Wednesday, October 03, 2012

Homeowners Have Standing To Challenge Faulty Mortgage Assignments From One Bankster To Another, But Only Where Defects Render Conveyance Absolutely Void, Not Merely Voidable

A common gimmick banksters often get away with in attempting to thwart homeowners that challenge foreclosures because of defective assignments of mortgage is to assert that the homeowners have no standing to challenge transactions (the assignment of a mortgage from one bankster to another) to which the homeowner wasn't a party.

A recent ruling by a Texas Federal court addressed such a gimmick and, in applying Texas law, said that homeowners do, in fact, have standing to challenge defective assignments to which they were not a party, but only when the defects render the assignments absolutely void, and not merely voidable.

From the ruling:
  • Defendants argue alternatively that plaintiffs have no standing to challenge an assignment of the security interest because they were not parties to the assignment. In support of their argument defendants cite nine recent decisions from federal district courts in this state (six of which were issued by the same magistrate judge), which do indeed affirm that proposition.[9]

    However, none of these decisions cite any Texas case law or statute, and all but one explicitly rely upon a single federal case, Eskridge v. Fed. Home Loan Mortgage Corp, 2011 WL 2163989, at *5 (W.D. Tex. Feb. 24, 2011), which cites no authority at all, state or federal.

    In fact, Texas has long followed the common law rule which permits a debtor to assert against an assignee any ground that renders the assignment void or invalid. See Tri-Cities Const., Inc. v. American Nat. Ins. Co., 523 S.W. 2d 426, 430 (Tex. Civ. App.-Houston [1st Dist. 1975, no writ); Glass v. Carpenter, 330 S.W. 2d 530, 537 (Tex. Civ. App.-San Antonio 1959, writ ref'd n.r.e.). The Glass court endorsed as authoritative the following summary of the rule, which still appears in the current version of Corpus Juris Secundum:

    "A debtor may, generally, assert against an assignee all equities or defenses existing against the assignor prior to notice of the assignment, any matters rendering the assignment absolutely invalid or ineffective, and the lack of plaintiffs title or right to sue; but if the assignment is effective to pass legal title, the debtor cannot interpose defects or objections which merely render the assignment voidable at the election of the assignor or those standing in his or her shoes."

    6A C.J.S. Assignments § 132 (database updated May 2012) (emphasis added). The current edition of American Jurisprudence states the same rule more succinctly, while adding the rationale:

    "The obligor of an assigned claim may defend a suit brought by the assignee on any ground that renders the assignment void or invalid, but may not defend on any ground that renders the assignment voidable only, because the only interest or right that an obligor of a claim has in the assignment is to ensure that he or she will not have to pay the same claim twice."

    6 Am.Jur. 2d Assignments § 119 (database updated May 2012). Examples of "voidable" defenses include the statute of frauds, Harding Co. v. Sendero Res., Inc., 2012 Tex.App. LEXIS 1754, *33 n.28 (Tex. App.-Texarkana 2012); fraud in the inducement, Kansas Life Ins. Co. v. First Bank of Truscott, 78 S.W. 2d 584, 587 (Tex. 1935); lack of capacity as a minor, Dairyland County Mut. Ins. Co. v. Roman, 498 S.W. 2d 154, 158 (Tex. 1973); and mutual mistake, Chase, Inc., v. Bostick, 551 S.W. 2d 116, 119 (Tex. Civ. App.-Texarkana 1977, writ ref'd n.r.e.).

    Plaintiffs here do not assert these or any other "voidable" defenses to Mellon's assignment. Instead, plaintiffs assert that, standing alone, this single assignment from a third party is ineffective to establish a right to foreclose, because it does not show a proper assignment of the original security instrument to the third party.

    Texas courts routinely allow a homeowner to challenge the chain of assignments by which a party claims the right to foreclose. See Martin v. New Century Mortgage Co., 2012 Tex. App. LEXIS 4705 (Tex. App Houston [1st Dist.] 2012); Austin v. Countrywide Home Loans, 261 S.W. 3d 68 (Tex. App.-Houston [1st Dist.] 2008); Leavings v. Mills, 175 S.W. 3d 301 (Tex. App.-Houston [1st Dist.] 2004, no pet.); Shepard v. Boone, 99 S.W.3d 263 (Tex. App.-Eastland 2003); Priesmeyer v. Pacific Southwest Bank, F.S.B., 917 S.W. 2d 937 (Tex. App.-Austin 1996).

    Federal district courts in this state have also entertained chain of title claims by mortgage debtors challenging foreclosure proceedings. See Millet v. JP Morgan Chase, N.A., 2012 WL 1029497, *4 (W.D. Tex. 2012); Norwood v. Chase Home Finance LLC, 2011 WL 197874 (W.D. Tex. 2011). Nor is Texas alone among non-judicial foreclosure states in permitting such suits. U.S. Bank Nat'I Ass'n v. Ibanez, 941 N.E.2d 40, 53 (Mass. 2011).

    Defendants' final (and weakest) argument is that homeowners like plaintiffs "will not be prejudiced" if the chain of assignments from original lender to foreclosing entity were immune to debtor challenge. After all, the argument apparently goes, the Millers owe the money to somebody. In truth, the potential prejudice is both plain and severe — foreclosure by the wrong entity does not discharge the homeowner's debt, and leaves them vulnerable to another action on the same note by the true creditor.

    Banks are neither private attorneys general nor bounty hunters, armed with a roving commission to seek out defaulting homeowners and take away their homes in satisfaction of some other bank's deed of trust. MasterCard has no right to sue for debts rung up on a Visa card, and that remains true even if MasterCard has been assigned the rights of another third party like American Express. Unless and until a complete chain of transactions back to the original lender is shown, MasterCard remains a stranger to the original transaction with no claim against the debtor. And that is a fair description of this case in its present posture.

    In sum, a standing issue is lurking here, but only as to the defendants, not the plaintiffs. The court concludes that under Texas law homeowners have legal standing to challenge the validity or effectiveness of any assignment or chain of assignments under which a party claims the right to foreclose on their property.

    Accordingly, plaintiffs have properly stated claims for declaratory and injunctive relief based on wrongful foreclosure, trespass to try title and quiet title.
For the court ruling, see Miller v. Homecomings Financial, LLC, Civil Action No. 4:11-cv-04416 (S.D. Tx. August 8, 2012).

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

Banksters' New Racket: Forgiving Homeowner Loans That Are No Longer Enforceable; Could Cause Unwarranted Debt-Cancellation Income Tax Issues

The New York Times reports:
  • GREETINGS, unhappy homeowners! Here’s some wonderful news:

    We are canceling the remaining amount you owe Chase!” says a letter that JPMorgan Chase sent recently to thousands of home loan borrowers. “You are approved for a full principal forgiveness of your Home Equity Account,” says another, from Bank of America.

    Jackie Esposito, of Guilford, Conn., got a letter like that. But she wasn’t elated — because she doesn’t owe the money anymore. She and her husband filed for bankruptcy three years ago. The roughly $64,000 they owed Chase has been legally wiped out.

    What’s going on?

    Cast your mind back to February. Five of the nation’s big banks, including Chase and Bank of America, agreed to pay $25 billion to settle state and federal claims over questionable mortgage practices and promised to work harder to help borrowers who were in trouble. To prod the banks, the government said it would give them credits against the amounts they agreed to pay.

    So, to the ire of customers who couldn’t get banks to work with them before, banks are now forgiving debts that no longer exist. “When I got this letter that said they were going to relieve our debt, I just about fell over,” Ms. Esposito said last week. “You can’t forgive a debt that you’re legally unable to collect.”

    Others have received similar letters about phantom debts. A borrower in Florida received word this month that Chase was erasing $190,065.10 of debt that had already been wiped out. Bank of America told a Virginia resident that a $231,767 home equity loan was being forgiven, even though the debt was discharged last May.

    Neil Crane is a lawyer in Hamden, Conn., who represented Ms. Esposito and her husband in their bankruptcy. He says four of his other clients have recently received letters from banks claiming to forgive discharged debt.

    I never thought in my wildest dreams that the banks would do this properly,” Mr. Crane said last week. “But I think it’s really wrong to be foreclosing on mortgages you don’t own and relinquishing debt you don’t own.”

    It’s bad enough that these letters are inaccurate. But even worse are the tax problems that they may create for people like Ms. Esposito. In most cases, the Internal Revenue Service considers debt that is forgiven to be taxable income. One exception occurs in bankruptcy; when a debt is discharged, it is not taxable.

    But the letters sent by Chase and Bank of America clearly warn that the forgiveness will be reported to the I.R.S. If so, these borrowers may have to prove that the banks erred in claiming to have forgiven the debts.

    I ASKED spokesmen for Chase and Bank of America how they could forgive debts that no longer existed. Both gave the same unsatisfying answer.

Nevada Supreme Court: OK To Foreclose When Note, Mortgage Are Split, Provided Ownership Of Both Are Reunified When Process Is Initiated

In Las Vegas, Nevada, the Las Vegas Review-Journal reports:
  • The Nevada Supreme Court has sided with banks by validating a key cog in the foreclosure enforcement machinery that has sparked legal disputes all over the country.

    In a 26-page ruling delivered Thursday, all seven justices agreed that hundreds of thousands of home mortgages in the state involving the Mortgage Electronic Registration System Inc. could be put into foreclosure after technical adjustments.
***
  • In Nevada, attorney Jacob Hafter said, who argued the case for homeowner David Edelstein, "the court has cleared a path to begin foreclosing in a mass effort."
***

  • Hafter had argued that once a loan has different note and deed holders, it is permanently flawed and precludes foreclosure. But the court concluded that returning the deed to the lender that holds the note fixes the defect, which is what happened in Edelstein's case. "Because nothing in Nevada law prohibits MERS' actions, we reject Edelstein's argument," the court wrote.
For more, see Supreme Court gives banks foreclosure win.

For the ruling, see Edelstein v. Bank of New York Mellon, 128 Nev. Adv. Op. 48 (September 27, 2012):
  • "We conclude that when MERS is the named beneficiary and a different entity holds the promissory note, the note and the deed of trust are split, making nonjudicial foreclosure by either improper.

    However, any split is cured when the promissory note and deed of trust are reunified. Because the foreclosing bank in this case became both the holder of the promissory note and the beneficiary of the deed of trust, we conclude that it had standing to proceed through the FMP [Nevada's Foreclosure Mediation Program]
    ."

Tuesday, October 02, 2012

Once-Obscure 'Hyperlocal' Dispute Between City & Ex-Marine Over Now-Destroyed $17K Houseboat Reaches U.S. High Court Threatening To Turn Nation's Entire Maritime Industry Inside Out

In Riviera Beach, Florida, The Palm Beach Post reports:
  • Made of plywood with three sets of French doors, the squat two-story building tied up to a dock at the Riviera Beach Marina didn’t look like your average boat. So, perhaps it is fitting that the battle over Fane Lozman’s $17,000 floating home has spawned a nationwide and potentially far-reaching debate over exactly what constitutes a vessel.

    But no one saw it coming.

    At the beginning, it appeared to be yet another in a long line of petty disagreements between Riviera Beach officials and the former U.S. Marine turned financial trader turned self-styled corruption fighter — a city newcomer who was regularly hauled out of commission meetings for accusing elected officials of all manner of wrongdoing.

    But during the legal battle, both sides inadvertently unleashed uncertainty in a centuries-old area of law that affects everything that floats and anyone who makes their living in the multibillion-dollar maritime industry.

    So, when the U.S. Supreme Court sits Monday to hear Fane Lozman v. The City of Riviera Beach, hundreds of people with millions of dollars at stake will be watching.

    It impacts everything in maritime law,” said Michael McLeod, a Boca Raton lawyer who is chairman of the Admiralty Law Committee of the Florida Bar. “It’s huge in South Florida because we live in the yachting capital of the world, but there’s humongous ramifications for the entire industry.”

    The list of groups that have joined the fight is impressive. There’s the National Marine Bankers Association, the American Gaming Association, the United Brotherhood of Carpenters and Joiners of America, and Floating Home Associations in Seattle, Wash., and Sausalito, Calif.

    Not to be overlooked, the U.S. solicitor general has weighed in, claiming the high court’s decision could have ripple effects for the U.S. Department of Homeland Security, the U.S. Coast Guard and myriad other federal agencies that could be forced to change policies and possibly increase manpower if the definition of vessel is changed.

    Some of the claims are dramatic.

    If Lozman convinces the high court that his floating home is not a vessel, boats no longer could be used as collateral for loans, marine bankers claim in briefs filed with the court. The impact would be catastrophic for their industry and costly for anyone buying a boat. “The recreational boating industry would be crippled,” their attorneys claim.

    If the city wins its argument that if it floats it’s probably a boat, blackjack dealers on casino barges could be turned into federally protected seamen, which would have huge and expensive consequences, counters the gaming association, whose members operate 61 neon-covered barges across the nation.

    Stanford University law Professor Jeffrey Fisher, who will be making his 18th appearance before the high court when he argues Lozman’s case, laughed when asked how what began as a hyperlocal dispute about a floating house at a city marina could attract such widespread interest.

    It’s the “funny reality” that most Supreme Court cases areplucked out of obscurity,” he said. While everyone understands the import of a decision on the Affordable Health Care Act or other such momentous cases as Roe v. Wade, “the bread and butter of the Supreme Court docket” are cases that highlight inconsistencies in what is supposed to be the law of the land. Often, the law of unintended consequences produces landmark decisions.
For more, see U.S. high court decision in ‘hyperlocal’ Riviera Beach case could help rewrite national maritime law.

See also, The Miami Herald: Floating home or vessel? South Florida man’s case going before U.S. Supreme Court (When Riviera Beach seized and later destroyed Fane Lozman’s floating home, no one expected it would create a legal battle that will have profound implications for the nation’s maritime industry).

For the Federal appeals court ruling currently under U.S. Supreme Court review, see City of Riviera Beach v. That Certain Unnamed Gray, Two-Story Vessel Approximately Fifty-Seven Feet In Length, 649 F.3d 1259 (11th Cir. 2011).

Suit: HOA President Gets The Snub For Crappy 'Buy' Offer, Then Goes All Out With Jerk-Around To Submarine Estate's $27.5M NYC Co-Op Sale To Someone Else

In New York City, the New York Post reports:
  • Hell hath no fury like a co-op board president scorned. Upset that the sellers of a sprawling penthouse apartment with eye-popping panoramic views spurned her lowball offer, 1107 Fifth Ave. board president Maureen Klinsky has set out to sabotage their $27.5 million deal with someone else, court papers say.

    Klinsky abruptly decided that the full-floor apartment’s prime selling point — a private wraparound terrace with city and Central Park views — can be used by everyone in the building to get onto a newly proposed roof deck.

    The estate of Monique Uzielli says that’s not fair and that’s not legal — her lease held that the terrace and the roof were private. In papers filed in Manhattan Supreme Court, the estate noted that the board’s moves came after it turned down Klinsky’s $21 million offer on the apartment they had on the market for $29.5 million.

    The timing is no mere coincidence. Rather, Klinsky, aided and abetted by other board members . . . is abusing her authority as the president of the board to prevent the sale from closing so she can purchase the penthouse for an amount substantially below market value, or damage the estate for rejecting her offers,” the suit says.

    The estate wants $5 million in damages — and a court order declaring that the terrace is private.

    While Uzielli’s 4,180-square-foot, 10-room apartment is spectacular, the terrace is the crown jewel — at 4,870 square feet, it’s larger than the interior living space and one of the largest in the city, the suit says.

    While the board approved the sale to the unidentified buyer in April, it then tried to revoke their approval unless both the buyer and the estate signed a deal making the roof intoa common area accessible to all residents.”

    It’s also refused to hand over documents the estate needs to proceed with the closing, the suit says — leaving the sellers worried the deal will fall apart. A hearing on the balcony brouhaha is scheduled for Oct. 4. Klinsky declined to comment through her doorman.

'Freemen,' 'Sovereign Citizens,' 'Moorish Law' & Other Movements (& The Crackpots Who Peddle Them To The Desperate Looking To Dodge Debts, Taxes, Criminal Charges)

Legal blogger Adam Wagner writes in the UK Human Rights Blog:
  • Almost a year ago, I and some other legal bloggers wrote about a phenomenon known as the Freemen on the Land movement. I called the post Freemen of the dangerous nonsense, for that is exactly what the movement is, for those desperate enough to sign up to it.

    Now a Canadian judge has done many judges around the world a huge favour by exploding the movement’s ideas and leaders (or “gurus”) in a carefully referenced and forensic 192-page judgment, which should be read by anyone who has ever taken a passing interest in this issue, and certainly by any judge faced by a litigant attempting the arguments in court.

    The Freemen, alongside other groups with similar creeds, believe that if you change your name and deny the jurisdiction of the courts, you will be able to escape debt collectors, council tax and even criminal charges. As this member of the Occupy London movement, “commonly known as dom” wrote in guardian.co.uk (of all places) “if you don’t consent to be that “person”, you step outside the system“.

    As you may have guessed, this magical technique never works in the courts, but judges are often flummoxed when faced with the arguments, which are odd and in many ways risible. But what has been lacking is an authoritative, systematic judgment explaining, in detail, why that is. Until now, that is.

    Associate Chief Justice J.D. Rooke in the Court of Queen’s Bench of Alberta, Canada has published a ruling which deals exhaustively with the movements’ (there are a number of similar ones of varying craziness and scariness) history and arguments.

    He groups the various movements including the Freemen under the title “Organized Pseudolegal Commercial Argument litigants” (OPCA).

    Clearly, this is Judge who has had enough. After “[o]ver a decade of reported cases” which “have proven that the individual concepts advanced by OPCA litigants are invalid”,

    "What remains is to categorize these schemes and concepts, identify global defects to simplify future response to variations of identified and invalid OPCA themes, and develop court procedures and sanctions for persons who adopt and advance these vexatious litigation strategies."

    His aim? To “uncover, expose, collate, and publish the tactics employed by the OPCA community, as a part of a process to eradicate the growing abuse that these litigants direct towards the justice and legal system we otherwise enjoy in Alberta and across Canada“. Good for him. Somebody needed to do it.
***
  • What the judgment says

    This is a long judgment, on the scale of a reasonably sized book. I will try my best to point out a few interesting bits but I would recommend that you read it. It is well set out and easy to follow. My numbered references are to paragraphs.

    Justice Rooke begins with a fascinating summary of the (surprisingly recent, only beginning in the last 20 years or so) history of movements such as the Freemen [172], Detaxers [169], Sovereign Men/Citizens [176], the Church of the Ecumenical Redemption International [183], and Moorish Law [189].

    One thing which is crucial to understand is that despite its anarchical tone, the movement has leaders or “gurus” who peddle its ideas to people. This is (you might have guessed) usually for a fee. The gurus focus on people who are at crunch points in their lives, such as those facing bankruptcy, foreclosure on their home or difficult litigation involving access to their children.
For more (including a very useful set of questions for the targets of these scams to ask of those gurus peddling the ideas to them), see Freemen on the Land are “parasites” peddling “pseudolegal nonsense”: Canadian judge fights back.

For the ruling, see Meads v. Meads, 2012 ABQB 571 (includes links to case law cited therein; go here for .pdf version - sans links to cited cases).

Monday, October 01, 2012

Theft By Deception/Failure To Make Required Disposition Of Property Received Among Charges Facing Pair Pinched By NJ AG In Alleged Sale Leaseback, Equity Stripping Foreclosure Rescue Peddling Racket

From the Office of the New Jersey Attorney General:
  • Attorney General Jeffrey S. Chiesa announced that a father and son from New Jersey were charged []  in an alleged scheme in which the father promised to rescue homeowners who were facing foreclosure, but instead sold their homes to unwitting investors and conspired with the son to steal $4.5 million from lenders by filing fraudulent mortgage applications in the investors’ names.

    Vito Grippo, 57, of Jackson, and his son, Frederick P. Grippo, 32, of Old Bridge, were each charged by complaint-summons with second-degree offenses of conspiracy and theft by deception. In addition, the father alone was charged with second-degree offenses of money laundering and theft by failure to make required disposition of property received. Each of the second-degree charges carries a sentence of five to 10 years in state prison. The charges are the result of an investigation by the Division of Criminal Justice Financial & Computer Crimes Bureau.

    We allege that Vito Grippo preyed on homeowners who were facing foreclosure, cheating 12 victims out of their homes and stealing $1.3 million in equity they had built up,” said Attorney General Chiesa. “He allegedly solicited investors and bought the homes in their names without their knowledge, so that he and his son could fraudulently obtain $4.5 million in loans and divert the proceeds. The end results were lost homes for former homeowners, ruined credit for investors, and major losses for lenders.”
***
  • Vito Grippo had an office in Holmdel and operated several companies, including Morgan Financial Equity Shares, Inc., Jandevar, LLC, and Vanick Holdings, LLC. He allegedly solicited financially distressed homeowners, saying he could rescue them from foreclosure and fix their credit rating by transferring title to their homes temporarily to a company called Morgan Financial. He allegedly represented that the homeowner would retain an 80 to 90 percent interest in the home, while Morgan Financial and an investor would share the remaining 10 to 20 percent interest. He allegedly told the homeowners to make their monthly mortgage payments to Morgan Financial, and Morgan would pay the lender, reducing their payments over time and giving them back full title to their homes in a year. He later sent letters to the homeowners telling them their mortgage payments had greatly increased.

    Meanwhile, Vito Grippo allegedly solicited investors who were led to believe that they would be investing through Morgan Financial in income generating rental properties. The investors did not know that they were actually buying the homes outright. He allegedly used the identities of the investors to file fraudulent mortgage applications to purchase the homes. His son, Frederick Grippo, who was a loan broker, allegedly conspired with the father to submit fraudulent applications. They allegedly created and submitted false documents for investors, including W-2 forms and bank statements, and asserted that the investors planned to live in the homes as their primary residences. Vito Grippo allegedly had both the original homeowners and the investors sign documents without giving them time to ascertain what they were signing.

    Vito Grippo was charged in connection with 12 homes in Elizabeth, N.J., Brooklyn, N.Y. (3 homes), Jersey City, N.J., Staten Island, N.Y. (2 homes), Rutherford, N.J., Monroe, N.J., Somerville, N.J., Mine Hill, N.J., and Cambria Heights, N.Y. He allegedly submitted fraudulent loan applications to obtain a total of more than $4.5 million to purchase the homes.

    It is alleged that Vito Grippo in turn stole more than $1.3 million in loan proceeds that should have been disbursed to the original homeowners as equity at closing. He allegedly diverted those funds into bank accounts of his companies to launder the money. It is further alleged that he then disbursed the funds to himself and other co-conspirators.

    Frederick Grippo allegedly was involved in seven of the fraudulent loan applications and received checks from Morgan Financial for his participation in the fraud. The defendants allegedly filed false HUD forms to conceal the improper payments. Although Vito Grippo made some mortgage payments on the loans in the names of the investors, he did not continue them and all of the homes fell into foreclosure. The original homeowners lost the properties and the investors’ credit ratings were ruined.

    Another man, John Pereless, 44, of Colts Neck, was involved in this type of mortgage fraud, and he allegedly conspired with Vito Grippo in connection with four of the 12 home sales with which Grippo is charged.

    Pereless pleaded guilty on July 2, 2012, before Superior Court Judge Verna G. Leath in Essex County to an accusation filed by the Division of Criminal Justice charging him with two counts of second-degree theft by deception for filing fraudulent mortgage loan applications and stealing $661,261 in equity due to home sellers in connection with 14 homes, including the four transactions involving Vito Grippo.

    Under his plea agreement, Pereless faces a 10-year prison sentence, which will run concurrently with an eight-year sentence stemming from his conviction at trial in 2010 in another mortgage fraud case prosecuted by the Monmouth County Prosecutor’s Office.
For the New Jersey AG press release, see Father and Son Charged with Conspiring to Defraud Lenders of $4.5 Million and Steal Equity from Struggling Homeowners (Investigation by New Jersey Division of Criminal Justice revealed that the father allegedly promised to rescue homeowners from foreclosure, but instead sold their homes to unwitting investors).

Sacramento Feds, California AG Pinch Suspected Foreclosure Rescue Scammer For Allegedly Peddling Mortgage Debt Reduction Scheme; 1,200+ Victims Fell For Ripoffs: Authorities

In Sacramento, California, The Modesto Bee reports:
  • Authorities on Friday arrested a Bay Area man accused of running a mortgage-relief scam that reached into the Northern San Joaquin Valley and beyond.

    Alan David Tikal, 44, was arrested at his home in Brentwood, in Contra Costa County, on charges that he defrauded more than 1,000 homeowners, U.S. Attorney Benjamin Wagner announced.

    He and state Attorney General Kamala Harris said Tikal persuaded homeowners that he could pay off their mortgage debt and replace it with new debt to his company, KATN Trust, reducing the principal to 25 percent of the original.

    Victims paid thousands of dollars in fees and made regular payments on their new loans, according to an affidavit filed Friday. Tikal's attorney, Fanya Young of San Francisco, said she could not comment because she had not reviewed the charges. Tikal was scheduled to appear in U.S. District Court in Sacramento on Friday afternoon.

    Tikal, who faces numerous counts of mail fraud, could be sentenced to up to 30 years in prison if convicted, Wagner said. Tikal pleaded no contest to fraud charges in a separate Alameda County case last year and was freed to await sentencing.

    The affidavit related to Friday's arrest said it involved "approximately 1,215" victims, 95 percent of them in California. About 185 were in the court's eastern district, which covers inland areas from Bakersfield to the Oregon border. The locations were not listed, but officials at the Stanislaus County district attorney's office estimate there are about 25 victims locally. The Stanislaus County district attorney's office helped state and federal agencies pursue the case, Wagner said. The fraud is said to have occurred from January 2010 to the present.

    As an example of how it worked, the affidavit says Tikal told "Mr. and Mrs. A.L. of Stockton" that he or his investors "could purchase a participant's home and sell it back to them for 25 percent of their current loan amount." The affidavit was written by special agent Joseph Camillucci of the Troubled Asset Relief Program, created in 2008 as part of the federal response to the financial crisis.

    That crisis happened in part because of mortgages on homes that had ballooned in value, then declined, leaving the owners at risk of foreclosure. The north valley was among the hardest-hit areas and still feels the effects in high jobless rates and sluggish home prices.

    Camillucci wrote that victims were "counseled to ignore the demands for payment by the original lenders whose claims are purportedly contrary to law … Tikal and his associates are enriched, and the homeowners fall behind or default on their mortgage loans."

    The state attorney general is joining in the prosecution. "As the foreclosure crisis continues, we are seeing a rise in scams that target struggling homeowners," Harris said in a news release. "These predators rob innocent families of their life savings and their piece of the American dream."

Closing Agent, Attorney Each Cop Guilty Pleas In Real Estate Escrow Ripoffs; Existing Mortgages Left Unpaid For Five Victimized Homeowners, Including One Scammer's Own Elderly Dad

From the Office of the Westchester County, New York District Attorney:
  • Westchester County District Attorney Janet DiFiore announced that Loronda Murphy (DOB 07/13/64) of 4 Heather Lane, Greenwich, Connecticut, pled guilty [] to:

    · one count of Residential Mortgage Fraud in the First Degree, a class “B” Felony,
    · one count of Residential Mortgage Fraud in the Second Degree, a class “C” Felony,

    In addition, Scott Forcino (DOB 04/12/66) of 400 Wilmot Road, New Rochelle, New York pled guilty to: one count of Criminal Facilitation in the Fourth Degree, a class “A” Misdemeanor.

    From April 2009 to June 2009, operating under the home mortgage closing company Settle One Corporation, with an office located at 428 Main Street in Armonk, New York, the defendants, Loronda Murphy and real estate attorney Scott Forcino, engaged in what amounted to a home mortgage fraud "Ponzi" scheme.

    The targeted homeowner/victims each took out a new mortgage on their home through Settle One Corporation with the understanding that real estate attorney Scott Forcino would oversee their closing and that money from their new mortgage would pay off their pre-existing mortgage.

    However, Forcino instead allowed Murphy to fraudulently assume the role of attorney for each closing, and, much to the homeowner's surprise, rather than paying off their pre-existing mortgage, Murphy instead stole portions of their new loan money and left their pre-existing mortgage unpaid.

    Murphy's theft then left the homeowner with the unsustainable burden of having multiple mortgages on their family home at one time.

    Over this time period the pair defrauded five victims including Murphy’s father. In addition to skimming money out of the Settle One Corporation bank account for her own personal benefit, Murphy also attempted to conceal her crimes by using money left in the Settle One bank account to make monthly mortgage payments on various unpaid mortgages and, in some cases, Murphy even stole one homeowner's new mortgage loan money and used it to pay off another homeowner's previously unpaid mortgage.

    In the three months, beginning in April of 2009 and ending in June of 2009, Murphy orchestrated the preparation and submission of a series of false mortgage documents in connection with five mortgage loan closings that resulted in her, through the Settle One bank account, receiving over one million dollars from two home mortgage lenders: Wells Fargo Bank and Live Well Financial.

    In turn, Murphy then stole over fifty thousand dollars in loan money from each of five Westchester County homeowners, including her own elderly father, all for her own personal financial gain and to cover up her continuing criminal activity.

    In September 2010, search warrants were executed leading to an eleven month investigation by the District Attorney’s office with the assistance of the Town of North Castle Police Department.
***
  • Murphy faces a maximum of twenty five years in state prison. As a condition of her plea, Murphy will have to pay $720,288 in restitution. The amount paid before sentencing will determine the length of her prison term.

    Forcino faces a maximum of one year jail. As a condition of his plea, Forcino will resign from the New York State Bar.

    Assistant District Attorney Brian Fitzgerald of the Economic Crimes Bureau – Mortgage Fraud Unit - prosecuted the case.

Texas Trial Judge OKs Foreign Company's Exercise Of Eminent Domain Right To Wrestle Land Away From Lone Star State Farmers To Construct Pipeline

In Beaumont, Texas, The Southeast Texas Record reports:
  • A Beaumont judge [last week] granted a foreign company’s petition to condemn land for the construction of a crude oil pipeline.

    Last June, TransCanada Keystone Pipeline filed the petition for condemnation against Texas Rice Land Partners, James and David Holland and Mike and Walter Latta. TransCanada filed the petition seeking to build a pipeline to carry crude from Alberta to the Gulf Coast.

    On Sept. 24 Judge Tom Rugg, Jefferson County Court at Law No. 1, ruled that the company has the right to sieze land in Jefferson County for the pipeline.

    TransCanada has posted bonds to compensate landowners if a higher court finds that the company ultimately did not have the right to damage the sought after property, court records show.

    During a Sept. 12 hearing, Terry Wood, the attorney for the rice farmers, attempted to link the TransCanda case to a ruling made by the Texas Supreme Court last August denying Denbury Green common carrier status in a pipeline project of its own.

    However, the Denbury pipeline would have carried CO2, not crude oil.

Sunday, September 30, 2012

Banksters' Foreclosure Trash-Out Contractors Claim Another Homeowner/Victim; Break Into Premises When No One Home, Allegedly Took About $10K Of Personal Stuff, Leaving Damage

In Des Moines, Iowa, KCCI-TV Channel 8 reports:
  • A Des Moines woman came home to find her belongings gone. A police report shows that last Thursday a crew that cleans out foreclosed homes arrived at the house on University Avenue and broke the lock off the back door when the homeowner was not home.

    The team entered the home and removed items. The homeowner confronted the supervisor who said there had been a mistake.

    The woman asked if she could get her items back from storage because they were supposed to be held for 30 days, but according to the police report she was told the items had been destroyed.

    On the door of the home Friday was a hand written note that reads "This is private property. No trespassing. If you coming in here, you won't be leaving."

    The police report shows the items had an estimated value of $10,000. There was also damage to a fence, back door and interior doors.(1)
(1) For those homeowners who've been screwed over by wrongful lockouts by foreclosing lenders (and their confederates) and seek some possible guidance on how much their cases might be worth if they seek to sue, see:
For examples of filed lawsuits involving illegal bank break-in, "trash-out" & lockout cases, see:

Indiana AG Tags Five More Out-Of-State Outfits For Alleged Loan Modification Ripoffs, Running Up Total To 140 Civil Lawsuits Throughout State Against Suspected Upfront Fee Rackets

From the South Bend (Indiana) Tribune:
  • You want to modify your home loan to stop foreclosure and a company offers to help for an upfront fee. You pay the fee. And your home winds up in foreclosure while the company that took your money disappears.

    On Wednesday, five out-of-state foreclosure consulting companies were sued by the state of Indiana for allegedly ripping off homeowners in St. Joseph, Elkhart, Allen and LaPorte counties.

    Indiana Attorney General Greg Zoeller filed five lawsuits -- three in St. Joseph Circuit Court and two in Elkhart County -- charging four companies and one law firm with violating the Credit Services Organization Act, the Mortgage Rescue Protection Fraud Act, the Home Loan Practices Act and the Deceptive Consumer Sales Act.

    American Home Relief Foundation of Delaware, CC Brown Law of Utah, Legacy Holding Group of Arizona, and Right Away Doc Preparations Inc. and Property Solutions Center, both of California, "... promised to modify customers' home loans in exchange for an upfront fee but didn't complete the job or provide a refund," Zoeller charged in the suit.
***
  • In South Bend, homeowners can call the Notre Dame Clinical Law Center, said Notre Dame law professor Judy Fox. "We represent you for free," Fox said. Contact the Clinical Law Center at 574-631-7795.

    Since 2006, the attorney general's office has filed 140 lawsuits against foreclosure consultant companies in more than 30 counties across Indiana. Zoeller urged those who may have been victimized by a mortgage relief scam to file a complaint with the Indiana State Attorney General's Office.

Missouri AG Targets Suspected Loan Modification Rackets In Three Unrelated Civil Suits Alleging Collection Of Upfront Fees, Failure To Perform Promised Services, Unauthorized Practice Of Law

From the Office of the Missouri Attorney General:
  • Attorney General Chris Koster [] filed three separate lawsuits against individuals and their companies for misleading Missouri consumers in connection with mortgage-modification services.

    The lawsuits were filed against Colleen Kelly, a Missouri resident operating Heartland Loss Mitigation, LLC,; Eric Mader, a Florida attorney operating Mader Law Group, LLC, a Florida company; and Jim Caplan, a Florida attorney operating CAPLAW, P.A., a Florida company.
***
  • The lawsuits allege that these companies engaged in multiple deceptive or unfair practices, including:

    Requiring and receiving advance payment for loan-modification services;

    Failing to provide the loan-modification services paid for by consumers in those advance fees;

    Failing to refund consumers for loan-modification services not received;

    Persuading consumers to cease mortgage payments to their lenders by promising successful loan modifications;

    Failing to place legally required notifications of homeowners’ rights in contracts between defendants and those homeowners; and

    Engaging in the unauthorized practice of law in Missouri.

Unrelated Caretaker For Now-Deceased Elderly Sisters Hijacks Their $291/Month 3 Bedroom, NYC Rent-Controlled Apartment; Landlord Expresses Objections With Action To Give Her The Boot

In New York City, the New York Post reports:
  • An East Village woman claims she can take over a $291-per-month rent-controlled three-bedroom apartment because she tended to its two elderly inhabitants for four years — even though she’s not related to them.

    Now the landlord is trying to boot her.

    Margaret Hearn, 48, began living at 345 E. 12th St. in 2008, when she became a full-time caretaker for sisters Margaret and Josephine Ruta, whom she met at church. Josephine died in March. Margaret died last year.

    When Hearn returned from Josephine’s funeral, the apartment was padlocked. Her brother cut the lock, and she has moved in. “I was emotional. I had just been to a funeral, and I felt I was losing it, and this happened,” Hearn said, adding the landlord “wants to remodel the apartment and charge more.”

    Similar pads in the building go for $4,400 in rent.

    Hearn — who also keeps a rent-controlled $747-a-month studio in Gramercy Park — says the landlord, 339-347 East 12th Street Investor LLC, filed to evict her in May 2012. Phillip Wartell, a lawyer for the landlord, did not return calls.

Saturday, September 29, 2012

Virginia Homeowner Cops Guilty Plea To Using Phony Social Security Number, Bogus Address When Filing Bankruptcy To Stall Foreclosure

From the Office of the U.S. Attorney (Lynchburg, Virginia):
  • A Burkeville, Virginia woman pleaded guilty [...] in the United States District Court for the Western District of Virginia in Lynchburg to charges related to bankruptcy fraud following an investigation by the Bankruptcy Fraud Task Force for the Western District of Virginia.

    Sally Marie Jones, 55, of Burkeville, Virginia, waived her right to be indicted and pleaded guilty [...] to one count of bankruptcy fraud. At sentencing, the maximum possible penalty faced by Jones is up to five years in prison and/or a fine of up to $250,000.
***
  • According to evidence presented by Assistant United States Attorney Daniel Bubar, Jones filed for bankruptcy in the Eastern District of Virginia twice between June 18, 2008 and June 8, 2009. Both times she filed, the defendant listed a different social security number and address.

    On July 23, 2009, the Bankruptcy Court for the Eastern District of Virginia banned Jones from filing bankruptcy for two years in any United States Bankruptcy Court.

    Despite the two-year ban, Jones filed Chapter 13 bankruptcy in the Lynchburg Division of the Western District of Virginia using a false social security number and the address of 3470 Candlers Mountain Road, Lynchburg. No such address exists.

    According to evidence, when a creditor made a motion to dismiss her bankruptcy claim, Jones admitted that the only reason she filed bankruptcy was to enjoy the protection of the automatic stay to avoid foreclosures.
For the U.S. Attorney press release, see Virginia Woman Pleads Guilty To Bankruptcy Fraud.

Civil Rights Feds File Fair Housing Suit Charging Landlord With Discriminatory Practices, Use Of Slurs, Harassment, Retaliation Targeting Black Tenants

From the U.S. Department of Justice (Washington, D.C.):
  • The Justice Department announced [] that it has filed a Fair Housing Act lawsuit against the owners and manager of approximately two dozen rental homes in Washington, N,C., alleging that the manager, William I. Cochran III, discriminated against African-American tenants.

    The complaint, filed in the U.S. District Court for the Eastern District of North Carolina, names Cochran and three related corporate entities – EKP LLC, WRC LLC and Emlan Properties LLC – that own or owned the various properties managed by Cochran.

    The complaint alleges that Cochran delayed or refused to perform maintenance or repairs at properties rented by African-Americans and refused to credit them for repairs they paid for or made themselves; verbally harassed African-American tenants with racial slurs and epithets, having made statements indicating that he disfavored African-American tenants; and threatened, harassed and retaliated against African-American tenants who resisted his discriminatory housing practices.

Tenants To Split $1M In Insurance Company Cash In Suit Settlement Against Former Landlord Who Operated Unsafe, Pest/Mold-Infested 40-Unit Building

In Rancho Cordova, California, The Modesto Bee reports:
  • The conditions were barely tolerable. Tenants living in the 40-unit Cordova Estates apartments in Rancho Cordova had to contend with cockroaches, bedbug infestations and balconies with failing floors. There were roof leaks, mold, damaged carpets, inadequate heat, dangerous gates on unpermitted laundry rooms and more.

    But in recent weeks, 99 people have become the latest tenants to win a legal settlement after being subjected to deplorable rental conditions. Jessica Rubio Munoz, the lead plaintiff in the lawsuit filed on behalf of Cordova Estates' tenants, said she's pleased to receive her share of the money – close to $8,000.

    But she said the money can't fully compensate for the losses she and her family suffered while battling illnesses, infestations and mold. "My son was constantly in the hospital," she said. "He always had rashes." Her daughter developed a staph infection, she said.

    Munoz said she was about to move out last year when she heard about an attorney who would go to bat for besieged residents. Last fall, she contacted the lawyer, Robb Strom of Los Angeles.

    Strom filed suit in December in Sacramento Superior Court on behalf of the tenants. A settlement came last month: $1 million paid for by three insurance companies with policies on behalf of previous owners. Lawyers for the insurance companies did not return calls from The Bee.
***
  • On Friday, Strom went to the Jalisco Market on Folsom Boulevard, within walking distance of Cordova Estates, and began to distribute settlement checks.

    Adults will each net just under $8,000, Strom said. Children will net about $3,500 each. The rest, about $388,000, will cover court costs and legal fees, Strom said.

    Meanwhile, Strom said he has been contacted by about 20 more former Cordova Estates tenants who have requested that he file a follow-up lawsuit on their behalf. And he's close to filing a suit involving another substandard Rancho Cordova apartment complex.

    In 2010, Strom and another attorney sued owners of another Rancho Cordova complex, Carriage House, and reached a $1 million settlement in that case. The Carriage House has since changed ownership.

Industry-Favoring Florida Law Allows For 'At Will' Evictions For Residents In Assisted Living Facilities

In Broward County, Florida the South Florida Sun Sentinel reports:
  • Assisted living facilities often market themselves as "just like home," cozy places where people will live just like they did in their houses or condos. But many don't realize their new lifestyle has the equivalent of a month-to-month lease.

    Under Florida regulations, assisted living operators need give residents little more than a 45-day written notice in order to evict them. The discharge rules are among the least restrictive in the nation, according to the National Senior Citizens Law Center.

    "Florida is an outlier on the wrong side of the curve. It allows people to be forced out at will," said Eric M. Carlson, the law center's directing attorney and long-term care policy expert.

    Florida advocates' ongoing efforts to change eviction rules failed again this year, with legislators not acting on reforms proposed by an assisted living task force. The group — composed of assisted living administrators, legislators, policy experts and advocates — was convened last year by Gov. Rick Scott to examine care centers' oversight and regulation.

    Florida's Long-term Care Ombudsman Program, which protects the rights of nursing home and assisted living residents, said it will continue to push for discharge policy changes when the group begins meeting again next month.

    An assisted living facility doesn't need to document specific reasons for a discharge and its residents have no right to appeal the decision, unlike in nursing homes. The staff isn't required to help residents find another place to live — even if the evictee is alone, sick or very elderly.

    State Ombudsman Jim Crochet said assisted living discharges should be handled similarly to those in nursing homes. Proposed changes include requiring the ombudsman program be notified when an eviction notice is issued, and that residents be entitled to a state-supervised appeals hearing.

    The ombudsman's office investigated 75 complaints about inappropriate evictions last year, and 72 complaints from residents who said they feared retaliation — including being discharged — for being too demanding or questioning staff decisions.

    One reason that discharge regulations aren't uniform is that nursing homes are governed by federal laws, and assisted living facilities by state regulations. And assisted centers, unlike nursing homes, are not allowed to house people with complicated medical conditions or advanced dementia.

    So discharges often happen when a resident's health deteriorates and the facility can no longer legally or safely care for the person, said Pat Lange, executive director of the Florida Assisted Living Association, an industry group.

    Passing more extensive rules could tie the facilities' hands "if they feel they need to relocate someone in order to meet the resident's needs," Lange said.

    Jean Merget, a family consultant with the Memory Disorder Center at North Broward Medical Center, said most of the discharges she's encountered are sensible and handled properly. "I tell my caregivers not to fight discharge decisions," she said.

    Some geriatric care managers, who coordinate services for elders, say families sometimes hear nothing about discharge policies when they sign their contracts — then suddenly, the resident is asked to leave, said Rona Bartelstone, the senior vice president of care management for SeniorBridge. "The family feels they have been bait-and-switched," said Bartelstone, of Fort Lauderdale.

    Bartelstone said assisted living centers should do a better job telling residents up front about eviction policies and consumers should educate themselves before moving in.

Foreclosed Homeowners Opt Against Pressing Criminal Charges Against Neighbors Who Looted Their Home Under Mistaken Belief It Was Abandoned

In Aurora, Illinois, WBBM-TV Channel 2 reports:
  • There will be no charges filed against the neighbors who picked clean an Aurora home they believed had been abandoned. As WBBM Newsradio’s Pat Cassidy reports, Mike Stapleton and his wife, Susan Kendall, had moved most of their possessions out of their home on Downer Place in Aurora before turning the home over to the bank and moving off to Kansas.

    But when they returned for the rest [o]f their personal belogings, the Aurora Beacon-News reports they discovered that neighbors had cleaned up – and cleaned out – the house.

    The neighbors entered the house without permission, and took about $3,000 worth of property from the house, including Stapleton’s lawnmower, hedge trimmer, and other gardening implements, the Chicago Sun-Times reported last month.

    The neighbors even took personal items of sentimental value such as family photos and heirlooms, the Sun-Times reported.

    Aurora Ald. Rick Lawrence (4th) said he was called by a neighbor about the trash left behind, the Sun-Times reported. The neighbor wanted the house cleaned up.

    Lawrence said he was inside the house shortly after the neighbors had picked over and taken many of the items, the Sun-Times reported.

    But Stapleton tells the newspaper the air conditioning was still on and the utilities were still in the family’s name, and they would never have abandoned the house with everything inside. He told the paper that no one had a right to barge into the house and take anything he or she wanted.

    Still, while police could have filed charges against the neighbors, they did not, because the owners did not want to press charges, the Beacon-News reported.

Homeowner Facing Foreclosure Faces Charges For Pointing Gun At Bank Employee Photographing Home As Part Of Monthly Inspection

In Bloomfield, Indiana, WBIW Radio 1340 AM reports:
  • A March 2013 jury trial date has been set for David Council Jr., of Solsberry,who is accused of pointing a loaded .12 gauge shotgun at a bank employee who was on his property on Washboard Road taking photographs as part of the foreclosure process. Nick Schneider, of the Greene County Daily World reports, Council is charged with pointing a firearm at another person, a Class D felony.
***
  • Council's wife, Barbara, told police that the U.S. Bank employee Richard Haynes had identified himself as a bank employee and gave her a red card that contained telephone numbers to call to verify his assignment. Haynes was there taking photos as part of a monthly inspection, part of the foreclosure action. [...] Hayes told police that Council had pulled a gun on him before during prior inspections and that is why he had brought a witness.

Friday, September 28, 2012

Investor Pleads Guilty To Antitrust Charges In Connection With NJ Bid Rigging Racket At Municipal Tax Lien Auctions

From the U.S. Department of Justice (Washington, D.C.):
  • A Pennsylvania corporation pleaded guilty [] to participating in a conspiracy to rig bids for the sale of tax liens auctioned by municipalities throughout New Jersey, the Department of Justice announced.

    A felony charge was filed today in the U.S. District Court for the District of New Jersey in Newark, against Crusader Servicing Corp., of Jenkintown, Pa. According to the felony charge, from at least as early as 1998 until September 2006, Crusader participated in a conspiracy to rig bids at auctions for the sale of municipal tax liens in New Jersey by agreeing to allocate among certain bidders which liens each would bid on. The department said that Crusader submitted bids in accordance with their agreements and purchased tax liens at collusive and non-competitive interest rates.
***
  • Since the conspiracy permitted the conspirators to purchase tax liens with limited competition, each conspirator was able to obtain liens which earned a higher interest rate. Property owners were therefore made to pay higher interest on their tax debts than they would have paid had their liens been purchased in open and honest competition.

Florida AG Files Civil Suits Tagging So-Called Land Trusts Peddling Schemes Purportedly Designed To Make Underwater Mortgages Disappear

In Fort Lauderdale, Florida, The Palm Beach Post reports:
  • The assets and operations of several South Florida land trust companies, related firms and their owners were frozen by the state attorney general’s office Tuesday in a complaint claiming they made promises to struggling homeowners they can’t fulfill.

    The companies have sold hundreds of homeowners statewide on a complicated legal “scheme” that pledges to make their underwater mortgages disappear.

    About 90 Palm Beach County homeowners have signed their deeds over to one of the land trusts as part of the plan. The homes range from million-dollar waterfront mansions in Boca Raton to $60,000 condominiums west of Florida’s Turnpike.

    A so-called “quiet title” lawsuit is then filed by the trust against the homeowner’s lender to try and cancel the mortgage while also setting the homeowner up with a new lower mortgage or other payment plan to the trust, the complaint says.
***
  • The civil complaint brought under Florida’s Deceptive and Unfair Trade Practices Act charges that the defendants;

    • Wrongfully guaranteed the land trusts will cancel the homeowner’s mortgage through legal proceedings that will leave the borrower with equity in their home.

    • Misrepresented that an assignment of mortgage is not valid unless it is recorded.

    • Charged an advance fee before completing foreclosure-rescue services.

    • Misrepresented that the homeowner’s mortgage is not enforceable against the land trust as a subsequent buyer even though the trusts paid nothing for the deed.
For more, see Florida attorney general files suit against land trusts, calling business unfair and deceptive (Hundreds of Florida homeowners have signed their deeds over to the trusts).

For the Florida Attorney General press release, see Attorney General Bondi’s Office Protects Distressed Homeowners from Mortgage Relief Scam.

For the lawsuit, see State of Florida v. Cherry, et al.

Self-Proclaimed President Of Sovereign Citizen Group Accused Of Running Seminars Teaching How To File Retaliatory Liens Against Gov't Officials, Creating Fictitious Bonds To Pay Federal Taxes

From the Office of the U.S. Attorney (Montgomery, Alabama):
  • A federal grand jury in Montgomery, Ala., charged James Timothy Turner, also known as Tim Turner, with conspiracy to defraud the United States, attempting to pay taxes with fictitious financial instruments, attempting to obstruct and impede the Internal Revenue Service (IRS), failing to file a 2009 federal income tax return, and falsely testifying under oath in a bankruptcy proceeding, the Justice Department, the IRS, and the Federal Bureau of Investigation (FBI) announced [].

    According to the indictment, Turner, the self-proclaimed “President” of the sovereign citizen group “Republic for the united States of America,” conducted seminars at which he taught attendees how to file retaliatory liens against government officials and to defraud the IRS by preparing and submitting fictitious bonds to the United States government in payment of federal taxes.

    Turner is alleged to have attempted to pay his own taxes with a fictitious $300 million bond and to have assisted others in attempting to pay their taxes with fictitious bonds purporting to be worth amounts ranging from $10 million to $100 billion.

Thursday, September 27, 2012

Use Of Eminent Domain To Condemn Underwater Mortgages: A Pro-Homeowner Viewpoint

Brooklyn Law School Professor David Reiss writes in The National Law Journal:
  • Local governments across the country are considering an innovative use of eminent domain. They propose to condemn underwater mortgages (those that exceed the fair-market value of the home) in their communities and restructure them so that home­owners can afford their payments and so that the new mortgage is for less than the fair market value of the property.

    If this proposal is implemented, the local government will pay the owner of mortgages of "underwater" homes the fair market value for the mortgages. The local government will then restructure each mortgage by reducing the principal amount owed to be in line with a mortgage that would be appropriate for the fair market value of the home. This will result in lower monthly payments. It will also result in a sustainable transaction, one in which homeowners can imagine ultimately paying off their mortgages, the American Dream of owning one's home free and clear.

    The financial industry is alarmed by this proposal, claiming that the sky will fall if it is implemented. But this proposal is constitutional, beneficial and administratively feasible. Local governments should give it a try as they seek to stabilize their communities.

    Eminent domain is an ancient prerogative of sovereign governments. Federal and state governments have limited that power by requiring that a government use eminent domain to achieve a public purpose and pay just compensation upon its exercise. See, e.g., Brown v. Legal Foundation of Washington, 538 U.S. 216, 231-32 (2003).

    The U.S. Supreme Court has taken an expansive view of the "public purpose" requirement, holding that use of eminent domain to achieve as broad a purpose as economic development is a legitimate exercise of government power even when it involves taking land from one private party and giving it to another. Kelo v. City of New London, 545 U.S. 469 (2005).
For more, see Eminently reasonable (Using the power of eminent domain to restructure underwater mortgages is constitutional, beneficial and administratively feasible).

Six Fair Housing Groups Tag BofA In Suit Alleging That They Maintain REO's In White Neighborhoods Better Than REOs In Minority Areas

From a recent news release from the National Fair Housing Alliance:
  • [T]he National Fair Housing Alliance (NFHA) and five of its member organizations around the country announced a federal housing discrimination complaint against Bank of America Corporation, Bank of America, N.A., and BAC Home Loan Servicing, LP.

    This complaint, which was filed earlier [this week] with the U.S. Department of Housing and Urban Development, is the result of an undercover investigation that found that Bank of America maintains and markets foreclosed homes in White neighborhoods in a much better manner than in African-American and Latino neighborhoods.
***
  • The investigation evaluated Bank of America REO properties in the eight metropolitan areas of Atlanta, GA; Dallas, TX; Dayton, OH; Grand Rapids, MI; Miami/Fort Lauderdale, FL; Oakland/Richmond/Concord, CA; Phoenix, AZ, and metropolitan Washington, DC.

Bed-Stuy 'Holy' War Breaks Out Between Excommunicated Christian Elder, Church Leaders Over Alleged $630K Home Equity Refinance Ripoff That Victimized Hapless Senior

In Bedford Stuyvesant, Brooklyn, DNAinfo.com New York reports:
  • A retired Brooklyn accountant is suing his former Christian church and its leaders for giving him the holy heave-ho in front of the entire congregation.

    Patson Agard claims in a lawsuit that during a Sunday service on Feb. 12, officials at Good Tidings Gospel Chapel excommunicated him and wrongfully accused him of some serious sinning.

    The lawsuit, filed Sept. 12 in Brooklyn Supreme Court, says church elders Theophilus Cato, Daril Neverson and Lloyd Allwood got up on a dais and told congregants that Agard swindled elderly church-goer Dorothy Jordan out of her home. The elders allegedly claimed he "prepared a deed without [Jordan's] knowledge" and pocketed $630,000 by refinancing her home and forging checks in her name.

    A congregant at the 275-member Bedford-Stuyvesant church since 1960, Agard says he became an elder in 1984 and "has always enjoyed a good reputation for honesty and uprightness of character." But after making their damning statements, the elders "stripped him of his position as elder and his membership in the church, in the presence of the plaintiff, his family and other worshippers in an effort to maximize his humiliation," the lawsuit says.

    Less than a week later, the elders allegedly badmouthed Agard in a letter to a dozen branches of Good Tidings Gospel Chapel with thousands of congregants, telling them he had a "serious breach of conduct," the lawsuit says.

    Agard, a retired MTA accountant from East New York, says Jordan first accused him of being a "crook" on Jan. 28 and then went to the other elders. He denies the allegations in the lawsuit and says his reputation was slandered by Jordan and the other elders who "acted with actual malice."

    There have been no criminal or civil cases filed against Agard, according to court records.

    He is suing Jordan, Cato, Neverson and Allgood for an undisclosed amount of money. Agard's lawyer did not respond to a request for comment. Jordan declined to discuss the lawsuit, but said "I didn't tell no lie on him." "I had him come in here helping me, but he helped himself," she said. "He refused to admit that he was wrong."