Manufacturer Of Dubious Foreclosure Documents, Ex-Company President Face Criminal Charges Alleging Forgery Of Robosigned Mortgage-Related Documents

The New York Times reports:

• One of the largest companies that provided home foreclosure services to lenders across the nation, DocX, has been indicted on forgery charges by a Missouri grand jury — one of the few criminal actions to follow reports of widespread improprieties against homeowners.



• A grand jury in Boone County, Mo., handed up an indictment Friday accusing DocX of 136 counts of forgery in the preparation of documents used to evict financially strained borrowers from their homes. Lorraine O. Brown, the company’s founder and former president, was indicted on the same charges.



• Employees of DocX, a unit of Lender Processing Services of Jacksonville, Fla., executed and notarized millions of mortgage documents for big banks and loan servicers over the years. Lender Processing closed the company in April 2010, after evidence emerged of apparent forgeries in these documents, a practice now called robo-signing.



• Chris Koster, the Missouri attorney general, will prosecute the case. “The grand jury indictment alleges that mass-produced fraudulent signatures on notarized real estate documents constitutes forgery,” Mr. Koster said in a statement. “Today’s indictment reflects our firm conviction that when you sign your name to a legal document, it matters.”



• Mr. Koster said his office’s investigation was continuing. This suggests he may hope to persuade Ms. Brown to cooperate in his investigation of the parent company. If convicted, Ms. Brown could face up to seven years in prison for each forgery count. DocX could be fined up to $10,000 for each forgery conviction.

For more, see Company Faces Forgery Charges in Mo. Foreclosures.

Fannie: 'UBS Peddled Mortgage Packages Loaded With Crappy Loans!'

Legal Newsline reports:

• Summaries of 24 mortgage loans paint a heart-breaking picture of routine dishonesty that brought down America's house of cards. Conservators of Federal National Mortgage Association filed the summaries in federal court in December, to support a claim that "Fannie Mae" relied on bad information from lenders when guaranteeing packages of loans.



• "A forensic review of loan files has revealed pervasive failure to adhere to underwriting guidelines," conservators wrote. Conservators wrote that in a random review of 996 loans that UBS Securities packaged, 78 percent were not underwritten in accordance with applicable guidelines.



• They also wrote that a review of 363 defaults revealed that 99 percent were not underwritten according to guidelines. Fannie Mae sued UBS and other big lenders last year, seeking to recover billions it lost in the mortgage meltdown that started in 2008.



• Lenders deny responsibility, claiming they didn't know that loan originators loaded mortgage applications with lies. What no one could see a few years ago appears monstrous in hindsight.

For more, see Fannie Mae offers examples of routine dishonesty in its fight against lenders.

Florida Bar Score On Attorney Misconduct In Foreclosure Fraud: Not Guilty: 139; Guilty: 0

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

• The Florida Bar's investigations into foreclosure fraud by its members jumped 63 percent in the past year, but no disciplinary actions against attorneys have been levied since complaints began to mount in the fall of 2010.



• The responsibility to hold lawyers accountable for foreclosure misconduct now rests solely with the Florida Bar after the state attorney general's investigation into high-volume foreclosure law firms collapsed this week.



• Since March of last year, the number of foreclosure fraud investigations of attorneys by the Bar grew from 222 cases to 362. During the same time period, about 130 cases were closed with no findings of fault. There are 229 pending cases.

***

• "We're putting a lot of resources into this," Vanstrum said Friday, a day after Florida Attorney General Pam Bondi announced an unfavorable court ruling that effectively shut down her foreclosure mill investigations. "These cases are unique in that it's very widespread, not just in Florida but nationwide."

For more, see Foreclosure lawyer probes left up to Florida Bar.

Florida AG Probe Into Sleazy Foreclosure Mills, Sweatshops Ends With A Dull Thud

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

• Florida's once-heralded foreclosure mill investigations have fizzled as the attorney general's office has failed to find the right strategy to continue its pursuit and three law firms call for the cases to be dismissed.



• [Last] week, an attempt to have the Florida Supreme Court weigh in on whether the state has the authority to subpoena the Law Offices of David J. Stern was denied by the 4th District Court of Appeal. The decision effectively ends the investigations into complaints that the firms doctored court paperwork in an attempt to speed foreclosures.

For more, see Florida attorney general's attempt to subpoena foreclosure mills stalls.

Suit: Unwitting Man Loses Home To F'closure After Scammer Sells Residence Out From Under Him, Allows Subsequently-Obtained Mortgage To Go Into Default

In Madison County, Wisconsin, The Madison/St.Clair Record reports:

• An Alton man claims he lost his home after a notary authenticated a fraudulent signature that conveyed his home to another owner.



• Stephen R. Evans filed a lawsuit Jan. 20 in Madison County Circuit Court against Robert Albert Burns, David C. Davis and Nicholas P. Terry. In his complaint, Evans alleges Burns notarized a quit claim deed on Aug. 30, 2005. The deed conveyed Evans's home [...] in Alton to Terry. Evans's signature on the deed, however, was fraudulent, according to the complaint.



• Evans claims he was not aware of the quit claim deed until May 2008 when a foreclosure judgment was entered on his property. Because of the deed, Evans lost ownership of his home resulting in a loss of more than $50,000 but less than $75,000, the complaint says.



• Evans blames Burns for contributing to the loss of his home, alleging Burns negligently failed to perform his duties and failed to obtain identification for Evans before notarizing his signature.



• "The defendant knew or reasonably should have known that the plaintiff was not present before him on August 30, 2005, or any other date and did not sign the purported Quit Claim Deed," the suit states.



• In addition to Burns, Evans names Davis as a defendant, saying he negligently prepared a mortgage on Terry's behalf even though he should have known Evans's signature to be fraudulent. Terry is also named as a defendant because he allegedly forged Evans's signature on the quit claim deed, according to the complaint.



• In his five-count complaint, Evans seeks a judgment of more than $239,000 but less than $300,000, plus punitive damages, attorney's fees, interest and costs.

Source: Alton man claims he lost home in fraudulent conveyance.

Home Hijacking Suspect Pinched For Commandeering Vacant Homes, Renting Them Out To Unwitting Tenants

In Destin, Florida, the Northwest Florida Daily News reports:

• A 40-year-old man has been charged with racketeering after he rented out vacant homes without the owners’ authorization, according to the Okaloosa County Sheriff’s Office.



• William ‘Bill’ Richard Slattery III of Destin posed as a real estate agent to rent out at least five homes in Destin since last Nov. 23, according to his arrest report. The homes [...] either were abandoned and in foreclosure or were vacant, with the owners in other cities.



• One renter said she met Slattery at the home on Harborwind Court and that he changed the locks and took her inside to look around before she signed a lease, the Sheriff’s Office reported. The home had been vacant for a long time and its owners were filing for bankruptcy.



• Slattery was renting the homes for between $900 and $1,200 a month, his arrest report said. He was arrested Jan. 27 and charged with five counts of racketeering and five counts of posing as an unlicensed real estate broker, according to the report. He was released from the Okaloosa County Jail the next day. Sheriff’s Office spokeswoman Michele Nicholson said deputies are still investigating the case. Additional charges are pending.

Source: Man charged with renting vacant homes illegally.

Georgia Grand Jury Indicts Five In Foreclosed Home-Hijacking Scam; Racketeering, Forgery, Burglary Among Allegations

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

• A Cobb County grand jury indicted five people accused of breaking into soon-to-be foreclosed homes then illegally renting them to unsuspecting tenants. John Harris, the CEO of New Life Granted, and four others were named in the racketeering, forgery and burglary indictments.



• Detectives said the investigation lasted more than four months and involved ten different metro Atlanta counties. They believe there are more than 20 victims in the case, including renters and home owners.



• "These individuals were basically taking over homes in various states of foreclosure and renting them out without the permission of the owners," said Cobb County Police Sgt. Larry White. "It's been a very, very manpower intensive investigation but we're very happy where we are at this point."



• In October, Harris told Channel 2's Craig Lucie that what his company was doing was perfectly legal. "I think it's ethical to do anything legal," Harris said. Police arrested him shortly afterwards. "I can't say that a reasonable person would think that what he was doing was legal," said Sgt. Harris.

***

• Harris remains in the Cobb County Jail. A judge ordered him and the others held on $75,000 bond.

For the story, see: Man accused of renting foreclosed homes indicted.

Scammer Gets Six Years In $300K Loan Counseling Ripoff; Insurer Stiffs Unwitting Housing Agency On Damage Claims Relating To Thefts Of Victims' Cash

In Buffalo, New York, The Buffalo News reports:

• The woman who earned their trust and then turned around and betrayed it is going to federal prison. Lori J. Macakanja, the former West Side housing counselor who stole from clients and then gambled away their money, was sentenced Thursday to six years in prison.



• Macakanja admitted stealing nearly $300,000 from 136 people who came to her looking for help. Many of them were on the verge of losing their homes to foreclosure.

***

• Macakanja worked as a counselor at HomeFront, a West Side housing agency, and over the course of 18 months in 2009 and 2010 defrauded the very people she was supposed to help.

***

• Outside the courtroom Thursday, Macakanja's victims reacted with mixed feelings to her sentence. They're pleased that she's spending time in prison but wonder if they'll ever see a penny of the restitution she was ordered to make as part of her sentence.

***

• Investigators found no evidence that HomeFront, as an organization, was intentionally involved in the fraud. Nevertheless, victims believe it needs to ensure that former clients are compensated.



• HomeFront has stopped short of accepting responsibility for the thefts but sued its insurance carriers in state court after they denied its initial claims. So far, the insurance companies are balking, leaving the victims to wonder if they'll ever get their money back.



• "This case is a tragedy for many people," James P. Harrington, a lawyer for HomeFront, said in a statement. He said the organization is addressing a number of claims filed by victims in Buffalo Small Claims Court as part of its suit against the insurance carriers. "Other victims may want to follow this procedure or contact their attorneys about it," he said.

For more, see Counselor who stole gets six-year sentence.

Illinois AG Lawsuit: Ratings Agency "Used Every Trick Possible To Give [MBS] Deals High Ratings In Order To Retain Clients & Generate Revenue"

From the Office of the Illinois Attorney General:

• Attorney General Lisa Madigan [] filed a lawsuit against Standard & Poor's for its fraudulent role in assigning its highest ratings to risky mortgage-backed investments in the years leading up to the housing market crash.



• Madigan filed her lawsuit today in Cook County Circuit Court, alleging that Standard & Poor's, or S&P, compromised its independence as a ratings agency by doling out high ratings to unworthy, risky investments as a corporate strategy to increase its revenue and market share. The Attorney General's lawsuit alleges that S&P ignored the increasing risks posed by mortgage-backed securities, instead giving the investment pools ratings that were favorable to its investment bank client base and S&P's profits.



• "Publically, S&P took every opportunity to proclaim their analyses and ratings as independent, objective and free from its desire for revenue," Madigan said. "Yet privately, S&P abandoned its principles and instead used every trick possible to give deals high ratings in order to retain clients and generate revenue. The mortgage-backed securities that helped our market soar – and ultimately crash – could not have been purchased by most investors without S&P's seal of approval."

For the Illinois AG press release, see Madigan Sues Standard & Poor's For Enabling Financial Meltdown (Lawsuit: 'Profits Were Running the Show' at Leading Credit Ratings Agency).

For the lawsuit, see People v. The McGraw Hill Companies, Inc. et ano.

Surplus Snatcher Gets Four Years For Embezzling Ex-Homeowners' Unclaimed Funds Generated From F'closure Sales; County, Insurer Left Holding $1.2M+ Bag

In Memphis, Tennessee, The Commercial Appeal reports:

• Former Chancery Court bookkeeper Brandon Gunn was sentenced Friday to four years in federal prison and ordered to repay more than $1 million in surplus tax foreclosure funds he embezzled from the office between 2008 and 2011. [...] The 47-year-old Gunn pleaded guilty in October to embezzlement, conspiracy and money laundering.



• U.S. Dist. Court Judge Samuel Mays Jr. told him he had stolen from taxpayers who were in a most vulnerable time of their lives. "The basis for this crime was sheer greed," Mays said, noting the theft was in seven figures. "That's an astonishing amount of money to steal from the public. The theft has caused people to lose faith with the government and the courts." U.S. Atty. Ed Stanton called Gunn's actions "a flagrant abuse of the public's trust."



• Gunn was involved in an office function in which delinquent property taxes are paid by selling a homeowner's property, with the remainder or surplus to be placed in an escrow account the homeowner can claim.



• The embezzlement scheme came to light when one homeowner seeking to claim a surplus discovered that it had been paid to a company set up by Gunn. Gunn admitted to writing 38 checks ranging in amounts from $5,761 to $72,241 and sending them to his company or to other entities linked to him between May 2008 and March 2011.



• He told the court earlier that he targeted old tax accounts, including some that had gone unclaimed for as many as 17 years. When he was first caught, he tried to pay back money by stealing even more money.



• On Friday, Gunn was ordered to make restitution of $1,063,903, most of which will go to the county's former insurance carrier. The county's loss not covered by insurance was placed at $179,596.

***

• A second man, Correy Isom, 35, a restaurant employee who allegedly conspired with Gunn, faces three felony counts and has pleaded not guilty.

For the story, see Chancery Court embezzler Brandon Gunn gets 4 years in prison (Ordered to repay more than $1 million purloined).

Fed. Judge 'Green-Lights' Consumer Suit Attacking Bill Collector's Crappy Paperwork In Obtaining State Court Judgment In Credit Card Collection Action

Lexology reports:

• A debtor’s assault on the quality of documentation used by a debt collector to obtain a state court judgment against him in a credit card collection action was held by a Tennessee federal court to be sufficient to state a claim that the debt collector, by filing the state court action, had violated the Fair Debt Collection Practices Act.



• The January 25 decision in Simmons v. Portfolio Recovery Associates, LLC provides yet another example of how collection-related documentation used by the non-mortgage consumer lending industry is increasingly coming under fire. While the case involved FDCPA claims against a debt collector, its analysis could be followed by courts considering claims made under state debt collection laws that mirror the FDCPA prohibitions against creditors collecting their own debts.



• The debtor alleged the debt collector had falsely represented the character, amount, or legal status of the debt in violation of the FDCPA in two ways: (1) as a result of its intentional business decision not to obtain a copy of the written contract or other documentation evidencing the debt prior to filing the state court action, and (2) by submitting an affidavit in support of the action executed by an individual who had no personal knowledge of the statements made in the affidavit, did not review any records of the card issuer, and did not make any other efforts to determine if the debtor actually owed the amounts claimed.

***

• [U.S. District] Judge [Thomas A.] Varlan noted that, unlike the claims in prior cases, the complaint in Simmons included allegations that the debt collector made false representations or used deceptive means to collect the debt. Most significantly, even though the judge acknowledged that the debtor had “not pointed to any specific statements in the affidavit about [his] account or the debt that [he] allege[d] to be factually false,” the judge nevertheless found the debtor’s allegations of falsity and a pattern and practice sufficient to survive a motion to dismiss.



• In light of the criticism that has been directed at mortgage foreclosure documentation, it is not surprising there is growing scrutiny by governmental agencies and consumer groups of collection-related documentation used in non-mortgage lending.

For more, see Tennessee Federal Court allows FDCPA claims based on documentation challenge (may require subscription; if no subscription, TRY HERE; or GO HERE - then click the appropriate link).

For the ruling, see Simmons v. Portfolio Recovery Associates, LLC, No. 3:11-CV-280 (E.D. Tenn., Knoxville Div. January 25, 2012).

San Bernardino DA: Duo Hijacked Possession Of Vacant Foreclosed Homes, Then Fraudulently Squeezed Banksters For Thousand$ In "Cash For Keys" Racket

From the Office of the San Bernardino County District Attorney:

• A woman alleged to have operated a "cash for keys" scam in Rancho Cucamonga has been charged with Burglary, Forgery and Grand Theft. Quddusa Lynette Anderson, 38, of Patton, was arraigned Thursday in Rancho Cucamonga Superior Court.



• Investigators from the District Attorney's Real Estate Fraud Prosecution Unit have issued a felony arrest warrant for John Woodrow Smith, 48, of Roseville, who is suspected of taking part in the scam. Smith also uses the alias Eimbari Kemet.



• Anderson and Smith are alleged to have conspired to defraud mortgage giants, Freddie Mac and Bank of America, and taxpayers, by illegally occupying foreclosed homes and applying for relocation assistance known as "Cash for Keys."



• To avoid a lengthy eviction process, mortgage lenders like Freddie Mac, Fannie Mae, and Bank of America offer legitimate tenants what is known as "Cash for Keys," to move out of the residence by a specific date and leave the property in turnkey condition.

***

• The homes selected by defendants were vacant and they would gain unlawful entry into the locations, change the locks, and have utilities turned on in their names to establish residency. One defendant even moved into a Rancho Cucamonga residence.



• Shortly after moving into the residence, the defendants contacted Bank of America's Mortgage Department and signed a Move Out Agreement between them and Bank of America. After signing the agreement, defendants were paid $7500 to move out of the residence.



• The investigation determined that one of the defendants was paid $2500 through Freddie Mac to move out of another foreclosed home located in Rancho Cucamonga.

For the San Bernardino County District Attorney press release, see Woman Arraigned In Cash For Keys Scam.

NY AG Bangs Big Banksters, MERS With Suit Alleging Creation, Use Of Registry System Instrumental In Filing Deceptive, Bogus Foreclosure Court Filings

From the Office of the New York State Attorney General:

• Attorney General Eric T. Schneiderman [] filed a lawsuit against several of the nation’s largest banks charging that the creation and use of a private national mortgage electronic registry system known as MERS has resulted in a wide range of deceptive and fraudulent foreclosure filings in New York state and federal courts, harming homeowners and undermining the integrity of the judicial foreclosure process.



• The lawsuit asserts that employees and agents of Bank of America, J.P. Morgan Chase, and Wells Fargo, acting as "MERS certifying officers," have repeatedly submitted court documents containing false and misleading information that made it appear that the foreclosing party had the authority to bring a case when in fact it may not have. The lawsuit names JPMorgan Chase Bank, N.A., Bank of America, N.A., Wells Fargo Bank, N.A., as well as Virginia-based MERSCORP, Inc. and its subsidiary, Mortgage Electronic Registration Systems, Inc.



• The lawsuit further asserts that the MERS System has effectively eliminated homeowners' and the public's ability to track property transfers through the traditional public records system. Instead, this information is now stored only in a private database – which is plagued with inaccuracies and errors – over which MERS and its financial institution members exercise sole control. Additional defendants include BAC Home Loans Servicing, LP, Chase Home Finance LLC, EMC Mortgage Corporation, and Wells Fargo Home Mortgage, Inc.



• “The banks created the MERS system as an end-run around the property recording system, to facilitate the rapid securitization and sale of mortgages. Once the mortgages went sour, these same banks brought foreclosure proceedings en masse based on deceptive and fraudulent court submissions, seeking to take homes away from people with little regard for basic legal requirements or the rule of law,” said Attorney General Schneiderman.



• “Our action demonstrates that there is one set of rules for all – no matter how big or powerful the institution may be – and that those rules will be enforced vigorously. Only through real accountability for the illegal and deceptive conduct in the foreclosure crisis will there be justice for New York’s homeowners.”

For the NY AG press release, see A.G. Schneiderman Announces Major Lawsuit Against Nation's Largest Banks For Deceptive & Fraudulent Use Of Electronic Mortgage Registry (Complaint Charges Use Of MERS By Bank Of America, J.P. Morgan Chase, And Wells Fargo Resulted In Fraudulent Foreclosure Filings; Servicers And MERS Filed Improper Foreclosure Actions Where Authority To Sue Was Questionable; Schneiderman: MERS And Servicers Engaged In Deceptive and Fraudulent Practices That Harmed Homeowners And Undermined Judicial Foreclosure Process).

For the NY AG lawsuit, see People v. J.P. Morgan Chase Bank, N.A., et al.

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

Illinois AG: F'closure Document Prep Sweatshop Utilized "Assembly Line Process" To Create Dubious Paperwork Used To Improperly Take People's Homes

In Chicago, Illinois, Bloomberg reports:

• Illinois Attorney General Lisa Madigan sued Nationwide Title Clearing Inc., a Florida company she claims caused the filing of faulty documents with county clerks. [...] Nationwide Title Clearing prepares documents for mortgage servicers to use against borrowers in default, foreclosure and bankruptcy, Madigan said. Among the documents are mortgage assignments used by lenders in foreclosures.



• NTC employees signed forms used in Illinois foreclosures as officers of the foreclosing financial institutions and not Nationwide, often without reading or verifying the documents they signed, Madigan said.



• “NTC creates documents through an assembly-line process,” Madigan said. “NTC signers typically have little or no role in the actual creation of documents that they sign.” Their sole role is to affix their signatures, she said.



• The complaint, which accuses the Palm Harbor, Florida-based company of unfair and deceptive acts, was filed [] in state court in Chicago.

For more, see Nationwide Title Clearing Sued by Illinois Over Foreclosure Documents.

See also, Courthouse News Service: Illinois A.G. Goes After Robo Signer.

For the Illinois Attorney General press release, see Madigan Files Suit Over Faulty Mortgage Assignments Filed With County Recorders (Attorney General Alleges Faulty Practices in Foreclosing on Homeowners in Crisis).

For the lawsuit, see People v. Nationwide Title Clearing, Inc.

Lawyer Dodges Pokey, Scores Conditional Jail "Buy Out' w/ 'Pay Restitution' Promise After $360K+ Ripoff; Prison Cell Awaits If Victims Stiffed: Judge

In Fort Lauderdale, Florida, the South Florida Sun Sentinel reports:

• A disbarred lawyer was spared a prison sentence Friday by a Broward judge who said she was giving him a chance to make things right with the elderly couple he bilked out of $362,000. Gerald Lindor, 52, was sentenced to 20 years of probation and ordered to pay $110,000 to Joscelyn and Herma Passley, a couple going through foreclosure because Lindor misappropriated more than $360,000 they gave him as part of a deal to refinance their Miramar home.



• Lindor, who entered a no contest plea to seven grand theft charges on Jan. 24, was also ordered to pay the couple $2,000 a month until the balance is met. The plea came with no promise from prosecutor Catherine Maus that prison time would be reduced from the 13 to 30 years allowed by law.



• Lindor, who worked out of Pembroke Pines, begged Broward Judge Cynthia Imperato to keep him out of prison and give him a chance to pay restitution to his victims. He also looked directly at the Passleys and offered a tearful apology. "I am so sorry," he said, promising to do everything he could to help them keep their home. "I give you my word. Give me the opportunity to make this right."



• Imperato withheld sentencing on one of eight charges of grand theft and warned Lindor that she would send him to prison for 13 to 30 years if he does not make good on his promise to repay the Passleys.



• Lindor lost his license to practice law in 2008, after he admitted to stealing more than $3 million from numerous clients over a period of more than 10 years. His lawyer, David Vinikoor, said the cycle of misconduct began when Lindor found himself saddled with a $40,000 shortfall in a botched transaction.



• The money Lindor took came from mortgage lenders and was put into a trust he managed. Instead of forwarding the money to the seller as required by law, Lindor used a portion to pay off the debt. When the seller demanded payment, Lindor would take money from the next mortgage transaction to settle the last one. Interest and penalties compounded with each misappropriation. Vinikoor said none of the misappropriated money went to Lindor personally, an assertion disputed by prosecutor Maus.



• By the time the Passleys sold their New York property and gave the money to Lindor in a refinancing deal, Lindor was behind more than $1 million and finally realized he would never catch up, Vinikoor said. "He was always in the hole," Vinikoor said. "Finally, he did what he should have done from the beginning. He self-reported the misappropriation to the Florida Bar and consented to his disbarment."



• It was Vinikoor who suggested that Imperato withhold sentencing on one of the charges to force his client to pay his debt to the Passleys, the only victims who have not had their troubles resolved. "Payment of restitution outweighs the need for prison," Vinikoor said. "If he does not make them whole, sentence him to whatever you think is appropriate."



• Herma Passley, 72, told Imperato she did not believe Lindor would be able to repay the full amount, and she feared the consequences. She said she wanted Lindor to spend the rest of his life in prison if he cannot repay his debt. "I am 72 years old," she said. "Where am I going to live? Should I end up in a shelter because he made mistakes?" Her husband, Joscelyn, 82, attended Friday's sentencing hearing in a wheelchair. Suffering from dementia, he did not speak to the judge.



• Maus echoed the victims' lack of confidence in Lindor. She accused the defendant of taking the money to "maintain a lifestyle he could not afford." She also questioned how he could raise the money he owes in any time reasonable enough to benefit the Passleys. [...] Imperato said she will revisit the case in a year to determine sentencing on Lindor's last remaining grand theft charge.

Source: Disbarred lawyer spared prison, but must repay victims.

(1) The Florida Bar's Clients' Security Fund was established to reimburse clients who have suffered a loss due to misappropriation or embezzle­ment by a Florida-licensed attorney.

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.

Couple Gets Three Years Probation For Creating, Using Bogus Lease To Hijack Possession Of Vacant Home In Failed Attempt To Snag 'Affordable' Housing

In Newport Beach, California, The Orange County Register reports:

• A husband and wife were sentenced to three years of informal probation after a guilty plea of illegally occupying vacant homes in foreclosure. Chris Wayne Duncan, 43, and Robin Ann Duncan, 37, both of Newport Beach, pleaded guilty to a court offer of one misdemeanor count of conspiracy to commit trespass and one misdemeanor count of trespass, according to a news release from the Orange County District Attorney's Office.



• Prosecutors filed the conspiracy count as a felony, but the court reduced it to a misdemeanor, according to the news release. The couple will also have to pay restitution, the amount of which will be determined at a later date, the district attorney's office said.



• In September 2010, prosecutors said, the Duncans drafted a fraudulent lease of 10 Hidden Pass – a foreclosed and vacant property in Newport Coast – and then broke in and illegally moved in.



• The district attorney's office said the couple claimed to be renters of the property and had utilities turned on in their names to give the appearance of legitimate tenancy. In October, when an appraiser went to the property as part of the short-sale process, prosecutors said the Duncans changed the locks and kept the appraiser from entering the home.



• The couple told the appraiser that they were legal renters and that the owner should contact the Duncans directly, prosecutors said. The owner then contacted the Newport Beach Police Department, which investigated the claim and arrested the Duncans.

Source: Husband, wife squatters get probation (The couple will also have to pay restitution, the amount of which will be determined at a later date, the Orange County District Attorney’s Office said).

Bar Ethics Opinion Fails To Set Off Nuclear Bomb Effect With Florida Foreclosure Lawyers & Their Bankster Clients

In Sarasota, Florida, the Sarasota Herald Tribune reports:

• A year ago, the Florida Bar issued an ethics opinion that was a warning for every mortgage lawyer who helps lenders foreclose on Florida homes. It must have made many of them squirm a bit, but maybe not enough.



• By then, everyone paying even a bit of attention knew huge numbers of foreclosure cases had been filed with iffy mortgage documents, most purporting to prove the plaintiff's right to foreclose.

***

• Though it seemed a fiasco, lenders' lawyers kept using the created-documents tactic. Most often, it still worked; most homeowners didn't even fight the case. The Bar ethics decision a year ago seemed likely to change that.



• It warned that lawyers could be suspended or disbarred if they knowingly filed iffy documents or, even in closed foreclosure cases, failed to tell judges about it now. Some predicted a nuclear bomb effect, all but wiping out the ability to foreclose.



• With all lawyers on notice, how could lawyers for lenders dare to keep glutting the courts with so many cases even if they were winning most without a fight?



• Well, there have been some effects. Lawyers are being more cautious, it seems. But that's about it. Sarasota County Circuit Judge Lee Haworth, a leader in helping courts handle the masses of such cases, says he hasn't heard of any lawyers coming forward to confess anything.

For more, see Lyons: Bar's ethics opinion little chill to foreclosures.

Dilapidated Buildings In F'closure Continue Driving Tenants Into Streets; Deteoriating Conditions Force Fire Chief To Give Residents The Boot

In Swissvale, Pennsylvania, WTAE-TV Channel 4 reports:

• Residents at a Swissvale apartment building are being forced out because officials said the landlord has been ignoring citations for the past five years. "He's not doing what he's supposed to be doing," said 83-year-old tenant Sarah Kandor of her landlord, Michael Sturdivant.



• Sturdivant is facing a foreclosure lawsuit on the apartment building. He also owes more than $40,000 in back taxes.



• "We've had window sashes that have rotted to the point where windows have fallen out. We've had a ceiling collapse on a tenant in there. We had to go over and render medical aid and transfer her to the hospital for injuries from that," said Swissvale Fire Chief Clyde Wilhelm.

***

• [The landlord's] tenants are asking for more time to move out but Wilhelm said he knows granting it could cost them everything. "It's getting to the point where it's not if something's going to happen, it's probably when it's going to happen -- and we don't want that to occur," Wilhelm said. [...] The Salvation Army said tenants will be able to get help with moving expenses.

For the story, see Residents Forced From Home After Landlord Ignores Citations (Swissvale Residents Looking For New Homes).

See also, State Assisting Tenants Being Forced Out Of Apartments (Officials Say Swissvale Landlord Has Ignored Citations For 5 Years).

Financially-Strapped Multi-Unit NYC Residential Apartment Houses Sap Value From Neighboring Rental Buildings

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

• Overleveraged residential buildings, properties that are not generating enough rental income to cover their mortgage payments and overall maintenance costs, as well as multi-family buildings that have gone through foreclosure are having a negative impact on neighboring properties, according to a new study released Thursday.



• Buildings within a 500-foot radius of overleveraged properties face a higher risk of physical deterioration and an increase in building code violations, said the study by the Citizens Housing and Planning Council and Enterprise Community Partners.



• The study, called "The Impact of Multifamily Foreclosures and Over-Mortgaging in Neighborhoods in New York City" looked at more than 1,100 multi-family buildings in Brooklyn, Bronx, Manhattan and Queens that were within 250 to 500 feet of overleveraged properties.



• “Our study suggests that proximity to an over-mortgaged building increases the likelihood of increased code violations, with New York City's Department of Housing Preservation and Development stepping in to carry out additional emergency repairs,” said Harold Shultz, senior fellow of Citizens Housing and Planning Council, in a statement. “As a result, the city should continue its efforts to closely monitor and prevent deterioration in those communities troubled by over-mortgaged multifamily buildings.”



• Buildings within a 500-foot radius of overleveraged building spend almost twice as much money on emergency repair expenditures conducted by the city, compared to buildings beyond that distance. In 2010, the study estimates that a building that neighbors a distressed property has roughly $1.9 million more in emergency repair charges than those beyond a 500-foot radius.



• Meanwhile, buildings within 250 feet of troubled properties had a tendency to have major housing code violations compared to buildings further away. These properties had a 13.7% increase in Class C, considered the most hazardous, code violations from 2008 and 2010.(1)

Source: Distressed buildings bring down their neighbors (A new study reveals buildings located 500 feet away from overleveraged and foreclosed properties face risk of deterioration and increased costs to maintain them).

(1) See also:

• The Real Deal: Foreclosures are contagious in NYC apartment buildings, too,
• The Wall Street Journal: City Feels Foreclosure Affects:
  
  "In single-family neighborhoods, you see empty homes and swimming pools filled with algae, in a way that you don't see them in multifamily neighborhoods," said Harold Shultz, a senior fellow at the housing and planning council.
  
  Instead, the parallel effect on neighboring apartment buildings can be measured in landlords making fewer repairs and a corresponding increase in housing-code violations, according to Mr. Shultz.
  
  The problem in New York City is widespread, but concentrated in northern Manhattan, the central and west Bronx and central Brooklyn, according to the report.

Law School Snags Local Vacant Firehouse; Will Be Future Home Of Institution's 10 Legal Aid Clinics

In Detroit, Michigan, the Detroit Free Press reports:

• The University of Detroit Mercy School of Law has purchased a vacant former Detroit firehouse downtown for use as the future home of its public legal aid clinics.

***

• The two-story facility will provide more than 6,000 square feet of space for the school's 10 legal aid clinics. Last year, UDM provided assistance for more than 1,450 people in its various clinics, including urban law, immigration and asylum, mediation, consumer defense and mortgage foreclosure. The school plans to open the new facility in December.



• The firehouse was built in the early 1900s and served as the home for the Detroit Fire Department's Engine 2 for many years. The building was used for other purposes after it was sold by DFD, but it retains much of its historic character including spiral staircases, exterior red fire doors and a lookout tower. UDM Law will keep the historic look in its redesign, the school said.

For the story, see UDM Law School buys former firehouse for legal aid clinics.

'Zombie Debt' Buyer Accused Of Tricking Consumers Into Paying On Stale Debts To Restart Clock On Statute Of Limitations Squeezed By Feds Out Of $2.5M

The New York Times reports:

• The Federal Trade Commission signaled on Monday that it would continue to crack down on debt collectors who harass consumers for money they may not even be legally obligated to pay.



• In the second-largest penalty ever levied on a debt collector, the F.T.C. said that Asset Acceptance, one of the nation’s largest debt collection companies, had agreed to pay a $2.5 million civil penalty to settle charges that the company deceived consumers when trying to collect old debts.(1)

***

• Asset Acceptance, based in Warren, Mich., was charged with a variety of complaints, including failing to tell consumers that they could no longer be sued for failing to pay some debts because the debts were too old. The company’s collectors also failed to inform consumers that paying even a small portion of the amount owed would revive the debt — in other words, making a payment would extend the amount of time the collector could legally sue.



• Debt collectors have only a certain number of years to sue consumers. The statute of limitations varies by state, but typically ranges from two to 15 years, Mr. Dolan said, beginning when a consumer fails to make a payment. But borrowers often do not realize that making a payment on the old debt may restart the clock.(2)

For more, see F.T.C. Fines a Collector of Debt $2.5 Million.

For the Federal Trade Commission press release, see Under FTC Settlement, Debt Buyer Agrees to Pay $2.5 Million for Alleged Consumer Deception (Firm Also Will Notify Consumers with "Time-Barred" Debt That It Will Not Sue to Collect).

Go here for more on zombie debts.

(1) For some of the relevant court documents in this matter, see:

• Complaint for Civil Penalties, Injunctive and Other Relief,
• Consent Decree,
• Joint Motion for Entry of Consent Decree.

(2) For more from the FTC on zombie debts, see:

• Time-Barred Debts: Understanding Your Rights When It Comes to Old Debts,
• Tick-Tock, Tick-Tock: Time-Barred Debts: What’s that, and why should I care?,
• Watch what you're doing with time-barred debts.

Utah App. Court: Photocopy Of Promissory Note In Lieu Of Original OK In F'closure Where Borrower Fails To Establish Basis For Questioning Authenticity

Lexology reports:

• In a victory for lenders, a Utah appellate court has ruled that a photocopy of a note is ordinarily acceptable in court, and that a borrower who demands the original note must establish a basis for questioning the authenticity of the copy.



• In Howard v. PNC Mortgage, the Utah Court of Appeals rejected a plaintiff’s argument that PNC Mortgage should have been required to produce the original note—not just a photocopy—to support its claim that it is now the holder of the note.

For more, see Lender’s use of photocopied note ok’d by Utah court (may require subscription; if no subscription, TRY HERE; or GO HERE - then click appropriate link for the story).

For the ruling, see Howard v. PNC Mortgage, 2012 UT App 19 (Ut. App. January 20, 2012)

North Texas Adverse Possession-Claiming Vacant Home Hijacker Faces The Boot As Foreclosing Lender Initiates Eviction Action

In Flower Mound, Texas, WFAA-TV Channel 8 reports:

• The man who made international headlines by claiming an abandoned $340,000 Flower Mound home with a $16 piece of paper now faces eviction in Denton County. Kenneth Robinson filed an affidavit for adverse possession in July, and his story on News 8 set off a frenzy of filings across North Texas.



• In court papers, Bank of America says it now owns the property in question and is asking for Robinson to be evicted. The bank says it took ownership through foreclosure on January 3. Papers say Robinson moved in when the previous owner walked out on his mortgage, and Robinson never had permission to be there. Bank of America says it asked Robinson to leave, but he did not vacate the property. News 8 e-mailed Robinson and stopped by the house. He would not comment about the case.



• If the court sides with the bank, Robinson will be the latest squatter to get the boot. At least eight people who sought his advice and claimed homes in Tarrant County have been evicted and charged with theft or burglary. Robinson was there when three of them appeared in court.



• Flower Mound neighbors say Robinson has been seen scouting out other potential homes for adverse possession. They are now counting the days until Robinson leaves town.



• Robinson tried to maximize his adverse possession claim with a speech at SMU's law school and in on-line seminars. He charged hundreds of dollars for sessions about how to file the paperwork.



• But when Tarrant County started making arrests, Robinson told News 8 that the others did not follow his advice to the letter. He said his case was different because he fully intended to pay property taxes and live in the house until he had clear title.



• Robinson is scheduled for a hearing in Denton County on February 6. If he fails to appear, he will forfeit his claim to the house.

Source: Original Flower Mound squatter gets eviction notice.

Title Hijacker Gets Five Years For Snatching, Selling Homes Belonging To Others; One Victim Discovers Occupant In House Recently-Inherited From Parent

From the Office of the U.S. Attorney (Birmingham, Alabama):

• A federal judge [...] sentenced a Birmingham man to five years in prison for a mortgage fraud scheme in which he sold three houses that he did not own, announced U.S. Attorney Joyce White Vance, [and others].



• U.S. District Judge Sharon Lovelace Blackburn sentenced DARRYL COBB, 54, on two counts of mail fraud in connection to the scheme. Cobb pleaded guilty to the charges in August. The judge also ordered Cobb to pay restitution of $262,861 and to forfeit $262,861 to the government as proceeds of his illegal activity.

***

• According to Cobb’s plea agreement with the government, his scheme was uncovered after the owner of a home in the 7900 block of 4th Avenue South complained to Birmingham police that someone was living in the house, which should have been vacant. The owner had gotten the house in a will from a deceased parent.



• The person living in the house said they had bought it from Cobb. Further investigation showed Cobb had filed false documents in Jefferson County court and with a mortgage company claiming to be the rightful owner of the property, according to the plea agreement.



• Records searches determined Cobb had conducted two other fraudulent transactions using identical methods to obtain control over two other properties, which he then sold under the false pretense that he was the rightful owner and seller.

For the U.S. Attorney press release, see Federal Judge Sentences Birmingham Man to Five Years in Prison for Mortgage Fraud Scheme.

Suit: Loan Servicers/Trustees Failed To Register With Nevada Regulator As Out-Of-State Debt Collectors, Resulting In Illegally-Conducted Foreclosures

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

• More than 20,000 Nevadans were foreclosed on by companies that are accused of doing business illegally in the state. That's according to a new class action lawsuit filed in Las Vegas. The class action lawsuit is against five companies hired by banks to collect debts and begin the eviction process. This lawsuit is one of the first of it's kind in the country.



• The suit alleges a number of foreclosure servicing firms failed to register as out of state collection agencies with the Nevada Financial Institutions Division. The suit was started by 16 Nevada homeowners who recently had their homes foreclosed.



• "These companies not being licensed and didn't have the ability to legally do the things that they did. Send notices out, foreclose on them, get them out of the house, move for eviction," attorney Shawn Christopher said.



• The lawsuit targets: Quality Loan Service, MTC Financial, Meridian Trust Deed Service, National Default Servicing and California Reconveyance company. Only one of those companies, Quality Loan Service, returned 8 News NOW's phone call Monday. They said they do not comment on pending litigation.

Source: I-Team: Nevada Homeowners File Class Action Lawsuit After Foreclosures.

Prosecutors: Wife Torched Family Home To Conceal Pending Eviction From Unwitting Family; F'closure Stemmed From Loans Obtained By Forging Hubby's Name

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

• A mountain of debt cloaked in years of forged spousal signatures and a pending foreclosure were the motive for a Pleasanton woman to burn down her home in a 2008 fire, according to arguments given by prosecutors before the Alameda County grand jury. Deonna Zuffa, 43, was critically injured in the fire that she is accused of setting.



• During the grand jury proceedings, which ended with an indictment of Zuffa on Dec. 20, prosecutors presented testimony from witnesses who said Zuffa used gasoline throughout her east Pleasanton home to ignite it the morning of Dec. 8, 2008, three days before her unsuspecting family was to be evicted due to foreclosure.

***

• In the transcripts, Alameda County senior deputy district attorney William Denny describes Zuffa as a master of keeping things bottled up. Testimony and evidence presented showed Zuffa was able to hide bankruptcy, foreclosure and deep financial debt incurred over the years from her husband and two sons.

***

• Witnesses told the jury Zuffa kept track of the finances and had the only keys to the family's two P.O. boxes, helping to conceal the debt.



• Keith Zuffa testified that he didn't know his wife of 17 years had taken out loans against the house, which was in his name, and that as far back as 2001, she had been forging his signature. He knew nothing about the failed bankruptcy attempt he said, or an eviction notice delivered Dec. 4, 2008, four days before the fire.



• According to the transcripts, Keith Zuffa told the grand jury that his wife had kept secret that she borrowed money from his 401k, took a second loan on the home and forged his signature to give herself power of attorney, giving her authority to sign all loan documents. The deceit was revealed by investigators to Keith Zuffa in the days after the fire. He has since divorced his wife.



• "It was unbelievable to me that (Keith Zuffa) didn't know what was going on," Keith Batt, a Pleasanton police detective, told the grand jury. "But all the evidence showed he didn't know this was happening."

For more, see Grand jury testimony points finger at Pleasanton woman accused of arson.