"The Eleventh Judicial Circuit Does Not Have A Rocket Docket!" Says Judge As She Dismisses Foreclosure Action, Cancels Debt Over Sloppy Paperwork

The Palm Beach Post last week obtained a copy of the 57-page transcript of a February 11, 2011 hearing in which Miami-Dade Circuit Court Judge Maxine Cohen Lando rips into attorney Marc A. Ben-Ezra, of the Ft. Lauderdale-based foreclosure mill Ben-Ezra & Katz, P.A. for the crappy paperwork filed in a foreclosure action that was apparently improperly brought.

After placing the world on notice that:

• ... the Eleventh Judicial Circuit does not have a rocket docket. We take every case seriously. We believe that every case deserves the Court's full attention and we expect the lawyers on those cases to do the same[,]

Judge Lando proceeds to:

• dismiss the foreclosure action with prejudice,
• cancel the promissory note and dismiss it with prejudice based on an IRS Form 1099-A, Acquisition or Abandonment of Secured Property, that was apparently filed and sent to the homeowner in this case,
• invite homeowner's attorney to "go for some other form of judgment" for any other remedy that might be available,
• announce that an order will be drafted finding both Ben-Ezra and a former associate in contempt of court,
• announce that she will send the contempt of court order to The Florida Bar for its review and consideration of any disciplinary action,
• order Ben-Ezra to pay the legal fees and costs incurred by the homeowner for his attorney fees incurred in defending this foreclosure action.

Ben-Ezra makes a valiant but ultimately futile attempt to throw himself on the mercy of the court in order to dodge being found in contempt of court, but Judge Lando refused to yield to his 'pure heart and empty head' defense.(1)

The transcript should serve as required reading for the rubber-stamping, "rocket docket" judges in Ft. Myers, Jacksonville, and anywhere else in Florida who are intent on bulldozing foreclosure cases through the court system based on faulty documents.

For the transcript, see Central Mortgage Company v. Gonzalez Del Real.

Go here for Judge Lando's earlier ruling in this case granting homeowner's motion to vacate the foreclosure judgment.

(1) For an earlier post on this story and more on the "pure heart and empty head defense," see Head Of Florida Foreclosure Mill Ordered Into Court To Explain Dubious Document Filings In Recently-Dismissed Suit.

AARP Sues HUD Over "Middle-Of-The-Game" Changes In Reverse Mortgage Rules

The New York Times reports:

• Reverse mortgages, which pay older homeowners a regular sum against the equity in their house, are supposed to shield borrowers from economic upheaval. But the popular loans have become tangled up in the real estate collapse.

• AARP, the seniors’ organization, filed suit Tuesday against the Department of Housing and Urban Development, which regulates reverse mortgages. The suit asserts that policy changes by HUD are pushing older homeowners into foreclosure. The case was filed in Federal District Court for the District of Columbia by the AARP Foundation, the organization’s charitable arm, and the law firm of Mehri & Skalet on behalf of the surviving spouses of three homeowners who had bought reverse mortgages. All three are facing eviction, the suit says.

• “HUD has illegally and without notice changed the rules in the middle of the game at the expense of vulnerable older people,” said Jean Constantine-Davis, a senior lawyer at the AARP Foundation.

• The lawsuit focuses on reverse mortgages where only one spouse signed the loan document. It argues that HUD shifted course in late 2008, making changes in its procedures so that surviving spouses who are not named on the mortgage must pay the full loan balance to keep the home, even if the property is worth less.

For more, see AARP Sues U.S. Over Effects of Reverse Mortgages.

Foreclosure Mill Shutdown Leaves Mess Behind For Tampa-Area Court System

In Tampa, Florida, the St. Petersburg Times reports:

• As many as 20,000 foreclosure cases in the Tampa Bay area have been left in limbo by the virtual collapse of the David J. Stern Law Firm, once Florida's most prolific foreclosure "mill.'' The firm's implosion gives many borrowers at least a temporary reprieve from foreclosure and means that thousands of cases could be dismissed unless lenders quickly hire other attorneys.

• "It's a mess,'' Pinellas-Pasco Chief Judge Thomas McGrady said Tuesday. In a letter dated March 4, Stern notified McGrady and other chief judges that as of March 31 the firm will end its involvement in all 100,000 foreclosure cases statewide in which it is still listed as attorney of record. Bank of America and other Stern clients jettisoned the firm last year because of its allegedly sloppy, fraudulent practices, but in many cases have yet to hire anyone to replace him.

***

• Attached to each letter was a list of Stern cases in that particular judicial circuit. In Pinellas-Pasco, the list is 251 pages with a total of about 10,000 cases — a third of all pending foreclosures.

• McGrady said his staff is working on orders requiring banks to show cause why their foreclosure suits should not be dismissed if they fail to get timely substitute counsel. In some cases, McGrady said, a new attorney has appeared but without proper legal authority. In other cases, more than one law firm has claimed to represent the same bank. "Then what do we do?'' he asked.

• In Hillsborough County, Stern is still attorney of record in just under 10,000 cases, of a total of 25,000 pending foreclosure suits. Chief Judge Manuel Menendez Jr. said he doubts that Stern's letter frees him from the responsibility of legally withdrawing from the cases. "You can't just walk away,'' Menendez said. "I think he's written the letter in attempt to circumvent the rules of judicial administration.''

For more, see Collapse of David J. Stern law firm throws foreclosure courts into disarray.

Colorado Law Incentivizes Foot Dragging By County Officials When Returning Surplus Sale Proceeds To Foreclosed Homeowners After Public Auctions

In Arapahoe County, Colorado, The Denver Post reports:

• What [Barry] Gragert didn't know was that a defining traumatic event for him — the loss of his Aurora home to foreclosure not long after the death of his wife two years ago — actually had a bittersweet outcome. Arapahoe County officials had quietly been holding more than $50,000 for him — funds left over from the foreclosure sale of the house where he had lived and raised a family for 19 years. Trouble is, no one had told him about it.

***

• State law requires counties to hand over any proceeds from foreclosure sales after all the debtors on a property have been paid. Usually there's little or nothing left. But when money is owed, counties put almost no effort into locating former homeowners. They're only required to send a notice to the homeowner's last-known address at the time the foreclosure began — usually the very house the homeowner was forced to leave — and to publish an ad in a local newspaper, often one the homeowner has never heard of.

• In a search of just three Front Range counties — Denver, Arapahoe and Adams — The Denver Post found that dozens of former homeowners were owed more than $653,300 since 2008.(1) Kenneth Aragon, who lost his Aurora home to foreclosure in 2009 and is owed money, was dumbstruck when told by The Post he had money coming. "They sent it to my old address?" said Aragon, who lives in Aurora. "How dumb is that?"

***

• In July 2008, the law changed, allowing counties to keep funds unclaimed after five years from the date of foreclosure. Previously the money was held in perpetuity. The three counties say their search efforts are minimal because of limited resources and small staffs.

For more, see Money owed to victims of foreclosure rarely gets to them.

(1) Here's a list of people in three metro-area counties due at least $10,000 from the county treasurer for property sold at foreclosure:

• Adams County: Efrain Ruiz ($14,203), Mike L. Zamora ($48,325), Richard A. Wasilkow ($37,026), Anthony J. Peters ($11,625), Arthur Schilling ($32,653), Rosa E. Martinez ($15,895), Barbara L. Brinkley ($11,792);
• Arapahoe County: Clarita Fritz ($10,536), Shirley Shellenbaum ($12,995), Patricia Rasmussen ($19,037), Thomas Allman ($42,156), Bernard and Margaret Krueger ($14,158), Barry Gragert ($50,641), Kenneth and Beatrice Aragon ($27,456), Clinton and Christine Rivard ($15,426), David and Jami Childress ($12,717), Laura Van Norden ($45,875);
• Denver County: Jesse and Theresia Morrison ($18,572), Marie Duran and Olan Gulley ($21,658), LeRoy Green ($31,730), Ruth Dewey ($39,412), Fayetta Curry and Sharon Davis ($33,212).

Mortgage Servicer Took Loan Modification Payments, Then Foreclosed On Her Anyway & Now Admits Screw-Up, Says Tucson Homeowner

In Tucson, Arizona, KOLD-TV Channel 13 reports:

• So many Tucson area homeowners are behind in their mortgage payments, and risking foreclosure, but an Oro Valley woman says her foreclosure was a shock. Up until the day her home was foreclosed on and sold, she thought everything was fine, and says she was even assured it would not happen. When it did, Tracy Wood says, "I felt like I was going to vomit and pass out."

***

• Wood says she was paying nearly 3,000 dollars a month on her Oro Valley home, never missing a payment as her mortgage company told her it was modifying her loan, and she would not be foreclosed on. Woods, says, less than two weeks after her Texas-based mortgage company, Saxon Mortgage assured her everything was fine, she got a phone call from an investor, telling her he was going to buy her foreclosed home that very day. And he did.

• "I thought he was joking. I go, well, that's not...I just talked to my mortgage company. There's no way that's going to happen," Woods says. "It was unexpected and hit me completely out of nowhere," She says.

For more, see Oro Valley woman says mortgage co. admits foreclosure was mistake.

Laid Off Robosigner Blows Whistle On Foreclosure Mill; Describes Boiler Room Operation Allegedly Set Up To Crank Out Docs w/ Falsified Signatures

In Baltimore, Maryland, The Baltimore Sun reports:

• Prosecutors have launched an investigation into a complaint that more than 1,000 deeds for homes foreclosed upon in Maryland were improperly executed — the latest development suggesting widespread problems in the way foreclosures have been handled in the state.

• The complaint, filed last week by a paralegal formerly employed by the Shapiro & Burson law firm, lays out allegations that attorneys who were supposed to be signing deeds and key foreclosure paperwork for Maryland properties instead instructed others to falsify their signatures on the documents.

• "We're looking at this case very closely," said Ramon V. Korionoff, chief of staff to the Prince George's County state's attorney, whose office is investigating. "It's very troubling."

***

• State regulators said this week that they also have received complaints about alleged foreclosure-documentation problems at the Baltimore law firm of Friedman & MacFadyen. Four notaries employed there resigned their commissions earlier this year after inquiries from the Maryland secretary of state's office, according to the agency.

***

• Charlene Perry, who specializes in foreclosure title work as vice president of Preferred Title Group Inc. in Baltimore, calls a deed with a false signature "a huge problem" that could come back to haunt a later homeowner if it is challenged. Most homebuyers purchase title insurance, so it would be up to the insurer to pay for their legal defense, she said.

• "I don't think the consumer at the end of the day is going to lose. But they're going to lose sleep," said Perry, who has worked in the title industry for more than 25 years. "They're going to be on pins and needles: 'Do I own my home?' "

***

• The complaint against Shapiro & Burson was filed by Fairfax resident Jose Portillo, 42, a notary who worked for the firm as a paralegal for nearly three years. He said he decided to file a complaint against his former employer after he and about 10 co-workers were laid off in February. He met with Civil Justice to offer information he thought would be helpful in the group's foreclosure litigation work and then prepared the affidavit last week.

***

• He described a boiler-room atmosphere, much like that at mortgage companies during the housing bubble, in which employees were overwhelmed with work. He said his shift regularly stretched into 12- and 13-hour days. Employees in another department handling foreclosure sales sometimes stayed until 4 a.m., he said.

• Portillo said he knows he is putting his Virginia-issued notary commission at risk by acknowledging that he improperly notarized documents. He said he decided to complain because it upset him that the firm laid off employees who followed instructions, while those who gave those instructions are still on staff. He said he hopes regulators see mitigating reasons to excuse his own notary violations.

• "It was implied that my job was at stake," said Portillo, who had already gone through a five-month stretch of unemployment in 2007 after settlement work dried up. "I know what I saw, and I have no qualms testifying and reaffirming my affidavit."

For more, see More foreclosure irregularities alleged in Maryland (Former law firm employee says over 1,000 deeds were recorded with false signatures).

State Lawmaker To Push Legislation Requiring Banks To Record Chain Of Title Before Filing Connecticut Mortgage Foreclosure Actions

From the Office of Connecticut State Senator Anthony Musto:

• Amidst national reports of shoddy paperwork processing that led to suspended foreclosure proceedings at many major lenders, state Senator Anthony Musto (D-Trumbull) is pushing legislation that would require banks to perfect their legal right to property before they can file a foreclosure action.

• Under current state law, banks and other lenders are exempt from recording their mortgage assignments, and thus securing their rights to the mortgage, before foreclosing on property—in contrast to individuals, who must properly record such things as deeds, liens and easements in public land records to make them effective.

• “Our law treats banks, mortgage holders and other lending institutions different from everyone else,” said Senator Musto, who testified in support of the bill before the General Assembly’s Judiciary Committee this past Friday. “With recent fraudulent document scandals involving some of the countries biggest mortgage lenders, and with a foreclosure crisis planted at the root of our continuing economic troubles, it makes no sense to allow banks to skip a step required by everyone else to secure an interest in the land. This bill will remove an unreasonable exemption and provide an additional layer of security for homeowners. Banks simply need to play by the same set of rules everyone else uses.”

For the press release, see Musto Seeks to Change Title Rules in Foreclosure Cases (Proposal would level playing field between banks and homeowners).

Demands Continue For MERS To Cough Up The Cash For Unpaid Recording Fees

In New York City, WNBC-TV Channel 4 reports on some of the calls demanding that Mortgage Electronic Registration System begin coughing up the cash for the millions it may owe for fees it has avoided by failing to record assignments of mortgages when loans are sold between its members:

• [Southern Essex, Massachusetts Register of Deeds John] O’Brien has officially requested that Massachusetts Attorney General Martha Coakley file suit against MERS, seeking $22 million in unpaid recording fees associated with home loans that were bought, sold, and securitized since 1998. “I have challenged them to open their books and show me how many times they have moved people’s mortgages around,” O’Brien said.

• In [New York State's] Suffolk County, former county clerk Ed Romaine is making a similar request. Now serving as a county legislator, Romaine has asked the Suffolk County attorney explore a lawsuit against MERS that he says would claw back more than $100 million for taxpayers. Romaine unsuccessfully tried to block MERS from doing business in Suffolk County back in 2001. “I saw a problem because we would not know who would be the owner of these mortgage notes because they would be sold in a private system and not recorded in a public system,” Romaine said.

• The prediction wasn’t far off. Mortgage industry insiders say a major reason many of the nation’s foreclosures are stalled or progressing at a slow pace is the inability of MERS to identify what parties actually hold title to distressed mortgage loans. The problem has led housing advocates to begin demanding foreclosure agents show proof of which investors actually hold legal claim on properties.

For the story, see Counties Seek Millions From Mortgage Giant (MERS under fire for unpaid fees).

Utah Federal Judge Grants TRO, Trial Request Stalling Foreclosure For Pro Se Homeowner

In Salt Lake City, Utah, the Deseret News reports:

• A Pleasant View man is taking one of the biggest banks in the world to federal court over a failed loan modification that resulted in a foreclosure on his home. And he's doing it without an attorney.

• “I went to several attorneys and every attorney told me the same thing: ‘You are never going to go anywhere. Banks have bottomless pockets, and you are not going to win,’” recalled Michael Waters, who repairs computers by trade.

• In what is shaping up to be a "David vs. Goliath" legal fight, Waters appears to be putting up a decent battle. He has already won a restraining order preventing the foreclosure of his home while the case is in court. And U.S. District Judge Bruce Jenkins appears to be sympathetic to Waters’ plight and has granted him a trial.

• Waters’ legal troubles began last year after he lost his job and called Bank of America to see what he could do to keep up with his mortgage payments. The bank offered a forbearance that drastically reduced Waters’ mortgage payment and told Waters he was eligible for a trial loan modification. "I thought, 'This is like a blessing. This is wonderful,'” Waters said.

• But before Waters had the chance to make his first payment, Bank of America sent a letter canceling the forbearance. The bank told him it was because his payment was late, but the letter was sent before the payment was due. When Waters contacted the bank, he was told a different story. The bank said it could not offer a forbearance because they did not have the note to the loan.

• “Well I said, 'Who does own the note? Maybe we could work something out' and they said, 'We can't give you that information,'” Waters said. Bank of America told Waters his February mortgage payment was due immediately and he had seven days before the March payment was due. Waters said he did not have the money because Bank of America advised him to use his savings to pay off all debt to qualify for the forbearance. The bank foreclosed three months later.

• Instead of giving up, Waters started doing research online to see if he could find any options that may give him a fighting chance. "It probably took me 64 hours of legal research," he said. "I just went to the Internet and found copies of lawsuits that were filed, and I just typed in something similar."

• Waters stumbled across two Supreme Court rulings (Haines v. Kerer and Platsky v. CIA) that have aided him in court. “(The rulings) said that if somebody is in court pro se, which is me — no attorney — that their case can't be rejected or thrown out on technical grounds” and the judge has to help, explained Waters.(1)

For more, see Pleasant View man takes banking Goliath to court sans attorney.

For the transcript of the hearing granting the homeowner a trial in this case, see Waters v. Bank of America.

(1) For a couple of the many Federal court rulings mandating that trial judges cut pro se homeowners a considerable amount of slack when hearing their cases, see:

Haines v. Kerner, 404 U.S. 519 (1972), in which the U.S. Supreme Court reversed the rulings of two lower courts, the court stated:

• The only issue now before us is petitioner's contention that the District Court erred in dismissing his pro se complaint without allowing him to present evidence on his claims.
  
  Whatever may be the limits on the scope of inquiry of courts into the internal administration of prisons, allegations such as those asserted by petitioner, however inartfully pleaded, are sufficient to call for the opportunity to offer supporting evidence. We cannot say with assurance that under the allegations of the pro se complaint, which we hold to less stringent standards than formal pleadings drafted by lawyers, it appears 'beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief.' Conley v. Gibson, 355 U.S. 41, 45—46, 78 S.Ct. 99, 102, 2 L.Ed.2d 80 (1957). See Dioguardi v. Durning, 139 F.2d 774 (CA2 1944).
  
  Accordingly, although we intimate no view whatever on the merits of petitioner's allegations, we conclude that he is entitled to an opportunity to offer proof. The judgment is reversed and the case is remanded for further proceedings consistent herewith.

Platsky v. Central Intelligence Agency, 953 F.2d 26 (2d Cir. 1991), in which a Federal Appeals Court ruled:

• Pro se plaintiffs are often unfamiliar with the formalities of pleading requirements. Recognizing this, the Supreme Court has instructed the district courts to construe pro se complaints liberally and to apply a more flexible standard in determining the sufficiency of a pro se complaint than they would in reviewing a pleading submitted by counsel. See e.g., Hughes v. Rowe, 449 U.S. 5, 9-10, 101 S.Ct. 173, 175-76, 66 L.Ed.2d 163 (1980) (per curiam); Haines v. Kerner, 404 U.S. 519, 520-21, 92 S.Ct. 594, 595-96, 30 L.Ed.2d 652 (1972) (per curiam); see also Elliott v. Bronson, 872 F.2d 20, 21 (2d Cir.1989) (per curiam). In order to justify the dismissal of a pro se complaint, it must be " 'beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief.' " Haines v. Kerner, 404 U.S. at 521, 92 S.Ct. at 594 (quoting Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 102, 2 L.Ed.2d 80 (1957)).
  
  In light of these principles, we think that the district court should not have dismissed Platsky's complaints without affording him leave to replead.

***

• The district court also dismissed the complaints for their failure to plead facts that were sufficiently specific. The district judge held that Platsky failed to allege the concrete and particularized injury required to establish standing and to state a claim upon which relief could be granted.

***

• We think that Platsky should have a chance to state his claim more clearly. It is not "'beyond doubt that the plaintiff can prove no set of facts in support of his claim[s],' " Haines v. Kerner, 404 U.S. at 521, 92 S.Ct. at 595, and therefore we hold that the better course would have been for the district court, in dismissing Platsky's pro se complaints, to grant him leave to file amended pleadings. See Elliott v. Bronson, 872 F.2d at 22. We have instructed Platsky that his complaint must set out, with particularity and specificity, the actual harms he suffered as a result of the defendants' clearly defined acts.
  
  Accordingly, we vacate the judgment and order below, and remand the case to the district court with instructions to allow the plaintiff to replead.

See also Estelle v. Gamble, 429 U.S. 97 (1976), which supports the mandate that trial judges cut pro se homeowners slack when bringing their cases:

• The handwritten pro se document is to be liberally construed. As the Court unanimously held in Haines v. Kerner, 404 U.S. 519 (1972), a pro se complaint, "however inartfully pleaded," must be held to "less stringent standards than formal pleadings drafted by lawyers" and can only be dismissed for failure to state a claim if it appears "`beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief.'" Id., at 520-521, quoting Conley v. Gibson, 355 U.S. 41, 45 -46 (1957). [429 U.S. 97, 107]

10th Circuit To Hear Appeals Of Lower Court Dismissals Of Utah Wrongful Foreclosure Cases Brought By Homeowners

In Salt Lake City, Utah, The Salt Lake Tribune reports:

• The Utah Legislature appears poised to stifle any legislation that might help thousands of Utah homeowners facing foreclosure, punting decisions on those issues back to the courts.

• But federal courts in Utah, where most foreclosure lawsuits end up, have been downright cold toward homeowners seeking relief from what they claim are illegal actions on behalf of banks and others. In case after case, federal judges have sided with banks and foreclosure trustees in lawsuits that raise legal questions about their ability to take property when loans become delinquent.

• State courts, according to homeowner attorneys, have been more open to foreclosure lawsuits. Given that, banks and others seeking to foreclose are automatically moving cases filed into federal court. Homeowners have never even be allowed to gather evidence from the foreclosure entities because their cases are quickly dismissed.

***

• Now, at least three of cases from Utah have been appealed to the 10th Circuit Court of Appeals in Denver, whose rulings could clarify whether the legal issues are serious and need more judicial consideration.

For more, see Shoulders cold when foreclosure cases hit the courts.

Feds Accuse South Florida Outfit Of Peddling Bogus Loan Modification Services

The Federal Trade Commission recently announced:

• As part of the Federal Trade Commission’s continuing crackdown on scams that target homeowners behind in their mortgage payments or facing foreclosure, the FTC has charged a national operation with marketing bogus loan modification services.(1) The FTC seeks to stop the illegal practices and make the defendants pay refunds to consumers.

• According to the FTC’s complaint, the defendants target financially distressed consumers using direct mail, the Internet, and telemarketing, and falsely promise they will get loan modifications to make consumers’ mortgages much more affordable, or fully refund their money if they fail. They make these promises even to homeowners whose lenders have denied them modifications or who have been sent foreclosure notices. The defendants charge up to $2,600 for their supposed services and typically ask for half of the fee up-front, claiming a success rate of up to 100 percent.

• As alleged in the complaint, the defendants claim expertise that enables them to prevent foreclosure, and often mislead consumers to believe they are affiliated with, or approved by, consumers’ lenders. They tell consumers not to contact their lenders and to stop making mortgage payments, claiming that falling behind on payments will demonstrate the consumers’ hardship to lenders.

For the FTC press release, see FTC Charges Mortgage Relief Operation with Deceiving Distressed Homeowners.

For the lawsuit and related court orders, see:

• Complaint for Permanent Injunctive and Other Equitable Relief,
• Order Granting in Part and Denying in Part Motion for Preliminary Injunction and Asset Freeze,
• Amended Ex Parte Temporary Restraining Order with Asset Freeze, Appointment of Receiver, Expedited Discovery, and Other Equitable Relief and Order to Show Cause Why a Preliminary Injunction Should Not Issue.

(1) The named defendants in the FTC lawsuit are: U.S. Mortgage Funding Inc., Debt Remedy Partners Inc., Lower My Debts.com LLC, David Mahler, Jamen Lachs, and John Incandela, Jr., also known as Jonathan Incandela, Jr.

Cops: Fake R/E Agent Conned Elderly Couple Facing F'closure Into Signing Over Deed, Then Pockets $45K Deposit From Would-Be Buyer In Failed Sale

In Orlando, Florida, WESH-TV Channel 2 reports:

• One man was arrested Friday and accused of real estate fraud. Authorities with the Orange County Sheriff's Office said they believe there could be more victims. Investigators said Dave Howell, 31, had a real estate office and was taking the clients' money, but he doesn't have a real estate license.

• Deputies said Howell contacted an elderly couple who was in foreclosure and promised he could sell their home in a short sale. Investigators said Howell had the couple sign what ended up being fake documents and also signed over the title over their house to him.

• Authorities said Howell then contacted a buyer and said he could sell the house for $85,000, but first the buyer paid what she thought was a $45,000 escrow deposit. "The transaction never closed," Orange County Sheriff's Office spokesman William Cruz said.

• "The bank account where the suspect deposited this escrow of $45,000 was completely depleted, misappropriated, ultimately stolen." Investigators said Howell had an office off of South Hiawassee Road called Nationwide Consultants LLC and has being doing business for about one year. He has been charged with practicing real estate without a license and grand theft.

Source: 1 Arrested In Real Estate Fraud Case (Howell Accused Of Grand Theft, Practicing Real Estate Without License).

Hidden Cost Of Buying 'Cheap' Foreclosed Home Becomes Selling Point For Builders Peddling Their Inventory

The Associated Press reports:

• Homebuilders trying to fight off customers' attraction to cheap foreclosures are doing more to show buyers that the good deals can come with pitfalls. [...] Many national builders are using some form of marketing to try to make that point and beat back the quiet competition from lower-priced foreclosures and short sales.

***

• Lennar Corp.'s website is fighting back with a "Buying a New Home vs. a Foreclosed Home" page that lays out the benefits of new construction — like home warranties, energy efficiency, and customization options — while highlighting the potential risks of buying a foreclosed home.

• PulteGroup Inc. uses similar tactics in its advertising, as does Shea Homes and Phoenix-area builder Fulton Homes. Fulton and Shea both promote new homes with a "foreclosure cost calculator" on their websites that lets customers calculate potential costs.

***

• Home builders say they're hopeful that as more customers turn to them instead of the overloaded foreclosure market, they'll be able to show the value in new construction.

For more, see Homebuilder Ads Highlight Pitfalls of Foreclosures (Homebuilders try to draw in buyers by pointing out pitfalls and risks of buying foreclosures).

South Florida Foreclosure Mill Throws In Towel; Will Shut Down At End Of Month

In Plantation, Florida, Reuters reports:

• A prominent Florida lawyer accused of mishandling many foreclosure cases in that state is shutting down his foreclosure law practice at the end of the month, a regulatory filing shows.

• The decision by the lawyer, David Stern, was announced by DJSP Enterprises Inc, a company he once ran and which calls itself the main customer of the Law Offices of David J. Stern PA. DJSP said it expects to receive no further referrals from Stern. The company, whose businesses have included processing, servicing and title operations, has already laid off much of its workforce.

• A lawyer for Stern did not immediately respond to a request for a comment on Monday. DJSP shares traded down 7 cents, or 29.2 percent, at 17 cents in morning trading on the Nasdaq, after falling as low as 15.5 cents. They traded as high as $13.65 last April.

• Stern's firm is among several being investigated by the office of Florida Attorney General Pam Bondi over whether documents they submitted in foreclosure cases were defective. Major mortgage companies, including Fannie Mae and Freddie Mac, stopped doing business with Stern.

• Florida media last month said Stern was trying to sell some luxury assets, including homes and a yacht, worth millions of dollars. He resigned as chief executive of Plantation, Florida-based DJSP in November.

Source: Florida lawyer David Stern ends foreclosure law practice.

See aslo, The Palm Beach Post: Stern law firm ends foreclosure operations:

• On Friday, Stern sent a letter to Florida judges saying his firm still needed to withdraw from 100,000 cases statewide, nearly a third of the state's court backlog of 350,615 foreclosure cases.

• "We have been forced to drastically reduce our attorney and paralegal staff to the point where we no longer have the financial or personnel resources to continue to file Motions to Withdraw in tens of thousands of cases that we still remain as counsel of record," Stern wrote. "Therefore, it is with great regret that we will be ceasing the servicing of clients with respect to all pending foreclosure matters in the State of Florida as of March 31, 2011."

Defendants In Mortgage Payment Hijacking Scam Face New Charges Of Running Fraudulent Upfront Fee Loan Modification Ripoffs

In Las Vegas, Nevada, the Las Vegas Sun reports:

• Two men were arrested Friday in connection with an alleged scheme designed to steal mortgage payments from Southern Nevada homeowners, Nevada Attorney General Catherine Cortez Masto said.

• Joseph Yorkus, who was out on bail from a February arrest in connection with a similar scheme, and James Bartczak, who was still in custody, were booked on new charges in connection with an investigation by the attorney general's Mortgage Fraud Task Force.

• Both men had been arrested in February for setting up the business “Great Western Business Services,” which is alleged to have embezzled homeowners’ mortgage payments by sending letters to homeowners falsely stating that their loans had been transferred from Bank of America to Great Western. The letters instructed the homeowners to make their mortgage payments to Great Western rather than to Bank of America, which actually owned the loan.

• Numerous victims missed mortgage payments that could potentially result in foreclosure, despite the fact they had actually made their payments -- albeit to the alleged scammers instead of their true loan servicer.

• The latest arrest is based on new allegations that, in addition to fraudulently operating Great Western Business Services, Yorkus and Bartczak also ran three other fraudulent companies, BAC Collections, Fresh Start Consultants and Learn Your Rights, for the purpose of convincing homeowners to pay their mortgage through those businesses.

• Yorkus and Bartczak allegedly misrepresented that the companies would assist homeowners in obtaining credit repair and loan modifications, as well as principal reductions. Instead of obtaining the loan modifications, the homeowners' payments were allegedly diverted by Yorkus and Bartczak for their own personal use.

• One of the alleged victims is a senior citizen who lost more than $10,000, officials said.

Source: 2 men arrested in alleged mortgage payment scam.

Securitizations Hit Tax Lien Industry

The Center for Public Integrity reports:

• When Florida retiree Gladys Walker fell behind in paying taxes on her modest Pompano Beach home, she had no idea one of America’s biggest banks and a major Wall Street hedge fund engaged in frenzied bidding for the right to collect her debt—all $768.25 of it. “I just couldn’t come up with the money,” said Walker, 67, a former hotel worker who makes do on a monthly Social Security check.

• Barely more than a year after a taxpayer bailout of major financial institutions, Bank of America and the hedge fund, Fortress Investment Group, spotted a fresh money-making opportunity – collecting the tax debts of tens of thousands of people like Walker. The bank and hedge fund can add interest charges and fees, and they bundled the debts as securities for investors.

For more, see Wall Street Quietly Creates a New Way to Profit From Homeowner Distress (Large Bank, Hedge Fund Bundle Small Tax Debts Into Private Investments).

MERS Gets Hammered In Recent Oregon Federal Court Rulings As 100s Of F'closures Stall; Resulting Crappy Titles Will Be Uninsurable, Warns Underwriter

The Oregonian reports:

• Sales of hundreds of foreclosed homes in Oregon have been halted or withdrawn in recent weeks after federal judges repeatedly questioned their legality, according to a number of real estate attorneys in the state. Lenders have withdrawn more than 300 foreclosure sales since February in Deschutes County alone, one of the Oregon area's hardest hit by the housing collapse. About 130 of those notices were filed in the past week, attorneys say.

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• And, in a potential deal breaker for other foreclosure cases, one of the nation's largest title-insurance companies is warning lenders that it might not guarantee title in some cases.

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• The legal concerns revolve around Mortgage Electronic Registration Systems Inc., a Reston, Va., corporation set up in the mid-1990s by the mortgage banking industry to rapidly record the ownership of mortgages so they could be packaged and sold as securities.

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• Since October, federal judges in five separate Oregon cases have halted foreclosures involving MERS, saying its participation caused lenders to violate the state's recording law.(1) Three of those decisions came last month, the key one in U.S. Bankruptcy Court in Eugene.

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• In response to that ruling, First American Financial Corp., one of the nation's largest title insurers, began warning lenders and buyers in title documents that it wouldn't insure titles with a cloudy public record in Oregon, company attorney Alan Brickley said. "It's simply saying we have a concern, and you should have a concern," said Brickley, who's based in Portland.

Fotr more, see Hundreds of Oregon foreclosure sales stopped after judges' rulings.

(1) For these Oregon federal court decisions, which raise questions about the legality of hundreds of foreclosures in the state, see

• Burgett v. MERS, et al.,
• Ekerson v. MERS, CitiMortgage Inc., et al.,
• McCoy v. BNC Mortgage Inc., MERS, U.S. Bank, Finance America LLC, et al.,
• Barnett v.BAC Home Loan Servicing LP, Federal National Mortgage Association fka Fannie Mae, ReconTrust Co.,
• Rinegard-Guirma v. Bank of America, et al.

The Stench Left By MERS After Swallowing Your Loan

Mortgage Electronic Registration Systems, also known as MERS, "whose private mortgage registry has all but replaced the nation’s public land ownership records," takes a heavy hammering in a recent article in The New York Times for the central role it's played in creating the quagmire in the foreclosure process as it and lenders (real and purported) attempt to enforce delinquent promissory notes secured by mortgages on people's homes.

For the story, see MERS? It May Have Swallowed Your Loan.

Two Ongoing Florida Cases Show HSBC's Purported Foreclosure Moratorium May Be BS; Inquiries To Lenders' Attorneys Yield No Explanations

AOL's Daily Finance reports:

• In HSBC's 2010 annual report, the bank asserted that it had stopped "processing foreclosures" and that it "suspended foreclosures" in December, even though the information wasn't made public until Feb. 28, when HSBC filed the report with the SEC.

• But based on at least two cases still working their way through Florida's courts, that delay in disclosure apparently also meant that HSBC didn't tell attorneys bringing foreclosure actions in the bank's name to put their cases on hold. Indeed, if HSBC had systematically put its many pending foreclosure cases on hold in December, the news surely would have come out before now. So it's appropriate to ask: What does the moratorium announcement really mean?

***

• In two active Florida cases, Wells Fargo is trying to foreclose as the loan servicer for HSBC, which is the plaintiff and will, if the foreclosures are successful, get the properties. The case names reflect HSBC's role: HSBC v. Harley, and HSBC v. Shinneman. Both are set for trial later this month, and as of March 3, had not been not affected by HSBC's foreclosure moratorium.

• Jacksonville Legal Aid attorney April Charney represents Harley, while attorney Todd Allen represents Shinneman. Both reached out to their opposing counsels repeatedly after the HSBC moratorium became public. Both opposing counsels told them on Thursday that the cases were going forward. (When I contacted the attorney for HSBC in the Shinneman case, Travis Harvey, his response was "no comment." HSBC's attorney in Harley, Michael Winston, didn't reply to my email.)

For more, see What Do HSBC's Foreclosure Moratorium and Robo-Signing Claims Really Mean?

Sacramento Feds Score Another Guilty Plea As 5th Defendant Goes Down In Foreclosure Sale Bid Rigging Conspiracy

In Sacramento, California, the San Jose Mercury News reports:

• Federal prosecutors say a Northern California man has pleaded guilty to conspiring to rig bids at foreclosure auctions in a county among the hardest hit by the real estate bust. The U.S. Attorney's Office for the Eastern District of California says 38-year-old Yama Marifat of Pleasanton pleaded guilty Friday to the conspiracy.

• Prosecutors say Marifat and a group of real estate speculators agreed not to bid against each other at San Joaquin County public foreclosure auctions to keep prices down. The group would then hold a private auction where the property went to the conspirator willing to pay the most above the public price. The speculators would split the difference between the prices at public and private auction as a payoff among themselves.

• Marifat faces up to 10 years in prison for bid rigging and 30 years for mail fraud, plus fines up to at least $2 million. The U.S. Attorney's Office says Marifat is the fifth person to plead guilty in connection with the conspiracy, which was uncovered as part of an ongoing federal investigation into fraud and bid-rigging in real estate auctions in San Joaquin County.(1)

Source: Calif man pleads guilty to foreclosure bid rigging.

For the U.S. Attorney press release, see Real Estate Investor Pleads Guilty to Bid Rigging at Public Foreclosure Auctions.

Go here for other posts & links on bid rigging at foreclosure and other real estate-related auctions.

(1) Anyone with information concerning bid rigging or fraud related to real estate foreclosure auctions should contact the Antitrust Division’s San Francisco Office at 415-436-6660, visit www.justice.gov/atr/contact/newcase.htm, the United States Attorney’s Office for the Eastern District of California at 916-554-2700 or the FBI’s Sacramento Division at 916-481-9110.

Attorney, Two Law Partners Admit To Bid-Rigging MD Real Estate Tax Lien Sales; Dodge Criminal Charges By Winning "Race To the Prosecutor's Office"

The Center for Public Integrity reports:

• A key witness in a federal probe of corruption in Maryland property tax-lien sales has stated under oath that he rigged bids for years while representing a Florida bank and other firms that bought liens at annual sales auctions, newly unsealed court records show.

• Baltimore real estate attorney John Reiff said he and two law partners helped fix bids for the purchase of “large numbers” of property tax debts, called tax liens, sold by tax assessors at auctions in Baltimore and several other Maryland counties between 2003 and 2007, according to court filings made public for the first time last month.

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• An investigation published in December by the Center for Public Integrity showed how lien buyers can tack on double-digit interest rates, legal fees and other costs that can add thousands of dollars to a homeowner’s bill. In some states, lien holders can seize homes from those who fail to pay. The bid rigging cost the city of Baltimore and surrounding counties money by artificially holding down bids, local officials say, although they could not determine how much.

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• Though the tax-lien industry has long been controversial, the Baltimore lawyer’s sworn declaration appears to be the first to mention a bank, or a tax-lien portfolio manager, in connection with allegations of criminal conduct in the bidding process.

• Reiff stated that a firm formed with his law partners acted to “suppress competition for tax liens by refraining from full competitive bidding.” [...] U.S. District Judge J. Frederick Motz in Baltimore unsealed Reiff’s declaration and some other records at the request of the Huffington Post Investigative Fund, now part of the Center for Public Integrity.

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• Reiff and his partners, Anthony DeLaurentis and Richard Turer, were one of three investment groups that participated in the five-year scheme to dominate the tax lien auctions, according to prosecutors.

• Three other participants have pleaded guilty to bid rigging in the case. In May, Baltimore County attorney Harvey M. Nusbaum, 73, was sentenced to a year-and-a-day in prison and an $800,000 fine. His partner, Jack W. Stollof, 75, was sentenced to 12 months of house arrest and an $800,000 fine. A third man, Steven L. Berman , 53, received two years probation and a $750,000 fine.

• “Bid rigging is typically a clandestine effort made to line the pockets of unscrupulous businessmen at the expense of unsuspecting consumers — in this case, at the expense of homeowners and county and city governments,” Justice Department prosecutors wrote in a sentencing memorandum about Nusbaum.

• “In principle, bid rigging is no different from any other common theft of money or property. It is criminal fraud, pure and simple.”

• The unsealed records describe in detail how the well-financed investment groups illegally dominated the process in Maryland through collusion — and how they made millions of dollars off homeowners as a result. The three groups, according to Reiff, decided in advance which liens each would bid on.

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• Reiff has been a key witness in the federal probe that has resulted in three convictions. He and his two partners cooperated with the government and were not charged.(1)

• In many cases, homeowners who owed only a few hundred dollars in taxes or municipal bills saw their debt soar into thousands because of the fees and interest. A Baltimore woman lost the home her family had owned for nearly three decades over what began as an unpaid water bill of $362, for instance.

For more, see Witness Says He Rigged Bids in Property Tax Lien Auctions in Maryland.

Go here for the recently-unsealed court filings referred to in this story.

Go here for other posts & links on bid rigging at foreclosure and other real estate-related auctions.

(1) This is another example of how scammers in criminal conspiracies can buy their way out of jail time (and, in this case, can avoid prosecution altogether) by winning the "race to the prosecutor's office" (possibly better described as the "rat-race to the prosecutor's office"), where once they learn they are the subject of a probe, they can run to the prosecutor's office (with the best criminal defense attorney they can afford in tow) and start ratting out their friends and colleagues in exchange for the best deal available. See United States v. Moody, 206 F.3d 609, 617 (6th Cir. 2000) (Wiseman, J., concurring) for one Federal judge's observation, made in the context of drug conspiracy cases, involving the so-called "race to the courthouse/prosecutor's office" which seems equally suited to other types of major, multi-defendant felony cases:

• In practical terms, drug conspiracy cases have become a race to the courthouse. When a conspiracy is exposed by an arrest or execution of search warrants, soon-to-be defendants know that the first one to "belly up" and tell what he knows receives the best deal. The pressure is to bargain and bargain early, even if an indictment has not been filed.

Sale Of Tax Liens To Speculators & Proliferation Of Vacant, Rundown Real Estate

In Fulton County, Georgia, a recent story in The Atlanta Journal Constitution on the proliferation of vacant and rundown properties highlights the role that the sale of tax liens plays in the physical deterioration of some neighborhoods:

• A contributing factor, [community development groups and tax officials] say, is the sale of tax liens. It burdens such properties with debt that exceeds their value and puts them in the hands of speculators who may sit on property as it deteriorates. As a result, many municipalities have stopped selling liens.

• Fulton County, however, still relies on the sale of tax liens as its primary method of collecting delinquent county and Atlanta city taxes, despite concerns over sometimes outrageous costs for property owners, questions about whether the practice saves the county money and negative effects on community revitalization. To a much lesser extent, Gwinnett County also sells tax liens.

• Fulton County Tax Commissioner Arthur Ferdinand continues to decline to discuss the county’s sales of tax liens or release property tax data that would support analysis of the practice. The Atlanta Journal-Constitution has sought his input since late last year. He has not returned phone calls.

• Fulton sold a lien for 2005 taxes on 55 Chester Ave. and, since 2006, taxes totaling $2,767 have not been paid. Tax liens and overdue taxes are not the only reason Chester Avenue and similar properties remain vacant and decrepit. But community development experts say liens in private hands discourage development by adding costs and legal complications to clearing land for construction.

• In Georgia, unless a property owner receives notice of a lien sale and settles the debt sooner, the legal process after a lien is sold drags out a year or more. Private companies may hold liens longer because they accumulate fees and interest, and once a property is sold, they can wait for a development project that needs the land. In the interim, the companies often don’t pay taxes on vacant properties or maintain them.

For the story, see In tax-lien limbo.

In a related Atlanta Journal Constitution story, see Senate bill tackles sales of tax liens:

• Legislation introduced in the [Georgia] Senate on Friday is meant to curb abuses of the sale of property tax liens, but broad language in the bill would obstruct tax collection by counties that do not sell liens, according to tax experts.

• Senate Majority Leader Chip Rogers, R-Woodstock, who introduced the bill, said the language will be changed to affect only the practice of selling tax liens to private companies and not the collection of taxes by the counties.

***

• A series of stories by The Atlanta Journal-Constitution over the past two months(1) detailed how the sale of tax liens can
create outrageous costs for property owners and stall community revitalization efforts. The stories also raised questions about whether selling tax liens saves the county money as Fulton County Tax Commissioner Arthur Ferdinand has said.

(1) See:

• AJC Shines More Light On Fulton County Tax Lien Inflating Rackets; Investors Who May Not Be Responsible Players An Important Public Policy Concern,
• Private Investors Score Big Profits In Tax Lien Ripoffs As County Process Allows For One Homeowner's $291 Delinquent Tax Bill To Grow To $8,200.

Florida Court Sets 2,700 Foreclosure Cases Set Dismissal After Lying Dormant For A Year

AOL's Daily Finance reports:

• If you sue someone in Florida but then stop pursuing your case for a year, the court can clear its case load by dismissing your suit for "failure to prosecute." Across Florida, courts are starting to clear their overwhelmed dockets by dismissing foreclosure cases the banks have failed to prosecute. In one division of one of Florida's 20 judicial districts, perhaps as many as 2,700 cases have been set for dismissal in one week.

• When Allison Albert of the Jacksonville Area Legal Aid went to foreclosure court in Duval County, part of the Fourth Judicial Circuit, on Tuesday, hundreds of "failure to prosecute" cases were on the docket. While waiting for her client's case to be called, she heard the court's staff talking about how the court had sent out notices, scheduling hearings for about 2,700 foreclosure actions -- and noting that if the bank didn't take action within 60 days of the notice, the case could be dismissed at the hearing for failure to prosecute. All of the cases were scheduled to be heard over the next eight court days.

For more, see Are Banks Abandoning Foreclosures in Florida?

Judge Slams F'closure Defense Lawyer w/ $12K Fine After Refusing To Recuse Himself In Case Involving Bank From Whom He Received Three Loan Mods

In Detroit, Michigan, The Michigan Citizen reports:

• Third District Court Judge Robert J. Colombo recently received three home loan modifications from Charter One Bank. Colombo ruled, however, he did not need to recuse himself from a mortgage foreclosure case involving the same bank. Nor did it stop him from levying a $12,000 fine on the attorney and client fighting the bank’s foreclosure when the attorney attempted to link the foreclosure case to a discrimination lawsuit now pending against Charter One.

• Attorney Vanessa Fluker has devoted her legal career to defending victims of foreclosure and predatory lending in Detroit. On March 1, Fluker’s colleague, Jerry Goldberg, defended her against a court sanction handed down by Colombo. Colombo’s decision included the $12,000 judgment against Fluker and foreclosure victim Asha Tyson.

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• During opening statements, Goldberg emphasized the effects of unfairly sanctioning one of the few attorneys who defend homeowners victimized by predatory lending and subsequent evictions. “To put a damper on attorneys to even raise these issues has a negative impact on society,” Goldberg said.

For more, see Judge fines anti-foreclosure lawyer (Court sanctions attorney for linking foreclosure to Charter One discrimination case).

Profile Of A Vacant Foreclosed Home Hijacker

In South Florida, Broward/Palm Beach New Times recently ran a lengthy story on Mark Guerette, a local real estate "entrepeneur" of sorts who recently copped a plea to a racket involving the hijacking of vacant foreclosed homes under a claim of adverse possession, and then renting them out to unwitting tenants.

For his story, and the stories of a couple of tenants who did business with him, see The Lord of Squat: Mark Guerette Got Busted for Putting Families in Foreclosed Homes (for the entire story on a single web page, go here.)

Lawsuit: Scamming Romeo Conned Texas Woman Into Borrowing Against Home Credit Line To Finance His Personal Lifetstyle

In Jefferson County, Texas, The Southeast Texas Record reports:

• A Jefferson County woman has filed suit against the man she claims is making a living by romancing women and then borrowing money from them. Beverly Hickman claims she lent defendant Robert Horowitz tens of thousands of dollars in 2009 after he wooed her and claimed to need money for himself and for his business, defendant Senior's Choice.

• "He (Horowitz) has developed, and utilizes, a business practice for himself and for his business, Senior's Choice, in which he romances middle-aged, single women and borrows money from them to float his business, maintain his cash flow, and maintain his personal lifestyle," the suit filed Feb. 18 in Jefferson County District Court states.

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• "In order to loan this money to Mr. Horowitz, Mrs. Hickman drew on a home mortgage line of credit, making herself vulnerable to foreclosure on her home and loss of her residence in the event of Mr. Horowitz's default," the suit states. Horowitz failed to repay Hickman after he developed a new romantic interest, she claims.

For the story, see Suit says man romances, rips off women.

Campground Operator Pleads No Contest, Gets 7 Years Probation For Torching Premises After Elderly, Mortgage-Holding Prior Owners Begin Foreclosure

In Susquehanna County, Pennsylvania, WNEP-TV Channel 16 reports:

• A woman was sentenced in Susquehanna County on Thursday, accused of setting several fires at a campground. Tamara Santarelli, formerly of Wilkes-Barre and now living in New York, was sentenced to seven years probation. She will also have to pay back nearly $100,000 to insurance companies, money that was paid out after two fires at the Shady Rest Campground near Gibson.

• The couple who used to own the campground and sold it to Santarelli said they were just glad the ordeal is over and that they were able to get that property back. [...] Arnold and Alice Manning owned the Shady Rest Campground and sold it to Tammy Santarelli and her husband, even financing the property for them.

• The Mannings said after the Santarelli's failed to make mortgage payments, they had started the foreclosure process. That was when the second fire nearly destroyed their decades of hard work. "We've been married for 60 years and we've worked together hard for all of our lives for what we have and it just seems a shame that people like Tamara can scam away from you what you've worked all your life for," said Alice Manning. "We trusted these people. We figured they were all right and it didn't take long," added Arnold Manning.

***

• As part of Tammy Santarelli's plea agreement, she handed over the deed to the Shady Rest Campground, giving it back to Arnold and Alice Manning. The Mannings said they now plan to keep the campground in the family.

For the story, see Owner Sentenced for Campground Arson.

Failure To Pay Mortgage On Headquarters Leaves 31,000+ Florida Boy Scouts Facing The Boot

In Palm Beach Gardens, Florida, the South Florida Business Journal reports:

• Forget tying knots and building campfires. The Boy Scouts need to start working on their foreclosure defense. TD Bank wants to boot the Boy Scouts organization for the Palm Beaches and the Treasure Coast out of its headquarters. It filed a foreclosure lawsuit Feb. 25 against the Gulf Stream Council of Boy Scouts of America.

• According to its website, this nonprofit serves more than 31,000 scouts and 3,100 volunteers in seven counties, including Palm Beach, Martin, St. Lucie and Indian River. Unfortunately, those scouts could get a lesson in how the legal system treats debtors unless somebody comes to their aid.

• This could be another loss for the children of Palm Beach County. Big Brothers Big Sisters of Palm Beach County filed Chapter 7 bankruptcy last year after shuttering its operations.

• Gulf Stream Council CEO Jeff Isaac was not immediately available for comment. The lawsuit involves a $777,000 mortgage issued in 2007 by Riverside National Bank of Florida, which later failed and had its assets acquired by TD Bank.(1) It targets the 10,368-square-foot office building at 8335 N. Military Trail, in Palm Beach Gardens.

For the story, see Bank aims to boot Boy Scouts.

(1) Another mortgage foreclosure where the loan was originated by a now-defunct bank. I wonder what the chances are that there is some paperwork screw-up that the now-foreclosing bank is going to have to address where the originating lender is no longer around.

Foreclosure Sale Buyer Finds Recent Purchase Comes Filled With Four Dumpsters Of Rotting Garbage; Stench Gives Interior Designer Vomit Attack

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

• Home buyers have seen some pretty nasty foreclosed homes – but one in Mesa just might be the worst. Justin Christman makes his living buying foreclosed homes, fixing them up and selling them months later. He picked up one in Mesa on the auction steps without seeing the inside until after the deal was done. Christman now realizes he might have bitten off a little more than he could stomach.

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• Crews with vacant home rescue have been collecting the rotting garbage in the home for three days --- filling four industrial-size Dumpsters. "The smell is just the most rancid smell you could ever imagine," Christman said.

• Kay Christman, Interior Designer with TDG Designs, said, "We went upstairs and it was so repulsive that I had to come back out and throw up." "Speechless is the only adequate adjective I could use to describe it," Kay added.

• This investment might not pay out like the Christmans originally hoped, but in the end, this neighborhood just lost another distressed property. Christman paid $93,000 for the home, which was a great investment on paper compared to assessments of the other homes in the neighborhood.

For the story, see Buyer Stuck With Rancid Foreclosure Home (Garbage From 1988 Litters House; Smell Repulses Interior Designer).

Go here for video, and here for slideshow.

Nursing Home Facing Foreclosure, Company Official Found Guilty Of Illegally Dipping Into Patient's Bank Account

In Selinsgrove, Pennsylvania, WNEP-TV Channel 16 reports:

• A nursing home has been ordered to pay a big fine after an administrator stole from patients. Now, the president of the place said another state investigation could force the nursing home out of business. A nursing home in Snyder County was found guilty for stealing from its residents. Monday the corporation learned its punishment for the crime and Newswatch 16 learned of a state investigation into the place.

• In December Loving Care Nursing Center in Selinsgrove was found guilty of misusing one resident's bank account. The vice president of the nursing home was also found guilty of using nearly $30,000 of that resident's money for the nursing home.

• Monday a judge ordered the company to pay $100,000 in fines and the president, Thomas Pregant, said in court the nursing home is now in jeopardy of closing. "I hope that nursing homes, personal care homes, assisted living homes will take heart that the DPW regulations in place the protection that we have for the residents actually mean something," said Snyder County District Attorney Mike Piecuch.

• Pregant refused to speak to Newswatch 16. "We are appealing the conviction and of course we'll be appealing the sentencing," said defense attorney Ted Seeber. The president of the company said the nursing home has been in Selinsgrove since 1999 and serves about 40 residents. The property is in foreclosure and the business is up for sale.

• District Attorney Piecuch said the business is getting what it deserves. "What they did is took advantage of the one person who had money in his bank account," Piecuch added. The vice president of the company, who, by the way, is the wife of the president, is expected to be sentenced soon. Piecuch said Loving Care Nursing Center is under investigation by the department of public welfare for violating regulations and its license could be revoked.

Source: Nursing Home Fined for Theft.

Vegas Fire Officials: Disgruntled Tenant Foiled In Attempt To Torch House After Being Told He Was Getting The Boot Because Landlord Was In Foreclosure

In Las Vegas, Nevada, the Las Vegas Sun reports:

• A 40-year-old Las Vegas man who was angry about being evicted from a house going into foreclosure allegedly attempted to burn the home down Saturday, fire officials said. Las Vegas Fire and Rescue spokesman Tim Szymanski said officials arrested James Edwards St. John in connection with attempted fourth-degree arson and booked him in the Clark County Detention Center.

• The situation unfolded Saturday afternoon at a home in the 6200 block of Garwood Ave. St. John's roommates called 911 when he began dousing a room of the house in gasoline, Szymanski said. Police arrived minutes later and detained St. John before he was able to light the fire, Szymanski said. No one was injured.

• St. John, who rented the house with several other people, had been notified by the owner that he needed to move out of the home because it was going into foreclosure, Szymanski said.

• Officials said St. John was apparently upset about the situation, which prompted him to attempt to set the home on fire. A fire investigator arrested St. John after questioning him at the scene, Szymanski said. He is scheduled to appear in court Monday.

Source: Las Vegas man arrested for attempted arson.