Thursday, August 02, 2012

Feds Squeeze City Of Santa Rosa, HOA For $50K+ To Settle Housing Discrimination Suit Over Alleged Improper Exemption Claim As Age-Restricted Community

From the U.S. Department of Justice (Washington, D.C.):
  • The Justice Department [] announced an agreement with a California municipality and a homeowners’ association to resolve allegations of discrimination on the basis of familial status in violation of the Fair Housing Act. The settlement, in the form of a consent order, must be approved by the U.S. District Court for the Northern District of California.

    The department’s lawsuit, which was filed on Nov. 21, 2011, alleged that the city of Santa Rosa, Calif., and La Esplanada Unit 1 Owners’ Association, a homeowners’ association, unlawfully sought to restrict residency at a housing development to seniors aged 55 and older.

    While the law allows an exemption for senior housing, the suit alleged that neither the city nor the homeowners’ association took the steps, such as routine age-verification, necessary to qualify for an exemption to the Fair Housing Act.
***
  • The homeowners’ association [] is prohibited from excluding families with children from the development unless it affirmatively elects to become an age-restricted community for persons 55 years of age or older and conforms to the requirements of the Fair Housing Act.

    The Fair Housing Act's requirements include ensuring that at least 80 percent of the occupied units are occupied by at least one person who is 55 years of age or older and ensuring there are proper age verification procedures in place.

    In addition, the homeowners’ association will provide compensatory damages to the aggrieved persons in an amount of $44,000 by providing a set-off to amounts it has claimed it is owed by the aggrieved persons.

    The consent order also requires the homeowners’ association’s officers, agents and employees, as well as city employees and agents with responsibilities related to zoning and land use to receive fair housing training, and requires the homeowners’ association and the city to pay $5,000 each to the United States as a civil penalty.

F'closing Bank Accused Of Booting Church Prematurely, Changes Locks w/o Title; Lack Of Sprinklers Leads To Loss Of School Operator's License, Default

In Sunrise, Florida, the South Florida Sun Sentinel reports:
  • The clock is ticking for 300 parishioners at the United Pentecostal Church in Sunrise. With the church in foreclosure limbo, Pastor G. Oliver Barnes says a banker arrived Tuesday morning without warning to change the locks. TD Bank has given Barnes and his flock two weeks to clear out, the pastor said.

    "We need more time – at least a few months," Barnes said. "We are at our wit's end." It turns out the bankers failed to change one of the locks, so Barnes plans to hold Sunday services at the church, perhaps for the last time.

    The bank won the church at a foreclosure sale on July 18, but had not yet taken title to the property when it changed the locks, Barnes says. The bank failed to give Barnes the required 10 days to object to the sale.

    "That's a no-no," said real estate attorney Gary Singer, who is not representing the church. "You need to follow the [legal] steps" in the foreclosure process.

    Edward Cochran, vice president of TD Bank in Boca Raton, referred questions to attorney Jon Swergold. Swergold could not be reached for comment Friday despite phone calls and emails.

    Barnes' attorney has requested an emergency hearing, but one has not yet been granted by the court.
***
  • The church paid $5.7 million for the property, a former temple at 7100 W. Oakland Park Blvd.

    Barnes said the church fell on hard times in 2009 after losing its charter school. The school brought in $20,000 a month – helping the church makes its $34,500 mortgage payment, Barnes said. The school lost its license after being cited by Sunrise officials for operating without fire sprinklers.

    With the church struggling to make its payments, Barnes said he asked the bank to let the church refinance its loan. The request was denied, he said.

Accused Vacant Home Hijacker Pinched For Allegedly Renting Homes She Didn't Own; Servicemember/Homeowner Away In Iraq On Active Duty Among Victims

In Yakima, Washington, KIMA-TV Channel 29 reports:
  • KIMA learned a suspected bogus landlord is now behind bars. Yakima police told us they've been on her tail for months. Detectives said she ripped people off by renting homes she didn't own. Action News discovered why it took the city so long to catch her and how you can keep it from happening to you.

    It's normally a given. When you meet with a landlord you assume the person actually owns the property. But that hasn't always been the case. Jade Chester's neighbor on Lincoln Avenue is a service member who was fighting in Iraq. Chester became concerned when a woman rented out the solider's property.

    "She rented out this back house," said Chester. Problem is police said Lashawne Rojas never had permission to rent out the Lincoln Avenue home. That home isn't the only place where she's done this city codes has a list of other homes and apartments here in Yakima.

    "She broke into five buildings that were vacant, changed the locks, came here opened up accounts and rented them out to people and collected rent," said code enforcement manager, Joe Caruso.

    City codes and police have been trying to find Rojas since March. They tell Action News Rojas went so far as to put water bills and at least one house deed in her name, using false documents.

    "I called YPD numerous times about her, but the problem was, we couldn't get a hold of the home owner," said Chester. The difficulty of tracking down that service member overseas allowed this issue to persist.

    It wasn't until Chester’s neighbor returned that Rojas was finally locked up forgery charges. It's likely this bogus landlord wasn't the only one taking money from tenants around town.

    "This is what's happening to our home owners here in Yakima,” said Chester. “It could happen to anybody it's an epidemic problem."
For the story, see Bogus landlord behind bars.

Homeowner's French Drain Installation To Ease Flooding Problem Leads To $589K In Invalid HOA Liens, Costing Her $50K+ In Legal Bills To Stop F'closure

In Mint Hill, North Carolina, WCNC-TV Channel 36 reports:
  • For Rosanna Wilfong, it started a decade ago. Her front yard was flooding. A pool of rainwater swelled until it was knee-deep. So she hired a company to install a French drain -- a kind of underground trench with a pipe to channel the water away from the foundation of her home.

    She said she spent $6,500 to install the drainage system. Her homeowners’ association forced her to spend another $6,500 tearing it out.

    It was only the beginning of a years-long legal battle with her HOA that ate up more than $50,000 in legal bills and almost cost her her home.
***
  • Simply removing the French drain didn’t satisfy the HOA board in Mint Hill’s St. Ives neighborhood. Wilfong, a grandmother, has documents to show the HOA asked her to grade the land. She said grading the front of the property would have led to the same flooding she was trying to correct.

    She said the conflict ultimately was not about flooding and grading and French drains. “It was about the money,” she said. “They wanted their money.”

    She’s referring to fines, which racked up at the rate of $400 per day, according to court documents. “They got to be $589,000,” Ms. Wilfong said. “The house wasn’t worth that much….I knew I was going to lose my house. We were all packed up.”

    Ms. Wilfong hired one attorney, then another, then a third. When her lawyer got documents from the HOA, she made a startling discovery. The HOA’s architecture review committee had approved the French drain. “I felt betrayed by the homeowners association,” she said.

    In a ruling earlier this year, Judge Richard Boner waived all the fines and she got to keep her home. But she still had to pay for her attorneys.

    This is a cash cow for the lawyers and the management companies,” said Chris Zbodula, who served on the St. Ives HOA board before having his own dispute. “They’re making an absolute killing on this.”

    The St. Ives HOA board kicked Zbodula off the board for missing meetings. He says the real reason is that he challenged the president for suing neighbors like Ms. Wilfong. “The only choice a homeowner has is to dig deep in their pocket with tens or even hundreds of thousands of dollars for what could be bogus charges,” Zbodula said.

Wednesday, August 01, 2012

Federal Court Slams Brakes On Dominican Republic-Based Upfront Fee Loan Mod Scam Pretending To Be In Chicago; Racket Targeted Spanish-Speaking Victims

From the Federal Trade Commission (Washington, D.C.):
  • At the request of the Federal Trade Commission, a U.S. district court has halted a nationwide scam operating from the Dominican Republic – but pretending to be in Chicago – that allegedly peddled fake mortgage assistance relief to financially distressed Spanish-speaking homeowners in the United States.

    The defendants promised to dramatically lower homeowners’ monthly mortgage payments in exchange for a hefty upfront fee, and collected more than $2 million in fees during the last three years, but failed to provide homeowners with the promised services, according to the FTC complaint.

    Speaking in Spanish and targeting homeowners behind in their payments or facing foreclosure, the telemarketers would empathize about the tough economy and claim to provide information about federal mortgage assistance programs, according to the complaint.

    In lengthy sales calls, the telemarketers would lie to create a sense of trust, falsely claiming to be affiliated with or approved by the consumers’ lenders or the government, and “making sure to mention President Obama or the Making Home Affordable Program by name,” according to documents filed with the court.
For the FTC press release and links to court documents, see FTC Action Halts Dominican Mortgage Assistance Scam That Allegedly Defrauded Spanish-Speaking U.S. Homeowners of more than $2 Million (Court Issues Restraining Order against Telemarketers Who Falsely Claimed Affiliation with Federal Mortgage Assistance Programs).

Investor Solicited To Help Restructure $500M In Sour Loans Buys Defaulted Debt Instead, Snatches Project Out From Under Hapless Developer By F'closure

In Las Vegas, Nevada, the Las Vegas Review Journal reports:
  • The developer of the Town Square shopping and office complex south of the Strip has sued the Connecticut investment fund that foreclosed on it last year, seeking more than $300 million in damages.

    According to the complaint filed in Clark County District Court late Wednesday, Miami-based developers Jeffrey and Jacquelyn Soffer and their company, Turnberry Capital, spent more than two years trying to restructure nearly $500 million in loans. The effort included bringing in Five Mile Capital Partners of Stamford, Conn., as a potential co-owner.

    However, the court papers contend that Five Mile covertly switched from partner to adversary, buying enough of the loans then in default to force a foreclosure and squeeze out the Soffers. Soffers' lawyers contended that this amounted to "stealing" the 1.2-million-square-foot project, noted for its mix of shopping, entertainment and offices set retro architectural style.

    "(Five Mile's) conduct was so egregious and vulture-like that it should be punished and made an example of," wrote Soffer attorney Daniel McNutt.

Vulture Funds Seek To Snatch Title To Small, Violation-Plagued NYC Rental Buildings With Delinquent Debt-Buying Spree Followed By Foreclosure

In New York City, The Real Deal reports:
  • Private equity firms such as Stabilis Capital Management, Madison Realty Capital and Onex Real Estate Partners have been buying debt on small, often severely distressed rental properties in secondary neighborhoods in New York City with little fanfare over the past year.

    The acquisitions resemble activity during the height of the market when private equity firms, often in partnership with local operators, purchased large portfolios of rent-regulated apartment buildings.

    Yet this post-boom trend is different in two significant ways: The properties are much smaller, and the buyers are seeking to gain control of them by buying the debt, instead of directly buying the buildings.

    The trend to buy debt on small properties in New York City mirrors a national investment strategy in which large funds are buying distressed single-family homes and converting them to rentals.

    In New York City, firms are targeting the non-performing debt on rental buildings that often have a high number of violations because the in-place owner cannot cover the mortgage and is cutting back on maintenance, several real estate professionals involved in this practice said.
For more, see Private equity firms snap up debt on small NYC rental buildings (NYC follows national buying trend, but city's real estate firms focus on violation-laden buildings).

Clueless Bidder At Foreclosure Sale Left Holding The Bag After Discovering $80K Townhome Just Purchased For $8K Comes With $184K Existing 1st Mortgage

In Tampa, Florida, WTVT-TV Channel 13 reports:
  • With home prices still down across the Bay Area, some people believe now is still a great time to buy an investment property. However, they are quickly learning a lesson: You'd better be careful what you bid on, even if the clerk of the court is selling it.

    Eric Dalhberg is an amateur investor who has learned a hard lesson after bidding on a property in Pasco County. "I thought I got a ridiculous good deal," said Dalhberg, who bought a three-bedroom townhouse in Wesley Chapel's Saddle Creek Manor for just over $8,000.

    What Dalhberg didn't realize is he did not buy a mortgage foreclosure from a bank, but rather a foreclosure brought on by the homeowners association. So when he took possession of the title, he learned the property had a first mortgage of $184,000. The debt was left by the previous owner.

    Nick Lang, a real estate attorney in St. Petersburg who is often hired by homeowners associations, has heard plenty of stories of amateur investors in the Bay Area making the same mistake.

    "They're acquiring it subject to a first mortgage. But the public is often unaware of that circumstance and there are probably inadequate available disclosures to the public with the clerk's offices in the various counties."

    Dalhberg says if he had known it was a homeowners, or HOA, foreclosure, he never would have bid on it. "Being a state-run auction, I really thought that, hey, it's the highest bidder wins. They did have the disclaimers saying buyer beware, but nowadays everything has that disclaimer and I just assumed."

Tuesday, July 31, 2012

Foreclosing Banksters Begin Feeling Effects Of Recent Georgia Appeals Court Ruling As Screeching Brakes Bring Some Sales To A Halt

In Forsyth County, Georgia, WSB-TV Channel 2 reports:
  • A metro Atlanta consumer attorney said he has already been able to halt a dozen foreclosures using a new ruling from the Georgia Court of Appeals. The latest case involves a Forsyth County home and lending giant Wells Fargo.

    "Having to move out of the dream home that my son and I built is the worst thing I could think of," said homeowner David Stripland. The recession hit his car dealership around the same time the housing crisis, cutting his home's value more than 60 percent. "You can't sell it, you can't re-fi, you have to get a modification," said his wife, Paulette.

    The Striplands said the process went on for more than a year. They then received a string of foreclosure notices from Wells Fargo. "Foreclosure. It's a shame," said Paulette through a stream of tears.

    The foreclosure has now been halted, after a recent ruling by the state appellate court. Wells Fargo does not hold the note. It only services the loan. The note holder is not clearly stated.

    The Striplands paid forensic auditors who found the loan has been divided up into dozens of securities sold to investors. "Once these notes are chopped up and turned into bonds, securities, whatever; who really owns it?" asked their attorney, Bob Thompson.

    But the Georgia Court of Appeals ruling in a case involving a Cobb County family and servicers Provident Funding, LLC, ruled homeowners have "a right to know" to whom they actually owe the money, lest they be "misled or confused."(1)

    "Even a dog in Georgia has the right to know who's kicking him," Emory law professor Frank Alexander told Channel 2's reporting partners at the Atlanta Journal Constitution. "These big banks and Wall Street have to follow the law of the land, just like I do," said Paulette Stripland.

    Channel 2's Jim Strickland learned just before 5 p.m. Thursday, Wells Fargo had halted the foreclosure. Thompson said most homeowners in peril should take action on their own. "Call and get it stopped and get yourself some time, because with time most people can work things out," he said.

    It is likely Provident will appeal to the state supreme court.

(1) See Reese v. Provident Funding Associates, LLC., A12A0619 (Ga. App. July 12, 2012). See also, Georgia Appeals Court: Failure To Include Name Of Actual Owner Of Mortgage Loan Sinks Foreclosure; Ruling Could Affect Tens Of Thousands Of Cases.

Bankster Agrees To Pay $12M To Settle DOJ Allegations It Ripped Off & Otherwise Trampled On Active Duty Servicemembers' Rights Under SCRA

From the U.S. Department of Justice (Washington, D.C.):
  • Capital One N.A. and Capital One Bank (USA) N.A. (together Capital One), have agreed to pay approximately $12 million to resolve a lawsuit by the Department of Justice alleging the companies violated the Servicemembers Civil Relief Act (SCRA), the Justice Department announced [].

    The settlement covers a range of conduct that violated the protections guaranteed service members by the SCRA, including wrongful foreclosures, improper repossessions of motor vehicles, wrongful court judgments, improper denials of the 6 percent interest rate the SCRA guarantees to service members on some credit card and car loans and insufficient 6 percent benefits granted on credit cards, car loans and other types of accounts.

    The proposed consent order, which was filed simultaneously with the complaint, is one of the most comprehensive SCRA settlements ever obtained by a government agency or any private party under the SCRA.

Cape Cod Mobile Home Peddler Settles Civil Suit Alleging It Extorted Cash From Owners With Bogus Fees/Charges Under Threat Of Loss Of Leased Home-Site

From the Office of the Massachusetts Attorney General:
  • In a settlement resolving allegations that it strong-armed residents into paying $16,000 for memberships of questionable value, Peters Pond RV Resort in Sandwich will refund residents, pay an additional $200,000 in civil penalties and costs, and refrain from future unfair and deceptive practices, Attorney General Martha Coakley announced today.

    This company took advantage of elderly customers and retirees who invested a significant amount of money in their homes,” AG Coakley said. “It is difficult to believe that any business would try to strong arm people who worked and saved their entire lives so they could enjoy their golden years. We are thankful that these practices will end and that consumers will receive restitution.”

    The AG’s Office filed the original complaint in Suffolk Superior Court in August 2011 alleging violations of the Massachusetts’ Consumer Protection Act. In September 2011, the court ordered a preliminary injunction prohibiting any future intimidating sales tactics.

    Residents at Peters Pond originally purchased “park model homes” that appeared to be manufactured homes, often referred to as mobile homes, that are costly to move. Although the homes are owned by residents, the lots are leased from Peters Pond. Residents believed they could renew their lease indefinitely as long as they paid rent and abided by community rules.

    According to the complaint, the owners and operators of Peters Pond – Peters Pond RV Resort, Inc., Morgan RV Resorts, LLC, Ideal Private Resorts, LLC and Robert Moser – allegedly threatened consumers that if they did not purchase a new $16,000 membership, in addition to paying the annual $6,000 homeowners fee, they would lose their home-site and be forced to move their mobile homes at their expense and without compensation. The membership fees did not include any apparent benefits.

    Nearly 100 homeowners paid to join the club out of fear that they would lose their home, in which many had invested their life’s savings. Then, when residents tried to sell their homes, the defendants allegedly interfered with the homeowners' rights by preventing homeowners from using brokers to assist in the sale and charging a $2,000transfer fee.”

    The consent judgment filed [] provides refunds to consumers who paid for the membership program. Residents who feel they are owed money will file claims with the company. Additionally, the defendants will pay $200,000 to the Commonwealth in penalties and costs.

    The consent judgment also prohibits the defendants from continuing certain alleged unlawful sales practices, provides lease rate increase restrictions for current Peters Pond consumers and requires full itemized disclosure of all fees charged for goods or services provided, including any transfer fees. The defendants must also allow consumers to retain an appropriate broker to sell their homes.
For the Massachusetts AG press release, see Peters Pond RV Resort to Pay Restitution for Allegedly Strong Arming Residents into Buying Memberships (Management Company also Required to Pay $200,000 in Civil Penalties and Costs).

Banksters' Failure To Complete F'closure Process On Violation-Plagued Homes Leaves Some Cleveland Homeowners Holding The Bag, Facing Criminal Charges

In Cleveland, Ohio, The Plain Dealer reports:
  • Renetta Atterberry thought she had lost her East 102nd Street house. So she was shocked to learn in January -- five years after her mortgage company filed for foreclosure -- that it was still in her name.

    Worse, the long-vacant rental home had been vandalized and she faced a raft of housing code violations. Since then, she has been saddled with debts of about $12,000 to pay for demolition and back taxes.

    "I thought I had nothing else to do with that home," said Atterberry. "I was so embarrassed and humiliated by this."

    Her mortgage company didn't buy the house and never took it to sheriff's sale to see if somebody else would, leaving Atterberry the legal owner, responsible for upkeep and taxes.

    These so-called "bank walkaways" are another troubling development in the foreclosure crisis, particularly in cities like Cleveland with weaker housing markets, say housing advocates and government officials.

    Lenders or mortgage companies decide they don't want homes they have already foreclosed on, sometimes because the value has plummeted or they believe the homes could become costly liabilities if they are socked with housing code violations.

    But without that sale, the property can languish abandoned and ripe for vandalism. As liens and liabilities mount -- creating a so-called "toxic title" -- it becomes even harder to transfer the property. Neighborhoods and local governments are left to deal with the mess.
***
  • Properties left in 'legal limbo'

    Joseph Schilling, associate director of the Metropolitan Institute at Virginia Tech and an expert on abandoned property, said the issue of bank walkaways is increasing. Lenders may decide that given low prices and their mounting inventory of foreclosed property, it makes sense to walk away.

    "But as a result, it leaves the property in this type of legal limbo and it leaves the community and local government really holding the bag," Schilling said.

    The problem has gotten the attention of government officials who are trying to fill a void in Ohio law and force companies that foreclose on property to act. State Rep. Dennis Murray of Sandusky is drafting a bill he hopes to introduce in the next two months that would require lenders or mortgage service companies to take foreclosed properties to sheriff sale within a certain time -- or see their mortgage lien erased.

    The lender wouldn't be required to buy the property -- only to take it to sale. More time could be given to lenders working to keep people in their homes by restructuring the mortgage.
***
  • 'I see shocked people every single week'

    Some of the fallout that results when properties languish vacant and abandoned shows up in Cleveland Housing Judge Raymond Pianka's courtroom. "I see shocked people every single week," Pianka said. "They thought the burden was lifted because they filed bankruptcy or because somebody somewhere told them they're no longer responsible, and then they're pulled back in facing criminal code violations."

Monday, July 30, 2012

DC Feds Squeeze Plea Out Of Area Sale Leaseback Peddler For Running Equity Stripping Scam That Ended In Foreclosure, Eviction For Unwitting Homeowners

From the Office of the U.S. Attorney (District of Columbia):
  • Carline M. Charles, 41, who operated a business that supposedly would rescue distressed homeowners from foreclosure, pled guilty [] to conspiracy to commit bank fraud for her role in a mortgage fraud scheme that cost lenders at least $1 million, [...] As part of her plea agreement, she agreed to the forfeiture of a money judgment of $838,978, representing her share of proceeds of the crime.

    According to a statement of offense, signed by the defendant as well as the government, Charles represented herself as the owner of C & O Property Solutions, LLC, a company that offered refinancing options to homeowners in the District of Columbia and Maryland whose properties were facing imminent foreclosure.

    In fact, she was operating a scheme that ultimately involved 12 homes along with fraudulently obtained mortgages, financial losses for lenders, and evictions for many of the people who turned to her for help.

    Charles and others contacted homeowners through solicitation postcards or by telephone, using foreclosure and land records to identify people who were in financial distress. Charles told the homeowners that they could refinance their mortgage loans with the assistance of financial partners or investors so they could buy time to repair their credit.

    She assured them that their names would remain on the property deeds after thisrefinancing.” Later, after a period of about six months, according to Charles, the homeowners could refinance the mortgages and remove the partners or investors from the property deeds.

    While the homeowners believed they were refinancing their mortgage loans, in actuality they were selling outright their properties to straw purchasers recruited by Charles. Charles and others paid the straw purchasers fees of up to $10,000 per transaction in return for use of their personal information to purchase properties.

    All told, these actions led to mortgage lenders issuing loans of approximately $4 million. Charles arranged to siphon out roughly $1 million of this money from the properties for herself or her company. She used the money to pay her own personal expenses and to continue perpetuating the scheme.

    In addition, Charles required many of the distressed homeowners to pay a monthly “mortgage” payment, which she claimed would be forwarded to the lenders or placed in escrow. Many homeowners paid her, as required, providing a total of about $114,000.

    Charles forwarded the mortgage payments for a period of time, but eventually stopped doing so. This led to the foreclosure of 12 properties that had the fraudulently obtained mortgages, the evictions of most of the homeowners, and a loss to the lenders of between $1 million and $2.5 million.(1)
For the U.S. Attorney press release, see Business Owner Pleads Guilty in Mortgage Fraud Scheme That Cost Lenders More Than $1 Million (Homeowners Turned to Her to Avoid Foreclosure, Wound up Evicted).

(1) For more on this type of foreclosure rescue ripoff, see:

Cal. AG Score $4M Judgment Against Loan Modification Racket That Targeted 1,000+ Consumers; Civil Lawsuit Leads To Some Jail Time For One Scammer

From the Office of the California Attorney General:
  • Attorney General Kamala D. Harris [] announced defendants who ran a national loan modification scam were ordered to pay more than $4 million in penalties and restitution, including $2 million to consumers who were falsely promised modifications of their mortgage loans.

    More than 1,000 customers paid more than $2 million for loan modification services to Statewide Financial Group, Inc., which did business as US Homeowners Assistance and Webeatallrates.com, and was based in Orange County. In July 2009, the Attorney General’s office shut down the business, which had been in operation since January 2008.
***
  • The Orange County Superior Court ordered that every US Homeowners Assistance loan modification customer should receive a full refund upon request. The defendants were also permanently enjoined from engaging in the conduct that led to the lawsuit and were ordered to pay $2 million in civil penalties. It is unclear, however, how much money will be recovered and available to pay refunds or penalties.

    The prosecution of this action took nearly three years, culminating in a multi-week bench trial in March 2012. The business’ owners, Zulmai Nazarzai and Hakimullah Sarpas and Fasela Sheren (who went by the name Sharon Fasela), were all found liable for violating California’s Unfair Competition Law and False Advertising Law.

    In a separate proceeding in late 2010, Attorney General Harris successfully prosecuted Nazarzai for contempt of court for his refusal to turn over $360,000 unlawfully taken by defendants as ordered by the court.

    He has been incarcerated in the Orange County jail since December 2010 because of his continued refusal to comply with the court’s order.
Go here for the court's Judgment and here for the court's Statement of Decision.

More On Trouble With Land Titles Arising Out Of Wrongful Foreclosures

Albany Law School Professor Elizabeth Renuart writes in Public Citizen's Consumer Law & Policy Blog:
  • [T]here is growing evidence that the parties to securitization deals handle and transfer the legally important documents that secure the resulting investments — the loan notes and mortgages — in a careless and, at times, fraudulent manner.

    Consequently, the foreclosing parties frequently do not possess the right to foreclose and the resulting sales may be unlawful. Defective sales harm homeowners when they lose their homes to the wrong party. Moreover, they could use the extra time afforded by a delayed or jettisoned foreclosure to find another solution, such as a loan modification or short sale.

    Wrongful foreclosures affect another important group, the purchasers. If title to the property is flawed as a result, those parties potentially buy nothing and can transfer nothing. Clear title to real property in the United States may be in jeopardy. The problem is most acute in non-judicial foreclosure states because doctrines of finality do not apply and state law may permit post-sale challenges.
See also:

Suit Tags Freddie, Fannie For Alleged Wrongful 'Government Entity' Exemption Claim To Dodge Deed Recording Taxes Upon Taking Title To Foreclosed Homes

In Dayton, Ohio, The Associated Press reports:
  • County officials in southwest Ohio have filed a class action lawsuit against two mortgage giants they say owe millions in unpaid taxes.

    Montgomery County filed a federal lawsuit Wednesday that says Fannie Mae and Freddie Mac wrongfully claimed various exemptions to avoid paying transfer taxes to state counties.

    Transfer taxes are owed to a county when a deed is recorded. The lawsuit claims the companies didn't pay transfer taxes involving banks that foreclosed on homes and new homeowners. Officials say both companies filed for exemptions as government entities and other inapplicable exemptions for an unspecified time.

    The lawsuit involves most state counties. Summit County has filed an individual case.

Sunday, July 29, 2012

Bail Set At $250K Each For Trio Accused Of Running Upfront Fee Loan Modification Foreclosure Rescue Ripoff Throughout Southern California

From the Office of the Ventura County, California District Attorney:
  • District Attorney Gregory D. Totten announced [] the filing of a felony complaint against Los Angeles residents Nino Vera (DOB 4/25/60), Rene Solis (DOB 1/17/60), and Hector Menendez (DOB 5/23/56).

    Vera is charged with nine counts of foreclosure consultant fraud and two counts of grand theft. Solis is charged with five counts of foreclosure consultant fraud and three counts of grand theft. Menendez is charged with two counts of foreclosure consultant fraud and one count of grand theft.

    The charges arise out of a fraudulent home loan modification and foreclosure rescue program operating across Southern California under the business name of “Sunset Beach Management.”

    The defendants are accused of collecting thousands of dollars in upfront fees from struggling homeowners while promising to modify mortgage loans and “save” their homes from foreclosure. The victims received no actual services from the defendants and, in addition to losing thousands of dollars, many lost their homes through foreclosure proceedings. Total victim losses are estimated to exceed $78,000.

    The arrests of Vera, Solis and Menendez in Los Angeles follow a two-year investigation by the District Attorney's Real Estate Fraud Unit. Bail was set for all three defendants at $250,000.

Ch. 13 Trustee Notorious For Invoking 'Show Me The Note' Defense To Divert Debtor Payments Away From Banksters To Other Creditors Tagged In BofA Suit

In Nashville, Tennessee, the Nashville Business Journal reports:
  • In a rare legal counter move, Charlotte, N.C.-based Bank of America has filed a lawsuit against Nashville's Chapter 13 bankruptcy trustee. It's the first time in recent Tennessee history that a large lender has sued a trustee of the court, according to a local bankruptcy attorney.

    The move marks an effort on behalf of the bank to put an end to a common defense tactic used by debtors and foreclosure judges in the aftermath of the mortgage meltdown. Known as "show me the note," the tactic forces a lender to offer up physical documentation that they actually own the mortgage.

    It's a method that has been successful in Nashville, where bankruptcy trustee Henry "Hank" Hildebrand has become well known for his efforts to force mortgage companies to produce the original note when filing a claim in bankruptcy proceedings. (Tennessee is a state that doesn't require judicial approval for foreclosures, so the process typically takes place in bankruptcy court.)

    But it can be a lofty order for lenders that, following the securitization boom, bundled up millions of home loans, sold them and packaged them into bonds. Bank of America is fed up.

    In mid-May, the bank filed a lawsuit (tucked away as an adversary proceeding in a consumer bankruptcy case) against Hildebrand for taking mortgage payments from the debtors, bypassing the bank and passing the cash along to other creditors.

    Hildebrand's defense? Bank of America had the mortgage but couldn't produce the underlying promissory note — often referred to as a "naked" mortgage.

    Bank of America fired back, citing cases in other states where original lenders didn't have to file a claim. Courts in Arizona and Massachusetts have recently ruled on the issue, partially siding with the banks.

    The rub? Bankruptcy rules in Tennessee still require a timely claim, the mortgage and the original note, rules that Hildebrand has followed to the tee during his tenure.

    The bank also charged in court documents that because of Hildebrand's methods, the debtors wouldn't have the chance for a "fresh start." "The trustee would affirmatively state that the term 'fresh start' is not found in the bankruptcy code, is undefined in the complaint and raises an ambiguous and confusing assertion to which the trustee cannot respond," Hildebrand said in his response to the lawsuit.

Couple Get Suspended Sentence After Copping Pleas To Fraudulently Scoring Section 8 Rental Benefits, Mortgage Loans

From the Office of the Massachusetts Attorney General:
  • [P]aulo Montenegro, age 45, and his wife, Rosana Pereira, age 48, each pleaded guilty in Middlesex Superior Court to charges of Larceny by False Pretense (3 counts) and Conspiracy to Commit Larceny by False Pretense (3 counts), in connection with fraudulently obtaining Section 8 public housing benefits and fraudulently obtaining mortgage loans from financial lending institutions.

    After the pleas were entered, Judge Maureen Hogan sentenced Montenegro and Pereira to two years in the House of Correction, sentence suspended for four years, and ordered Montenegro and Pereira to pay restitution and $25,000 each in fines.
***
  • Pereira and Montenegro misrepresented material information to the Cambridge Housing Authority and HUD in order to obtain the benefit of Section 8 public housing subsidies. Pereira, in conspiracy with Montenegro, under-reported her income and assets, and reported that she was unmarried, when in fact she was married to Montenegro, and they lived together, shared finances, and benefited from each other’s incomes.

    As a result of such misrepresentations, Pereira and Montenegro received the benefit of renting a three bedroom apartment in Cambridge at a greatly reduced rate, while the Cambridge Housing Authority and HUD covered most of the rent.

    For two years during the period when Pereira and Montenegro fraudulently benefited from Section 8 public housing subsidies, they were not even living in the Cambridge apartment that they were renting at a reduced rate; instead, they were living in a home in Weston that Montenegro had purchased for $860,000.
For the Massachusetts AG press release, see Weston Couple Pleads Guilty, Sentenced in Connection with Section 8 Public Housing Fraud and Mortgage Fraud (Defendants Defrauded Public Housing Subsidy Program and Mortgage Lenders).

Bay State Landlords Settle Housing Discrimination Charges Alleging Refusal To Rent To Families w/ Young Kids To Dodge Lead Based Paint Abatement Rules

From the Office of the Massachusetts Attorney General:
  • Multiple landlords have settled allegations that they refused to rent to families with children in order to avoid obligations to remove lead paint hazards, Attorney General Martha Coakley announced [].

    Under state law, it is illegal to discriminate against housing applicants because they have children or because the rental would require the landlord to abate lead hazards.
***
  • Celina Puszko and Alojzy Jackiewicz

    According to the complaint filed on June 22, in Suffolk Superior Court, Dorchester property owners Celina Puszko and Alojzy Jackiewicz discriminated against families with children under the age of six by refusing to rent to them in order to avoid their obligation to abate lead paint hazards. Along with the complaint, the parties filed a consent judgment, [...]. The consent judgment requires Puszko and Jackiewicz to delead at least one of their three rental units in Dorchester, to attend fair housing training, and to pay $3,000 in restitution and penalties.

    Gregory Howell and Scott Michels

    According to the assurance of discontinuance filed on June 25, Gregory Howell and Scott Michels, who jointly own four rental properties in Bourne, Wareham, and Fairhaven, posted a discriminatory advertisement for one of their Wareham properties on the website Craigslist.org.

    The advertisement specifically stated that certain families with young children were not eligible to rent the advertised rental property because the property had not been deleaded. Under the terms of the assurance, Howell and Michels agreed to attend fair housing training, delead the property, and pay a penalty of $3,000 to the Commonwealth.
For the Massachusetts AG press release, see Landlords Settle Claims of Housing Discrimination (Landlords Accused of Refusing to Rent to Families with Children Agree to Remove Lead Paint from Rental Properties).

Saturday, July 28, 2012

Wanted: Sleazy, Rubber-Stamping Part-Time Attorney To Sign Ghost-Prepared Court Documents In Collection Lawsuits For Zombie Debt Buyer; Inquire Below

St. John's University Law Professor Jeff Sovern comments on Public Citizen's Consumer Law & Policy Blog on the following excerpt taken from an ad found on a Craigslist posting:
  • We are a collection agency/debt buyer. What we are looking for is a part time attorney to work for us as our corporate counsel, on our payroll, about 5 to 6 hours a week. This is a short term employment arrangement, no longer than 90 to 120 days.

    Your job will be to sign pleadings, praecipe for entry of appearances, praecipe for writ of execution, and garnishment orders. Our paralegal will prepare all paperwork for your signature. This is very standard stuff for us.

    If you are an attorney looking for challenging legal work, this is not for you. WE DO NOT NEED F LEE BAILEY- we are fee shopping.

    If you passed your boards with a D+, and you can sign your name, you possess all the credentials required for this job. If this opportunity interests you, please feel free to reply to this email with a brief description of who you are, when you got your law license, and what you will be needing from us in the way of compensation.
For Professor Sovern's comments, and the link to the Craigslist post, see Debt Collection Attorney Listing: Attorney Who Can Sign Name is Good Enough.

NYC Co-Op Moves To Boot Chain-Smoking Resident Accused Of Willfully Neglecting Effects Of Her 2nd-Hand Smoke Intrusion Into Hallways, Other Units

In New York City, the New York Post reports:
  • Hit the bricks, smokestack!

    A chi-chi Upper West Side building wants to boot the trust-fund transsexual who’s been stinking up the joint with her chain smoking. In papers filed in Manhattan Supreme Court, the co-op board of the El Dorado, at 300 Central Park West, says Diane Wells has ignored its pleas to be more considerate of her neighbors — even refusing to use the air purifiers residents bought her for her ninth-floor apartment.

    "Wells smokes so heavily that the smoke and odor permeates the elevator and extends as far down as the lobby of the building and at least as high up as the apartments on the 10th floor,” the complaint says.

    On multiple occasions, the cigarette smoke and odor [have] filled the entry halls on at least the ninth and 10th floors of building, requiring shareholders to traverse a cloud of smoke between the elevator and their apartment entrances.”

    The odor “permeates the inside of other shareholders’ apartments,” says the filing on behalf of the El Dorado, which has been home to the likes of Alec Baldwin, Bono, Michael J. Fox and Marilyn Monroe over the years.
    While Wells has lived — and smoked — in the apartment for about a decade, the problem apparently started this year.

    The building blames it on holes in the walls of Wells’ four-bedroom apartment, as well as a hole in the plumbing line. Management has offered to seal the holes, but Wells, 59, has denied them access, the suit says.

    When she refused the building’s requests to buy air purifiers for her apartment, fed-up residents bought her some on their own. But she’s refused to use them, the suit says.

    Wells, who was born a man, also has fallen behind on her common charges to the tune of $18,000 and is $42,000 short in the escrow account she agreed to maintain in return for living in the apartment, which used to belong to her late mother.

    The building is seeking an order barring her from smoking until the apartment is repaired — and an order giving her the heave-ho.
    She could not be reached for comment yesterday. Her multimillionaire mom, Constance Cheney, died in 2007.

    A Manhattan judge allowed Wells to stay there pending the outcome of a battle for her mother’s estate in Manhattan Surrogate’s Court, where she’s duking it out with her two siblings.

Condo-Residing Couple Score Win In Disability Discrimination Complaint Against HOA Over Lower-Floor Neighbors' 2nd-Hand Tobacco, Pot Smoke Intrusion

In Vancouver, British Columbia, The Toronto Star reports:
  • Condominium corporations have a duty to accommodate residents who have sensitivity to second-hand cigarette smoke, according to a recent decision of the British Columbia Human Rights Tribunal. Corporations who fail in their duty may well be subject to penalties.

    The case involved Melanie and Matthew McDaniel, who lived in a 39-unit condominium in Langley, B.C. Shortly after the McDaniels took possession in March 2008, they experienced second-hand smoke entering their unit as a result of other residents smoking tobacco and marijuana on the patios and decks below their unit.

    For the next three years, the McDaniels were involved in lengthy ongoing communications with the board and property manager. Melanie suffers from severe allergic reactions to all types of smoke and perfumes. She was pregnant when she moved in and claims her health was being seriously affected by the smoke fumes.

    Melanie kept a two-year log in which she documented some 175 incidents of smoke infiltration into her unit.

    Matthew also suffers from chronic health issues, including diabetes and hypoglycemia, making it important that he avoid exposure to second-hand smoke.

    The condominium corporation suggested that the McDaniels install an air conditioner, and that they attempt to get 25 per cent of the owners to petition for a no-smoking bylaw. It asked residents who smoke to be respectful of others, it wrote the owners below the McDaniel unit asking them not to smoke on their patios, and it considered imposing a total smoking ban.

    Nothing worked. Eventually, the McDaniels took the matter to the B.C. Human Rights Tribunal, alleging that the condo corporation failed to accommodate their complaints adequately or appropriately.
***
  • In the end, the tribunal sided with the McDaniels. It acknowledged that the McDaniels were physically and psychologically vulnerable and that they were treated by the condominium and the property managers with “what can best be termed a patronizing or benign neglect for a period of almost three years.”

    I accept that the (corporation’s) conduct severely diminished the McDaniels’ enjoyment of the property and had a physical as well as significant emotional impact on them,” tribunal chair Bernd Walter wrote in his decision,

    Walter ordered that the corporation refrain from committing a similar contravention in the future (even though the McDaniels had lost their unit to foreclosure and had moved out), but declined to order that they pass a non-smoking bylaw.

    The condominium was ordered to pay the McDaniels $1,118.88 for an air conditioner and to reimburse them for naturopathic consultations.

    The tribunal also ordered the condominium to pay Matthew $2,000, and Melanie $4,500, as compensation for injury to their dignity, feelings and self-respect.
See McDaniel v. Strata Plan LMS 1657, 2012 BCHRT 167 (May 14, 2012) for the ruling of the British Columbia Human Rights Tribunal.

Man Gets 42 Months For Interference w/ Another's Housing Rights, Civil Rights Conspiracy; Played Role In Vandalizing, Torching Biracial Man's Home

From the U.S. Department of Justice (Washington, D.C.):
  • A Missouri man was sentenced today to 42 months in prison for his role in the vandalism and arson of a biracial man’s home in Independence, Mo., the Department of Justice announced.

    Charles Wilhelm, 23, of Independence, was sentenced in the Western District of Missouri by U.S. District Judge Dean Whipple.

    On March 8, 2012, Wilhelm pleaded guilty to one count of conspiracy and one count of violating the Fair Housing Act. Wilhelm’s co-conspirators, Teresa Witthar and David Martin, pleaded guilty on Feb. 2, 2012, and March 7, 2012, respectively, for their roles in vandalizing and burning down Nathaniel Reed’s home in Independence.

    According to the plea agreement filed with the court, Wilhelm, Witthar and Martin conspired to intimidate and scare Reed, a biracial man, into moving out of the Highland Manor Mobile Home Park in Independence, in part because of his race. On or about June 6, 2006, Wilhelm, along with Witthar and Martin, entered Reed’s home, without his permission, and vandalized it by writing at least 15 racially derogatory slurs on the walls of his trailer.

    Two days later, on or about June 8, 2006, Witthar drove Wilhelm and Martin to a neighborhood behind Reed’s home so that they could set fire to it without being detected. Witthar waited in her vehicle for Wilhelm and Martin to set the fire and then provided them a ride back to the Highland Manor Mobile Home Park.
***
  • Witthar was sentenced to 63 months in prison on June 18, 2012. Sentencing for Martin is scheduled for Aug. 2, 2012.

Baltimore Pair Accused Of Hanging Dead Racoon On African Family's Home Plead Guilty To Interference With Housing Rights, Civil Rights Conspiracy

From the Office of the U.S. Attorney (Baltimore, Maryland):
  • Dena Whedbee, age 42, and her daughter Brittany Whedbee, age 20, both of Baltimore, pleaded guilty [] to their involvement in a racially-motivated conspiracy to interfere with an African family’s housing rights by hanging a dead raccoon on the family’s porch.
***
  • According to their plea agreements, Dena and Brittany Whedbee conspired with Joshua Wall, Billy Pratt, and another co-conspirator to hang a dead raccoon from a noose on the porch of a family from Africa, in order to frighten the family and interfere with their housing rights.

  • Dena Whedbee admitted that she and another co-conspirator found the dead raccoon. Wall, Pratt, and the other conspirator hung the raccoon on the porch of the home in the middle of the night of April 29, 2010. Both Dena and Brittany Whedbee also admitted that they encouraged their co-conspirators to hang the raccoon on the family’s porch. The investigation is ongoing.

    Dena and Brittany Whedbee each face a maximum penalty of 10 years in prison and a $250,000 fine for conspiracy to deprive a person of civil rights and one year in prison and a $100,000 fine for violating the Fair Housing Act.
For the U.S. Attorney press release, see Two Conspirators Plead Guilty to Civil Rights Violation (Used a Noose to Hang a Dead Raccoon on a Family’s Porch).

Baltimore Landlord Gets 12 Months Prison, 6 Months House Arrest For Improper Lead Based Paint Abatement, Failure To Disclose Hazards To Tenants

From the Office of the U.S. Attorney (Baltimore, Maryland):
  • U.S. District Judge Benson E. Legg sentenced Cephus R. Murrell, age 69, of Catonsville, Maryland, [] to a year and a day in prison, followed by six months of home detention as part of one year supervised release, for improper lead paint abatement at rental properties owned and managed by Murrell, as well as failure to disclose to tenants the presence of documented lead-based paint hazards. Murrell owns and manages approximately 175 rental housing units throughout Baltimore.
***
  • [M]urrell pleaded guilty to three misdemeanor counts of violating the Toxic Substances Control Act. According to his guilty plea, on September 15, 2010, Murrell had workers conduct lead-paint abatement work at one of his apartments, located on Frederick Avenue in Baltimore, while one of the apartment tenants and his children were present on site, in violation of the lead-paint abatement regulations.

    In addition, Murrell provided MDE [Maryland Department of the Environment] with a Project Notification Form for this project in which he falsely stated that a particular supervisor would be at that location on a particular date, when in fact no supervisor was on site, also in violation of the lead-paint abatement regulations.

    Murrell admits that there were several instances in which he falsely certified that workers would be conducting lead abatement work and that a particular supervisor would be on site to supervise the work, when in fact, no supervisor was on site.

    For example, Murrell had notified MDE that he would be conducting abatement work on August 31, 2010, and that a specific individual would be supervising it. When officials from MDE visited the apartment on that date they found workers conducting abatement work, but no supervisor was on site. The alleged supervisor was, in fact, out of town on travel.

    Finally, Murrell admits that he and his company failed to disclose to tenants the presence of documented lead-based paint hazards when they rented units he owned and managed. Many of these units had a history of lead-based paint problems that had been documented by MDE.
For the U.S. Attorney press release, see Baltimore City Landlord Sentenced to Prison for Lead Paint Violations in Rental Properties He Owns and Manages (Previously Cited by the State for Numerous Lead Paint Violations and Documented Children with Elevated Lead Blood Levels Living in His Properties).

Bay State AG Squeezes Guilty Pleas From Pair Charged With Improper Asbestos Removal, Disposal For Work On Public, Private Buildings

From the Office of the Massachusetts Attorney General:
  • The owners of a Lynnfield asbestos removal company have pleaded guilty and been sentenced in connection with the improper removal and disposal of asbestos for work performed on numerous public and private buildings in the communities of Lynn, Beverly, and Marblehead, Attorney General Martha Coakley announced [].

    Asbestos is a hazardous material that must be properly removed and reported to ensure the public’s safety,” AG Coakley said. “These individuals disregarded the laws around asbestos removal and put people at risk of being exposed to this dangerous toxin.”
***
  • David Harder, Jr., age 48, and Julie Rosati, age 52, of Lynnfield, each pleaded guilty in Essex Superior Court on charges of violating the Massachusetts Clean Air Act (12 counts), violating the Massachusetts Solid Waste Act (2 counts), and Evasion of Unemployment Insurance (3 counts). Rosati also pleaded guilty to Filing False Statements for the Protection of the Environment (1 count).

Remaining Residents In Failing 20-Unit Condo At Risk Of Getting The Boot After Being Belted With $47K+ Overdue Water Bill, Shut-Off Notice

In Warrensville Heights, Ohio, WEWS-TV Channel 5 reports:
  • Owners of the Clarkwood Townhouses #3 in Warrensville Heights were issued a shocking piece of news, their homeowners association is more than $47,000 behind on their water bill.

    To make matter worse, the Cleveland Division of Water sent them a notice that their water is scheduled to be turned-off on Aug. 10, if payment arrangements aren't made soon.

  • Townhouse owners like Gloria Davis told NewsChannel5, many will lose their homes if water service is interrupted. "If the water is shut-off here, that would become a medical emergency crisis," said Davis. "We have seniors living here, we have children living here."

    Davis and other tenants said they were not aware their association water wasn't being paid over the past three years, and blame their former management company, and association board for the massive total.

    The huge water bill was also caused by a growing number of association members not paying their monthly dues, and going bankrupt. NewsChannel5 confirmed 12 of the 20 units on the property are now vacant, many of the unoccupied units are in foreclosure.
For more, see Warrensville Heights homeowners association faces $47,000 water bill (Homeowners blame former management company).

Friday, July 27, 2012

Rush Is On For Payday Lenders Seeking Out, Striking Associations With Indian Tribes For Legalized Loan Sharking Rackets

From a recent post on Credit Slips:
  • Think about what happens when you pit tribal sovereign immunity against effective consumer protection laws. In my view, no one wins. Yet payday lenders are now very actively seeking tribes with whom to partner, in order to get the benefits of tribal sovereign immunity. As one might expect, the payday lenders make out big and in most cases, the tribes get very little, at least so far.
  • The payday loan industry generates $52 billion worldwide each year, and Chukchansi officials hope to get a piece of it. They're not alone; about three dozen tribes are in the business across the United States, said Allen Parker, a California consultant who works with tribes nationwide.
***
  • Although tribes expect to turn a profit, competing payday lenders complain that it's at their expense because tribes are sovereign nations that can ignore state regulations. While California sets a cap of $300 and a 15% interest rate for nontribal payday loans, Blue King's maximum loan is $1,000 -- and the sky's the limit for its interest rate.
  • This article explores how tribal sovereign immunity is being used in the context of payday lending to avoid state law and explores the ramifications of this for both consumer-protection regulation and tribes.

WV Court Order Temporary Temporarily Stalls Business For Auto Title Lender Accused Of Falsely Threatening Slow-Pay Consumers With Arrest, Etc.

In Charleston, West Virginia, The West Virginia Record reports:
  • Virginia-based Fast Auto Loans Inc. has been ordered to stop collecting payments, seizing vehicles and entering into new loans with West Virginia residents, according to Attorney General Darrell McGraw's office. That is, until a hearing on Aug. 24, the attorney general said in a news release []. Jefferson County Circuit Court Judge David H. Sanders entered the four-page order July 3.

    The order also requires defendants Fast Auto Loans; its parent company, Community Loans of America; and their owner, Robert I. Reich, to produce all records of their loans to state consumers, including records of their marketing activities, to the Attorney General's Office within 30 days.

    A lawsuit filed by McGraw's Consumer Protection Division against the defendants prompted the circuit court order. The suit, filed June 14, sought to prohibit them from "victimizing" state consumers who travel to neighboring Virginia to obtain title loans. Such loans are made to people who own motor vehicles. The loan is secured by a lien on the borrower's vehicle.

    The loans in question charge interest rates of 300 percent Annual Percentage Rate, or APR. Consumers' vehicles are seized when they default on the loans.
***
  • In his lawsuit, the attorney general alleged the defendants engaged in various unlawful debt collection activities and other unfair or deceptive practices, including repeated telephone harassment, disclosure of debts to employers and other third parties, and false threats of arrest or criminal prosecution to force consumers to relinquish possession of their vehicles without a court order.

HOAs Add Nonlitigious Tactics To Collection Efforts Against Unit Owners Owing Back Due Maintenance Fees

In New York City, The New York Times reports:
  • A SUCCESSFUL condominium depends, in large part, on owners’ paying their monthly fees promptly and in full. Delinquencies can mean less money for maintenance and amenities — and draw the ill will of fellow residents. While the sheer size of larger buildings can often blunt their impact on the budget, small buildings with a high number of delinquencies can be toxic for buyers and a millstone for sellers.

    Now, with New York’s economy seemingly recovering, condominium boards are growing more aggressive in cracking down on delinquent owners, according to brokers, lawyers and board members.

    Some are publicly shaming deadbeats by posting their names on hallway bulletin boards or barring them from facilities like health clubs and concierge services. Others are reflexively filing liens against owners who are more than 60 days in arrears. And boards are writing requirements into their bylaws to provide additional protections.
***
  • [C]ondominiums have begun employing [] nonlitigious tactics to persuade the delinquent owner to pay up. This can include barring the owner — or the owner’s tenant, if the unit is being rented — from using nonessential services in the building like the health club or the pool. Doormen may be required to stop accepting packages and deliveries. Some buildings even resort to public humiliation by posting names in common areas.

    A number of our buildings, especially those with high-level amenities, are now passing house rules that revoke the privileges of owners or their tenants who are in default for more than 60 or 90 days,” said Dan Wurtzel, the president of Cooper Square Realty, which manages more than 500 buildings in New York City.

    One complex, Zeckendorf Towers at 1 Irving Place, recently instituted a rule that prohibits a tenant from paying the unit owner advance rent, so that if the owner becomes delinquent it will be able to collect directly from the tenant.

    Now, in the event the owner doesn’t keep up with the common charges, this gives the board the ability to go directly to the tenant and have them pay us,” said Lynda Deppe, a senior vice president of City Connections Realty and a resident broker at Zeckendorf Towers. “If they had already paid their rent, we wouldn’t have that leverage.”

Suit: Lawyer Letter Demanding Back Rent, Failing To Include Required Disclosure In Connection w/ F'closed Homeowner's Eviction Violates FDCPA

In St. Louis, Missouri, Courthouse News Service reports:
  • Deutsche Bank and a Missouri law firm evict people from their homes illegally, a couple claims in a class action in City Court. Sonja Lawson and Ross Schuman sued Boyd Law Group, of St. Peters, Mo., and Deutsche Bank National Trust. They claim the defendants evict people in violation of the Fair Debt Collection Practices Act.

    Lawson and Schuman say they got a letter from the defendants on March 19, threatening legal action for back rent.(1) They say the letter failed to disclose that it was from a debt collector trying to collect a debt, and that though trustee's deeds claim their home was bought at a foreclosure sale, that was not the case.

    "Thus contrary to the express representation in defendant's form letter, Deutsche Bank National Trust did not purchase the plaintiff's home, but was assigned an illegal credit bid," the complaint states.

    "This representation by defendant is grossly misleading in that it not only conceals the true nature of the foreclosure sale from plaintiff, but also actively covers up the whole process of the credit bid being assigned by representing that Deutsche Bank 'purchased' the property."

(1) According to the lawsuit, the Defendants had earlier obtained a final judgment on the merits in an Unlawful Detainer action, and that said judgment was entitled to res judicata effect. The lawsuit then alleges that, six days after obtaining the final judgment, Defendants sent a letter to the foreclosed homeowners threatening to commence another action for back rent. The suit claims that, because Defendants threatened an action barred under principles of res judicata, they threatened an action they could not legally take. See lawsuit, paragraphs 8-14.