Sunday, November 28, 2010

Woman Victimized In Sale Buyback Scam Faces Boot After Dubious 'Help' From F'closure Defense Lawyers; Rubber-Stamping 'Rocket Docket" Judge OKs Sale

In Miami, Florida, The Miami Herald reports:
  • All she wanted was $50,000 from the equity in her house to help pay the bills while looking for a job in nursing. What Imogene Hall got was a brutal lesson in the sometimes shady ways of the mortgage industry. It's a lesson learned by untold numbers of homeowners in Florida, epicenter of the foreclosure crisis gripping the nation.

  • "Everywhere I turn, someone else is scamming me,'' said Hall, a 49-year-old Jamaican immigrant who stands to lose her Miami Gardens home the Monday after Thanksgiving. "All I do is work hard, and I get surrounded by thieves.''

  • A review of court records found evidence of misconduct at nearly every stage of Hall's experience. Consider:

    • Johnson Cuffy, a former mortgage broker now serving an 11-year prison sentence for grand theft, handled Hall's refinancing in early 2006, using a strategy a state investigator described as ``outright mortgage fraud.''(1) He faces up to 30 more years in prison if convicted of 16 other mortgage fraud charges he's facing.

    • The title agent who signed the crucial deed transfers that Hall's fraud claim rests on operated an unlicensed title company that stole more than $1.5 million from South Florida home buyers during closing proceedings between 2005 and 2007, according to Florida Supreme Court records.(2)

    • A man [the straw buyer participating in the sale buyback scam] who listed his employer as a nonexistent Blockbuster Video store in New York somehow used Hall's home as collateral to secure a $230,000 loan from subprime lender Argent Mortgage.

    • Hall's foreclosure was processed by the Florida Default Law Group, one of four Florida law firms being investigated by the state attorney general for using flawed documents to repossess homes from thousands of owners.

  • After spending more than three years in the judicial system, Hall's case was transferred to Miami-Dade's County Court's new foreclosure-only division in July. There, Judge Jeffrey Rosinek, who was fresh to the case, quickly tossed out Hall's fraud defense, and granted the bank a swift summary judgment in a process critics describe as a "rocket docket.''(3)

  • Hall's foreclosure defense lawyers, in what has become a booming -- and sometimes predatory -- business, charged her more than $20,000 while regularly failing to show up in court. One lawyer charged Hall $2,800 for work he did trying to withdraw himself from the case.(4)

  • Law enforcement officers are scheduled to come to Hall's house to evict her and her family next week, nearly five years after a mortgage broker showed up on her doorstep unannounced, pitching a stress-free refinance.

***

  • Closing documents from the sale show that Cuffy and his affiliates made more than $25,000 in transaction fees, and pocketed more than $180,000 from subprime lender Argent Mortgage Company, without Hall's knowledge, she says. Hall received the balance of the $230,000 loan -- about $50,000 -- the proceeds of what she thought was a simple refinance.(5)

For more, see Hellish home refinancing nears bleak conclusion.

(1) According to the story, attorney general Mortgage Fraud Task Force chief R. Scott Palmer said similar mortgage fraud schemes were prevalent during the boom years as fraudsters looked to take advantage of a rising market and unsuspecting homeowners. "They preyed on people who had equity in their homes that they could strip, and what you described happened to this person has happened to a lot of people,'' he reportedly said.

John Swope, a Department of Financial Services agent who has been investigating Cuffy and his entourage for the last three years, said the mortgage fraud ring made millions of dollars in Florida real estate transactions that closely mirrored Hall's. "The loan is never anticipated to be paid back,'' he said. "Unfortunately, I've had people who have become homeless because of this individual.''

(2) Others involved in the sale -- closing agent O.J. Odunna, title issuing company Organized Title and BlueKap affiliate Cliff Johnson -- have all been either charged or convicted by law enforcement officials of mortgage-related offenses in other South Florida cases, the story states.

(3) Reportedly, Judge Rosinek, to whom the case was assigned after he was called back from retirement to preside in Miami-Dade's County Court's new foreclosure-only division, made quick work of the proceedings in August, approving the foreclosure in the type of swift hearing that many have criticized as a "rocket docket'' that favors lenders. Hall claims that during her 15-minute hearing, the judge did not allow her or her lawyer to get in a word, the story states. "The first judge was so nice -- helping me, helping me,'' Hall said. "Then they [transferred] my case, and the second judge wouldn't listen to anything. He just said `You're going to lose the house, you're going to lose the house.'''

(4) Hall reportedly paid her first lawyer, Alan Soven, more than $10,000 to fight the foreclosure. At one point, Judge Ronald Friedman (the Miami-Dade judge to whom the case was originally assigned) rebuked the Miami lawyer for subpar legal work, and the Florida Bar ordered him to refund $2,000 in legal fees to Hall in a mediation settlement, the story states. With a $400 hourly rate, he reportedly charged Hall nearly $3,000 for the 7.2 hours he spent trying to get legal approval to quit the case, court records show. Soven, who appears to have a disciplinary history with The Florida Bar in at least one unrelated matter (see Formal Complaint, Referee's Report, Florida Supreme Court order), reportedly declined to comment to The Miami Herald on the case.

According to the story, Hall's next lawyer, Johnny Kincaide of The Kincaide Law Group in Weston, routinely skipped crucial court hearings and failed to file a response to a court ruling, causing the judge to penalize Hall with an order of default. Reportedly, Kincaide's firm is being investigated by Attorney General Bill McCollum after several homeowners said he promised to help them get a mortgage modification and then disappeared after taking their initial deposits, and did not return calls from The Miami Herald seeking comment on this story.

(5) For some insights on the various legal theories and startegies to attacking this type of scam in litigation brought on behalf of the screwed-over homeowner, see:

posted by Home Equity Theft Reporter at 4:00 AM