Welcome to The Home Equity Theft Reporter, a blog dedicated to informing the consumer public and the legal profession about Home Equity Theft issues. This blog will consist of information describing the various forms of Home Equity Theft and links to news reports & other informational sources from throughout the country about the victims of Home Equity Theft and what government authorities and others are doing about it.
Friday, April 14, 2017
Judge: Colorado's Now-Defunct Foreclosure King Did Nothing Wrong When Allegedly Pocketing Million$ By Padding Bills, Saying Scheme Reflected An Entrepreneurial Spirit That Capitalized On A Process That Didn't Prohibit It
In Denver, Colorado, The Denver Post reports:
Colorado’s largest foreclosure law firm has landed a major victory in its five-year legal battle against state investigators who tried to prove attorney Larry Castle and his law-partner wife, Caren, headed a money-hungry outfit that for years preyed on a foreclosure system gone wild.
In a 92-page opinion issued Tuesday [April 4], Denver District Judge Morris Hoffman ruled mostly in favor of the Castles, their now-closed firm, The Castle Law Group, and other foreclosure-related companies with whom they did business. Hoffman ruled that the Castles and other defendants did not, as the state claimed, conspire to pad billings and reap millions in illegitimate profits on the backs of the banks they represented, the affected homeowners and real estate investors who later bought the houses at auction.
Hoffman did determine, however, that the Castles failed to tell federal mortgage insurers Fannie Mae and Freddie Mac — two of their biggest clients — about their indirect financial interest in a summons-posting company and for that must pay a civil penalty of $119,500.
The state had sought $16 million to $26 million from the Castles and other defendants in the case. The trial lasted three weeks.
In essence, Hoffman determined the state tried to prove a conspiracy where one did not exist, and that the fees charged by Castle and the other companies with which they did business were merely an entrepreneurial spirit that capitalized on a foreclosure process that didn’t prohibit it. Although the Castles had an obligation to report their profit-sharing to federal mortgage authorities, the larger costs were what the market would actually allow.
“We received the decision yesterday. We are looking it over and evaluating our options,” said Annie Skinner, communications director for Attorney General Cynthia Coffman.
Castle’s lead defense attorney, Larry Pozner, did not immediately respond to a request for comment.
The civil penalty dwarfs a $10 million settlement state prosecutors made in July 2014 with Castle’s biggest competitor, Aronowitz & Mecklenburg, who they sued at the same time for much of the same alleged infractions. The Aronowitz firm closed and later agreed to pay about $2.5 million more to affected homeowners who sued in a separate class-action case.
It also runs against several other settlements the AG’s office made with six other foreclosure law firms, though not as pricey, with each accused of padding billings and profiteering from a foreclosure system that logged unprecedented volume from about 2005 to about 2014.
CBC News: Betrayal of Trust (A CBC investigation reveals how lawyers across Canada have misappropriated and mishandled clients money, to the tune of tens of millions of dollars, or sometimes even charging vulnerable people top dollar for shoddy services)
Land Contract/Contract For Deed/Rent-To-Own Rackets
The New York Times: The Housing Trap (In the wake of the housing crisis, low-income families have turned to seller financing to buy homes but these deals can be a money trap)
Beware The Fine Print: Consumers Forced To Sign Away Their Rights To Use Court System
The NY Times: Arbitration Everywhere, Stacking the Deck of Justice(Part 1 in series examining how clauses buried in tens of millions of contracts have deprived Americans of one of their most fundamental constitutional rights: their day in court)
Foreclosure Mills' Abysmal Record In Complying With New NYS Foreclosure Requirements
Justice Deceived: How Large Foreclosure Firms Subvert State Regulations Protecting Homeowners
MFY Legal Services Report On Questionable Practices By Process Servers In Debt Collection Cases
Justice Disserved: A Preliminary Analysis of the Exceptionally
Low Appearance Rate by Defendants in Lawsuits Filed in the Civil Court of the City of New York
Mortgage Mess Redux: Robo-Signers Return (A Reuters investigation finds that many banks are still employing the controversial foreclosure practices that sparked a major outcry last year)
CNN Video: As Foreclosures Mount, Florida Court Turns To 'Rocket Docket'
The Wall Street Journal: A Florida Court's 'Rocket Docket' Blasts Through Foreclosure Cases (2 Questions, 15 Seconds, 45 Days to Get Out; 'What's to Talk About?' Says a Judge)
"Produce The Note" Strategy When Dealing With Missing Promissory Notes In Foreclosure Actions
ABC Video: Fighting Against Foreclosure (Some homeowners have found a new tactic to keep the banks at bay)
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