accused of violating state law in connection with an alleged bogus sale leaseback, foreclosure rescue equity stripping scam:
  • Summarily suspended the mortgage loan originator license of Nicholas Elko for allegedly engaging in an illegal foreclosure rescue scheme in violation of Maryland's Protection of Homeowners in Foreclosure Act.

  • Elko, who worked with Baltimore-based Equitable Trust Mortgage Corp., obtained the title to a Maryland residential property in foreclosure after promising the homeowner that he would convey title back to her after a period of time. Instead, Elko allegedly refinanced the property multiple times through Equitable Trust Mortgage. Each time that the property was refinanced, Elko stripped more and more equity out of the home, ultimately conveying the property to his mother.

For the press release, see DLLR's Financial Regulation Division Targets More Mortgage Scams.

Dozens Air Out Grievances Against Southern California Attorney Accused Of Pocketing Thousands For Mortgage Litigation Services & Leaving Them Hanging

In Glendale, California, the Glendale News Press reports:
  • Dozens of homeowners claim they paid for loan litigation services with Los Angeles-based Bander Law Firm and never saw any legal action taken in their cases, causing some homes to foreclose. The homeowners gathered Saturday for a news conference inside a Glendale Days Inn Motel banquet hall, where several signs calling for attorney Joel Bander’s disbarment lined on the walls.

***

  • [H]omeowners at the news conference called on attorneys who are suing the law firm to give them advice on their next move. “You guys have been cheated in the worst way that I could possibly imagine,” attorney Anne Singer said. “Going to a lawyer, asking for help and not only having your money being taken away from you, but many of you losing your homes, and from what I understand some of you have been put in bankruptcy without your knowledge.”

***

  • Montrose attorney John Miller represents 20 clients who sought help from the law firm. He filed a complaint, which is still pending, with the State Bar of California against the law firm in September, said Singer, who spoke on behalf of Miller.

For the story, see Residents: Attorney cheated us (Group claims Bander Law Firm took money without solving home problems). loan modification

Monday, December 14, 2009

Maryland Loan Officers Charged In Alleged Foreclosure Rescue Scam; Used Bogus Sale Leasebacks To Pocket $650K In Equity Stripping Proceeds, Say Feds

In Annapolis, Maryland, The Capital reports:
  • James William Fox II, 39, of Crofton, and James Hooper Dan, 45, of Annapolis were indicted this week in a mortgage-fraud scheme, officials announced [last week]. The two could face 40 years in prison if they are found guilty. According to the indictment, the two were loan officers employed at Charm City Investment Group LLC in Annapolis. From April 2006 to February 2009, the two allegedly identified victims who were unable to make the mortgage payments on their homes. The two promised to help the victims avoid foreclosure, but instead allegedly obtained new mortgage loans in their own names or in the names of "straw purchasers."

***

  • Because of the fraud scheme, Fox and Dan allegedly caused lenders to lose more than $1.7 million in fraudulently obtained mortgage loans and caused the individual victims to lose more than $650,000 in equity in their homes. The indictment seeks the forfeiture of the total loss of $2,350,000.

For more, see 2 indicted in mortgage scheme (Local brokers allegedly target struggling homeowners).

See also U.S. Attorney press release: Maryland Mortgage Fraud Task Force Announces Progress And Plans (United States v. James Fox II and James Dan).

Eastern Pennsylvania Man Pocketed $655K+ In Sale Proceeds On Properties He Didn't Own & $168K Due To Investors, Feds Charge

In Doylestown, Pennsylvania, the Allentown Morning Call reports:
  • A 36-year-old Bucks County man is facing federal charges in a real estate investment scheme prosecutors say bilked investors of nearly $1 million. Roman R. Fitzmartin, former operator of the Doylestown Investment Group, was charged with mail fraud in a two-count information [...]. According to the U.S. Department of Justice, Fitzmartin sold interest in three properties -- two of which he did not own -- and diverted the money to his own accounts instead of paying investors, who lost a total of $872,719.(1)

  • Fitzmartin allegedly sold equity interest in a commercial property [...] in Doylestown and a piece of land in Douglassville, Berks County, but he did not have a stake in either property. Federal authorities say he received $655,000 for both properties. He also sold a property he owned at [...] in Doylestown and allegedly kept $168,763 that should have been paid to investors, authorities said.

For more, see Doylestown man charged with real estate fraud.

(1) For additional background on Fitzmartin's real estate operation, see this 4/11/2007 Pennsylvania Securities Commission press release: Commission Halts Unregistered Activity By Doylestown Investment Group, LLC and Roman Fitzmartin:

  • The Pennsylvania Securities Commission issued a Summary Order to Cease and Desist against Doylestown Investment Group, LLC (DIG) and Roman Fitzmartin (Fitzmartin) to halt the offer and sale of unregistered securities in Pennsylvania. MIG, an entity with an address in Doylestown, Pennsylvania, is purportedly in the business of purchasing, developing, and managing various real estate properties, and maintains a web site at www.digdevelopers.com (Web Site). Fitzmartin, an individual with an address in Doylestown, Pennsylvania, was the president of DIG.

Boston Feds Charge Two In Alleged Condo Conversion, Straw Buyer Mortgage Scam; Nine Units In Four Triple Deckers Wind Up In Foreclosure

From the Office of the U.S. Attorney (Boston, Massachusetts):
  • A former Dorchester man and a Wrentham mortgage broker were charged in federal court with wire fraud and money laundering in connection with a mortgage fraud scheme which generated more than $1 million in profits and sending nine properties into foreclosure.

***

  • The Indictment alleges that from about August 2006 through February 2007, [DWIGHT] JENKINS and his associates recruited “straw buyers” for the purchase of nine properties for which [ERIC J.] ARCHAMBAULT brokered the mortgages. The nine properties identified in the Indictment were individual units in triple-deckers at 77, 80 and 85 Draper Street, and 35 Harwood Street, all in Dorchester. These properties had been converted to condominiums shortly before the sales to the straw buyers.

  • It is alleged that, although the straw buyers took title to the properties and obtained mortgages to finance the purchases, none of the straw buyers actually intended to live in the condominiums they bought or intended to repay the loans. Instead, it is alleged that JENKINS and his associates promised the straw buyers that JENKINS, or his company, would pay the mortgages, maintain the properties, find tenants and then re-sell the properties. JENKINS and his associates allegedly promised most buyers they would be paid a fee for the use of their names and credit histories in securing the loans.(1)

For the U.S. Attorney press release, see Two Charged In $1.3M Residential Mortgage Fraud Scheme.

(1) The Feds also allege that a slew of misrepresentations were made to the lenders in obtaining the necessary financing from them.

Philadelphia's Courtroom 676 Featured On ABC News' Nightline

In Philadelphia, Pennsylvania, ABC News' Nightline ran a story last week on Courtroom 676, the home of the city's Residential Mortgage Foreclosure Diversion Pilot Program, a court program that helps strike deals that lower monthly payments for borrowers facing foreclosure with the view of helping them retain their homes. According to an earlier story, when a homeowner cannot afford the home even at modified terms, the program helps to create a graceful exit, in which the borrower accepts cash for vacating the property or signs over the deed in lieu of further payment.

For the story (video only), see Save My Home (See a Philadelphia judge's efforts to fight foreclosure).

Go here for other posts on Philadelphia's Courtroom 676.

In a related story, see WGAL-TV Channel 8: County Judge Recognized For Saving Homes From Foreclosure (Program Helped Save 2,000 Homes From Sheriff Sale):
  • [Philadelphia] Judge Annette Rizzo received an award in Harrisburg Friday from the Housing Alliance of Pennsylvania. Rizzo created a program one year ago that brings all parties face-to-face and has saved more homes from foreclosure than any county in the country.

Sunday, December 13, 2009

State Regulator Issues C&D Order Against Northern Virginia-Based Loan Modification Group Targeting Maryland Homeowners

The Maryland Department of Labor, Licensing and Regulation's Office of the Commissioner of Financial Regulation recently announced enforcement actions against entities and individuals accused of illegal activities that victimized Maryland homeowners, including an outfit accused of violating state law in connection with providing loan modification services:
  • Issued a Summary Order to Cease and Desist against The Shmuckler Group, LLC, Nova Key, LLC, Howard R. Shmuckler, Alon Fisch, and Ted Dubin for allegedly engaging in illegal loan modification activities. They are accused of collecting up-front fees from Maryland homeowners in default on their residential mortgage loans, in exchange for promises to assist them in obtaining a loan modification from their mortgage lender.(1)

For the press release, see DLLR's Financial Regulation Division Targets More Mortgage Scams.

In a related story, see The Huffington Post: Shmuckler Group: Another Mortgage Rescue Firm Accused Of Scam.

(1) According to the press release, by failing to obtain a Maryland credit services business license, and by collecting up-front fees prior to completing all promised services, the group's activities allegedly violated the Maryland Credit Services Businesses Act and the Protection of Homeowners in Foreclosure Act. These Respondents allegedly collected a total of over $1.2 million in up-front fees while promising to modify 372 different Maryland residential mortgage loans (charging an average of $3,440 in up-front fees to each Maryland resident, with amounts varying between $1,750 and $6,000). Respondents allegedly obtained loan modifications or analogous results in only a quarter of those cases, yet refused to provide any refunds to Maryland consumers. These Respondents operate primarily out of Northern Virginia, the press relates states.

Cops Seek Out More Victims After Charging Suspect In Metro Detroit Alleged Loan Modification Scam Probe

In Roseville, Michigan, WDIV-TV Channel 4 reports:
  • 48-year-old Grosse Pointe Woods man who had warrants for his arrest in four metro Detroit communities(1) in connection with a mortgage fraud investigation was charged Friday in a Roseville courtroom. The Roseville Police arrested Bryan Cervier early Thursday morning. Judge Matt Rumora charged Cervier [...] with one count of false pretenses.

  • Cervier is accused of running a fraudulent mortgage consulting business. Investigators said he would pose as a financial adviser and then he would meet with homeowners who were on the verge of losing their homes to foreclosure. Cervier told the victims that for a fee, he would renegotiate the terms of their mortgages in order to stave off foreclosure. The victims would pay the fee, and then they would never hear from Cervier again.

For more, see Man Charged In Mortgage Fraud Scheme (Police Looking For More Victims).

(1) According to the story, investigators said they believe Cervier may have scammed many other people. He's wanted in Redford, Saline and West Bloomfield on no bond felony warrants. Other victims of this mortgage scam are urged to call their local police department.

Struggling Homeowners Accuse Soon-To-Be Suspended & Recently Foreclosed Upon Attorney Of Fleeing With Fees After Promising Loan Modification Help

In Phoenix, Arizona, KPHO-TV Channel 5 reports:
  • Fernando Sanchez was one of the [dozens of people 5 Investigates reportedly found victimized by scam loan modification companies]. He was barely making ends meet when he heard about an opportunity to reduce his mortgage, from $2,300 per month to $900 per month. "They told me to go to this meeting to see what it was about … and these people allegedly have an attorney and a translator," he said. Sanchez paid $1,000 to sit in a garage in a residential neighborhood set up with tables and chairs for the meeting. The attorney charged $6,000 for the loan modification.

  • Dora Fuentes had already lost her home when she signed up to work with the same lawyer. "He never told us that we were in foreclosure or that the house was no longer ours," she said. According to documents Fuentes provided, the lawyer took her money anyway. She lost her house, and the lawyer disappeared.(1)(2)

For more, see Expert: Loan Mod Scams Common (Immigrants Seem Especially Vulnerable, Mortgage Broker Says).

(1) The story states that Robert Jung, the attorney who offered to modify Sanchez and Fuentes' loans, was working with a company known as "Stop Foreclosure Wizard." His law license is set to be suspended Jan. 2, according to the story [Jung's history available on the Arizona Bar website indicates the suspension date is January 4]. Jung did not return numerous phone calls, and when 5 Investigates tried to visit the address listed in its corporate records, they discovered Todd Carpenter's home. According to the story, Carpenter said he recently purchased the home at a foreclosure auction, and for weeks, he wondered why non-English-speaking families would show up looking for Jung. "Finally, I said, 'What are you looking for him for?'" Carpenter said. "And they said, 'Well, we paid him to modify our loan. And I told them I said I don't think you're going to get your loan modified because (Jung) lost this house."

(2) The victims in this story might want to check out the Client Protection Fund of the State Bar of Arizona to see if they can qualify to recover any of their losses from the Fund as a result of the alleged dishonest screwing over by this reportedly not-yet-suspended attorney.

For those victimized by dishonest attorneys in other states and Canada, see:

Financial Hole Becomes Bigger For Struggling Homeowner After Hiring Loan Modification Outfit That Pocketed $2.5K By Promising Help

In San Antonio, Texas, the San Antonio Express News reports:
  • When family medical bills soared, Norma Baker missed a mortgage payment. And when she decided to rectify that financial slip, she and her husband hired a San Antonio mortgage loan modification company to negotiate with Wells Fargo on their behalf. The firm, Xpert Loan Modifications, charged the Bakers $2,500 upfront for its services. But now the Bakers owe the bank around $9,000 and face foreclosure in January.

***

  • Miguel Gonzalez of Xpert Loan Modifications said he has successfully guided many other families through loan modifications, and that his company provides a valuable service to people who don't have the expertise or time to call the banks themselves. “I didn't just pop up and say, ‘I'm going to scam people,'” said Gonzalez. “They are going to be in the house if she would just let us do our job.” The fee compensates Gonzalez for his work and will be used to hire an attorney,(1) if needed, to try to stop the Baker's foreclosure, he said.

***

  • Baker said Wells Fargo recently told her there was no loan modification in the works for her property. She is concerned that her family could end up homeless next month.

For more, see Homeowners' woes unresolved.

(1) If the rules in Texas are anything like the rules in California, Florida, Ohio or other states, this character risks being accused of unlicensed practice of law for conduct as an intermediary in hiring out an attorney to represent the homeowner. An attorney taking a case on this basis also risks being slammed for aiding a non-lawyer in the unlicensed/unauthorized pratcice of law, among other things. See:

NC Shuts Down Purported "Non Profit" Loan Mod Outfit; Clipped Homeowners For Up To $1,500 Upfront, Failed To Honor Money Back Guarantee, Says State AG

In Raleigh, North Carolina, North Carolina News Network reports:
  • A judge has barred a Kannapolis-based foreclosure assistance firm from doing business. State Attorney General Roy Cooper had sought the action. Cooper accuses Geoffrey Lamb of Cabarrus County, doing business as The Lamb Group and US Business, of charging consumers up-front fees of as much as $1,500 but doing little to help them. “We’ve made it illegal to take money up-front for foreclosure or loan modification help, and we’re cracking down on violators,” said Cooper.

  • A complaint also alleges that Lamb stated on his website that his firm was a “non-profit foreclosure relief organization” with a “success rate of 97%.” Wake County Superior Court Judge Donald Stephens agreed with Cooper’s request to temporarily bar Lamb from offering foreclosure and loan modification services. Cooper contends that Lamb promised a full refund if a consumer’s lender did not offer to rework their loan. The complaint alleges that Lamb failed to get loans modified but still refused to give consumers their money back.(1)

Source: AG Cooper Cracking Down On Foreclosure Assistance Scams.

(1) According to the North Carolina Attorney General's Office (see AG Cooper stops Kannapolis foreclosure scam), a total of six consumers have filed complaints about Lamb with the Attorney General’s Consumer Protection Division. Nine consumers complained to the Better Business Bureau of the Southern Piedmont, which assisted in the investigation. The case against Lamb is part of a national crackdown on foreclosure rescue and loan modification scams brought by 26 federal and state agencies, the NC AG stated. Also included in the 118 case sweep was another case brought by Cooper last week against Campbell Law Firm and Rudolph C. Campbell of Florida, which is pending in Wake County Superior Court, according to the NC AG press release.

Maine AG Tags Three Out-Of-State Firms With Civil Suits Alleging Illegal Loan Modification Activity

From the Office of the Maine Attorney General:
  • The Maine Attorney General has filed three separate lawsuits in Kennebec County Superior Court against three out-of-state businesses and their principals. The defendants are: Elect Group, LLC, Anthony Ferlanti and Emmanuele Zuccarelli (Florida); Help Modify Now Debt Solutions, Inc., Help Modify Now, Inc. and Chas Bain (California and Nevada); and US Advocate Law Group, P.C. and Jeff Nemerofsky (California).

  • These lawsuits allege that the defendants used deceptive and unfair practices in marketing so-called “debt settlement” services, in the form of foreclosure rescues and mortgage modifications, and that they failed to register as debt management services under Maine law.(1) The suits seek the recovery of fees paid by Maine consumers to these defendants, as well as civil penalties and costs.

For the Maine AG press release, see Attorney General Sues Unlicensed Foreclosure Rescue/Mortgage Modification Companies.

(1) According to the press release, the State alleges that the defendants’ illegally high upfront charges ranged from $1,000.00 to $4,300.00. Maine law prohibits debt management service providers from charging more than a $75 set-up fee and for charging more than 15% of the amount by which the consumer’s debt is reduced as part of each settlement. The State also alleges that the defendants misrepresented the benefits of their programs to consumers and refused to provide refunds when consumers asked for them after the defendants failed to prevent foreclosure. As a result, many Maine consumers found themselves in more dire financial straits than they were before they engaged the defendants, the press release states.

Idaho Joins Nationwide Federal/State Effort To Slam Upfront Fee Loan Modification Rackets

From the Office of the Idaho Attorney General:
  • Attorney General Lawrence Wasden joined the Federal Trade Commission and 26 other state and federal regulatory agencies in Operation Stolen Hope, a nationwide enforcement and consumer education effort to combat foreclosure rescue fraud. [...] Wasden recently filed a lawsuit against a Kootenai County mortgage modification company, APS Northwest Idaho LLC, for numerous violations of the Idaho Consumer Protection Act. A similar lawsuit against Coeur d’Alene based Apply 2 Save is pending, although the now-closed company is in bankruptcy. The Attorney General also reached a separate settlement with a former Apply 2 Save executive.

For the Idaho AG press release, see Idaho Joins Operation Stolen Hope.

Saturday, December 12, 2009

Long Island Man Charged In Vacant Home Hijacking Rental Scam; Suspect Pocketed Over $10K From Tenant On House He Didn't Own, DA Says

In Nassau County, New York, the Long Island Press reports:
  • Not only did Ozell Neely collect $2,200 a month in rent on a house Nassau prosecutors contend he didn’t own, but they say he also tried to evict a tenant when the woman stopped paying in a dispute over whether promised repairs had been made. [...] Neely, the 47-year-old operator of Welcome Home Realty in Queens, was arrested Tuesday on burglary, grand larceny and other charges after prosecutors say he rented out the abandoned home in Baldwin that he didn’t own. He faces a maximum of seven years in prison if convicted.(1)

For more, see DA: Baldwin Man Rented Out Home He Didn’t Own.

(1) According to the story, Nassau County District Attorney Kathleen Rice said that Neely took a prospective tenant to the boarded-up home in September 2008. Reportedly, despite the house having no refrigerator, no running water and warped doors, the tenant agreed to pay $2,200 a month in rent, as long as Neely repaired the damages, prosecutors said. Neely collected more than $10,000 over the next few months, but in April 2009, the tenant stopped paying rent, claiming Neely had reneged on the repairs, prosecutors said. KappaPhonyLandlordScam

Landlord Accused Of Hate Crime After Former Tenant Moves Out Of Apartment Upon Learning Unit Was In Foreclosure

In Palm Beach Gardens, Florida, WPTV-TV Channel 5 reports:
  • Palm Beach Gardens Police have arrested 32-year-old Anthony Schell on charges of stalking, criminal use of public record information and criminal mischief. In addition, there's sufficient evidence, say investigators, to show Schell "evidenced prejudice" while committing the crimes, to label them “hate crimes” based on the victim's religion.

***

  • The victim, Jodi Kahn, had discovered and reported that someone had spray painted an obscene message [on her front door] making reference to her Jewish religion. [...] Kahn believed that her former landlord, Schell, was responsible because the two were in the middle of a civil dispute.

  • Kahn, say police, had stopped paying rent and moved out of the apartment she was renting from Schell in the same complex after she'd learned the unit was in foreclosure. When initially interviewed, detectives say Schell denied any knowledge of the incidents, but did admit to the ongoing problems with Kahn regarding her lease.(1)

For more, see Hate-crime arrest made in PB Gardens case.

(1) The story goes on to report the police version of what followed that led up to the arrest of Schell:

Investigators say Kahn also described other events that had occurred, including the distribution to Kahn’s parents, neighbors, landlord, employer and others - material that painted her in a poor light. Kahn also reported that on November 11, 2009, her Mezuzah, an exterior door ornament used by some people of the Jewish faith, was removed, broken and the pieces were left in front of her apartment door. Then, on November 17, 2009, she reported a swastika was written with black marker on her front door.

During the investigation, detectives say they learned that an unknown person was passing out flyers with derogatory information about the Kahn and was doing so around the victim’s place of employment. They determined the person who admitted to handing out the flyers had also spray painted the words on Kahn’s door, and told police he did so at the request of Schell, who was his employer. Police say that person also told them Schell had driven him to the victim’s apartment and wrote on a piece of paper what to paint on the door, telling him that he was playing a joke on someone. Schell’s employee, say investigators, is a recent immigrant who does not read English well and so they believe he may not have understood the meaning of the words. The employee said he did what Schell asked because he was afraid of losing his job if he did not.

Louisiana Chinese Drywall Victims Get State Hotline; Urged To Register

In New Orleans, Louisiana, The Times Picayune reports:

For more, see Contaminated drywall victims get state hotline.

(1) According to the story, people can register online at www.lra.louisiana.gov/drywallform or by calling 1.866.684.1713 Monday through Friday from 7 a.m. to 7 p.m. and Saturday, 8 a.m. to 5 p.m.

Wells Fargo To Ante Up $25K To Help Fund Care For Animals In Recently Foreclosed Farm

In Glocester, Rhode Island, The Providence Journal reports:
  • A fund to support the animals left uncared for after Bonniedale Farm was foreclosed upon will receive a donation of $25,000 from Wells Fargo Bank. [...] An agreement hammered out in Superior Court Thursday morning gave the Rhode Island Society for Prevention of Cruelty to Animals the authority to care for and take control of the animals left after the former owner, Daniel J. MacKenzie, was evicted from the farm on Monday. He filed a lawsuit on Tuesday to get a restraining order that would force American Home Mortgage Services, the company that foreclosed upon his home, to provide food and water for the 136 animals left on the farm, a number that later dwindled to 55. Students from the University of Rhode Island's veterinary care program stepped up to care for the animals while the matter went to court.

For more, see: Wells Fargo to donate $25,000 to Bonniedale Farm fund.

See also, Agreement allows RISPCA to rescue ‘foreclosed’ animals in Glocester:

  • MacKenzie Thursday turned over to his attorney, Guy Settipane, a check for $42,600 in donations that MacKenzie collected to be forwarded to the RISPCA. The Bonniedale Farm Fund at the society will accept donations from anyone wanting to help care for the rescued animals. Any donations should be made directly to the RISPCA and designated for that fund.

Friday, December 11, 2009

Kiboshed Lender Defies Court Order? Bills Homeowner For $474K+ Two Weeks After Long Island Judge Wipes Out Loan In Foreclosure For "Repugnant" Conduct

In Suffolk County, New York, Newsday reports:
  • The state Supreme Court justice who last month lashed out at a bank's dealings with an East Patchogue family facing foreclosure and canceled the mortgage on the home has ordered the bank and the homeowners back to court, records show.

  • Justice Jeffrey Spinner wants the parties to return to discuss a recent letter from IndyMac Mortgage Services that says $474,936.78 still is owed, according to legal documents obtained by Newsday. Spinner's unusual decision to cancel the mortgage generated much attention. His ruling said the lender - a division of OneWest Bank, FSB - was "harsh, repugnant, shocking and repulsive" in proceedings where the homeowners attempted to work out a loan modification.

  • This week, Spinner ordered that a conference be held Dec. 18 in Riverhead to explore "at length" the bank's letter, which was dated two weeks after his initial ruling. Homeowners Diana Yano-Horoski and husband Gregory Horoski could not be reached Thursday. After the first decision, Gregory Horoski told Newsday he was stunned that the decision essentially gave them the house outright, but that he worried the bank would appeal and prevail.

  • Spinner's latest order notes that the letter came after he "barred, prohibited and foreclosed" the bank from taking any action to enforce the mortgage and adjustable rate note on the Oakland Street house.

Source: Judge orders parties back to court in mortgage case (requires paid subscription to Newsday; if no subscription, try here).

Supremes To Decide Whether Attorney Screw-Up When Pursuing Foreclosure Action Is Defensible As "Bona Fide Error" Under FDCPA

Inside ARM reports:
  • In June 2009, the U.S. Supreme Court accepted a writ of certiorari to consider whether 15 U.S.C. Section 1692k(c) of the Fair Debt Collection Practices Act (FDCPA), otherwise known as the bona fide error defense, applies to mistakes of law. The Supreme Court accepted review of Jerman v. Carlisle, McNellie, Rini, Kramer & Ulrich LPA, in which the Sixth Circuit Court of Appeals concluded the bona fide error defense available under Section 1692k(c) of the FDCPA applies to mistakes of law. After setting the brief scheduling order, on Nov. 2, 2009, the Court scheduled oral arguments in the case for Jan. 13, 2010.(1)

***

  • In Jerman, the defendant law firm filed a complaint seeking foreclosure of real property owned by the consumer plaintiff. The complaint included a validation notice that provided the debt would be assumed valid unless the consumer disputed the debt in writing within 30 days. The plaintiff filed a complaint alleging the defendant violated the FDCPA because it compelled consumers to dispute the debt in writing when the FDCPA imposes no such requirement.

For more, see U.S. Supreme Court Oral Arguments Scheduled for FDCPA Case (The U.S. Supreme Court will hold oral arguments on Jan. 13, 2010, to decide whether the bona fide defense under the Fair Debt Collection Practices Act applies to mistakes of law).

(1) The case docket is available on the Supreme Court's Web site. The argument calendar states the case will be heard at 11 a.m.

All briefs are available here (from the homeowner, debt collector, as well as amici (ie. friends of the court)), courtesy of the American Bar Association. Friend of the court briefs in support of the homeowner's position have been filed by the U.S. Department of Justice and the Federal Trade Commission (go here), the Office of New York Attorney General Andrew M. Cuomo, as lead counsel for 21 state attorneys general (go here), and Public Citizen Litigation Group, as lead counsel for various consumer advocacy groups (go here). A number of credit and collection industry trade associations have also submitted amicus briefs supporting the debt collector's position.

Legally Blind Siblings Duped By Relative Into Signing Home Mortgage Now Face Foreclosure

In Boston, Massachusetts, The Bay State Banner reports:
  • Hildreth Brewington, 69, and his sister Vanita Brewington, 59, both of whom are legally blind, have lived in a two-family home near Codman Square since they bought the property 14 years ago. In 2007 they found out their home was in foreclosure—even though they sent in monthly mortgage payments. To their knowledge, they had never missed a payment.

  • Baffled at first, they pieced together the puzzle. They had been deceived two years earlier by another family member into signing papers for a second mortgage on the house. Unaware that the monthly mortgage bill had shot up from $1,000 to $2,100 — notices from the bank were sent to the niece’s house — the Brewingtons had continued making their accustomed payments. “We were paying the $1,000 and [the bank] was accepting it,” said Hildreth Brewington. “Then in April [2007] they sent it back, because they were planning on foreclosing on us.”

***

  • The Brewingtons have little hope of recovering any money from the relative that initiated the second-mortgage process. She spent the loan money “living high off the hog,” according to Brewington, and has since lost her own house to foreclosure.

For the story, see Protest to support Dot family's foreclosure fight. DeedContraTheft

Missouri AG "Zero Tolerance Policy" Against Loan Modification Rackets Continues By Tagging Florida Firm With Civil Suit

From the Office of the Missouri Attorney General:
  • Attorney General Chris Koster said today he is suing a Florida company that took money from distressed Missouri homeowners without providing any meaningful mortgage-modification service. Koster joined the Federal Trade Commission and the state of Iowa in taking legal action against the company. This represents the eighth lawsuit against a fraudulent mortgage business since Koster began his campaign against mortgage fraud in April.

  • "This Attorney General's office has instituted a zero tolerance policy for any mortgage modification firm that preys on and cheats desperate homeowners," Koster said. "Our office will use all its powers to investigate and prosecute businesses involved in these foreclosure rescue schemes to defraud Missouri consumers."

  • Koster said First Universal Lending, LLC, is based in Palm Beach Gardens, Florida, but transacts business throughout Missouri.(1)

For the Missouri AG press release, see Attorney General Koster sues foreclosure consultant (Continues Zero Tolerance Campaign).

(1) He said the company markets its services to homeowners who are having difficulty paying their mortgages or facing foreclosure, promising them lower house payments or lower interest rates. In reality, the company appears to do little or nothing for most of its customers. In addition, company representatives told some clients to stop making mortgage payments while the modification process was proceeding, which harms consumers by injuring their credit rating and resulting in higher late fees, penalties, and interest payments, as well as increased likelihood of foreclosure. Koster said the business required people to pay up-front fees before they would provide any services, which is illegal for mortgage modification companies in Missouri.

Abandoned Homes In "Legal Limbo" Hinder Real Estate Recovery In Weaker Markets: Fed

Reuters reports:
  • The recovery of many U.S. low income areas remains stymied as lenders decide completing some foreclosures simply isn't worth the cost, casting many properties into "legal limbo," Federal Reserve Governor Elizabeth Duke said on Wednesday. [...] "Many community organizations have been frustrated by the difficulties of working with mortgage lenders and servicers, and these problems are even more exaggerated in weaker market cities," Duke said in prepared remarks.

***

  • In some neighborhoods, lenders do not even complete foreclosures because the cost of the process exceeds the value of the home, Duke said. "Anecdotal evidence suggests that these 'toxic titles' have placed significant numbers of properties in a difficult state of legal limbo," she said.

For the story, see Fed's Duke: "toxic titles" foiling housing recovery.

See also, The Washington Independent: The Fed Is (Finally) Talking About Toxic Titles.

Thursday, December 10, 2009

Philly Feds: Two Lawyers Among Five Who Ran Bogus Sale Leaseback, Equity Stripping Racket Clipping 35 Homeowners Of $14.6M; Civil Suit Pending

In Philadelphia, Pennsylvania, The Intelligencer reports:
  • Doylestown Township Supervisor Jeffrey Bennett and his law partner, Stephen Doherty, were indicted in U.S. District Court Tuesday for reportedly skimming equity from the homes of owners facing foreclosure in a mortgage fraud scheme.(1) The 15-count indictment accuses the attorneys at Doylestown Township's Bennett & Doherty, P.C., plus three others of conspiring to obtain fraudulent mortgages totaling $14.6 million for at least 35 struggling homeowners. The mortgages funded a scheme that generated cash for the defendants but often cost victims their homes, according to the indictment.

***

  • Bennett, Doherty and the McCuskers were previously named in a Bucks County civil suit brought by 11 homeowners who claimed to have been swindled out of houses they owned in Haycock, Hilltown, Newtown Township, Plumstead, Richland, Solebury and other towns. The homeowners' attorney - Stuart Eisenberg of Warminster's McCullough & Eisenberg PC - said he hadn't read the indictment Tuesday afternoon, but he hopes his civil case will be able to continue in light of the criminal charges. "This has been going on for too long for my clients," Eisenberg said. "I need to push forward. My clients have been terribly hurt."(2)

***

  • The criminal indictment claims the scheme [...] included purchase and sales agreements with forged signatures, forged lease agreements, documents misstating the borrower's creditworthiness, and paperwork that failed to mention that the new owner was relying on the financially distressed former owners to pay part of the new mortgages.

For more, see Supervisor, law partner indicted in scheme (Fellow Doylestown Township supervisors called on Jeffrey Bennett to resign his post).

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

(1) Also indicted were: Ed McCusker, who ran the now-defunct Axxium Mortgage Inc. of Upper Makefield; his wife, Jacqueline McCusker; and Mount Laurel mortgage broker John Alford Bariana. All five are charged with mail fraud, wire fraud and conspiracy to commit money laundering, according to the indictment. Doherty also is charged with bankruptcy fraud. The defendants will be formally notified of the charges against them later this week, and U.S. Attorney Michael L. Levy said he expects them to voluntarily appear for processing, the story states.

(2) For an earlier Intelligencer story on the civil case filed against this alleged foreclosure rescue racket, see Suit claims 9 are victims of mortgage scheme. foreclosure rescue

Vegas Class Action Seeks To Stop BofA Foreclosures; Cites Lender's Lack Of Good Faith Negotiations In Loan Mods, Despite Grabbing Gov't TARP Cash

In Las Vegas, Nevada, KVBC-TV Channel 3 reports:
  • As more homeowners find they aren't having any luck trying to work with their lenders, one local attorney is filing suit against one of the largest lenders of all: Bank of America. [...] The suit was filed on behalf of homeowners facing foreclosure who say there has been no progress made with regard to negotiations with their lender. And, as the president has discussed, there are actual laws in the books requiring lenders to negotiate with homeowners.

  • However, throughout Southern Nevada, many insist it's simply not happening. "And that's why what we're calling for in this lawsuit," explains attorney Matthew Q. Callister. "(It) is an automatic stay of any further Bank of America foreclosures until such time as every Southern Nevadan avails himself of his right under federal law to have that fundamental 'good faith' negotiation."(1)

For more, see Local attorney files suit against Bank of America.

(1) According to the story, the class-action suit against Bank of America represents about 30 people so far; it alleges that the bank has failed to act in accordance with a section of the government's Making Home Affordable program, saying the lender has "refused to evaluate loans" and "failed to suspend foreclosure proceedings." Callister says Bank of America accepted TARP funds and now refuses to do what was required as part of the acceptance. loan modification

Wells Fargo Farm Foreclosure Leaves 100+ Thirsty, Unfed Animals In Limbo After Owner Gets Boot

In Glocester, Rhode Island, The Providence Journal reports:
  • The evicted owner of Bonniedale Farms, upset with the way 136 animals on his farm have been treated since he was forced off the property Monday by Wells Fargo Bank, plans to go before a Superior Court judge [...] to get a restraining order to force the bank or its agents to provide food, water and care for the animals left behind.

***

  • [T]he lawyer [for evicted owner Dan MacKenzie] said [McKenzie's] main concern was for the animals — including cats, dogs, chickens, pigs, horses, sheep, goats and others — that he said had been left to fend for themselves despite assurances by Wells Fargo that it had arranged to have the Rhode Island Society for Prevention of Cruelty to Animals take care of them. Tuesday, RISPCA president Dr. Ernest Finocchio confirmed some of MacKenzie’s fears, saying that the bank said it didn’t want the organization’s help. When he visited the site Tuesday, he said that at least some of the animals — eight horses and two 800-pound pigs — had not been given any water even though he had been told that they had.

For more, see Glocester farmer, evicted in foreclosure, seeks to compel care for animals.

See also, WBZ-TV Channel 38: Farm Foreclosure Leaves 150 Animals In Limbo.

For story update, see SPCA to direct care for Glocester farm animals:

  • After nearly an hour in a Superior Court judge's chambers Wednesday, lawyers for both sides in the eviction of Bonniedale Farm's former owner hammered out an agreement for how the farm's animals will be cared for in the next 24 hours. The agreement is for Dr. Ernest Finocchio, president of the Rhode Island Society for the Prevention of Cruelty to Animals, to examine the animals and determine the care they need. Lawyers for Wells Fargo Bank, which now owns the farm, and former owner Dan MacKenzie have agreed to abide by whatever Finocchio determines the animals need in the next 24 hours, lawyers for both sides said in open court after meeting with the judge.

Kansas AG Joins Nationwide "Operation Stolen Hope" - Tags Two Loan Modification Outfits With Suits Alleging Pocketing Upfront Fees, Breaking Promises

From the Office of the Kansas Attorney General:
  • [Kansas Attorney General Steve] Six recently filed two [...] lawsuits against [loan] modification companies. He alleges that these companies find consumers that are in trouble with their mortgage payments and contact them directly, either through internet advertisements or by phone. Despite promising to negotiate lower rates for the consumers, they either do nothing at all or provide services the consumers could obtain for no cost. The companies being sued are Home Loan Modification Advisors in California and Infinity Funding Group in New York.

For the Kansas AG press release, see AG Six continues fight to stop mortgage, foreclosure fraud.

Wednesday, December 09, 2009

MERS Takes Another Hit As Appellate Panel Affirms Bankruptcy Court Ruling That It Lacked Standing To Bring Foreclosure Action

In Las Vegas, Nevada, the Las Vegas Review Journal reports:
  • Homeowners struggling to avoid foreclosure got some good news [...]. U.S. District Judge Kent Dawson upheld a bankruptcy court ruling that makes it harder for lenders to foreclose on home mortgages. The case, heard by a panel of federal judges in November, concerned whether Mortgage Electronic Registration Systems Inc. could foreclose on residences on behalf of lenders.

  • The electronic system records the ownership of residential mortgages for the mortgage banking industry. Dawson said the company could not foreclose on a home, because it did not provide evidence that it held the note on the residence and didn’t show that it was an agent of the lender.(1)

For more, see Ruling may help homeowners trying to avoid foreclosure.

For Judge Dawson's ruling, see Mortgage Electronic Registration System, Inc. V. Chong, et al.

(1) According to the story, the case started in bankruptcy court two years ago. Mortgage Electronic Registration Systems Inc. was unable to show that it had possession of the note. On March 31, 2009, U.S. Bankruptcy Judge Linda B. Riegle ruled in bankruptcy trustee Lenard Schwartzer favor, saying the electronic system was not a “real party in interest” in the foreclosure action. The decision was appealed to federal court.

In his decision Tuesday affirming Riegle's ruling, U.S. District Judge Dawson (sitting in an appellate capacity) found that the Mortagage Electronic Registration must at least provide evidence that it was a representative of the mortgage loan holder, which it failed to do. “Since MERS provided no evidence that it was the agent or nominee for the current owner of the beneficial interest in the note, it has failed to meet its burden of establishing that it is a real party in interest with standing,” Dawson said, affirming the bankruptcy court ruling.

For a report on Judge Riegle's March 31 ruling in the bankruptcy court, see Las Vegas Business Press: Judge's ruling deals blow to national mortgage servicer. For Judge Riegle's ruling itself, see In re Mitchell. EpsilonMissingDocsMtg

Sentencing Wraps Up In "Money Store" Scam Prosecution; Bogus Sale Leasebacks Used To Strip Equity From Unwitting Homeowners Seeking Foreclosure Help

From the Office of the U.S. Attorney (Greenbelt, Maryland):
  • U.S. District Judge Roger W. Titus sentenced Jennifer McCall, age 48, the Chief Executive Officer of the Metropolitan Money Store, of Fort Washington, Maryland, to 135 months in prison, followed by five years of supervised release, for 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, [...].(1) Judge Titus also entered a judgement ordering McCall to pay restitution of $16,880,884.86. Judge Titus also sentenced co-conspirator Wilbur Ballesteros,(2) age 34, of Lanham, Maryland to 63 months in prison, followed by five years of supervised release and sentenced Ronald Aaron Chapman, Jr.,(3) age 35, of Washington, D.C., to seven days in prison, 10 months of home detention with electronic monitoring and five years of supervised release. Both men previously pleaded guilty to conspiracy to commit mail and wire fraud for their roles in the scheme. Judge Titus also entered judgements ordering that Ballesteros and Chapman pay restitution of $16,859,950 and $268,279.66, respectively.(4)

For the entire U.S. Attorney press release, see CEO of Metropolitan Money Store Sentenced to over 11 Years in Prison and Two Other Conspirators Sentenced in $37 Million Mortgage Fraud Scheme.

(1) McCall was originally scheduled for sentencing on November 16. That court date was marked by an incident in which her son, Raymond V. Jones, allegedly called federal prosecutor James Crowell a “coward” and “mother f*cker” and then threatened to kill him, before he jumped over the barrier dividing the gallery and the courtroom well and hit Crowell in the head, according to court documents. Crowell’s head was swollen after the alleged attack, the court records said. For a report on this incident, see MainJustice: Court Records: Man Punches, Threatens To Kill AUSA (requires free registration; alternatively, try here - then click link for the story). Read the criminal complaint against Jones here and a court motion, which describes his alleged attack on the federal prosecutor in greater detail, here.

(2) Ballesteros, a licensed real estate agent who served as a closing agent on more than 60 straw buyer properties, pocketed more than $100,000 in kickback payments to process real estate closings quickly, according to the U.S. Attorney's office.

(3) Chapman, hired to work as a loan officer, pocketed at least $66,000 in commissions that he was aware were probably the proceeds of fraud, but he deliberately avoided learning the truth as to the fraudulent nature of the funds, according to the U.S. Attorney's office.

(4) Ten defendants, including a lawyer, mortgage broker, real estate agent, loan processor and company officers have pleaded guilty in this scheme, according to the U.S. Attorney's office. In addition to the three defendants named above, the other seven are:

  • Joy Jackson, age 41, of Fort Washington, Maryland, and President of the Metropolitan Money Store - 151 months in prison;
  • Kurt Fordham (Jackson’s husband), age 39, of Fort Washington, Maryland - 10 years in prison;
  • Richard Allison, age 38, of Camp Springs, Maryland, an attorney - 18 months in prison;
  • Carlisha Dixon, age 32, of Hyattsville, Maryland - five months in prison and five months home detention;
  • Clifford McCall (Jennifer McCall’s husband), age 48, of Lanham, Maryland - four years in prison;
  • Chandra Jones (Jennifer McCall’s daughter), age 31, of Lanham, Maryland, - 33 months in prison;
  • Katisha Fordham (Kurt Fordham’s sister), 1 day in prison, followed by five months home detention and five months supervised release. foreclosure rescue equity stripping

Georgia Regulator Issues Cease & Desist Orders To Four Upfront Fee Loan Modification Companies

From the Georgia Department of Banking and Finance:
  • Georgia Banking Commissioner Robert Braswell [...] joined federal and state officials to crack down on loan modification and foreclosure relief scams, by the issuance of Cease and Desist Orders against individuals and companies who advertised unlicensed loan modification services to take hard-earned money from distressed Georgia homeowners.(1)

For the entire press release, see Georgia Cases Part of National 'Operation Stolen Hope'.

(1) The following firms were issued cease & desist orders, with links to the related press releases and C & D orders:

Illinois AG Lawsuits Targeting Alleged Loan Modification Fraud Operators Now Totals 31 With Three Recent Cases

From the Office of the Illinois Attorney General:
  • Attorney General Lisa Madigan [...] announced three lawsuits against mortgage rescue fraud schemes operating in Illinois as part of a national crackdown with the Federal Trade Commission (FTC) and the U.S. Department of Justice.(1) [...] With these new filings, Madigan has brought lawsuits against 31 mortgage rescue fraud schemes. To date, the Attorney General’s lawsuits have resulted in judgments in nine cases for more than $1.2 million in restitution for homeowners.

For the entire Illinois AG press release, see Madigan Continues To Crack Down On Mortgage Rescue Fraud (Illinois Attorney General Files Three New Lawsuits, Joins Federal Trade Commission, U.S. Department of Justice in Move to Protect At-Risk Homeowners Nationwide).

(1) Madigan filed complaints in Cook County Circuit Court against the following defendants:

  • Loan Mod One, LLC, which has offices in Las Vegas, Nev., and West Dundee, Ill.;
  • Freedom Mortgage Team, Inc., of Chicago, and Nevrus Mehmeti;
  • Living Modifications Corp., of Schaumburg, Ill., and its owner, Tomasz Tomczyk.

SF To Consider Expanding Rent Regulation Coverage To All Residences; Renting Out House To Tenant Could Become Iffy Proposition For Homeowners

In San Francisco, California, the San Francsico Chronicle reports:
  • San Francisco's Board of Supervisors is getting ready to vote on a proposal that would make it difficult and costly - in some cases, impossible - for property owners who have rented out their homes to move back into them.

  • At issue is a proposal by Supervisor John Avalos that would extend certain eviction protections to tenants living in residences built after 1979. Avalos and tenants' rights advocates characterize the proposal, which is expected to come up for a key committee hearing today, as a matter of fairness for tenants living in relatively modern buildings, which are not covered by the city's most stringent rent regulations. They suggest it could be particularly helpful to tenants in condominiums that are facing foreclosure.

For more, see Landlords could be locked out.

For story update, see S.F. tenants' victory likely to be short-lived:

  • Tenant advocates got a win at the San Francisco Board of Supervisors Tuesday with initial approval of a plan to extend eviction protections to rental housing built within the past 30 years - but the victory is expected to be short-lived. Mayor Gavin Newsom plans to veto the legislation, according to spokesman Joe Arellano, and the board, which voted 7-4, was one vote shy of securing a veto-proof majority.

(1) According to the story, the city's sweeping rent control laws of 1979 included provisions that allowed evictions only when a landlord could establish "just cause," which includes nonpayment of rent, illegal activity in the residence and other breaches of lease. Owners who want to move into their own homes must pay relocation benefits of $5,000 per adult tenant - and an additional $3,300 to households with children, the story states. Even then, a challenge to the landlord's "just cause" can reportedly add thousands of dollars in legal fees or settlement costs - or, if the tenant is elderly, disabled or catastrophically ill, he or she might not be able to be evicted at all. "In San Francisco, it's easier for a camel to pass through the eye of a needle than for a homeowner to move into his home," said Bart Murphy, a rent board commissioner. But, reportedly, those rules only apply to units that existed when the 1979 rules were passed.