Saturday, July 21, 2007

"Operation Home Improvement" Stings 19 Unlicensed Florida Contractors

The Ocala Star-Banner reports that detectives from Marion County, Florida Sheriff's Office executed "Operation Home Improvement," an undercover sting operation that netted 19 home improvement contractors in the act of contracting without a license. According to the story:

  • "Operation Home Improvement was a joint effort between the Sheriff's Office, the State Attorney Office for the 5th Judicial Circuit and the Florida Department of Business and Professional Regulation. [...] During the weeklong sting, from July 9 to 13, a home was used to lure the would-be contractors to check out bids for a job. [...] The bids from the unlicensed contractors were for between $18,000 to $20,000, with 50 percent down. Many were told it would be a cash deposit for the work."

For more, see Sweep targets unlicensed contractors (Man hired by soldier among those charged). Go here for arrest video.

Elderly Couple Almost Lose Home To Scam Artists

The Waikato Times has a story of an elderly couple who almost lost their home and suffered ill health due to a mortgage broker / scam artist and a cohort who, in assisting the couple in obtaining a loan to to pay some debts and buy a car, had them sign their property over to a family trust set up by the brokers; they were told no loan repayments would be required because the house was now owned by the trust. Mortgage broker Miles McKelvy and Arden Fatu are reportedly now both in jail for convictions resulting from the fraud investigations in connection with this scam.

For more, see "They pick on the vulnerable" (A retired Huntly couple can again call their home their own after almost losing it when borrowing turned sour) (story no longer available online).

More On Tampa / St. Pete Multi Million Dollar Mortgage Fraud

The arrests of Scott Almeida, Orson Benn, Adrienne White, Frank Giffone, and Samuel Green for allegedly fraudulently obtaining mortgages in the names of local homeowners solicited for home improvement projects was the result of a three-year joint investigation by the Tampa Police Department (TPD), Hillsborough County Consumer Protection Agency (HCCPA), Pinellas County Department of Justice and Consumer Services (PCDJCS), Florida Attorney General’s Office of Statewide Prosecution (OSWP), and the Florida Department of Law Enforcement (FDLE).

Investigators conducted hundreds of interviews, issued approximately 250 subpoenas, and reviewed tens of thousands of documents over this period of time.

Of the five charged, Orson Benn and Samuel Green are former high-ranking employees of the Argent Mortgage Company White Plains, New York office who, according to authorities, subverted Argent policies and approved fraudulent documents and loan packages submitted by the others.

The other three defendants, Scott Almeida, Frank Giffone and Adrienne White, are reportedly all former owners, principals or employees of the mortgage brokerages Advanced Mortgage Solutions and Consumer Lending Resources. In addition to the mortgage brokerages, they also operated two home improvement companies: Premier Quality Renovations and Florida Beautiful Construction, according to authorities.

In addition to Argent, fraudulent loans were also allegedly submitted by Almeida and processed and approved by Pinnacle Mortgage Company, Decision One Mortgage Company and Mortgage Lenders Network USA.

Authorities say Argent Mortgage executives and their outside legal counsel have cooperated with investigators and have provided information and documents to support the investigation. Argent has also communicated with and assisted the homeowners victimized in this case, many of whom were facing potential foreclosure actions. (Strictly in terms of dollar amounts, however, Argent itself looks like the single biggest victim of the fraud).

For more, see FDLE News Release - Former Mortgage Company Employees Charged in Multi-Million Dollar Racketeering Case.

Go here for other posts on this story.

Complaints Against Florida Home Improvement Contractor Results In BBB Suspension

As a result of processing 78 complaints in the last twelve months involving, among other things, the company taking large deposits or payments and not finishing jobs, the Better Business Bureau of Central Florida has pulled the membership of Rockledge contractor Transflorida Corp., according to a story in Florida Today.

Reportedly, Transflorida is working to fix the problems and has hired four subcontractors to help with its backlog of jobs, and a public relations firm to handle the negative publicity the business has received.

Several Broward County residents who had contracts with Transflorida have banded together in an effort to persuade the Broward state attorney to file criminal charges. Reportedly, under Florida law, contractors who take deposits of more than 10 percent must apply for a permit in 30 days and start work within 90 days unless a customer agrees to a delay in writing. The law doesn't say how long the job should take. Theft charges can be filed against violators.

One couple had to pay other firms to make their home habitable, and they may face foreclosure because of financial problems caused by their experience with Transflorida. For more, see Company appeals its suspension by BBB (Transflorida says it's fixing problems) (no longer available online).

See also:

  • Broward County families band together to fight Brevard County contractor (South Florida Sun-Sentinel) (no longer available online).
  • Broward homeowners take complaints against builder to prosecutor (Builder took money, didn't do work, they say) (no longer available online).

For story update, see:

Go here for other posts on Transflorida Corp.

Friday, July 20, 2007

Home Health Care Aid Charged With Ripping Off Elderly Couple; Leads To Home Foreclosure

The Norwalk Citizen-News reports:
  • "A 60-year-old city woman is accused of defrauding an elderly couple of hundreds of thousands of dollars while she worked for them as a home health aide. Nuria Reyes, 60, ... was arrested July 12 on six counts of first-degree larceny, one count of second-degree larceny, one count of third-degree larceny and 15 counts of criminal attempt to commit third-degree larceny."

According to an investigator with the Norwalk, Connecticut police, Reyes went to work for the elderly couple in 2003, at which time, the elderly couple owned their home free and clear of any mortgage. The husband died later that year after suffering a stroke, but the woman, who has a long term debilitating disease, continued to reside in the home. By 2006, the house had three mortgages and a home equity line of credit of almost $100,000, which led to its foreclosure in October, according to the investigator.

For more, see Home Health Aide Charged With Larceny.

Maryland Attorney Cops Plea To Stealing $260K From Dead Friend's Trust

Attorney James Lee Coffin, 54, of Crownsville, Maryland pleaded guilty this week to stealing more than $260,000 over a two year period from a family trust that he was hired to manage, according to a story in The Capital. Reportedly, he used the money towards buying a house, and also, the money came in handy in helping him avoid telling his wife that he lost his job at a law firm. Stealing the money made it look like he was still working.

Coffin was considered a friend by the family patriarch who hired him to manage the family trust. When the patriarch became ill in December 2002 and was not expected to live much longer, Coffin reportedly went to the hospital and promised him and his family that he would make sure the family was financially secure. He failed to keep his word. For more, see Attorney convicted of stealing $260,000 (Crownsville man stole from trust fund).

California Foreclosure Rescue Operator Gets Five Years In Federal Prison

The Sacramento Business Journal reports that Christopher Craig, 35, of Auburn, California was sentenced in a Sacramento Federal Court yesterday to five years incarceration, followed by five years supervised release, and ordered to pay nearly $1 million in restitution. Craig pleaded guilty to fraudulently collecting $1.2 million in home equity loans from Washington Mutual Bank that were obtained in the course of an equity stripping, foreclosure rescue operation in which he bilked homeowners of their home equity and defrauded WaMu of almost $1 million.

The straw buyers who participated with Craig, Donald Edgecomb, 35 of Trevor, Wisconsin., and Jacob Esteves, 35 of Auburn, also pleaded guilty to misprision of a felony (failing to report a crime) and are scheduled for sentencing next month. For more, see 'Foreclosure help' leads to prison term.

For copy of grand jury charges, see Indictment - U.S.A. vs. Christopher Craig, et al. Go here for other posts on this story.

Go here for U.S. Attorney's Press Release - Man Who Posed As Foreclosure Specialist Sentenced To Over 5 Years In Federal Prison And Ordered To Pay Back Almost A Million Dollars.

Go here for other Criminal Prosecutions Of Foreclosure Rescue Operators.

South Florida Realtor Finds Himself In The Middle Of A Cash Back Mortgage Fraud

In South Florida, the Daily Business Review recently reported:
  • "It took real estate broker Wayne Blackburn less than a minute to spot the fraud in documents for a pending Fort Lauderdale home sale. A settlement statement showed a $1.2 million purchase price when the contract price was $830,000. The buyer’s name had been changed to Edimar DaSilva from Alex Costa. An unrecorded $237,080 second mortgage to a construction company was to be paid off at closing. The papers said sellers Gordon and Paula Clelland were holding $70,000 of an $80,000 deposit on the house and were to give DaSilva a $33,268 credit toward closing costs. Blackburn knew none of it was true. It turned out there was no second mortgage, and the actual deposit had been $20,000. [...] It’s not even clear if the first buyer, Alex Costa, even exists. If the sale had closed with lender Washington Mutual, the cashback deal allegedly would have allowed DaSilva to walk away with more than $330,000 on closing day and the house."
To find out what happens next, see Mortgage fraud’s latest fashion. (link OK as of 7-23-07; 10:39 am - EST)

NYS AG Charge Owners Of Adult Home With Theft Of Elderly Patient's Home Sale Proceeds

New York Attorney General Andrew M. Cuomo announced the arrests of Harry Smith, 46, and his wife, Christine Smith, age 40, of Beaver Dams, the former operators of a Beaver Dams “Family Type Home” for adults, for stealing thousands of dollars from two elderly residents of the home. Among other things, the indictment accuses the pair of stealing the proceeds of the sale of a 71-year-old resident’s home. Both elderly residents are now deceased. For more, see NY AG Press Release - Schuyler County Home Care Operators Charged With Stealing from Elderly Patients.

See also, Couple stole from elderly, officials say (Schuyler County husband and wife operated adult home in Beaver Dams) (The Ithaca Journal) (no longer available online).

Thursday, July 19, 2007

More On Multi Million Dollar Tampa Bay Home Improvement Mortgage Fraud Scam

(revised 7-20-07)
In Central Florida, mortgage brokers Scott Almeida and Frank Giffone, both of Tampa, and three others have been arrested and charged for their alleged involvement in a multimillion dollar mortgage fraud scheme in the Tampa Bay area. According to investigators, the group passed out fliers that lured residents on fixed incomes to agree to a mortgage to finance home improvement projects. Investigators said a majority of the improvement projects were never started. They said it was one of the largest fraud cases they've ever seen in the Bay area. Their companies included Giff Inc., Priority One Title Services and Advanced Mortgage Solutions and Florida Beautiful Construction Management Inc.

According to a chief investigator at the Hillsborough County Consumer Protection Agency, "The defendants were targeting the low-income areas of town, which typically in this case were all minorities, uneducated, poor, dilapidated houses in many cases that needed repairs." The current criminal case focuses on 31 fraudulent mortgage loans, but it’s believed Almeida and his associates submitted about 180 loans totaling $18 million through Argent Mortgage Company.

Others arrested include two Argent employees, Orson Benn, 36, and Samuel Green, 27, who investigators say Almeida paid off to approve loans even though they knew supporting documents were fake, and Adrienne White, 37, who worked as a loan processor for Almeida. There is currently an arrest warrant out for a sixth person, Bradford Chase Peck.

For the local TV reports, watch:

Channel 10 TV report - FRAUD: Mortgage employees busted stealing millions

Channel 9 TV report - Five accused of mortgage fraud (They allegedly got people to take out loans, but didn't start construction).

To read Channel 9 online report, see Five accused of mortgage fraud.

For Tampa Tribune article, see 5 Arrested In Mortgage Scam.

For St. Petersburg Times article, see Loan scam hits dozens (Investigators describe victims across Florida, then five arrests).

Florida Mortgage Broker Charged In Multimillion Dollar Racketeering Fraud

The St. Petersburg Times reports:
  • "State investigators arrested a Lithia man Wednesday in a multimillion-dollar racketeering mortgage fraud case, the result of a three-year probe into the former mortgage broker. Scott A. Almeida ... is accused of obtaining mortgages under false pretenses, according to his attorney, Todd Foster. Almeida faces charges of racketeering, conspiracy to commit racketeering, seven counts of grand theft and six counts of obtaining a mortgage by false representation, jail records show."

For more, see Arrest made in mortgage fraud case (A man is in jail after a three-year inquiry).

Go here for other posts on this story.

WBAL-TV Investigates Another Baltimore-Area Foreclosure Rescue Operator

WBAL-TV Channel 11 I-Team reporter Barry Simms is hot on the tracks of another Baltimore-area foreclosure rescue operator who is in a legal dispute with another homeowner facing foreclosure. Yesterday, I put up a post on rescue operator Michael Powell, who Barry Simms was literally chasing around trying to get answers to some questions about Powell's rescue business (go here to watch that WBAL-TV report) (link no longer available).

Today's post is on rescue operator Michael K. Lewis, who reportedly considers himself a pioneer and calls his cure for people facing foreclosure the "MKL financial diet." Unlike Michael Powell (yesterday's featured foreclosure rescue operator), Lewis was amenable to an on-camera interview with Simms.

Reportedly, the MKL financial diet for the homeowner featured in the story involved, among other things, her filing bankruptcy, selling her home, and the renting it back for nearly double of what her mortgage payments were. The buyer ended up being Ernest Lewis – Michael Lewis’ brother.

Reportedly, the homeowner is in court trying to get her home back. Her attorney is Phillip Robinson, executive director of Civil Justice Inc., a Baltimore nonprofit group.

Go here to watch the WBAL-TV report. (which includes an excerpt of a TV commercial featuring Michael K. Lewis offering his foreclosure rescue services) (link no longer available).

To read the WBAL-TV online report, see Woman May Lose House After Answering TV Ad.

Go here for other posts on Michael. K. Lewis.

Orlando TV Station Unveils Possible Central Florida Equity Skimming Operation

WKMG-TV Channel 6 in Orlando, Florida reports:
  • "A Local 6 investigation unveils how some Central Floridians who thought they were on their way to home ownership may be caught up in one of the worst cases of mortgage fraud to hit the area, according to Problem Solver Steven Cooper."
The article highlights the stories of two aspiring homeowners who initially did business with a company called Livewire Properties. One homeowner entered into a "rent-to-own" arrangement to buy a home; the other reportedly bought her home using owner financing. Apparently, both homes had existing mortgages that were not paid off upon the consummation of each transaction. Each homeowner says that he/she unwittingly paid Livewire monthly payments without realizing that Livewire stopped applying the payments to the mortgages owed to the bank. Now, both homes are in foreclosure.

The story then takes an odd twist. Now that the homes are in foreclosure, two new companies stepped in, including Firenze Property Solutions owned by Robert Bove. Reportedly, Bove claimed he can save the homes if the homewoners start making payments to him. Bove's foreclosure rescue pitch is claimed to be the working out of "short sales" with foreclosing mortgage lenders.

Reportedly, Bove's past includes being wanted in New York on 37 felony counts. Go here to watch the full WKMG Channel 6 TV report (reported by Channel 6's "Problem Solver" Steven Cooper).

To read the online story, see Local 6 Investigates Man Promising To Save Homes.

For update on Robert Bove, see WFTV Channel 9 - Orlando: Man Sentenced To 13 Months For Writing Bad Checks In Real Estate Deal (Robert Bove, accused of using bad checks in a real estate scheme, has been sentenced to 13 months in prison, pleading no contest to grand theft. Investigators said he wrote bad checks worth more than $31,000 to buy a condo duplex in Apopka. Bove was also accused of using bad checks to buy condos then re-selling them before the original check was deemed worthless.).

Go here for other posts on "rent to own" scams.

For other recent stories on Robert Bove, see:

Flight ends in harsher sentence (Con artist who skipped court date sees his prison term doubled) (2-26-08 - Albany Times Union),
Mobile-home park residents still hoping for changes (Palamar's would-be savior has a criminal history. Will he improve their living conditions?) (8-19-07 - Orlando Sentinel),
Man Who May Buy Trailer Park Has Record (WKMG Channel 6 - Orlando),
Park finds a buyer -- with a catch (Orlando Sentinel), and
New Owner Of Mobile Home Park May Evict (WKMG Channel 6 - Orlando) or watch Channel 6 TV report - Eviction Fight. alpha rent to own lease purchase option scams zebra

Washington Post On The Maryland Foreclosure Rescue Problem

In a recent column in The Washington Post, Metro columnist Courtland Milloy comments generally on the foreclosure rescue problem in Greater Baltimore. He also gets comments about the problem from Largo attorney Stan Brown and Baltimore attorney Phillip Robinson, executive director of Civil Justice Inc. Both attorneys represent clients involved in the foreclosure rescue class action lawsuit filed last month in Prince George's County, Maryland against Metropolitan Money Store and a number of other defendants. For more, see Foreclosures Bloom at Corner Of Prosperity and Gullibility.

See also, Maryland foreclosure rescue class action lawsuit reported in other posts. Joy Jackson

Wednesday, July 18, 2007

Maryland Resident Falls Victim To "Rescue Buy Back" Scheme

WTOP Radio reports:
  • "Instead of the American dream, a growing number of homeowners are experiencing the nightmare of losing their homes. YaVonna English of Silver Spring knows that anguish all too well. After her business failed, she filed for bankruptcy. She fell victim to a buy back scheme that meant the loss of the home her parents bought in 1970. Maryland state and local officials say English is not alone."

Since 2005, foreclosure rescue operators have been subject to strict rules on how they conduct business in Maryland. The new law passed in 2005 can be found at Sections 7-301 through 7-321 of the Maryland Real Property Law (Protection of Homeowners in Foreclosure - Each section of the statute has its own link).

For more, see Hot Mortgage Deal With Really Low Rates? Watch Out.

Two Detroit Men Get Prison Terms In Deed Theft / Forgery Scams

The Detroit Free Press reports:
  • "Two Detroit men who were forging the signatures of property owners so they could illegally obtain ownership of the land, take out a mortgage and then pocket the money have been sentenced to prison, Wayne County officials announced Monday. Leroy Adams of Detroit was sentenced last week to 3-14 years on 15 counts of fraud after he used the identity of Vanna De Dona, 66, of Grosse Pointe Park, who owns rental properties in Detroit. [...] A month earlier, Russell Daniels of Detroit was sentenced to 3-20 years after neighbors told the owner of a Detroit house that unknown people were living there."
For more, see Forgery with homes leads 2 to prison.

Go here for other deed theft posts. deed theft zorro

Foreclosure Rescue Service Sued In Cincinnati For Alleged Failure To Provide Promised Services

Cincinnati-area foreclosure rescue operator Foreclosure Solutions LLC, Tom Bien, and attorney John S. Brooking have been sued by four homeowners in a state court in Hamilton County, Ohio for allegedly running an upfront fee foreclosure rescue scam that promised to save their homes from foreclosure, but did little or nothing in exchange for an upfront fee of $1,150.

According to the lawsuit:
  • "The 'Solution' that Foreclosure Solutions sells to homeowners is the false promise of a foreclosure defense in exchange for an up-front charge of $1,150. After the customer pays the fee Foreclosure Solutions hires an attorney who does nothing more than file an answer to the foreclosure. When the foreclosing lender files a motion for summary judgment, the attorney abandons the case and the house eventually goes to sheriff's sale."

In addition to the upfront fee, the foreclosure rescue arrangement allegedly required the homeowners to deposit their monthly mortgage payments into "escrow" with Foreclosure Solutions.

The lawsuit asserts the following claims: (1) violations of Ohio's Consumer Sales Practices Act & Home Solicitations Sales Act, (2) misrepresentation, (3) civil conspiracy, and (4) infliction of emotional distress. Representing the homeowners are the Legal Aid Society of Southwest Ohio, LLC and Cincinnati attorney Matthew Brownfield.

For a copy of the lawsuit, see Dorn, et al. vs. Foreclosure Solutions, LLC, et al. (lawsuit available online courtesy of WCPO-TV Channel 9 in Cincinnati).

For the WCPO-TV Channel 9 online story, see People With Homes In Foreclosure Say They Were Victimized By Blue Ash Firm.

For The Enquire online story, see Mortgage 'rescue company' faces suit (Homeowners mad at foreclosure group).

Go here for the Press Release (Legal Aid Society of Southwest Ohio, LLC.)

Maryland Homeowner Still Battling Foreclosure Rescue Operator For Her Home Equity

WBAL-TV Channel 11 has a report on Michael Powell and Amanda Mende, Powell's business partner, who are currently being sued for allegedly running a foreclosure rescue scam on a Glen Burnie, Maryland homeowner in which they are accused of tricking her out of the title to and equity in her home which she claims to be over $100,000. Attorney Michael Gregg Morin, who filed a lawsuit on her behalf claiming the deal to rescue her home broke Maryland law, calls it "a classic foreclosure rescue fraud. It's what is forbidden by the law that was passed in 2005."

The law passed in 2005 can be found at Sections 7-301 through 7-321 of the Maryland Real Property Law (Protection of Homeowners in Foreclosure - Each section of the statute has its own link).

To see foreclosure rescue operator Michael Powell literally be chased around by Channel 11 I-team investigative reporter Barry Simms while refusing to answer Simms' questions, go here to watch the WBAL-TV report (no lonhger available online).

To read the online report, see Woman Claims To Be Swindled In Foreclosure Feud.

Go here for other posts on this story.

Possible Virginia Straw Buyer Flipping Scam Ends Up In Bankruptcy Court

The Virginian-Pilot reports:
  • "A half-dozen investors in CM Development have asked a federal court to force the company and its president into bankruptcy in an attempt to recoup some of the millions they've spent on properties across Hampton Roads. If successful, the investors' move could spell the end of a company dogged by mortgage lenders, city code officials and creditors."

  • "A Virginian-Pilot investigation in March found that about half of the 250 properties owned by CM Development and its investors were vacant and in various stages of disrepair. [...] The investigation also found that since forming in late 2001, CM Development has financed its operations largely by selling its properties repeatedly among a growing circle of investors at ever-higher prices. The investors, drawn by the promise of big returns, took out larger and larger loans on the houses."
Attorneys representing the six investors who filed the involuntary bankruptcy petition against CM Development said they had no choice. Reportedly, many of the investors haven't been paid in months and have been left to care for properties, mostly in Norfolk and Portsmouth, that now are going into foreclosure. The attorneys said company President Cary McEntee has said little about why payments were not made. For more, see Housing developer's investors ask federal court to step in.

Go here for posts and links to other stories on CM Development and Cary McEntee.

Tuesday, July 17, 2007

Connecticut Woman On Alleged Financial Fraud Rampage Arrested By Cops

The Bristol Press reports that Lori Wadman of Southington, Connecticut has been arrested by police on suspicions that she charged more than $20,000 on fraudulent credit card accounts she opened in her mother's name. According to sources for the story, Wadman had previously:
  • (1) allegedly stolen money from community services, (2) been arrested in February after she allegedly stole about $225,000 from her employer by forging business checks, and (3) reportedly, took money from her husband's construction business and took her husband's share of their home equity by refinancing the mortgage on their home without his consent.

For more, see Police: Woman charged with credit-card fraud (no longer available online).

Virginia Homeowner Hauls Foreclosure Rescue Operator Into Court

While working on a post last week on New York City foreclosure rescue operator Home Savers ConsultingaCorp., I stumbled into a pending foreclosure rescue lawsuit against a Virginia rescue operator also using the "Home Savers" moniker. The lawsuit, being litigated in a Norfolk, Virginia Federal Court, is captioned Clemons vs. Home Savers LLC, and White and Selkin, and has been filed by Virginia Beach attorney Tanya Bullock of the firm Bullock & Cooper, PC on behalf of the plaintiff.

Among the causes of action asserted in the lawsuit are (1) equitable mortgage, (2) violations of the Federal Truth In Lending Act, Home Ownership & Equity Protection Act, and Federal Reserve Board Regulation Z, (3) breach of fiduciary duty & negligence, (4) fraud, intentional misrepresentation and deceit, (5) conversion, (6) unjust enrichment, (7) breach of the implied covenant of good faith & fair dealing, (8) violations of Federal & Virginia Real Estate Settlement Procedures Acts, (9) constructive trust and resulting trust, (10) action to quiet title, (11) violation of Virginia Mortgage Broker Lender Act.

For a copy of Clemons vs. Home Savers LLC, et al., drop me a line at and I'll e-mail you a copy.

Go here for information on other foreclosure rescue litigation filed by the law firm Bullock & Cooper. equitable mortgage yak

Baltimore Realtor Group Criticizes Last Minute Ground Rent Ejectment Suits

The Baltimore Sun reported last week:
  • "Leaders of the Greater Baltimore Board of Realtors, which for years served as an advocate for ground rent owners, are criticizing some of them for rushing to seize houses of delinquent rent-payers ahead of a recent change in state law and are proposing to help affected homeowners. The Realtors are talking with the Community Law Center in Baltimore about using their charitable foundation to help pay for review of ejectment lawsuits to ensure that they were conducted properly and that fees are "reasonable.""

One official with the Greater Baltimore Board of Realtors is quoted, "It's one thing if someone is going to collect on a debt and collect what they're owed, but this is more like robbery. To lose all the equity [in one's home] they've accrued over all those years is just wrong."

For more, see Rush to ejectment criticized (Realtors reduce support for ground rent owners).

For links to the entire series of stories on the Maryland ground rent issue reported by The Baltimore Sun, see The Sun's ground rent series.

Go here for other posts on the Maryland ground rent issue.

Alabama Feds' Mortgage Fraud Investigation Focus On Orlando Businessman

The FBI is investigating convicted Florida cocaine dealer Robert B. Guest Jr. for alleged mortgage fraud in and around Montgomery, Alabama involving the purchase and subsequent resale of "100 houses," according to a story in the Montgomery Advertiser. Federal agents have reportedly conducted searches of the offices of Betts Realty and Appraisal Service and real estate brokerage Jerri Baker Real Estate LLC in Montgomery for records of home sales involving Guest. According to the story:
  • "Acting through several companies, Guest is suspected of buying 100 homes, mostly in Montgomery, obtaining misleading appraisals and then reselling the rental properties within six months at two or three times the price he paid, according to a sworn statement by FBI agent Christopher P. LaCarter. [...] Each investor was required to put down 20 percent of the purchase price and the rest was financed through the home mortgage unit of Countrywide Financial Corp., a Fortune 500 company. [...] After the home sales closed, according to the FBI affidavit, Guest refunded the down payments to the investors. So Countrywide ended up funding the full price of the homes. Unhappy investors, realizing they cannot resell the homes for anywhere near what they paid, have begun filing lawsuits in Montgomery County Circuit Court. To date, the fraud suits claim economic losses of $1.4 million."
For more, see FBI inquiry involves area home sales.

The Subprime Bait & Switch

An opinion article appearing in In These Times expresses a not-so-flattering point of view of the subprime mortgage lending industry, the tactics employed by some loan originators that has left the subprime mess that we deal with today, and the inherent problems that are very difficult to regulate. Among the points mentioned are (1) the misrepresentation of a loan’s characteristics, such as the concealment of a fixed rate “teaser” period that adjusts upward after two years, (2) the use of bait-and-switch tactics to lure in potential borrowers, (3) the targeting of low-income and minority communities, and (4) “perverse compensation incentives” for “hazardous” loan products. For more, see The Subprime Bait and Switch (Under the guise of extending home ownership to all, predatory lenders undermine community reinvestment).

Monday, July 16, 2007

More On The Boston Alleged Discrimination / Subprime Lending Lawsuit

The lawsuit filed by three African-American mortgage borrowers accusing Countrywide Home Loans Inc. of racial discrimination in a Boston Federal Court last Thursday also names as defendants Countrywide Bank (a division of Treasury Bank, N.A.), Countrywide Correspondent Lending, Full Spectrum Lending, Inc., Loans For Residential Homes Corp., and Summit Mortgage LLC.

Representing the plaintiffs is attorney Gary Klein with the Boston, Massachusetts consumer protection law firm Roddy Klein & Ryan, the Chicago, Illinois law firm Miller Law LLC, the Long Island firm of Lerach Coughlin Stoia Geller Rudman & Robbins LLP, of Melville, New York, and the Boston office of the firm Hagens Berman Sobol Shapiro LLP, based in Seattle, Washington.

For a copy of the lawsuit, see Miller, et al. vs. Countrywide, et al.

Go here, Go here and Go here for more on recent Countrywide problems with consumers.

Go here and go here for other posts on alleged race bias in real estate transactions. race bias predatory lending countrywide pressure yak

More On The NAACP Alleged Discrimination / Subprime Lending Lawsuit

The NAACP Federal lawsuit filed last Wednesday in an effort to stop those lenders from engaging in what it calls "systematic, institutionalized racism in making home mortgage loans" specifically names the following lenders; Ameriquest Mortgage Company, Fremont Investment & Loan, Option One Mortgage Corporation, WMC Mortgage Corporation, Long Beach Mortgage Company, Citigroup, Inc., BNC Mortgage, Inc., Accredited Home Lenders, Inc., Bear Sterns Residential Mortgage Corporation, d/b/a Encore Credit; First Franklin Financial Corporation, HSBC Finance Corporation, Washington Mutual, Inc.

For a copy of the lawsuit, see NAACP vs. Ameriquest Mortgage Corporation, et al., made available online courtesy of the NAACP.

For the NAACP press release, see NAACP Files Landmark Lawsuit Against Major Home Mortgage Companies For Discriminatory Lending.

Go here and go here for other posts on alleged race bias in real estate transactions. race bias predatory lending

88 Year Old "Mother Branch" Threatened With Foreclosure Of Home; Countrywide Subprime Loan Suspected

In California, a column by Patty Fisher in the San Jose Mercury News reports:
  • "For more than 50 years, Onedia Branch has handed out clothing, food, hope and prayers to needy people in East Palo Alto, operating her own community charity from her house on Farrington Way. But these days Mother Branch, as everyone calls her, is the one asking for hope and prayers. Less than a year after she refinanced her house and put herself on the hook for loan payments she couldn't afford, the 88-year-old woman is in danger of losing her house and becoming yet another casualty of the subprime mortgage market that targets the elderly, the naive and those with poor credit."

A manager at Redwood Financial, the firm which originated the mortgage, reportedly refused to speak to the Mercury News on the record. Also, several calls to Countrywide, the mammoth lender that took over the loan, reportedly went unreturned.

For more, see Mortgage mess snares savior of East Palo Alto community.

For story update, see East Palo Alto humanitarian avoids eviction (8-17-07 - Palo Alto Online News).


Countrywide was sued last Thursday in a Boston Federal Court for alleged racial discrimination in connection with the conduct of its subprime mortgage lending business. In December, 2006, it also reached a settlement with the New York Attorney General in which the company must monitor its lending practices to prevent discrimination against blacks and Latinos.

Go here for more on these cases.

Federal & State Authorities Investigating Maryland Foreclosure Rescue Scam

The Washington Post reports:

  • "Federal and state authorities are investigating an alleged foreclosure-recovery scam that stripped hundreds of home buyers of millions of dollars in equity in their homes, according to a law enforcement source and a defendant named in a class-action lawsuit."

The matter being investigated involves the foreclosure rescue operator subject of the Maryland class action lawsuit reported in other posts. Among those targeted in the class action are Metropolitan Money Store Corp. of Lanham, the main defendant in the suit as well as Sussex Title LLC, Fordham and Fordham Investment Group of Lanham, and RTE Title LLC in Largo and Kurt Fordham and his wife, Joy Jackson.

Sussex Title, according to its part owner, Steve Norman, is cooperating with state and federal law enforcement authorities.

For more, see Alleged Home Investment Scam Probed (2nd story from top).

North Carolina Court Shuts Down "We Buy Homes" Equity Skimming Operation

The North Carolina Attorney General's Office reports:

  • "Attorney General Roy Cooper today announced the end to a scheme by a Charlotte company that promised to buy homes from people who needed to sell quickly but instead left them vulnerable to foreclosure. 'This scam hurt both homeowners and people who hoped to become homeowners,' said Cooper. 'We’ve put a stop to their phony ‘We Buy Homes’ promises so no more consumers will be caught up in this scheme.'"
Cooper has put a stop to a scheme by Charlotte Home Solutions and its manager William Keaton that purported to buy homes and then resell them to buyers with poor credit. Cooper previously won a consent judgment against Keaton’s partner Steven Huff in May. They, along with David McBride began doing business as Charlotte Home Solutions in September 2002.

They advertised their business through signs, mass mailings to targeted neighborhoods and a website that promised to buy consumers’ homes. The rent skimming / equity skimming allegedly occurred when they allegedly took title to property from the original owner without paying off an exsiting mortgage, subsequently rented the home to a tenant with an option to purchase, and then, while pocketing the rent payments unwittingly made by the tenants, they failed to make mortgage, tax and homeowner’s association payments on the homes, leading in some cases to foreclosure proceedings against the original owners. When the homes were foreclosed on, the tenants were also forced to leave and lost their deposit and their option to purchase a home.

Charlotte Home Solutions also used trust agreements when taking title to the homes (possibly under the mistaken belief that doing so avoids triggering the "due-on-sale" clause that may have been contained in the existing mortgage, or possibly, they were just trying to keep the mortgage lenders from finding out that the original owners transferred all their legal and equitable interests in the property). While the press release is silent as to this point, I must assume that the operators also used "assignments of beneficial interests" in connection with the trust agreements when having the original owner transfer his/her home to them.

For more, see AG Cooper ends Charlotte “We Buy Homes” scam (Charlotte Home Solutions scheme put homeowners in foreclosure, renters out on the street).

For other stories on tenants unknowingly renting homes in foreclosure, go here, or here, or here. alpha

CBS News On The Maryland Foreclosure Rescue Class Action Suit

(originally posted 7-13-07)
The CBS Evening News ran a report, by investigative reporter Armen Keteyian, on Friday about the alleged foreclosure rescue, equity stripping scam in Maryland allegedly perpetrated by Joy Jackson, her husband Kurt Fordham, and the people at Metropolitan Money Store. Keteyian speaks with some of the victimized homeowners in the report.

Currently, Metropolitan Money Store is out of business, the company is under investigation by the state, and is the subject of a huge class action lawsuit charging “the single largest mortgage scam in Maryland history.” Also, when Keteyian went out to look for Jackson and Fordham at their home for an interview, they were nowhere to be found. Reportedly, "the only trace of them were photos of their $800,000 wedding last year. It was an over-the-top, Hollywood-style affair at which they gave away cash, a Porsche and — in a final insult to folks like those CBS News interviewed — a house."

Go here to watch the CBS Evening News Report - Maryland Foreclosure Rescue Class Action.

To read the online story, see Victims Of A Foreclosure "Rescue" (CBS News Shows How A Growing Scam Is Exploiting Homeowners In Foreclosure).

To read the post by Armen Keteyian on his CBS News blog, see Foreclosed: "You Wanted To Cry".

Go here for other posts on the Maryland foreclosure rescue class action lawsuit.

Milwaukee Prosecutors Have Their Eye On Foreclosure Rescue Operators

(oroginally posted 7-13-07)

A Milwaukee Journal-Sentinel blog reports:
  • "While tracking the developments of a previous story she reported on a widow fighting eviction [in a foreclosure rescue arrangement], Journal Sentinel reporter Marie Rohde has found that the district attorney's office has taken a pronounced interest in similar situations of late. Assistant District Attorney David Feiss told Rohde that his office and the Milwaukee Police Department have been swamped with complaints from people who are crying fraud in situations that bear some similarity to what is alleged in that case. A number of businesses have sprung up to "rescue” homeowners facing eviction. Some of the homeowners have found that they are loosing [sic] the equity they have in their homes and are facing eviction anyway. Although Feiss would not talk about specific cases, he told Rohde that his office is looking into mortgage rescuers and allegations that some home appraisals were inflated by the rescuers."

For more, see Eviction-related fraud prosecutions coming soon?

Sunday, July 15, 2007

New Hampshire Homeowner Continues Fight With Mortgage Servicer

The Concord Monitor ran an interesting article today on the continuing battle of New Hampshire homeowner Michael Dillon against the mortgage servicing company fomerly known as Fairbanks Capital Corp., which, after it was charged several years back by the Federal Trade Commission with conducting illegal foreclosures, collecting unwarranted fees and other predatory lending practices that resulted in a $40 million settlement, has since changed its name to Select Portfolio Services.

The battle began in 2001 when Dillon received a letter from Fairbanks Capital Corp. informing him that his mortgage loan was in default and that ultimately resulted in an attempt by the mortgage lender to foreclose on his Manchester home even though he says he made the payments he owed.

According to the article:
  • "This spring, Dillon filed a new lawsuit against Select Portfolio Services and five other national companies that played a role in handling his mortgage. This time, he is seeking damages, and the charges - which include conspiracy and racketeering - are far-reaching. [Attorney Walter] Maroney and Dillon argue in the suit that Select Portfolio Services engaged in unfair and deceptive servicing practices that resulted in high interest rates, unwarranted penalties, and illegal foreclosures. The other companies, including Merrill Lynch and LaSalle National Bank, were aware of that pattern and failed to do anything about it, they argue. The case is scheduled to be heard in federal court in Concord next spring."
Former New Hampshire Consumer Protection Bureau chief Walter Maroney of Manchester represents Mr. Dillon in the legal proceedings. Maroney recently left the Concord law firm of Gallagher, Callahan & Gartrell last month after seven years as a partner to start his own one-man consumer protection law firm.

As a part of his battle:
  • "Dillon spends his spare time poring over contracts between mortgage servicers and the holding companies that own the loans, learning the intricacies of the industry most homeowners have never heard of, let alone attempted to understand. He maintains a website about his travails with links to some of his court documents and congressional testimony on subprime lending."
For more, see Taking on an industry (After a mortgage lender tried to foreclose on his home, Michael Dillon made it his mission to set the record straight on his own).

Consumers victimized by predatory mortgage servicing and others can find Mr. Dillon's website at

Go here for prior posts on this story.

Go here , go here , and go here for posts on questionable mortgage servicing practices. questionable mortgage servicing practices tactics zebra

Baltimore Sun Follow-Up On Local Cab Driver Who Lost Home To Foreclosure Despite Never Missing Payments

The Baltimore Sun reports:
  • "Efforts are under way in Howard County to help Kwaku Atta Poku, the Columbia cab owner who lost his home to foreclosure through no fault of his own, but for now he and his family continue to struggle financially."

For more, see Foreclosure only part of family's troubles (Howard residents reach out as stress, bad credit hurt cab owner's efforts).

Go here for other posts on this story, including links to media reports.

Lenders Stuck With 2500+ Modesto-Area Homes Since January

"It's becoming a pretty substantial problem." So says Rafael Rodriguez, supervisor for Modesto, California's Neighborhood Preservation Unit. In a recent story, The Modesto Bee reports that over 2,500 homes have been repossessed by lenders since January in the Northern San Joaquin Valley area of California. According to the story:
  • "Rodriguez said many abandoned properties pose fire, safety and health hazards as weeds grow, trees die and untreated pools become breeding grounds for mosquitoes and pests. Unsecured vacant homes also attract vandals and vagrants. After foreclosure, Rodriguez said it is extremely difficult to track down the legal owners and convince them to maintain the property. "We can't seem to get even to first base with some banks," said Rodriguez, recalling the runaround his staff often gets when trying to contact the responsible parties. "They're not being good neighbors.""

The article describes the plight of one home, a six-bedroom house on nearly one acre sold for $1.75 million less than two years ago in one of Modesto's most prestigious neighborhoods, which has since been foreclosed on by an out-of-state lender and now sits as a vacant, uncared for mess that has been described as a blight in the neighborhood that has raised safety concerns.

For more, see Abandoned and left to rot (After foreclosure, properties become neighborhood eyesores).

See also, Hunting Kern mosquitoes (All-out effort aims to keep disease carriers at bay), describing Kern County, California's war on mosquitos being attributed in large part to "the outbreak of foreclosures." (reported in The Bakersfield Californian).

Race Discrimination Alleged In Subprime Predatory Lending Lawsuit Filed In Boston; Class Action Status Sought

The Boston Globe reports:
  • "Three African-American mortgage borrowers from Boston accused Countrywide Home Loans Inc. of racial discrimination in a federal lawsuit yesterday, saying the nation's largest home lender charged them more for subprime mortgages than it charged white borrowers in similar financial situations. The lawsuit ... contended Countrywide violated federal housing discrimination laws because the black homeowners in Boston paid higher fees to the network of agents that generate Countrywide's new customers. The company, the suit said, uses an "unchecked, subjective surcharge" that adds to the total costs of loans for its customers, and black borrowers, it contended, paid more than whites. The suit seeks class-action status and more than $100 million to reimburse black customers of Countrywide and its subprime subsidiary, Full Spectrum Lending Inc., including about 10,000 in Massachusetts."

This lawsuit, filed by Massachusetts attorney Gary Klein on Thursday in a Boston Federal Court, comes on the heels of a suit filed on Wednesday by the NAACP in a Los Angeles, California Federal Court in which it sued a dozen subprime lenders for "systematic racism," charging blacks were 30 percent more likely to pay higher interest rates than whites (see NAACP suit targets mortgage lenders - Rights group alleges whites offered better terms than blacks on home loans).

Reportedly, similar litigation alleging discrimination in predatory lending practices against Argent Mortgage Co. and Wells Fargo Bank is also pending in Cleveland, Ohio (see Sue The *astards! - What To Do About Mortgage Brokers And Lenders Who Don't Play Fair?).

Last December, the New York Attorney General reached a settlement with Countrywide in which the company must monitor its lending practices to prevent discrimination against blacks and Latinos (see New York AG Press Release - 12-5-06).

For more, see Borrowers sue subprime lender, allege race bias (Countrywide denies blacks were charged more in fees).

For a copy of the Boston Federal lawsuit, see Miller, et al. vs. Countrywide, et al.

Go here, Go here and Go here for more on recent Countrywide problems with consumers.

Go here and go here for other posts on alleged race bias in real estate transactions. race race bias predatory lending countrywide pressure yak

Mass. AG "Persuades" Subprime Lender To Stop Foreclosures For 90 Days

The Boston Herald reports:
  • "Fremont Investment & Loan has agreed to stop foreclosure proceedings on all of its mortgages in Massachusetts for 90 days while [Massachusetts Attorney General Martha] Coakley’s office reviews the loans. If the attorney general’s office finds evidence of loans “tainted by unfair and deceptive lending practices,” it will then seek to block the California-based subprime lender from foreclosing on the mortgages in question. At that point, the AG’s office may seek a new payment plan for the homeowner or other relief."
Reportedly, as many as 2000 Massachusetts homeowners will be benefitting from this arrangement. For more, see A foreclosure truce: Fremont AG pact gets homeowners 90 days.

Pending Foreclosure Due To Lender Screw Up Threatens Massachusetts Homeowner

The Ipswich Chronicle reports that a dispute based on a miscommunication involving an Ipswich, Massachusetts homeowner and the mortgage company who had recently acquired their mortgage loan has resulted in a foreclosure sale being scheduled for August 13. The trouble first started when the homeowner received a letter from their new mortgage company, GMAC, that stated they owed $4,300 on a forced placed insurance policy purchased by GMAC. The homeowner said when the home was purchased a year earlier, it was mandatory that there be an insurance policy in place before they could close on their purchase, and there was one. As far as the homeowner knew, they had made all required payments and were not notified of any problem prior to receiving the $4,300 bill.

The homeowner was then told that it had missed mortgage payments, which her lawyer has since proved were paid all along. The homeowner also said a payment that she made to the company in February of 2006 was actually mailed back to her with no explanation.

How GMAC resolves this matter remains to be seen. For now, the family lives with its life disrupted and with a cloud of uncertainty over their heads. For more, see Family fights foreclosure.

Servicemembers' Civil Relief Act Gives Protection To Financially Strapped Members Of U.S. Military

The Navy Compass reports:
  • "Are creditors trying to repossess a service member's car? Are creditors attempting to foreclose on a home? If so, the Servicemembers' Civil Relief Act (SCRA) could help give a member some valuable time by halting proceedings and affording them an opportunity to work out new payment plans with their creditors."
For more on this legal protection available for members of the U.S. military, see The SCRA and protection from creditors.

Go here for other posts on Servicemembers' Civil Relief Act.