Oregon Judge Slams Brakes On F'closure Eviction; Failure To Record Mortgage Assignment Violates State Law, Allows Homeowner To Unpack Bags & Stay Put

In Columbia County, Oregon, The Oregonian reports:

• A Columbia County judge has blocked U.S. Bank from evicting a Vernonia woman whose home it purchased in foreclosure, concluding in a case with far-reaching implications that her lenders had not properly recorded mortgage documents.



• Last week's action appears to be the first in which an Oregon judge has halted an eviction and declared a foreclosure sale void after the fact. The ruling, if it stands, raises questions about the validity of other recent foreclosures in the state and could create serious problems for lenders and title companies, as well as for buyers of such properties.

***

• Nearly all foreclosures in the state occur without a judge's involvement under so-called nonjudicial proceedings. But this ruling, legal observers say, could potentially divert more foreclosure actions into courtrooms, a more time-consuming and costly proposition that could exacerbate the state's housing slump. "This will certainly be problematic for lenders," said David Ambrose, a Portland real-estate attorney.



• It also casts doubt on the validity of already completed foreclosure sales in which lenders resold mortgages without recording the sales in county recorder offices. Many of those questionable transactions, [...] involve the Mortgage Electronic Recording System. MERS was created by the mortgage industry to rapidly securitize loans without recording them.



• Federal judges in Oregon have ruled that MERS-involved foreclosure actions violated state recording law. MERS also has been tied to so-called robo-signing scandals that prompted a 50-state investigation of the nation's largest loan servicers and banks.

For more, see Oregon judge voids foreclosure sale, casting doubt on others.

For the ruling, see U.S. Bank v. Flynn, Case No. 11-8011 (Columbia Cty. Cir. Ct. June 23, 2011).

Who Are Bank Of America's Newest Robo-Signers?

From Fraud Digest:

• Who are Bank of America's newest robo-signers? For several years, BOA turned to its subsidiary, BAC Home Loans Servicing, in Collin County, Texas, whenever mortgage assignments were needed in foreclosures. This office, formerly Countrywide Home Loans Servicing, produced hundreds of thousands of assignments, including most all of the assignments to Countrywide CWABS and CWALT trusts.



• In recent months, however, BOA has turned to its office in Ventura County, California, as the Collin County, TX, signers have become too well known. These assignments are made primarily for CWALT and CWABS trusts that closed in 2005, 2006 and 2007.



• These assignments claim to assign both the mortgages and the notes to the trusts. On each of these assignments, MERS is stated to be the HOLDER of the mortgage.

Source: Who are Bank of America's newest robo-signers?

(1) Who are the newest signers - who use MERS titles to assign mortgages TO BAC while actually working FOR BAC - signing as if they were MERS officers for dozens of different companies? According to Fraud Digest, The names appearing most often include:

• Ricki Aguilar, Malik Basurto, Youda Crain, Diana DeAvila, Edward Gallegos, Christopher Herrara, Bud Kamyabi, Tina LeRaybaud, Jane Martorana, Martha Munoz, Srbui Muradyan, Debbie Nieblas, Yomari Quintanilla, Luis Roldan, Miguel Romero, Cynthia Santos, Swarupa Slee.

According to Fraud Digest, these individuals, in 2011, have signed as MERS officers for the following mortgage companies and banks, including many that no longer existed in 2011:

• Aegis Wholesale Corporation, American Brokers Conduit, America's Wholesale Lender, Amnet Mortgage, Ampro Mortgage, Countrywide Bank FSB, Decision One Mortgage Company, First Choice Funding Inc., First Interstate Financial Corp., First National Bank of Arizona, Market Street Mortgage Corp., M/I Financial Corp., Millenia Funding Corporation, MortgageIt, One Mortgage Company, LLC, Pinnacle Direct Funding Corp., Pulte Mortgage, Quicken Loans, Universal American Mortgage Company, Service Mortgage Underwriters, Inc., Wilmington Finance, Inc.

CoreLogic in Chapin, South Carolina, is the keeper of these documents, and Bank of New York Mellon is the trustee for most of the CWABS and CWALT trusts that use these BAC documents, according to Fraud Digest.

HUD Left Holding The Bag On Potentially 'Flammable F'closure' As Hazardous Materials Crews Step In, Rip Apart Premises In Search For 'Meth' Chemicals

In West Valley, Utah, The Salt Lake Tribune reports:

• Hazardous materials crews began digging in the backyard of a foreclosed home [] after the previous owner said chemicals used to make methamphetamine may have been buried in the backyard. So far, only a waste basin from an old outhouse and buried garbage and concrete blocks have been found at the scene [...]. Digging will conclude [...] with firefighters on standby.



• “The previous owner said he buried some stuff in the backyard, but he didn’t know where,” said West Valley Fire Capt. Bridger Williams. EnviroCare Inc., which specializes in dealing with hazardous materials, dug a number of holes by hand in search of what the man may have buried. “They (EnviroCare) wanted to make sure the home is safe and the property is safe for those who live nearby and for the eventual buyer,” Williams said.



• John Hart, COO of EnviroCare said they were told chemicals used to make methamphetamine may have been buried in the backyard, so they used ground penetrating radar to search the area. They found eight areas of interest and started digging with plastic shovels so they didn’t create any sparks.



• The home went into foreclosure more than a year ago and is now owned by the Federal government’s Housing and Urban Development program. The government is working to clean up the home and property and eventually sell [unload] it.

For the story, see Crews check for buried meth chemicals at foreclosure home.

Texas Homeowner/Couple Facing Demolition Order Head For Court In Effort Thwart Oncoming City Wrecking Ball

In Beaumont, Texas, The Southeast Texas Record reports:

• Beaumont residents Charles and Angela Richard have filed suit against the city in hopes of saving their residence. [...] According to the petition, on May 18 the city served the Richards with notice that their home was not up to code and was slated to be demolished.



• In their suit, the Richards claims they have brought the home up to code but the city refuses to rescind its order to vacate. Plaintiffs would (show) sic that there is no remedy at law that is clear and adequate to protect plaintiffs' property interest against this wrongful demolition by defendant," the suit states.

Source: Beaumont residents sues city to save home.

Revocation Of Mobile Home Park Operator's License Could Drive 30 Families Out From Homes

In Bradford Township, Wisconsin, The Janesville Gazette reports:

• Juan and Anna Iniguez have a brand-new lease on their lot at Shady Hills Mobile Home Park. According to the lease, they can stay through at least December. And they want to stay. Desperately. But the lease doesn’t give them much confidence.



• The Bradford Town Board has set a public hearing as part of the process to revoke Shady Hills owner David Merriam’s operating license.



• The Rock County Health Department also has filed orders against the park. The county would support whatever decision the town made about Merriam’s license, Environmental Health Director Tim Banwell said.



• If the license were revoked, it could mean the residents would have to move. [...] The Iniguezes are among the 30 households that in April were given a letter that states their lot leases were terminated as of Jan. 1. They had until July 4 to move out, the letter states.

***

• The town of Bradford building inspector has recommended Merriam’s license be revoked based on the half-torn-down mobile homes, the lack of access for emergency vehicles and work that has been done on some units without a license.



• The Rock County Health Department has issued an order for streets to be repaired, manholes secured and trash removed.

For more, see Action vs. owner could hurt Shady Hills tenants.

BofA Director On Countrywide: "Worst Decision We Ever Made!" As Bank Settles 'Crappy Mortgage' Suit For $8.5B; Will Swallow Add'l $5.5B In Buybacks

The Wall Street Journal reports:

• Just before Bank of America Corp. swooped in to buy Countrywide Financial Corp. in 2008, the bank's then-chief executive, Kenneth D. Lewis, told analysts why he had dropped his resistance to owning a mortgage lender.



• "Arithmetic overcomes all your issues," he told analysts. "If I ever did anything in the mortgage business, I would have to eat about seven years of my words, so it would have to be pretty compelling."



• The nation's largest bank by assets has been haunted by Countrywide's numbers ever since the $2.5 billion deal was completed.



• On Wednesday, Bank of America announced, as expected, an $8.5 billion settlement with investors who took a beating on mortgage bonds issued by Countrywide before the housing market collapsed.



• The Charlotte, N.C., bank also will swallow an additional $5.5 billion to buy back other defective mortgages in the future. And it took a $6.6 billion hit for lawsuits, foreclosure snarls, a write-off in the value of its mortgage business and loan-servicing adjustments.

***

• Of all the deals Bank of America made during its climb to the top of the U.S. banking heap since the 1980s, Countrywide has spawned more regret than probably any other acquisition by Mr. Lewis or his predecessor, Hugh L. McColl Jr.



• "It turned out to be the worst decision we ever made," said one Bank of America director who voted for the Countrywide deal in January 2008. Mr. Lewis declined to comment through his attorney.



• Since the purchase, the bank's real-estate division has saddled it with more than $17 billion in losses, most of it coming from the assets inherited from Countrywide. Even Mr. Moynihan has hinted publicly that the deal was a mistake, telling shareholders in May that the bank agreed to take on Countrywide, based in Calabasas, Calif., "just when you shouldn't have done it."

***

• Since then, Bank of America's mortgage division has racked up $17.7 billion in net losses amid rising numbers of homeowner defaults. The company has lost $22 billion since the start of 2010 to investors who demanded the bank buy back Countrywide mortgage bonds.



• Other legal payouts include $8.4 billion for home-loan modifications, $108 million to the Federal Trade Commission to settle claims of excessive fees by Countrywide, and more than half of the $67 million fraud-suit settlement involving former Countrywide founder Angelo Mozilo. Mr. Mozilo declined to comment through his lawyer.



• Bank of America still faces the prospect of billions of dollars in fines from U.S. and state regulators investigating foreclosure procedures. That mess could cost the company about $7.4 billion on a pretax basis, said Glenn Schorr, an analyst at Nomura Securities.

For more, see BofA Haunted by Countrywide Deal (requires subscription; if no subscription, GO HERE - then click appropriate link for the story).

NY AG: 'Quick, Cheap $20-25B Multi-State Foreclosure Fraud Settlement Not Enough!'; Scneiderman "Stunned" To Find Probe Lacking In Docs, Depositions

The Rochester (New York) Democrat and Chronicle reports:

• New York Attorney General Eric Schneiderman expects to lead opposition to what he called a "quick, cheap settlement" of a 50-state investigation into foreclosure practices.



• Schneiderman put the monetary settlement being discussed with the largest U.S. mortgage servicers at $20 billion to $25 billion and said he will take "the hardest line" against it.



• The probe began in October. New York launched its own investigation two months ago and, Schneiderman said, has found the problem is much deeper. He said he was "stunned" to find the multi-state probe so lacking that no documents or witness depositions had been obtained.

For more, see AG Eric Schneiderman opposes foreclosure deal.

The Saga Of 'Sunny' Sheu - NYC Man Who Fought Foreclosure After Being Victimized By Forged Land Documents Winds Up Dead

In New York City, Black Star News reports:

• Since his death last summer, associates of Sun Ming Sheu, an activist fighting alleged judicial corruption in New York, remain convinced that he was murdered and that police aren't investigating his death because of a coverup.



• They point to the alleged kidnapping and death threats by New York Police Department (NYPD) officers Sheu reported to the FBI, the highly suspicious circumstances of Sheu’s injury, the contradictions in the official reports of his death, and most conspicuously, the lack of any investigation by law enforcement, even after the manner of Sheu’s death was ruled "undetermined" by the Medical Examiner, making an investigation legally mandatory.



• They also cite a motive - the silencing of Sheu three days after he declared that he had discovered proof of felonies by a New York State Supreme Court Judge.



• Perhaps the most ominous evidence of foul play, the associates say, is the video Sunny Sheu made weeks before his death - now posted on Youtube - in which he predicts his own murder and names the parties he feels will be responsible; parties including a sitting State Supreme Court Judge [Joseph Golia] and two detectives of the Queens District Attorney office whom he had claimed "kidnapped" and threatened him months prior.

For more, see Was Sunny Sheu, Foe Of Judicial Corruption, Murdered? (Activist Dead Weeks After Posting Video About His Fears) (Part One of a Series).

See also, Business Insider: The Unbelievable Story Of The Queens Man Who Fought Foreclosure And Wound Up Dead.

For an August 4, 2009 post on Sonny Sheu, see Queens Homeowner Fights To Hold Onto Home Stolen In Deed Theft Scheme; May Lose House Anyway Despite Successful Forgery Prosecution Against Scammers.

Judge To Bill Collectors: Courtroom Is Not A "Land Of Oz!"

From a May, 2010 story in The New York Times:

• As New Yorkers have tumbled into credit card debt in large numbers during the great recession, bill collectors have inundated the courts to get what they say is due. In turn, the courts have issued hundreds of thousands of orders against residents. Some consumer groups argue that by doing so, the courts have become little more than an arm of the debt collection industry.



• Now, a few judges in New York State are suggesting that they agree, at least in part, with the consumer groups. They have fumed at debt collectors and their lawyers, scolding them for interest as high as 30 percent a year and berating them for false statements and abusive practices.



• Some of the rulings have even been sarcastic or incredulous. In December, a Staten Island judge said debt collectors seemed to think their lawsuits were taking place in a legal Land of Oz, where everyone was supposed to follow anticonsumer rules invented by some unseen debt-collection wizard.

***

• In the Staten Island case, the judge, Philip S. Straniere, said a credit card company was claiming interest of 28 percent on the balance due, which would be illegal as usury under New York law. The company argued that the credit card issued to a New Yorker that seemed to be from a national company had actually been issued by a one-branch bank in Utah, which had no usury law.



• “Like the Land of Oz, run by a Wizard who no one has ever seen,” Judge Straniere wrote, “the Land of Credit Cards permits consumers to be bound by agreements they never sign, agreements they may never have received, subject to change without notice and the laws of a state other than those existing where they reside.”(1)



• The judge ruled that the supposed agreement allowing unlimited interest charges was not enforceable in New York.(2)

For the story, see In New York, Some Judges Are Now Skeptical About Debt Collectors’ Claims.

For Judge Straniere's ruling, see American Express Travel Related Services Company, Inc. v. Assih, 2009 NY Slip Op 29527 (NYC Civ. Ct., Richmond Cty., 2009).

(1) Commenting on the rules governing the consumer credit and debt collection industries, Judge Straniere makes this observation:

• Having dealt with thousands of consumer credit cases over the years the court is sometimes caused to wonder if the regulations governing this industry originated in the "Wonderful Land of Oz" and not in the legislature of the various states and national government.

(2) Judge Straniere gave the lender the kiblosh on the usury issue with this remark:

• The Wizard in the "Wizard of Oz" warned Dorothy and friends, "Do not arouse the wrath of the great and powerful Oz," I am sure the court will likewise be arousing the wrath of the plaintiff by finding that the credit card agreement entered into by the defendant with any of the plaintiff's entities is void as in violation of New York's usury statute.

Indiana U.S. Senate Candidate Caught Taking Double Homestead Exemptions; Says He Didn't Mean To, Agrees To Pony Up Unpaid Back Taxes

Buried at the end of a recent article, the Evansville (Indiana) Press & Courier reports:

• An Indianapolis television station reports that state treasurer and U.S. Senate candidate Richard Mourdock has taken more property tax breaks than allowed. WTHR-TV says Mourdock had a homestead exemption on a home in Evansville and a second one for an Indianapolis condominium, even though multiple homestead exemptions are not allowed.



• Mourdock says he filed a form to cancel one of the exemptions but learned this month that Marion County officials misplaced the form. He says he has since filled out another form to cancel the credit and has made arrangements to pay back taxes.



• Marion County Deputy Auditor Claudia Fuentes wrote in a memo this month that a previous owner applied for the deduction. Mourdock is a Republican seeking the U.S. Senate seat currently held by GOP Sen. Richard Lugar.

Source: Mourdock's taxes under scrutiny.

Defective Foreclosure At Center Of REO Homebuyers' Dilemma; Discover They Acquired Crappy Title When Subsequent Refinance Attempt Failed

In Cape Coral, Florida, The News Press reports:

• Brian and Holly Barnhart thought they were home free when they bought their Cape Coral dream house from Wells Fargo Bank - but the bank didn't even own the house.



• Now the Barnharts, who emptied their life savings to buy the house for $153,000 cash and renovate it for another $80,000, are stuck in limbo along with their two small children and a baby due in July.

***

• At the heart of the problem is a mortgage foreclosure lawsuit filed by Wells Fargo in 2007 against Richard Riccobono for a mortgage he had on the house. The bank won the suit and then took back possession of the house, but moved July 30, 2009, to set aside its ownership.



• That caused ownership of the house to revert to Riccobono. But on Nov. 3, 2010, Wells Fargo sold the house to the Barnharts - who discovered two months later they didn't really own it when they applied for a mortgage.



• Their plight is the latest in a string of cases in which people are suffering the aftershocks of the wave of foreclosures that swept through the county after the real estate bubble burst at the end of 2005.(1)

For more, see Exclusive: Cape Coral family pays Wells Fargo for home bank didn't own.

(1) Unless they updated their owner's title insurance policy (assuming, of course, they obtained one when they bought the home in the first place) to reflect the additional $80,000 investment for renovations (or unless they have something in their existing policy that addresses market value increases - for which they would have paid an additional insurance premium), the Barnhart's may find that their title insurance coverage is limited to the $153,000 they paid for their home. (It may be possible, however, that the Barnhart's can go to court and request that a judge impose an equitable lien on the property for the $80K expended to fix the place up.)

Virginia Homeowner's F'closure Challenge Leaves Public Auction Buyer Out $310K With Ongoing Tax Bills, In 2-Year Tug-Of-War For Possession Of Premises

In Richmond, Virginia, the Richmond Times Dispatch reports:

• The foreclosure mess rocking the nation is playing out in Richmond.



• On one side is a father-and-son team who bought a house in Windsor Farms as an investment at a foreclosure auction nearly two years ago but can't take possession of the house.



• On the other is the couple who owned the house — and claim they still do, alleging that the foreclosure process was improper and should be voided.



• Now, the case is tied up in the courts. [...] Judge Walter W. Stout of Richmond Circuit Court said Monday that the case has become a quagmire because of questions relating to title and possession.

***

• Similar cases are likely to pop up, as foreclosures continue to mount nationwide and lenders and attorneys general in all 50 states review foreclosure procedures for possible improprieties.

***

• The Watsons paid $310,200 for the house at a foreclosure auction on the steps of the John Marshall Courts Building in July 2009. Their name was recorded a couple of weeks later on the deed of trust. They have paid property taxes of nearly $15,000 since then, said their attorney, William K. Grogan.



• But it's not clear who owns the house. The Nicholsons have not paid any mortgage or rent for at least 30 months, Grogan said in court filings. But the Nicholsons allege that the foreclosure process on their home was bogus, according to court records. [...] The couple has posted more than $19,000 in bonds, the Nicholsons' attorney said. "He is not a freeloader," Henry W. McLaughlin, one of two attorneys representing the Nicholsons, said at a recent court hearing.

For more, see Windsor Farms foreclosure case a quagmire.

"This Is Only The Beginning!" Warns Florida Lawmaker As Insurance Industry Begins To Jack Up Rates On Homeowner Policies

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

• Brace yourself before you open your next home insurance bill. When Paul Hobson received his State Farm Florida renewal this month, he was shocked to find the annual premium to insure his 2,200-square-foot house had increased to $2,715 from $1,092.



• "That's a 152 percent increase. I called to make sure the figure was right," Hobson said. "Did the end of the world happen or something?" The State Farm office he called in Jupiter assured him the amount for his St. Lucie West home was correct and due in August.



• In April, regulators granted State Farm an average 18.8 percent rate increase, but as Hobson discovered, those averages mean little because there is no cap. Some homeowners are being hit with huge increases.



• "This is only the beginning. The rates are being approved quicker and easier on behalf of the insurance industry. It's quite sad," said state Sen. Mike Fasano, R-New Port Richey, who has been an advocate for consumers on insurance. "We have a governor now who is sympathetic to the insurance industry."

For more, see Uptick in homeowners insurance rates 'only the beginning'.

Use Of Quiet Title & Slander Of Title In Undoing Real Estate Equity Ripoff, Voiding Deeds & Mortgages

The successful use of a quiet title and slander of title lawsuit in an effort to undo a real estate equity scam perpetrated on an elderly property owner by his nephew and a gang of others was the focus of a December, 2009 ruling of an Illinois appeals court.

The fact pattern involved, among other things, a purported sale leaseback, coupled with a repurchase option, of property and the recording of forged land documents.

For those in Illinois (and possibly elsewhere) in the business of undoing and unwinding these ripoffs on behalf of the victims, there may be some points of interest, including the following:

• action to quiet title,


• requirements for adequately proving slander of title,


• essential elements of a forgery,


• cloud on title ("is the semblance of title" which is "unfounded" or "which it would be inequitable to enforce"),


• authority of an agent (may be actual or apparent and, if actual, may be express or implied),


• ratification of agent's unauthorized acts,


• failed attempt by the bank that financed the ripoff to reinstate its mortgage lien that had been voided by the trial court (unsuccessfully argued judicial estoppel and unclean hands),


• imposition of punitive damages in a slander of title case,


• availability for an attorney fee award for the victim in a slander of title case,(1)


• factors in determining an appropriate award for attorneys fees for the victimized property owner (liability for which is imposed on the scammers),


• applicability of a contingency fee risk multiplier in calculating the award for attorneys fees(2) (court approved use of a multiplier of 3 to determine the total fee award of $595,574 for the contingent portion of the fee).

For the ruling, see Gambino v. Boulevard Mortg. Corp., 398 Ill. App. 3d 21, 922 NE 2d 380 (Ill. App. 1st Dist., 6th Div. 2009) (Appeal denied by Gambino v. Blvd. Mortg. Corp. (W.W. Funding, L.L.C.), 2010 Ill. LEXIS 909 (Ill., May 26, 2010)).

(1) With respect to the appropriateness of awarding attorneys fees in a slander of title action, the Illinois appeals court made this observation:

• Contrary to the Wolf defendants' argument, there is authority in Illinois providing that recovery for slander of title actions permit recovery of those costs and attorney fees which directly flow from the wrongful disparagement. Home Investments Fund v. Robertson, 10 Ill. App.3d 840, 844, 295 N.E.2d 85 (1973).
  
  Further, plaintiffs were entitled to recover those costs and attorney fees directly related to the quieting of title and to those damages directly related to a slander of title, i.e., loss of vendibility, etc. Robertson, 10 Ill.App.3d at 844, 295 N.E.2d 85.

(2) For more on the use of risk multipliers in calculating prevailing party attorney fees in pro bono and contingency fee cases, see:

• The Yale Law Jounal: The Contingency Factor In Attorney Fee Awards.


• Defending A Foreclosure Defense Case Pro Bono? Don't Forget The Contingency Risk Factor When Sticking Losing Lender With Tab.

More On Void vs. Voidable

Whether one is looking to undo or unwind an abusive real estate deal, set aside a deed, mortgage or other conveyance, or vacate/void a foreclosure judgment, the distinction between its status as void and voidable may, in many cases, be the most important issue to address.

In this regard, the following reminder as to the fundamental difference between void and voidable (in the context of a court judgment under attack) appeared in a recent ruling from an Ohio appeals court, a reminder that can't be repeated enough:

• {¶11} " 'The distinction between "void" and "voidable" is crucial. If a judgment is deemed void, it is considered a legal nullity which can be attacked collaterally.
  
  Conversely, if a judgment is deemed voidable, it will have the effect of a proper legal order unless its propriety is successfully challenged through a direct attack on the merits. * * * ' " GMAC, LLC v. Greene, 10th Dist. No. 08AP-295, 2008-Ohio-4461, ¶27, quoting State v. Montgomery, 6th Dist. No. H-02-039, 2003-Ohio-4095, ¶10, quoting Clark v. Wilson (July 28, 2000), 11th Dist. No. 2000-T-0063.
  
  A judgment is void where service of process has not been accomplished or where the court lacks subject-matter jurisdiction. Deckerd v. Deckerd (June 24, 1999), 7th Dist. No. 98-CO-59.
  
  In contrast, "[a] voidable judgment is one rendered by a court having jurisdiction and although seemingly valid, is irregular and erroneous." GMAC at ¶26, quoting Montgomery at ¶9, citing Black's Law Dictionary (7 Ed.1999) 848.(1)

The significance of the distinction(2) lies in:

1. the timing and (in the context of court judgments) method of attack relating to any challenge made by the injured party:
   
   (void - can be challenged at any time and (in the context of court judgments) can be collaterally attacked; voidable - subject to time constraints and (in the case of court judgments) rules set forth in the state rules of civil procedure);
2. the effect on the rights of those who subsequently acquire an interest in any property, the title to which may be implicated by the judgment, conveyance, contract, etc.:
   
   (void - all subsequent acquirers are out of luck and acquire nothing, even those who may otherwise qualify as bona fide purchasers; voidable - will not trump the rights of subsequent purchasers and encumbrancers if, and only if, they qualify for protection as bona fide purchasers).

For the ruling, see Wagenbrenner v. Wagenbrenner, 2011-Ohio-2811 (Ohio App. 10th Dist., Franklin County, June 9, 2011).

(1) For Ohio civil procedure junkies, the court then added this point:

• {¶12} It is well-settled that a court has the inherent authority to vacate a void judgment and that a void judgment may be challenged at any time. The Milton Banking Co. v. Dulaney, 4th Dist. No. 09CA10, 2010-Ohio-1907, ¶26.
  
  However, "[a] voidable judgment is subject to direct appeal and to the provisions of Civ.R. 60(B). A Civ.R. 60(B) application for relief must be made to the trial court that rendered the judgment from which relief is sought." Montgomery at ¶9 (internal citations omitted). See also GMAC; Deckerd (exclusive means to challenge a voidable judgment is Civ.R. 60(B)); Brown v. Brown (Feb. 5, 1991), 2d Dist. No. 90-CA-41 (because the judgments were voidable and not void the appellant should have sought relief through Civ.R. 60(B)); McIntyre v. Braydich, 11th Dist. No. 96-T-5602 (a court has no inherent authority to vacate voidable judgments); Evans v. Supreme Court of Ohio, 10th Dist. No. 02AP-736, 2003-Ohio-959, ¶17 (voidable judgments may only be challenged on direct appeal); Mayfield Hts. v. N.K., 8th Dist. No. 93166, 2010-Ohio-909 (because the judgment was voidable the trial court did not have the authority to vacate it).

(2) See Beyond a Definition: Understanding the Nature of Void and Voidable Contracts for an analysis (in the context of contracts) of the problems encountered when making the distinction between what is truly void, and what is merely voidable (footnotes conained in the original text omitted):

• Contract law has a problem. With predictable recurrence, court opinions, statutes, scholarly literature, and contract draftsmen use the words “void,” “voidable,” and “unenforceable” – as well as dozens of other terms of the same ilk – to describe flawed contracts.
  
  Yet the meaning of these declarations is persistently and maddeningly slippery. In the rare case where the precise meanings of these words are pressed into service in the courtroom, litigants are often surprised to find the court announce that a transaction formerly (and unequivocally) declared to be void is, in fact, merely voidable or unenforceable.
  
  The scope of the problem is as widespread as it is trifled; though the distinction between void and voidable is sometimes the most important issue in contract disputes, very little serious, scholarly attention has been paid to the nature of the distinction. DeedVoidVoidable

Appeals Court Says 'No Way' To BofA's F'closure Eviction Attempt; Crappy Affidavit Sinks Effort To Boot Homeowner; Another Lower Court Ruling Reversed

A defective affidavit filed by an officer ("Hiatt" - maybe a robosigner?) of loan servicer Bank of America in an action for ejectment targeting a recently-foreclosed borrower was the focus of another appeals court reversal of a lower court ruling adverse to homeowners.

After considered analysis of the facts of the case, and the state law applicable thereto, the Alabama Court of Civil Appeals ruled as follows:(1)

• In the case now before us, Hiatt's affidavit did not show that Bank of America was a participant in the servicing of the mortgage or in the foreclosure.
  
  It did not explain how Hiatt, in his capacity as an officer of, and attorney-in-fact for, Bank of America, would have acquired personal knowledge of the information he testified to in his affidavit.
  
  Moreover, none of the documents that accompanied his affidavit were sworn, certified, or otherwise authenticated.
  
  Consequently, based on the holding of the supreme court in Crawford, we hold that the testimony contained in Hiatt's affidavit and the documents that accompanied his affidavit were inadmissible and, therefore, that the trial court erred in entering a summary judgment in favor of the Secretary.
  
  Therefore, we reverse the summary judgment and remand the cause for further proceedings consistent with this opinion.

For the ruling, see Smith v. Secretary of Veterans Affairs, No. 2100194 (Ala. Civ. App. June 24, 2011).

(1) Before addressing the admissibility of the affidavit, the court addressed BofA's defense that, because the homeowner failed to file a motion to strike the affidavit in the trial court, he effectively waived his right to challenge it:

• In the case now before us, although Frank did not move to strike Hiatt's affidavit and the unsworn, uncertified, and unauthenticated documents that accompanied it, Frank's response to the summary-judgment motion called the trial court's attention to the inadmissibility of the affidavit and those documents by objecting to them and stating the grounds of the objection.
  
  Therefore, we find no merit in the Secretary's argument that Frank waived his objection to the Hiatt affidavit and the documents that accompanied it because he failed to move to strike them. See Ex parte Elba Gen. Hosp. & Nursing Home, Inc.

Call Out The Homeowner Pitchfork Brigade! Maine Banksters Win Preliminary Skirmish In Battle Over Proposed Anti-Crappy F'closure Document Legislation

Buried in a recent article in The Portland (Maine) Press Herald is this blurb on one of a number of bills that state lawmakers are trying to advance:

• L.D. 145, "An Act to Protect Homeowners Subject to Foreclosure by Requiring the Foreclosing Entity to Provide the Court with Original Documents," sponsored by Rep. Roberta Beavers, D-South Berwick. The bill would require a mortgage holder to produce the original mortgage note as part of the civil foreclosure complaint.



• Despite a unanimous vote in support from the Judiciary Committee, intense lobbying from the banking industry threatened the bill, so it was sent back to committee, Beavers said.

Source: Lawmakers put key proposals on hold.

Facing Financial Squeeze, D.C. Tax Collector Goes On Prowl Hunting For Homeowners Claiming Fraudulent Homestead Exemptions

In Washington, D.C., The Washington Post reports:

• Perhaps the most important lesson about tax breaks is this: You have to know when you are eligible, and then you have to ask for them.



• The D.C Official Code contains two popular real-property tax exemptions: the homestead exemption and the senior-citizen real-property tax exemption. These exemptions can save a homeowner many thousands of dollars annually. Understanding the eligibility rules is key because the tax savings are significant — and there are serious penalties for those who receive these tax benefits despite being ineligible.



• In these times of tight municipal budgets, you’d better believe the District is aggressively auditing these valuable tax exemptions. In 2006, the Office of Tax and Revenue established a separate Homestead Audit Unit. According to the office’s spokeswoman, Natalie Wilson, the audit unit conducts approximately 10,000 “annual” audits and up to 3,000 “daily” audits.



• This unit has been quite successful. In fiscal year 2010, it collected approximately $6.6 million in additional revenue for the District’s coffers. There is no statute of limitations on how far back the District can audit, bill and seek to collect delinquent taxes, penalties and interest.

For more, including homestead eligibility, filing requirements, and penalties for gaming the system, see D.C. property tax exemptions: Know when you’re eligible, and know when you’re not.

Lack Of Competent Evidence Supporting Confirmation Of Non-Judicial Foreclosure Process Sinks Sale; Lower Court Foreclosure Ruling Reversals Continue

A ruling by the Georgia Court of Appeals reinforces the fact that a lower court hearing to confirm the results of a Georgia non-judicial foreclosure sale under a power of sale is not to be treated as an exercise in rubber-stamping, a lesson that a reversed state trial judge recently received.

From the ruling (bold text is my emphasis; footnotes from the original text omitted):

• Franklin argues that the trial court erred by finding that the properties sold for their true market value because no evidence was introduced as to the regularity of the sales, no evidence was introduced showing foreclosure sales ever took place, and no evidence was introduced regarding the actual prices received for the properties at the alleged sales.
  
  Franklin contends that First Georgia produced only the notices of sale under power for the properties and the testimony of two appraisers, who provided evidence of the market value of the properties, but First Georgia failed to produce competent evidence as to the occurrence or outcome of the sales. We agree and reverse.

***

• The confirmation statute requires the trial court to determine whether the sale under power was properly executed. Here, the trial court's determination as to the regularity of the sales is not supported by any competent evidence in the record.
  
  Although the report to the judge contained allegations of fact concerning the sales, the report was not verified and not supported by testimony or other evidence at the hearing. Although First Georgia's attorney stated that the properties sold for $170,000; $48,000; and $300,000; this statement was not competent evidence.

For the ruling, and the analysis of the applicable Georgia law, see Franklin v. First Georgia Banking Co., A11A0216 (Ga. Ct. App. June 23, 2011).

Lawsuit: BofA At Center Of Another Illegal Trashout As 82-Year Old Man Away On Extended Trip Returns Home To Find Premises Emptied & Padlocked

In Hillborough County, Florida, the St. Petersburg Times reports:

• After going out of town, an 82-year-old man returned home to find his house emptied out. Even the trash was gone. He found a padlocked door and a sign for a company that cleans out properties in foreclosure. But Benito Santiago Sr.'s home wasn't in foreclosure, public records show.



• In a lawsuit filed this month in Hillsborough Circuit Court, Santiago claims that Field Asset Services Inc., took his property and changed his locks in the fall of 2009. He sued the company, along with Countrywide Home Loans, for damages.



• A Hillsborough County sheriff's deputy estimated in an Oct. 5, 2009, report that the Santiago's possessions were worth $29,100. In an interview, Santiago, a retired antiques dealer, guessed they were worth $100,000. "At least," he said.



• Pictures of his deceased wife were among the items taken. He lost everything, including his furniture and an antique wagon wheel. The incident upset him enough that he moved in with a friend. "Everything was taken out of the property," he said. "I feel nervous. I'm not going back."



• Neither Field Asset Services nor Bank of America, which now owns Countrywide, commented on the incident when contacted by the St. Petersburg Times. Field Asset Services said it doesn't discuss client cases. Bank of America requested a copy of the suit.

***

• Carlin Phillips is a Massachusetts attorney who specializes in cases of wrongful "lock-outs" and "trash-outs." In the past year, he's had hundreds. Sometimes, the homeowner is delinquent, but the lockout is premature. Sometimes, cleaners go to a "road" instead of a "court." And in some cases, people who just purchased a bank-owned home will return to find it cleaned out, because no one took it off the foreclosure list.



• Phillips says banks have failed to adopt policies to make sure they have the right house. His experience doesn't bode well for Santiago's possessions. "We have never gotten one piece of property back," he said.(1)

For the story, see Tampa retiree says he lost belongings in foreclosure blunder.

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

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



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

Another Sale Leaseback Peddler Feels The Pinch As Norfolk Feds Bag Foreclosure Rescue Operator To Face Equity Stripping Allegations

In Norfolk, Virginia, The Virginian Pilot reports:

• Kathleen Harps of Chesapeake was arrested Friday by the FBI after she was indicted by a federal grand jury Tuesday, according to a news release from the U.S. Attorney’s office. Harps, 51, is being charged with one count of conspiracy to commit mail and wire fraud, three counts of mail fraud and three counts of engaging in unlawful monetary transactions.



• The indictment says that Harp operated a business named the New Beginnings Group in Hampton Roads that specialized in “foreclosure rescue” during 2006. Harps and others solicited homeowners facing home foreclosure and agreed to sell their homes to Harps or other buyers.



• Harps promised them that during a one-year period after the sale, the homeowners would remain in their homes without having to pay the mortgage so they could buy back their homes at the end of the year. This didn’t happen, the indictment said.



• Instead, the indictment says Harps and other property buyers lied to fraudulently obtain mortgage loans, which later defaulted. Foreclosures soon followed and the homeowners lost their homes and equity they built up, which they paid to Harps’ business, according to the indictment.



• Harps faces a maximum of twenty years in jail for each of the conspiracy and mail fraud counts, and ten years in jail for the unlawful monetary transaction count.(1)

For the story, see Chesapeake woman charged with foreclosure fraud.

(1) In a recent case with reported similarities:

• the perpetrator of the scam was recently convicted (see Foreclosure Rescue Equity Stripping Victims Burst Into Courtroom Applause As Feds 'Frog-March' Sale Leaseback Peddler To Prison For 13+ Years); and



• in at least one case, one homeowner brought and won a civil lawsuit (a lawsuit that probably serves a good template for those looking to undo these types of real estate swindles) where the victim successfully voided the sale leaseback transaction. Included in the voided conveyances was the (presumably unwitting) lender's mortgage that financed the scam because the latter failed to physically inspect the premises and inquire into the rights and equities of the occupants in possession before providing the loan to finance the ripoff. Said failure resulted in the lender being found to have 'notice' of the scam, even though it may not necessarily have had any actual knowledge (and may have been completely clueless) thereof. See:
  
  (1) Pennsylvania B'kruptcy Court Voids Sale Leaseback Scam; Victimized Homeowners' Continued Possession Leads To Invalidation Of Subsequent Deed, Mortgage,
  
  (2) Fowler v. Rauso (aka In re Fowler), 425 B.R. 157 (Bankr. E.D. Pa. 2010).

See Criminal Prosecutions Of Sale Leaseback Peddlers In Equity Stripping Foreclosure Rescue Deals for links to some earlier posts on government prosecutions involving these deals.

See National Consumer Law Center, Dreams Foreclosed: The Rampant Theft of Americans' Homes Through Equity-Stripping Foreclosure 'Rescue' Scams for more on this type of scam (which, by the way, is just the latest mutation of a real estate equity ripoff that's been around for centuries, as any student of the old common law cases from states around the U.S. (which, in turn, are based on the pre-1787 English common law) addressing the equitable mortgage doctrine (involving a conveyance of a 'deed absolute' in exchange for a loan) will attest to).

Lawsuit: Robosigning, Securitization-Documentation "Liabilities Appear To Be Hanging Like The Sword Of Damocles Over Wells Fargo & Its Shareholders"

Housing Wire reports:

• Two pension funds filed a shareholder derivative lawsuit against Wells Fargo [last] week, claiming the bank and its leaders failed to properly address mortgage documentation issues, leaving Wells exposed to $15 billion in potential liabilities.

***

• The pension funds claim the bank's leadership failed to promptly address robo-signing and documentation issues tied to the mortgage securitization process, resulting in a situation where "liabilities appear to be hanging like the sword of Damocles over Wells Fargo and its shareholders." The plaintiffs specifically named Wells Fargo CEO and Chairman John Stumpf a defendant, along with other board members and officers.



• Investors in the pension funds claim Wells Fargo's leadership ignored early reports that robo-signing and issues with the Mortgage Electronic Registration System during the securitization process tainted some foreclosures and property titles.



• The plaintiffs, who own a combined 169,000 shares of the banking giant's 5.3 billion shares outstanding, said in court papers the leadership continued "to prolong the illusion of Wells Fargo's success, concealing the adverse facts concerning Wells Fargo's actual financial condition, its lack of ownership over real estate debt that had been securitized through the MERS system, and the company's lack of clean title to real property, in judicial foreclosure states."



• "This wrongful conduct exposed the company to billions of dollars of liability to investors in the secondary securitized debt markets, and hundreds of millions of dollars in litigation related expense and liability stemming from wrongful foreclosure and related litigation arising in judicial foreclosure jurisdictions," the pension funds allege. As part of the derivative suit, the two groups are suing Wells Fargo's directors and executives, claiming they breached their financial duties.



• MERS, which is a subsidiary of Merscorp Inc., is accused in the complaint of aiding and abetting the bank by assisting and ignoring in some of the material breaches of fiduciary duties.

For the story, see Pension funds sue Wells Fargo, alleging executives breached fiduciary duties.

Broken Loan Modification Promises Continue To Haunt, Say Now-Booted Ex-Homeowners Who Suffered F'closure While Payment Workout Plan Still Under Review

ProPublica reports:

• Four years into the foreclosure crisis, banks say they've made major improvements in how they handle struggling homeowners. They've promised, for example, not to foreclose on homeowners who are being considered for mortgage modifications. But that's still happening.
• Consider the cases of Laurie Pinkerton and Lisa Peterson. The two women, both Californians and Bank of America customers, had been assured by the bank that they wouldn't lose their homes before they'd been evaluated for a possible modification. Both had their homes sold last month. [...] Both Pinkerton and Peterson said their homes were sold after foreclosure for far less than they're worth.
• Regulators have done little to stop the practice, and the "problem appears to be getting worse," said Kevin Stein, associate director of the nonprofit California Reinvestment Coalition.
• Last month, the coalition surveyed 55 foreclosure-avoidance counselors throughout the state. Collectively they serve thousands of borrowers every month. Almost all of the counselors, 94 percent, reported having worked with clients who'd lost their homes while under review for a modification. About half of the counselors reported this happened "often." This year's totals, which are due to be publicly released next week, are higher than those in the group's survey last year.

For more, see Bank Errors Continue to Cause Wrongful Foreclosures.

Go here for more from Paul Kiel at ProPublica on the problems surrounding loan modifications that face homeowners seeking to re-work their house payments.

Despite Successfully Obtaining Pinheaded Lower Court Foreclosure Ruling, Defense Attorney Gets Slammed With Sanctions, Bar Disciplinary Referral

A recent ruling by Florida's 3rd District Court of Appeal is evidence that a homeowner facing foreclosure can be the beneficiary of a pinheaded lower court ruling (Miami-Dade County Circuit Court Judge Peter Adrien), only to have it reversed on appeal.

The facts set forth in the 3-judge panel's ruling are 'mind-boggling' (a term used by the court elsewhere in the opinion), as evidenced by these excerpts:

• Debtors and their counsel, Attorney Paul B. Woods, managed to convince the trial court that a mere letter of "tender" and a fabricated Unilateral Note, without payment of any kind, were sufficient to discharge the entire debt owed to Washington Mutual. Judge Adrien, in turn, granted the Motion to Vacate, vacated the final judgment, discharged the lis pendens, and dismissed Washington Mutual's complaint with prejudice.

***

• Despite the nonsensical terms of the Unilateral Note, the Debtors amazingly claim that they are satisfying "any amount due Plaintiff pursuant to original promissory note" by tendering this newly concocted document, and therefore, owe nothing to Washington Mutual.
  
  The absurdity of this argument notwithstanding, there is absolutely no evidence in the record that Washington Mutual "negotiated and agreed [to]" the Unilateral Note, nor is there any evidence that Washington Mutual ever considered a possible pre-judgment modification of the Mortgage or renegotiation of the Promissory Note.
  
  Moreover, other than the Debtors' self-serving, unsupported statements, the record is devoid of any evidence demonstrating that the final judgment, much less the Promissory Note or the Mortgage, were ever satisfied. Given the sheer lack of evidence that there had been a satisfaction of any kind by the Debtors, the requirements of Florida Rule of Civil Procedure 1.540(b)(5) were simply not met, and, thus, there was no basis for vacating the final judgment.
  
  Accordingly, we reverse the trial court's April 2010 Order and remand with instructions to reinstate Washington Mutual's lawsuit, lis pendens, and the final judgment. The trial court is further instructed to reschedule the foreclosure sale.

The appeals court then went further:

• We also consider and grant Washington Mutual's motion for appellate attorneys' fees and sanctions. Under Florida law, "appellate attorney's fees may be assessed against a party and their counsel for filing a frivolous appeal pursuant to section 57.105, Florida Statutes . . . and Florida Rule of Appellate Procedure 9.410." Visoly v. Sec. Pac. Credit Corp., 768 So.2d 482, 490 (Fla. 3d DCA 2000); see T.I.E. Commc'ns, Inc. v. Toyota Motors Ctr., Inc., 391 So.2d 697 (Fla. 3d DCA 1980).
  
  Further, "[f]ees are appropriate under section 57.105(1) when the party or his attorney pursues a claim or defense that is without factual or legal merit." Sullivan v. Sullivan, 54 So.3d 520, 522 (Fla. 4th DCA 2010) (emphasis added).

***

• Accordingly, we grant Washington Mutual's motion for appellate attorneys' fees and sanctions against both the Debtors and their attorney, Paul B. Woods, jointly and severally. See id.; §57.105 Fla. Stat.
  
  Also, given the essentially fraudulent behavior of the Debtors, and the potentially unethical conduct of their counsel, based upon and in furtherance of this behavior, we refer Paul B. Woods to the Florida Bar for its determination of whether professional discipline is warranted.(1)

For the ruling, see JPMorgan Chase v. Hernandez & Hernandez, No. 3D10-1099 (Fla. App. 3d DCA, June 22, 2011).

(1) Once again, Section 57.105 of the Florida Statutes rears its head in a foreclosure case, and is expected to do so quite a bit as these cases continue to float up to the various Florida appeals courts.

For Florida foreclosure counsel unfamiliar with the operation of this statute, the Section 57.105 reading list is somewhat long. Whether one is seeking a recovery of prevailing party attorneys fees for a client, or looking to have a court impose sanctions on adversaries for their conduct (or dodge sanctions requested by one's adversaries), it might be a good idea to familiarize oneself as to how and when the statute has been applied in the past.

One More Homeowner In Foreclosure Hops On 'Conga Line' Of Appellate Court Reversals

Another ruling of a lower court adverse to a homeowner in a foreclosure matter was recently reversed by a Florida appeals court.

As in an earlier ruling (see Appeals Court 'Conga Line' Of Happy Homeowners Winning Reversals Of Erroneous Trial Judge Foreclosure Rulings Continues To Get Longer), the issue here involved whether the foreclosing lender complied with the written requirement contained in the mortgage that the borrowers be given written notice specifying the default, the action needed to cure the default, and the time period of thirty days to do so.

Despite the fact that the lender failed to establish that it had complied, Broward County Circuit Court Judge Ronald J. Rothschild rubber stamped the foreclosure judgment anyway. On appeal, a three-judge panel reversed, and booted the matter back to Rothschild.

This case serves as another reminder to homeowners in foreclosure that it's not enough to have the law on your side and expect a trial judge to rule accordingly. Inasmuch as it appears that some trial judges seem to have taken leave of their senses when ruling in foreclosure cases by screwing up on basic procedural fundamentals, homeowners also need the wherewithal to challenge an unfavorable ruling in an appeals court.

Marcy S. Resnik of Kahn, Chenkin & Resnik, P.L., Dania, and Mark L. Pomeranz of Pomeranz & Associates, P.A., Hallandale, represented the homeowners.

For the ruling, see Valencia v. Deutsche Bank National Trust Company, 4D09-3297 (4th DCA June 22, 2011).

Foreclosure Slowdown Leads To Shaky Servicers With Major Cash Flow Squeeze

Housing Wire reports:

• Mortgage servicers are facing a billion-dollar crisis when it comes to advancing payments and interest to the secondary markets. The problem, according to one panelist providing a mid-year outlook at the American Securitization Forum's annual meeting in Washington, is that mortgage servicers are growing weary of paying for property problems that aren't getting fixed.



• Heavy foreclosure backlogs and other difficulties in liquidating distressed properties mean mortgage servicers are dealing more and more with negative cash flows in their RMBS portfolios. Mortgage servicers are advancing payments to the secondary markets, even when the properties aren't paying.



• The assumption is the properties are going to be profitable again, one day. The concern is more and more mortgage servicers doubt this scenerio will actualize. Howard Kaplan, a partner at Deloitte & Touche, said the national average on turning around a distressed property is now more than two years.



• "If it takes three years to recover, can you imagine the uproar in the markets if servicers stop advancing?" he asked. "Billions and billions of dollars in receivables would stop. This problem will get worse before it gets better."

***

• Kaplan said secondary market players should appreciate the constraints mortgage servers face. In addition to principal and interest on distressed properties, the servicer still needs to pay local governments, insurance and cover maintenance costs.



• "I can't emphasis enough the expense on servicers to keep the lawn mowed, the pool clean and pay taxes," he said. "And it's even more complicated if the home is occupied."

Source: Mortgage servicing faces billion-dollar secondary crisis.

Nine Lender Employees Indicted For Roles In Alleged Fraudulent Subprime Loan Peddling Racket 'Greased' By Bankster Securitization Process

In Cleveland, Ohio, The Plain Dealer reports:

• A Cuyahoga County grand jury on Wednesday indicted nine employees of California-based Argent Mortgage Inc. for their suspected roles in approving fraudulent home loans. It's the first time in Ohio and one of few instances nationwide that a mortgage fraud investigation has led to criminal charges against employees of a subprime lender, Cuyahoga County Prosecutor Bill Mason said.

***

• The indictment alleges that Argent employees helped coach mortgage brokers about how to falsify loan documents so that they misstated the source or existence of down payments as well as borrower's income and assets. Employees at an Argent loan processing center in Illinois ultimately approved the loans knowing that the company's own lending rules had not been satisfied.

***

• This fraud was facilitated by the practice of subprime lenders that, with the help of Wall Street, pooled mortgages into asset-backed securities and sold them to eager investors. Subprime lenders used their considerable profits to make even more loans while blatantly ignoring long accepted standards used to discern which borrowers could actually afford to pay back the loans they received.



• "The securitization and selling of these fraudulent, subprime loans to Wall Street typified the rampant greed of the industry that ultimately led to the financial crisis," Mason said in a statement.

For more, see Former employees of subprime mortgage lender indicted by Cuyahoga County grand jury.

See also, OhioFRAUDclosure: OHIO says enough !! - 9 Indicted from ARGENT MORTGAGE.

Georgia Grand Jury Slaps Indictment On Alleged Home Hijacker Over Recorded Bogus Land Documents Used In Do-It-Yourself Mortgage Cancellation Scam

In Cobb County, Georgia, WSB-TV Channel 2 reports:

• A Cobb County woman who showed how she canceled her own mortgage to avoid foreclosure has now been indicted for racketeering and theft. Channel 2 investigative reporter Jodie Fleischer first interviewed Susan Weidman last fall. "I didn't really set out to think that I could possibly get a free house. I just wanted to stall," Weidman said at the time.
• She showed how she researched her own mortgage to uncover fraud and filed repeated notices with the Cobb County clerk of court. The trail of documents led to one where she canceled her own mortgage by signing her name, on behalf of World Savings Bank.
• "You actually signed this as attorney in fact for the CEO of the mortgage company?" Fleischer asked. "That's right, for John Stumpf," Weidman replied proudly. She said she gave the bank CEO fair warning and asked questions his staff couldn't answer. At the time, she hadn't paid her mortgage in more than a year and was still in the house.
• "She believed if the bank didn't prosecute her that she was going to get away with it, but it's never been legal," says Cobb County Clerk of Court Jay Stephenson. On Thursday morning, he showed the grand jury all of that paperwork. They came back with a nine-count indictment on charges of racketeering, false statements, and theft.

***

• In May, Fleischer conducted another investigation that, she said, revealed Weidman filed paperwork taking ownership of a million-dollar foreclosed home in DeKalb County, then rented it to someone else.

For the story, see Woman Indicted On Charges Of Stealing Houses.

For an earlier post on Susan Weidman, see Do-It-Yourself Mortgage Cancellation Racket A New Foreclosure Avoidance Technique?

5,000 Oregonians Score BofA Apology After Receiving Notice Of Delinquent Taxes From Sloppy Servicer

The Oregonian reports:

• Bank of America said [] it mistakenly sent nearly 5,000 Oregonians letters claiming they owe property taxes and might be risking foreclosure when they, in fact, don't. Washington County Department of Assessment and Taxation director Rich Hobernicht estimates his office has received 1,000 calls since Monday from homeowners who received letters from BAC Tax Services Corp, an arm of the bank's BAC Home Loan Servicing division.



• In Multnomah County, the bank said it sent 1,600 letters in error, according to county spokesman Shawn Cunningham. "We sincerely apologize to those who received the letter in error," said Jumana Bauwens, a bank spokeswoman. She said the bank is in the process of notifying affected customers in 14 Oregon counties where the erroneous letters went out.



• Judy Crawford of Aloha and Sharyn Rowe of Bethany said the letters indicated they were delinquent on their property taxes. Neither of them are. The letter said they had 30 days to pay the bill or the bank might do it for them and impose an escrow account to cover its costs, raising their monthly payment."We have always been in good standing in the 15 years we've owned our home," Crawford said. "My husband and I are truly furious."

For more, see Bank of America apologizes for mistakenly accusing 5,000 Oregonians of being late on property taxes.

Go here for BofA's delinquent tax notice.

Illinois Regulator Fines Mortgage Servicer Over Altered Foreclosure Affidavits, Robosigned Documents

From the Illinois Department of Financial and Professional Regulation:

• PHH Mortgage Company has been fined $290,000 for signing foreclosure affidavits that the company knew would later be altered by its attorneys and for signing affidavits using someone else’s name, according to an order released today by the Illinois Department of Financial and Professional Regulation (IDFPR). The violations were found during an ongoing special investigation of 20 Illinois licensed mortgage servicing companies, which was launched last year after learning of foreclosure improprieties across the country.

***

• The order, signed by Manuel Flores, Director of IDFPR’s Division of Banking says that in at least 19 files, PHH failed to sign affidavits after they had been altered by the company’s attorneys and that PHH’s knowledge of and complicity with this process is evidenced by the fact that the original affidavits were incomplete and contained notations such as “will add” when they were tendered to the law firm of Fisher and Shapiro. The law firm, in turn, under penalty of perjury and acting on behalf of PHH, then attested to the completeness of the altered affidavits although they had not been reviewed or re-executed by PHH.
• The Department discovered other evidence of improprieties on the part of PHH employees in 16 of the 19 affidavits. These 16 affidavits were identified as having all been signed and attested to by the same PHH employee in his or her official capacity. Yet, the Department noted no less than five distinctly different signatures attributed to this same PHH employee, leading the Department to conclude that at least four different people used one employee’s name to sign the affidavits. PHH has ten days to request a hearing on the Department’s order.(1)

For the IDFPR press release, see Mortgage Company fined $290,000 for Incomplete and False Foreclosure Documents.

(1) See Chicago Tribune: Company in foreclosure document probe to dispute fine.

City Attorney To All Victims Of Recently-Convicted Upfront Fee Loan Modification Peddler: 'Pick Up The Phone & Call For Cash!'

In Southern California, The San Diego Union Tribune reports:

• The San Diego City Attorney's Office is looking for homeowners who paid an up-front fee to a company that promised to lower monthly mortgage payments and never delivered, agency officials said [].



• Christopher Dixon, the owner of the now-defunct Nations Mortgage Solutions, pleaded guilty in San Diego Superior Court on Friday to acting as an unlicensed real estate agent, while collecting up-front fees for loan modifications, which is illegal in California. Dixon has been ordered to pay a $1,000 fine and $6,500 in restitution to victims.



• The City Attorney's consumer protection division filed charges against Dixon last year after looking into complaints from people who paid Dixon 1,000 to $3,000 to modify their loans and got nothing in return.



• Agency officials are on the look-out for more people who may have fallen victim to the scam. Dixon has been ordered to pay restitution to victims who come forward within the next two months. Do you think you were victimized? File a claim by calling (619) 533-5600.

Source: Prosecutors seeking victims in loan-mod scam.

Feds Score $18.8M Settlement With Florida Upfront Fee Loan Modification Outfit Accused Of Rampant Ripoffs From Hapless Homeowners

From the Federal Trade Commission:

• Under a settlement with the Federal Trade Commission, a federal court banned three men and their company from the mortgage modification business and ordered them to pay nearly $19 million for consumer refunds. The defendants allegedly deceived distressed homeowners with phony claims that they would negotiate with lenders to modify their mortgages and make them more affordable.



• The FTC sued First Universal Lending and its owners in November 2009 as part of Project Stolen Hope, a continuing federal-state crackdown on mortgage foreclosure rescue and loan modification scams. As alleged in the FTC’s complaint, the defendants encouraged homeowners to stop making mortgage payments, saying lenders would not negotiate unless they were at least a few months behind in their payments. After charging consumers up to $7,000 in up-front fees, the defendants often did little or nothing to help them, the agency charged. The court subsequently halted the defendants’ operation, froze their assets, and ordered them to disable their Web sites and computers.



• In addition to imposing a judgment of more than $18.8 million against the defendants, the settlement order bans them from the mortgage relief services business. It also permanently prohibits the defendants from misrepresenting material facts about any good or service, violating the Telemarketing Sales Rule, selling or using customers’ personal information, failing to properly dispose of customer information, and collecting payments from their customers.



• The defendants are First Universal Lending LLC, Sean Zausner, David Zausner, and David J. Feingold, an attorney in Palm Beach Gardens, Florida.

For the FTC press release, see FTC Stops Bogus Mortgage Loan Modification Business Defendants Ordered to Pay Almost $19 Million to Settle FTC Charges.

Go here for some available court filings in this case.

Washington State Regulator: Watch Out For Upfront Fee Loan Modification Ripoffs Masquerading As Forensic Loan Audits, 'Mass Joinder' Lawsuits

From the Washington State Department of Financial Institutions:

• Many Washington consumers have reported receiving misleading advertisements such as the ones shown here:
  
  Sample Advertisement 1,
  Sample Advertisement 2.



• The Department of Financial Institutions has conducted an investigation of the source of these materials, and ascertained that they are neither from the consumer’s lender or any branch of the government, but from companies affiliated with a California law firm, Kramer & Kaslow, and a professional corporation called "Consolidated Litigation Group."



• In late 2010, these affiliated companies sent mailings to Washington consumers for loan modification services; in early 2011, the advertisements were for forensic loan audits (mortgage loan compliance review).



• Fees for loan modification services were reported as $3,000 or more; the "mortgage loan compliance review" was quoted as $2,500, fully refundable if no violations are found. If the modification efforts are unsuccessful, or the forensic loan audit uncovers "predatory lending violations", the consumers are then solicited to become a plaintiff in a mass joinder lawsuit with "Consolidated Litigation Group."



• Initially this inclusion required no extra fees; however, recent consumer reports indicate that the fees to join the "mass joinder lawsuit" are quoted as $1,500 or more.

For more, see Consumer Alert: Kramer and Kaslow (Unlicensed Loan Modification Services and Advance Fees).

Washington State Regulator Tells Out-Of-State Lawyer Allegedly Peddling Loan Modification Services To 'Stop Now!'

From the Washington State Department of Financial Institutions:

• The Washington State Department of Financial Institutions (DFI) has taken swift action to stop an unlicensed mortgage loan modification company from continuing to harm Washington consumers.



• DFI issued a Temporary Cease and Desist Order against Home Credit Law Center, its President, attorney Brian R. Linnekens, and an employee, Derek Thomas. The Department ordered the Respondents, all of Los Angeles, to immediately cease and desist unlicensed activity, misrepresenting that Mr. Linnekens was licensed to practice law in Washington, and taking advance fees for loan modification services.

***

• As the mortgage crisis continues in Washington, more homeowners are facing the prospect of foreclosure. Some, in a desperate search for relief, cling to any offer of help. Home Credit Law Center employees call Washington homeowners offering that relief for a $3,000 advance fee.

For more, see DFI Orders Unlicensed California Law Firm - Home Credit Law Center - To Stop Offering Unlawful Mortgage Loan Modifications (Brian R. Linnekens and his law firm charged with taking property from Washington residents by fraud or misrepresentation).

Illinois Regulator Tags Unlicensed Outfit With Fines, C&D Order For Alleged Racket That Clipped Homeowners With Upfront Fees For Failed Loan Mods

From the Illinois Department of Financial and Professional Regulation:

• Governor Pat Quinn’s Mortgage Fraud Task Force (MFTF) [] announced the results of a recent investigation into alleged unlicensed and improper mortgage loan modification activities by Avatar Realty Group, also known as Monroe Realty and Financial Enterprises and Arthur R. Monroe of Oswego.
• The MFTF learned of possible mortgage fraud when a homeowner called the MFTF hot-line. He had gone to the company for help in saving his home from foreclosure after hearing an ad on Polish language radio about loan services offered by Monroe. The company and Monroe demanded a $150 consulting fee and required an up-front payment of $1,125 for loan modification services. The MFTF learned of the situation after the homeowner lost his home because the loan modification services were not performed and the loan was not modified.

***

• The MFTF investigation resulted in multiple disciplinary actions. IDFPR is ordering Avatar Realty to cease and desist its unlicensed loan modification activities and is fining the firm $25,000 for violating the Residential Mortgage License Act of 1987. The Department is also revoking the prior loan origination registration of Arthur Monroe for not having a current license to provide loan services and failing to meet the law’s standards of conduct. Finally, the Department has filed a disciplinary action on Monroe’s real estate broker’s license for exceeding the scope of licensed activities.

For the Illinois IDFPR press release, see Mortgage Fraud Task Force Investigation Leads to Multiple Disciplinary Actions.

Go here for the Cease & Desist Order and here for the Complaint.