"Good Deal" On Recently "Rehabbed" Foreclosure Leaves Novice Homebuying Couple Unpleasantly Surprised, Holding The Bag

In Cincinnati, Ohio, WKRC-TV Channel 12 reports:

• Many of the homes now on the market got there through foreclosure. Some have been rehabbed before going back up for sale. But, if you're looking at such a home, Troubleshooter Howard Ain is here to show why you have to be very careful.

• Some rehabbed homes can come with lots of problems. That's what Erin Bohannon-Chenault of Fairfield learned. She and her husband say they thought they were getting a good deal. "All we know is it was a rehab and they had fixed it up. And from what we knew everything was new. They said they had put in new appliances, new water heater, that's what they had told us."

***

• Erin says she's now contacting an attorney to see if she can get out of the purchase because she says there were so many problems that were not disclosed. And repairs on the house will run into the thousands of dollars.(1)

For a rundown on the unpleasant surprises that Erin and her husband discovered after moving into their home, see Fairfield Couple's Dream Home Purchase Becomes Nightmare.

(1) If the potential title trouble arising from sloppy and fraudulent paperwork-handling during the foreclosure process isn't enough to scare away those homebuyers looking for a good deal by buying recently foreclosed homes, then certaintly the sloppy and fraudulent "facelifts" masquerading as "rehabs" that some real estate investor-flippers (and possibly some lenders and loan servicers as well) are giving to some of these wrecks might.

And, to the extent that the homes being flipped were built before 1978, you can bet that these flippers, lenders and loan servicers are probably not complying with new Federal rules regulating the repair and maintenance of these homes (effective as of April 22, 2010, and which impose certain training, certification and work practice requirements on activities that disturb lead-based painted surfaces). See EPA's New Lead-Based Paint Renovation, Repair and Painting Requirements Take Effect, which provides one law firm's overview of the new Federal rules, which generally apply to those pre-1978 homes where repair or maintenance activities will disturb 6 square feet or more of interior paint per room or 20 square feet or more of exterior paint. Note that the renovation activities subject to this rule could include electrical work, plumbing, carpentry, and other work that disturbs painted surfaces.

Homes In Foreclosure Limbo Create Health, Safety Concerns For Panhandle Town; Banks Reluctant To Take Title To Unwanted, Critter-Infested Collateral

On the Florida Panhandle, WJHG-TV Channel 7 reports:

• Some Springfield residents say they've had it with the owners of an abandoned home in their neighborhood. "From what I understand it's been in foreclosure for years. It's been empty for years,” said next door neighbor Cleveland Drayton. Drayton's well-manicured Springfield home sits directly next to the eyesore at the end of the cul-de-sac that nobody wants to take responsibility for.

***

• Code Enforcement officials have written “Notice of Responsibility” orders to the owners and contacted the bank holding the mortgage. "The bank gives me the excuse, ‘Well it's not totally theirs until that foreclosure is finalized,’ and up to the day that the judge awards their title back to them, or deed back to the bank, that person can come up and get the money. So they're not willing to spend the money to clean it up. So that leaves it on us to go over there and clean it up,” said Lee Penton of Springfield Code Compliance.

• Neighbors say they are worried about their health and safety. “We've been seeing a lot of critters now, snakes, rats. I had to take a dead rat out of my neighbor's yard. I got an exterminator to come out here and he said well your big problem is right here,” Drayton said pointing next door.

• City officials filed another clean up work-order Thursday morning. But officials say they are very short-staffed and it may take a couple weeks before anything gets done. If no one pays the maintenance fee, the city will clean up, and then place a lien on the property. Springfield officials say they have about 30 vacant houses in the same foreclosure limbo.

For the story, see Neighbors Say Abandoned Springfield Home Is Infested With Rats And Snakes (Springfield residents want someone to take responsibility for an abandoned home that is making them worry about their health and safety).

Town To Pursue Criminal Charges Against Developer/Landlord Facing Imminent Foreclosure For Egregious State Sanitary Code Violations At Rental Property

In Framingham, Massachusetts, The MetroWest Daily News reports:

• Investors interested in bidding on pieces of the failed downtown Arcade redevelopment project gathered [] on Frederick Street, but the bank holding the mortgage postponed a planned auction. As part of foreclosure proceedings, Framingham Co-operative Bank has moved to sell five triple-deckers on Frederick Street and a vacant lot at 80 Kendall St.

• The town, meanwhile, is pursuing criminal charges against Wellesley project developer Michael Perry for egregious state sanitary code violations at one of those multi-family homes.

• Inspectors found cockroaches, rodents and safety issues in one apartment Perry has refused to correct, according to an application for a criminal complaint on file in Framingham District Court. The Board of Health said it has found bedbugs and other serious problems in others of Perry's Frederick Street apartments that are on the auction block.

***

• The paperwork Board of Health Director Ethan Mascoop filed in district court on July 27 charges Framingham Acquisition with numerous violations of the state sanitary code at 39 Frederick St., Apt. 3. Among them: shock hazards, the rodent and cockroach infestation, improper installations and maintenance, emergency exit issues, general disrepair, inadequate weathertightness, improper lighting and other problems. "It was particularly egregious," Mascoop said. He said Perry was "recalcitrant in complying with our order" to correct the violations.

Source: Framingham auction postponed; landlord faces criminal charge.

Prospective Tenants Now Entitled To "Bedbug Disclosure" From NYC Landlords

In New York City, the New York Post reports:

• New York City landlords will now have to tell prospective tenants if there's been a history of bedbugs in their building, thanks to a new law that Gov. Paterson signed []. The legislation requires that landlords give all tenant wannabes a disclosure form saying whether or not the building has had any of the bloodsuckers in the last year, said Manhattan Assemblywoman Linda Rosenthal, who sponsored the initial legislation.

• Even if the apartment that the tenant is going to occupy never had bedbugs, the landlord will be compelled to tell him or her about other infestations in the building, according to the new law. "Nothing is more horrifying than signing a lease after a lengthy apartment search only to discover that your new apartment is bedbug infested," Rosenthal said in a statement.

• The law applies only to New York [City], which the pest-control company Terminix last week named the most bedbug-infested city in the country.

Source: Sweet dreams: Landlords must disclose bedbugs.

NYC Landlord Found Liable In Rent Overcharge Case Involving 1300+ Unit Housing Complex

In New York City, Crain's New York Business reports:

• In yet another victory for tenants, a state Supreme Court judge ruled late Monday against Laurence Gluck declaring that the landlord unlawfully deregulated rents at Independence Plaza North, a big downtown Manhattan residential complex, while receiving tax breaks.

• The decision is the latest blow to the landlord, who has prospered by buying Mitchell-Lama housing projects, which are rent-stabilized properties, in the city and then taking them out of the program and raising rents. Independence Plaza, a 1,331-unit complex in TriBeCa was taken out of the Mitchell-Lama program in 2004. The lawsuit, which was filed five years ago, claims that Mr. Gluck unlawfully turned the building into a market-rate property while still accepting J-51 tax breaks from the city.

• “I am happy about the decision, but it is tempered by the fact it took this long,” said Seth Miller of Collins Dobkin & Miller who represents the tenants in this case. Mr. Miller refused to disclose the amount of rent overcharges that might be due to his clients as a result of the ruling. He also added that he expects Mr. Gluck to appeal the decision.

For the story, see Court rules against big Manhattan landlord (Judge finds Laurence Gluck unlawfully deregulated rents in the 1,331-unit Independence Plaza North complex in TriBeCa; appeal seen as likely).

Oregon AG, State Represntative Squeeze Refund Out Of Loan Modification Racket For Elderly Couple Hoodwinked Into Defaulting On Mortgage

In Medford, Oregon, the Mail Tribune reports:

• A Gold Hill couple may lose their home because of the illegal acts of a Florida-based mortgage consultant now being sanctioned by the Oregon attorney general. 1st Call Consultants, of Boca Raton, Fla., must stop doing business in Oregon and was required to repay $1,500 that Eva and Vern Patterson paid the consulting firm for help modifying their mortgage.

***

• Attorney General John Kroger and [state representative Dennis] Richardson were in Medford [] to present a check from 1st Call reimbursing the Pattersons for the illegally collected fee. [... T]he Pattersons plan to meet with ACCESS Inc., which provides foreclosure prevention help through federally approved programs. Richardson said he plans to contact the Pattersons' lender to help explain that the aging couple was "hoodwinked into defaulting" by 1st Call's bad advice.

For the story, see Retirees might lose home in land scam (Oregon attorney general bars Florida firm from doing business in the state).

Family Gets 1-Day Notice Of Pending Foreclosure Sale After Being Stiffed By Suspected Out-Of-State Loan Modification Racket

In Lewisburg, Tennessee, WSMV-TV Channel 4 reports:

• The Vetter family in Lewisburg first learned their house was being auctioned on the courthouse steps when they read it in the newspaper the day before. They’d paid a home loan modification company to help them avoid foreclosure, but later discovered the company had hundreds of complaints against it for doing nothing to help the consumers who had paid them.

***

• They turned to a company called Premier Legal Advocates and paid it a fee of $998 upfront to negotiate a lower mortgage payment for them. They found out too late it isn't a real law firm.(1) Hundreds of former clients have posted comments on consumer websites claiming they lost their houses to foreclosure because Premier never contacted their mortgage companies.

• [Kathrynne] Vetter said her mortgage company had never heard from Premier Legal Advocates. The company, which is based in California, has an F rating with the Better Business Bureau. The owner is listed as Brian Pascal, a man who the Better Business Bureau said has owned several similar companies in the past.

For the story, see Family Loses Home With 1 Day's Notice (Couple Blames Loan Modification Company).

(1) By using the word "legal" in the name of their business, Premier Legal Advocates arguably misrepresented that consumers would receive professional services associated with legal counsel. The Ohio Attorney General has recently taken this position in an unrelated lawsuit involving an outfit allegedly running a racket targeting the infirm elderly. See Cordray Sues Duo who Targeted Seniors with Medicaid Ploy.

Mortgage, Consumer Fraud Litigation To Skyrocket With Passage Of Wall Street Reform Act?

LegalNewsLine.com reports:

• Homeowners gained leverage for litigation against mortgage lenders through the financial reform law Congress passed this summer. The Dodd-Frank Wall Street Reform and Consumer Protection Act not only tightened mortgage rules, but it also multiplied potential damages against rule breakers.

***

• Along with mortgage litigation, the bill invites consumer fraud litigation. Any state attorney general can enforce the state's consumer fraud law against a national bank or a federal thrift, the authors wrote. "This will subject national banks to state law requirements they otherwise would not be subject to," Taft said. "If they do not comply, there would be penalties under state and possibly federal law." [...] Whether a private citizen can pursue a cause of action for consumer fraud could depend on state or federal law, he said.

For more, see Dodd-Frank reform law invites new litigation opportunities against mortgage lenders.

See also Lexology: Mortgage Reform and Anti-Predatory Lending Act for an overview of this new consumer protection law (requires subscription; if no subscription GO HERE; or TRY HERE - then click link for the story).

BofA's "Deed-In-Lieu" Mail Solicitation After Approving Loan Modification Leaves Couple Confused, Upset; Bank Speechless When Asked To Explain Letter

In Thornton, Colorado, KUSA-TV Channel 9 reports:

• Chris Carpenter says he has paid his mortgage on-time for the nearly seven years he has owned his home. [...] But Friday, Carpenter said his wife brought a letter from the mailbox from his mortgage lender, Bank of America, that baffled the couple. "She was crying," he said. "She was upset."

• The letter was "deed-in-lieu of a foreclosure" solicitation from Bank of America, saying the family needed to take immediate action to prevent foreclosure. If the Carpenters would sign over the deed to their home, the letter stated, Bank of America would give the couple $3,000 relocation assistance, and save them from the credit nightmare of a foreclosure. Carpenter would also lose any equity built up in his home.

• "She couldn't understand why we were being singled out like this," Carpenter said. Carpenter and his wife were approved through a loan modification with Bank of America after her layoff, but he said they paid their mortgage on-time, every month, and sent in all the necessary paperwork the bank required. "We have paid," he said. "We have done exactly what they wanted." Monday, no one at Bank of America could explain why Carpenter received the letter.(1)

For more, see Couple confused about bank's request for deed to home.

(1) Bank of America has stepped up its solicitation for "deed-in-lieus" this year, according to its quarterly impact report, the story states. Citibank also reportedly is doing the same. See Citibank Says If Borrowers Return the Deed of Their Property, They May Stay on For 6 Months.

7 Bagged In Mtg Fraud Scam That Lured Straw Buyers w/ Phony "No Management" Investment Program, Sham Rent-To-Own Offers To Credit-Impaired Tenants

In Northern Ohio, WYTV-TV Channel 33 reports:

• The Youngstown Mortgage Fraud Task Force and the U.S. Attorney for the Northern District of Ohio are investigating a $7.5 million mortgage fraud scheme involving 48 properties in Mahoning and Trumbull counties. The U.S. Attorney's office indicted seven people, five of whom are from the Valley, Tuesday in connection with the scheme.

***

• The indictment alleges that Romero Minor, 51, of Georgia, was the person who spearheaded the scheme along with Wendell Kerr, 62, of Mississippi. They had local loan officers, appraisers and title companies help them commit the mortgage fraud.(1)

• The indictment alleges that Minor operated a religious organization and investment group known as BFB Investments. Between July 2003 and January 2006, state court documents, Minor recruited investors to purchase several properties, telling them he wanted to help those in the community with bad credit who could not buy homes themselves.

• The investors were told that after they bought the homes, Minor would enter one-year rent-to-own agreements with tenants so the tenants could improve their credit scores. After a year, he told them, the tenants would buy the homes.

• "(He said that) during that year period he would make the mortgage payment, he would keep the houses up, he would pay the taxes, all of that," said Assistant U.S. Attorney Mark Bennett. "In reality, Minor did none of that. He didn't pay the mortgages, but for a limited instance, he did not keep the houses up, he did not mow the lawns, etc., etc." [...] "He just takes the extra money and walks away from the properties," said Bennett.

For the story, see 7 Indicted in Valley Mortgage Fraud Conspiracy.

(1) The others indicted were:

• Title attorney William Helbley, 57, of Poland,
• Appriaser Timothy Corey, 49, of Youngstown,
• Loan officer Robert Lunsford, 54, of Hubbard,
• Appraiser Damon Petrich, 39, of Boardman,
• Title attorney Michael Wagner, 54, of Canfield.

Federal Judge Ruling Favorably For BofA In Utah Foreclosure Challenge May Have Conflict Of Interest: Report

In Salt Lake City, Utah, KTVX-TV Channel 4 reports:

• "They're foreclosing illegally here in Utah.” Those were the words of St. George Attorney John Christian Barlow spoken in early June. Barlow at the time had appeared before a Federal Judge arguing that the banking giant, Bank of America, was foreclosing illegally in the State of Utah. The Southern Utah Attorney believed that because B.O.A. was not a registered business or corporation in the state, they lacked authority to do business here. Barlow had succeeded in getting a 5th Circuit Court Judge to agree with him. As a result, the judge imposed an injunction on all Bank of America foreclosures.

• Weeks later, the case went before a Federal Judge where B.O.A. argued that they were regulated by federal, not state laws. Federal Judge Clark Waddoups heard the case, and threw out the injunction therefore Bank of America’s foreclosure company (ReConTrust) was allowed to foreclose once again.

• After the decision, ABC4 got a tip about the case and started digging. Our tipster said that Judge Waddoups may have a conflict of interest in hearing the B.O.A. cases. Why? Because Judge Waddoups' old law firm represents Bank of America. We checked into Waddoups background, and found that the Federal Judge did work for Parr, Brown, Gee & Loveless for nearly 30 years. ABC 4 also found that Waddoups, as of 2008, drew a pension from the law firm. ABC 4 placed a call to the firm, but they wouldn’t comment if the former firm partner had ever handled B.O.A. cases.

For more, see Conflict of Interest? ABC 4 investigates judges' ties to Bank of America.

Title Insurance Unavailability For Would-Be Buyers In Bankrupt HOAs May Make It Nearly Impossible For Unit Owners To Unload Homes & Bail Out

In Phoenix, Arizona, The Arizona Republic reports:

• Thousands of vacant properties and millions of dollars in unpaid dues are taking their toll on Arizona homeowners associations, and homeowners are paying the price.(1) [...] In the most troubled master-planned communities, generally those in recent high-growth areas [...], delinquencies have reached alarming proportions, placing some HOAs under serious threat of bankruptcy.

• Should an HOA go bankrupt, prospective homebuyers would not be able to obtain title insurance on the community's homes, making them nearly impossible to buy or sell.

***

• Although there are no recorded instances of Arizona HOAs declaring bankruptcy thus far, the home-vacancy problem is widespread enough to cause serious concern, said Steve DeLaveaga, vice president of sales and marketing at Fidelity National Title in Tempe. "There are over 25,000 homes in our state that are just empty, vacant," DeLaveaga said.

• If an HOA did go bankrupt, the most serious consequence would be the inability of prospective homebuyers to obtain title insurance, required for any home purchased with a mortgage loan, he said. "Title insurers cannot insure a home in an HOA that is bankrupt," DeLaveaga said.

Source: HOA groups in Arizona cutting services, raising fees (Homeowners associations facing own crisis amid foreclosures).

(1) See Chicago Sun-Times: A cure for crumbling condos for the kind of horror stories that have resulted in Chicago, Illinois as a result of financially strapped associations going under.

Homeowners Accuse HOA Of Using Lien Notices To Retaliate For Earlier Suit Charging Association w/ Illegally Amending Rules To Increase Their Control

In Charlotte County, Florida, the Sarasota Herald Tribune reports:

• Residents in a retirement community here say they are being threatened with lien and foreclosure notices because of a legal battle with their homeowners association. About 50 residents of the Gardens of Gulf Cove, [...] are suing the association that manages the community, and the local board of directors. Their attorney, Barbara Stage, said the board illegally amended association rules to gain greater control over the budget and dues assessments.

***

• [R]esidents say that since the suit was filed in March, perhaps 90 homeowners have received "intent to lien" letters over late dues, without receiving bills or late-payment notices.

***

• The lawsuit was filed around the time quarterly payments were due, so the timing of the letters may be a coincidence. But Stage said it is common for HOAs to "play dirty" when they are sued, and the lien process is a moneymaker. Resident and plaintiff James McMahon noted that he was charged $256 in attorney's fees. Multiplied by 90 residents, that is about $23,000.

For more, see Homeowners association battle threatens homes.

Cops: Developer Pocketed $410K From Buyer For Condo In Project That Was Never Built; Faces Grand Theft Charges After Allegedly Refusing To Refund Cash

In Flagler Beach, Florida, WJXT-TV Channel 4 reports:

• A Flagler Beach developer was arrested [...] on a charge of grand theft in excess of $100,000 in connection with a fraudulent real estate purchase. John Boback Sr., 51, is accused of taking $410,000 from a Marco Island man in the sale of a condominium on North Oceanshore Boulevard. Investigators said although Boback received the money, the man who purchased the condo received only a deed for the unit, and the structure was never built.

***

• In October 2009, South Florida resident Patrick Lyons, 55, told investigators that between August and December 2006, he paid Boback for a condominium unit that was to be part of a professional complex on State Road A1A. Lyons said when he realized the property had not been developed, Boback would not refund his money, investigators said. The property is presently in foreclosure. [...] "He never turned a shovel of dirt," said Cpl. Nate Flach, a detective with the Flagler County Sheriff's Office, in a news release.

For the story, see Developer Charged With Grand Theft (Man Accused Of Taking $410,000 In Condo Sale).

S. Florida Lawyer Gets Jail Time For Hijacking $1.6M In Real Estate Closing Funds Earmarked For Mortgage Loan Payoffs; Title Insurer Left Holding Bag

In Miami, Florida, the South Florida Sun Sentinel reports:

• Hollywood title attorney Peter N. Price has been sentenced to almost four years in jail, and ordered to pay $1.7 million to Stewart Title Guarantee Inc. regarding allegations that he embezzled $1.6 million in loan proceeds.

• Federal and state investigators said Price took the money, earmarked for paying off mortgage loans for clients, from his Intracoastal Title Services Inc. escrow account for real estate closings he was handling. Instead of doing the payoffs, Price prepared and sent false federal real estate forms, stating the loans had been paid, according to court documents.

• Price was charged with making false statements to the U.S. Department of Housing and Urban Development, and sentenced by U.S. District Judge James Cohn in Miami.

Source: Hollywood title attorney gets four years after embezzling $1.6 million.

Bank Returns Possession Of Prematurely Padlocked Home In Foreclosure To Ailing Senior Who Spent Winter In Homeless Shelters; Slept In Parked Car Since

In Schaumburg, Illinois, the Daily Herald reports:

• A Schaumburg man who was living in his own yard after being padlocked out of his house during foreclosure proceedings was able to move back inside [last week]. John Wuerffel, 62, [...] was returned access to his home by representatives of HSBC Mortgage Corp., which is handling the foreclosure case on behalf of Freddie Mac.

• HSBC spokesman Neil Brazil said the house was padlocked last fall to protect its value after it appeared to have been abandoned by Wuerffel, who couldn't be found. Wuerffel said he was living out of state when the house was padlocked, and he returned to find it in that way. He spent the winter living in homeless shelters and took to sleeping in one of his several vehicles parked in the driveway when the shelters closed in the spring.

***

• Wuerffel said he is supposed to be on medication for bipolar disorder and a heart condition, but that his financial situation has sometimes kept him from affording either one. In fact, Wuerffel said medical bills are to blame for the threatened foreclosure of the home he's owned since 1971.

For more, see Schaumburg man regains access to padlocked home.

Chicago Man Guilty Of Creating Phony Land Documents To Sell Homes Out From Under Real Owners To Unwitting Buyers While Posing As Federal Official

From the Office of the U.S. Attorney (Chicago, Illinois):

• A Chicago man was convicted of federal charges for posing as a federal government official in a scheme to sell properties he did not own out from underneath the real owners. The defendant, John Hemphill, was found guilty [] of mail fraud and false impersonation of a federal official following a week-long trial in U.S. District Court, [...].

***

• According to the evidence at trial, since 2008, Hemphill engaged in a scheme to defraud property owners and prospective purchasers of property by creating and recording fictitious deeds with the Cook County Recorder of Deeds, posing as the property owner selling the property in question.

• Hemphill typically filed a fictitious deed with the county recorder that purported to convey title to a parcel of property from its lawful holder to one of Hemphill’s businesses, and then filed a second fictitious deed purporting to convey title to the same property from his business entity (the new purported owner) to a third party. Hemphill also falsely represented to prospective purchasers of properties that he and his business entities held title to these properties in their capacity as a "federal receiver" or had other lawful authority to convey the properties to third parties. Under these false pretenses, Hemphill purported to sell these properties to third parties, usually for cash payments.

***

• Two witnesses at trial — a La Grange police officer and a victim who bought a home Hemphill did not own — testified that when they challenged Hemphill over his fraudulent representations, he produced a bogus badge indicating that he was a federal agent.

For the U.S. Attorney press release, see Chicago Man Convicted of Posing As Federal Official in Scheme to Obtain and Sell Area Properties he Did Not Own.

Rogue Public Official Gets 17 Years In Prison For Assorted Corruption; Bad Acts Include Sales Of Land He Didn't Own To Church, Elderly Woman

In New Orleans, Louisiana, The Times Picayune reports:

• Jonathan Bolar upset an incumbent in 2001 to gain a seat on the Gretna City Council, in great part because voters believed his promises to work hard and to put their interests first. Mr. Bolar worked hard all right -- but to put his office up for sale.

• He extorted thousands of dollars from constituents who needed city permits. He twice sold land he did not own, to a church and to an elderly woman. He evaded paying taxes for a decade. In April, a jury convicted Mr. Bolar on 13 charges. The heavy price for such a resume of corruption came [last week], as U.S. District Judge Lance Africk sentenced Mr. Bolar to 17 years in prison. He also will have to pay $174,000 in restitution to his victims, in addition to $85,700 he already was ordered to forfeit.

For the story, see Former Gretna Councilman Jonathan Bolar, rogue public official, goes to jail.

Florida Court Clobbers Foreclosure Mill With $49K Contempt Citation; Continuous Failure To Appear At Hearings w/out Giving Notice Raises Judge's Ire

In Manatee County, Florida, the Sarasota Herald Tribune reports:

• A circuit judge singled out a Fort Lauderdale foreclosure firm on Monday, finding its business model violates legal ethics and leveling a $49,000 fine for scheduling hearings and then not showing up in court.

• In a judicial district that has taken a hard line on fraudulent or messy foreclosure filings, the judge's ruling is the first time a court officer has openly attacked the methods of one of the firms responsible for thousands of foreclosures statewide.

• Circuit Judge Janette Dunnigan scolded five lawyers from the Smith, Hiatt and Diaz firm in connection with a Manatee County foreclosure case filed in 2007. The firm is one of several "foreclosure mills" filing thousands of foreclosure cases monthly. The firm's attorneys filed what amounted to "sham" paperwork setting seven hearings over two years, and then failed to appear in court or tell the judge or other parties when they were canceled. The case is still unresolved.

***

• Dunnigan brought the contempt of court herself, and threatened to push forward on a criminal contempt of court against the attorneys. [...] The firm will be fined $7,000 a day until [the firm] provides Dunnigan with a description of a new policy that attorneys cannot set hearings without having all documents ready. Also, every lawyer in the firm must sign documentation that they understand the new policies. The firm must also review all cases scheduled in Manatee County and have the attorney that will appear at that hearing sign a paper that they will do so.

***

• The case turned out well for the homeowner. The law firm voluntarily dismissed the case, and must pay the owner $450 in lost wages for showing up at the last hearing.(1)(2)

For more, see Judge fines major legal firm for foreclosure conduct (Lawyers to pay $49,000 for not showing up at scheduled hearings).

(1) The homeowner may also be able to recover any legal fees paid or due to his/her attorney by asking the judge to order the foreclosing lender to cough up the cash. See Landry v. Countrywide Home Loans, Inc., 731 So. 2d 137 (Fla. 1st DCA 1999):

• The general rule is that "when a plaintiff voluntarily dismisses an action, the defendant is the prevailing party." See Thornber v. City of Ft. Walton Beach, 568 So. 2d 914, 919 (Fla. 1990). Further, "it is well established that attorney's fees are properly awarded after a voluntary dismissal where such award is provided for by statute or agreement of the parties." See Century Construction Corp. v. Koss, 559 So. 2d 611, 612 (Fla. 1st DCA 1990), review denied, 574 So. 2d 141 (Fla. 1990). See also Boca Airport, Inc. v. Roll-N-Roaster of Boca, Inc., 690 So. 2d 640, 641 (Fla. 4th DCA 1997), review dism'd, 698 So. 2d 543 (Fla. 1997)("for purposes of a prevailing party attorney's fees statute, a voluntary dismissal by the claimant makes the opposing party a 'prevailing party' as to the issue of entitlement to fees").

In Florida, where an agreement allows for an attorney fee award to one of the contracting parties, state statute mandates an award of prevailing party attorney's fees to the other party under the reciprocity provisions of section 57.105(7), Florida Statutes; Landry, supra. (Mortgages almost always contain a provision that allow a lender to tack on its legal fees to the amount owed by the borrower when bringing litigation to enforce its rights. Accordingly, by reason of section 57.105(7), the homeowner likewise would be entitled to a recovery of his/her attorney's fees from the losing lender).

See also Attorney Fee Awards For Successful Foreclosure Defense In Florida.

For the latest (as of 9/8/2010) Florida court ruling involving the application of section 57.105(7), which turns contractual provisions allowing only one side attorney’s fees into bilateral provisions that allow both sides fees under Florida law, see Florida Hurricane Protection and Awning Inc. v. Pastina, No. 4D08-4641 (Fla. App. 4th DCA, September 8, 2010) (en banc). See also, Abstract Appeal: Fourth District: Fees, and “Blog” Arrives In The Case Law.

In addition, in this case, the law firm possibly may also be ordered to ante up part of the homeowner's legal fees by reason of section 57.105(1), Florida Statutes:

• Upon the court’s initiative or motion of any party, the court shall award a reasonable attorney’s fee, including prejudgment interest, to be paid to the prevailing party in equal amounts by the losing party and the losing party’s attorney on any claim or defense at any time during a civil proceeding or action in which the court finds that the losing party or the losing party’s attorney knew or should have known that a claim or defense when initially presented to the court or at any time before trial:
  
  (a) Was not supported by the material facts necessary to establish the claim or defense; or
  
  (b) Would not be supported by the application of then-existing law to those material facts.

In a peripherally related article (added 9-22-10), see The Florida Bar: Pleading Requirements for a Claim for Attorneys' Fees.

(2) The Court reportedly awarded Barrington Ridge Homeowners Association, Inc., the association in which the property in foreclosure is a part of and which presumably holds a lien (subordinate to the foreclosing lender's mortgage) for unpaid HOA fees, its attorneys' fees from the filing of its Motion to Compel the Bank to Proceed with Foreclosure to the present, according to a press release issued by the association's law firm. See Becker & Poliakoff Applauds Manatee County Circuit Court Judge's Order Imposing Fines Against Bank's Foreclosure Law Firm.

Media Probe Spurs Texas AG Lawsuit Alleging That Unlawful Servicer Collection Tactics Squeezed Late Fees From Homeowners, Driving Them Into F'closure

In Dallas, Texas, KDFW-TV Channel 4 reports:

• Just two weeks after a FOX 4 investigation, the Texas Attorney General is cracking down on a local mortgage servicing company. In our investigation, FOX 4 showed how the AG's office told complaining consumers it was too busy and they should hire their own attorneys to fight American Home Mortgage Servicing, Inc.

• But that has suddenly changed. Now, the Texas Attorney General has sued the Coppell-based company, accusing AHMSI of aggressive and unlawful tactics to collect mortgage payments from Texas homeowners and has filed suit.

For more, see Texas Attorney General Sues Mortgage Servicing Company.

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

From the Office of the Texas Attorney General:

• Texas Attorney General Greg Abbott [] charged Coppell-based American Home Mortgage Servicing Inc. (AHMS) with using illegal debt collection tactics and improperly misleading struggling homeowners.

• According to state investigators, AHMS collections agents used aggressive and unlawful tactics to collect payments from Texas homeowners who had difficulty meeting their payment obligations. The defendant also failed to credit homeowners who properly submitted their payments on time.

***

• In other cases, AHMS agents falsely claimed that homeowners did not make payments so the agents could justify profitable late fees or escrow accounts. The defendant also failed to properly credit homeowners after AHMS agents withdrew funds from the homeowners’ checking accounts. Because of the defendant’s unlawful conduct, homeowners defaulted on their loans, leading to foreclosure proceedings.

For the Texas AG press release, see Attorney General Abbott Charges Home Loan Servicer With Violating State Debt Collection Laws (American Home Mortgage Servicing Inc. failed to properly process requests).

For the lawsuit, see State of Texas v. American Home Mortgage Servicing Inc.

Nevada AG: Trio Stiffed Strapped Homeowners Seeking Loan Mods After Clipping Them Out Of Thousand$ In Upfront Fees, Filed Liens Based On Bogus Notes

In Las Vegas, Nevada, KLAS-TV Channel 8 reports:

• The Nevada Attorney General has announced that three people have been indicted for allegedly operating a foreclosure rescue scam in Las Vegas. The AG's office says Doninador Palalay, a.k.a. Dominador Palalay, Marie Tejada Medina and Benjamin Aquino Moraleda III operated a foreclosure rescue business named PDM Financial Group, Inc.

• The AG says PDM charged around $3,000 for loan modification services and misled customers. They say PDM told customers they could prevent foreclosure and customers could obtain loan modifications. But according to the AG, those services were not performed.

• Moreover, the state alleges the suspects had their customers sign deeds of trust that gave PDM liens on their customer's homes based on false promissory notes. The AG believes this was done to cloud the home's title to prevent the lenders from foreclosing.

For the story, see Three Indicted in Foreclosure Scam.

For the Nevada AG press release, see Three Indicted In Foreclosure Rescue Scam.

Wisconsin AG Scores $110K+ Default Judgment Against Forensic Loan Audit Outfit That Pocketed Upfront Fees From Consumers

From the Office of the Wisconsin Attorney General:

• Attorney General J.B. VanHollen announced [] that the Wisconsin Department of Justice has obtained a default judgment of $111,861 against Relief Law Center, Inc., (d/b/a USA Loan Auditors), for violating Wisconsin's consumer protection laws in soliciting purported loan modification services.

***

• The lawsuit charged USA Loan Auditors, a California company, with using deceptive and misleading representations in its mail solicitations. The solicitations were designed to appear as though the company was a “loan auditor” investigating the homeowner's lender but it in fact was soliciting purported loan modification services. The judgment was obtained following the failure of the company to file an answer to the complaint. The judgment enjoins the company from further violations and orders $118,861 in forfeitures, penalties, and costs to the State for prosecution.

For the Wisconsin AG press release, see Van Hollen Announces Judgment Against USA Loan Auditors.

Cops: "Owner-Finance" Home Seller Pocketed Buyer's Monthly Payments & Stiffed Bank Holding Existing Mtg After Screwing Earlier Victim In Similar Scam

In West Palm Beach, Florida, The Palm Beach Post reports:

• Michael Chinloy, detectives allege, bought an Acreage home, sold it to someone, waited for her to move out, sold it to another couple, and then let it foreclose. And, in the process, pocketed at least $86,000.

• Now Chinloy, 46, booked into the Palm Beach County Jail [...], is charged with grand theft more than $20,000 and organized scheme to defraud more than $50,000. He's being held in lieu of $20,000 bail.

• According to a Palm Beach County Sheriff's report, the couple believed they'd bought the home from Chinloy in June 2007. The deal: $30,000 down plus a monthly mortgage payment of $3,290.42. Over two years, the couple claimed, they paid Chinloy more than $120,000 before they started getting foreclosure notices.

• It turned out Chinloy had bought the Acreage home in July 2006 for $360,905. Three months later, he sold it for $384,000 to a woman in Palm Beach Gardens. The woman, who had just gone through a divorce and had credit problems, said Chinloy kept jacking up her mortgage payments until she could no longer pay and she moved out in May 2007.

• A month after that, Chinloy sold the house to the couple for $354,983. Then he stopped paying the mortgage and the home was foreclosed on in January 2008.

For more, see West Palm Beach man charged with grand theft, real estate fraud; allegedly sold same house twice.

Seattle Feds Bag Woman In Alleged Scam That Placed Title To Homes Bought By Novice Homebuyers Into Other Clients' Names & Pocketed Their Loan Payments

From the Office of the U.S. Attorney (Seattle, Washington):

• LIZA BAUTISTA, 50, of Tukwila, Washington, was arraigned [] in U.S. District Court in Seattle on charges of mail fraud, wire fraud and misuse of a Social Security Number, in connection with a scheme to defraud lenders and line her own pocket.

***

• According to the indictment, BAUTISTA held herself out as someone who could help first time buyers with bad credit purchase their first home. According to the indictment, she took advantage of these purchasers naivete—they trusted BAUTISTA when she told them the paperwork was all in order, and that they had purchased their first home.

• In reality, BAUTISTA had obtained the home loans and placed title to the properties in the names of past clients who had better credit. These past clients were shocked when lenders started contacting them about homes they had never purchased. The naive buyers could not understand why lenders kept mailing information to their home in the names of other people.

• Some of these new purchasers made their mortgage payments to BAUTISTA who pocketed the payments instead of passing them on to the lending institutions. When the young purchasers learned they had not really purchased their dream home, they had to move out, and the lending institutions lost thousands as the homes were foreclosed and sold at a loss. BAUTISTA pocketed about $20,000 on six loans worth over $800,000.

For the U.S. Attorney press release, see Former Mortgage Originator Indicted for Scheme Misusing Former Clients’ Personal Information (Woman Allegedly Obtained Loans in the Names of Past Clients for New Novice Purchasers).

Banks’ Self-Dealing Super-Charged Financial Crisis

ProPublica reports:

• Over the last two years of the housing bubble, Wall Street bankers perpetrated one of the greatest episodes of self-dealing in financial history. Faced with increasing difficulty in selling the mortgage-backed securities that had been among their most lucrative products, the banks hit on a solution that preserved their quarterly earnings and huge bonuses:

They created fake demand.

• A ProPublica analysis shows for the first time the extent to which banks -- primarily Merrill Lynch, but also Citigroup, UBS and others -- bought their own products and cranked up an assembly line that otherwise should have flagged.

For more, see Banks’ Self-Dealing Super-Charged Financial Crisis.

Thanks to Mike Dillon at GetDShirtz.com for the heads-up on the story.

Closing Attorney Ordered To Pay $2.37M Restitution In Escrow Funds Theft; State's "Lawyer Ripoff Reimbursement Fund" May Be Left Holding The Bag

In Ballston Spa, New York, The Glens Falls Post Star reports:

• A 47-year-old attorney who practiced law in Saratoga Springs admitted [...] to stealing millions of dollars during real estate transactions he handled for more than a dozen clients. Patrick M. Reidy of [...] Wilton, pleaded guilty in Saratoga County Court to second-degree grand larceny, a felony.

• Saratoga County District Attorney James Murphy said his office will ask the court to impose a 5-to-15-year jail term when Reidy is sentenced on Oct. 22. Reidy will also be ordered to pay $2.37 million in restitution to the 19 victims and will lose his license to practice law.

• Reidy, an attorney who specialized in real estate in addition to being a licensed real estate broker and notary public, stole money from real estate closings and used that money for own purposes, rather than paying off mortgages and other loans, Murphy said.

***

• "I'm thrilled because it feels like there's finally a light at the end of the tunnel," said [Theresa] Olson-Hoffman, of Lake George, whose dealings with Reidy resulted in the disappearance of a $135,000 check she had given to him and a crash to her credit rating when she refinanced a home loan.

***

• Olson-Hoffman has been working with The Lawyers' Fund for Client Protection [of the State of New York], an organization whose mission is to protect consumers from dishonest conduct in the practice of law, by reimbursing client money that is misused.(1) "They said that they needed a conviction and we'll have that in October," she said regarding the Oct. 22 sentencing. "After that, I don't know how long it's going to take to kick in."

For more, see Saratoga Springs lawyer pleads guilty in larceny case.

(1) This recent Albany Times Union story adds:

• [Criminal defense attorney Michael] Koenig would not discuss any personal assets Reidy still has, but said the victims will be able to turn to the Lawyer's Fund for Client Protection for money, and the fund managers will then pursue Reidy's holdings.

For similar "attorney ripoff reimbursement funds" that cover the financial mess created by the dishonest conduct of lawyers licensed in other states and Canada, see:

• Directory Of Lawyers' Funds For Client Protection (courtesy of the American Bar Association);
• Check the USA Client Protection Funds Map;
• Check the Canada Client Protection Funds Map.

Maps available courtesy of The National Client Protection Organization, Inc.

Closing Agent Blames Russian Mob For Stolen Online Wire Transfers Meant For Loan Payoffs; Unwitting Couple Seeking Mtg Refi Now Left Facing F'closure

In Parker, Colorado, KMGH-TV Channel 7 reports:

• It sounds like it's from a movie, but a Parker family and a title company both say the Russian mafia is stealing money from wire transfers. As a result, a Parker family may lose their home to foreclosure and they did nothing wrong. "I don't get why this can't be cleared up today," said Kim Canning, of Parker.

• Canning and her husband, Tim, refinanced their home in September 2009. Canning thought it was a simple process -- a few signatures and the deal was done. But a few months later she started receiving letters from Bank of America stating she had not paid her mortgage and they were going to begin foreclosing on her home. That's when she learned the refinancing never went through and she might actually lose her home.

***

• Canning refinanced her home with Classic Title Agency. At some point when Classic Title was transferring the funds online to Chase Bank, $900,000 disappeared. President Ryan Rodenbeck of Classic Title said nine $100,000 transfers were stolen -- $277,000 of that was part of the Cannings' refinancing.

• According to Rodenbeck, the Russian mafia intercepted it and stole the money. Bank of America, which held the Cannings' first mortgage and was supposed to get the money, never did. Bank of America assumed the Cannings had just stopped paying their mortgage so they started the foreclosure process on the family's Parker home.

For more, see Did Russian Mafia Steal Family's Refinancing Money? (Title Company Claimed Russian Mob Stole Money During Wire Transfer).

Foreclosure Mill Cited In Recent Case By Judge For Fraud Calls State AG Probe Into Allegedly Fabricated Documents Politically Motivated, Overly Broad

In West Palm Beach, Florida, The Palm Beach Post reports:

• The Shapiro & Fishman law firm is objecting to an attorney general's investigation into alleged foreclosure offenses, calling the probe politically motivated and overly broad.(1) The firm, which has offices in Boca Raton and Tampa, filed a motion to quash a subpoena for information [...] in Palm Beach County Circuit Court.

• The economic crimes division of the Florida attorney general's office is reviewing three firms following complaints that foreclosure documents were fabricated to rush cases through the court system. Other firms included in the probe are the Law Offices of Marshall C. Watson in Fort Lauderdale and the Plantation-based firm of David J. Stern.

For more, see Boca law firm calls foreclosure probe political.

For more on this outfit, see The Florida Foreclosure Fraud Weblog: Foreclosure lawsuits are built on lies: Shapiro & Fishman admits foreclosure claims cannot be verified (Shapiro & Fishman explained that their lawyers cannot ethically swear to the truth of the papers they file with the court, because they rely on information from others, according to this Motion for Rehearing filed earlier this year with the Florida Supreme Court).

(1) The Shapiro & Fishman law firm was recently cited by Duval County, Florida Circuit Court Judge Jean Johnson in a foreclosure action for "ha[ving] acutal knowledge of the falsity of any averments and representations made [in court] on behalf of the current servicer of the Mortgage" being foreclosed, and went further by "find[ing] by clear and convincing evidence that these acts committed by WAMU, Chase and Shapiro & Fishman amount to a "knowing deception intended to prevent the discovery essential to defending the claim" and are therefore fraud." See Jacksonville Trial Judge Bags Foreclosure Mill, Chase, WAMU For Fraud On The Court In Foreclosure Action; Dismisses Suit With Prejudice.

For Judge Johnson's ruling, see JP Morgan Chase Bank v. Pocopanni, Case # 16-2008-CA-3989 (Fla. Cir. Ct. 4th Dist. Duval County, August 9, 2010).

State Bar Confirms Probe Into South Florida Foreclosure Mill

The South Florida Business Journal reports:

• David J. Stern, an attorney who is the target of a state civil investigation for mortgage fraud complaints, was previously disciplined by the Florida Bar for deceiving the courts and clients about his web of businesses that do legal support work.(1)

• The Bar also confirmed Aug. 16 that it is also investigating Stern for numerous allegations of violating attorney regulations, including whether his running of DJSP Enterprises, a publicly traded company, is in compliance.

For more, see Florida Bar previously disciplined Stern.

For more on this outfit, see The Florida Foreclosure Fraud Weblog:

• Forged foreclosure filings by David J. Stern anger Pasco judge ("[T]he notary’s stamp [on an assignment of mortgage] said Terry Rice’s commission expired on May 19, 2012. That stamp could not have been lawfully issued any time before May 19, 2008. So that assignment document wasn’t really signed on December 5 of 2007 – unless our notary has discovered a way to travel in time.");

• Why this Pinellas judge may never admit another foreclosure affidavit.

(1) Reportedly, Stern received a public reprimand in 2002 for billing practices that made it appear he was paying other companies for work on title insurance, when he was actually using in-house staff. See More On Alleged South Florida Bogus Foreclosure Document Manufacturing Foreclosure Mill, footnote 1, for more links to other past allegations made against Stern.

Alleged Mastermind In Sale Leaseback F'closure Rescue Scam Arraigned On 25 Counts; Investors Left Holding Bag As Homeowners Got Boot, Say Prosecutors

From the Office of the Massaachusetts Attorney General:

• An Oxford man was arraigned in Worcester Superior Court for his role in a complex scheme in which fraudulent documents were used to defraud homeowners and mortgage lenders in numerous real estate transactions involving distressed properties in the Worcester County area. Allen Seymour, age 42, is charged with Forgery (4 counts), Uttering (8 counts), Inducing a Lender to Part with Property (12 counts) and Larceny by False Pretenses.(1)

***

• According to authorities, Seymour targeted properties in danger of foreclosure. He allegedly personally approached the owners of these properties and presented a variety of rescue options. For those homeowners who merely wished to sell their property to avoid foreclosure, Seymour allegedly offered to purchase the property for the amount owed to the foreclosing lenders.

***

• Simultaneously, Seymour allegedly found individuals with good credit who were looking to begin investing in real estate. Many of these “investors” were allegedly told they would be helping homeowners in danger of foreclosure. Seymour allegedly told several investors that the purchase would only be temporary, and the homeowners would purchase the property back from them after Seymour repaired the homeowner’s credit.

***

• After the closing, several investors state that Seymour abandoned them to the mortgage payments. Without Seymour’s assistance, the investors were unable to pay the loans, and these mortgages themselves fell into foreclosure. Some homeowners, allegedly promised lifetime leases, have been evicted from their homes by these foreclosures.

For the entire Massachusetts AG press release, see Oxford Man Arraigned in Connection with Orchestrating Complex Mortgage Rescue Scheme.

(1) According to the press release, three other co-defendants have been charged in connection with this case. On December 1, 2009, Raymond A. Desautels III, age 43, of Oxford, was sentenced to serve two years in State Prison after pleading guilty to the charges of Inducing a Lender to Part with Property (5 counts) (see Disbarred Attorney Cops Plea In Fraudulent Rescue Scam; Homes Drained Of Equity, Then Fall To Foreclosure; Owners Get Boot; Investors Left Holding Bag).

On January 13, 2010, Judith Piette, age 44, of Worcester, pled guilty to the charge of False Written Report by Public Officer (4 counts). Piette was sentenced to serve two years of probation. The remaining co-defendant, Jason Passell, age 51, of Worcester, is charged with Forgery and Uttering (7 counts). He is due back in court on August 30, 2010, for a status conference.

Mass AG Obtains Civil Judgments Against Five Accused In Equity Stripping, Sale Leaseback, F'closure Rescue Racket; Case Against 9 Others Still Pending

From the Office of the Massachusetts Attorney General:

• Attorney General Martha Coakley’s Office has obtained consent judgments against five defendants that perpetrated an unlawful foreclosure rescue scheme against multiple homeowners facing foreclosure that stripped and retained hundreds of thousands of dollars of the victims' home equity.

• The judgments, entered against Primary Mortgage Resource, Leo Desire, Sr., Robert Marks, Pierre Joseph and Daphne Mompoint, provide for payments of restitution to victims and civil penalties to the Commonwealth and prohibit the defendants from engaging in certain activities that facilitated the scheme.(1)

For the entire Massachusetts AG press release, see AG Martha Coakley Obtains Judgments Against Multiple Defendants in Alleged Foreclosure Rescue Scheme.

(1) In addition to the five recently-announced consent judgments, the Commonwealth obtained consent judgments against five other defendants (closing attorney Valerie Hanserd and straw buyers Marie Betey Mereus, Neville Francis, Jean Roll Joseph and Robens Joseph) within the last year, the press release states. The case remains pending against defendant closing attorney James J. Alberino, defendant real estate salesperson Robin Hayes, and seven other defendants who failed to appear or defend in the action and as to whom the Commonwealth obtained entries of default.

California AG Scores $1.1M Judgment Against Attorney In Alleged Foreclosure Rescue Racket That Screwed 2,000 Desperate Homeowners Out Of Thousand$

From the Office of the California Attorney General:

• Attorney General Edmund G. Brown Jr. [] announced a $1.1 million judgment against longtime Los Angeles attorney Mitchell Roth after he conned 2,000 desperate homeowners into paying him thousands of dollars to file "frivolous and phony" lawsuits that didn't reduce a penny of mortgage debt for a single client.(1)

***

• In 2008, Roth, a seasoned Los Angeles attorney, joined with Nevada-based United First, Inc. and the company's owner, Paul Noe, to provide foreclosure relief services to homeowners struggling to pay their mortgages.(2)

***

• United First charged homeowners some $1,800 in up-front fees, plus at least $1,250 each month, and 50 percent of the cash value of any settlement. If a homeowner's debt was eliminated altogether, the homeowner was required to pay United First 80 percent of the value of the home.

• After collecting up-front fees, Roth filed lawsuits on behalf of homeowners, pushing a novel legal argument that a borrower's loan could be deemed invalid because the mortgages had been sold so many times on Wall Street that the lender could not demonstrate who owned it. Once the lawsuit was filed, Roth did next to nothing to advance the case and often failed to make required court filings, respond to legal motions, comply with court deadlines or appear at court hearings. Instead, Roth tried to extend the lawsuits as long as possible to collect additional monthly fees from clients. This approach did not generate a single victory in court and did not lower or eliminate the mortgage debt for a single one of the 2,000 homeowners who hired Roth and United First.

For the entire California AG press release, see Brown Wins $1 Million in Restitution for Victims of Attorney-Backed Foreclosure Rescue Scam.

Go here for the California AG lawsuit against Roth and here for the $1.1 million judgment against Roth.

(1) AG Brown's lawsuit contended that Roth and others:

• Violated California's credit counseling and foreclosure consultant laws, Civil Code sections 1789 and 2945;
• Inserted unconscionable terms in contracts;
• Engaged in improper running and capping, meaning that Roth improperly partnered with United First, Inc. and company owner Paul Noe, who were not lawyers, to generate business for his law firm violating Section 6150-6156 of the California Business and Professions Code, and
• Violated Section 17500 of the California Business and Professions Code.

(2) In addition to the hot water they got into in this case, Paul Noe reportedly was convicted of wire fraud in 1989 and the subject of a California Department of Insurance Cease and Desist Order in 2004; and Mitchell Roth resigned from the California State Bar in late May 2009, after the State Bar closed his law firm (see SF Weekly: State Bar Takes Over 'Son of Super Swindler' Law Firm -- 2,000 Con Jobs Too Late).

Homeowners Say Chase Pocketed Insurance Payment w/out Promptly Crediting Account; Sue Servicer For Credit Rating Damage, Inflated Fee Clip

In Galveston, Texas, The Southeast Texas Record reports:

• A Galveston County couple accuses Chase Home Finance LLC of mishandling a house payment made after Hurricane Ike and providing false information to credit bureaus, recent court documents say. According to a lawsuit filed July 20 in Galveston County Court No. 3, Sam and Jennifer Finegan informed the defendant that they will pay off a loan for their Hurricane Ike-damaged residence when they receive their insurance claim.

***

• The plaintiffs issued Chase a check for $20,000 in November 2008. They claim the defendant, however, did not properly apply the payment, but submitted negative credit information to various credit reporting agencies instead.

• Chase continued to hold on to the funds without crediting the account, the suit says. The plaintiffs argue that they tried to address the situation, but were unsuccessful in reaching an authority. Chase's errors and lack of response inflicted damage to the Finegans' credit rating, the suit states.

For more, see Couple claims finance company ruined their credit.

Loan Mod Scammer "Buys Out" Of Jail Time; Gets Suspended Sentence, Probation After Agreeing To Cough Up Half Of Required Restitution Before Sentencing

From the Office of the Nevada Attorney General:

• Michael Sinclair was sentenced in Las Vegas [] connection with his involvement with a mortgage foreclosure rescue company, Federal Housing Aid, whose operation included a call center in the Philippines.

• District Court Judge Michael Villani imposed a sentence of 30 to 90 months in the Nevada State Prison, but suspended the sentence and placed Sinclair on probation for a period not to exceed five years. Sinclair entered a plea to one count of Mortgage Lending Fraud and is required to pay half of the restitution owed prior to sentencing. He is required to pay restitution in the amount of $29,853.56 to the victims of his crime as well as another $300 for the cost of his extradition from the Philippines.(1)

For the Nevada AG press release, see Defendant In Mortgage Rescue Scam Operated from The Philippines Sentenced.

(1) According to the Nevada AG press release, Sinclair would contact homeowners facing foreclosure and offer to stop the foreclosure proceeding and save their credit. The victims entered into an agreement to pay an up-front fee ranging from $700.00 to $1,500.00 as compensation for affecting a solution to the foreclosure. Once the victims forwarded these fees to Federal Housing Aid, no further action was taken. The homeowners, some of whom were over the age of 60, were never provided with assistance in resolving their problems and, in fact, ended up losing their homes.