Thursday, October 18, 2012

Equifax, Outfit That Peddled Lists To Loan Mod Rackets Conatining Consumers' Credit Info Prescreened For Mortgage-Delinquent Homeowners Settle FTC Charges

The Federal Trade Commission recently announced:
  • One of the largest U.S. consumer reporting agencies, Equifax Information Services LLC, has agreed to settle Federal Trade Commission charges that it improperly sold lists of consumers who were late on their mortgage payments.

    In two separate actions, both Equifax and the companies that allegedly bought and resold the information from it will pay a total of nearly $1.6 million to resolve charges that they violated the FTC Act and the Fair Credit Reporting Act (FCRA).

    The two settlements are part of the FTC’s ongoing efforts to protect consumers in financial distress and to protect consumer privacy. Equifax will pay $393,000 to resolve allegations that its inadequate procedures led to the sale of lists of consumer information to firms that should not have received them.

    According to the FTC, Equifax sold more than 17,000 prescreened lists of consumers to companies including Direct Lending Source, Inc., which subsequently resold some lists to third parties, who used their data to pitch loan modification and debt relief services to people in financial distress.

    As part of a separate settlement, Direct Lending Source will pay a $1.2 million civil penalty, and will be barred from using or selling prescreened lists without a permissible purpose, or in connection with solicitations for debt relief or mortgage assistance relief products or services.
For the FTC press release, see FTC Settlements Require Equifax to Forfeit Money Made by Allegedly Improperly Selling Information about Millions of Consumers Who Were Late on Their Mortgages (In Separate Actions, Equifax and Its Customers Will Pay a Total of $1.6 Million).

Financially Weak High End Home Builder To Customers: Cough Up 15% More Than Contract Calls For To Finish Job Or I'm Going Belly-Up!

In Sarasota, Florida, the Sarasota Herald Tribune reports:
  • The owner of Paradise Homes, while acknowledging that his company is on the verge of collapse, is hoping to bring in another builder to complete customers' houses.

    But owner Jim Butler's plan has a catch: Paradise customers who have already purchased homes and in many cases arranged financing will have to pay up to 15 percent more than their contracts call for to finish the jobs.

    On a $600,000 house, a prospective homeowner would have to come up with another $90,000 -- half of it up-front -- before construction would begin again.
***
  • Donald Staley put down more than $200,000 to build a $957,000 home in the Royal Valley section of the planned community's Country Club East. Construction has yet to begin, and he said he will not pay the builder any more.

    "That is like putting bad money on top of bad money," said Staley, a part-time resident who plans to move here from Ohio. "He says there is no money in the bank account. But there should be for my house."

    Rob Nielsen, a commercial contractor from the Washington, D.C., area, was fuming after learning of Paradise's problems. He was looking to build a $700,000 home in the Lake Club, another upscale Lakewood Ranch community, and the builder was pressing him just two weeks ago to make a sizable downpayment.

    He has hired another local company to build his house.

Texas Appeals Court: Trial Judge "Abused Its Discretion" By Ordering Bankster To Pay Homeowner $300K In Sanctions In Ongoing Litigation Centering On Alleged Loan Modification Jerk-Around

In Beaumont, Texas, The Beaumont Enterprise reports:
  • A Fannett woman's courtroom fight with a mortgage company over her foreclosed home could end up before a jury.

    Ninth Court of Appeals justices on Thursday released an opinion saying the 58th District Court "abused its discretion" when Judge Bob Wortham sanctioned Bank of America on June 27, ordering the company to pay Trudie Crutchfield $300,000 in a breach of contract settlement.

    The company could have been fined up to $600,000 more if it did not correct Crutchfield's credit within 90 days and if she received another foreclosure notice, per Wortham's ruling. Court records show Wortham also ordered Bank of America to pay $20,000 to Crutchfield in attorney's fees.

Wednesday, October 17, 2012

Central Florida Pair Pinched For Moving Into Temporarily Unoccupied Home & Claiming Ownership Thru Adverse Possession; Homeowner/Victim An Active Duty Servicemember

In Hillborough County, Florida, ABC Action News reports:
  • Squatters are getting creative in Hillsborough County. It's illegal to move into an unoccupied or abandoned home, but some have looked for a way to justify it.

    Over the weekend, deputies arrested two women, Tami Robinson and Samantha Gavin-Magras, accused of breaking into a Riverview home, changing the locks, and living there.(1)

    When the owners caught wind, investigators say they moved on to another home nearby on the brink of foreclosure. "There's always going to be those that think they can take that risk," said Larry McKinnon, spokesman for the Hillsborough County Sheriff's Office.

    Their squatters' defense: A century old law called adverse possession -- other squatters have tried it before. "It's quite rare. It's a very arcane theory of law and real property," said Charles Gallagher III, a St. Petersburg lawyer. He says the old law was designed more for farmers to claim land, not squatters to claim vacant homes.

    "You can't go ahead and trespass on somebody's property, take up residence there, pay the taxes, fill the forms out, and expect to have 7 years of uninterrupted residence there," he said.

    Seven years is how long it takes someone to take ownership of a piece of property if they filed out the paperwork and paid taxes the entire time.

    Last month, ABC Action News got a tour of a home where a squatter tried the same trick. The sheriff's office describes it as their way to put legitimacy in squatting, but it doesn't work. "No one should be able to leave their home and come back and for whatever reason find somebody living in it," McKinnon said.

    While the problem has tapered off some, the sheriff's office says it still exists, and they rely on the public's help. Anyone who sees someone move into an abandoned or unoccupied home should call police.
Source: Squatters turn to century-old law to try takeover of unoccupied home (Lawyer: Adverse Possession law meant for farmers).

For the Hillsborough County Sheriff's Office press release, see Women Try To Assume Possession Of Vacant Homes.

(1) According to the Hillsborough County Sheriff's Office press release, the pair were pinched for:
  • Invasion by False Impersonation (2 Counts),
  • Organized Fraud (2 Counts),
  • Burglary of an Unoccupied Dwelling (2 Counts),
  • Grand Theft (2 Counts).
The property owner/victim is an active member of the United States Air Force and currently on active duty, the press release states.

Lack Of Funds Forces Homeowner To Live With Squatter Who Moved Into Her Temporarily Vacated Home, Made Repairs, Filed Construction Lien On Premises & Now Refuses To Leave

In Detroit, Michigan, WJBK-TV Channel 2 reports:
  • Heidi Peterson always dreamed of living in a historical home. In May of 2010, she bought one in Detroit's Boston-Edison District for $23,000. After being away for a year, she said she returned to her house last week and found a woman living there. Peterson learned from neighbors she had been living there for a few months.

    Peterson claims the squatter changed the locks, reworked the plumbing, replaced her appliances, put a lien on the house and even changed the curtains, and now this squatter won't leave. So now they are forced to sleep one room away from each other, Peterson with her one-year-old daughter.

    The alleged squatter's name is documented all over the house as Missionary-Tracey Elaine Blair, a write-in candidate for president. We asked Peterson whether she feels safe. "I don't know what the capabilities are. We're afraid of her mindset of entitlement."

    A squatter doesn't have a legal right to the property, but under the law the homeowner cannot remove a squatter by force. In most cases, the homeowner has to file a civil action in court, prove it's their property and evict the squatter. That is what Peterson is trying to do. "She thinks that this is a program in Detroit to take people's homes and fix them up and then she gets to keep them," Peterson said.

    Since Peterson spent all of her money on the house, she said she can't afford to go anywhere else, and until she can legally kick the woman out, they are forced to live under the same roof.

    "I thought if the house is not safe, how can I come here with my child? There's an issue with that. But should I lose my house to a squatter because I don't have rights to my property or should I fight to get it back," said Peterson.

    As our story was going to air, we had a chance to talk to the alleged squatter. She denied that she was squatting and said she has a lease.

    "I have a construction lien for the repairs that I put into the house. Someone had (broken) into the house on July the Fourth and they stripped the radiators and I made a report," she added.

    "In February 2011, we had to vacate because the boiler was damaged," she continued. "I took all my books and my writings, but my (furniture was) still left in (there)."

    We also asked her whether she thinks there is a program where anybody can go into Detroit, take over an abandoned house and live there. "I'm an advocate for affordable housing. That's a part of my campaign," she said. "I've believed that since the first time I met her when I was running for state Senate (in) 2010 and she was also running for a political office, that was a part of my belief. I signed an oath pledging that I would fight for affordable homes."

    We're told Peterson leased the house to tenants in 2010, including this alleged squatter, but had to evict everyone when it was found not fit to live in.

    We're also told the alleged squatter filed papers with the city claiming the property was abandoned.

Criminal Slander Of Title Among Charges Facing Crackpot Who Found Vacant Lakefront Pool Home In Foreclosure, Filed Adverse Possession Affidavit To Claim Ownership & Moved In

In Meanasha, Wisconsin, the Appleton Post-Crescent reports:
  • A Fox Cities woman is facing criminal charges after she and her adult son moved without permission into a vacant lakefront home in Menasha.

    Marsha L. Anthony, 45, is charged with criminal slander of title as a party to a crime(1) and misdemeanor charges of criminal trespass and criminal damage to property.

    According to the criminal complaint, Menasha police were called to the residence at 822 Emily St. on Aug. 12 for a report of open windows and music at the residence on Little Lake Butte des Morts where no one was supposed to be living. When an officer arrived, he found the electricity and water had been turned on and a lock bolt used to secure a doorknob was lying on the floor.

    When Anthony arrived at the residence, she questioned the authority of officers to be there and showed them a notarized affidavit of adverse possession, which she claimed gave her legal rights to the property’s title. Anthony’s 24-year-old son also was living at the residence. The son has not been charged with a crime.

    During the course of a month-long investigation, police learned that Anthony’s 24-year-old son worked as a subcontractor for a Minnesota-based inspection firm and was given the keys to the residence to inspect it as part of a foreclosure action by Wells Fargo Bank.

    The chief executive officer of the company confirmed the son had been given keys to the residence to conduct an inspection and had not returned the keys. The company sent a second inspector to the property, who reported he was confronted by a man matching Schroeder’s description who threatened “to release the dogs on him,” according to the complaint.

    Police had asked Anthony and her son to voluntarily vacate the property several times during the investigation, but they refused. The son voluntarily went to speak to police on Sept. 13 after he and his mother got into an argument. He told officers he no longer wanted to live at the residence. He said his mother was with him the day he went to inspect the residence.

    She called it her “dream home” and said she always wanted a home on the lake with a pool, the complaint states. He told police he moved into the home on Aug. 9, one or two days after his mother gained access to the property by opening an unlocked patio door. He said he and his mother both had poor credit and had lost their previous place.

    Anthony is due back in Winnebago County Court on Oct. 18. If convicted, she faces 11 years, six months imprisonment and $30,000 in fines. Her son has not been charged with a crime.
Source: Woman, 45, faces charges for occupying Menasha foreclosure (Son given keys to inspect residence).

(1) Section 943.60 of the Wisconsin Statutes provides in part:
  • 943.60  Criminal slander of title.

    (1) Any person who submits for filing, entering or recording any lien, claim of lien, lis pendens, writ of attachment, financing statement or any other instrument relating to a security interest in or title to real or personal property, and who knows or should have known that the contents or any part of the contents of the instrument are false, a sham or frivolous, is guilty of a Class H felony.

Tuesday, October 16, 2012

Some Widows Now Face The Boot From Homes After Being 'Left Off The Deed' When Hubbys Obtained Reverse Mortgage Loans

The New York Times reports:
  • The very loans that are supposed to help seniors stay in their homes are in many cases pushing them out.

    Reverse mortgages, which allow homeowners 62 and older to borrow money against the value of their homes and not pay it back until they move out or die, have long been fraught with problems. But federal and state regulators are documenting new instances of abuse as smaller mortgage brokers, including former subprime lenders, flood the market after the recent exit of big banks and as defaults on the loans hit record rates.

    Some lenders are aggressively pitching loans to seniors who cannot afford the fees associated with them, not to mention the property taxes and maintenance. Others are wooing seniors with promises that the loans are free money that can be used to finance long-coveted cruises, without clearly explaining the risks. Some widows are facing eviction after they say they were pressured to keep their name off the deed without being told that they could be left facing foreclosure after their husbands died.
***
  • Joan Serioux-Forde, 72, thought that she couldn’t feel more devastated after her husband, Christopher, died last year. Then, roughly a month after the funeral, she received a letter from Generation Mortgage, a reverse mortgage lender, informing her that unless she paid $293,000, she would lose her home in San Bernardino, Calif. Ms. Forde said she was never informed that if she wasn’t on the reverse mortgage deed, she would have virtually no right to stay in her home unless she bought it outright. “It’s a nightmare,” she said. Generation Mortgage declined to comment.
***
  • Some solicitations reviewed by the Consumer Financial Protection Bureau present reverse mortgages as “free money” or mistakenly tell seniors that they could never lose their home. [...] Officials at the bureau, which issued a report on the industry in June, said they heard from a number of seniors who claimed that lenders encouraged them to make their older spouses the sole borrower on the loan. The brokers earn more money when they make larger loans with the older spouse as the only borrower.

    Some surviving spouses complained that brokers told them they could be added later, but they were not. The bureau says those seniors are at greater risk of losing their homes. The complaints, according to elder-care advocates and federal officials, have been rising during the past year, although there are no exact numbers.

    Linda McMahon, a 65-year-old widow, watched helplessly as the locks were changed on her home in St. Croix Falls, Wis., last month. She said that in 2005, when her husband was 82 and she was 58, a mortgage broker from Wells Fargo promised her that she could add her name to the mortgage once she turned 62. That never happened because that year, in 2009, she didn’t have time to deal with it as her husband’s health quickly deteriorated and he died from a heart condition, she said. Soon, she was unable to pay any of the property taxes and insurance. “I am devastated,” said Ms. McMahon, who is retired, living on Social Security income and now renting an apartment.

    A spokeswoman for the bank declined to comment. Reverse mortgages also have troublesome incentive structures that might encourage brokers to steer seniors toward lump-sum loans, which carry a fixed interest rate, rather than a line of credit with a variable interest rate, the bureau found. In a lump sum arrangement, the interest charges are added each month, and over time the total debt owed can far surpass the original loan.

    Brokers earn higher fees on these loans and even more money when they sell the loans into the secondary market, where they can get rates nearly double those for variable loans, according to rate sheets obtained by the consumer bureau.
***
  • Ms. Forde, who lives in fear of losing her San Bernardino home, said she could not afford to save her house by paying the full $293,000 debt. Now, she said, she spends much of her day standing guard by the window. Her home is already in foreclosure proceedings. With a wavering voice, she said: “I have nowhere to go.”

Scammer Pinched For Running Loan Modification Racket Pleads No Contest To 12 Felony Grand Theft Charges, Three Felony Foreclosure Consultant Violations

In Santa Barbara, California, KEYT-TV Channel 3 reports:
  • The Santa Barbara County District Attorney's office announced [last week] that Jessica Lynn Orca has been convicted of 15 felony charges related to real estate fraud. The judge in the case indicated that he will sentence Orca to 7 years in prison.

    Orca violated state law by collecting fees in advance from clients who wanted loan modifications. Orca would require them to pay with a money order or cashier's check and told them the money would go directly toward house payments and foreclosure services. However, investigators for the District Attorney's office discovered that Orca embezzled the money instead for her personal use.

    Orca pleaded no contest to 12 felony counts of Grand Theft, 3 felony counts of Engaging in Prohibited Practices of a Foreclosure Consultant and 2 misdemeanor counts of Unlawfully Collecting Advance Fees.

    Although Orca will be sentenced to 7 years in prison, she will likely only serve two years in county jail and the remaining five years under supervised release because of California's new Public Safety Realignment Law.
Source: Woman Convicted of Real Estate Fraud.

For the Santa Barbara District Attorney press release, see People v. Jessica Lynn Orca: Real Estate Fraud Case.

Foreclosure Rescue Racket Requiring Homeowners To Sign Over Deeds Into Trust Ends In Guilty Pleas For Pair

From the Office of the Santa Barbara County, California District Attorney:
  • Santa Barbara County District Attorney Joyce E. Dudley announced the plea [] of Franklin David Marquez and Sisy Aragon. Franklin David Marquez pled to one felony count of violating Civil Code section 2945.4, commonly known as Loan Modification Fraud/Foreclosure Assistance Fraud.

    Sisy Aragon pled to one misdemeanor count of Penal Code section 32, Accessory After The Fact. Aragon was sentenced to three years of probation and ordered to make restitution in the sum of $27,500. Marquez will be sentenced on November 29, 2012.

    The foreclosure scheme associated with these subjects involves contacting homeowners in distress and offering to save their homes from foreclosure. To do so they require Quit Claim Deeds and Power of Attorney documents.

    They tell the homeowner that for a fee, usually in the thousands of dollars, their homes will be put into a trust. They tell the victim they no longer need to make house payments but instead make payments directly to the trust or company managing the trust. The victims are told that attorneys are aggressively working with the banks to get their homes back. These companies then file documents that potentially cloud title and slow down the foreclosure process and/or file bankruptcies to slow down the process.(1)

    While the foreclosure process is stalled, the victims continue to make payments to these companies and are assured that their homes are actually being rescued. Eventually the lenders successfully foreclose on the property but not before the victims/homeowners have paid thousands of dollars to the fraudulent companies.
For the Santa Barbara District Attorney press release, see People v. Franklin Marquez and Sisy Aragon: Loan Modification/Foreclosure.

(1) For what sounds like a similar racket that may be going on in Florida (but currently being prosecuted by the state attorney general only as a civil - not criminal - matter), see:
  1. Homeowners Lament Handing Over Their Deeds & Cash To Now-Shut Down Outfits That Peddled Programs Purporting To Eliminate Mortgages By Filing 'Quiet Title' Lawsuits
  2. Florida AG Files Civil Suits Tagging So-Called Land Trusts Peddling Schemes Purportedly Designed To Make Underwater Mortgages Disappear,
  3. Mortgage Cancellation Rackets That File Suits To Obtain Default Judgments To Wipe Out Banksters' Liens Gain Steam In Florida,
  4. Title Insurers Red-Flag Homes w/ Quiet Title Suits In Ownership History; Add'l Scrutiny Required As One R/E Operator Peddles Mortgage Elimination Plan.

    Monday, October 15, 2012

    BofA's "Independent" Foreclosure Review Based Largely On Work It Does Itself? Crucial Judgment As To Compensation Entitlement "Only A Matter Of Double Checking" Bankster's Work: Report

    Investigative reporter Paul Kiel writes in ProPublica:
    • Late last year, the country's bank regulators launched a massive program to evaluate millions of foreclosure cases and compensate homeowners who fell victim to the banks' flawed or illegal practices. Regulators dubbed it the "Independent Foreclosure Review" to emphasize that the banks would not be making key decisions about loans they had made or serviced.

      But a raft of evidence — internal Bank of America memos and emails obtained by ProPublica, interviews with two bank staff members who have worked on the review, and little-noticed documents released late last year by a federal banking regulator — throw the independence of the review into serious doubt. Together, they indicate that Bank of America — the financial giant with the largest number of homeowners eligible for the program — is performing much of the work itself.

      The ultimate decision as to whether and how much a homeowner will be compensated is not made by Bank of America, the evidence shows, but is based largely on work that the bank itself performs. One current employee called that crucial judgment "only a matter of double checking" the bank's work.

      Moreover, the bank gets a chance to challenge that key decision before it becomes final — an opportunity not given to homeowners.

    Non-Profit Attorney Group Tags Network Of Suspected Loan Modification Rackets In Civil Suits Saying Homeowners Were Illegally Clipped For Upfont Fees & Failed To Get Positive Results

    The Lawyers' Committee for Civil Rights Under Law recently announced:
    • The Lawyers' Committee for Civil Rights Under Law (Lawyers' Committee) has filed a lawsuit in Riverside County, California against a network of for-profit loan modification companies on behalf of 16 homeowners from California and five other states.

      The suit alleges that defendants defrauded vulnerable homeowners out of tens of thousands of dollars by falsely promising to obtain—for substantial upfront and monthly membership fees—much-needed mortgage modifications on the homeowners’ behalf, but consistently failing to deliver results. Plaintiffs also sought and obtained a temporary restraining order against the defendants enjoining their illegal operations. Attorneys in the San Diego office of Latham & Watkins LLP are providing pro bono counsel on the case.

      In exchange for sizable advance fees of up to $3,700 collected in violation of California law and also, in addition, monthly membership fees required from a number of homeowners, defendants promised to work directly with plaintiffs’ lenders to renegotiate their home loans and to secure lower monthly payments and interest rates, and, in some instances, avoid impending foreclosure.
    ***
    • The complaint alleges that the loan modification scam in this case is operated by multiple corporate and individual defendants, managed by principals Michael Wayman and Don Brokaw. The corporate defendants named are Certified Financial Protection Group, LLC, Financial Hope for America, Inc., Safehouse 911, LLC, d/b/a Safehouse Professional Mortgage Restructuring 911, and U.S. Financial Advantage, all of which are California companies.
    ***
    • Cox v. Certified Financial Protection Group is the Lawyers’ Committee’s ninth loan modification scam lawsuit and second in California. As part of the Lawyers’ Committee’s work with the Loan Modification Scam Prevention Network (LMSPN), this litigation effort has sought to put an end to the fraudulent and deceptive behavior of so-called loan modification “specialists” in California, Florida, Georgia and New York.

      LMSPN is a broad coalition that also includes representatives from key governmental agencies, such as the Federal Trade Commission, the U.S. Department of Housing and Urban Development (HUD), the U.S. Department of Justice, the U.S. Department of the Treasury, the Federal Bureau of Investigation, and the offices of numerous state Attorneys General.

    Feds' Civil Suit: Outfit Acquired 17,000 Lists Conatining Consumers' Credit Info Prescreened For Mortgage-Delinquent Homeowners, Then Peddled Lists To Loan Modification Operators

    In San Diego, California, Courthouse News Service reports:
    • Two people and their three companies paid Equifax for credit reports on millions of delinquent consumers, then sold the lists to bad actors in the "debt relief" business, the United States says in Federal Court.

      The United States sued Robert M. Bailey Jr., Linda Giordano, and Direct Lending Source, Bailey & Associates Advertising, and Virtual Lending Source.
    ***
    • The defendants "purchased over 17,000 prescreened lists containing the consumer report information of millions of consumers from Equifax," according to the complaint. "The lists included, among other things, consumers' credit scores and whether they were 30, 60, or 90 days late on their mortgage payments.

      "Defendants sold these prescreened lists to third parties. For example, defendants sold over 2,400 lists to entities that target consumers in financial distress for loan modification, debt relief and foreclosure relief services. Some of the lists were sold to entities with names such as: 'Save Me From Foreclosure,' 'SOS Modification,' 'Stop Your Lender,' 'Virginia Foreclosure Preventing,' 'Making Homes Affordable, 'Fight Your Credit Co.,' and 'Debt Regret.'"

      Equifax is not a party to the complaint.

      People may not obtain consumer reports without a "permissible purpose," under the Fair Credit Reporting Act.

    Sunday, October 14, 2012

    S. Georgia Feds Pinch Foreclosure Rescue Operator; Found In Arizona, Suspect Faces Charges Of Screwing Over Distressed Homeowners Out Of Their Equity, Investors

    In Augusta, Georgia, the Augusta Chronicle reports:
    • A former Augusta businesswoman has been indicted on federal charges of mail fraud and money laundering in connection with a “foreclosure rescue” business she ran.

      Regina M. Preetorius is scheduled to make her initial trip to U.S. District Court in Augusta next week. She faces 10 counts of mail fraud and three counts of money laundering. The indictment accuses Preetorius of cheating investors out of more than $1.7 million and defrauding homeowners trying to stave off foreclosures.

      The Augusta Chronicle first wrote about Preetorius and her company, SDA & Associates, in August 2008. Her foreclosure rescue business left a wake that included more than 40 foreclosure filings and about a dozen bankruptcies, including her own.

      According to the federal indictment, Preetorius solicited people to invest in SDA, saying the money would be used to buy houses from distressed homeowners, then the houses would be sold at a profit that would guarantee investors a minimum return of 12 percent.

      According to the indictment, Preetorius “misapplied the investors’ money and converted those funds to her own use” and “defrauded a number of distressed homeowners by using their homes without their authorization as collateral for investors’ loans.” The indictment says Preetorius and others ran the scheme from 2004 to 2009.

      People in danger of losing their homes were sought out and convinced that SDA could save them from foreclosure because its staff would work out a payment plan with the mortgage holders and sell the homes for them if they signed aspecial power of attorney,” the indictment said. Preetorius then enticed investors to loan SDA money to purchase and renovate those homes, the indictment said.

      Investors were lured into a false sense of security because they were promised their money would be protected by legally recorded deeds. According to the indictment, they were also promised that the houses had sufficient equity to cover their investments and that each property’s value was assured by proper real estate appraisals. In reality, according to the indictment, there was neither.

      What investors didn’t learn until it was too late was that each home already had a mortgage from a financial institution that stood first in line for any value of the property, leaving their deeds worthless.

      Preetorius previously said she did nothing wrong and was trying to help homeowners. At one of her bankruptcy court hearings, she told investors that she got caught short by the real estate market crash.

      She and her husband, Charles, who also worked at SDA, filed for bankruptcy in 2008, claiming $2.47 million in liabilities and zero assets. Though there were several legal challenges to the bankruptcy petition by people who believed they were cheated out of money and homes, the couple’s debts were discharged by the court.

      According to court documents, the Preetoriuses moved to Arizona in 2009.

    Long Island Woman: Elderly Mom Fell Victim To Sale Leaseback Equity Stripping Scheme, Leaving Both Facing Homelessness

    In Bohemia, New York, WCBS-TV Channel 2 reports:
    • The new wave of mortgage rescue scam operators targets homeowners who are facing possible foreclosure. “They prey on the fact that people are feeling desperate. The goal of these foreclosure rescue scam artists is to make a quick profit from these vulnerable home owners,” Jessica Wollman with Long Island Housing Services told WCBS 880 Long Island Bureau Chief Mike Xirinachs. The organization is warning people to be on alert for scammers.

      Nicole Garafalo told Xirinachs that her elderly mother was a victim. “Stole the ownership of our home and put a mortgage in his name at an inflated value. He drained the equity out of the property and pocketed the money that he had promised to leave in an escrow account,” she said. “It changed our lives forever. We lost our home and we’re now facing homelessness.”

    Suit: Social Service Volunteer Used Forged Deed To Steal Title To Financially Distressed Owner's Home, Then Flipped It For Big Buck$

    In Lakewood, New Jersey, The Associated Press reports:
    • Not so long ago, he was a successful carpenter and handyman, with a lagoon-front home at the Jersey shore, a small fishing boat that was the lifelong dream of his and his wife, and a solid middle class existence.

      Now he lives in a teepee made of plastic tarpaulins atop a plywood platform, deep in muddy, mosquito-infested woods. He has no money and no belt; a length of thin red rope holds his pants up.

      Hardman is suing a volunteer with a homeless assistance program, and a real estate company, accusing them of cheating him out of his home, selling it without giving him any of the proceeds.

      "I worked my ass off all my life; I never stole a thing," he said. "Everything was stolen from me, right down to my underpants. It all went straight to hell."

      When his wife died of cancer, Hardman started drinking to escape the pain, and soon developed a drinking problem. He fell behind on the payments on his Bayville house, and it went into foreclosure.

      While living in temporary housing in 2010, he met two real estate investors and agreed to sell his house to them for $115,000, even though it was worth far more. Soon afterward, he ended up at Tent City, an encampment of homeless people in the woods of Lakewood that township officials have tried for years to shut down.

      Hardman's troubles worsened at Tent City; it was there that he met Wallace Doman III, a Jackson Township man who volunteered as housing director with a social service agency that works to help the homeless. Doman is also a real estate investor who buys distressed properties, fixes them up and re-sells them.

      At issue is an April 6, 2010, deed that purports to transfer title to Hardman's house to a company Doman owns, Platinum Home Management, for the sale price of $50. Hardman swears he never signed it. But in court papers, Doman insists that's exactly what happened, and that he has witnesses to the transaction.

      Doman returned a call seeking comment but hung up as soon as a reporter identified himself. He did not answer subsequent calls.

      In court papers filed in response to the lawsuit, Doman maintains Hardman signed the house over to him of his own free will. Doman also claims he tried to end the deal and sign the house back to Hardman once he found out that Hardman had already signed a contract to sell the house to the two real estate investors, but that Hardman refused to take it back.

      The house was sold for $215,000 to the two investors, who are not named as defendants in the lawsuit. They later sold it to a third party for $355,400. Hardman and his lawyer, Benjamin Dash, say not a penny of that went to Hardman.

    Suit: Mortgage Holder Fails To Remit Property Tax Escrow Payments To County, Leaving Homeowner Facing Tax Lien Foreclosure

    In Chicago, Illinois, the Post-Tribune reports:
    • An East Chicago woman claims her mortgage company never paid her property taxes, sending her house into a tax sale and furthering her bankruptcy troubles.

      Arlene Nunez’s estate and Paul Chael, a bankruptcy trustee, filed a lawsuit Tuesday in U.S. District Court in Hammond against Juan Martinez and Guadalupe Zuniga-Martinez, the owners of the now-defunct JNRC Capital Investments, an Illinois firm. The company, based in Plainfield, Ill., was involuntarily dissolved in 2010.

      The suit claims that JNRC never paid her property taxes and failed to give her a detailed accounting of what happened to her monthly payments, including money that was supposed to be used to pay the property taxes.

      Nunez bought her home in the 4500 block of Baring Avenue in 2005. The loan was transferred about a year later to JNRC, and, the suit claims, Nunez continued to pay the money meant for taxes. The company never sent those payments to Lake County, however. That led Nunez’s house to be placed on a tax sale list, which in turn caused Nunez to file for bankruptcy, according to the suit.

      Nunez had filed for bankruptcy in the past, according to court records. She filed again in 2007, and JNRC claimed Nunez owed the company about $2,856.

      Nunez’s lawsuit says she asked the company for a breakdown of her payment history, the claimed arrears and foreclosure fees, but the company never sent the information.

      Nunez’s attorney Adam Sedia said federal law dictates that banks and financing companies have to share information with their customers about their mortgages. “It’s all about openness,” Sedia said. “The financing entity has to let you know what you’ve paid, where it’s gone and how much you owe.” He added that Nunez had been paying her taxes as part of her Chapter 13 bankruptcy case.

      She is asking for treble or punitive damages and attorney fees.

    Saturday, October 13, 2012

    Purchaser Of Recently Foreclosed Home 'Inherits' Unwanted Surprise As Prior Owner's Unpaid Water Bill Leaves Buyer All Wet, Hosed For $1,800

    In Tequesta, Florida, WPTV-TV Channel 5 reports:
    • A telephone call to a local utility provider may have spared a home buyer the responsibility of a nearly $1,800 water bill, housing counselors said.

      Linda Albrecht purchased an HOA foreclosure [...] in Tequesta earlier this year. She discovered she was responsible for the previous owner's water bill when she asked the utility to transfer the account to her. "They say I must pay it," Albrecht said. "They won't turn the water on until I pay that bill."

      According to housing counselors, home buyers are made responsible for outstanding fees and bills -- unless they learn of them before they purchase a home and are able to negotiate with the seller.

      "Without that due diligence, you are stuck in a position where you take title subject to everything of record," said Paul Krasker, founder of the Paul A. Krasker Law Firm. "Anything that can still be of record that wasn't wiped out in the foreclosure is what you're going to take title subject to."

    Federal Law Shields Tenant Who Unwittingly Rented Home In Foreclosure From Unexpected Boot

    In St. Louis, Missouri, KMOV-TV Channel 4 reports:
    • Less than two months after moving her family into a new home, Shirley McCoy received a letter in the mail, telling her the home was in foreclosure. McCoy signed a one year lease and paid her landlord a $700 deposit in August. She says her landlord never told her the home was in danger of going into foreclosure.

      The sale date is set for October 16th and McCoy says she started to panic, assuming she'd have to move and incur all the expenses that come with it. "I don't know... it did something to me. It just stabbed me in the heart," said McCoy.

      But, the law is on McCoy's side. The Protecting Tenants at Foreclosure Act of 2009 gives tenants at least 90 days from the date of the foreclosure sale to move out if the tenant wants to move.

      "The lease survives the foreclosure sale," said Susan Alverson, Managing Attorney for Legal Services of Eastern Missouri.(1) Renters can also choose to stay in the home through the duration of the lease. There may be a few exceptions and there's a chance the new owner (who buys the property in the foreclosure sale) will offer a cash incentive for the tenant to move out before the lease is over.

      Tenants, however, are not required to accept a cash offer. "You still have to honor that lease unless the tenant living there doesn't want to and you all negotiate something different, but the tenant is the person in power in that case," Alverson explained.

      Alverson adds many tenants may not be aware of their rights and receive misinformation in the foreclosure process. "All it means is that the owner is going to lose ownership, but it doesn't mean, at all, that the new owner has a right to just set them out."
    For the story, see Renter gets foreclosure notice: What now?

    (1) Legal Services of Eastern Missouri (LSEM) is a private, non-profit 501(c)(3) organization providing legal assistance to the low-income community in 21 counties of eastern Missouri. LSEM handles only civil cases in the areas of family, housing, consumer, education, immigration, public benefits, income maintenance, and other problems specific to the elderly.

    Cops: Underwater Property Owners Seeking To Rent Out Their Homes To Dodge Foreclosure Good Targets For Marijuana Growers Setting Up Indoor Pot Farms

    In Las Vegas, Nevada, KLAS-TV Channel 8 reports:
    • Metro Police narcotics officers have seized about 7,000 marijuana plants with an estimated street value of more than $20 million in recent raids of marijuana grow houses.

      According to police, detectives carefully track the location of each grow house and look for potential trends in making the bust.

      Police said the largest grow houses so far are in the southwest and northwest parts of the valley. Investigators believe homeowners are in over their heads and are the first to face foreclosure. It is also where large grow houses are now sprouting up.

      "Empty homes, people who are distressed and are trying to rent their homes rather than going under in their mortgage - it's a combination of a lot of different things," Lt. Laz Chavez of Metro narcotics said. "But, we attack the problem with enforcement and with awareness."

      Chavez said criminals saw an opportunity by turning homes into grow operations. "These are sophisticated criminals who are running 100, 200, 500 plant grows inside these homes," he said. "There are homes that are burning up, and they are endangering the lives of everyone around them."

      Metro designed an indoor marijuana map that shows locations of grow operations. Police said marijuana grow houses are extremely dangerous, because criminals bypass the meter when they rig their own wiring to prevent tipping off the power company.

      "They really have no consideration or concern for the community or where they are doing these grows - in residential neighborhoods, nice upscale neighborhoods, gated communities, country clubs - it really doesn't matter," Chavez added.

      Police said growers are ready to protect their lucrative investments. Police officers have recovered more than 100 guns, including assault rifles.

      Faced with budget cuts and doing more with less, investigators are doing their best to locate grows, but they rely on the public to call when something isn't right. Officers said activity, such as people coming and going during the early morning hours, could be an indication of a grow house.

    Pair Busted For Commandeering Foreclosed Home In Upscale Neighborhood & Setting Up Meth Lab

    In Ocoee, Florida, WFTV-TV Channel 9 reports:
    • Foreclosures already have a tough impact on neighborhoods around central Florida, but WFTV's Jeff Deal found out one foreclosure was particularly bad for the Silver Glen neighborhood in Ocoee.

      Investigators found a full meth lab hiding inside and neighbors said they saw investigators in masks pulling all kinds of equipment from the home. The outside of the home is a mess. The front door is ripped off the hinges, and through the window WFTV spotted all kinds of junk inside.

      The Silver Glen community is a well-kept neighborhood with big homes. "It's a good neighborhood and I don't know, (it) just turned bad," said resident Lascelles Mundle. Mundle said things turned bad because of one house that happens to be right next door.

      Monday neighbors reported a burglary in progress at the home they said had been empty for a few weeks. When Ocoee police arrived, they found two men, John and Joseph Stone, inside and they found meth.

      Investigators obtained a warrant and the Orange County Sheriff's clandestine lab response team found chemicals, jars, tubing and pseudoephedrine, which are all used to make meth.

    Health & Safety Hazards, License Expiration Force Foreclosed Transient Motel Shutdown; 26 Long-Term Occupants Temporarily Dodge Boot As Judge Allows Management Chance To Fix Flaws

    In Bremerton, Washington, the Kitsap Sun reports:
    • For the foreseeable future, the Chieftain will be a motel in name only. A Kitsap County Superior Court judge ruled Tuesday that the West Bremerton motel cannot rent rooms to any new guests until it regains a key state license necessary to operate a motel.

      But Judge Leila Mills, following an agreement forged between county prosecutors and the Chieftain's lawyer, will allow long-term residents to remain there as staff works with the state Department of Health to obtain its transient accommodation license, which lapsed in March 2011.

      Twenty-six people, denoted in court documents by their initials and room numbers, will be allowed to stay at the motel. "It seemed like a good compromise and a good disposition pending the department's decision" on the permit, said Ione George, Kitsap County deputy prosecutor.

      Hari Ghadia, a managing partner with the management company that has operated the Chieftain since June, called the agreement a "win-win for everybody." He said his company, Moteri Management, will continue to make improvements to the motel that will bring it back into compliance with the health department.

      "I'm very confident that everything will be done," he said.

      The agreement also states that police "will freely be allowed onto the premises" to ensure that no new guests are registered and rooms, outside of those for the long-term residents, remain closed.

      Kitsap County will drop its case against the Chieftain if the health department issues the license. But Mills' ruling says that if the department issues a "final denial" of the Chieftain's application, the motel will be emptied until the license can be secured.

      The motel on National Avenue rented rooms for $50 a night or $850 a month.

      The Department of Health refused to issue the transient accommodation license after inspections in May found "numerous deficiencies (that) created a hazardous and unsanitary environment for guests," including bedbugs, collapsed ceilings, overflowing trash and fire hazards.

      The property entered foreclosure and was purchased by Westside Community Bank of Pierce County in May for $1.3 million. The bank hired a property management company that has set about cleaning up the motel.

      City officials in August targeted the motel for alleged violations of its chronic nuisance properties ordinance. Police responded there 78 times in the first eight months of the year. The property also lacks a city business license. A hearing has been set in the city's case against the Chieftain on Nov. 26 at the Norm Dicks Government Center.

      While the city independently pursued that action, county prosecutors, acting on behalf of the health department, filed the civil action against the property for lacking the transient accommodation license.
    Source: Judge: Chieftain can't rent rooms, but long-time residents may stay (Long-term residents at motel allowed to remain).

    Unpaid $12K Water Bill May Lead To Boot For Condo Residents As Nearly Half Of Owners In 120-Unit Complex Aren't Paying Maintenance Fees

    In Orlando, Florida, WFTV-TV Channel 9 reports:
    • People who live in an Orlando condo complex could soon be kicked out of their own homes.

      The Orlando Utility Commission is about to shut off water to The Village on Crayrich Circle because the complex isn't paying its bills. And if the water is shut off, no one will be allowed to live there.

      Some residents said this is not their fault. People who have paid their monthly bill to the management feel this notice that their water will be shut off in a week isn't fair since they've paid their portion.

      People who haven't paid their fees said they don't plan to until new management steps in. A water notice has pitted neighbor against neighbor at the Village condos.

      OUC plans to shut the water off to all 120 units in one week because of a $12,000 bill. If it's not paid, and the water is shut off, the condo association said the county may force residents to move out.

      Ann Tucker lives in the Village and works in the management office. She said the reason is twofold. She tells WFTV nearly half of the units are in foreclosure and the banks aren't paying fees. The other reason some just quite paying.

      Phyliss Scott, a former association board member, is one of those people who haven't paid her dues in years. Management said she owes $10,000. She and other homeowners haven't paid because they question where previous funds have gone.

      Several homeowners are fighting a legal battle to have a third party handle the dues and payouts.

      "Another company they run the association and clean us up," said Scott.

      WFTV tried to contact the property manager who is also the board president, but he didn't come to the door and has not returned a phone call.

      Homeowner Kevin Souder, who's paid his bills, is afraid time may be running out. "I'm out because of course I have a mortgage payment here and my tenants out because she won't have anywhere to live," said Souder.

      The homeowners trying to get a third party to take over the dues will be in court Thursday. If a judge grants a third party. the homeowners said they plan to pay their back fees to management. If not, residents said they plan to stay as long as they can without water.

      Renters and homeowners have taken it upon themselves to try to come up with the $12,000 owed to OUC. So far, they have raised $7,000.

    Fines Arising From Failure To Connect House Directly To City Sewer System Leaves 93-Year Old Facing Foreclosure Of Residence She's Called Home For 55 Years

    In Honolulu, Hawaii, The Associated Press reports:
    • A 93-year-old Honolulu woman is facing foreclosure because she refuses to properly connect her home to the city's sewer system.

      The Honolulu Star-Advertiser reported Monday that Sunny Lee owes hundreds of thousands of dollars in fines for the home she has lived in for 55 years.

      Lawyers say it's the first time Honolulu has foreclosed on someone for not hooking up a line directly to the city's sewer grid. Lee had been using a line that ran through a neighbor's house. But the line was discovered when it sprang a leak in 2000.

      The neighbors sued to try to recover repair costs and settled with other residents but not Lee's family. The line was disconnected in 2002 when a judge ruled Lee didn't have rights to the line.

    Friday, October 12, 2012

    77-Year Old Homeowner Struggles To Keep Roof Over Her Head After Being Shoved By Bankster Into Force-Placed Insurance

    In St. Paul, Minnesota, the Star Tribune reports:
    • Compared with her neighbors' well-tended homes in St. Paul's historic Cathedral Hill neighborhood, Jean Keeney's 19th-century property looks a bit forlorn.

      The lot is overgrown, paint is peeling and two ragged posts are all that's left of the front railing. It has been years since Keeney could afford to maintain her home the way she wants. At 77, an age at which the former stockbroker thought she would be comfortably retired, Keeney is toiling away as a substitute teacher, trying to keep her lender from foreclosing on her home.

      "I would rather not be working, but I need the money," she said.

      Like thousands of other Minnesotans, Keeney's financial problems involve force-placed insurance, a little-known form of coverage generating billions of dollars in profits for insurers and banks -- but getting little scrutiny from state regulators.

      Billed as a policy of last resort, force-placed insurance is routinely imposed on homeowners by lenders when property is not covered against tornados, floods and other hazards. The coverage can cost 10 times as much as typical homeowners insurance despite offering less protection.

      Across the country, the high premiums are pushing hundreds of thousands of vulnerable homeowners closer to default as the costs are added to their monthly mortgage.

      When Keeney's homeowners policy lapsed, she was pushed into a forced-placed policy at an annual cost of $4,185, well above the $1,655 she used to pay State Farm. "It's ridiculous," she said.

      Minnesota officials concede they have no idea whether those rates are reasonable. Unlike most states, Minnesota regulators allow insurance companies to set their own rates on force-placed insurance without requiring either state approval or public disclosure. That means regulators don't check whether insurers have padded the bills.

      In an interview, Commerce Commissioner Mike Rothman said he was alarmed by the Star Tribune's findings and pledged to make force-placed insurance "a top priority." The department is reviewing its policies, and has requested current rates and other documents from firms providing force-placed insurance in Minnesota. "We want to make sure we are protecting consumers from inappropriate practices," Rothman said.

      Regulators in other states have also begun scrutinizing the industry after consumer advocates complained about alleged price gouging and questionable ties between insurance companies and lenders.

      Mortgage lenders typically receive a commission from carriers when they push their clients into force-placed coverage. Those commissions and other payments are big business for banks.

      For example, JP Morgan Chase -- one of the nation's biggest mortgage lenders -- disclosed in May that it earned $663 million in the past five years by charging commissions of up to 20 percent on each policy and splitting profits with its insurer.
    ***
    • When asked if the $663 million that JP Morgan earned from force-placed insurance created an "incentive" to keep homeowners in such policies, Segnini said "no," but conceded the point. "I can see how somebody would think that."
    For more, see Forced insurance policies cripple Minnesota homeowners (Lenders slap struggling homeowners with sky-high insurance rates).

    Montana Man Gets Four Years For Duping Elderly Woman Out Of $600K+, Leaving Her Financially Ruined, Rendered Homeless To Foreclosure

    In Billings, Montana, the Billings Gazette reports:
    • As Billings resident Mitchell John Romersa chased his dream of becoming a country singer, he turned the life of one his supporters into a nightmare.

      [Last week], Anne Kero, an elderly Bozeman woman whom Romersa left financially ruined, watched as Chief U.S. District Judge Richard Cebull sentenced Romersa to four years in prison for wire fraud and money-laundering convictions.
    ***
    • In 2009, when Kero, who formerly lived in the Billings area, became homeless from a Romersa-related foreclosure, Romersa was still living in a 3,200-square-foot house on 10 acres, driving nice vehicles and giving Kero “false promises,” Cebull said.
    ***
    • Kero, 74, testified at the hearing that she trusted Romersa, whom she had met through her late husband. “I was his surrogate grandma. He was short of money” as he tried to launch his singing career, she said.

      Kero started lending Romersa money in 2003. By the time Romersa’s scheme imploded in 2008, Kero had given him more than $697,000, including money from refinancing her home, which she lost to foreclosure, and from cashing out annuities.

      Romersa paid back $51,224, leaving $645,776 still owed to Kero, not including interest, said Assistant U.S. Attorney Victoria Francis.
    ***
    • Romersa scammed others as well, Kero said, using the money to live a lifestyle he thought he deserved. Kero said she was too embarrassed to tell anyone what was happening but finally called her brother when she had to leave her house because of the foreclosure. She ultimately contacted law enforcement.

    NYC HOA Sued For Allegedly 'Stealing' Little Old Lady's Parking Spot; Management's Offer To Place 93-Year Old Mom On 10-Year Wait List For New Spot Not Adequate: Son

    In New York City, the New York Post reports:
    • Management at a Lower East Side apartment complex allegedly stole a little old lady’s parking spot — and now the 93-year-old is suing to get it back.

      Virginia Rubino has kept her sea-foam green 1967 Cadillac convertible in parking spot 1 in the Seward Park Housing Corp. garage since 1987, and she’s had the spot since 1981. But when her son, Richard, went to return it in May after getting some work done on the classic vehicle, he discovered another car parked there — and it wasn’t a mistake.

      We were told we don’t have access to the spot anymore,” Richard said.

      The lawyer for the management company told Virginia that “her right to her parking spot was revoked” because the car had “not been operable of driving in over a year” and the registration and insurance policy had expired. She was also told she’d been sent several notices about the problem. Richard said none of the claims were true.

      The son said while his mom’s no longer in good enough health to drive, he uses the car to take her to doctor’s appointments. The suit says having the car parked farther away is a physical hardship for Virginia, and Richard says it’s a financial hardship, too.

      While the spot in the complex’s garage cost about $100 a month, the public garage it’s in now is closer to $600.

      The Manhattan Supreme Court suit says that when Rubino complained, the managing agent offered to add her name to the end of the garage’s waiting list, which had hundreds of people on it. “It’s a 10-year wait,” Richard said.

      The suit seeks the spot’s immediate return, plus unspecified money damages for the lifelong Lower East Side resident. The lawyer for the co-op board, Arthur Weinstein, said that the building acted properly but that if Rubino wants “to bring additional facts to our attention” as to why she needs the spot, “we’ll be happy to listen.”