More Problems With Loan Modification Firms

The following links are to stories on financially strapped homeowners reporting problems with loan modification companies they hired to help resolve their mortgage problems:

• Oceanside, California: Couple brings loan modification fees into question. Warnings cautioning homeowners about paying upfront consultant fees in last-ditch efforts to avoid foreclosure may have been too little, too late for homeowners Ryan Walker and Kelly Hart. “She told us we were perfect candidates,” Hart said. “We met all the qualifications for a modification. They said it would be 30 to 45 days.” That guarantee was never made in writing, however. “Their attorney supposedly had a 99 percent success rate when working with candidates like us,” Walker said. “She sold us a good story.” In October 2008, they paid the $3,495 service fee with a cashier’s check hoping to have some financial relief by the end of the year. In the nearly seven months since, Walker and [Hart] have received about 30 e-mails from Mary Moi, the Better Life modification specialist assigned to their case after they paid the fee, but there has been no change in the status of either of their mortgages.

• Indianapolis, Indiana: Hoosiers falling victim to foreclosure scams. Laura Bailey and her husband lost their jobs and missed mortgage payments. The bank foreclosed and a sheriff's sale notice arrived. Desperate, they called a mortgage foreclosure consultant. "When someone tells you 'for this amount of money we can stop all this,' you think 'great,'" said Bailey. New Hope Modifications took $1,250 of the couple's money, then shut down. The Federal Trade Commission charged the New Jersey company with false advertising. It claimed it was part of the non-profit, government-endorsed mortgage assistance network. New Hope is one of many suspected fraudulent businesses authorities are trying to close. "They are like vultures. They go after people who are down on their luck," said Bailey.

• Phoenix, Arizona: Loan modification scam leaves Phoenix woman facing foreclosure. Not one but two Valley families fell for the same promise, come up with some cash and we'll save your home from foreclosure. Weeks and then months went by and the families still found themselves facing foreclosure. Their mortgages were not modified. That’s when law enforcement got involved and so did 3 On Your Side. In one particular neighborhood alone, two houses back to back both signed up with Jose Chavez. In total, Chavez reportedly collected $8,000 in cashier’s checks. Phoenix police and the FBI got involved and they are now looking in to theft allegations against Jose Chavez.

• Middletown, Pennsylvania: Couple lose home despite ability to pay (One payment was returned, and mortgage service firm refused to negotiate after they got behind). After inadvertently failing to mail a mortgage payment, Richard & Patricia Meredith's mortgage company, Wells Fargo, threatened foreclosure. About the same time, the Merediths got a postcard from a foreclosure rescue company called American Housing Authority in California offering to help. It seemed to be just what they were looking for, Patricia said. American Housing Authority told them to send $4,500 to Wells Fargo, but the money was returned for reasons the Merediths can't explain. American Housing Authority started demanding payments to continue negotiating on behalf of the couple, the Merediths said. They sent the company $1,200 in 2007 but balked when it asked for more, because they hadn't seen results. In February 2008, the Merediths' home was foreclosed on by Litton Loan Servicing in Houston, which services Wells Fargo loans. As for the money and time the couple spent with American Housing Authority, it's not clear what, if anything, the company did for the Merediths. Though the Pennsylvania attorney general's office has had no dealings with American Housing Authority, the company has been sued by the attorneys general in several other states, including Illinois, Ohio and Minnesota. A contact number for American Housing Authority could not be found.

HUD Rules Force Seneca Nation To Give Ten Senior Citizens Of Non-Native American Ancestry The Boot From Elderly Housing Authority Complex, Or Face Loss Of Funding & Fine Of Up To $500K

In Salamanca, New York, The Salamanca Press reports:

• Ten non-Native American residents of the Seneca Nation Housing Authority’s Elderly Complex at 44 Seneca St. have been given until the end of May to vacate their apartments.
  
  The decision that non-Native residents could not continue to live in the elderly Seneca housing complex came after an audit last year by the Chicago office of the U.S. Department of Housing and Urban Development office.
  
  Phil Pantano, a Seneca Nation spokesman, said [], “HUD officials informed the Nation that having non-Native tenants in our Seneca Housing Authority apartments was non-compliant with HUD regulations, and could result in a fine and loss of HUD funding if not addressed.”
  
  Pantano, who spoke with Seneca Nation Housing Authority Chairman Adrian Stevens, said, “After lengthy discussions between the Housing Authority Board and the Nation Council, the Nation decided to give the residents until May 31, 2017 to move, knowing that a loss of important funding was possible.”
  
  Stevens met with residents to explain the situation, Pantano said.
  
  “The Seneca Nation will be actively working with the City of Salamanca, other housing agencies, and local, state and federal officials to find alternate housing for the approximately 10 residents who will be affected by this mandatory action,” said Pantano.
  
  Sources told The Press on Monday the residents were put on notice after Thanksgiving, but have not complained publicly for fear of retaliation.
  
  Those who have received the notices that their leases will not be renewed range from a woman in her early 90s, who has lived there for nearly 30 years, to a resident in her 70s who has lived there for four years, according to several sources.
  
  Mayor Michael Smith said Tuesday he and other city officials are working very closely with Seneca Nation on the eviction issue.
  
  “The city and the Seneca Nation are on the same side, working against HUD,” he explained.
  
  Mayor Smith said the Senecas were facing a possible HUD fine up to $500,000 because non-Natives were in what HUD considered to be Native American housing.
  
  Mayor Smith, who is of Seneca descent, said, “It looks awful for the Nation to throw out the non-Natives.” He said the Native American HUD office in Chicago “is desperately trying to find alternate housing” for the people being evicted.
  
  The mayor added, “It’s almost criminal. The best we can hope for is to grandfather these people in.”

For more, see Non-Natives facing eviction from Seneca Housing over HUD rule.

For a story update, see Three elderly grandfathered in Seneca housing:

• Three non-Native residents facing eviction from the Seneca Nation Housing Authority’s Salamanca elderly housing complex will not have to leave after all. [...] “The magic number is down to five. Three of the residents were grandfathered,” said the mayor, who was informed Friday by Adrian Stevens, executive director of the Seneca Nation Housing Authority.
  
  ***
  The 10 residents had been under threat of eviction at the end of May since shortly after Thanksgiving. Since last week, one person has moved to Hillview Manor, across from the Post Office, and another left public housing, Smith said.
  
  ***
  Last week, State Sen. Catharine Young, R-Olean, also urged HUD to relent in its pursuit of forcing the Seneca Nation Housing Authority to evict the non-Natives.
  
  She said, “One of the women who is being evicted has lived in the complex for nearly 30 years and she is in her 90s. Another, who has already been forced out, had to give up her companion animal of 14 years, so she could secure a new place to live.”
  
  “It is heartbreaking,” Young said.
  
  She asked HUD to grandfather in the remaining 10 residents so that they can live out their years in the housing accommodations of their choice. “I also requested that the agency not impose harsh penalties on the Seneca Nation for housing these elderly individuals,” she said.

State AGs Target Califormia Upfront Fee Foreclosure Rescue Operator

American Housing Authority ("AHA"), a California-based company in the business of providing foreclosure consulting services in exchange for an upfront fee has been recently sued by the Attorneys General for Illinois and Ohio for alleged conduct in connection with its foreclosure consulting business.

In Illinois, Attorney General Lisa Madigan filed suit against AHA (doing business as American Housing Help) and its president, Brandon Roberts, for violating Illinois ' recently-enacted Mortgage Rescue Fraud Act, as well as the Consumer Fraud and Deceptive Business Practices Act and alleges that AHA and Roberts defrauded homeowners by falsely promising to help them escape foreclosure, taking their money as a fee, and then failing to provide any real help.

In Ohio, Attorney General Marc Dann filed suit against AHA and, according to the complaint, affiliate American Housing Financial, Inc. ("AHF") - principal place of business in Phoenix, Arizona - for violating a number of Ohio consumer protection laws. The complaint in this case identifies Brandon Roberts as AHA's president, and Mace Miller as AHF's president.

For more on the Illinois case against AHA and Roberts, see:

• Illinois AG Press Release
• Copy of lawsuit - State of Illinois vs. American Housing Authority

For more on the Ohio case against AHA and AHF, see:

• Ohio AG Press Release
• Copy of lawsuit - State of Ohio vs. American Housing Authority, American Housing Financial.

A recent media report mentions American Housing Authority in connection with an alleged problem that a Texas resident facing foreclosure reportedly had with the foreclosure consulting services (see Texas Homeowner Facing Foreclosure Falls For Upfront Fee "Rescue" Offer). No word if any official investigation has taken place in that reported incident.

City Housing Authority Accused Of Running Five Racially Segregated Rental Housing Complexes Agrees To Cough Up $175K To 19 Discrimination Victims To Settle Fair Housing Charges

The U.S. Department of Justice recently announced:

• The Justice Department announced [] that the Housing Authority of the city of Ruston, Louisiana, has agreed to pay $175,000 and adopt comprehensive new policies to settle a race discrimination lawsuit filed by the department. The settlement must still be approved by U.S. District Court Judge Robert G. James of the Western District of Louisiana.
  
  The department’s lawsuit, filed in September 2013, alleged that the Ruston Housing Authority (RHA) had long segregated the 300 apartments in its five public housing developments by assigning vacancies to applicants based on their race, rather than on their place on the waiting list.
  
  Specifically, the department alleged that the RHA disproportionately assigned white applicants to its two developments that were located in the predominantly white neighborhoods of Ruston—Louise Homes and Maryland Plaza Homes. At the same time, the department alleged, RHA primarily assigned African-American applicants to the complexes located in predominantly African-American neighborhoods—Eastwood Homes, Greenwood Homes and Truman Homes. When it originally began developing housing in the 1950’s and early 1960’s, the RHA explicitly reserved Louise Homes and Maryland Plaza for “white” persons, while reserving Greenwood and Truman for what it termed “colored” persons.
  
  Although the RHA no longer maintained this de jure system, the department alleged that it had continued to segregate its complexes in practice. During the litigation, the former Ruston Housing Authority project manager from 2003 to 2013 admitted in her sworn deposition testimony that on numerous occasions she skipped over earlier applying African-American applicants in order to fill vacancies at Louise Drive Homes with later applying white applicants.
  
  She also testified that on multiple occasions she did not offer eligible white applicants available apartments in the nearly all-black Eastwood Homes, Greenwood Homes and Truman Homes, but instead offered those units to later-applying African American applicants.
  
  
  ***
  
  [Among other things], the RHA will pay $175,000 to compensate 19 individuals who suffered damages as a result of the RHA passing them over for available housing units because of their race. Additionally, for those 19 victims of the RHA’s discriminatory actions identified in the consent order, the RHA will allow those who are current tenants to request a transfer to another complex on a priority basis. It will also permit those identified individuals who are prior applicants and former tenants to reapply and, upon approval of their applications, give them priority for a unit at a complex of their choice.
  
  The federal Fair Housing Act prohibits discrimination in housing on the basis of race, color, religion, sex, familial status, national origin and disability. More information about the Civil Rights Division and the laws it enforces is available at www.usdoj.gov/crt. Individuals who believe that they have been victims of housing discrimination can call the division’s Housing Discrimination Tip Line at 1-800-896-7743, e-mail the Justice Department at fairhousing@usdoj.gov or contact HUD at 1-800-669-9777.

Source: Ruston, Lousiana, Housing Authority Agrees to Pay $175,000 and Stop Filling Vacancies Based on Race to Settle Justice Department Lawsuit.

For the settlement agreement, see USA v. Housing Authority of the City of Ruston.

Illinois AG Brings Civil Suit Against Foreclosure Rescue Service

(revised 8-17-07)
From the Illinois Attorney General:

• "Attorney General Lisa Madigan [last Thursday] filed a lawsuit against a mortgage foreclosure rescue company for violating Illinois ' recently-enacted Mortgage Rescue Fraud Act, as well as the Consumer Fraud and Deceptive Business Practices Act. Madigan's lawsuit, filed against American Housing Authority, Inc., a Nevada corporation, and its president, Brandon Roberts, alleges that the defendants defrauded homeowners by falsely promising to help them escape foreclosure, taking their money [$1,400] as a fee, and then failing to provide any real help. [...] In the complaint, Madigan's office asks the court to order the defendants to pay restitution to defrauded homeowners and to stop all deceptive business practices. The suit also seeks a civil penalty of $50,000 and additional penalties of $50,000 for each violation found to have been committed with the intent to defraud."

For more, see Illinois AG Press Release - Madigan Sues Mortgage Company For Deceiving Homeowners In Foreclosure (Attorney General Seeks to Shut Down Business and Obtain Restitution for Homeowners).

For a copy of the lawsuit (thanks to the Illinois AG's office), see State of Illinois vs. American Housing Authority, or if there's a problem with the link, drop me a line at HomeEquityTheft@yahoo.com (be sure and put "Illinois vs. American Housing Authority" in the "Subject" line) and I'll e-mail you a copy.

See also Illinois AG Sues Mortgage Company For Deceiving Homeowners In Foreclosure (All American Patriots).

Go here for other posts on American Housing Authority and Brandon Roberts. upfront fee

Housing Authority Admits No Wrongdoing, But Quickly Coughs Up $180K Anyway To Settle Fair Housing Lawsuit; "Code Words" That Substitute For Overt Racial Language Were Allegedly Used In Emails In Connection With Effort To Reject Homeless Black Single Mom For Section 8 Rent Subsidy/Housing Voucher

In Hartford, Connecticut, the Hartford Courant reports:

• Equalla Jenkins didn't see any blatant signs of racial discrimination when the Mansfield Housing Authority rejected her for a Section 8 voucher in 2014.
  
  All she knew was that she was living in transitional housing through a shelter, working 15 hours a week at a store in her hometown of Middletown, living from place to place with her 5-year-old son. After years on the Mansfield authority's waiting list, she had made it to the top.
  
  Now she had to show up at the office and fill out some forms before finally receiving a subsidy for her own apartment. It was in reach; under federal law, housing authorities can deny Section 8 subsidies only for issues such as criminal records or drugs, not income or transportation -- and Jenkins' record was clean.
  
  But the authority rejected her, saying she didn't show that she could get to her job at Bob's Stores in Middletown, a 50-minute drive from the authority's territory of Mansfield and four rural towns.
  
  She told them she had a cousin willing to drive her. And she even had a car, though it wasn't legal yet. "I was working to get the money to get it registered and insured," Jenkins said. "They just didn't care."
  
  Two years later, Jenkins, who is African American, has won a $180,000 settlement, ending a federal racial discrimination lawsuit filed in January against the Mansfield Housing Authority and its executive director, Rebecca Fields.
  
  Fields and other authority employees never referred to Jenkins' race. They didn't have to in order for the Connecticut Fair Housing Center(1) to file a credible lawsuit with Jenkins as plaintiff.
  
  Instead, the authority used what federal courts have come to describe as "code words" that substitute for overt racial language. Jenkins never heard or saw any of those words -- rather, they were contained in emails to the Fair Housing Center and Jenkins' case worker from a shelter in Middletown.
  
  In the settlement, the authority and Fields did not admit any wrongdoing or any violations of the Fair Housing Act (part of the Civil Rights Act of 1965) or other federal rules.
  
  But the code words were enough to bring a settlement in just over six months. That's lightning fast as federal cases go.
  
  For example, the authority openly discouraged "urbanites...who have not ventured far from their urban surroundings" from applying.
  
  Jenkins' case is not unique in Connecticut; I wrote about a similar one three years ago involving Crystal Carter, a woman with six children who sued the Winchester authority along with the Fair Housing Center and won a $350,000 settlement, of which she received $75,000. But settlements and rulings are highly unusual.
  
  The takeaway: First, subtle and not-so-subtle barriers are alive and well for non-white applicants in some towns. And second, it isn't necessary to show evidence of flagrant racism in order to bring a claim of racial bias under federal law.
  
  ***
  Under the settlement, the Mansfield authority must, among other measures, eliminate income requirements; create a fair housing outreach plan; maintain a list of applicants and reasons for rejection, by race and nationality if possible; and stop discouraging applicants.
  
  The authority quickly offered Jenkins a voucher after the lawsuit was filed, and waived a one-year residence requirement.
  
  Jenkins, who was homeless for a time after the rejection, today lives in Middletown, in a racially mixed neighborhood in an $800-a-month, two-bedroom apartment on the first floor of a three-family house. She just bought a 7-year-old Audi.
  
  When her second-grade son returned home on the bus on a recent afternoon, eager for a snack, she said he's done a complete turnaround, "ever since I've been able to be stable and happier, too."

For more, see 'Code Words' Lead To Big Settlement In Housing Case (In a racial bias case, Middletown woman wins $180,000 after she was denied a Section 8 voucher).

-------------------------

(1) The Connecticut Fair Housing Center is a non-profit fair housing organization that provides investigative and legal services to Connecticut residents who believe they have been the victims of housing discrimination. The Center also has provided education and conducted outreach on fair housing and fair lending issues throughout Connecticut.

Ohio AG Conducts Foreclosure Rescue Sweep; Hauls Six Upfront Fee Operators Into Court

From the Ohio Attorney General:

• "Attorney General Marc Dann today filed lawsuits against 6 different companies for preying on Ohioans with false promises of saving their homes from foreclosure. The attorney general’s investigations produced evidence that these companies may have violated at least five different consumer laws: Consumer Sales Practices Act (CSPA), Telephone Solicitation Sales Act (TSSA), Home Solicitation Sales Act (HSSA), Debt Adjusters Act (DAA), and the Credit Services Organization Act (CSOA). “Today, along with filing lawsuits against 6 foreclosure rescue firms, I am issuing a warning to companies who think they can get away with exploiting families who face the prospect of losing their homes: Stop Now or my office will stop you,” Attorney General Dann said [on Wednesday]."

Suits were filed against the following companies doing business in six Ohio counties: American Housing Authority, Inc. (Newport Beach, California), American Housing Financial, Inc., (Phoenix, Arizona), Cary Lavensky d/b/a Home Restoration Services (Cleveland, Ohio), F.A.S., LLC d/b/a Foreclosure Assistance Solutions and Mortgage Second Chance (Clearwater, Florida), Foreclosure Solutions, LLC (Cincinnati, Ohio), Richard Pinnix d/b/a Pinnix Business Services (Shaker Heights, Ohio), United Foreclosure Managers, LLC (Youngstown, Ohio).

For more, see Ohio AG Press Release - Foreclosure Rescue Scams Sweep (Attorney General Dann Files 6 Suits Against Companies For Foreclosure Rescue Scams)., or

See also, Attorney general's office sues six foreclosure rescue companies (Cleveland Plain Dealer), and Ohio Foreclosure Rescue Scams Sweep (All American Patriots).

For copies of the newly filed lawsuits (available online courtesy of Ohio Attorney General Marc Dann), see:

• American Housing Authority Inc. Complaint
• Foreclosure Assistance Solutions Complaint
• Foreclosure Solutions L.L.C Complaint
• Lavensky Complaint
• Pinnix Business Services Complaint
• United Foreclosure Managers, LLC Complaint
• Exhibit A

Go here for other posts on Ohio upfront fee foreclosure rescue services.

Go here for other posts on American Housing Authority and Brandon Roberts.

Fair Housing Lawsuit Accuses Rural Connecticut Town Of Using Illegal Residency Requirements To Remain "Lily White"

In Bridgeport, Connecticut, Courthouse News Service reports:

• The rural town of Winchester "systematically and unlawfully" discriminates against minorities in its Section 8 housing voucher program to keep the town's black population at statistically zero percent, The Connecticut Fair Housing Center claims in Federal Court.
  
  The Hartford-based Fair Housing Center is joined as a plaintiff by Crystal Carter, who is black, in the lawsuit against The Town of Winchester Housing Authority.
  
  Winchester, pop. 11,000, in rural Litchfield County in northwest Connecticut, is 94.4 percent white, according to city-data.com. Its estimated median household income of $56,260 is 16 percent below the state median of $67,036, according to city-data.
  
  The Winchester Housing Authority is in charge of the Section 8 housing voucher program for Winchester and 16 neighboring communities in a "Rental Assistance Alliance."
  
  The federal complaint claims that "according to the 2010 American Community Survey 5-year estimates, 94.5 percent of housing units in Winchester are occupied by white, non-Hispanic households, while only 4.5 percent are Hispanic. The number of housing units occupied by African-American households is so low that it does not register above 0 percent."
  
  This population trend holds for the other towns in the Rental Assistance Alliance, where in "the percentage of units occupied by white, non-Hispanics is greater than 91 percent," according to the complaint. Carter and the Housing Alliance claim Winchester remains lily white through illegal "residency requirements."
  
  They say in the complaint that admission to Section 8 programs cannot be based on "where the family lives before admission to the program. These requirements are unlawful because in communities with populations that are disproportionately white and/or non-Hispanic they perpetuate segregation by excluding minority applicants who live outside those communities from obtaining housing there."
  
  Carter lived Hartford when she applied for a housing voucher through the Winchester Housing Authority (WHA). She claims that "although WHA's waiting list was open to applicants, WHA refused even to send Ms. Carter an application, telling her that she was ineligible because she did not live within the Rental Assistance Alliance. WHA also told Carter that Winchester was not on a 'bus line,' there were no real jobs there, and it was in the 'woods.' WHA recommended that Ms. Carter apply to the housing programs in Bridgeport, New Haven, or Torrington, all communities with considerably larger African-American and Hispanic populations than the towns in the Rental Assistance Alliance."
  
  Carter and the Fair Housing Center seek declaratory judgment that the WHA is violating the Fair Housing Act, an injunction, and punitive damages.

Source: Rural Town Accused of Housing Discrimination.

For the lawsuit, see Carter, et ano. v. Housing Authority of the Town of Winchester.

Minnesota AG Files Suit Against Upfront Fee Foreclosure Rescue Operators

Upfont fee foreclosure rescue operators Foreclosure Assistance Solutions, LLC of Florida and American Housing Authority, Inc. are being targeted it again. This time, its the Minnesota Attorney General's office on the attack, filing separtate civil lawsuits against each. Excerpts from the Minnesota AG Press Release announcing the suits:

• Minnesota Attorney General Lori Swanson [last Thursday] filed two separate lawsuits in Hennepin County District Court against two out-of-state companies that charged homeowners in foreclosure up to $1,395 to save their homes but failed to provide the promised assistance in helping the borrowers to retain home ownership.

***

• The first suit is against Foreclosure Assistance Solutions, LLC of Florida, which has also done business under the names FAS and Mortgage Second Chance. The second suit is against American Housing Authority, Inc. and American Housing Financial, Inc. of Nevada.

For more, see Minnesota AG Press Release - Swanson Sues Two Out-Of-State Mortgage "Foreclosure Consultants" For Charging Fees But Not Delivering Promised Services (Suit Alleges Violation of 2004 Law that Prohibits Foreclosure Consultants From Charging Fees Before Services are Performed ).

Go here for more problems for Foreclosure Assistance Solutions ; and here for more problems for American Housing Authority.

Foreclosure Rescue Operator To Pay $50K In Restitution, Fines In Deal With Ohio AG; Accused Of Pocketing Upfront Fees, Failing To Deliver On Promises

WHIO-TV Channel 7 in Dayton, Ohio reports:

• One company that offered mortgage help to people facing foreclosure, but didn’t deliver, is being forced to pay restitution by the Ohio Attorney General. The Ohio Attorney General's office said they filed a lawsuit that claimed the American Housing Financial companies promised to help Ohioans facing foreclosure by negotiating loan repayment plans. They routinely misled consumers and didn’t deliver promised services, according to the AG's office. The companies paid more than $50,000 in restitution and fines.(1)

For more, see Mortgage Company Must Pay Restitution.

See also Ohio AG press release: Restitution Available For Victims Of Ohio Mortgage Rescue Scam.

To view the original lawsuit filed by the Ohio AG, see State of Ohio vs. American Housing Authority, American Housing Financial.

(1) To be eligible for restitution, consumers must have paid American Housing Authority Inc. and/or American Housing Financial Inc. for services on or before Aug. 8, 2005. Consumers also must file a complaint with the state attorney general's office before Oct. 3. Complaints can be filed online at www.ag4ohio.gov or by phone at 1-877-244-6446.

Recent U.S. Department Of Justice Housing Discrimination Actions

The following links are to announcements by the Civil Rights Division of the U.S. Department of Justice of recent civil & criminal housing discrimination actions over the last 3+ months:

• November 26, 2008: West Virginia Man Indicted on Federal Civil Rights Charges for Allegedly Burning a Home - Daryl Lee Fierce, 69, of Charleston, W.Va., was indicted by a federal grand jury for using fire to intimidate and interfere with a person’s housing rights because African-American and biracial individuals visited the person in her home.

• November 13, 2008: Justice Department Resolves Lawsuit Alleging Race Discrimination at Roseville, Michigan Apartment Complex - Owners and managers of a Michigan apartment complex agreed to pay up to $170,000 (including $75K to 3 victims, and $40K into a fund for additional victims that may come forward) resolving a lawsuit brought by DOJ; they allegedly engaged in a pattern or practice of discrimination against African-American applicants for tenancy.

• November 7, 2008: Justice Department Sues Evansville, Indiana Retirement Home for Discriminating Against Persons with Disabilities - DOJ sues the owners and managers of a retirement home for not allowing residents with disabilities to use motorized wheelchairs or scooters in the dining hall or in their apartments and for forcing out two tenants who used motorized wheelchairs.

• November 5, 2008: Justice Department Files Fair Housing Lawsuit in South Dakota - DOJ sues the owners and managers of three Sioux Falls, S.D., apartment buildings, alleging that they violated the Fair Housing Act when they refused to rent apartments to families with children, and when they told tenants and prospective tenants that they did not rent to African-Americans.

• October 9, 2008: Justice Department Settles Fair Housing Lawsuit Alleging Discrimination by Lancaster, Penn. Apartment Owner, Managing Agent Against Persons with Disabilities - Former owner and managing agent of an apartment complex have agreed to pay up to $60,500 to resolve a DOJ lawsuit alleging discrimination against persons with disabilities. According to the complaint, the defendants refused to rent an apartment to a man who is visually impaired and uses a guide dog.

• September 30, 2008: Justice Department Settles Lawsuit with Louisiana Landlord Alleging Discrimination Against Families with Children - Owner and manager of apartment complex agreed to pay up to $145,000 to resolve claims that they discriminated against families with children in violation of the Fair Housing Act. According to the Department’s complaint, they had and exercised a policy of refusing to rent second floor units to families with children and discouraging families with children from renting at the complex.

• September 29, 2008: Justice Department Files Lawsuit Alleging Disability-based Housing Discrimination at Seven Nashville-Area Complexes - DOJ sues Murphy Development, LLC, for failing to provide required accessible features for persons with disabilities at developments with more than 375 covered ground floor units.

• September 26, 2008: Winder, Georgia Public Housing Authority Settles Race Discrimination Housing Complaint with Justice Department - The Housing Authority for the City of Winder, Ga., agrees to pay up to $490,000 to resolve allegations that it engaged in a pattern or practice of discriminating against African-American tenants and housing applicants.

• September 18, 2008: Justice Department Sues Owners and On-Site Manager of Kansas City Apartment Complex for Race Discrimination and Retaliation - DOJ sues the owners and operators of an apartment complex, and against the former on-site manager of the complex, for violating the Fair Housing Act by discriminating against African-Americans on the basis of race, and by retaliating against a former employee of the complex for aiding and encouraging tenants to exercise the rights granted by the Fair Housing Act.

• September 8, 2008: Justice Department Sues Bloomingdale, Georgia Landlord for Sexual Harassment and Race Discrimination - DOJ sues Darwin Kenneth Morgan and his company DK Morgan Consolidated LLC, for violating the Fair Housing Act in the rental of mobile homes and mobile home lots. The complaint alleged that Morgan refused to rent to inter-racial couples, made statements indicating a racial preference, and misrepresented the availability of units because of the race or color of the prospective tenants. The complaint also alleged that Morgan subjected female tenants and prospective tenants to unwanted verbal and physical sexual advances, granted and denied tangible housing benefits based on sex, and took adverse action against female tenants when they refused or objected to his sexual advances.

• September 4, 2008: $1 Million Judgment in Sexual Harassment Case Against Cincinnati Landlord - James G. Mitchell and Land Baron Enterprises, a corporation that owned many of the properties that Mitchell managed -- agreed to pay $890,000 in compensation to 12 women who Mitchell sexually harassed and $110,000 in a civil penalty to the United States. The complaint alleged that the defendants subjected female tenants to unwanted verbal sexual advances and unwanted sexual touching; entered the apartments of female tenants without permission or notice; granted and denied tangible housing benefits in exchange for sexual favors; and took adverse action against female tenants when they refused or objected to his sexual advances.

Housing Authority That Allegedly Assigned Elderly Residents To Housing Based On Race Rather Than Place On Waiting List, & Restricted Those With Disabilities To One Complex To Cough Up $120K To Settle Fair Housing Lawsuit

From the U.S. Department of Justice (Washington, D.C.):

• The Justice Department announced [] that the Bossier City, Louisiana, Housing Authority (BCHA) has agreed to pay $120,000 and adopt new policies and practices to settle a lawsuit alleging that it discriminated on the basis of race and disability, in violation of the Fair Housing Act. The settlement must still be approved by the U.S. District Court for the Western District of Louisiana.
  
  The complaint alleges that from 2007 to 2014, BCHA assigned elderly residents to housing on the basis of race, rather than by their place on the waiting list, and restricted residents with disabilities primarily to one of BCHA’s seven apartment complexes.
  
  Specifically, the Justice Department alleges that BCHA assigned white elderly residents to Patricia Plaza I or Patricia Plaza II, the two complexes that it had reserved for elderly persons. By contrast, the complaint alleges that BCHA assigned African-American elderly residents to one of its other five complexes, all of which were at least 90 percent African-American.
  
  The complaint further alleges that BCHA primarily assigned residents with disabilities to Patricia Plaza II and did not consider such residents for vacancies at BCHA’s six other properties.

For more, see Bossier City, Louisiana, Housing Authority Agrees to Pay $120,000 and Implement Reforms to Settle Justice Department Lawsuit.

Texas Homeowner Facing Foreclosure Falls For Upfront Fee "Rescue" Offer

(original post - 7-21-07; revised 8-17-07)
KHOU-TV (Channel 11) in Houston, Texas reports on one homeowner facing foreclosure who responded to a postcard in the mail from an entity she thought was an arm of the Federal government, but ultimately turned out to be American Housing Authority — an outfit in California offering hope, claiming it can stop foreclosures. Reportedly, she's out a $948 fee, and she's losing her house anyway.

For more, watch Channel 11 TV report, Foreclosure Rip-Offs (Wendell Edwards reporting).

To read online report, see Don't let foreclosure fears rush decisions.

For a recent post on an "upfront fee" Ohio foreclosure rescue operator currently being sued by financially strapped homeowners, see Foreclosure Rescue Service Sued In Cincinnati For Alleged Failure To Provide Promised Services.

Go here for other posts on American Housing Authority and Brandon Roberts.

Foreclosure Rescue Operator Ignores Refund Request From Homeowner; Changes Mind After Connecticut AG Intervenes

In Middletown, Connecticut, WVIT-TV Channel 30 reports:

• Mike and Tracy Banks were living in their Middletown home when their finances became tight. Tracy took time off of work after her mother had a stroke and Mike’s overtime was cut from work. Before they knew it, they were months behind on their mortgage and foreclosure was on their doorstep. They said a postcard arrived in the mail from American Housing Authority and Tracy called the number.

After reportedly being clipped for $1,245 and not getting any satisfaction, the Banks' sought help first from the VA, and then ultimately from Connecticut Attorney General Richard Blumenthal , who is now investigating AHA.

• The Banks' got good news this week. AHA responded to questions from the Blumenthal’s office with a letter. In it, AHA said it "successfully negotiated mortgage relief" and set up the Banks’ repayment plan. AHA also agreed to refund the $1,245 service fee and said they no longer provide service to homeowners in the state of Connecticut. NBC 30 tried to contact AHA, but calls were not returned. The Banks' said it was the VA who set up their repayment plan, not AHA.

For more, see NBC 30 Investigates Foreclosure Nightmare.

Go here for more hot water for American Housing Authority with state AG's in Minnesota, Ohio, and Illinois.

Housing Authority Audit Of Gov't-Subsidized Rental Homes Triggers Mass Eviction For 30 Central Florida Farmworker-Families Who Couldn't Provide Proof Of Citizenship/Legal Status

In Pasco County, Florida, the Tampa Bay Times reports:

• About 60 children, most of them American citizens, are being forced to move from a cluster of government-subsidized homes because their parents are undocumented immigrants and ineligible to live there.
  
  Thirty families, nearly half of those who live in Cypress Farms — a neighborhood of farm-labor housing funded by the U.S. Department of Agriculture — have been served seven-day notices to vacate their homes or be taken to court for eviction proceedings.
  
  ***
  Within the past few months, the Pasco County Housing Authority, which oversees Cypress Farms, conducted an audit of all the families living in the community [...]. Officials told every family in the development they'd have to come up with proof of citizenship or legal status — a birth certificate, green card or other applicable government paperwork — to continue living there. The 30 who couldn't received a notice to vacate.
  
  Nancy Wesoff, the executive director of the Housing Authority, hung the responsibility for the situation around the necks of the families who moved in under false pretenses.
  
  "Keep in mind, all these families signed forms," she said. "When you ask me how did this happen, families signed forms, signed federal documents, stating that they were eligible when they weren't."
  
  ***
  [Margarita] Romo, who runs the local advocacy group Farmworkers Self Help Inc., said she knew families needed to leave and encouraged them to do so to avoid more trouble. She sought to buy them more time than a week to move.
  
  The seven-day notice, though, is in line with Florida eviction statutes, said Tom DiFiore, an attorney with Bay Area Legal Services, which specializes in eviction law.
  
  "All we were asking for was some compassion and some time," Romo said. "I just want to make sure the children are remembered, because nobody is considering the children."
  
  Many of the kids, she said, will have to switch schools in the middle of testing season as their families move around.

For more, see 30 Pasco families told to vacate public housing complex.

Jury Rejects Home Builder 's 'Not Guilty' Plea To Ripping Off HUD Grant Funds Targeted To Help Navajo Nation Develop Affordable Housing For Its Members

From the Office of the U.S. Attorney (Las Vegas, Nevada):

• Following a 13-day jury trial, a home builder was convicted by a jury [] of embezzlement crimes for converting, misappropriating and stealing from a federal housing grant program during 2004, announced Daniel G. Bogden, United States Attorney for the District of Nevada.
  
  William Aubrey, 69, of Mesquite, Nevada, was convicted of two counts of conversion of money and funds from a tribal organization, and is scheduled to be sentenced on Aug. 7, 2013, by U.S. District Judge Kent J. Dawson. Aubrey faces up to five years in prison and a $250,000 fine on each count.
  
  “The Navajo Nation counted on the monies stolen by the defendant to provide housing for its members,” said U.S. Attorney Bogden. “This defendant stole from the tribe and from the American people, and used the monies to finance an extravagant lifestyle.”
  
  According to the court records and the evidence introduced at trial, the Navajo Nation is a federally recognized sovereign Indian Tribe whose borders encompass a large portion of Arizona and extend into New Mexico and Utah. The Navajo Housing Authority was an official Navajo Nation entity authorized to receive and administer federal housing funds which were awarded annually by the U.S. Department of Housing and Urban Development (HUD). The Navajo Nation receives an average of $90 million from HUD annually in grant funds.
  
  A Navajo Nation non-profit corporation, the Fort Defiance Housing Corporation, was responsible for the development of safe and affordable housing on the Navajo Nation lands. Fort Defiance was also a sub-grantee for the HUD grant funds.
  
  Beginning in 1996 and continuing to 2004, Fort Defiance contracted with a private housing development company, Lodgebuilder, to develop the housing projects. Lodgebuilder is owned and operated by William Aubrey. Lodgebuilder and Aubrey managed several housing development projects for Fort Defiance from approximately 2000 to 2004.
  
  HUD funds, which were supposed to be used to pay vendors, subcontractors and expenses at the housing developments, were converted by Aubrey for his own personal use and used for gambling, and other personal expenses.

For the U.S. Attorney press release, see Home Builder Convicted Of Embezzling From Hud Grant Program.

Lone Star Landlords Get Green Light To Nix Prospective Tenants Who Receive Section 8, Other Public Assistance; New Statewide Law Invalidates Austin City Ordinance Against "Source Of Income" Housing Discrimination

In Austin, Texas, The Austin Chronicle reports:

• After rejection from 19 landlords across Aus­tin, Dimple Smith's U.S. Housing and Urban Development Housing Choice Vouch­er – commonly referred to as a "Section 8" voucher – was on the verge of getting revoked.
  
  Luckily, she secured a residence in the nick of time (recipients have 90 days to find housing), but it's not ideal. Unable to secure a one-story unit, the 59-year-old, who is disabled and suffers from congestive heart failure, chronic arthritis, and muscle spasms, must make do with a two-story apartment in far South Austin, facing uncomfortable daily trips from her bedroom upstairs to the living room and kitchen area below. But she supposes it's at least better than her previous unit, which was infested by bed bugs; Smith was forced to repeatedly buy new furniture on her fixed income and eventually resorted to sleeping on the floor. "When I was denied so many times, I thought, 'Oh my god, what do I do?'" she said. "The place that I got is my last option. I wasn't sure I could even get up the stairs every day, I'm disabled. I was just so pleased they said yes."
  
  While a city "source of income" ordinance would have protected Section 8 renters from the threat of constant rebuff from landlords, a new state law, which took effect on Sept. 1, invalidates the hard-fought progress won by affordable housing advocates.
  
  In December, Austin's previous Council sought to alleviate the struggle residents like Smith go through by amending the Housing Discrimination Ordinance to add source of income as a protected class. The measure was intended to grant increased housing choice to the nearly 5,800 area families receiving tenant-based rental assistance each month, including Housing Choice Voucher holders.
  
  Just a day later, the Austin Apartment Association filed suit, claiming the ordinance forces property owners to contract involuntarily with the federal government (see "Landlords Sue to Block Section 8 Renters," Dec. 19). U.S. Judge Sam Sparks harshly grilled the city's legal team during trial, but ultimately sided with the defendants, one of whom was Smith, who provided testimony (see "Sparks Flare Over City's SOI Ordinance," Jan. 30). The ordinance then got caught up in another legal limbo, as the AAA appealed to the 5th Circuit, which allowed a temporary injunction, but then vacated the ruling, allowing poor renters a temporary reprieve. But then came the legislative session.
  
  With an exception carved out for military veterans, Senate Bill 267 by Sen. Charles Perry, R-Lubbock, bars cities from adopting or enforcing ordinances that compel landlords to accept renters who pay with federal housing assistance – in other words, landlords can keep on discriminating against the disadvantaged. "Businesses should not be forced to partner with a governmental agency that significantly impacts its flexibility and day-to-day operations," said Perry: Accepting vouchers was never intended to be mandatory.
  
  But what happens when it remains voluntary? A 2012 Austin Tenants' Council survey found that 91% of private landlords (544 of 600 across five counties) refused to house Section 8 voucher recipients, relegating the mostly African-American and Latino renters to "low-opportunity" areas with concentrated poverty and higher crime rates – many accepting units near Rundberg Lane and East Riverside; very few were west of MoPac. And the need for wider options is great: Earlier this year, the city's Housing Authority saw more than 19,000 applications (including 2,600 homeless applicants) to fill just 2,500 spots.

For more, see (Not) For Rent (New state law blocks Austin housing ordinance).

See also, What’s the state of Austin’s source of income protections for veterans?

Brothers Get 21 Months In $500K+ Housing Authority Construction Program Ripoff; Cash Intended For ADA-Compliant Improvements For Low-Income Renters

From the Office of the U.S. Attorney (Los Angeles, California):

• Two brothers each were sentenced today to nearly two years in federal prison for conspiring to steal more than $500,000 from the Housing Authority of the City of Los Angeles (HACLA).
  
  
• Diego L. Taracena, 36, and Bennett A. Taracena, 31, both of Burbank, each were each sentenced to 21 months imprisonment and ordered to pay $526,727 in restitution to HACLA.
  
  
• A third brother charged in this case, Victor Taracena, managed HACLA’s construction program for public housing units occupied by disabled residents, and the money his brothers stole was intended to build accommodations that complied with the American with Disabilities Act. Victor Taracena is currently a fugitive being sought by federal authorities.
  
  
• Diego Taracena and Bennett Taracena each pleaded guilty earlier this year to conspiracy charges. As part of the scheme, Diego and Bennett Taracena established four sham companies to get contracts from HACLA.
  
  
• After establishing bank accounts for those sham companies, Diego and Bennet Taracena accepted $526,727 from HACLA over the course of 3½ years. Despite receiving the payments, the companies did not perform any actual work.

For the U.S. Attorney press release, see Two Brothers Sentenced To Federal Prison In Scheme That Stole Over $500,000 Intended To Help Low-Income, Disabled Residents.

Central Florida Woman Faces Accusations Of Fraudulently Buying, Using Social Security Card To Gain Access To Public Housing, Scoring $12K+ In Federal Rent Subsidies

In Pasco County, Florida, the Tampa Bay Times reports:

• A Dade City woman was arrested [] on a charge of public assistance fraud, accused of using a fake Social Security card to gain access to public housing, according to the Pasco County Sheriff's Office.
  
  Cecilia Alvarez, 33, told detectives she purchased the Social Security card for $100 from someone's home in the Dade City area, according to an arrest report. Armed with the card, Alvarez was able to move into Cypress Farms, a housing complex in Lacoochee managed by the Pasco County Housing Authority.
  
  The U.S. Department of Agriculture subsidizes rent for residents in Cypress Farms. Detectives said the department provided Alvarez with $12,713 in rental assistance.
  
  In order to be eligible for assistance, residents must be either American citizens or in the country legally. Alvarez was born in Mexico, but her legal status was not available [].
  
  Alvarez was released [] from the Land O'Lakes Detention Center after posting $5,000 bail.

For the story, see Former public housing resident accused of defrauding government. Section 8

Central Florida Woman Loses Home To Foreclosure Despite Paying Thousand$ For Loan Modification

In Orlando, Florida, WFTV Channel 9 reports:

• An Orlando woman hired a foreclosure rescue service. She not only lost thousands of dollars, she's also losing her home. "I'm scared every day every minute," said Michelle Campbell. The bank has already foreclosed on her home in west Orlando--so she faces eviction any day. Michelle says her daughter's sudden death from a rare seizure -- left her scrambling to make mortgage payments. That's when the realtor she hoped could sell her house ---- instead told her to hire a foreclosure rescue company.

***

• Michelle says he recommended U.S. Loss Mitigation and the American Housing Authority. Both out-of-state firms promised to negotiate with her bank to lower the payments and save her house ... But first she had to pay the rescue companies 3 thousand dollars up front.(1) According to Michelle, both failed to even contact her lender---her home was sold by the bank last month.

For more, see Woman Loses Home After Paying Thousands To Home Rescue Companies.

(1) Upfront fees for these services is now against Florida law. See Florida AG Shuts Down Tampa-Area Foreclosure Rescue Operator; Accused Of Taking Upfront Fees In Violation Of New Law.