JP Morgan Chase Breaks Into C. Florida Woman's Home A 2nd Time; Clueless Cops Refuse To Do Anything About It, Loan Servicer Dodges Media Phone Calls

MSNBC's The Dylan Ratigan Show reports on the ostensiby out-of-control JP Morgan Chase Bank which, for a second time, had one of its property preservation contractors break open the doors and change the locks on the home of Orange County, Florida homeowner Nancy Jacobini, despite the fact that Ms. Jacobini is apparently current on her loan modification payments.(1)

Among the highlights of the story is the claim that the local cops are so out-of-touch with the problem of banks prematurely breaking into homes that may be in or near some stage of foreclosure that they refuse to do anything about it, apparently taking the stance that the matter is nothing more than a 'civil matter.'(2)

According to MSNBC's Ratigan, JP Morgan Chase was called to participate in the interview, but they are dodging his staff's phone calls.

For the story, see Breaking In: Lenders Overstepping Their Bounds?

Go here for earlier posts on the plight of Nancy Jacobini in her relationship with her mortgage loan servicer, JP Morgan Chase.

(1) For examples of filed lawsuits involving illegal bank break-in, "trash-out" & lockout cases, 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),
• Couple: Bank Foreclosed On Wrong House (New Bedford Couple Suing Bank Of America) (involving a Massachusetts resident with a home in Florida) (for a copy of the resulting federal lawsuit, see Cardoso v. Bank of America, et al.),
• 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.),
• In a Sign of Foreclosure Flaws, Suits Claim Break-Ins by Banks (involving a California homeowner) (for a copy of the resulting federal lawsuit, see Ash v. Bank of America).

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)).

(2) This isn't the first time that cops have washed their hands when investigating real estate-related these crimes. See:

• Fed. Court Affirms 29+ Year Sentence For F'closure Rescue Operator In Rackets That Local Cops, DAs, Texas AGs Cluelessly Minimized As 'Civil Matters';
• Would-Be Buyers Screwed Over In Rent-To-Own Racket Involving Homes In F'closure Complain To Local Prosecutor; Ripoff Is Treated As A Civil Matter;
• Cops Accept "The Bank Sent Me!" Defense In Home Break-In Probe Targeting "Trash-Out" Agent; Say No Crime Was 'Intended' - "It's A Civil Matter!";
• Another F'closed Homeowner Illegally Driven From Home; Cops Decline To Pursue Criminal Charges; Call Premature, Unauthorized "Eviction" A Civil Matter;
• Suspected Home Hijacking Case Once Considered "Civil Matter" Will Now Be Treated As Criminal Trespass, Say Cops;
• Another Foreclosure Misidentification Screw-Up Results In Pair "Cleaning Out" Wrong Home; DA Declines Prosecution - Says It's A Civil Matter.

NC AG Scores Temporary Halt Of Outfit Clipping Distressed Homeowners Out Of Upfront Fees For Foreclosure Help; Seeks Permanent Shutdown

From the Office of the North Carolina Attorney General:

• A Winston-Salem foreclosure rescue operation that targeted financially distressed homeowners with claims to help them save their homes from foreclosure is barred from collecting any money from consumers for foreclosure assistance or loan modifications, Attorney General Roy Cooper announced.
• “This kind of scheme robs struggling homeowners of valuable time and hard-earned money that could be used toward legitimate help that could put them back on their feet again,” Cooper said. “My office will continue to target outfits that violate the law by charging an upfront fee for their service.”
• Last week, Wake County Superior Court Judge Howard Manning agreed with Cooper’s request to temporarily bar Edward “Eddie” Phillip Long, Jr., doing business as Credit Enhancement Services, from offering foreclosure and loan modification services, and from charging advance fees for credit repair and credit score improvement services. Cooper is seeking to permanently shut down Long’s foreclosure assistance business and win consumer refunds and civil penalties.

For more from the North Carolina AG press release, see AG Cooper moves to stop phony foreclosure assistance scheme (Forsyth County operation makes promises to save homes but fails to deliver).

For the lawsuit, see State of North Carolina v. Long.

Foreclosure Rescue Operator Faces Arraignment For Allegedly Peddling Mortgage Elimination Racket Involving Phony Land Document Filings

In Oakland, California, KGO-TV Channel 7 reports:

• A Las Vegas man is scheduled to be arraigned this week on 29 counts of mortgage fraud. He has been indicted in Alameda County on charges of cheating distressed homeowners out of thousands of dollars. It's a story 7 On Your Side broke earlier this year, and now our investigation shows evidence the program extends far beyond the East Bay.

***

• [Alan David] Tikal[, owner of a so-called mortgage reduction company,] was extradited from Las Vegas where he was arrested and made his first court appearance in Alameda County late last month. He is charged with conspiring to commit real estate fraud, mortgage security fraud and filing false documents. Prosecutors say Tikal's mortgage rescue program promised to pay off a homeowner's mortgage and refinance at a 75 percent savings.

For more, see More homeowners claim mortgage rescue fraud.

For an earlier post on Tikal's indictment, see Bay Area Grand Jury Indicts Four In Alleged Foreclosure Rescue Racket; Filed Fraudulent Documents In Bogus Attempts To Stall Legal Process: DA.

Fed. Court Affirms 29+ Year Sentence For F'closure Rescue Operator In Rackets That Local Cops, DAs, Texas AGs Cluelessly Minimized As 'Civil Matters'

The 5th Circuit Court of Appeals recently affirmed a 350-month prison sentence for Texas woman Rosario Divins (aka Rosie Divins), a notorious upfront fee foreclosure operator who, by reason of the length of her sentence, has apparently reached the end of an inglorious, 30+ year career screwing financially distressed people by falsely promising to keep their homes out of foreclosure in exchange for exorbitant fees.(1)

Congratulations to the Texas Feds for properly pursing this racket that, according to a September, 2009 San Antonio Express News story, local cops, local DAs, and more than one Texas AG washed their hands of, dismissing the complaints as "civil matters."(2)

For the ruling, see U.S. v. Divins, No. 09-50855 (CA-5, May 16, 2011) (unpublished).

Go here for earlier posts on the now-defunct Rosie Divins.

(1) The 3-judge panel describes Divins and her conduct in these excerpts (bold text is my emphasis):

• For the past 30 years, Divins has made a living swindling financially distressed people by promising (falsely) to keep their homes out of foreclosure in exchange for exorbitant fees. She has been brought to court and sanctioned on four separate occasions for this conduct.
  
  Various court orders, issued in 1994, January 2000, June 2000, and September 2003, permanently enjoined Divins from the unauthorized practice of law, including offering or providing bankruptcy services, making representations to assist or stop foreclosure, and making representations to provide mortgage brokering services to assist or stop foreclosure.
  
  In February 2006, the district court learned that Divins was violating these orders. The court initiated criminal contempt proceedings, which the government supplemented with charges of mail fraud. The matter went to trial. At least eight individuals testified against Divins, including Jackie Guerrero, Guadalupe Dominguez, Stanley Miele, Tommy Bordelon, Lupe Monreal, Maria Martinez, Issac Vela, and Juana Anderson.
  
  Their stories were similar. Each had faced the possibility of foreclosure due to some sort of financial hardship brought about by an illness or a lost job. Divins had contacted them via mailed flyers promising that she could keep them out of foreclosure in exchange for thousands of dollars in up-front fees. In each case, Divins either had absconded with the money or refused to return it when she failed to secure the clients relief from foreclosure. Many of Divins' victims ultimately spent thousands more on real attorneys to undo the damage Divins caused.

***

• The evidence showed that Divins solicited vulnerable individuals facing foreclosure by mailing flyers to them to further her scheme. The flyers stated that she could stop foreclosure. Each individual contacted Divins based on the representations made in the flyers. The victims would then pay Divins sums of money, usually in cash, in exchange for promises from Divins that she would stop foreclosure, negotiate with the mortgage company, and sell homes or refinance mortgages.
  
  Though there was testimony that foreclosures were initially delayed, there is no evidence that Divins performed her promised actions. The evidence showed that she continually requested more money and then avoided contact with these individuals when her fraudulent actions were suspected or discovered. Mortgage companies never received the money on behalf of her "clients."
  
  Additionally, Divins did not inform any of these victims that she had been prohibited by the bankruptcy court from representing that she could assist in foreclosure or bankruptcy proceedings. Divins was repeatedly warned by the bankruptcy court of the consequences if she failed to comply with the court's orders. These warnings occurred in bankruptcy proceedings where it was apparent that the individuals involved had suffered loss as a result of her actions.

(2) See Woman sentenced to almost 30 years for fraud (Besides ripping off homeowners, Divins had a long record of harassment and threats):

• The 350-month sentence imposed by U.S. District Judge Fred Biery was an exclamation point on a case that screamed a question even Biery asked: Where were state and local authorities when Divins was dishing out various forms of fraud for more than 30 years? The judge also ordered restitution, but acknowledged it wouldn't be likely any victim would be repaid.
• An investigation by the San Antonio Express-News found disinterested police agencies, Texas attorneys general, assistant district attorneys and others nudged aside complaints as civil matters between Divins, 55, and her victims. Some of the homeowners ultimately lost their houses while other managed to stave off foreclosure through no help from Divins.

***

• Biery noted that it wasn't until Divins' shenanigans spilled into federal bankruptcy court that she was finally caught. The FBI investigated her after she was found in contempt in bankruptcy court and violated orders to stop her misleading, direct-mail foreclosure-rescue ads. Biery also read her 32-year criminal record of harassment, stalking and threats, including one case where she called one person 50 times.
• "Other than that, you've been a model citizen," Biery said, sarcastically. [... B]iery said he admonished her for taking advantage of desperate people who shared her cultural, ethnic and religious background and trusted her.

AZ Lawmaker In F'closure Drops Proposal To Hold Banks Accountable During Loan Mod Negotiations After Scoring 50% Loan Principal Reduction

In Phoenix, Arizona, Blog For Arizona reports (based on a KPHO-TV Channel 5 story):

• Republican Rep Carl Seel got a "principle reduction loan modification" on his home loan to the tune of $100,000 while he was facing foreclosure. That amounted to more than half the principle he owed.
• Before his principle was cut in half, Seel had planned to propose an amendment to hold banks accountable during foreclosure negotiations. You know, protection for people like him. But after he got the loan reduction, he dropped the amendment.
• Seel swears there was no quid pro quo. I'm sure he's telling the truth, in a literal sense, anyway. I doubt there was a deal that he would drop the amendment in return for a $100,000 loan reduction.
• But there are two other options, both of which give off a very bad odor.

For more, see Probably not a bribe. But was Carl Seel's $100,000 mortgage reduction a gift?

Would-Be Buyers Under Rent-To-Own Program Threatened With Foreclosure Over Landlord's Failure To Pay Real Estate Taxes

In Cleveland, Ohio, The Plain Dealer reports:

• Dozens of renters in Cleveland's Glenville neighborhood, whose dreams of home ownership have been threatened by tax delinquencies that are not their fault, received foreclosure letters this week.
• Huntington National Bank moved last month to foreclose on a loan to Northeastern Neighborhood Homes Limited Partnership II because more than $95,000 in taxes and penalties going back to 2007 had not been paid. The loan is secured by 46 homes built or rehabbed in the 1990s as part of a rent-to-own program that is now in shambles.
• A letter about the foreclosures from Cleveland Housing Court Judge Raymond Pianka was mailed to the homes, creating panic in the minds of some renters who interpreted the notice to mean they could be evicted or possibly thrown in jail if housing or building codes are violated.

For more, see Foreclosure letter concerns rent-to-own residents in Cleveland's Glenville neighborhood.

HUD IG Claims Fraud By Five Biggest Banks Involving Government-Backed Mortgage Loans; Refers Findings To Justice Department

The Huffington Post reports:

• A set of confidential federal audits accuse the nation’s five largest mortgage companies of defrauding taxpayers in their handling of foreclosures on homes purchased with government-backed loans, four officials briefed on the findings told The Huffington Post.
• The five separate investigations were conducted by the Department of Housing and Urban Development’s inspector general and examined Bank of America, JPMorgan Chase, Wells Fargo, Citigroup and Ally Financial, the sources said.
• The audits accuse the five major lenders of violating the False Claims Act, a Civil War-era law crafted as a weapon against firms that swindle the government. The audits were completed between February and March, the sources said. The internal watchdog office at HUD referred its findings to the Department of Justice, which must now decide whether to file charges.

For more, see Confidential Federal Audits Accuse Five Biggest Mortgage Firms Of Defrauding Taxpayers.

NY AG Opens Probe Into Mortgage Loan Packaging In Banks' Securities-Peddling Operations

The Wall Street Journal reports:

• New York Attorney General Eric Schneiderman has opened an investigation into the packaging of mortgage loans into securities, in the latest sign of increased scrutiny of the mortgage industry.
• Mr. Schneiderman will hold meetings with executives of several major banks, including Bank of America Corp., Morgan Stanley and Goldman Sachs, according to people familiar with the investigation. He intends to discuss securitization of mortgage loans and other mortgage practices and has requested related documents from the firms, these people said. The meetings over securitization are expected to happen in the coming week.

***

• Mr. Schneiderman, who took office this year, appears to be continuing in the aggressive footsteps of his predecessors, Andrew Cuomo and Eliot Spitzer. They have a powerful legal tool at their disposal. The 1921 Martin Act, revived by Mr. Spitzer as a weapon against Wall Street, is seen as one of the most potent prosecutorial tools against financial fraud.
• The sweeping definition of fraud in the Martin Act doesn't require prosecutors to prove intent to defraud, in contrast to federal securities laws. The act has been used to prosecute Wall Street firms for securities manipulation, improper allocation of initial public offerings of stock and misleading stock research on Wall Street.

For more, see New York AG Probes Banks Over Mortgage Securities (requires paid subscription; if no subscription, TRY HERE; or GO HERE, then click appropriate link for the story).

Garden State Feds Squeeze 3rd Guilty Plea In Norhern NJ Sale Leaseback Equity Stripping Scam

From the Office of the U.S. Attorney (Newark, New Jersey):

• A West Orange, N.J., man who owned and operated multiple foreclosure rescue companies admitted today to his role in a mortgage fraud scheme that defrauded numerous mortgage lenders of over $10 million, U.S. Attorney Paul J. Fishman announced.
• Ronald Harris Jr., 41, of Piscataway, N.J., pleaded guilty [...] to an Information charging him with one count each of conspiracy to commit wire fraud and conspiracy to commit money laundering.

***

• According to documents filed in this case and statements made during Harris’ guilty plea proceeding:
• Harris owned and operated Harris Capital and Skyline Capital Group, both of which held themselves out as foreclosure rescue companies and operated out of offices in Newark and later, Maplewood, N.J. Harris admitted that he and other individuals, including Harris Capital employee Sterling Bruce, 37, of Newark, fraudulently promised to help homeowners avoid foreclosure, keep their homes, and repair their damaged credit by directing the homeowners to allow title to their homes to be put in the names of third party purchasers, or straw buyers, for approximately six month to one year.
• Harris told the homeowners that during that time period, he and others would help them obtain more favorable mortgages and improve their credit ratings. The homeowners were told that the titles to their homes would be returned to them.
• After the homeowners were signed up, Harris, Bruce and others recruited individuals with good credit scores to act as straw buyers of the distressed properties. The straw buyers were told that they were helping someone save his or her home and that they would make money when they sold the property back to the current owner after approximately one year.
• Once the distressed homeowners and straw buyers were in place, Harris, Bruce, Pia Perkinson, 39, of Parlin, N.J. – a mortgage loan officer at a number of different mortgage loan companies – and others caused loan applications to be sent in the straw buyers’ names to mortgage lenders. To increase the credit-worthiness of the straw buyers and to ensure that they would be approved for the loans, Harris, Bruce, Perkinson, and others submitted loan applications containing material false personal and financial information about the straw buyers, such as misstating their employment, income, and assets.

***

• Prior to the closings of these fraudulent transactions, Harris and Bruce regularly filed fraudulent liens for tens of thousands of dollars on the properties. At the closings of the transactions, the liens would be paid off with the proceeds of the fraudulently obtained loans and Harris and Bruce would enrich themselves. Harris admitted that he regularly laundered these loan proceeds through various bank accounts he controlled.
• In total, Harris and his co-conspirators caused lenders to fund dozens of fraudulent loans that totaled more than $10 million. Of that amount, Harris received approximately $1,145,993.(1)

For the U.S. Attorney press release, see Owner of New Jersey-based mortgage foreclosure rescue companies pleads guilty to $10 million mortgage fraud.

For the formal charges filed in this case, see USA v. Harris.

(1) According to the press release:

• Sterling Bruce previously pleaded guilty to one count of wire fraud conspiracy relating to his role in the mortgage foreclosure rescue scheme, and is currently scheduled to be sentenced on September 12, 2011;
• Pia Perkinson also previously pleaded guilty to one count of wire fraud conspiracy; a sentencing date has not yet been determined;
• Sabir Muhammad, 47, of South Plainfield, N.J., was charged along with Harris in the initial Complaint, and the charges against him remain pending.

BofA Refuses To Cancel Foreclosure Sale Despite Losing Homeowner's Certified Check To Reinstate Loan; Forces Borrower To Scramble To Save Home

In Sacramento, California, The Consumerist reports:

• CBS 13 has the story of a man who fell behind on his mortgage payments who was told by Bank of America that unless he sent them $4,175 he would lose his house that he had spent years putting work into. So he managed to put together the money and sent it in as a cashier's check. Then the bank lost his check.
• They told him to just cancel the check and send a new one, but the cashier's check wouldn't become void for 90 days. The foreclosure was scheduled to happen well before then. He had sent the check in by certified mail and so he had proof that Bank of America got it, but they just said, "whoops."
• Bank of America said they lost the check because it didn't have his loan number on it. But the man says he gave the teller payment instructions when he had them make out the check. The teller was a Bank of America teller.
• The man was able to send in a new check from a friend and get the foreclosure action stopped, no thanks to BofA.

Source: BofA Loses Check That Would Have Saved House From Foreclosure.

For the CBS 13 story, see The Bank Lost My Mortgage Check And Is Auctioning Off My House.

Head Sacramento Fed: Latest Bid-Rigging Convictions "Not Going To Be The Last That You Hear About These Types Of Prosecutions!"

In Northern California, CBS 5 reports:

• For those who are losing their homes to foreclosure, it’s a bitter pill to swallow. But some homeowners may have lost their homes to investors cheating on the courthouse steps. Richard Northcutt and Yama Marifat are part of a ring of at least six men who have pled guilty to a new kind of foreclosure fraud called “bid-rigging.”
• It all started on the courthouse steps in Stockton, where there are thousands of foreclosures up for bid. It’s a fast-paced world where cash is king, and the highest bidder nabs the best deal. With that much money swirling, federal officials say some people cheat.

***

• It was a temptation Marifat and Northcutt couldn’t resist. Both have admitted to making hundreds of thousands of dollars from the bid rigging scheme. “This is not going to be the last that you hear about these types of prosecutions,” said [U.S. Attorney Benjamin] Wagner.(1)

For more, see New Kind Of Foreclosure Fraud Sweeping California.

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

(1) In Northern California, 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.

Servicemember Screwed Over By Court-Appointed Lawyer's Lack Of Action Now Seeks To Undo Foreclosure Sale Of Home Sold Out From Under Him While On Duty

In Tampa, Florida, WFTS-TV/ABC Action News reports:

• While they are fighting for our nation overseas, some military personnel are losing their homes to foreclosure here at home. In the thick of battle, in the heat of the fight, it's the last thing a GI should have to worry about. While Coast Guardsman Keith Johnson was fighting for our country overseas, he was losing a battle here at home, for his home. A battle, he claims, he had no idea was being waged until the moment he got back and spoke to his wife.
• "It just boggled my mind. I got back and she said 'the house is basically foreclosed' and I was like 'What do you mean?'" Johnson says.
• At the same time Johnson and his wife Alysia were negotiating with their lender, Wells Fargo, to modify the mortgage on their Clearwater home, the bank's lawyers were foreclosing on the property, getting a summary judgment, and auctioning it off.

***

• The I-Team has uncovered case after case in the Tampa area, around Florida, and the nation where banks have foreclosed on the homes of active duty military personnel. In Johnson's case, Tampa Attorney Jay Passer was appointed by the court to track him down and protect his rights.
• He said he went to neither their home nor the base to find Johnson. If Passer had only contacted Johnson’s unit at Air Station Clearwater or used the Coast Guard's world-wide personnel locator, Johnson said, "My command would have informed me immediately -- immediately."
• Instead, Passer sent a letter to the Pentagon. He never received an answer from them. "It was not known to me. It was never explained to me, and I never received a response to any of that," Passer said.
• With no defenses to the foreclosure filed on his behalf, Wells Fargo obtained a summary judgment and auctioned off Johnson's home.

***

• Johnson and his new attorney are now petitioning the court to undo the foreclosure. "We're going to get in front of a judge and I believe the judge is going to undo this sale," says Johnson's attorney Matt Weidner.

For more, including the responses from Wells Fargo and the snoozing court-appointed attorney, see Banks find it easy to skirt federal laws protecting servicemembers from foreclosure (Clearwater Coast Guardsman Fights Foreclosure).

County Official Agrees To Comply With Colorado Law In Handling Left Over Surplus Cash From Foreclosure Sales Belonging To Ex-Homeowners

In Arapahoe County, Colorado, The Denver Post reports:

• Despite a law that dictates otherwise, Arapahoe County for years has not told homeowners who lost their property to foreclosure that they are entitled to money left over from the sale.
• Instead, tens of thousands of dollars in overbids that belong to homeowners have sat in a county-controlled account. The money is from funds remaining after the house was sold in foreclosure and the bank note and liens were satisfied.
• State law says counties must publish notice that they have the money so it can be claimed. If it isn't claimed after five years, the county can keep it.

***

• Arapahoe County has published almost none of the required notices since the law took effect in 1990. The county published a notice once, in early 2009, for a foreclosure with an overbid of $6,600, but Treasurer Sue Sandstrom said it's unclear why only that one was handled properly. The money remains unclaimed.
• State law requires county treasurers to take out five weeks of newspaper ads shortly after a foreclosure sale to announce it has the leftover money.

***

• Sandstrom said notices were published properly last week on 15 properties, a practice that will continue. Arapahoe County recently doled out more than $165,000 in overbids to seven homeowners who have lost their property to foreclosure since 2006. That was the result of a Denver Post story last month about how few people know about the money and how counties sometimes do little to find them.
• Sandstrom, in office since Jan. 1, said her plan now is to also publish the names from the entire five-year period on the county's website as well as in a local newspaper.

For more, see People foreclosed on in Arapahoe County might be owed money and not know it.

Sovereign Citizen Movement, 'Paper Terrorism' & Bogus Lien Extortion Rackets Involving Billion$

CBS' '60 Minutes' recently did a story on the 'sovereign citizen' movement, a a group of Americans that have little regard for the police or the courts and who the FBI lists among the nation's top domestic terror threats. One of the tactics they have been known to engage in when they get thwarted in their attempts to beat the system is referred to as "paper terrorism."

An excerpt:

• But when those efforts to beat the system fail, a sovereign citizen will often seek retribution. The weapon of choice is paper. For example, when a sovereign has a run-in with the law, they might file a lien or financial claim against the personal assets of the police officer or the judge involved. It's easy to file and you don't even need a lawyer. The sovereign never collects, but the target of the lien can have their credit ruined. The practice has been called "paper terrorism."
• "I have liens against me in three states in this country for a half a billion dollars," Robert Vosper, the town justice in tiny Rosendale, N.Y., told Pitts. Vosper thought there was some/thing odd about a defendant named Richard Ulloa, who appeared in his court room over a misdemeanor traffic offense.
• Ulloa refused to cooperate during his arraignment, so Vosper set bail. And that's when Ulloa inundated Vosper's court with paper. "We're talking a couple of pieces of paper?" Pitts asked.
• "No, no, it was 20, 30 sheets he would crank out on his computer of quasi-lookin' - like if a layperson looked at it, you would say, 'Boy, this guy's pretty good. Look at all the law in here,'" Vosper explained. "But you looked at it and thought what?" Pitts asked. "Gobbledygook," Vosper replied.
• Eventually, Ulloa and two other sovereign citizens filed liens against Judge Vosper and other local officials in excess of $1.24 trillion. The three men were convicted on federal mail fraud charges.(1)

For the full story, see A look at the "sovereign citizen" movement.

Go here for other posts on sovereign citizens and "paper terrorists."

(1) See Feds Indict Trio In Alleged $1.24 Trillion Bogus Lien Extortion Racket Targeting Government Officials, Bank Executives.

For a civil lawsuit filed in this case that describes this racket in more detail, see County of Ulster, New York, et al. v. Ulloa, et al.

FDIC Head: Bankster Robosigner Screw-Ups "Infected Millions Of Foreclosures"; "Damages ... Could Be Significant & Take Years To Materialize!"

The Wall Street Journal reports:

• The head of the Federal Deposit Insurance Corp. is warning that flaws may have “infected millions of foreclosures” and questioned whether other regulators’ inquiries into problems at the nation’s mortgage-servicing companies have been thorough enough.
• “We do not yet really know the full extent of the problem,” FDIC Chairman Sheila Bair said Thursday in written remarks submitted to a hearing of the Senate Banking Committee. “Flawed mortgage-banking processes have potentially infected millions of foreclosures, and the damages to be assessed against these operations could be significant and take years to materialize.”
• Federal and state officials launched numerous investigations last autumn after revelations that, to process foreclosures, banks used “robo-signers” who didn’t review documents prepared by their colleagues. Banking regulators’ have said their reviews of a sample of 2,800 foreclosure cases have found a small number of improper foreclosures.

For more, see FDIC’s Bair: Millions of Foreclosures Could Be ‘Infected’.

In related stories, see:

• The Palm Beach Post: Tip from Palm Beach Gardens woman spurs wide search for papers 'Linda Green’ OK’d;
• The Saginaw News: Michigan Attorney General's office investigating possible mortgage document fraud ("The name “Linda Green” was hard to miss").

Unwitting Homebuyer Of MERS-Related REO Told "Don't Move In, There's A Problem!" As 'Crappy-Title Clouds' Darken Over F'closd Houses Thru-Out Michigan

In Three Rivers, Michigan, WWMT-TV Channel 3 reports:

• A foreclosure mess is putting people's status as homeowners in question. It has to do with a recent Michigan Appeals Court ruling that calls into question thousands of foreclosures. The court says a company called Mortgage Electronic Registration Systems didn't have the right to initiate foreclosures. That company keeps mortgage records.
• Now, some people who bought foreclosed homes, or homes in the process of foreclosure, are finding themselves in limbo.
• “It's hard to find a replacement for the perfect house,” said Bob Van Zalen. Van Zalen says he'd found the perfect home, a foreclosed home near Three Rivers. Van Zalen closed on it a few weeks ago. “It was typical closing, flawless,” said Van Zalen. “Title company was there, bank was there, realtor was there.” Van Zalen got the keys and an hour later his moving crew and rental truck were ready to go.
• “Standing in line at the rental place, phone rang,” said Van Zalen. “Realtor said 'don't move in there, there is a problem.'” Van Zalen had already gotten the utilities turned on, and even had to rush to the house to stop the cable company from installing service.
• Three weeks later, and Van Zalen still can't move in. Big questions are being raised about the sale of foreclosed homes related to MERS, the mortgage record company accused of fraudulent practices. Until the mess is sorted out, Van Zalen is in limbo even though he has the keys and is packed and ready to move in. “I have signed documents saying I am the owner,” said Van Zalen.
• “What if I find another house, then this gets straightened out, then I have two homes.” The foreclosure mess is some/thing that the registrar of deeds offices across the State of Michigan and the rest of the country are dealing with.(1)

Source: Foreclosure mess puts homeowners in limbo.

In a related story, see The Battle Creek Inquirer: Michigan appeals court ruling could erase thousands of foreclosures:

• Debbie Barnett, the owner of the East Lansing real estate company Tomie Raines Inc., said the company already has halted one sale of a MERS-foreclosed home.
• Not only have people lost their homes under a process the Court of Appeals declared illegal, said Curtis Hertel Jr., the county register of deeds, but "we also have people who have legitimately bought those homes and now are going to have problems insuring the title in the future when they go to sell the property."

In a related post, see Michigan To Join Massachusetts As Real Estate Resale Market Quagmire After Recent State Appeals Court 'Anti-MERS' Ruling?

(1) For more on the crappy title problem in connection with improperly foreclosed homes, see

• Daily Finance: Why the Foreclosure Mess Settlement Proposal Can't Fix the Damage,
• Naked Capitalism: On the Clouded Title Mess and the Difficulties of Cleaning It Up.

Grandson: MERS Illegal Foreclosure Forced Sale Of Dying Gandmother's Home; Hope Still Alive In Attempt To Recover Title

In Ingham County, Michigan, WILX-TV Channel 10 reports:

• Nick Reeser's love for his grandma is written all over him. "Grandma was a huge tigers fan, this is a tribute to her," he said, pointing to a still-healing "D" tattoo on his leg. When she died just weeks ago, she left him her house. So he went to the Register of Deeds' office to get a copy of the deed and mortgage.
• "He finds out when he got here there had been a foreclosure on his grandmother's house the last few months before she passed away," said Curtis Hertel, Ingham County Register of Deeds. "Nobody was notified, my grandma was in no mental or physical state to make decisions on it," said Reeser.
• To make matters worse, it was a MERS foreclosure, one of 469 just in Ingham County deemed illegal by the Court of Appeals.
• "MERS did not own the note, they were in the chain of title but you need to have both to foreclose by advertisement," said Attorney Brian Dailey.
• Dailey has filed a class action law suit against the Mortgage Electronic Registration Systems company (MERS), saying its crimes are many.(1) "Violating people's rights, trespassing on their property, taking their property when they shouldn't be," he said.

For more, see Illegal Foreclosures Prompt Class Action Suit (Hundreds of homeowners, just in Ingham County, have been illegally foreclosed upon, according to the Court of Appeals).

(1) For the lawsuit, see Depauw v. Mortgage Electronic Registration Systems Inc.

Ex-NH Sale Leaseback Peddler Cops Plea In Equity Stripping Scam After Fleeing State; Undicted Co-Conspirator Remains On The Loose

In Concord, New Hampshire, The Nashua Telegraph reports:

• A second man accused of operating an elaborate mortgage scheme that fleeced banks out of millions of dollars and people out of their homes pleaded guilty in U.S. District Court this week. Former Nashua resident Walter Bressler, 42, now of Frisco, Texas, admitted this week in U.S. District Court to participating in the scheme and violating federal mail fraud laws, according to the U.S. Attorney’s Office.
• Prosecutors charge that Bressler helped persuade financially troubled home-owners to sign over the deed to their property with the promise that the homeowners could stay on as tenants, pay rent for two years and then buy the property back at a prearranged price.
• Instead, the scheme participants resold the homes to “straw buyers,” often in amounts that exceeded the original owner’s loans, according to the U.S. Attorney. Some of the rent money was used to pay off the new mortgages, but the loans eventually went unpaid and the homes fell into foreclosure.
• The original owners had no “realistic opportunities” to buy their homes back because they had been stripped of equity and encumbered with large, defaulted loans, according to the U.S. Attorney.
• The first to admit to the scheme was Richard Winefield, of Nashua, a former Re/Max real-estate agent (See Sale Leaseback Peddler Starts "Singing" To NH Feds After Copping Guilty Plea In Equity Stripping, Foreclosure Rescue Conspiracy). Winefield has pleaded guilty to mail fraud and is due to be sentenced June 1.(1)
• Michael Prieto has been identified by prosecutors as a partner of Bressler’s and Winefield’s, but he hasn’t been charged. Prieto said it was no scheme; rather, a refinancing program that was intended to help struggling homeowners, which would have worked if they had paid their agreed-upon rent.
• “The agreement and the program … was not a scam,” Prieto previously told The Telegraph. “It was designed for its purpose, which was helping people pay off their debts, giving them breathing room, giving them an opportunity to stay in their homes for two years.” Prieto couldn’t be reached by phone or e-mail for this story.(2)

For more, see Former Nashua man admits to mortgage scheme.

Go here for Bressler's plea agreement filed in U.S. District Court.

(1) Congratulations goes to Winefield, who has proven himself to be the clear winner of the "race to the prosecutor's office", "bellying-up" to investigators and spilling his guts in an attempt to take down as many of his co-conspirators and "buy-out" of as much prison time as possible. 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.

Winefield's cooperation has presumably been of help to the Feds in taking down two other co-conspirators - there is apparently one left on the loose.

(2) Prieto may simply be trying to enjoy his remaining days of freedom. Presumably, now that Winfield and Bressler, as well as a 3rd co-conspirator, Sadie Stanhope Ng, have copped guilty pleas, they have become very cooperative with prosecutors in helping them bag Prieto - especially if it results in a 'downward adjustment' in their expected prison sentences.

Sadie Stanhope Ng, 34, of Quincy, Mass., and formerly of Milford and Bedford, was part of the same conspiracy. See 2nd Suspect Agrees To Go Down In Granite State Sale Leaseback, Equity Stripping Foreclosure Rescue Scam.

Stanhope, Prieto and Bressler were previously sanctioned by state Banking Commissioner Peter Hildreth by a "cease and desist" order in 2007. The trio were fined $10,000, and they and their various limited liability companies were ordered to repay eight homeowners around the state (including two in Nashua) money gleaned from the sale of their properties. They also were ordered to stop being involved in mortgage brokerage or debt adjustment services in the state.

See Criminal Prosecutions Of Sale Leaseback Peddlers In Equity Stripping Foreclosure Rescue Deals for other incidents that led to criminal prosecutions in sale leaseback deals.

$5 Billion A Paltry Offer In View Of Mounting Evidence Of Abusive Mortgage Servicing Practices

A recent column in The New York Times offers commentary on the paltry $5 billion offer made by the mortgage industry to settle any claims in connection with the 50-state attorney General foreclosure fraud probe, particularly in light of the fact that evidence of extensive and abusive servicing practices keeps piling up:

• That figure is a fraction of the $20 billion that state attorneys general had apparently floated. If regulators accept the lowball offer, perhaps that would be because they haven’t dug deep enough.
• Because evidence of extensive and abusive servicing practices does in fact exist. It is piling up at the offices of the United States Trustee Program, the arm of the Justice Department that monitors the bankruptcy system. Over the past six months, the trustee has drawn material from 95 field offices covering 88 judicial districts. The findings should dispel any notion that toxic servicing practices were atypical or have done no harm.
• Clifford J. White III, director of the executive office of the United States Trustee, discussed some of the findings in an interview last week. But before we recount the ugly details, it’s worth noting the immense pushback the banks have mounted against the trustee office.
• Banks have repeatedly tried to thwart the program’s actions, filing lawsuits and court motions to prevent officials from compiling evidence. Never mind that part of a trustee’s job is to investigate possible improprieties in foreclosures to determine if they are poisoning the bankruptcy system.
• “We have faced consistent opposition by all of the major servicers,” Mr. White said. “We are currently facing 200 motions to quash our discovery requests. We also are facing upwards of 20 appeals either in district courts or in circuit courts.”
• Those pushing back include Bank of America, Citigroup, G.M.A.C., JPMorgan Chase and Wells Fargo, he said.

For more, see A Low Bid for Fixing a Big Mess.

Trump 'Name-Renting' Scheme Used To Jack-Up Prices On Beach Condos Leaves Investors Headed For The Courts

In Fort Lauderdale, Florida, The Miami Herald reports:

• Another vacant season winds to an end for the grand hotel formerly known as Trump. The yellow and blue tower, one of the few modern structures in Broward County designed by a world renown architect, should have been the throbbing heart of the renaissance on Fort Lauderdale Beach.
• It’s empty. As empty, perhaps, as the Trump brand that was used to lure investors into a condominium-hotel scheme that would collapse before a single guest signed the register. The architectural flourishes of the 24-story building, with great portholes looking out over A1A, were meant to evoke the old fashioned “elegance and grace of the luxury ocean cruise liners.” In retrospect, maybe the Titanic.
• More than 100 investors bought into the 248-room project in 2005 and early 2006, putting 20 percent down for units priced between $500,000 to $3 million.
• Lawyer Joseph E. Altschul, who represents purchasers holding stakes in some 50 units, said his clients had bought into that Donald Trump allure. The Trump name. The Trump luxury hotel network. And they paid, he said, about $200 more per square foot over comparable condo-hotel projects along the beach for that magical Trump name.
• Preconstruction brochures assured buyers that “Mr. Trump is committed to personal and direct involvement in everything that this name represents.”
• Not so much, as it turned out. Two years ago, when the project fell into foreclosure, Trump told the Sun-Sentinel, “We have nothing to do with the building. We had a licensing deal, and we terminated the licensing deal a long time ago.”
• Altschul said his clients were shocked to learn that the famous name used to jack up the prices on investment packages for a luxury hotel project was just another cheesy Trump marketing deal. “Trump International” carried no more meaning then the logo fixed on Trump shirts, Trump suits, Trump ties, Trump chocolate bars (“Each bar is packaged in a beautiful and luxurious gold, silver, or copper casing”) Trump crystal, steaks, vodka, lamps, bottled water, mattresses. And, of course, “Donald Trump by Donald Trump,” which turns out to be a fragrance. Spray it on for “citrus notes with hints of mint, cucumber and black basil.” And the subtle whisper of mendacity.
• The New York Times reported Friday that would-be condo buyers who lost hefty deposits in two other Trump buildings, condos in Tampa and Baja California, were similarly stunned to learn that the failed projects were “Trump” in name only. Trump’s lawyers pointed out that if the buyers had closely examined the sales contracts, they would have found the obtuse language indicating that The Donald was only the front man in someone else’s real estate deal.
• He rented his name to the Tampa project for $4 million and a cut of the never-to-be profits. (The Times also reported that consumer complaints and lawsuits were piling up against the unaccredited but very expensive Trump University, with its courses in get-rich-like-me real estate and deal making.)
• So the Trump International on Fort Lauderdale Beach was no more authentic than the would-be presidential candidate’s descent into the birther conspiracy. Just a famous name attached to an empty lie.

For more, see Trump hotel just another lie.

In related stories. see:

• The New York Times: Buying a Trump Property, or So They Thought,
• Los Angeles Times: Donald Trump's rough run: Now he's being sued by hundreds of property investors.

No Protection Under Title Insurance Policy For Pre-Existing Environmental Contamination; Pre-Purchase Failure To Inspect Leaves Buyer Holding The Bag

Lexology reports:

• [A]ccording to a recent US case in Louisville, Kentucky, a title insurer cannot be held liable to its insured for pre-existing environmental contamination (Pavilion Park LLC v First American Title Insurance Co.).
• In that case, the insured sued its insurer under its title insurance policy claiming that a restrictive covenant documenting the property’s former use as a solid waste disposal site was an “encumbrance” under the title insurance.

***

• The court was not particularly motivated to assist the insured purchaser because the purchaser had negotiated a contractual right to inspect the property during the due diligence period but apparently chose not to. One would think that such searches are commonplace. In the end, the court held that since the restrictive covenant did not create any legal impediment to title to the property, the insurer had no coverage responsibility.
• While it may have affected development, use, valuation and marketability, title insurance is not intended to address these issues.
• At its essence, it insures the prior chain of title; not an intended use. Challenges to marketability due to a regulatory restriction for a future clean up does not equal “title marketability”.
• The insured purchaser’s argument in this case was not the first attempt at such an argument in the US and not the only context in which it has been made: asbestos, lead paint and former tanks have all been determined not to affect marketability of title under title insurance.
• Not all title insurance policies are drafted equally, but the moral of the story is: due diligence is called due diligence for a reason. Read the policy, do the due diligence.

For more, see Can title insurance protect you from environmental defects? (requires paid subscription; if no subscription, TRY HERE, or GO HERE - then click appropriate link for the story).

Empire State Timeline For Foreclosure Actions Leads To 7-Year Backlog Of Cases

Housing Wire reports:

• At the rate the New York court systems are currently working through the backlog of foreclosure cases, it will take more than seven years to clear, according to RealtyTrac.
• New York is a judicial state, whereby foreclosures are completed through the court system. But as cases mounted, the state developed the largest foreclosure timeline in the country. It currently takes an average of 900 days for a foreclosure to wind through the New York system, according to RealtyTrac, which maintains a count of filings at the county level.

For more, see New York foreclosure courts face seven-year backlog: RealtyTrac.

Thanks to Bill Collins of Frontier Abstract, Rochester, NY for the heads-up on the story.

Possible Retaliation In Play As Bankster Names Homeowner's Son In Refiled Foreclosure Against Fraud Expert Who Recently 'Blew Whistle' On '60 Minutes'

In Palm Beach Gardens, Florida, The Huffington Post reports:

• Deutsche Bank appears to have retaliated against a high-profile foreclosure fraud expert, whose years-long battle against her own foreclosure helped reveal a wave of apparent malfeasance, by suing her son.
• The expert, Lynn Szymoniak, an attorney who specializes in white-collar crime, is widely considered on Capitol Hill to be one of the nation's top experts on foreclosure law. When Deutsche Bank attempted to jack up the interest rate on the mortgage for her Palm Beach Gardens, Fla., home in May 2008, she contested the move, setting off an investigation which unveiled mountains of forged signatures and fraudulent bank paperwork associated with the foreclosure process.
• Szymoniak alerted other attorneys, neighborhood advocates, lawmakers and the media about the apparent rampant fraud. She appeared on "60 Minutes" in April to discuss the broader foreclosure scandal.

***

• Shortly after appearing on "60 Minutes" Szymoniak won a major victory in her own foreclosure case. The court found that Deutsche Bank was unable to demonstrate ownership of her mortgage, which had originally been issued by the defunct subprime mortgage lender Option One, and threw the case out.
• Deutsche Bank was permitted to refile their case if they could obtain proper documentation, however. And on Friday, May 6, Szymoniak received a notification from the bank's lawyers that she was again being sued for foreclosure.
• But Deutsche Bank wasn't just going after her. The bank was also attempting to sue her son, Mark Cullen, who is currently pursuing a graduate degree in poetry at the New School in New York. Cullen hasn't lived in Szymoniak's house for seven years and is not a party to any aspect of her mortgage -- he has no interest in either the property or the loan, and never has had any such interest, according to Szymoniak.
• "It is just absolute harassment," Szymoniak said. "He doesn't own anything, for god's sake! He's getting a masters in poetry. He not only doesn't have any money, he's never going to have any money."
• And other Florida foreclosure experts say it's difficult to interpret Deutsche Bank's move as anything other than retaliation for Szymoniak's media presence. If it is not, in fact, retaliation, they argue, then Deutsche Bank's lawyers have demonstrated rank incompetence.
• "It sounds crazy," said Margery Golant, a principal with the foreclosure defense law firm of Golant & Golant PA in Florida. "I can think of no legitimate reason, if he doesn't have some connection to the property or to the mortgage, to include him in an action to foreclosure."
• "It's an intimidation tool," said Matt Englett, a partner at the Florida law firm Kaufman Englett Lynd PLLC. "Most people, they get scared and they get nervous and I think that's the effect that they're trying to have on him and his mother."
• "If he's not an owner of the house, it's pretty clearly just vindictive," said Joshua Rosner, the managing director of Graham Fisher & Co., a mortgage investment firm. "If they're doing it intentionally, that's one hell of a statement. If they're doing it randomly, that's still pretty incredible."
• The experts said the lawsuit against Szymoniak's son could also have negative implications for him beyond the immediate costs of fighting the foreclosure case, even though he has no financial interest in anything related to it. "He's going to have a lawsuit out there against him," Englett said, "so if someone were to do some kind of background check against him, that would come up."

For more, see Deutsche Bank Sues Foreclosure Fraud Expert's Son With No Financial Interest In Her Case.

Thanks to Deontos for the heads-up on the story.

Judge Stalls 300-Day Sentence For Loan Modification Scammer To Allow Time For Add'l Restitution Payments In Possible 'Jail Time Buy Down' Deal

From the Office of the Tulare County, California District Attorney:

• On Wednesday, May 11th, 2011, Albert J. Carazolez, 43 of Porterville, was sentenced in the Tulare County Superior Court by the Honorable James Hollman for 21 charges relating to Foreclosure and Loan Modification Fraud. The charges consisted of four felony counts of CCC 2945.4(a) (foreclosure rescue fraud), four misdemeanor counts of CCC 2945.4(a), (foreclosure rescue fraud), nine counts of CCC 2944.7 (demanding up front payments for loan modification services), two counts of BP 6126 (practicing law without a license), one count of CCC 2944.6 (violating loan modification contract disclosure laws, and one count of BP 6402. (failure to register as a legal document assistant).
• The defendant was sentenced to 300 days in county jail, five years felony probation, and ordered to repay $20,630.00 to 15 named victims for illegally obtained fees. The defendant pled no contest to the 4 felony charges and 17 misdemeanor charges on October 10, 2010.(1)
• The Honorable Judge Hollman delayed sentencing over the People’s objection to allow time for the defendant to pay restitution. At the time of sentencing, the defendant had only paid $5,000.00 of the $20,630.00 owed.(2)
• The case began in July of 2009. District Attorney Investigator Dwayne Johnson began looking into complaints against Carazolez’s company, Quick Action Services. The investigation revealed that Carazolez was claiming to be able to effect loan modifications. District Attorney Investigators and an Investigator from the California Department of Real Estate conducted undercover operations which established that Carazolez was illegally offering to provide loan modification services.
• A search warrant was served and Carazolez’s files revealed an ongoing operation in which he claimed to negotiate loan modifications for an up-front fee, usually around $1,500.00.
• Although not an attorney, Carazolez filed bankruptcies for several of the victims as well.(3) Because of Carazolez’s actions, most of the loan modifications did not work out and some of the victims ultimately lost their homes.

***

• This case was prosecuted through the Real Estate Fraud Program of the Tulare County District Attorney’s Office.

For the Tulare County DA press release, see Porterville Man Sentenced for Foreclosure and Loan Modification Fraud.

(1) According to this story, Carazolez pled no contest to:

• four felony counts of foreclosure rescue fraud,
• four misdemeanor counts of foreclosure rescue fraud,
• nine counts of demanding up front payments for loan modification services,
• two counts of practicing without a license,
• one count of violation of loan modification contract disclosure laws, and
• one count of failure to register as a legal document assistant.

(2) I suspect that the prosecutor's objection to delay the sentencing has to do with:

• the likelihood that if Carazolez coughs up all the cash before going to jail, he will immediately ask the judge for consideration of a 'buy down' (reduction) in his 300-day jail sentence; and
• the possibility that Carazolez, as a convicted scammer, may consider raising the loot by going out and scamming more people before the next sentencing hearing.

(3) Carazolez should consider himself lucky that he has apparently dodged scrutiny from federal criminal investigators for possible fraud involving the bankruptcy filings.

See Final Report Of The Bankruptcy Foreclosure Scam Task Force for a discussion of the various foreclosure rescue rackets involving the use of abusive bankruptcy court filings.

Media Spotlight Causes Foreclosure Rescue Operators To Cough Up Refunds On Failed Loan Modification

In New York City, WABC-TV Channel 7 reports:

• The foreclosure crisis has left many homeowners desperate for lifelines to stay in their homes. Many mortgage modification companies offer help to lower payments. A Staten Island woman invested her trust and her money in a firm promising guaranteed solutions.
• When they didn't fix the loan then closed, she asked Nina Pineda and 7 on Your Side to track them down. With the kind of reaction Eyewitness News received, it's easy to see why customers of Home Safe America are left upset.

***

• Within weeks of our visits she got three bank checks from Home Safe's former partners.(1)

For the rest of the story, see Battle with mortgage modification company.

(1) According to the story, Home Safe America never got the homeowner's modification and then went out of business. When Eyewitness News went to Home Safe's offices, the company's president was peddling mortgage modifications under a new name, United Solutions Corp. At first he didn't want to talk but finally, he agreed to refund the homeowner. Off camera he placed the blame for clients not getting refunds on his former Home Safe partner. Eyewitness News went looking for the partner and tracked him down peddling mortgage modifications for another company. The partner also refused to be interviewed but promised to pony up part of the refund for the homeowner. Shortly thereafter, they forked over three bank checks to her.

Indiana Attorney Cuffed & 'Frog-Marched' To Prison For 5+ Years After Ripping Off 100+ Victims In Client Trust Account Swindle

In Fort Wayne, Indiana, The Journal Gazette reports:

• After a two-hour hearing that clearly aggravated the judge, the prosecutor and nearly every other attorney in the room, former attorney Daniel Serban was handcuffed and led off to begin a 5 1/2 -year prison sentence.

***

• Serban’s sentence, which includes 5 1/2 years of probation and a restitution order of more than $280,000, came after an April admission that he had been stealing money from his clients’ trust fund accounts.

***

• According to court documents, there were more than 100 victims in the case and more than 600 instances of “racketeering activity.”
• In one instance, according to testimony and court documents, a woman was seen crying in the hallway outside his office because she had paid her utility bill, which had been turned over to collection with Serban. Because he did not pass the money on to the utility, the woman’s water had been shut off.
• In another situation, Serban forged the name of the personal representative of an estate to take money from the estate to pay back some of the other money he had taken. Two attorneys testified to having used Serban’s firm to handle collection work for them, only to have the cases mishandled and left in a state of disarray.

For more, see Lawyer’s thefts lead to prison.

(1) The Clients’ Financial Assistance Fund ["CFAF"] of the Indiana State Bar Association provides compensation, as a matter of grace, and not as a right, to qualified applicants who have suffered a monetary loss as a result of dishonest acts of an Indiana lawyer, acting either as a lawyer or as a fiduciary. No client or member of the public shall have any right in the Fund as a third-party beneficiary or otherwise; instead any award from the Fund depends upon the sole discretion of the ISBA, according to its rules and regulations. This Fund, which exists because of the voluntary contributions of the members of ISBA, recognizes that the lawyers of Indiana as a whole desire to help those who fall victim to the few lawyers who are dishonest.

Please review the Rules of Procedure prior to filling out the application. There are certain guidelines that must be adhered to. The Rules of Procedure should help you determine if you qualify for CFAF assistance.

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 (now includes Canadian recovery funds, courtesy of the American Bar Association);
• Check the USA Client Protection Funds Map;
• Check the Canada Client Protection Funds Map.

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

Foreclosure 'Happy Hour' A Forum For Exchange Of War Stories For Homeowners Screwed Over By Illegal Bankster Take-Back Attempts

In West Palm Beach, Florida, TC Palm reports:

• Several Treasure Coast residents scribbled the name “Linda Green” in black permanent marker on their temporary name tags at a recent happy hour gathering in West Palm Beach.
• That name and others have become synonymous with the nationwide foreclosure robo-signing crisis that’s rocked the foundation of several major banks and mortgage lending institutions. Several foreclosure law firms and lenders have been accused of improperly preparing and filing foreclosure documents by allegedly bulk-signing names of bank employees on court documents, questioning the validity of past foreclosures and cases that are still in active litigation.
• It’s one of the bonds shared by the half dozen Treasure Coast residents and 30 others from South Florida who meet monthly at what they call the Foreclosure Hamlet Happy Hour. Almost all attendees claim their foreclosure documents were robo-signed.
• “The banks created this fabricated propaganda that framed us like deadbeats. Irresponsible Americans that scammed the banks out of trillions of dollars by signing on loans we knew we couldn’t pay, ” said West Palm Beach activist and ForeclosureHamlet.org founder Lisa Epstein.
• She and Michael Redman, founder of 4closurefraud.org started the group that plans to expand north and hopes to organize a Treasure Coast meeting soon.

For more, see Treasure Coast residents exchange sad stories at foreclosure happy hour.

Texas Man Bagged For Allegedly Pocketing Cash, Passing Himself Off As Lawyer Providing Foreclosure Rescue Services

In Williamson County, Texas, KXAN-TV Channel 36 reports:

• A Williamson County man is arrested after allegedly fraudulently posing as an attorney. The Williamson County Sheriffs office was contacted after Ray Echavez filed several documents with the Williamson County Clerk’s Office. Clerks in the office did not believe that Echavez was a lawyer.
• Deputies contacted the man named in the document. According to the affidavit, the victim said that he met Echavez through a realtor and agreed to pay $2,500 for help in stopping the foreclosure of his Cedar Park home. The victim said he received legal advice and even appeared in court with Echavez, where a judge refused to grant an application for a restraining order against the foreclosure company.
• The victim also said there was paperwork where his signature was forged. Investigators also believe that Echavez at one point called deputies attempting to impersonate the victim. Echavez is charged with falsely holding oneself out as a lawyer, a third degree felony.

Source: Man posing as attorney arrested (Man allegedly paid $2500 for legal advice).

Victim Of Home Refinance Gone Haywire Who Never Missed Any Mortgage Payments Gets 6-Month Hold On F'closure Eviction As Parties Work Toward Resolution

In Milwaukee, Wisconsin, the Milwaukee Journal Sentinel reports:

• A six-month reprieve has been issued to Keon Williams, the north side man whose home was sold at a sheriff's sale in January even though he was current on the only mortgage he knew he had.

***

• The delay provides time to try to resolve the mortgage issues swirling around Williams either through negotiations or court action.
• Williams, whose dilemma was the subject of a Journal Sentinel report last month, has been teetering on the edge of eviction for months because he is caught in a vise created by the national mortgage meltdown and some fast dealings by the now-defunct Central States Mortgage Co. and an affiliated company.
• In 2008, Williams, a single father of three, refinanced his home through Central States, which had been the state's largest mortgage broker. However, unknown to Williams, the proceeds from that 2008 refinancing were not used to pay off his previous lender, Amcore Bank. Amcore was bought by Harris last year.
• Instead, Interim Funding LLC - an affiliate of Central States - used the money to pay off a different lender, said Stephen Kravit, an attorney for Richard Jungen, an owner of Interim and the founder and former chief executive of Central States. The FBI has been investigating Central States and some of its former executives since 2009.

For more, see Eviction postponed for six months (Caught up in mortgage mess, Milwaukee man gets a reprieve).

Lawsuit: Current Philly Sheriff Not Legal, Void All Foreclosures Conducted By Her

In Philadelphia, Pennsylvania, the Philadelphia Daily News reports:

• A candidate in next week's primary election for sheriff filed a lawsuit in U.S. District Court last week seeking to void all mortgage-foreclosure sales conducted under acting Sheriff Barbara Deeley.
• The suit, which names as its plaintiffs Democratic candidate Jacque Whaumbush and former West Philadelphia homeowner Glenda Sanders, seeks an order from the court declaring that Deeley "is not, and never was, the Sheriff or 'Acting Sheriff' " of Philadelphia and overturning the sheriff sale held April 5.
• The suit claims that the sale shouldn't be recognized because Deeley was never confirmed by the state Senate after she took over the office on an interim basis to fill in for Sheriff John Green, who retired in December.

For more, see Suit seeks to void sheriff sale; says current sheriff not legal.

Ohio AG Tags Foreclosure Rescue Operator With Civil Suit Alleging Upfront Fee Ripoffs

In Cleveland, Ohio, WEWS-TV Channel 5 reports:

• An exclusive 5 On Your Side investigation has uncovered rising complaints against an Ohio company offering mortgage relief for struggling homeowners. A review of complaints contained filed with the Ohio Attorney General's Office found at least 71 homeowners alleging they paid thousands for loan modifications that never happened.
• Consumers identified "The Modification Group" or "TMG" as offering to lower their monthly payments through a process called home loan modification.
• Bob Miller and his wife said they gave the company $4,000 to obtain a home loan modification that never happened. The Millers said they signed a contract that they said offered to refund 80 percent of their up-front payment if the loan was not approved. But after waiting 14 months, the Millers said they have no loan and no refund. "And then, the end of April, I come and there's a foreclosure notice on our door," said Paula Miller. "Now what?"
• Lynn Franks is another homeowner who withdrew $2,000 from her retirement account to pay for a loan modification she says she never received. "They told me I would be a perfect candidate," said Franks.
• Three homeowners took "TMG" to small claims court and won. In one case, a judge wrote, "They (TMG) accomplished nothing...nor does it appear they exerted any effort to try to do so."
• Tracie Lee is another homeowner who won her court case as well. In her case, Lee said she spoke on several occassion to Gregory D. Lewis about her loan modification. It turns out that Lewis has a criminal background. A mortgage fraud task force in Cuyahoga County convicted Lewis and six others in 2009 for obtaining $3 million worth of fraudulent loans. He was sentenced to five years probation.

For the story, see Homeowners complain Ohio loan company took thousands in cash (Loans preventing foreclosure never happened).

For the Ohio Attorney General press release, see Attorney General DeWine Files Suit Against Cleveland Foreclosure Rescue Company.

For the Ohio AG lawsuit, see State of Ohio v. The Modification Group, LLC, et ano.

New Mexico AG Accuses Purported Mobile Home Peddler Of Targeting Immigrants With Downpayment Ripoffs

From the Office of the New Mexico Attorney General:

• Attorney General Gary King says an apparent scam is being perpetrated against mobile home buyers in Albuquerque who never take delivery or get their deposit money back.
• "We filed a civil lawsuit today against Fernando Chavez-Guillen, who we believe is targeting immigrant consumers," says AG King. "He is charged with misrepresenting mobile homes he is selling; failing to deliver; taking cash deposits and failing to return them when delivery is not made; all without a proper state license."

For more, see AG Alleges Misrepresentation in Mobile Home Sales... Lawsuit Filed Seeks Restitution & Civil Penalties.

DeKalb County Declares War On Roadside 'Bandit' Signs Peddling Foreclosure Rescue, Junk Car Buyers, Etc.

In DeKalb County, Georgia, The Atlanta Journal Constitution reports:

• The brightly colored signs shoved into the ground next to DeKalb County roads have a new enemy: all county workers. Any county employee assigned a vehicle – including sanitation workers and animal control officers -- soon will be authorized to remove illegal signs and placards along roadsides countywide under a law approved Tuesday by the Board of County Commissioners.
• “I’m seeing a whole lot of ‘We Buy Junk Cars” out there," said Commissioner Larry Johnson, who pushed for the law. “Removing these kinds of signs helps keep DeKalb beautiful.”
• The county’s code enforcement division is charged with handling the nuisance signs, which also appear tacked to utility poles and slathered on buildings. That office, though, is overwhelmed with keeping an eye on properties, officials say. DeKalb is among top three counties in the state for foreclosures, with more than 13,000 in its borders.
• Empowering other county workers to yank out illicit signs will give those enforcement officers a hand in battling the problem. Johnson said he also plans a crackdown on violators, who faces civil fines when caught.
• The county will spend the next few months training workers on how to spot illegal signs, such as the ones advertising ways to avoid foreclosure, versus proper ones such those for real estate. County workers will be allowed to start removing signs in the fall. "The truth is, these illegal signs are a lot like graffiti,” said Commissioner Jeff Rader. “The quicker you can get them down, the more you deny them any benefit of being up.”

Source: DeKalb enlists county workers to police signs.

NC Appeals Court: Insufficient Proof Of Promissory Note Ownership Sinks Foreclosure; "Stephan" Affidavit At Center Of Crappy Paperwork

In Raleigh, North Carolina, The Charlotte Observer reports:

• Lenders statewide may have to work harder to get their paperwork right in foreclosure cases after an N.C. Court of Appeals decision. The court has ruled against a lender in a 2009 Hyde County foreclosure, saying the documents presented did not prove the lender was the legal holder of the homeowners' promissory note to repay. The court's decision stopped the foreclosure, at least for now.
• The $525,000 home loan to Rex and Daniela Gilbert - like many mortgages in the nation in recent years - was passed among several lenders. N.C. law requires "that the party seeking to foreclose on a promissory note is the holder of said note....and the debtor is entitled to demand strict proof," according to the 3-0 opinion written by Judge Robert Hunter.
• The court found that two affidavits by GMAC Mortgage employees did not explain how the signers had knowledge of some testimony. One affidavit was signed by Jeffrey Stephan. The appeals court opinion noted GMAC "recently was found to have submitted a false affidavit ... by signing officer Stephan" in U.S. District Court in Maine. His name also has been cited in reports about lenders whose workers robo-signed hundreds of documents without knowing what they contained.

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• Katherine Parker-Lowe of Ocracoke, the Gilberts' attorney, said of the court opinion filed last week: "I think it's a great day for homeowners." [...] Jerry Hartzell, a Raleigh lawyer who consulted with the Gilberts' attorney, applauded the appeals court "about how picky they're getting with affidavits. That seems to be a consequence of the robo-signing stuff - about how mortgage servicers are swearing to things they don't really know about. Who knows how many foreclosures that could affect?"

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• [Mecklenburg Clerk of Superior Court Martha Curran] sees the ruling as a strict application of existing law, a message from the courts to "get it right, get it right." The N.C. attorney general's office "is carefully reviewing" the Gilbert case, said a spokesman. "It's a significant issue."

For more, see Homeowners favored in court ruling (N.C. appeals court: Lenders must have solid foreclosure documents).

For the court ruling, see In re Foreclosure of Gilbert, NO. COA10-361 (NC App. May 3, 2011).

(1) The appeals court made this observation on the importance of establishing, by sufficient evidence, the ownership of the promissory note before proceeding with a foreclosure (except where noted, bold text is my emphasis):

• Respondents also argue the trial court erred in ordering the foreclosure to proceed, as Petitioner did not prove that it was the holder of the Note with the right to foreclose under the instrument as required by section 45-21.16(d)(i) and (iii). We agree.
  
  A “foreclosure under a power of sale is not favored in the law and its exercise will be watched with jealousy.” In re Foreclosure of Goforth Props., Inc., 334 N.C. 369, 375, 432 S.E.2d 855, 859 (1993) (citations and internal quotation marks omitted). That the party seeking to foreclose on a promissory note is the holder of said note is an essential element of the action and the debtor is “entitled to demand strict proof of this element.” Liles v. Myers, 38 N.C. App. 525, 528, 248 S.E.2d 385, 388 (1978).
  
  For the trial court to find sufficient evidence that Petitioner is the holder of a valid debt in accordance with section 45-21.16(d), “this Court has determined that the following two questions must be answered in the affirmative: (1) ―is there sufficient competent evidence of a valid debt?'; and (2) ―is there sufficient competent evidence that [the party seeking to foreclose is] the holder[ ] of the notes [that evidence that debt]?'” Adams, __ N.C. App. at __, 693 S.E.2d at 709 (quoting In re Cooke, 37 N.C. App. 575, 579, 246 S.E.2d 801, 804–05 (1978)); see N.C. Gen. Stat. § 45-21.16(d) (2009) (in order for the foreclosure to proceed, the clerk of court must find, inter alia, the existence of a “valid debt of which the party seeking to foreclose is the holder,” and a “right to foreclose under the instrument” securing the debt) (emphasis added).
  
  Establishing that a party is the holder of the note is essential to protect the debtor from the threat of multiple judgments on the same note.
  
  If such proof were not required, the plaintiff could negotiate the instrument to a third party who would become a holder in due course, bring a suit upon the note in her own name and obtain a judgment in her favor. . . . Requiring proof that the plaintiff is the holder of the note at the time of her suit reduces the possibility of such an inequitable occurrence. Liles, 38 N.C. App. at 527, 248 S.E.2d at 387.