Title Insurer Extends Policy-Writing Suspension To JP Morgan Chase Foreclosures

The New York Times reports:

• A major title insurance company has stopped insuring homes foreclosed by JPMorgan Chase, another sign that the controversy over the legal practices of the big lenders is starting to influence the housing market.

• The company, Old Republic National Title Insurance, told its agents Friday that it would not write policies on foreclosed Chase properties until “the objectionable issues have been resolved,” according to a memorandum sent out by the firm’s underwriting department.(1)

• A Chase spokesman declined to comment. Old Republic executives did not return calls for comment. The title insurer, which is based in Minneapolis, said earlier in the week that it would not write policies for properties that had been foreclosed by another big lender, GMAC Mortgage.

For more, see Company Stops Insuring Titles in Chase Foreclosures.

See also, USA Today: Old Republic to stop writing policies for some foreclosures:

• [M]aryln Weiner, a title agent and real estate lawyer in Boca Raton, Fla., said she received a bulletin saying that Old Republic would also not insure title policy to a purchaser who has bought a property from Chase when the bank has foreclosed on the home and are now selling it to third parties.

• "They won't insure it after completion after the foreclosure," Weiner says. "This is going to set us back years. It's really going to be a mess. I think you're going to see actions to reopen foreclosures that already took place. This will have tremendous consequences and all title companies will do the same thing. We've never seen anything like this before."

(1) It seems to me that the underwriting department should also be concerned with the mortgages purportedly held by Chase, GMAC, etc. on those homes that are not in foreclosure as well. It stands to reason that if these companies can't prove that they own the loans that are in foreclosure, they probably can't prove that they own the loans they purportedly hold that aren't in foreclosure, either. Should a non-delinquent borrower decide to sell his/her home in a standard, conventional transaction (or any borrower for that matter, delinquent or not, who is trying to unload the home in a short sale), who does the title/closing agent look to for the satisfaction of mortgage when paying off the home seller's existing loan??? (If the purported existing mortgage lender can't prove that it owns the loan they claim to hold, they certainly have no authority to sign the satisfaction of mortgage.)

In theory, at least, it seems that the entire residential real estate sales industry, in my view, should be coming to a grinding halt by the end of the month.

Florida Congressman Takes To YouTube To Explain The Foreclosure Mess Created By The Home Loan Industry

Congressman Alan Grayson of Florida's 8th District (Orlando area) has taken to YouTube to provide a clear, cogent explanation of what foreclosing lenders, loan servicers, foreclosure mills, Mortgage Electronic Registration Services ("MERS"), "robosigners"/"affidavit slaves"/multiple corporate hat-wearing vice presidents and others have done to create the foreclosure mess we all find ourselves in, and which is beginning to cause the major loan servicers to begin suspending foreclosure actions and withdrawing the dubious documents they've been filing in court.

For the video (just under 8 minutes), see Fraud Factories: Rep. Alan Grayson Explains the Foreclosure Fraud Crisis.

Thanks to Deontos .is for the heads-up on the video.

The Ghosts Of The Dearly Departed WAMU, Lehman Brothers Continue Cranking Out Foreclosure Docs?

Shelter Island, New York attorney Abigail Field writes in AOL's DailyFinance:

• GMAC, JPMorgan Chase and Bank of America and One West Bank employees routinely sign hundreds of documents without verifying what they're signing. Those documents are then submitted to courts as if the documents were true, to enable the banks to foreclose on delinquent properties. Wells Fargo and CitiMortgage told the New York Times their employees do not engage in similar practices. Yet new evidence I've found shows they have. At deadline, I was still awaiting response from the banks.

***

• For example, in one case I reviewed, Herman John Kennerty of Wells Fargo gave a deposition describing the department he oversees for Wells Fargo. It's a department dedicated to simply signing documents. Kennerty testified that he signs 50 to 150 documents a day, verifying only the date on each.

• What else might he want to verify? Well, in one document he signed that I've reviewed, he supposedly transferred the mortgage from Washington Mutual Bank FA to Wells Fargo on July 12, 2010. But that's impossible, since Washington Mutual Bank FA changed its name in 2004, and by any name WaMu ceased to exist in 2008, when the FDIC took it over.

***

• In a similar example, one M. Matthews signed a number of documents that CitiMortgage has used to try to foreclose on properties. While Matthews may or may not sign hundreds of documents a day -- I have not yet found a deposition in which he swears that he does -- he certainly does not seem to verify the contents of the documents he's signing.

• For example, he signed a document supposedly transferring a mortgage from Lehman Brothers to Citi in 2009. It's hard to see how that's possible, since Lehman had already ceased to exist. When confronted with its nonsensical filing, Citigroup decided not to foreclose. Instead, it gave the homeowner a meaningful mortgage modification -- $15,000 principal reduction, plus a 30-year fixed mortgage at 3%.

For more, see Robo-Signing Scandal Spreads: Documents Show Citi and Wells Also Committed Foreclosure Fraud.

1st Time Homebuyers May Be Out Thousand$ In Tax Credits Due To Stalled Closings Resulting From Recent 'Robo-Signer' Mess

HousingWire reports:

• Homebuyers who were set to close on the purchase of a foreclosed home may not qualify now for the homebuyer tax credit after lenders suspended those sales in 23 states, real estate agents tell HousingWire. The closing deadline for the homebuyer tax credit was extended earlier in the year from July 30 to Sept. 30 in order to make sure more first-time buyers received the $8,000 credit. Existing homeowners were set to get $6,500.

***

• "There are brokers who were at the closing table, with their buyers, and GMAC (Ally) pulled the carpet out from underneath them. Can you imagine the lawsuits they are going to have, for the people expecting the tax credit, which had to transfer title by Sept. 30?" one REO broker told HousingWire.

For more, see Foreclosure robo-signers put homebuyers' tax credit at risk.

Lawsuit: Timeshare Outfit Uses Foreclosure Threat In Attempt To Squeeze $276 In Late Fees Over "Missing Penny"

In Passaic County, New Jersey, Courthouse News Service reports:

• An attorney claims his Hawaiian timeshare company charged him $276 in late fees and threatened to foreclose on his property because he owed it a penny. Jonathan Dorman says the Kahana Beach Vacation Club subjected him to abuse and threats until he wrung from it the information that it was charging him 20 months of late fees for a penny - which a supervisor said "appeared to be the result of a computer glitch."

***

• He says he offered to pay the penny, but the accounts receivable rep refused to accept it, but "continued to verbally berate plaintiff," and said he "was on the phone to get plaintiff to the pay $276.77 that was past due." [...] Dorman seeks punitive damages for fraud and violations of the Fair Debt Collection Act. He filed the case pro se.

For more, see Lawyer Fights $276 in Late Fees & Foreclosure Threat, Over a Penny.

For the lawsuit, see Dorman v. Kahana Beach Vacation Club an Consolidated Resorts, Inc.

Fresno Feds: Duo Pocketed Bank Loan Proceeds While Simultaneously Conning High-Equity Elderly Home Sellers Into Owner Finance, Equity Stripping Ripoff

In Fresno, California, The Sacramento Bee reports:

• The founder and longtime owner of Century 21 Apollo real estate was arrested Friday and charged with defrauding banks and elderly homeowners of more than $10 million. Jim Lankford, 71, and his roommate, Jon McDade, 46, bilked seniors and lenders for 11 years, according to a federal grand jury indictment [].

***

• Authorities say the men targeted seniors who owned homes free and clear and ran schemes that enriched the two with multiple loans on each property. Some homes were sold in short sales with Lankford's firm reaping commissions or lost to foreclosure, the indictment says.

• "Lending institutions did not know the loans they were extending were going to purchase property for which there was seller-backed financing, and sellers who agreed to finance the purchases did not know that the defendants had [simultaneously] obtained loans from lending institutions to purchase the properties," the document reads.

• In some cases, Lankford filed deeds with forged signatures or deceived elderly owners into signing away their homes "by telling them it had another legal purpose," authorities allege.

***

• Authorities previously said Lankford was the mastermind behind erasing a $22,400 loan by filing a document in 1999 -- "signed" by a woman who had died in 1995. He faced six felony charges, but a judge threw them out because investigators discovered the alleged crime after the statute of limitations had expired.

For the story, see Feds indict Modesto men in real estate scheme.

For the U.S. Attorney (Sacramento/Fresno) press release, see Modesto Century 21-Apollo Realty Owner Charged With Defrauding Elderly Homeowners ($10 Million in Losses Alleged):

• The indictment alleges that the defendants would divert the proceeds of the mortgage loan to themselves, and would lull the elderly property owners by mailing them monthly interest-only payments.

For the indictment, see U.S. v. Lankford, et ano.

Pending NYS Law Targets Loan Modification Scams, Deed Ripoffs; Bill Awaits Governor's Sign-Off

In the Throgs Neck section of The Bronx, the New York Daily News reports:

• The bottom-feeders are back, but a bill on Gov. Paterson's desk could protect distressed Bronx homeowners from fraud. Two years after the subprime mortgage crisis imploded, unscrupulous loan modification consultants are still scamming homeowners like Angeleta Beckford.

• The 54-year-old coughed up more than $17,000 for consultants who promised to save her Throgs Neck home from foreclosure - not knowing she could have gotten free help from the state, said Senator Jeff Klein (D-Bronx, Westchester), the bill's sponsor.

• One firm took $400 per month from Beckford. Another persuaded her to sign over the deed and title to her home, she charged. "They scammed me," said Beckford. "I spent so much money. ... It's a nightmare."

• Many scammers have been charged with fraud in federal court. But other cold-blooded consultants continue to prey on Bronx homeowners, Klein said, by flooding their mailboxes with flyers that make false promises.

• The bill requires consultants to put a disclaimer on loan modification ads telling homeowners they can receive similar services for free through the New York State Banking Department.

For the story, see Home fraud shield law on Gov. Paterson's desk would fight loan scams.

Schwarzenegger Signs Bill Targeting Forensic Loan Audit Ripoffs

In Sacramento, California, The Sacramento Bee reports:

• California homeowners could get protection from "foreclosure-relief" scams under a bill signed into law by Gov. Arnold Schwarzenegger. Assemblyman Ted Lieu, D-Torrance, said his measure targets so-called forensic loan audits, where homeowners paid upfront fees, purportedly to determine their lender's compliance with state and federal mortgage laws.

For the story, see New state law targets mortgage relief scams.

California AG: "I'm Directing Chase To Prove It Is Following The Law Before It Continues Foreclosures In California!"

From the Office of the California Attorney General:

• Attorney General Edmund G. Brown Jr. has demanded that JP Morgan Chase prove immediately that it is complying with state law or, if it cannot, halt foreclosing on California homes. "I'm taking this action to further protect California homeowners on the brink of foreclosure," Brown said, "JP Morgan Chase, like GMAC/Ally Financial, has admitted that its review of key foreclosure documents was a ruse." "I'm directing Chase to prove it is following the law before it continues foreclosures in California," Brown added.(1)

For the California AG press release, see Brown Demands JP Morgan Chase Suspend Foreclosures Unless It Can Demonstrate Compliance with California Law.

Go here for AG Brown's letter to JP Morgan Chase.

(1) The recent revelations about JP Morgan Chase and GMAC/Ally couldn't have come at a better time for AG Brown, who currently finds himself in a tight race for governor.

BofA Joins Parade Of Lenders Hitting Brakes On F'closures In 23 States; Company 'Robo-Signer' Signed Up To 8,000 Docs/Month Without Reviewing Them

The Washington Post reports:

• Bank of America, the nation's largest bank, on Friday became the latest lender to put foreclosures on hold in 23 states because of concerns that court documents it submitted were improperly prepared.

• Bank of America and other mortgage companies have been under pressure to review their paperwork after employees and contractors said in sworn depositions that, because of the enormous volume, they hadn't had the time to read the documents, much less check them for accuracy.

***

• A Bank of America executive, Renee Hertzler, said in a February deposition in Massachusetts that she signed as many as 8,000 foreclosure documents a month without reviewing them. The deposition is similar to others taken from document processors at J.P. Morgan Chase and Ally Financial, which have also frozen foreclosures over the past week. The statements were taken by lawyers for homeowners contesting the seizure of their homes.

For more, see Bank of America latest to put hold on foreclosures amid paperwork concerns.

Atlanta-Area Law Enforcement Probes Alleged Loan Modification Racket Accused Of Ripping Off Thousand$ From Financially Strapped Homeowners

In Atlanta, Georgia, WGCL-TV Channel 46 reports:

• A CBS Atlanta exclusive investigation has exposed a local company victimizing people who are trying to lower their home and car loans. CBS Atlanta has spoken with dozens of families who say they've been devastated by one man who's profiting off their misfortune.

• Fred Lee, an agent with Matrix Capital, has been served with a cease-and-desist order in Georgia and he is under investigation by the DeKalb County Police Department, but you'd never know it. His business is booming and the number of victims is growing.

***

• Lee and his company, Matrix Capital, sell people the promise of a loan modification for $1,500 up front. He said he'll get you a lower interest rate, and while he's negotiating, you don't have to make a payment. You can live mortgage free. And people have believed him. He holds packed meetings across the Southeast, luring in new clients. [...] But his victims say they were never told their homes might go into foreclosure. And no one we spoke with had a successful modification through Lee.

***

• DeKalb County Police now tell us they have also launched an investigation into Fredrick Lee's company. They started investigating Lee four months ago when 30 victims stepped forward to police to tell them the same story. "Essentially it is a theft, a fraud,"(1) Sgt. John Germano said.

• Germano told us Lee has been skirting the law, moving from state to state,(2) changing his company name, and preying on people in dire financial situations. In fact, CBS Atlanta News found out in 2007 the Georgia Department of Banking and Finance issued Lee a cease and desist letter ordering him to stop brokering mortgages in Georgia. "That company changed names, but continued to do business," Germano said.

***

• If you have information on Fred Lee or Matrix Capital, please email [CBS Atlanta's Wendy Saltzman] at wendy.saltzman@cbsatlanta.com. You can also contact the DeKalb County Police Fraud Unit at 770-724-7704.

For the story, see Company Promises Lower Mortgage Payments (Lands Clients In Foreclosure).

(1) Georgia law enforcement authorities recently charged another alleged loan modification scammer with racketeering and theft by deception (see Self-Proclaimed Minister Faces Racketeering, Theft By Deception Charges For Allegedly Ripping Off Homeowners By Peddling Bogus Loan Modifications).

(2) According to the report, Lee was busted in Maryland doing the same thing. Another cease and desist order was issued there, but police say Lee has worked his way around the system and around the country making the same sales pitch. Reportedly, Lee also applied for and got a mortgage license in North Carolina in 2002, but his license was later revoked. Lee was said to have been sued over loans he brokered in Virginia.

Customers Claim Forensic Loan Audit Outfit Left Them Out Thousand$ & Homeless

In Rancho Cordova, California, KOVR-TV Channel 13 reports on companies U.S. Loan Auditors and My U.S. Legal, two firms who have been accused by disgruntled clients of ripping them off out of thousands of dollars by claiming to perform forensic loan audits on their home loan documents, purportedly in an effort to avoid foreclosure.

For the story, see Call Kurtis Investigates: U.S. Loan Auditors (Families Say The Company Took Thousands; They Ended Up Homeless).

Store Owner Suspects City Of Using Code Enforcement Rules To Take His Property, Squeeze Him Out Of Business

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

• For the latest example of local government run amok, look no further than the small Farm Store owned by Nasir Ahmed on Peters Road in Plantation. It's a drive-through convenience store where people roll up to buy beer, cigarettes and milk.

• After nearly 15 years of ownership — after working hard, paying his taxes and paying off the mortgage — Ahmed might lose the store because of a city code-enforcement nightmare. What Ahmed says were minor violations have turned into a $156,700 fine and a foreclosure judgment.

• "I think the city wants this property," said Ahmed, 52, an immigrant from Bangladesh. "Ever since I paid off the mortgage, there's been problems."

***

• If the city wants this property for a public purpose, eminent domain allows government to take it by paying the owners fair market value. But this seems like a squeeze play to force Ahmed off the land.

For more, see Plantation store owner could lose property in code-enforcement nightmare (City gets foreclosure order after fine surpasses $150,000).

Bedbug Invasion In Rented Condo Has Tenant's Skin Crawling; Complex Management Says It's Not Their Problem; Says Unit Owner May Be In Foreclosure

In Phoenix, Arizona, KPHO-TV Channel 5 reports:

• They are trapped in Scotch tape like fingerprints from a crime scene. Bree Daniels said it's the evidence that bedbugs have infested her Phoenix condo. "I woke up one night and saw one crawling out of my electrical socket, and I freaked out," Daniels said.

• Daniels lives at the Paradise Village II complex near 19th Avenue and Cactus Road, and said the problem started a month ago. "I got rid of my bed, I threw out all the comforters, all the sheets, and the pillows," she said. Daniels said the infestation was so widespread, that the only safe place to sleep was the bath tub. "I haven't had a good night's sleep since this started," she said.

• Daniels contacted CBS 5 News because she said she couldn't get anyone from the complex management to take care of the problem. They told us that she might be out of luck. "Unfortunately in her situation, we're not the ownership or management in charge of her unit," said complex manager Jaramiah Cox.

• Cox said Daniels' unit might be going through foreclosure and whoever owns it has not contracted with his management company. Meanwhile, Daniels is stuck with a problem that makes her skin crawl just thinking about it. "A hair falls on your arm and you think something's crawling on you. It's psychologically damaging," she said.

Source: Phoenix Woman Losing Sleep Over Bedbugs (Complex Manager Says He Can't Help Battle Infestation).

Would-Be Renter Out $1350 In Craigslist Rent Ripoff; Scammer Tricked Victim Into Transacting Bogus Deal Inside Bank Where He Claimed To Be Employed

In Sarasota, Florida, the Sarasota Herald Tribune reports:

• Nothing Betty Baker experienced after she replied to an ad on Craigslist for a $750-per-month apartment in June gave the single mother any reason to pause. The owner walked Baker through the spotless duplex, the paperwork was in perfect order. So she met the owner at the bank where he worked to sign the lease and hand over a $1,350 check for the deposit and rent.

• The check was cashed. Then, citing damage from a water leak, the owner postponed the move-in date several times. Then he stopped calling, and Baker could not find him. She returned to Synovus Bank on Main Street in Sarasota -- she had previously handed the man her money there -- and was given the bad news by an employee in the lobby.

• "He said, 'I hope you didn't give him any money because someone else was just there with the same story,'" Baker said. "That is the moment when my heart sank and I knew this guy just got me for nearly $1,400." The "owner" turned out to be anything but. He also was not a bank employee. The lease was bogus.

***

• Sarasota police identified the man who they say scammed Baker as Teddy Foster and discovered that he allegedly bilked two more people out of $1,000 on the same property in the same manner a month earlier. There is a warrant for his arrest.

• He is part of a fast-growing national scam tied closely to the foreclosure crisis and the Great Recession. The millions of vacant homes that have resulted are ready-made bait for stressed people looking for the cheapest rent possible. The prevalence of the swindle -- with endless variations that also can target the real owner or property manager -- is also a sign of scammers desperate for quick cash.

***

• The basic scam works this way: The fraudster finds a vacant home from the ranks of foreclosures, or via a legitimate for-rent advertisement, and places an ad on Craigslist for a below-average price. Included are various perks: all utilities included, or perhaps multiple pets allowed.

***

• Sarasota Police Det. Jack Carter had no complaints of online rental scams last year but already has had a dozen since January, three now in various stages of prosecution. The charge is a third-degree felony that carries with it the potential for five years in jail and a fine of up to $5,000.

• "The permutations are unbelievable," Carter said. "Sometimes the victims show up on the same day and say, 'I'm renting this place,' and the other says, 'No, I'm renting this place,' and the third says, 'No, I'm renting this place." The scammer often gets the renter off Craigslist but converses with them in other ways to avoid the site's roving online security teams looking for fraud. "They have gone as far as to get a transient to meet the renter at the house," Carter said. "They think the guy is a gardener or caretaker letting them into the house." The house in question has been broken into ahead of time and unlocked.

***

• Many law enforcement agencies in Southwest Florida say they have not received any complaints, but Julie LeLande, owner of Sarasota's LeLande Properties, said many cases she has dealt with have gone unreported. "None of the people I've talked to have reported it to the police," she said. "It is just so rampant."

For more, see Web-based scam snaring renters.

Ohio Secretary Of State Asks Feds To Open Criminal Probe Into 'Robo-Notary' Abuses Involving Mass-Produced Foreclosure Docs; Lists 5 Violations Of Law

From the Office of the Ohio Secretary of State:

• Ohio Secretary of State Jennifer Brunner, Ohio’s chief elections officer and the state officer responsible for licensing notary publics, [...] revealed that she has referred specific instances of notary abuse occurring at Chase Home Mortgage in Columbus and by the Mortgage Electronic Registration Systems, Inc. (MERS) to a federal prosecutor for investigation.

***

• Secretary Brunner, in two letters dated Aug. 11, 2010 and Sept. 1, 2010, referred matters of alleged notary abuse in thousands of home mortgage foreclosures by Chase Home Mortgage and the Mortgage Electronic Registration Systems, Inc. to U.S. District Attorney Steven Dettelbach in Cleveland. Citing two depositions, (one & two) of Chase employee Beth Cottrell, taken in Columbus in May of 2010, and a deposition of MERS Secretary and Treasurer, William Hultman taken in New Jersey in April of 2010. These depositions contain sworn testimony that at Chase Home Mortgage, 18,000 documents per month are executed and notarized per month by eight people, with admissions that:
  
  1) it is the notary and not the document signer who gives an oath who fills in numbers in the affidavits used in court ordered foreclosures,
  
  (2) no oath is administered for the signing of each document,
  
  (3) notarized documents are not verified by the person signing and giving oath that they have personal knowledge of the contents of the documents, but rather, signers are relying on verification by others,
  
  (4) documents are signed in bulk and notarized in bulk separately,
  
  (5) notaries know this at the time they notarize documents in this process.
  
  
• It’s not fair to consumers or to the employees who by virtue of their jobs, are signing these documents. I urge the U.S. Department of Justice to take up this investigation with vigor and purpose to protect consumers and hold financial institutions to the standards of scrutiny and exactitude required by law, even if it means prosecuting some of our largest corporations. These apparent violations of state law point to schemes that merit federal investigation of large institution lending practices and use of the U.S. Postal Service.

For the entire Ohio Secretary of State press release, see Secretary Brunner Outlines Two Lines of Attack in Fighting High Ohio Foreclosure Rates.

Major Title Insurance Company Declares Ally/GMAC REOs Uninsurable Until Further Notice!

A recent story in The New York Times on the ongoing turmoil due to the dubious documents being used by loan servicers and foreclosure mills in foreclosure actions against delinquent borrowers contains this gem:

• As more defaulting homeowners become aware of the lenders’ problems, they are expected to hire lawyers and challenge the proceedings against them. And if completed foreclosures were not properly done, families who bought the troubled homes could be vulnerable to claims by the former owners.(1)

• Apparently alarmed about such a possibility, one of the major title insurance companies, Old Republic National Title, has sent a bulletin to agents saying that “until further notice” it would not insure title to properties foreclosed upon by GMAC Mortgage, the country’s fourth-largest home lender and one of the two big lenders at the center of the current controversy. GMAC declined to comment, and Old Republic representatives did not return calls.

Source: Document Flaws Have Put Brakes on Foreclosures.

(1) See Use Of Special Addendums & Bank-Designated Title Agents When Dumping REOs Mark Wave To Unload Defectively-Titled F'closed Homes Onto Unwitting Buyers? for an example of the business practices that one lender is allegedly engaging in when reselling foreclosed homes to the general public.

Federal Regulator Directs Seven Big Banks To Review Foreclosure Processes

The Washington Post reports:

• A top federal bank regulator said Thursday that he has directed seven of the nation's largest lenders to review their foreclosure processes after learning about the widespread mishandling of homeowner evictions by the industry.

***

• The banks contacted by regulators include J.P. Morgan Chase, which announced Wednesday that it was freezing 56,000 foreclosures after finding errors in its preparation of documents, according to OCC spokesman Kevin Mukri. Other lenders contacted include Bank of America, Citibank, HSBC, PNC Bank, U.S. Bank and Wells Fargo.

***

• The paperwork problems range from potentially forged documents to bank employees who never read borrowers' files before signing off on an eviction.

For more, see 7 major lenders ordered to review foreclosure procedures.

Florida Foreclosure Mills Under Assault Fire Back As Judges Rulings Citing Unprofessional Conduct, Rules Violations Face Challenge

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

• A foreclosure firm that was scolded and fined for unprofessional conduct by a Manatee County circuit judge last month has fired back, saying the judge is prejudiced against them and broke the rules herself.

• The vice president of Smith, Hiatt and Diaz law firm has filed motions accusing Circuit Judge Janette Dunnigan of violating judicial ethics when she leveled a $49,000 fine against them last month for repeatedly scheduling hearings and then not showing up.

• The Fort Lauderdale firm asked for a rehearing and requested Dunnigan be disqualified from the case where she found the firm in civil contempt of court. The firm "fears that it will not receive fair consideration due to prejudice and bias of the presiding judge."

• The clash over reputations -- both of the judge and lawyers who could be punished for their behavior -- underscores the growing imbroglio caused by a glut of foreclosures as local judges assert themselves to re-establish control in their courtrooms.

***

• Smith, Hiatt and Diaz is not the only law firm firing back. Judges have started throwing out foreclosure cases that do not follow simple court rules in the 12th Judicial Circuit, including Manatee and Sarasota counties.

• Firms are challenging retired Judge Harry Rapkin's decision to throw 61 cases out of court on Friday, raising the stakes on following court rules. Dismissing the cases forces lenders to pay another court filing fee to restart the case -- up to $1,900.

For more, see Foreclosure firm challenges Manatee judge who fined it.

Homeowner Suffers Through Series Of Lock Outs As Lender Changes Door Hardware Seven Times After Falling 30 Days Behind On House Payments

In South Florida, WFOR-TV Channel 4 reported on local homeowner Xavier Bracco, and the recent problems with his mortgage lender:

• [L]ast fall, Bracco's dream turned into a nightmare."I felt as if like everything was coming down," said Bracco. When he got a pay cut, forcing him to miss one mortgage payment by only 30 days. He called the bank to tell them the news. "I said I'd be late 30 days," said Bracco."

• But in March after he came home from a business trip he found someone had broken into his house. "I came in and starting seeing my doors opened," said Bracco. It turns out, the people who were breaking in were sent from the bank that holds Bracco's mortgage. They were sent there to change the locks while Bracco was away on business. It apparently was a strong arm way of taking possession of the house.

• "For the first time in so many years I started to cry," said Bracco of those times. According to logs kept by the contractors hired by the bank which were left on Bracco's kitchen counter, every time Bracco changed the locks back and then went off on business the crew sent by the bank broke back into his house and changed the locks again. "I changed one set (of locks)," said Bracco. "And they changed the other set."

• They did that seven times. According to logs the crew signed and left behind the bank has changed the locks at least seven times and they kept doing it until Xavier Bracco finally hired a lawyer.(1)

Source: I-Team: Mortgage Help Not Helping.

(1) Earlier media reports reveal that at least one Massachusetts law firm is apparently going around the country taking on these illegal lockout cases on behalf of screwed-over homeowners. See:

• Bank admits mistake on Willcox home foreclosure (involving an Arizona homeowner) (for a copy of the resulting federal lawsuit, see Newman v. Bank of America, N.A. and go here for the attached Exhibits),

• Family's recently purchased home, gutted by property removal service (involving a Michigan homeowner) (for a copy of the resulting federal lawsuit and accompanying Exhibits , see Rought v Deutsche National Trust Company, Trustee, et al.).

For those homeowners who've been screwed over by wrongful lockouts by foreclosing lenders (and their confederates) and seek some possible guidance on how much their cases might be worth if they seek to sue, see:

• Nevada High Court OKs $1M+ Damage Award To Homeowner Due To Mortgage Company Misidentification Of Home In Foreclosure (for the court ruling, see Countrywide Home Loans v. Thitchener, 192 P.3d 243; 2008 Nev. LEXIS 79; 124 Nev. Adv. Rep. 64 (September 11, 2008)),

• Long Island Judge Hammers Wells w/ $155K Tab For Oppressive, Heavy Handed, Egregious Conduct For Pre-Sale Lockout Of Homeowner In Foreclosure (for the court ruling, see Wells Fargo v. Tyson, 2010 NY Slip Op 20079 (Sup. Ct., Suffolk County, March 5, 2010)).

Another Homeowner Who Never Missed A Payment Victimized By Wrongful Foreclosure Lock-Out; Bank Agent Admits Screw-Up

In Scottsdale, Arizona, KTVK-TV Channel 3 reports:

• The foreclosure crisis has forced thousands of Valley families out of their homes but a few days ago a Scottsdale woman got locked out of her home, which is not in foreclosure.

• Banks are hiring private companies to lock people out of their foreclosed homes but mistakes are being made due to more homeowners going into foreclosure. Cory Miller says she came home to her Scottsdale condo last week to find she had been locked out. Someone had put a lock box on her door and taped up a scribbled note which said they were given the address as a foreclosed property.

• Miller says, “I haven't missed a payment. Ever!" Miller says she called police thinking perhaps it was a scam or maybe she had been robbed. A Scottsdale police officer arrived to check things out and it turned out the whole thing was a mistake.

• The note on the door was signed by someone from Regis Development. Miller says she called them, explained they had the wrong house and they sent someone to fix her lock. The CEO of Regis Development admits to the mistake. The company is hired by banks to put lock boxes on foreclosed homes. Leo Loiacano admits, “Unfortunately when stuff like this happens, it's a serious nature. You're acting on behalf of a bank and if they send you to the wrong the spot you're in the wrong spot."

• Miller says the whole situation left her feeling unsettled. “If somebody told me yesterday that somebody can gain access to your home and lock you out I would’ve said ‘You're out of your mind there's no way’ but today I'm living it." 3TV spoke to attorneys and police about the matter and they all say there is no way to prevent this kind of thing from happening.(1)

Source: Scottsdale woman locked out of home due to foreclosure mistake.

(1) For a recent similar incident in Arizona, see BofA Bagged Again On Wrongful Foreclosure Attempt; Says It's Sorry For Action Against Couple With Paid-Off Loan After Local Media Steps In.

Earlier media reports reveal that at least one Massachusetts law firm is apparently going around the country taking on these illegal lockout cases on behalf of screwed-over homeowners. See:

• Bank admits mistake on Willcox home foreclosure (involving an Arizona homeowner) (for a copy of the resulting federal lawsuit, see Newman v. Bank of America, N.A. and go here for the attached Exhibits),
• Family's recently purchased home, gutted by property removal service (involving a Michigan homeowner) (for a copy of the resulting federal lawsuit and accompanying Exhibits , see Rought v Deutsche National Trust Company, Trustee, et al.).

For those homeowners who've been screwed over by wrongful lockouts by foreclosing lenders (and their confederates) and seek some possible guidance on how much their cases might be worth if they seek to sue, see:

• Nevada High Court OKs $1M+ Damage Award To Homeowner Due To Mortgage Company Misidentification Of Home In Foreclosure (for the court ruling, see Countrywide Home Loans v. Thitchener, 192 P.3d 243; 2008 Nev. LEXIS 79; 124 Nev. Adv. Rep. 64 (September 11, 2008)),

• Long Island Judge Hammers Wells w/ $155K Tab For Oppressive, Heavy Handed, Egregious Conduct For Pre-Sale Lockout Of Homeowner In Foreclosure (for the court ruling, see Wells Fargo v. Tyson, 2010 NY Slip Op 20079 (Sup. Ct., Suffolk County, March 5, 2010)).

Flood Of Foreclosure Cases Leads To Kangaroo Courts In Florida

Naked Capitalism opines:

• Florida is ground zero of the foreclosure crisis. In addition to being one of the epicenters of the housing meltdown, it has also become the jurisdiction where local lawyers have been the most effective overall in unearthing how servicers and foreclosure mills have engaged in widespread document fabrications and use of improper affidavits to foreclose.

• This abuse of contracts and legal procedures matters because the courts are the last bastion of defense of the individual. Even libertarians, who keenly oppose government mission creep, give courts an elevated role as a protector of rights.

***

• The old saw about “best government money can buy” now looks to apply to the courts, the one area most people assume to be relatively free from tampering by well funded interests. [...] Let’s look at one example of banana republic faux justice in the US, via a speech by foreclosure court Judge Roger Colton to his court on how the day was going to go. It’s simply breathtaking.

For more, see Florida’s Kangaroo Foreclosure Courts: Judges Denying Due Process on Behalf of Banks.

Purported Forensic Loan Auditor Impersonating Lawyer Peddling Foreclosure Rescue Services Gets Year In Jail, 5 Years Probation, $35K Restitution Order

In Marin County, California, the Contra Costa Times reports:

• A loan auditor who impersonated a Mill Valley lawyer in a foreclosure scam was sentenced to a year in jail []. Nicolas Moscouplos, 54, of Sacramento was also ordered to pay restitution to the victims, said Deputy District Attorney Leon Kousharian. The restitution amount is approximately $35,000, said Moscouplos' public defender, Michael Schroettner.

***

• The case began in May after the Mill Valley lawyer, Mohamed Salem, contacted the sheriff's department to report that someone had opened an Internet site using his name. The website, www.canwinforeclosure. com, appeared to offer Salem's legal services in helping residents fend off foreclosure actions. Salem reported that he became aware of the site after receiving complaints from lawyers regarding paid services that were not being provided.

***

• Investigators identified at least 12 victims. Moscouplos eventually pleaded guilty as charged to false impersonation and identity theft. He was sentenced by Judge Kelly Simmons in Marin Superior Court. The judge also sentenced Moscouplos to five years of probation.

For the story, see Scammer sentenced for impersonating Mill Valley lawyer.

Court To Hear Fla. Foreclosure Mill's Request To Immediately Kibosh State AG's Subpoena Related To Probe Into Alleged Farudulent Document Fabrication

From a Shapiro & Fishman press release:

• The Honorable Jack S. Cox of the Fifteenth Judicial Circuit in Palm Beach County, Florida today [Sept. 30, 2010] hears a “motion to quash” an investigative subpoena by Florida’s Attorney General Bill McCollum. The motion is brought forth by Shapiro & Fishman, LLP, which has been targeted for investigation concerning foreclosure processes throughout Florida. Gerald Richman of Richman Greer, P.A., legal counsel for Shapiro & Fishman, argues in the motion the Attorney General lacks jurisdiction over this matter. Richman also highlights specific flaws within the Subpoena, which violates the Fourth Amendment, litigation, attorney-client and work product privileges along with a large number of general and specific objections.

For more, see Foreclosure Attorney Seeks Immediate Halt to Improper Investigation by Attorney General Bill McCollum (The Honorable Jack S. Cox of the Fifteenth Judicial Circuit of Florida Set to Hear Motion to Quash the Investigative Subpoena).

California Judge Stalls Foreclosure Eviction After Being Made Aware Of "Dubious Docs" Signed By Central Florida "Affidavit Slave"

In Los Angeles, California, the Los Angeles Times reports:

• Zeenat "Zee" Ali, who dropped out of medical school to contest the foreclosure of her mother’s Diamond Bar home, won another round in court this week when a judge in Pomona put the eviction on hold at least until November.

• In an order filed Tuesday, Los Angeles County Superior Court Judge R. Bruce Minto said the family had "shown a probability of success" in its claim that fouled-up paperwork invalidated the transfer of the mortgage in 2006 when it was sold in a bundle of loans that were used to create mortgage-backed securities.

***

• The defendants are now-defunct Downey Savings(1) of Newport Beach, which wrote the loan; Deutsche Bank; and Central Mortgage Co., a subsidiary of Arkansas' Arvest Bank Group that handled customer service on the loan.

***

• Her lengthy battles with the banks in state and federal courts, conducted without benefit of an attorney, were described in a Times article(2) and blog post in early August. At that time, Ali, 23, had just retained a lawyer, Kenneth T. Zwick of Costa Mesa. Zwick filed the request for a temporary restraining order that Minto granted this week.

• Zwick's grounds for requesting the order included the allegation that a document transferring customer-service rights on the Ali mortgage had been signed improperly by Crystal Moore, identified in the papers as a Downey vice president.

• Citing stories in the St. Petersburg (Fla.) Times,(3) the request said Moore in fact worked for Nationwide Title Clearing Inc. in Palm Harbor, Fla.,(4) where she and another employee had been "robo-signing" thousands of mortgage documents as though they were officers of banks, when in fact they were not. "A few people in Florida pretended to be vice presidents of dozens of banks," Zwick said in an interview.

• Jeremy Pomeranz, a Nationwide Title Clearing senior vice president, said Moore works for his company but denied that anything improper had occurred. Nationwide Title Clearing employees such as Moore are often appointed vice presidents by lenders for the limited purpose of allowing them to sign transfer papers when pools of loans are sold, Pomeranz said. He said that in the case of the Ali loan, Downey’s board had named Moore a vice president for that purpose.

For the story, see Eviction delayed again in challenge to Diamond Bar foreclosure.

(1) The fact that one of the mortgage companies appearing downstream in the loan's chain of title is now out of business can only make it that much more difficult for the current holder to properly establish said chain, thereby enhancing the chances of a favorable resolution for the homeowner.

(2) See Fighting parents' foreclosure, Diamond Bar student wins rounds against Deutsche Bank (With no legal training, Zeenat Ali, 23, has been doing battle in court, winning judgments against the bank and two other companies mainly on procedural grounds).

(3) See When 'Bryan J. Bly' became 'NB,' did he know what he was signing? (St. Petersburg Times, June 20, 2010).

(4) Nationwide Title Clearing is named in Fraud Digest's recently released list of the Dirty Dozen - "the mortgage servicing companies most responsible (in the opinion of Fraud Digest) for flooding courts with millions of fraudulent mortgage assignments and Affidavits in foreclosure cases." (Thanks to Deontos .is for the heads-up on the Dirty Dozen list.)

JP Morgan Chase Freezes Foreclosures In 23 States; Expected To Affect 56K Homeowners

The Washington Post reports:

• J.P. Morgan Chase, one of the nation's leading banks, announced Wednesday that it will freeze foreclosures in about half the country because of flawed paperwork, a move that Wall Street analysts said will pressure the rest of the industry to follow suit.

***

• The paperwork problems at J.P. Morgan mirror those uncovered last week at another large mortgage lender, Ally Financial. But J.P. Morgan's decision is expected to have a much greater effect on the industry because it is held in high regard by its peers. By contrast, Ally, formerly known as GMAC, is a still under the cloud of a $17 billion federal bailout package that it has been unable to pay back.

• Both firms are investigating whether foreclosure files were improperly or fraudulently assembled, and whether their employees failed to review the documents even as they signed off on them. A growing number of homeowners - even those who missed their mortgage payments - are now scrambling to challenge the proceedings, weighing down an already overburdened court system.

For more, see J.P. Morgan Chase to freeze foreclosures over flawed paperwork.

Plea Deal Yields Prison Time For Mom, Daughter Duo In F'closure Rescue, Lease-To-Own Rent Skimming Scam Targeting Strapped Homeowners, Would-Be Buyers

In Bakersfield, California, the Bakersfield Californian reports:

• A mother and daughter will go to prison for their part in a real estate scam that cheated dozens of people out of 24 homes, a prosecutor said []. Alice Kantin,(1) also known as Meyer, 69, and her 38-year-old daughter, Dawn Kantin, pleaded no contest [] to felony charges that will put the mother in prison for two years and the daughter in prison for five years, Deputy District Attorney Gordon Isen said. [...] The Kantins will also be ordered to pay restitution in an amount to be determined, but it is unknown if they have any money to pay the victims, Isen said. The loss is a few million dollars, he said.

***

• Each were charged with 44 felonies of conspiracy, embezzlement, theft, notary fraud and forgery stemming from transactions between 2007 and 2009.

• Both women reportedly agreed to take over payments for distressed homeowners by using rents from people who had an option to buy the homes, investigation reports say. But in most cases, the homes went into foreclosure during a time the senior Kantin poured at least $290,000 into her bank account, the reports say. Both the homeowners and renters lost everything, the reports say.

For more, see Mother, daughter plead no contest to felonies in real estate scam.

(1) Reportedly, Alice Kantin operated from a firm called Desert Air Real Estate Investments Inc. in Bakersfield, according to court reports.

Plea Negotiations Tank In Criminal Prosecution Of Loan Modification Pair; Michigan AG's Office Ready To Go To Trial

In Brighton, Michigan, WHMI Radio 93.5 FM reports:

• Two employees of a Howell mortgage company charged with violating foreclosure rescue regulations are heading to trial. Michelle Garbuschewki of Howell, also known as Michelle Justice, along with Lisa Joboulian of Northville are charged with violating the Credit Services Protection Act.

• The pair, who worked for Elite Mortgage, were in 53rd District Court in Brighton [] for a scheduled plea hearing but nothing was worked out and the case was adjourned. A spokeswoman from the Michigan Attorney General’s Office says negotiations have broken down and they are now waiting for a trial date to be scheduled.

• The terms of any offered details have not been revealed but the state is seeking restitution — estimated at more than $25,000 — for all eight complainants. Garbuschewski previously admitted to WHMI that she and Joboulian had taken money up front from customers facing foreclosure, but said she thought the law applied only to mortgage companies, not loan-modification companies like Elite Mortgage, which has since closed its doors. The Attorney General’s office says they received eight complaints against Garbuschewski, Joboulian and Elite Mortgage, although only two complaints are included in the current charges.

Source: Plea Negotiations Break Down In Foreclosure Violation Case.

Self-Proclaimed Minister Faces Racketeering, Theft By Deception Charges For Allegedly Ripping Off Homeowners By Peddling Bogus Loan Modifications

In Atlanta, Georgia, MyFox Atlanta Channel 5 reports:

• The FOX 5 I-Team has the exclusive video of the arrest [last week] of a self-proclaimed minister who police say took more than $100,000 from his most recent victims. An I-Team investigation caught the man on hidden camera offering to save people's homes from foreclosure, even after the state had warned him to stop.

• The man spent time in federal prison for fraud and when he got out of prison and settled in Metro Atlanta to start another business, which the state told him was illegal. That same man was warned a second time by the state to stop. Then, after an I-Team hidden camera investigation he was raided by local police. What did he do? Police say opened up shop again.

For more, see I-Team: Trinity Arrest.

See Media Report Probes Into Minister's Activities Involving Dubious Loan Modification Services, for more on Trinity Corporation's 'Uncle' Mike Surgent, the self-proclaimed minister bagged by the cops for allegedly ripping off homeowners by peddling bogus loan modifications.

Forensic Loan Audits "Had No Value" Admits Soon-To-Be Booted Attorney As State Bar Continues "Historic" Effort In Slamming Bogus Loan Mod Lawyers

In Los Angeles, California, Metropolitan News Enterprise reports:

• The State Bar of California said [] that Orange County attorney Mark Alan Shoemaker has agreed to be disbarred for loan modification misconduct. Shoemaker, 50, did so as a result of complaints from 18 homeowners who received little or nothing for their money when seeking help in trying to change the terms of their mortgage and avoid foreclosure, the State Bar said.(1) He is the sixth lawyer to agree to disbarment since the group created its Loan Modification Task Force in April 2009.(2)

***

• The State Bar said that Shoemaker, as president of Advocate For Fair Lending, promised homeowners “trapped in their mortgages” that his company could “reduce your payments, interest and balance without refinancing your home.” Clients paid a minimum $1,000 a month for three months for the company’s services.

• The company promised to audit loan documents, which, Shoemaker said in a stipulation letter, “had no value to clients.” Demand letters were sent to lenders and when they didn’t respond, AFFL said the client would need an attorney for an additional fee.(3)

For more, see Sixth Attorney Agrees to Disbarment for Loan Modification Misconduct.
See Another Lawyer Agrees To Disbarment For Loan Modification Activities for the State Bar of California press release.
(1) Shoemaker's reportedly admitted State Bar violations include:

• knowing or being “grossly negligent in not knowing” employees who were not lawyers were giving legal advice,
• failed to perform legal services competently,
• failed to refund unearned fees (see footnote 3, below),
• inadequately communicated with clients,
• failed to account for advanced fees and costs,
• charged an unconscionable fee,
• failed to deposit funds in a client trust account, and
• aided a non-attorney in the practice of law,

(2) “What the State Bar discipline system is doing to lawyers engaged in loan modification misconduct is historic,” State Bar Chief Trial Counsel James Towery reportedly said. “The [State Bar] has never so aggressively gone after a group of attorneys for misconduct.” Towery reportedly described as “remarkable” the results of State Bar prosecutors working to stop foreclosure-related unethical behavior. According to the story, in addition to the six disbarments, the State Bar’s Loan Modification Task Force has obtained 12 resignations of attorneys involved in loan modification misconduct. Six trials are pending, another 1,800 active investigations related to loan modification are underway, and more than 4,000 complaints have come through the task force since it was formed, the story states.
(3) Homeowners ripped off by the dishonest conduct of a California attorney (including a failure to refund unearned legal fees) who want to recover their money can apply for possible restitution from the Client Security Fund of the State Bar of California (up to $100,000 if the screwing over occurred on or after January 1, 2009; up to $50,000 is reimbursable if the dirty deed(s) occurred before January 1, 2009. See also Can the Client Security Fund Help You?).
For earlier posts referencing California's Client Security Fund in the context of loan modification ripoffs, see:

• Thousands Of Distressed Homeowners Left Hanging After Attorney Abruptly Chucks Law License; Calif. State Bar Urges Victims To File Restitution Claims,
• Calif. State Bar Probers Have Hands Full With Loan Mod Ripoff Complaints; 1200 Probes Pending; Attorney Scams Begin To Drain Client Security Fund.

For similar "attorney ripoff reimbursement funds" that sometimes help 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 (list now includes Canadian protection funds, courtesy of the American Bar Association);
• Check the USA Client Protection Funds Map;
• Check the Canada Client Protection Funds Map.

State Bar Of California Clobbers Another Rogue Member For Involvement In Loan Mod Ripoffs; Usually Never Met Clients In Possible Lawyer-Renting Racket

In Los Angeles, California, Metropolitan News Enterprise reports:

• Orange County attorney Brian Colombana, who handled dozens of foreclosure cases, has admitted extensive misconduct that will lead to his disbarment, the State Bar of California said []. [...] He becomes the fifth attorney to agree to disbarment in the wake of complaints by homeowners who paid fees to lawyers the State Bar says did little or nothing to help them.

***

• According to the State Bar, Colombana, who practiced in Laguna Hills, accepted nearly $36,000 in fees from 12 distressed homeowners, but did not obtain a single loan modification. Eight of the clients live in states where Colombana is not licensed to practice, and he admitted to engaging “in a scheme to defraud these clients, by exploiting them for personal gain and accepting employment where he was not licensed to practice law.”(1)(2)(3)

For more, see Lawyer Faces Disbarment for Misconduct, State Bar Says.
See Another Lawyer Agrees To Disbarment For Loan Modification Activities for the State Bar of California press release.
(1) Reportedly, two of Colombana’s clients lost their homes to foreclosure, one had to sell his home at a loss and another cashed in insurance policies to bring the mortgage current and avoid foreclosure. Colombana, 29, affiliated with several loan modification companies, including Loan Negotiators of America, Housing Law Center and Mortgage Relief Law Center, and in most cases, he never met his clients, the story states.
No word in the story on whether law enforcement authorities are considering whether criminal theft by deception charges are applicable in this case.
(2) Online rumor has it that Colmbana may be back in the troubled mortgage business, peddling reports to help people know if they meet the federal guidelines for the HAMP program. See NPV Report. Brian Colombana is Back in the Mortgage Modification Business. This Time With a Report. In related posts, see:

• Liberty Law Firm in California. Is It Brian Colombana, Esq. or American Financial Modifications?,
• Liberty Law Firm – Scam, Complaint, Review, or Praise?

(3) Homeowners ripped off by the dishonest conduct of a California attorney (including a failure to refund unearned legal fees) who want to recover their money can apply for possible restitution from the Client Security Fund of the State Bar of California (see also Can the Client Security Fund Help You?).
For earlier posts referencing California's Client Security Fund in the context of loan modification ripoffs, see:

• Thousands Of Distressed Homeowners Left Hanging After Attorney Abruptly Chucks Law License; Calif. State Bar Urges Victims To File Restitution Claims,
  Calif. State Bar Probers Have Hands Full With Loan Mod Ripoff Complaints; 1200 Probes Pending; Attorney Scams Begin To Drain Client Security Fund.

For similar "attorney ripoff reimbursement funds" that sometimes help 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 (list now includes Canadian protection funds, courtesy of the American Bar Association);
• Check the USA Client Protection Funds Map;
• Check the Canada Client Protection Funds Map.

Participant In Alleged "King Solomon" Sovereign Movement, Home Hijacking Racket Targeting Vacant Foreclosed Homes Escapes Forgery-Related Convictions

A California Court of Appeals recently reversed all forgery-related convictions of Maurice Antoine Simmons, a participant in the alleged King Solomon II(1) (not to be confused with the original King Solomon of Biblical fame) home-snatching scam involving vacant foreclosed houses in the San Diego-area.(2)

The trial court, which originally sentenced Simmons to prison for two years eight months, now gets the case back for resentencing on the remaining convictions of filing a false instrument (six counts), conspiracy to file a false instrument (one count), and (this one's the biggie, folks!) driving with a suspended license (one count).(3)

Source: People v. Simmons, No. D056165 (Cal. App. 4th Dist. Div. 1, September 27, 2010).

(1) In footnote 2 of its ruling, the appeals court notes that King Solomon II prefers to use a copyright symbol at the end of his name (i.e., King Solomon II ©) and legally changed his name from Terry Lee Herron.

(2) The appeals court summarized Simmons' role in the scam as follows:

• In mid-2008, Simmons became acquainted with a man known as King Solomon II. Simmons paid $5,000 to King Solomon II so that he could learn about the concepts of "sovereignty" and "common law," on which King Solomon II purports to be an expert.

• While being mentored by King Solomon II, Simmons came to believe that he could become a sovereign by surrendering his birth certificate to the chairman of the Federal Deposit Insurance Corporation, among other things, and that under his sovereign status he could claim abandoned real estate as his own, even if the real estate was bank owned pursuant to a foreclosure process.

• According to Simmons, the process of obtaining ownership of abandoned properties under the concepts of "sovereignty" and "common law" involved posting a notice on the properties or on a courthouse bulletin board, and then — after waiting 30 days — recording a grant deed on the property, changing the locks, turning on the utilities, and removing the mailbox and the street numbers from the property.

• In October 2008, Simmons, with the participation of King Solomon II, caused grant deeds to be recorded in the San Diego County Recorder's office for six properties. Specifically, each grant deed stated that Simmons was conveying the property at issue to Sovereign Solomon Brothers Archbishop Corporation Sole, which is a Nevada corporation created by King Solomon II. The grant deeds were signed by Simmons and notarized.

• Simmons did not have the ability to convey the properties because he did not own any of them. Three were owned by banks after having been acquired through a foreclosure process. Three were owned by individuals.

• However, the county recorder's office does not determine whether a grant deed presented for recording is a valid legal document. It looks only for recordability. As the six grant deeds met the technical requirements, they were recorded, and Simmons began to take possession of the properties. According to Simmons, he and King Solomon II planned to turn the properties into "sanctuaries" for homeless families.

(3) For earlier posts on the alleged King Solomon II, sovereign movement home-snatching racket, see:

• California Man Gets 32 Months For Filing Phony Deeds To Illegally Claim Title To Homes In Foreclosure,
• California Man Says "Prove It" To Multiple San Diego-Area Mansion-Stealing, Deed Theft Allegations; Local Authorities Notice Phony Deed Filing Trend.

Ohio AG Asks State Courts To Review Ally/GMAC Foreclosures

Reuters reports:

• Fallout over GMAC Mortgage's foreclosure practices deepened on Tuesday as Ohio's top law enforcement official asked courts in that state to review all foreclosure cases involving the Ally Financial Inc unit.

• Richard Cordray, the state's attorney general, said he made his request after GMAC last week acknowledged that some employees were submitting affidavits in foreclosure proceedings without personally verifying the documents' contents.

• This has raised doubt over GMAC's foreclosure process, including whether some borrowers lost their homes without good reason, exacerbating the nation's housing crisis. It has also raised the specter that procedural shortfalls might be an industrywide problem, and not limited to GMAC.

For more, see Ohio asks courts to review GMAC foreclosures.

For the Ohio AG press release, see Cordray Asks Ohio Judges to Carefully Review GMAC Foreclosure Cases.

Palm Beach County Chief Judge Considers More Active Role For Jurists In Examining Foreclosure Cases

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

• Palm Beach County Chief Judge Peter Blanc is trying to decide whether judges can take a more active role in examining foreclosure cases after a meltdown in Ally Financial's foreclosure proceedings last week.

• Blanc said Monday that there has been an increase in requests by lenders and loan servicers to cancel foreclosure sales and vacate judgments following the disclosure that Ally was freezing portions of its foreclosure operation in 23 states, including Florida.

• While judges granted those requests, Blanc said he was concerned about cases in which defective foreclosure affidavits aren't being brought to the court's attention, possibly because the borrower has given up or walked away from the home. Also, he's unclear on whether the court should scrutinize past cases for flaws.

***

• Blanc said he was looking at case law regarding the duties and responsibilities of judges to see whether there is precedent for the current situation. But he said Florida's foreclosure crisis has brought many unique challenges to the courts and there is likely little historical guidance.

For more, see Judge ponders jurists' role in Ally Financial foreclosure cases.

SC Foreclosure Defense Attorney: Undated, Unnotarized Stamps "Magically Appear When A Foreclosure Plaintiff Needs To Prove Chain Of Title In A Case"

In Columbia, South Carolina, The Washington Post reports:

• A South Carolina attorney is alleging more wrongdoing against homeowners facing foreclosure by Ally Financial's GMAC mortgage unit. In a letter to a state trial court, Robert Rikard accused Judy Faber, a woman who identified herself as a GMAC vice president, of having "fabricated and changed the title in thousands of foreclosure cases."

***

• Faber, who is not named as a defendant in the South Carolina case, was the owner of a stamp that was used to authenticate the transfer of titles. In a deposition in Alabama, she said she was a vice president and director of a residential funding corporation in addition to being a GMAC vice president.

• Whether these stamps were used legally is critical in foreclosure cases. To foreclose on a house, a lender needs to not only prove that the homeowner is in default but that the company owns the mortgage.

• In case after case, "these stamps are all undated and not notarized, and they magically appear when a foreclosure plaintiff needs to prove chain of title in a case," Rikard said in a phone interview.

For the story, see Ally disputes charges that another GMAC employee 'fabricated and changed title' in foreclosure cases.

JPMorgan Chase Next In Line To Face Scrutiny Over Use Of Dubious Documents In Foreclosure Actions

In Palm Beach County, Florida, Bloomberg News reports:

• JPMorgan Chase & Co. faces a legal challenge next month that could cast doubt on thousands of foreclosures after a mortgage executive [Beth Ann Cottrell] at the bank said she didn’t verify documents used to justify home seizures.

• Lawyers for a Palm Beach County, Fla. homeowner asked a judge to throw out a foreclosure as a penalty for misleading the court, according to attorney Tom Ice of Ice Legal PA. They’re citing a May 17 deposition(1) in which the JPMorgan executive [Cottrell] said she signed thousands of affidavits and documents supporting the New York-based bank’s claims without personally checking loan records. The court is scheduled to hear arguments Oct. 19.

For more, see JPMorgan Based Foreclosures on Faulty Documents, Lawyers Claim.

(1) See May 17, 2010 deposition of Beth Ann Cottrell (available online courtesy of Mother Jones).

Another Notorious Multiple Corporate Hat-Wearing Vice President In The News

A recent USA Today story references another multiple corporate hat-wearing vice president that has gained some notoriety over the last couple of years for allegedly signing reams of documents related to foreclosure actions for various companies, and mostly doing so without actually reading them:

• In one case, Erica Johnson-Seck, a vice president at OneWest, said she signed 750 foreclosure documents a week and didn't read each document before signing it, according to a 2009 deposition [page 13, lines 11-23] obtained by Ice Legal. She also said they were signed without a notary present.(1)

Source: Mistakes widespread on foreclosures, lawyers say.

See also: The Washington Post: OneWest Bank employee: 'Not more than 30 seconds' to sign each foreclosure document:

• Johnson-Seck estimated that she spent no more than 30 seconds to sign each document. She explained that while she does not check everything, she does check some information, "which is why I said 30 seconds instead of two seconds."

• In the past, the company had a quality control process that required signatories to check 100 percent of the debts and any figures for loans and bankruptcy, Johnson-Seck said. But the error rate was low, so now they only check about 10 percent of the documents.

(1) Go here for:

• transcript of the deposition taken of Ms. Seck in the lawsuit,
• here for the Motion For Sanction Of Dismissal With Prejudice in the referenced lawsuit,
• here for links to other posts on Erica Johnson-Seck, all available online courtesy of 4closureFraud.org.

The Motion for Sanction makes reference to two earlier cases in which Ms. Johnson-Seck receives a less-than-honorable mention:

• In re Hwang, 396 B.R. 757 (Bankr. C.D. Cal. 2008); Bufford. J.,
• Deutsche Bank Natl. Trust Co. v Maraj,18 Misc 3d 1123(A), (Sup. Ct. Kings County 2008); Schack, J.

North Carolina, Colorado Join List Of State AGs Seeking Stoppage Of Ally/GMAC Foreclosures

Bloomberg News reports:

• Ally Financial Inc., the lender that stopped evictions in 23 states amid concern that its foreclosure process may be illegal, was asked by Colorado’s attorney general to extend the freeze by its GMAC Mortgage unit to his state.

***

• North Carolina sent a similar letter to Ally yesterday. “The use of unverified affidavits to obtain judicial relief could constitute a fraud upon the court,” North Carolina Assistant Attorney General Philip Lehman wrote in a Sept. 27 letter to Ally General Counsel William B. Solomon Jr.

For more, see Ally Asked to Halt Colorado Evictions as Foreclosure Legality Questioned.

Florida High Court Declines Request To Freeze Foreclousres; Hands Are Tied By Procedural Rules

The Palm Beach Post reports:

• The Florida Supreme Court says it has no authority to freeze foreclosure proceedings as was requested by U.S. Rep. Alan Grayson in light of state investigations into three foreclosure law firms and allegations they submitted fraudulent foreclosure documents.

• In a letter [] responding to the Orlando congressman's request, Clerk of Court Thomas D. Hall said the court has no authority under the Florida constitution or court rules to intercede in pending cases on the basis of allegations of attorney misconduct. The court also has no authority to investigate allegations of fraud or misconduct in foreclosure cases.

For more, see Florida Supreme Court powerless to freeze state foreclosures.

BofA Finally Dumps Debt Collector After Report Of Use Of Racist, Obscene Calls Hits National TV; Bank Continued Using Outfit Despite $1.5M+ Jury Award

In Dallas, Texas, ABC News reports:

• Two days after being confronted by ABC News, Bank of America has fired a debt collection agency after several of its operators were caught using racist and obscene phone calls to collect debts from bank customers.

• "What's up, you f---ing n---r?" said one of the collection agents in a message to 32-year old Allen Jones of Dallas, who owed $81 on his Bank of America credit card. "This is your f---ing wake up call, man," the debt collector said in a message left at Jones' home at 6:30 a.m. In a message left a few minutes later, the debt collection agent told Jones, "You little, lazy ass bitch, get your mother f---ing ass up and go pick some mother f---ing cotton fields, bitch."

• Jones said the calls continued even after he told the debt collection company he had paid his credit card bill. [...] Jones saved the taped messages and hired lawyers to sue ACT. A jury in Texas found the [sic] both the debt collectors and the corporation responsible and awarded Jones more than $1.5 million.(1)

• Despite the verdict, Bank of America continued to use ACT, accepting the company's explanation that these calls were made by rogue employees, until the bank CEO, Brian Moynihan, was given a copy of the taped calls and questioned about the use of the agency.

For more, see Investigation: Debt Collectors, the N-Word and Bank of America (Bank Fires Collection Agency After Operators Caught Using Racist, Obscene Phone Calls to Collect Debts).

(1) Click Here, Here, Here, Here, Here, Here, and Here to listen to phone messages left by the debt collectors (Warning: Offensive Content in the phone messages, and be prepared to first sit through a ponderous commercial before hearing the messages).