Saturday, August 04, 2007

Fort Lauderdale-Area "Contractor Cops" In Pursuit Of Contractor Fraud

WTVJ-TV Channel 6 in South Florida recently ran a story of the duo working for the Broward County Sheriff's Office Contractor Fraud Unit who are sometimes referred to as "Batman & Robin" for the work they do in going after home improvement and repair contractors operating on the wrong side of the law. According to the Channel 6 online story:
  • "A special team of detectives has been dedicated to going after contractors that customers have complained about in South Florida. [...] [Detective John] Beach and Deputy Dan Belyeu work together to stop contractors who do poor or illegal work or contractors who take the money and run. In addition to working for the sheriff's office, Beach is also a general contractor and Belyeu is an electrician. "It does lend a certain benefit to John and I having those capabilities to walk out and immediately recognize someone who may not be a licensed contractor," Belyeu said. Beach said he does specialized investigations into contractor fraud, and being a licensed general contractor gives him insight to the job."

For residents of Broward County, the Broward County Sheriff's Office Contractor and Licensing Fraud Unit can be reached at 954-659-3526. For the Channel 6 TV report, watch Contractor Cops.

For the online report, see Broward Detectives Investigate Bad Contractors.

Go here for the Broward Sheriff Office's Contractor Licensing and Fraud Unit, and go here for Florida's construction lien laws (sections 713.001 - 713.37).

Go here for other posts on contractor arrests by Broward Sheriff's Office.

California Investigators Sting Six More Unlicensed Contractors

In South Lake Tahoe, California, the Tahoe Daily Tribune reports another undercover sting last week that netted investigators six unlicensed contractors. It marked the third sting operation by authorities in July in the Angora disaster zone that was ravaged by fire several weeks ago. Earlier in July, several people were arrested for not having the correct permits to haul hazardous waste, while a sting July 4 nabbed a couple of people for not having a contractor's license. For more, see Six arrests made in contracting sting.

New Hampshire Contractor Guilty In Scamming Senior In Home Repair Ripoff

The Manchester Union Leader reports:

  • "A local contractor was convicted of scamming a 72-year-old Manchester man of $4,000 and failing to re-roof his house as promised, Attorney General Kelly Ayotte announced ... . After a trial in Hillsborough County Superior Court, the state found George Sideris of Manchester committed an unfair or deceptive business act or practice in violation of the New Hampshire Consumer Protection Act, Ayotte said. The Elder Abuse and Financial Exploitation Unit of the Attorney General's office reported that Sideris took the $4,000 as a deposit to buy building materials for the job, then failed to perform the work and never returned the money despite the man's repeated requests to do so."
For more, see Contractor convicted of defrauding elderly man.

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

North Florida Unlicensed New Home Contractor Charged In $700K Scam

WESH-TV Channel 2 (Orlando, Florida) reports:
  • "The Flagler County Sheriff’s Office has busted an unlicensed contractor that they say stole hundreds of thousands of dollars from would-be homeowners in Palm Coast. At least 18 people have been victimized by this scheme, WESH 2 News reported. Investigators said Gregory Bleyl illegally operated Osprey Custom Homebuilders and took advantage of homebuyers. Victims who signed contracts with Osprey Homes lost at least $700,000. Empty lots sat for months, and some victims lost the construction money. Some also lost their property and are going into foreclosure."

For more, watch the WESH-TV report, or to read the online report, see Unlicensed Contractor Schemes Homebuyers Out Of Thousands.

For a story update, see Friends call jailed contractor 'good guy' (8-17-07 - Daytona Beach News-Journal).

Connecticut Contractor Charged With Fraud; Home In Ruins

Hartford, Connecticut TV station WFSB Channel 3 reports on contractor John Nelson, who took over $40,000 to repair the home of a Bantam, Connecticut couple, but never performed the work. The home is now in ruins, as Channel 3 I-Team reporter Eric Parker reported that all that remains of the couple's home are about half-a-dozen beams. Nelson has now been charged in another incident with a different homeowner in a neighboring town for taking money for home improvements and not doing the work. For more, watch Channel 3 TV report, or to read the online article, see Accused Contractor Faces Charges (Couple Says Home Lost After Contractor's Failed Work).

Friday, August 03, 2007

L.A. Feds Indict Two Realty Agents, Two Appraisers In $40+ Million Loan Fraud

(revised 8-4-07; 8-8-07)
The Los Angeles Times reports:
  • "Two high-profile Beverly Hills real estate agents and two licensed appraisers were indicted Thursday on charges of joining in a sophisticated scheme that lenders said cost them more than $40 million in fraudulent loans for homes in some of Southern California's most expensive neighborhoods. Joseph Babajian and Kyle Grasso, agents with Prudential California Realty, along with appraisers Lila Rizk of Trabuco Canyon and Scott Robinson of Dana Point, were each indicted on multiple counts of conspiracy, bank fraud and loan fraud. [...] Babajian and Grasso are also charged with money laundering."

For more, see Brokers to Westside elite accused of fraud (2 Beverly Hills agents and appraisers are indicted in a scam that allegedly inflated home prices and loan amounts).

For the L.A. Times follow-up story, see Two Beverly Hills agents suspended by brokerage.

Prosecutors filed a two part indictment. For Part 1, see U.S. vs. Babajian, et al - Part 1 (22 pages, .83 MB approx.).

Unfortunately, Part 2 of the indictment is a little too large for me to upload on this humble blog of limited resources. If you want Part 1 & 2, you can drop me an e-mail at and I'll be glad to send it to you (Be sure to put the words "U.S. vs. Babajian, et al - Part 2" in the subject line).
Alternatively, you can go directly to the document link on the U.S. Courts' PACER website and get it there directly (link #2 - "Part II Indictment" - 63 pages; approx 2.5 MB - $2.40 cost). PACER registration required.
Go here for the official FBI Press Release - Westside Real Estate Agents And Appraisers Indicted In Multi-Million Dollar 'Property-Flipping’ Fraud Scheme.
Go here for all posts on this story.

FTC, Mortgage Servicer Modify Settlement Agreement

The Federal Trade Commission reports:
  • "The Federal Trade Commission [Thursday] announced that it has reached an agreement with [Select Portfolio Servicing, Inc. - the former Fairbanks Capital Corp.] to modify certain terms of a 2003 court settlement, providing substantial benefits to consumers beyond those in the original settlement, including account adjustments and reimbursements or refunds of fees paid in certain circumstances."

The settlement relates to charges brought by the FTC several years ago of abusive and predatory mortgage servicing practices allegedly engaged in by the former Fairbanks Capital Corp.

For more, see FTC Press Release - FTC, Subprime Mortgage Servicer Agree to Modified Settlement (Agreement With Former Fairbanks Capital Provides Additional Consumer Benefits).

For a copy of the settlement, see U.S. v. Select Portfolio Services - Modified Stipulated Final Judgment And Order (12.4 MB, available online courtesy of the FTC).

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

Plea Deal In The Works For Foreclosure Rescue Operators?

In Northern California, The Modesto Bee reports:

  • "Two men awaiting trial on charges of swindling people out of their homes took the uncommon step Wednesday of waiving their right to a preliminary hearing on similar additional counts. A possibly pending plea bargain and civil settlement factored into the waiver by Lonni Ashlock and Ronald Buhler, defense attorneys said Thursday. [...] Witnesses from throughout Stanislaus County at a fall hearing said they faced foreclosure when Ashlock and Buhler gained their confidence, then duped them into signing over deeds for pennies on the dollar."

For more, see Plea deal for men accused of fraud? (Prosecutor tells judge both sides talking in Ashlock-Buhler case).

For prior reports on these defendants, see:

New York AG Charges Man With eBay House Flipping Scheme

(revised 8-23-07)
The Niagara Gazette reports:
  • "A Town of Niagara [New York] man was charged Thursday with defrauding investors through an eBay house-flipping scheme involving properties across the region. Joseph Furan, 39, ... was charged with fraud by state Attorney General Andrew Cuomo. Furan is accused of falsely representing himself as a property flipper, or someone who buys homes with the intent to renovate them and sell them at a profit, according to a release from Cuomo’s office."

For more, see Town of Niagara man charged in housing scam.

Go here for New York AG Press Release (Cuomo files suit against Niagara Falls man who tried to sell bogus properties in and around Buffalo).

For follow-up stories, see:

Investor defends actions (Accused Town of Niagara man denies some charges from state; Falls woman says he swindled her).

Property investor in court today (Attorney general’s suit alleges Joseph Furan defrauded homebuyers on Internet) (8-22-07).

Milwaukee Feds Indict Ten In Mortgage Fraud Involving At Least 25 Properties

(revised 8-10-07)
The Associated Press and WTMJ-TV Channel 4 in Milwaukee, Wisconsin report:
  • "Ten people have been indicted in a $2 million mortgage fraud scheme on allegations they tried to get loans through falsifying applications and falsely inflating property appraisals. The 21-count indictment was announced Thursday by the U.S. Attorney's Office for the Eastern District of Wisconsin. The office said two people, Michael Lock and Jerhonda McCray, advanced the scheme through their mortgage brokerage company, World Financial Mortgage of Milwaukee.The announcement said Kevin Slamann of Muskego closed some of the fraudulently obtained loans through his business, Excell Closing Services in Kenosha. Other people named in the indictment include Chianti Clay, Monique Dunlap, Marcus Leonard, Ruben Fields, Nicole Brown, Lisa Colella and Krista Jeray. All are from Milwaukee. Prosecutors said the scheme involved at least 25 properties and more than $2 million in loan proceeds."

For more, see 10 Indicted in $2 Million Mortgage Fraud.

Go here for U.S. Attorney's Press Release.

For a copy of the indictment, see U.S. vs. Lock, McCray, Slamann, et al. (If there's a problem accessing the indictment, drop me an e-mail at and I'll send it to you (be sure and put the words U.S. vs. Lock, McCray Slamann, et al. in the "Subject" line).

For updated post, see More On Milwaukee Straw Buyer Mortgage Fraud Indictments.

Loan Overpayment Trips Up Mortgage Fraud / Identity Theft Scammer

WRC-TV Channel 4 in Washington, D.C. reports:
  • "A Fairfax County [Virginia] woman has pleaded guilty to stealing someone's identity to buy a house. Elizabeth Cabrera-Rivera was having trouble getting a mortgage. So when she happened to find Jose Lara's lost wallet, she used his identity to buy a $419,000 townhouse in Springfield. Cabrera-Rivera made the payments on time. In fact, she paid too much. Lara found out about it when he got a check in the mail for almost $2,800. The bank said it was an overpayment."

Source: Woman Uses Lost Wallet To Buy House (Stolen Identity Victim Gets Overpayment Check In Mail).

For the full story, see Stolen ID leads to mortgage fraud (Con-artist uses identification to buy a $419,000 house, with no money down) (The Washington Post - reported at MSNBC).

Thursday, August 02, 2007

California Real Estate Broker Cops Plea To $43+ Million Swindle

The San Jose Mercury News reports:
  • "A Hillsborough man who preyed on the elderly through a real estate scam and swindled many people out of their life savings pleaded no contest Tuesday in a Santa Clara County courtroom to 173 felony counts, and may spend the rest of his life in prison. Michael Schneider, 45, took more than $43 million from his victims, according to the Santa Clara County District Attorney's Office. The complaint was filed jointly by the district attorney's offices in Santa Clara and Santa Cruz counties. [...] Some of the elderly victims "don't have a life anymore," said Saratoga resident Saeed Fazeli, a retired engineer who says he lost about $6.8 million in the scam. [...] Fazeli estimated that more than 50 people lost their life's savings.

Schneider's attorney, Daniel Horowitz claims that there is currently available enough funds in the bankruptcy court to return to victims about 30 percent of what they lost, but that "bankruptcy attorneys are gutting all the money." For more, see Man enters no contest plea in real estate scam.

See also, Broker pleads no contest to 173 felonies (Man could face up to 169 years in alleged pyramid scheme).

New Jersey Social Worker Pleads Guilty To Scamming Senior In Home Sale Proceeds Ripoff

In New Jersey, the Bridgeton News reports:
  • "A 45-year-old Egg Harbor man pleaded guilty [last week] to stealing more than $70,000 from an elderly nursing home patient. [Alexander] Gotay, a Cumberland County social worker, admitted ... [that] he stole approximately $70,000 from an elderly patient, who has since died, who had resided at Lincoln Specialty Care Center in Vineland. He admitted withdrawing the victim's life savings from her various bank accounts and stealing the proceeds from the sale of her former residence."

For more, see Social worker pleads guilty to theft.

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

Pennsylvania AG Investigating "Short Sale" Flipping Scam

(revised 8-23-07)
The Pittsburgh Post-Gazette reports that the Pennsylvania Attorney General's office is investigating a residential real estate transaction involving a short sale, a quick flip, the alleged use of falsified double HUD-1 settlement statements, and possible mortgage fraud. The individual at the center of the deal is James Platts, of Easy Realty Solutions. Platts has, in the past, reportedly pleaded guilty to a dozen counts of fraud and theft in connection with the home building business he once ran, and he was indicted earlier this year on charges of tax evasion. He has also been the subject of complaints by dozens of couples in connection with other real estate transactions, according to the story. He has also reportedly been connected with a "rent-to-own" program offered to consumers. For more, see Confusion reigns in murky house sale.

For more on Jim Platts (and a similar operation he runs in Florida), see Company under investigation in Pa. seems to have a twin in Florida (Realty pitch sounds familiar).

Go here for other posts on James Platts.

Missouri Feds Indict Broker In Mortgage Fraud / Identity Theft Scam

The Kansas City Star reports:

  • "A federal grand jury [last week] indicted a Lee’s Summit woman in a purported scheme to defraud hundreds of thousands of dollars from mortgage lenders. Kimberly M. Davis, 42, was charged with eight counts of wire fraud, five counts of aggravated identity theft and one mail fraud count. Davis worked as a mortgage broker for two Northland firms between November 2003 and January 2005, according to court records. Prosecutors alleged that Davis illegally used the identities of three men to prepare bogus mortgage loan applications. She allegedly used the money to purchase two homes, prosecutors said."
For more, see Lee’s Summit woman accused of mortgage fraud, identity theft.

For KCTV Channel 5 reports on this story, watch Mortgage Broker Accused Of Fraud; or see Woman Accused In Mortgage Fraud Scheme (Kimberly Davis Charged With 14 Counts Relating To Identity Fraud).

For story update, see The Examiner: LS woman guilty of mortgage fraud ("Kimberly M. Davis, 42, pleaded guilty [December 19, 2007] to charges contained in a July 24 federal indictment. Davis admitted to using the names, social security numbers and birth dates of three separate victims, without their permission, to purchase two homes in Lee's Summit.").

North Carolina Mortgage Broker Loses License

The Charlotte Observer reports:
  • "Matthews-based Hall Financial Services has lost its license and has agreed to reimburse consumers up to $250,000 in an agreement with the N.C. Commissioner of Banks and the N.C. Attorney General. [...] The NCCOB permanently pulled Hall Financial's mortgage broker license as well as the license of its owner James M. Hall. The agency's investigators found Hall originated mortgages without considering borrowers' ability to repay the loans and made misstatements on loan documents. More than 40 percent of loans originated by Hall Financial in a three-year timespan have gone into foreclosure."

For more, see Matthews mortgage broker loses license.

See also, U.S mortgage scammer losing own home to repay victims.

Go here for other posts on Hall Financial Services.

Wednesday, August 01, 2007

Beazer Homes Hitting More Turbulent Waters

(revised 8-11-07; 8-16-07)
The Charlotte Observer is reporting today:
  • "Shares of Beazer Homes USA Inc. fell sharply Wednesday amid worries about the ability of builders to pay their bills as subprime lending woes expand to other parts of the market and push housing prices down. [...] As for the [federal investigations] involving the company, Beazer Homes previously disclosed that it received a subpoena from the United States Attorney's office in the Western District of North Carolina, seeking the production of documents focusing on the company's mortgage origination services. The investigation followed a March Observer series that found Beazer's mortgage arm arranged larger loans than some customers could afford, among other problems. The Observer found Beazer's sales practices contributed to an unusually high foreclosure rate in its Mecklenburg developments."

For more, see Beazer shares plunge on rumors.

For later stories, see:

Go here for prior posts and links to The Observer's investigative reports on Beazer.

Massachusetts Establishes Pro Bono Foreclosure Hotline

The following announcement came out of Massachusetts on Tuesday:
  • "Massachusetts Attorney General Martha Coakley, in partnership with several bar associations, legal services organizations and advocacy groups, announced the establishment of a Pro Bono Foreclosure Assistance Hotline. Low-income Massachusetts residents who are facing foreclosure on their homes may call (800) 342-5297 or (617) 603-1700 and leave a message in the "foreclosure assistance" voice mail box. Each day, Legal Advocacy and Resource Center (LARC) will return the calls, determine how to best assist the caller and provide general advice. If the homeowner meets the eligibility criteria, LARC will refer the homeowner to Volunteer Lawyers Project (VLP), who will assign each case to a pro bono lawyer."

For more, see Massachusetts AG Press Release.

7 Charged In Alleged Cleveland-Area Straw Buyer Flipping Scam

The Cleveland Plain Dealer reports:
  • "Seven people indicted Tuesday on charges of racketeering and conspiracy of mortgage fraud are the first targets of a task force formed to crack down on predatory lending in Cuyahoga County. Among those accused in the 65-count indictment are an unemployed single mother who bought five Cleveland houses in one day and two area property managers who investigators say sold nine rundown houses at inflated prices."

Forged and falsified documents were used to secure subprime mortgage loans from Argent Mortgage Co., (the same mortgage company that provided the loans - believed to be $18 million - in the alleged home improvement scam in the Tampa-St. Petersburg area of Florida recently - see Loan scam hits dozens).

The alleged ringleaders have been identified as Joan Shinkaruk, owner of Elite Investors Corp. of Parma, and Daryle Rutherford of J. Rutherford and Associates, a Cleveland area investment property management company. Each face 49 felony counts. Also indicted were straw buyers Angela Brown, David Crosby and Marvin Hill, along with Michael Wojciechowski, a partner of Shinkaruk, and real estate broker Chad Cook. For more, see 7 indicted in Cuyahoga predatory lending crackdown.

Mortgage Servicer Wins Again On Right To Represent Lenders In Foreclosure Actions reports:
  • "A federal judge has dismissed a proposed class action lawsuit filed by homeowners who cast doubt on the legitimacy of the nation's leading mortgage registration firm to represent lenders in foreclosures. U.S. District Judge Timothy J. Corrigan in Jacksonville, Fla., ruled that Mortgage Electronic Registration Systems did not misrepresent itself or hide its role as a nominee for mortgage lenders."

For more, see Federal Judge Rejects Homeowners' Lawsuit Against Major Mortgage Registry.

Three Tennessee Mortgage Brokers Sentenced To Federal Prison

The Chattanooga Times Free Press reports that former mortgage brokers Darren Todd Moyer (2+ years), Phillip Howard McKinnish (1+ year) and Jennifer Jewel Henson (1+ year) were sentenced on bank fraud charges in a Tennessee Federal Court last week. They were also ordered to pay $1.12 million in restitution. In April, they each waived their right to a jury trial and copped a plea instead. According to court records, the scheme involved the standard stuff - creating false and fictitious documents, preparing false loan applications and inflating the sales prices of multiple properties. For more, see Three sentenced for bank fraud.

New Defaults On Crisp & Cole Property Flips

(revised 8-5-07)
The Bakersfield Californian reports:
  • "Four new defaults have rolled in for former Crisp & Cole Real Estate partners and spouses in less than a week, public records show. The latest default notices add more than $1.7 million in primary loans to a growing list of Crisp & Cole-related properties in some stage of foreclosure."

This story update involves the suspected property flips in the Bakersfield, California area involving David Crisp, Carl Cole, business associates and family members. For more, see New defaults for Crisp, Cole, records show (Cole says one of homes has offer on it already).

See also, Crisp & Cole defaults: Nightmare on Ordsall Street (Agent: Crisp & Cole took advantage of weak for gain) (The Bakersfield Californian - 8-4-07).

Go here for other posts on the Crisp & Cole ongoing saga.

Tuesday, July 31, 2007

Ohio Feds Charge Two With Bank & Bankruptcy Fraud In Alleged Intrafamily Flipping Scam

The Toledo Blade reports:
  • "Federal prosecutors have charged two Lima, Ohio, real-estate investors with bank fraud and bankruptcy fraud, saying the men defrauded lenders of $2.2 million by “flipping” properties to inflate values, creating phony rental and purchase agreements, and failing to disclose the actual buyers and their debts. Charged in U.S. District Court in Toledo are Robert Frye and Matthew Ebbeskotte, who prosecutors say formed Skyway Partnership Investments LLC in 1999 and arranged for the purchase of 46 properties through falsified mortgage-loan documents. [...] Lima housing officials found “a pattern of purchases and foreclosures” that seemed suspect."

Not charged were the defendants' wives and parents, who allegedly also participated in the scheme. For more, see Bankruptcy fraud laid to 2 Lima men.

Misapplication Of Construction Funds Results In Consumers Paying Twice For Unfinished, Defective Homes

Florida Trend Magazine reports:

  • "The fallout from the downturn in Florida’s housing market: More than 21,000 new foreclosure cases in June alone — up 144% from a year earlier — and a skyrocketing number of complaints against home builders over construction defects. Meanwhile, home builders in financial trouble have simply abandoned hundreds of customers, many of whom end up paying twice. “Contractors and consumers had both better hold onto their chairs,” says one attorney."

Among other things, the story highlights the practice by some in the construction industry of accepting deposits from customers (new-home buyers as well as existing homeowners desiring home improvements) and/or drawing down on customers' construction loans, and using the proceeds for things other than building the home or home improvement. In some cases, the builder or general contractor will simply "go out of business," stiffing in the process subcontractors or materials suppliers for labor and materials already provided. This results in mechanics liens being placed on the property, ultimately resulting in the customer either paying twice for an unfinished or defective home (or home improvement) or risk losing his/her home or building lot.

For more, see Left in the Lurch (Florida has one of the highest foreclosure rates in the nation. But the downturn in the residential housing market has left plenty of other problems in its wake, including increasing numbers of construction defects).

For related stories, see:

Foreclosure Rescue Civil Lawsuit Reads Like A Federal Criminal Indictment

In reading through the recent class action lawsuit filed on behalf of three Maryland homeowners against Metropolitan Money Store and a number of others, the complaint reads much like a criminal indictment would read that was handed up by a Federal grand jury to a Federal prosecutor. For example:

1) reference is made to a "Foreclosure Reversal Program," which was the name that the defendants allegedly gave to the scheme they are accused of using to cheat financially strapped homeowners out of their home equity. The lawsuit describes this Foreclosure Reversal Program as "a criminal enterprise which was made up of an association in fact consisting of [several of the named defendants],"

2) the complaint accuses the defendants of "hav[ing] engaged in willful, systemic and widespread violations of the Federal Racketeer Influenced And Corrupt Organizations Act ("RICO"), ...",

3) accusations are made of payments of "illegal kickbacks and unearned fees", preparation of "false HUD-1s" by the two named title insurance agency defendants, and that the homeowners were "robbed blind",

4) the complaint alleges that "The systematic false representations on HUD-1 Settlement Statements in the transactions ... were designed to conceal the illegalities of the transactions, ..."

5) allegations are made of conduct constituting wire fraud and mail fraud, and that "the false HUD-1 Settlement statements were utilized to launder the money being paid to the RICO defendants for the purpose of evading taxes ..."

6) allegations are made of charging and collecting interest and compensation on the "Foreclosure Reversal Program" loans in an amount that violated state law.

The defendants in this case include two title insurance agencies which, among other things, allegedly acted as the settlement/closing agents in the foreclosure rescue transactions described in the lawsuit, and two title insurers, for their alleged failure to properly supervise the title insurance agents who issued the title policies and handled the closings.

The defendants in this case are: Metropolitan Money Store Corp.; Fordham and Fordham Investment Group, Ltd.; RTE Title & Escrow, LLC; Sussex Title, LLC - formerly known as Cap Title, LLC; Diane Linda Jones; Leticia Nicholls; Jamie Armand Clark; Joy Jenis Jackson; Kurt Fordham; Alexander Jamil Chaudhry; Valeria Tomlin; Jennifer McCall; Southern Title Insurance Corp.; Chicago Title Insurance Company; and fifty unknown individuals that are currently referred to in the lawsuit as John Doe #1 through John Doe # 50, inclusive.

For a copy of the complaint, see Proctor, et al. v. Metropolitan Money Store, et al. (no exhibits).

You can also go here for direct links to the lawsuit (76 pages - $2.40) and the 28 accompanying exhibits (50+ pages - $.08/page) on the U.S. Courts' PACER website. PACER registration required.

Go here for other posts on the Maryland foreclosure rescue class action, which now also covers those homeowners in Washington, D.C. and Virginia who were allegedly ripped off by the named defendants.

Monday, July 30, 2007

More On Maryland Foreclosure Rescue Class Action Lawsuit

The foreclosure rescue class action lawsuit filed last month in a Maryland state court was refiled in a Maryland Federal Court last week.

For a copy of the complaint, see Proctor, et al. v. Metropolitan Money Store, et al. (no exhibits).

You can also go here for direct links to the lawsuit (76 pages - $2.40) and the 28 accompanying exhibits (50+ pages - $.08/page) on the U.S. Courts' PACER website. PACER registration required.

Go here for other posts on the Maryland foreclosure rescue class action, which now also covers those homeowners in Washington, D.C. and Virginia who were allegedly ripped off by the named defendants. Joy Jackson

New Yok State Creates Mortgage Rescue Fund

The Buffalo News reports:
  • "A $100-million refinancing program has been created by the state and the mortgage industry for people on the verge of losing their homes because of risky, adjustable-rate mortgages."
For more, see State creates $100 million mortgage rescue fund.

In a related New York foreclosure story, see Thompson Foreclosure Prevention Helpline Reaches Over 1,100 Calls (32 Percent of Calls Come from Brooklyn) (Brooklyn Daily Eagle).

Elderly North Dakota Woman Allegedly Ripped Off By Nephew, Home Sale Proceeds Unaccounted For

Reed Lloyd Satrom, 55, faces two felonies and stands accused of swindling his elderly aunt out of thousands of dollars, reports In Forum News. Satrom, in whom his aunt's trust was so strong that she granted him power of attorney three years ago – two years after being diagnosed with Alzheimer’s – allowing him to make her financial and legal decisions. According to the aunt's current legal guardian, when commenting about his inability to document where all of the aunt's assets went, “When you add up all the numbers it approaches half a million dollars. We don’t know where all the money went.” Included in the amounts unaccounted for is $225,000 representing the proceeds of the sale of her farm. For more, see Nephew accused of abuse of trust.

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

Minnesota Contractor Gets 9+ Years In Prison For $950K+ Swindle

The Star Tribune reports:
  • "The scheme carried out by remodeling contractor Rick Gurewitz to swindle two families of nearly $1 million dollars was so abhorrent, a Hennepin County judge said Monday, that he doubled the prison time usually handed down for such crimes. Gurewitz, 41, the owner of Home Update Company, bilked one elderly woman out of her entire inheritance. He charged her $789,000 for substandard and overpriced work on a century-old 600-square-foot Minneapolis house."
For more, see Contractor gets double the sentence for swindling elderly (Rick Gurewitz told the judge that "pathologies," like gambling, made him do it. The judge was not moved).

Maryland Civil Jury Finds In Favor Of Foreclosure Rescue Operator

In a column by Eric Hartley, reported in The Capital, a civil jury found that there was not "clear and convincing" evidence that foreclosure rescue operator Loren Williams defrauded an Odenton, Maryland couple out of their townhouse in 2002. However, according to the column:

  • "But the foreman read an extraordinary statement along with the verdict: Although we the jury did not find clear and convincing evidence of fraud on the part of the defendant, we do believe the defendant's business practices to be deplorable, unethical and unscrupulous."
The Maryland law regulating foreclosure rescue operators (Sections 7-301 through 7-321) which became effective in 2005, did not apply to this 2002 transaction.

One attorney familiar with Williams' business practices, reportedly commented that he believed Williams had victimized 200+ homeowners. Nevertheless, Williams is now "temporarily" out of business. He's reportedly serving 32 years in prison after admitting in 2005 to crimes not involving foreclosure rescue or other financial transactions. For more, see Justice not always about right and wrong.

Sunday, July 29, 2007

Add Atlanta, GA, Maricopa County, AZ To List Of Metro Areas With "Green Pool" Problem

In Atlanta, Georgia, WXIA-TV Channel 11 is reporting that the local foreclosure problem in the metropolitan area is giving rise to homes that are left vacant and abandoned, and that those with untended pools are giving rise to a "green pool" problem. According to the story:
  • "The problem with green pools is that very few people know that there is one behind the fences of vacant homes -- and because the pool is on private property, public health officials can't get involved until or unless there's a complaint from a neighbor. The Gwinnett Health Department said they will respond quickly to a complaint, because they understand the potential threat."It does pose a public health problem. Because again it can be harborage for mosquitoes" said a Health Department representative."
For more, see Foreclosures Turn Pools Green.

In Maricopa County, Arizona, The Arizona Republic reports:
  • "Increasing numbers of newer Chandler homes are being abandoned by cash-strapped owners, leaving weeds, green pools and headaches for neighbors and city officials. "It's scaring me," neighborhood services Sgt. Greg Carr said of the trend. "We're trying to figure out how we can approach this, who do we call when homeowners walk away and we can't find them?" Carr doesn't have statistics but said home foreclosures are rising and along with them code violations. His counterparts in Mesa, Gilbert and Peoria said the phenomenon is affecting those municipalities, too."

For more, see Abandoned homes concern city officials.

String Of Suspicious Fires Hits Vacant Homes In One Upstate NY Town

In New York State, The Plattsburgh Press Republican reports:
  • "A vacant house on The Portage in Ticonderoga burned to the ground early Thursday in what authorities believe was the third in a string of deliberately set fires. “They’ve all been vacant houses, at this point. But the next one could be occupied,” [said a police spokesperson]."
Of the three, at least one was in foreclosure; no word as to the foreclosure status of the other two, although they were currently being offered for sale. For more, see Ticonderoga house fire was third arson (So far only unoccupied homes have been burned). zebra

Foreclosed Home Filled With Mold, Claim Neighbors

In a story reported by (The Times - Munster, Indiana), a home that a bank got stuck with after foreclosing on it is allegedly contaminated with mold, according to the neighbors living near the home. The residents said the mold from the home, which they said has been vacant since June 2005, is causing respiratory problems for neighbors and relatives with asthma and emphysema. The bank has not confirmed the presence of mold, but say they'll clean it if found. For more, see Bank pledges to clean house.

Feds Investigating Foreclosure Investment Seminar

WFOR-TV Channel 4 in Miami, Florida reports:
  • "From documents filed with the government, [Channel 4] learned that the [Whitney Information Network] is being investigated by the Securities and Exchange Commission. The U.S. Department of Justice is looking into their marketing techniques, and they face several lawsuits alleging securities fraud. The Better Business Bureau has given them an unsatisfactory rating. In fact, the BBB says they've received more than 200 complaints against the company in the past three years."
The company, which is run by Russ Whitney, was in South Florida this week promoting their "Teach Me Foreclosure" seminar and Channel 4 went there to get some answers to questions about the ongoing Federal investigations.

For more, watch the WFOR-TV report, or to read the online story, see Feds Investigate Real Estate Seminar Company.

For a story on legal action taken against foreclosure seminars, see Illinois AG Sues Foreclosure Seminar Operator.

Subprime Lending Stories From Around The Country

The following are links to stories from around the country of homeowners getting in over their heads financially in transactions involving predatory subprime loans that reportedly involved questionable tactics by mortgage lenders and loan originators that made the loans. In each case, the homeowners appear to have relied on the "professionalism" with which the mortgage company employees held themselves out, only to find out that these particular people weren't reputable professionals at all, but merely agressive (and possibly unscrupulous) salespeople looking to sell a commodity that would yield themselves the most income.

To those reputable professionals in the mortgage lending industry, I'm sure you realize that the bad actors are ruining it for everyone. Industry credibility is hurting (see, for example, 2 In 3 Say Mortgage Ads Are Full Of Baloney, Says Poll). You better get your state regulators and professional organizations to do something about it quickly before the Federal government steps in and does it for you.

(Maybe one day the lending laws will change to (a) require uniform licensing requirements throughout the country and (b) create fiduciary responsibility on the part of the loan originators to the consumer - at least it will make it that much easier to keep some of the unscrupulous bad actors out of the industry, and it will also make it easier to go after those that do get in and hammer them and the companies employing them in a court of law.)

New Hampshire - Subprime mortgage saga: Home gone, inheritance lost.

California - Anatomy of a foreclosure (Creative financing, questionable loans leave woman mired in debt).

California - Lenders taking advantage of elderly.

Minnesota - 'I got burned. It's outright fraud.'

Brooklyn, NY - Subprime Woes Hit B'klyn (Local Couple Face Mortgage Hard$hip).

Oregon - Trapped by a house (Predatory lending ravages a family).