Fleeing Buffalo-Area Homebuilder Nabbed In Louisiana; Gets Shipped Back To NY For Prison Time After Ripping Off Customers

From the Office of the New York Attorney General:

• Attorney General Andrew M. Cuomo [...] announced that a corrupt Buffalo-area homebuilder has been sentenced to prison for ripping off his customers for tens of thousands of dollars. Steven Wisniewski, former owner of Elite Custom Homes, was sentenced for grand larceny in Erie County today to 5 to 15 years in prison [...] In separate related charges brought by the Erie County District Attorney, Wisniewski was also sentenced to 2 1/3 to 7 years and 1 1/3 to 4 years to be served consecutively for a total sentence of 8 2/3 to 26 years, the maximum sentence. Wisniewski pleaded guilty to second-degree grand larceny last September. Wisniewski was originally scheduled for a court appearance on January 8, 2009, but he failed to appear. He was subsequently caught in Louisiana in March and brought back to western New York.

• “Wisniewski ripped off hard-working New Yorkers and then tried fleeing from the law,” said Attorney General Cuomo. “This so-called home contractor left one family with little more than a hole in the ground. He also tarnished the hard-earned reputations of all honest workers in the building trades.”

• According to the felony complaint, [...] Wisniewski and [one couple] agreed on a contract for construction of a new 2,300 square-foot home and 600 square-foot garage [...] for $207,500. The family made several substantial payments to Wisniewski for labor and materials, but he never delivered, other than installing a construction driveway in October 2006 and installing concrete walls and footers for the basement in January 2007. Despite repeated requests, Wisniewski never refunded any of the money. The Office of the Attorney General hired a licensed contractor from Buffalo to assess the value of the work performed, which estimated to be $33,572. Of the down payments made to Wisniewski, the family lost $120,000.

For more, see Attorney General Cuomo Announces Buffalo Area Homebuilder Sentenced To Prison For Grand Larceny (Steven Wisniewski, former owner of Elite Custom Homes, caught in Louisiana after fleeing justice in western New York, gets maximum sentence).

For more on homeowners left in the lurch due to actions by builders/contractors, go here, go here, go here, go here, and go here.

Go here for other posts on other home improvement contractors hammered by the NY AG. Cuomo hammers contractors StiffingContractorsTheta

Asphalt Supplier Stiffed By Contractor Slaps Lien On Paid-Up Homeowner

In Gresham, Oregon, KGW-TV Channel 8 reports:

• [A] local paving company has been hurting consumers because it's not paying bills. [Brian] Lee is one of those consumers. He was actually happy with asphalt work done by Gresham Paving at a duplex he owns, a job for which he paid $5,400 up front.

• Several weeks later, Lee started getting a series of lien notices from Knife River, the supplier of the asphalt. Gresham Paving didn't pay its asphalt bill so now Knife River has slapped a lien on Lees’ property.

***

• Officials with Knife River told KGW Gresham Paving owed them thousands of dollars. [...] For his part, Lee understands times are tough, but said it was ridiculous that he could be forced to pay twice.

For more, see Gresham contractor's unpaid bills thrust upon customers.

For more on homeowners left in the lurch due to actions by builders/contractors, go here, go here, go here, go here, and go here. StiffingContractorsTheta

Homeowner Paying Cash For New Home Faces Threat Of Foreclosure As Builder Accused Of Stiffing Contractors

In Phoenix, Arizona, KPHO-TV Channel 5 reports:

• Some Valley homeowners are facing foreclosure even though they've paid their mortgages in full, thanks to a lien placed on the property by a contractor. Retired homeowner Danny Riggs paid cash for his home, but builder Brown Family Communities failed to pay the contractors who installed the windows, plumbing, drywall and air conditioning as well as the construction crew, he said. Contractors hit Riggs with a mechanic's lien, which gives a homeowner six months to settle a debt -- even if the homeowner was not the one who hired the contractor. Otherwise, the home goes into foreclosure.

For more, see Liens Send Homes To Foreclosure.

For more on homeowners left in the lurch due to actions by builders/contractors, go here, go here, go here, go here, and go here. StiffingContractorsTheta

Home Improvement Rip Offs Made Easy

In New Jersey, two articles recently appeared in the Herald News that report on how some savvy, but unscrupulous contractors, often times in concert with a crooked mortgage broker or loan officer, rip off homeowners by selling home improvement jobs in which the contractor steers the financing to a third party lender. The rip off takes place when, after the lender pays the contractor most or all of the price of the job upfront, the contractor proceeds to perform shoddy work on the home. Since the contractor is already paid in full and the homeowner's debt is to the third party lender, they are unable to "hold back" part of the contract price that is a common remedy used when the homeowner owes the money directly to the contractor. According to one of the stories:

• "Contractors can help homeowners find financing to pay for their renovations, and a segment specifically target low-income residents. Too often, experts say, some of these companies steer customers into a second mortgage with above-average interest rates, huge fees and terms homeowners don't understand. These loans typically get sold to another bank without the borrowers' knowledge. If a customer stops paying the contractor because of poor work, the new loan holder will require reimbursement of the full loan amount, setting up a homeowner for possible foreclosure -- the loss of their home. Contractors, however, have a win-win setup. Home repair provides a powerful incentive for someone to take out a loan. Once the financing comes through, the contractor often gets the bulk of payment before work starts. A contractor's fingerprints rarely show up on mortgage documents. And if a client sues, lawyers often find it difficult to prove criminal intent by the company."

For more, see:

• Shoddy repairs raise homeowners' concern, and
• Savvy scammers in win-win situation.

For more on homeowners left in the lurch due to actions by builders/contractors, go here, go here, go here, go here, and go here. StiffingContractorsTheta

Hiring A Contractor For Home Improvement Work? Don't Forget Those Lien Waivers

An excerpt in a recent Q & A column appearing in the Daily Herald, Illinois attorney Tom Resnick gives this reminder of the importance obtaining lien waivers anytime a property owner hires others to make home improvements on a home.

• [A]nyone who performs work or furnishes materials that ultimately improve your property obtains certain rights under the mechanics lien act. The most basic of these rights is that the contractor may record and ultimately foreclose his or her lien. In the event the contractor prevails on his or her lien claim, if the contractor is not paid, he or she can force the sale of the property to satisfy the claim.

• Accordingly, it is imperative that anytime a party performs work at your property, upon final payment, you should insist on receiving a Final Waiver of Lien. This document generally states that the contractor waives any lien rights he or she has on the property. A properly drafted and executed Final Waiver of Lien will generally defeat a lien claim that evolved before the execution of the Final Waiver.(1)

For more, including some options applicable to Illinois homeowners when a contractor slaps a lien on their property, see Don't forget a final, important step in dealing with contractors.

(1) Obtaining lien waivers from any subcontractors and suppliers involved in the job may not be a bad idea, either. Buyers of newly-constructed homes are also well-advised to assure themselves that the appropriate lien waivers have been obtained by the title insurance agent handling the closing. For an example of what could happen if the lien waivers are not obtained and the homebuilder or general contractor goes out of business, see Stiffed Sub Sues Contractor For Unpaid Work At New Development; Slaps Liens, Seeks Foreclosure On Residents' Homes. StiffingContractorsTheta

Missouri AG Brings Civil Suit Against Homebuilder For Allegedly Pocketing Customer Cash & Either Failing To Perform Work Or Doing So In Shoddy Manner

From the Office of the Missouri Attorney General:

• The Franklin County Circuit Court has entered an order against homebuilder Jason Woods that prevents him from doing any home repair or construction in Missouri while a lawsuit brought by the Attorney General's Office is pending.

• The lawsuit,(1) filed in October, alleges that Woods, who does business as Timber Ridge Construction, took money for home repair or construction projects from consumers but then either failed to do the work or did the work in a shoddy manner.

For the Missouri AG press release, see Preliminary injunction prevents homebuilder accused of fraud from doing business while AG lawsuit is pending.

For more on homeowners left in the lurch due to actions by builders/contractors, go here, go here, go here, go here, and go here.

(1) According to the Missouri AG press release, the lawsuit alleges that Woods entered into a contract with one consumer in which Woods was paid a total of $138,951 to construct a new home on property owned by the consumer. However, Woods allegedly failed to complete the construction of the house per the specifications listed in the agreement; and the work completed was also alleged to have been done using poor workmanship. The lawsuit also alleges the defendant entered into a contract with another homeowner couple to construct a storage building on the couple's property. The couple paid Woods a total of $30,000 to construct the structure, but he failed to do so, according to the AG's press release. StiffingContractorsTheta

Illinois AG Brings Civil Suit Alleging Deceptive Practices In Equity Stripping, Home Repair Scam That Duped 36 Chicago Homeowners

In Chicago, Illinois, the Chicago Tribune reports:

• The Illinois attorney general's office filed suit in Cook County Circuit Court on Tuesday against a Chicago man and five home repair and mortgage companies for allegedly defrauding 36 Chicago homeowners, including two who lost homes to foreclosure. The complaint charges Mark Diamond and several companies to which he is linked with coordinating a scheme to strip almost $1.3 million in equity from the homes of elderly and African-American homeowners on the city's West and South Sides.(1) The actions allegedly violated the state's consumer fraud act.

***

• The suit charged that Diamond offered to refinance mortgages at lower interest rates or lower monthly payments and encouraged homeowners to take equity out of their homes for repairs, with the work performed by the affiliated companies. After persuading homeowners to sign the checks over to Diamond, he pocketed a portion of the funds instead of completing the repairs, the state said. The state also accused Diamond of putting homeowners into mortgages they could not afford and, in some cases, forging consumers' signatures on loan documents. As a result, 12 consumers have defaulted on their mortgages and two people have lost their homes to foreclosure, the state said.

Source: Chicago man and five companies are sued in consumer fraud case (Lawsuit says Mark Diamond defrauded elderly and African-American homeowners on the city's West and South Sides).

For the Illinois Attorney General press release, see Madigan Cracks Down On Chicago Mortgage And Home Repair Fraud Scheme ($1.3 Million Swindled from Elderly, African-American Homeowners in Subprime Loan Scam).

(1) According to the story, also named in the suit were three home repair and remodeling companies, United Construction of America Inc., United Residential Services and Real Estate Inc., and Skyway Builders #1 Inc.; and two finance companies, OSI Financial Services Inc. and Harbor Financial Group Ltd. Diamond is president of United Residential Services and OSI Financial Services and "fronts for all the companies," the lawsuit reportedly said. StiffingContractorsTheta

360 Unit Owners Dragged In As Defendants In Mechanics Lien Lawsuit Between Contractor, Condo Developer

In Northern Virginia, Washington Business Journal reports:

• As the sun set over Potomac Yard on Nov. 7, owners at The Eclipse condominium community came home to an unpleasant surprise. Nearly three-quarters of the units had a two-inch-thick stack of legal papers on their doorsteps, notifying the owners that every one of them was being pulled into a lawsuit between their developer and the construction company that built the 465-unit project just south of Reagan National Airport.

• The owners’ predicament is just one more wave in the economic undertow that has swept up banks, developers, builders and homeowners alike. For the owners — some of whom took a risk in buying a unit in a troubled building in the first place — the lawsuit was yet another setback.

For more, see Condo owners caught in crossfire of builder dispute. StiffingContractorsTheta

Illinois AG Tags Unlicensed Contractor With Civil Suit; Firm Accused Of Pocketing Money, Failing To Satisfactorily Perform Work

Frrom the Illinois Attorney General's Office:

• Attorney General Lisa Madigan [...] filed a lawsuit in Ford County Circuit Court alleging that a Gibson City, Ill., contractor solicited roofing contracts without a license and collected up to $18,090 in fees for work that he failed to perform or completed in a substandard manner.(1) Madigan’s suit alleges that Bryan Brandon, B.F. Roofing and Brandon Finishing entered into contracts for roofing and remodeling services, accepted consumers’ down payments and then either failed to perform the work or conducted the work in a substandard manner. The Attorney General’s Consumer Fraud Bureau has received seven complaints about Brandon’s work from consumers in Champaign, Clinton, DeWitt, Ford, McLean and Vermillion Counties.

For more, see Madigan Sues Ford County Roofer For Failure To Fulfill Home Improvement Contracts.

For more on homeowners left in the lurch due to actions by builders/contractors, go here, go here, go here, go here, and go here.

(1) According to the press release, Madigan’s lawsuit alleges that Brandon violated the Illinois Consumer Fraud and Deceptive Business Practices Act and the Illinois Home Repair and Remodeling Act by performing work in a shoddy, unprofessional manner; failing to complete the repair work; and refusing to provide refunds to consumers. The complaint also alleges that Brandon failed to provide homeowners with written contracts and the “Home Repair: Know Your Consumer Rights” pamphlet, as required under Illinois law. StiffingContractorsTheta

NY AG Thwarts Contractor's Attempt To Hide Assets In Effort To Avoid Paying Restitution To Screwed Over Homeowners

From the Office of the New York Attorney General:

• Attorney General Andrew M. Cuomo [...] announced that his office has obtained a court order to obtain a contractor’s property, which will be sold to help pay back consumers he defrauded in his home improvement contract business.

• Brian Tyrrell was previously ordered to pay restitution(1) to the victims of his shoddy and incomplete home improvement work. In an attempt to hide his assets and avoid making payment, Tyrrell fraudulently transferred land he owned in Ulster County to a friend after the Attorney General’s lawsuit was filed. The property was then given to Tyrrell’s brother.

• As a result of the Attorney General’s intervention and the Ulster County Supreme Court order, the property will now be sold by the state and the proceeds distributed to the consumers to whom Tyrrell owes restitution.

For the entire press release, see Attorney General Cuome Obtains Order To Sell Contractor's Property To Pay Back Ripped Off Consumers (Contractor transferred Port Ewen property to others to hide assets).

For more on homeowners left in the lurch due to actions by builders/contractors, go here, go here, go here, go here, and go here.

Go here for other posts on other home improvement contractors hammered by the NY AG.

(1) According to the NY AG press release, Tyrrell, of Vienna, Virginia (formerly of Macks Road in Highland), demanded large up-front payments for home repair projects and then either failed to complete the jobs or did the work in an unprofessional, shoddy manner. Tyrrell also failed to return to repair the defective work or refund customers’ money, the press release states. In 2005 the Attorney General’s Office sued Tyrrell and won a judgment of more than $124,000 in restitution to consumers he defrauded in his home improvement contract businesses, Tyrrell Construction Corp and Dura-Crete LLC. StiffingContractorsTheta Cuomo hammers contractors

Florida Developers Cop Plea To Grand Theft Charges; Accused Of Pocketing $475K Of Customer Cash, Failing To Deliver

In Vero Beach, Florida, TC Palm reports:

• Two developers of an unfinished subdivision north of Vero Beach pleaded no contest to criminal charges of first-degree grand theft of $475,000 in deposits from customers at the Indian River Courthouse on Wednesday.

• Developer Richard Rendina of Palm Beach Gardens agreed to pay $80,000 in restitution in addition to serving five years probation. [...] Stephen Siegel of Boca Raton agreed to pay $388,936 in restitution — to be paid out of his cash bond of $500,000 — in addition to five years probation.

***

• Construction of Eagle Trace Phase II was stopped last year, leaving empty lots and unfinished concrete block walls. Prosecutors allege they improperly took deposits from 11 customers who paid on homes, according to court files.

For more, see Eagle Trace developers plead no contest to grand theft charges, agree to pay restitution.

For more on homeowners left in the lurch due to actions by builders/contractors, go here, go here, go here, go here, and go here. StiffingContractorsTheta

Stiffed Sub Sues Contractor For Unpaid Work At New Development; Slaps Liens, Seeks Foreclosure On Residents' Homes

In Pingree Grove, Illinois, The Courier News reports:

• A subcontractor is suing not only developer DRH Cambridge Homes for improvements made at its Carillon subdivision, but also home­owners, according to a lawsuit filed with the Kane County Circuit Clerk's Office. VCNA Prairie Inc. seeks $164,856 against D.R. Horton, Neptune Construction Co. and Cambridge Homes for subcontracting work it performed dating back to February 2007, the lawsuit states.

***

• "What this is about is Cambridge and its customers are caught in a dispute between sewage contractors and their suppliers," said Steve Goodman, a Cambridge vice president and general counsel. [...] The lawsuit lists names of people -- including homeowners and the Cambridge Lakes Homeowners Association -- who have some right, title or interest in the premises sought to be foreclosed.(1)

For more, see Subcontractor sues construction company, subdivision.

(1) Stories like these are a reminder of the importance of obtaining a title insurance policy when buying a home, especially with new construction, where there is the added risk of liens being placed on the home after the closing of title if all of the appropriate lien releases have not been obtained from contractors, and their subs and suppliers. (The homebuyer may also be well advised to steer clear from purchasing the insurance from the developer's "in-house" title agent, who may be controlled by, or otherwise "in bed with," the developer). In this situation, it's the insurance company's job to step in on the homebuyer's behalf and both defend the title to the home, and foot the bill for the legal costs incident thereto. StiffingContractorsTheta

Arrest Warrant Issued For Unlicensed California Contractor Suspected Of Illegally Slapping Phony Mechanics Liens On Homes In Foreclosure

In Vallejo, California, the Vallejo Times Herald reports:

• A $30,000 arrest warrant has been issued for a Benicia man who officials believe has been trying to profit illegally from Vallejo's foreclosure crisis. A team from the Solano County District Attorney's Office and Vallejo Police Department on Wednesday went to arrest James Paul Jones in the Vallejo home he's been occupying and found him gone, said Deputy District Attorney Laura Undlin.

• Jones, 53, also known as James King and King James, is suspected of contracting without a license and filing false or forged documents, Undlin said. The false document charge is a felony, she said.

• Jones has filed mechanic's liens against several foreclosed Vallejo homes he claims to have done work on for which he wasn't paid.(1) [...] Reached by phone Friday, Jones appeared surprised to hear about the warrant, and insists he's done nothing wrong.(2)

For the rest of the story, see Man trying to cash in on foreclosures, officials say.

Go here for other posts on suspected mechanics lien scams.

(1) If Jones actually did what he is suspected of doing, he possibly felt that having the mechanics liens would facilitate a claim on his part to all or part of any surplus funds generated by a subsequent foreclosure sale, in the event the home sold at auction for more than what was owed to the foreclosing lender.

(2) Reportedly, in one case, Jones seems to have contracted for $40,000 worth of water damage repairs with a relative of Jones's who owned the property before it was foreclosed on, according to Deputy DA Undlin. Jones is then said to have then filed a $75,000 mechanics lien six days later. "We don't believe that such extensive work could be done in six days, and, in fact, we have a witness that says he saw work being done for six to eight weeks after the lien was filed," Undlin said. StiffingContractorsTheta MechanicLienScamTheta

South Florida Contractor Faces More Felonies For Allegedly Taking Customer Cash, Failing To Start, Finish Remodeling Jobs

In Plam Beach County, Florida, the South Florida Sun Sentinel reports:

• [P]olice arrested Douglas Livingston, 41, [...] accusing him of two felonies- fraud and grand theft of more than $50,000. He took money from four Delray Beach clients for remodeling jobs that the company either never started or failed to finish, said Detective Tom Whatley of the Delray Beach Police Department.(1)

For more, see Oakland Park man arrested again on construction-related theft charges.

See also, WPTV Channel 5: Man arrested for allegedly scamming thousands of dollars.

For other posts on homeowners left in the lurch due to actions by builders/contractors, go here, go here, go here, go here, and go here.

(1) According to the story, the latest accusations echo the charges that Livingston, of Oakland Park, faces in Broward County Circuit Court as the chief executive officer of the now-defunct HomeCo Unlimited. He was reportedly arrested in November 2004 on 70 counts of extortion, theft and fraud related to remodeling jobs never completed. Former HomeCo customers accused him of verbally intimidating them, prompting six to file police reports against him, the story states. StiffingContractorsTheta

Home Improvement Contractor Gets Prison Time In $80K+ Ripoff; Accused Of Shoddy, Incomplete Work On 88-Year Old Widow's Home

From the Office of the New York Attorney General:

• Attorney General Andrew M. Cuomo [...] announced the sentencing of a Western New York home improvement contractor who repeatedly pressured an 88-year-old widow into paying more than $80,000 for home improvements that were never done or “grossly substandard.”

• Bryan Boone, 47, of [...] Kenmore [dba Urban Residential Maintenance], was sentenced to the maximum 2 1/3-to-7 years in prison [... and] ordered the defendant to pay full restitution. Boone pleaded guilty to grand larceny in the third degree (class D felony) on November 7, 2008.

• “This so-called home improvement contractor was nothing more than a con artist who thought he could get away with ripping off an 88 year-old widow,” said Attorney General Cuomo. “My office will aggressively pursue crooked contractors who prey on New Yorkers, especially the elderly and vulnerable.”

***

• Boone’s work was careless and incomplete. [...] Independent experts who reviewed Boone’s work at the request of the Attorney General’s Office declared it to be grossly substandard and of little value to the homeowner. They estimated the cost of labor and materials to be between $11,000 and $13,000. Besides shoddy and incomplete work, Boone also failed to meet the legal requirements for home repair work, including obtaining the proper permits, providing a written contract to the consumer, and depositing payments into a trust account.

For the entire press release, see Home Improvement Contractor Sentenced To Prison For Scamming Western New York Senior Out Of More Than $80,000 (Bryan Boone pressured 88-year-old widow into writing more than 70 checks over seven months for ‘grossly substandard’ work).

For more on homeowners left in the lurch due to actions by builders/contractors, go here, go here, go here, go here, and go here.

Go here, here, here, here, here, and here for other posts on elder financial abuse.

Go here for other posts on other home improvement contractors hammered by the NY AG. Cuomo hammers contractors FinancialAbuseOfElderlyAlpha StiffingContractorsTheta

Mass AG: Firm Agrees To Remove Mechanics Liens On Houses; Resolves Complaints By Paid-In Full Homeowners Of Improper Squeezing By Contractor, Supplier

From the Office of the Massachusetts Attorney General:

• Attorney General Martha Coakley’s Office has entered into a settlement agreement with [...] National Lumber Company resolving a civil investigation into National Lumber’s placement of liens on the homes of at least ten Massachusetts consumers totaling approximately $260,000, as well as National Lumber’s business relationship with Taunton-based home improvement contractor Dennis Bartel (“Bartel”) and Bartel’s companies New Dimensions Construction Services and New Dimensions Construction, LLC . [...] National Lumber has agreed to remove all liens placed on Massachusetts residential properties where National Lumber was seeking to recover monies for labor and/or materials it had supplied to Bartel and New Dimensions.

***

• The Attorney General’s Office began investigating Bartel in 2005, after receiving complaints from Massachusetts consumers alleging, among other unfair conduct, that Bartel, through his home contracting businesses, executed contracts and took payments for home improvements and failed to either commence or complete the projects. Bartel allegedly also failed to pay National Lumber for the materials for which the consumers had prepaid.

***

• The Attorney General’s Office received complaints that National Lumber, a subcontractor for Bartel, was placing liens on the homes of Massachusetts consumers to assist Bartel in leveraging payments from these consumers even though the consumers claimed not to owe additional monies to Bartel.

• The Attorney General’s Office also investigated allegations that National Lumber's liens exceeded the amount owed for materials and that National Lumber extended credit to Bartel, despite his payment delinquency, with the intention of placing these liens to recover from the consumers the monies due from Bartel.

For more, see the Mass AG press release: AG Coakley Reaches Agreement with Lumber Company to Remove Liens Placed on Consumers’ Property for Monies Owed by Contractor.

For a similar sounding alleged scam in Illinois, see Attorney General Madigan, State's Attorney Alvarez Sue Chicago Lien Filing Service For Fraudulent Practices.

Go here for other posts on suspected mechanics lien scams. StiffingContractorsTheta MechanicLienScamTheta

Stiffed Sub Slaps Lien On Homeowners For Unpaid Work, Leaving Them With Having To Pay Twice For New Pools Or Face Foreclosure

In Casselberry, Florida, WFTV Channel 9 reports:

• Customers of a well known pool company got shocking news this week. A subcontractor was never paid. So there are now liens against their homes forcing the homeowners to pay a second time. [...] Greg Vanek paid Florida Pools of Casselberry in full more than 6 thousand dollars. Then a lien notice arrived by mail, a subcontractor was never paid by Florida Pools. So a lien demanded Greg pay another 5 thousand dollars. [...] Under Florida's Construction Lien Law----a homeowner is responsible for bills the contractor doesn't pay. Unless they pay off the liens, pay twice, worst case they face foreclosure. [...] 3 other Florida Pool customers have been liened, and others [...] were notified a lien's on the way.

***

• The best protection, demand signed waivers of liens from all subcontractors before you pay - a complicated process for homeowners. "I don't know enough about liens to even ask that," said Greg Vaneck. If you have signed waivers of lien from subs and suppliers, you can't be forced to pay a second time.

For the story, see Pool Customers Face Liens On Their Homes. StiffingContractorsTheta

Builder Convicted Of Pocketing Customer Cash For Homes Never Constructed

In Prince George's County, Maryland, The Washington Post reports:

• A District Heights builder who was accused of collecting more than $1 million from banks and home buyers for homes that were never constructed has been convicted of 16 counts of theft and other violations. Leon T. Coleman, 40, promised to build homes in Kings Grant, a new subdivision in Upper Marlboro. Instead, prosecutors said, he pocketed $206,000 and used some of the rest to buy land and pay closing costs. Now many buyers face foreclosure on the land. Coleman, who ran Opportunity Investment Group, was convicted late Monday in Prince George's County Circuit Court and faces as much as 30 years in prison. His attorney, Sloane R. Franklin, said he expects the verdict to be appealed.

Source: Builder Convicted in House Scam. StiffingContractorsTheta

Title Insurer's Lack Of Action On Subcontractors' Mechanics Liens Filed Against Bankrupt Developer Leaves Recent Homebuyers In Refinancing Limbo

In Woodstock, Illinois, the Chicago Sun Times reports:

• Woodstock resident Deborah Sinnett's taste of the American dream has turned sour big-time, and she blames bankrupt Streamwood-based home builder Kirk Homes. Since Sinnett moved into her $355,000 Kirk home in December, 11 liens have been placed against the property by companies claiming they weren't paid by Kirk.(1) She faces the threat of foreclosure because of the liens, according to a local attorney. But her title insurance should cover her.

• Sinnett said the liens also have complicated her plans to refinance at lower rates. Kirk says she's protected. But the title insurer, First American Title Insurance Co., hasn't taken court action to remove the liens, and Sinnett doesn't know how long the liens will remain on her property. It could be a couple of years, according to state law.

***

• Sinnett said she received the first lien notice shortly before Christmas. She contacted First American Title and was told by letter that her title is insured, but "because there has been no action taken by the lien claimants to enforce their claims through a court proceeding, there is no action for First American to take at this time." [...] First American declined to comment on Sinnett's case, but said it "stands behind its policies of title insurance." But the company indicated Sinnett and others could be in for a long wait.(2)(3)

For more, see Kirk Homes bankruptcy leaves homeowners in limbo (STUCK IN MIDDLE: With Kirk Homes in bankruptcy, many homeowners can't refinance because of contractors' claims).

For more on homeowners left in the lurch due to actions by builders/contractors, go here, go here, go here, go here, and go here.

Go here for other posts involving legal issues related to title insurance.

(1) Reportedly, Sinnett's situation isn't unique as builders across the country fold or file Chapter 11 bankruptcy.

(2) Reportedly, Sinnett shared documents showing liens totaling more than $140,000. "It's costing us hundreds of dollars per month to not be able to refinance. No mortgage company wants to talk with us about refinancing with all those liens," she said.

(3) If faced with a lien on your home, attorney Mark Nora, vice chair of the Chicago Bar Association's real property committee, provides this advice in the article:

• Homeowners can "make demand" on the title insurer to take appropriate action to discharge the lien. The insurance policy will specify how soon a homeowner must make that demand.
• Alternately, homeowners can demand in court that the filer of a lien either file a lawsuit to enforce the lien or be barred from proceeding with one.
• Those in the process of building a home can require in the contract proof that subcontractors are being paid as work has been completed and lien waivers to prevent those companies from filing liens on the property related to that work.
• Work with a qualified attorney, make sure you have title insurance from a company with sufficient reserves to handle claims and read the fine print. title insurance legal issues StiffingContractorsTheta

Illinois AG, Cook County SA Say Firm Filed Phony Mechanics Liens & Started Foreclosure On Homeowners Refusing To Be Squeezed

From the Office of the Illinois Attorney General:

• Attorney General Lisa Madigan and Cook County State’s Attorney Anita Alvarez [Wednesday] both filed lawsuits against a Chicago mechanic’s lien filing service for filing invalid liens against property owners and for intimidating homeowners either to pay debts they don’t owe or to overpay for debts incurred with contractors.

***

• According to the Attorney General’s complaint, Contractor’s Lien Services (CLS) and its founder, Steve Boucher, analyze, prepare and file mechanic’s liens on property on behalf of general contractors and subcontractors. CLS allegedly misrepresents to contractors that it has valid cause for filing mechanics liens against homeowners when, most often, those contractors do not actually have valid claims under state laws.

• CLS also allegedly files liens without the knowledge of some contractors and, in other instances, CLS files liens against homeowners when contractors have not performed work at the properties in question.

• After filing foreclosure liens, CLS allegedly files foreclosure actions against consumers who don’t pay off the debts. Some contractors claim that CLS collects money on behalf of contractors but then fails to redistribute the collected debts to them.

For the Illinois AG press release, see Attorney General Madigan, State's Attorney Alvarez Sue Chicago Lien Filing Service For Fraudulent Practices.

For what sounds like a similar matter recently resolved by the Massachusetts Attorney General's Office, see Mass AG: Firm Agrees To Remove Mechanics Liens On Houses (Resolves Complaints By Paid-In Full Homeowners Of Improper Squeezing By Contractor, Supplier).

Go here for other posts on suspected mechanics lien scams. StiffingContractorsTheta MechanicLienScamTheta