Saturday, September 08, 2007

$2.6 Million NJ "Cat House" Foreclosure Sale Voided; "Duped" Buyer To Get Back Deposit

(revised 9-14-07)
The Bergen Record reports:

  • "The restaurateur who bought a Saddle River [New Jersey] home just days before 150 cats were found to be living there in filth will be allowed to back out of the sale, a Superior Court judge ruled Friday. Michael Acciardi, 47, agreed to pay $2.6 million for the 20-room house on Burning Hollow Road at a sheriff's sale on Aug. 10. Four days later, authorities acting on a tip from a DHL courier rescued the first of the cats -- and six dogs -- that were found roaming the interior of the house, which was strewn with pet food and animal feces. [...] Presiding Chancery Court Judge Peter E. Doyne ... cit[ed] a report from a Union City claims adjuster that estimated the total repair bill at $2.25 million. Doyne approved Acciardi's petition to be relieved from his obligation to buy the house. Acciardi said the bank wanted to keep his security money of $420,000 for the $2.6 million sale. Instead, he said, it has to give him his money back within five days."

The quote of the day, from Michael Acciardi, "I'm pretty well versed at buying and selling homes ... but this was a case of total surprise and shock. It's somewhat of a lesson. Hopefully people can learn from the mistake that I've made."

(The lesson I think Mr. Acciardi is referring to here is very simple - and is something I intimated at in my August 26 post: If you have the right money, and you have the right attorney, and you get the right judge, anything is possible in court. Congratulations to Michael Acciardi.)

No word on whether the mortgage lender will appeal the decision. For more, see Cat squalor voids sale of house.
See also, Case of Pet-Ridden House Nudges Law on Setting Aside Foreclosure Sales.

Go here for other posts and links relating to the Saddle River Cat House.
Editorial Note:

If there is anybody out there who has a digitized copy of the judge's ruling in this case, and wishes to share it with the world, I'll gladly make it available online. It is something that I'm sure that many of the readers of this blog might find interesting. I can be reached at
In conclusion, I will point out that this case, even if it's not considered binding precedent under New Jersey law for others seeking to void a real estate transaction, should be of considerable interest to attorneys representing financially strapped New Jersey homeowners who find themselves caught up in foreclosure rescue scams and go to court seeking to void a transaction based on equitable grounds, which was done here.
After all, if someone with the apparent business and financial sophistication of Michael Acciardi, who by his own admission, "is pretty well versed at buying and selling homes," can get a real estate transaction like this one voided based on equitable grounds, a financially strapped homeowner with little or no business or financial sophistication and who is in the process of getting his/her home equity ripped off in a foreclosure rescue scam should, at least in theory, find it equally as easy to void the foreclosure rescue transaction.

Mortgage Lenders May Be Own Worst Enemy In "Short Sale" Negotiations

A recent article in Realty Times points out two problems that could be the cause of insufferable delays with mortgage lenders involved in short sale situations:
  1. dealing with out-of-state short sale representatives and appraisers, and
  2. the lack of smooth interaction between their employees in the "short sales department" and the "foreclosure department."

For two cases that illustrate how these problems can play out, see Lenders' Worst Enemy in the Short Sale Arena.

For another story addressing the common problem of delay in the short sale negotiating process, see Foreclosures become more than some bargain for (Buyers seeking quick deals on bank-owned homes are losing out to the industry backlog).

Minnesota Feds Score Second Guilty Plea In Alleged $50 Million Mortage Scam

The Minneapolis Star Tribune reports:
  • "Kristopher Robbins, 27, became the second defendant this week to plead guilty and agree to cooperate with the government's investigation and prosecution, which may involve as many as 200 homes and $50 million in losses. Robbins, a closing agent and licensed notary public, admitted that he participated in scores of fraudulent real estate transactions on behalf of a home builder described in court records only as "Company A." His lawyer, Jerry Strauss, said in an interview that Company A is Parish Marketing and Development Corp. of Eagan."

For more, see Closing agent pleads guilty in home fraud (It was the second plea related to an alleged scheme by Parish Marketing that may involve 200 metro-area homes and $50 million) (if link expire, try here).

Go here for other posts on this ongoing investigation.

Florida Escrow Company Abruptly Closes Down; $ Millions May Be Missing

WPTV Channel 5 in West Palm Beach, Florida is reporting on the abrupt closing of Vero Beach escrow company, Coastal Escrow Services. Reportedly, a fax went out from the company to area real estate agents last week stating that it ceased doing business as an escrow company and not to send them any more deposits. The company is said to have managed millions of dollars at any particular time and their is speculation that there may be people who will be taking a severe financial beating if the worse comes to pass and the funds are not accounted for. Vero Beach Attorney Ira Hatch, who owns the company, could not be reached for comment. For more on this part of the story, see Real Estate Fraud.

In addition, TC Palm is reporting that:

  • "Two lawsuits have been filed in Indian River County Circuit Court against Ira C. Hatch's defunct firm Coastal Escrow Services Inc. seeking in excess of $700,000. The lawsuits claim that the company has refused to return clients' deposits and bounced checks."
There may be hundreds of victims missing deposits placed with Hatch's escrow business; the missing deposits are being estimated to be in excess of $3 million. For more on this part of the story, see Defunct escrow business owner Hatch sued for deposits.

For copies of the lawsuits, see:

For related stories, go here for questions raised over attorney Ira Hatch's past; or go here for investigation into Coastal Title Services by the Florida Department of Financial Services and The Florida Bar, or here for a number of related issues.

Go here for stories on other alleged escrow agent mishandling of funds. sneaky slick escrow agents alpha

Massachusetts Attorney / Escrow Agent Pockets Loan Proceeds Meant For Lienholders

The Worcester Telegram & Gazette News reports that a guilty plea to income tax evasion and two counts of wire fraud was entered in a Boston Federal Court by disbarred attorney Alan Mason, 61, who operated Alan Mason Legal Services Inc. in Worcester.

It is alleged by prosecutors that Mason defrauded at least 10 lenders and Stewart Title, a real estate title insurance company, of more than $6.2 million between June 2001 and June 2006 while acting as an escrow agent for real estate transactions. Despite the plea agreement, Mr. Mason disputes that he received more than $1 million from the fraud or that it involved 10 or more victims.

Allegedly, some of the loan proceeds from real estate transactions that were intended to pay previous lien holders of properties was pocketed by Mason, leaving Stewart Title, for which Mr. Mason was an agent, on the hook for the unpaid liens requiring payment to cure the defective titles to the properties. For more, see Lawyer admits to tax evasion (Fraud counts included in plea).

Go here for stories on other alleged escrow agent mishandling of funds. sneaky slick escrow agents alpha

Florida Builder Accused Of Pocketing Loan Proceeds & Stiffing Subs; Homebuyers Pay Twice For Same Work

The Daytona Beach News-Journal reports:
  • "Several Palm Coast residents say they hired Canterbury Estates Homes Inc. to create their dream homes, many of them on Lewiston Court in Palm Coast. But the company has left them scrambling to pay the people doing the work. At least a half dozen people who contracted homes from Canterbury said they filed complaints against the company's owners with the Flagler County Sheriff's Office. At least two contractors said they have filed complaints with the State Attorney's Office against Canterbury."

  • "Stephen Rende, owner of Rende roofing, a longtime Palm Coast business, said this is the first time his company has ever had to file criminal complaints against a builder. Homebuyers like Anthony Rappa say Canterbury's owners, Herbert Heron and Noel Richardson, didn't pay the subcontractors who worked on their homes. Rappa and several others say Heron and Richardson took money from them either directly or from their bank-drafted construction loans, which should have been used to pay subcontractors."

One Palm Coast resident said he has spent 80 to 90 hours each week for the last few months finishing the construction of his new home that was left unfinished by the builder. For more, see Flagler builder investigated over liens, bad checks.

Go here for earlier posts on criminally implicated homebuilder Canterbury Estates Homes.

Go here for other stories of builders / contractors stiffing customers and subcontractors. contractors stiff subs customers alpha

"Brand New" vs. Used - Beware Of Bad Builders

For those who view purchasing a newly constructed home as a superior choice over buying a resale (used home), you might want to check out these two stories (both in Florida, coincidentally) of homebuyers whose buying experiences have turned into disasters.

Palm Beach County, Florida

The South Florida Sun Sentinel reports of some owners of one- and two-year-old homes in one development are scared to stay in their townhouses when it rains because water seeps in behind fuse boxes. They point to water stains around leaky windows and report mold spreading inside new walls. One woman holds up a picture of a toilet that trickled water onto her front porch with every flush — spoiling the pleasure of walking through the front door of the first home she owned. Examples of other complaints are:

  • plumbing problems, such as bathtubs leaking into downstairs ceilings; leaky windows and doors and the spread of mold,
  • electrical issues such as outlets that don't work and lights that dim when the air conditioning is running,
  • one homeowner complained that she would get a shock while washing dishes if one of the kitchen switches was turned on,
  • another homeowner complained that a retaining wall behind her home is made of stacked bags of cement mix, instead of a poured concrete wall or one reinforced with other supports.

A group of the owners, frustrated by a builder who they say failed to fix problems at their 64-home neighborhood have launched a new kind of attack: They have teamed up to try to stop one of their developers from getting approval for 48 new homes more than a mile away. They have been showing up at county meetings to oppose the builder's plans for a new project.


Lake County & Polk County, Florida

WFTV Channel 9 in Orlando, Florida reports that hundreds of would-be homeowners bought into three new neighborhoods being offered by one builder in Lake and Polk counties. After three years, not a single home has been built, and reportedly, the builder has started selling homes in a new project. The Florida Department of Law Enforcement is investigating builder Platinum Properties' owners David Weiker and Larry Maloney. For more, see:
For a message board organized for those who have bought into the unbuilt development to air out their complaints, see

Go here for other stories of builders / contractors stiffing customers. contractors stiff subs customers alpha

Friday, September 07, 2007

Minnesota Builder, Straw Buyers Possibly Involved In Equity Skimming Scam

Buried in the recent Minneapolis Star Tribune article describing communities that may have been subjected to a possible $50 million mortgage fraud conspiracy involving about 200 newly constructed houses are the following excerpts indicating the possible existence of equity skimming by the builder and the straw buyers (where property owners find tenants to unwittingly rent homes that are in, or about to go into, foreclosure - the landlord pockets the rent while failing to pay the mortgage payments; the tenants ultimately find themselves being evicted from the homes, even though all rent payments were made):
  • "As the case unfolds, the Prague Estates development remains pocked with empty houses. Neighboring owners are irate about the effects of the foreclosures on home values, while renters, concerned that their homes may be put up for auction, are unsure whether to stay or move."

  • "Matthew Phyle, 38, thought he found the home of his dreams when he and his family rented one of the Prague Estates houses in June. The house was nearly 3,000 square feet and carried monthly payments of just $1,200. But less than a month after Phyle signed a two-year lease, a Scott County sheriff showed up at his door with a foreclosure notice. Phyle said he called Michael Parish [of builder Parish Marketing & Development] for an explanation and was told, "Nothing in life is guaranteed." Phyle, who has four children, decided to move to south Minneapolis before the school year started. "This has completely turned my life upside down," he said."
see Alleged mortgage conspiracy led to $50 million in losses (A plan using "straw buyers" and falsified loan data resulted in a rash of foreclosures in southern suburbs) (if link expired, try here).

Go here for other posts on this ongoing investigation.

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

Georgia Mortgage Company Owner Gets 10 Years In Mortgage, Bankruptcy Fraud & Identity Theft Scam

The Atlanta Business Chronicle reports:
  • "Donna Renae Woods Lawrence, 43, of Decatur, was sentenced Thursday ... to 10 years in prison followed by three years of supervised release and was ordered to pay $2.9 million in restitution for mortgage fraud and bankruptcy fraud. [...] Lawrence used her company, Assurety Mortgage, and a stolen social security number to obtain loan origination and underwriting authority from the U.S. Department of Housing and Urban Development (HUD) for FHA guaranteed loans. She then originated hundreds of both FHA guaranteed and conventional loans with false income and employment information, including some where she was the borrower but used a stolen social security number and pretended to be her own twin sister. [...] Lawrence filed seven separate bankruptcy petitions to stay foreclosure on a number of the fraudulently acquired properties, with four of the petitions filed under the social security numbers of others. When HUD first learned of this problem and suspended Lawrence, she formed a second mortgage brokerage firm, Accurate Mortgage Group, and originated an additional 98 fraudulent loans."
Also sentenced with Lawrence were (1) Kerwanna Lashon Bennett Woods, 33, of Atlanta, (one year and six months in prison, three years of supervised release, $503,150 in restitution on a charge of bankruptcy fraud); and (2) Gwendolyn Reshell Woods, 41, of Decatur, (three years of probation beginning with six months of house arrest, restitution of $238,079 on a charge of conspiracy to commit mortgage fraud.

For more, see Three metro women punished for fraud.

Builder Faces 30 Years In Conviction For Grand Theft, Contracting Without License

The News Herald (Panama City, Florida) reports:
  • "Steven Palmer faces more than 30 years in prison when he's sentenced [September 11] for grand theft of more than $100,000 and contracting without a license. Jurors convicted Palmer [last month] after a two-day trial of taking $600,000 from a project he had contracted to do with Ashley Griffin to build a home in the Cook's Bayou area. Griffin paid Palmer $950,000 from December 2004 to Nov. 30, 2005, but the work done during that time amounted to about $350,000."

Palmer's situation is exacerbated by the fact that the contract period went through a hurricane season in which a state of emergency was declared. For more, see Contractor convicted, faces 30 years.

Go here for other stories of builders stiffing customers. contractors stiff subs customers alpha

Thursday, September 06, 2007

Minnesota Feds Estimate $50 Million In Losses In Alleged Mortgage Fraud Conspiracy

The Minneapolis Star Tribune reports:
  • "Authorities revealed in federal court Wednesday that they are investigating allegations of a mortgage fraud conspiracy involving about 200 houses in several southern Twin Cities suburbs. The investigation is tied to a rash of foreclosures in New Prague and New Market, and possibly other suburbs, and some people who were renting the houses have been evicted. The government estimates losses of more than $50 million."

  • "The foreclosures are rooted in the sale of homes by Eagan builder Parish Marketing and Development to a small group of investors, according to the company's attorney. Loan documents were allegedly falsified to make the buyers appear as if they qualified for the mortgages when they did not."

  • "[Ramiz Yousef Saadeh, a] 30-year-old loan officer for U.S. Bank[,] pleaded guilty Wednesday in federal court in Minneapolis to one count of conspiring to commit mail fraud in connection with the alleged mortgage fraud. Saadeh said that at the direction of a homebuilder identified in court only as "Company A," he provided mortgage brokers with falsified financial data from 2004 through May of this year. The information was used so that "straw purchasers" could obtain loans under false pretenses to buy the homebuilder's properties."

Parish Marketing and Development and its principals, Michael and Ardith Parish, have not been criminally charged at this time. An official in the U.S. Attorney's office in Minnesota said "the investigation is ongoing and we are unable to comment further at this time."

For more, see:

Go here for other posts on this ongoing investigation.

Indianapolis Landlord Charged In Alleged Equity Skimming Scheme; Deutsche Bank Chairman Listed As Potential Witness

The Indianapolis Star reports that Marion County prosecutors filed welfare fraud and theft charges Wednesday against Brent E. Perkins, 27, in an alleged scam involving his being accused of a failure to make mortgage payments on a house he rented to a tenant even as the U.S. government sent $4,045 in rent checks to him on behalf of the tenant under the Federal Section 8 subsidized rental housing program. Perkins may have been involved in a flipping operation where he reportedly purchased six Indianapolis properties that all ended up in foreclosure, according to the story.

The article points out a possible subplot to this story:
  • "[T]he Perkins case stands out because Marion County prosecutors could subpoena as a witness Josef Ackermann, chairman of Deutsche Bank, the largest bank based in Germany. Deutsche Bank is not charged with a crime, but it acted as trustee for some of Perkins' lenders. Housing officials say the German bank could provide insight into the lending process. Ackermann's name appears on the prosecution's list of possible witnesses. "What we're seeing is properties are being flipped four and five times, being bought and sold over and over again, and still the banks keep making the loans," said Rufus "Bud" Myers, executive director of the Indianapolis Housing Agency, which manages the city's Section 8 program."

For more, see Landlord accused in fraud, theft case (Steakhouse employee charged with failing to pay mortgage on Section 8 property).

Feds Get Guilty Pleas In Two Unrelated Alleged Mortgage Fraud Rings

In Illinois, the Rockford Register Star reports:
  • "A 45-year-old Rockford woman pleaded guilty Tuesday in federal court to being part of conspiracy to boost mortgage and real estate commissions by falsifying documents so unqualified buyers could receive mortgage loans from the Federal Housing Authority. Rhonda Torossian is the fourth person out of five charged in the scheme to plead guilty, according to Patrick Fitzgerald, U.S. attorney for the northern district of Illinois. The fifth, Cesar Arenas, 43, a Rockford Realtor, goes to trial in October."

For more, see Rockford woman pleads guilty to mortgage fraud.


In Missouri, the St. Louis Business Journal reports:

  • "Dack Daugherty pled guilty Tuesday to conspiracy and money laundering in connection with a south St. Louis-operated mortgage fraud ring, according to U.S. Attorney Catherine Hanaway's office. Daugherty admitted to defrauding lenders of more than $500,000, which he agreed to pay back, and laundering the proceeds of the plot through a local credit union. According to Daugherty's plea agreement, he and others, who were not named in the release, arranged for the fraudulent purchase of 52 properties."

For more, see Daughtery pleads guilty to money laundering. See also, St. Louis Post-Dispatch - Man admits fraud in home-buying scheme.

Go here for U.S. Attorney Press Release.

New Hampshire "Sleeping Judge" Accused Of Helping Hubby Hide Assets From Creditors

The New Hampshire Union Leader reports:
  • "A Superior Court judge, accused of fraudulently hiding her husband's assets from creditors, has been placed on paid administrative leave by the state Supreme Court. Patricia Coffey, who presides in Rockingham County Superior Court, was placed on leave as of 4 p.m. [August 29], pending the outcome of formal charges filed against her by the Judicial Conduct Committee (JCC). [...] Coffey allegedly compromised the integrity of the judiciary by creating a trust so creditors could not get at the assets of her husband, [disbarred attorney] John Coffey."
Reportedly, one of Mr. Coffey's creditors is The Professional Conduct Committee, who is looking for him to cough up the cash to cover the legal fees related to his disbarment in 2005 for exploiting an elderly client suffering from dementia. He was accused of taking the woman's Rye cottage as payment for $50,000 in legal bills.

Reportedly, Judge Coffey has had her own problems. Last year, she was accused of nodding off while on the bench, charges that she was cleared of. However, while the conduct committee found there was no "credible evidence" she ever actually slept during any trial or hearing, a report of the case states that a number of "credible" people described to an investigator several instances where they saw Coffey "nodding off" - brief periods of time when her eyes closed, her head fell forward or to the side and she appeared "fighting to stay awake."

For more, see Put on leave, judge denies fraud charges.

For more examples of alleged less than impeccable conduct by members of the judiciary:

Go here for story updates on this post.

Go here for other stories on questionable conduct by members of the judiciary. naughty judges

Countrywide Promoting Its Foreclosure Prevention Strategies

Countrywide Financial recently issued a press release that begins as follows:

  • "Help is readily available for homeowners who are experiencing difficulty meeting their monthly home loan mortgage payment. Countrywide Financial Corporation (NYSE:CFC), through its Home Ownership Preservation Program, recommends several strategies that may enable borrowers to manage their mortgages, avoid foreclosure and preserve their most valuable asset, their home.

Go here for the rest of the press release - Countrywide’s Home Ownership Preservation Program Offers Foreclosure Prevention Strategies (Countrywide borrowers avoid foreclosure 70 percent of the time when they engage in loan workouts.).

For more on Countrywide, see:

Wednesday, September 05, 2007

District Of Columbia vs. Metropolitan Money Store

(original post - 9-4-07)
As reported here last week, a second civil lawsuit has been filed against foreclosure rescue operator Metropolitan Money Store (Joy Jackson, Kurt Fordham, et al.), this time in the D.C. Superior Court by the Washington, D.C. Attorney General (the first lawsuit was filed in a Maryland Federal Court seeking class action status).

Go here for the D.C. Attorney General Press Release - AG Singer Sues Metropolitan Money Store, Others, Alleging They Stripped More Than $2 Million In Equity From DC Homeowners.

For a copy of the D.C. Attorney General lawsuit, see District of Columbia vs. Metropolitan Money Store, et al. (available online courtesy of Mayor Adrian Fenty, and DC Attorney General Linda Singer).

For a copy of the first lawsuit, see Proctor, et al. v. Metropolitan Money Store, et al. (available online courtesy of Legg Law Firm, LLC.).

Go here for other posts on Metropolitan Money Store.

For more on equity stripping scams, generally, see DREAMS FORECLOSED: The Rampant Theft of Americans' Homes Through Equity-stripping Foreclosure 'Rescue' Scams (4.61 MB approx.).

Metropolitan Money Store Class Action Website

(original post - 9-4-07)
The attorneys for the plaintiffs suing foreclosure rescue operator Metropolitan Money Store (involving Joy Jackson, Kurt Fordham and others and which seeks class action status) in a Maryland Federal court have set up a website to allow homeowners who have been taken advantage of by Metropolitan Money Store and others to voice their concerns, share information and get information about the pending lawsuit that was filed as a class action. For more, check out the Metropolitan Money Store Class Action Website.

For a copy of the class action lawsuit filed in Maryland, see Proctor, et al. v. Metropolitan Money Store, et al. (available online courtesy of Legg Law Firm, LLC.).

Go here for other posts on Metropolitan Money Store.

For more on equity stripping scams, generally, see DREAMS FORECLOSED: The Rampant Theft of Americans' Homes Through Equity-stripping Foreclosure 'Rescue' Scams (4.61 MB approx.).

AG Coakley Puts "For Profit" Foreclosure Rescue Operators Out Of Business In Massachusetts

(original post - 9-4-07)
From the office of the Massachusetts Attorney General:
  • "Attorney General Martha Coakley has filed a regulation with the Secretary of State’s Office that permanently bans for-profit foreclosure rescue transactions in the Commonwealth. The Massachusetts Consumer Protection Act authorizes the Attorney General to promulgate regulations to identify unfair or deceptive conduct that violates the act. The new regulation prohibits predatory, for-profit foreclosure rescue transactions. Foreclosure rescue transactions between family members or arranged by a non-profit community or housing organization are not banned under this regulation. The new regulation also makes it an unfair or deceptive act to market foreclosure-related services without a precise description of how the promoter will assist persons in avoiding or delaying foreclosure. The regulations define a “Foreclosure Rescue Transaction” as a transaction designed to avoid foreclosure and where the homeowner transferring the property maintains an option to reacquire the home by maintaining a legal interest in the home."

For more, see Mass AG Press Release - Attorney General Martha Coakley Permanently Bans Foreclosure Rescue Transactions.

See also, Coakley bans foreclosure rescue scams (Swapping help for house title called exploitive) (The Boston Globe - 9-5-07).

For more on equity stripping scams, generally, see DREAMS FORECLOSED: The Rampant Theft of Americans' Homes Through Equity-stripping Foreclosure 'Rescue' Scams (4.61 MB approx.).

Connecticut AG Files Suit In Predatory Lending, Mortgage Fraud Scam reports:
  • "Attorney General Richard Blumenthal and state Banking Commissioner Howard F. Pitkin today served a lawsuit against New London loan officer Jose Guzman and his associates, accusing him of leading “an extensive predatory lending scheme” that violated the Connecticut Unfair Trade Practices Act and state banking law. Also named in the suit are Royal Financial Services, LLC, in Trumbull, First Source Mortgage Solutions, Inc., in Branford, Elizabeth Athan Real Estate, LLC, in Shelton, J.G. Property Management & Investment, LLC, of New London and Attorney Maurizio Lancia, of Trumbull. Cutting Edge Contracting of Norwich, of which Brian Guimond is the sole proprietor, according to court documents, is also named in the suit."
For more, see New London Loan Officer Sued for Leading Predatory Lending Scheme, and State Suit Alleges Predatory Lending (Guzman, associates accused in scam that targeted Hispanics).

See also, Fighting To Keep Their Homes (Borrowers Victimized By Predatory Loans Look For Ways To Stay).

For AG Press Release, see Blumenthal Sues Brokers, Realtors And Others For Vast Predatory Lending Scheme.

For a copy of the lawsuit, see State of Connecticut vs. Royal Financial Services, LLC., et al.

Go here for other posts on the investigation of the named defendants.

Central Florida Man Charged In Alleged Home Improvement Scam

The Tampa Tribune reports:

  • "Frank Edmund Donofrio, the Seminole man who has been accused by at least a dozen Pinellas County residents of failing to properly renovate their property and of setting them up with high interest loans to pay for the work, was arrested in Tampa last week. Donofrio, 41, was charged with grand theft and acting in the capacity of a contractor without a license. The charges were the result of his dealings with a Tampa homeowner."

In addition to the current legal matter, Donofrio reportedly also has hanging over his head (1) a pending 2005 criminal case for a charge of grand theft in connection with another contract, and (2) a civil case in which he was sued by almost a dozen homeowners for shoddy work and for setting them up with high interest loans (some have since agreed to undisclosed financial settlements, but four are proceeding with the suit). For more, see Controversial renovator charged with grand theft (Civil and criminal charges are not new for Frank Donofrio, who took over his parents' business).

For other articles on the alleged escapades of Eddie Donofrio, see:

  • Renovator pleads no contest to theft (Frank Donofrio must pay $13,200 in restitution to a St. Petersburg homeowner. He still faces lawsuits related to other incidents).
  • Remodeler faces new complaints (A couple accuse him of shoddy work at a steep price) (St. Petersburg Times, 1-28-2007),
  • Home renovator wants to settle suit (Ed Donofrio sends checks to at least two couples. They say it's not nearly enough) (St. Petersburg Times, 2-13-2005),
  • State investigators home in on renovator ("Eddie" Donofrio says he is trying to satisfy clients who complained of incomplete and incompetent work) (St. Petersburg Times, 4-18-2004),
  • In a fix (Homeowners were promised affordable home improvements, but say they were delivered high payments, shoddy work and stress), (St. Petersburg Times, 3-21-2004).

Go here for other stories of contractors stiffing customers.

contractors stiff subs customers alpha

Tuesday, September 04, 2007

Abandoned Homes Raise Public Safety & Health Risks

An East Valley Tribune (Phoenix, Arizona) article appearing on MSNBC reports:
  • "Cash-strapped homeowners facing foreclosure are abandoning their homes in higher numbers and leaving behind potential public safety and health risks. City code enforcers and county health officials are saying many of the vacated houses are showing up in newer high-end subdivisions historically immune to such trends. [...] Once homeowners pack up and leave, the vacated houses create problems that include the overall appearance of the neighborhood and more serious health hazards. Green stagnant pools can become breeding grounds for mosquitoes that can carry West Nile virus. Empty homes can become flop houses for squatters and vandals. Unkempt yards are eyesores for neighbors that can also bring property values down. [... One] Mesa police officer ... said he has seen abandoned homes used for parties by teenagers and for criminal activity such as drug dealing."
For more, see Abandoned homes let health risks move in.

Deceptive Use Of Federal Government Insignia Lands Lender In Hot Water

KPIX-TV Channel 5 in San Francisco reports:
  • "The Monterey County District Attorney's office ordered the mortgage company Lending First Home Loans, Inc. to pay $15,000 in civil penalties for charges relating to fraudulent loan advertising, according to the district attorney's office. The company may be subject to a permanent injunction, as it reportedly sent unsolicited fliers featuring federal government insignia to Monterey County residents even though the company offered only private loans. [...] The civil suit that resulted from the investigation alleges that Lending Home Loans, Inc. illegally deceived consumers by withholding that the loan promotion was not government sponsored or endorsed."

For more, see Monterey: Mortgage Company Ordered To Pay $15,000 In Fraud Lawsuit.

Coping With The Income Tax Hit On "Short Sales" & Foreclosure Sales

A recent syndicated column in the Los Angeles Times gives a layperson's explanation of how the income tax law operates when a homeowner receives the benefit of a cancellation of debt when he or she sells a home on a short sale (when the sale price is less than what is owed to the mortgage lender), or when the home is sold in foreclosure and the sale proceeds are less than the homeowner's outstanding loan balance.

Also mentioned are several of the exceptions to the general rule that income from the mortgage lender's cancellation of debt is taxable to the homeowner, including the bankruptcy exception and the insolvency exception that have been discussed here in prior posts.

Also meriting attention in the column were the options that may be available to a taxpayer to pay off the tax if they have no cash to pay it (IRS Offer-In-Compromise - see IRS Form 656 & Instructions (44 pages - 3.3 MB); and Payment Plans, Installment Agreements - see IRS Form 9465).

For more on the syndicated column, see Look out for tax hit after home loss; Tax hit could follow home loss (President Bush proposes a temporary exemption. Here's a Q & A on how that might affect homeowners in distress).

Go here for prior posts on dodging the income tax on short sales and foreclosure sales.

For further information from the government on avoiding the income tax in these situations under current law, see:

Hollywood, Florida Cops Flush Out Alleged Toilet Part Pilferers

The South Florida Sun Sentinel (among other media outlets) is reporting on three suspects who have been apprehended and charged with stealing about $2,000 worth of commercial toilet flush valves at a state park in Broward County, Florida. According to the story:
  • "Detectives are investigating whether the suspects are responsible for a string of similar thefts throughout south Broward County. Valves from toilets and urinals have disappeared since May at parks and fast-food restaurants, rendering the restrooms useless."

Reportedly, the global shortage of copper, aluminum, nickel and other materials found in the stolen parts has driven up demand and prices for all metals worldwide (and is apparently driving the thefts of metal plumbing parts). Brass devices that prevent backflow on water lines is also growing in popularity as a theft target. For more, see Police flush out suspects who stole toilet parts from parks, restaurants (if link is expired, try here).

Go here for posts on copper & other metal thefts.

See also, WFOR-TV Channel 4 TV report - Thieves Caught Stripping Bathroom Toilet Fixtures.

Theft of metal parts (as well as other items of value) is not unheard of in the context of abandoned, vacant foreclosed homes. See this Minnesota story on thieves breaking into vacant homes and ripping off the copper tubing; or this Indiana story which, among other things, involved stripping homes of their siding, copper wiring, appliances, metal fixtures and anything else salvageable. With the inventory of vacant foreclosed homes littering the landscape on the upswing, I suspect that my coming across more of these metal and appliance stripping stories will also be on the upswing. copper metal theft zebra

Monday, September 03, 2007

Equity Skimming Scam Lands Con Mail In Jail; Leaves Woman Homeless

In Pennsylvania, the Pocono Record reports that Sid J. Butler, 51, a Bartonsville con artist posing as a real estate broker was sentenced to six to 23 months in jail after pleading guilty to a scam that left a 63-year-old Effort woman homeless.

Reportedly, Butler, who has no real estate broker’s license, took possession of a home that had gone into foreclosure and, after the previous occupant moved out, rented the home to the victim. Butler never told her the house was in foreclosure and told her she could pay him rent with the option to buy it from him. She lived in the house for one year, paying Butler a total of $6,000 in rent over that time period. A few days after a sheriff’s deed was issued on the foreclosed property, she unwittingly issued Butler an $80,000 check to buy the home from him. After becoming aware of the foreclosure, she asked Butler for her money back. She never received her money and was ultimately evicted from the property and now lives with family in New Jersey. For more, see Con man gets county jail time for scam that left woman homeless.

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

Tenants In Apartment Building In Foreclosure Lose Lights, Fear Running Water Is Next

WTOL-TV Channel 11 in Toledo, Ohio reports on the predicament tenants in a certain apartment building face as their landlord reportedly has been stiffing the mortgage lender out of its mortgage payments and allowing the building to go into foreclosure. In addition to the possiblity of ultimately facing eviction, electricity to the common areas of the premises (exterior and hallway lighting, etc.) has already been cut off, literally leaving the tenants in the dark. They expect the running water to the property will be cut off by mid-September (the landlord is apparently stiffing the utility companies, too). The Call 11 For Action Problem Solver Mika Highsmith had the following advice for all Toledo, Ohio residents (hopefully with some input from the Channel 11 legal department):
  • "If this is happening to you, go straight to Toledo Municipal Court. There you can put your rent in escrow and apply for a restraining order to save your utilities. It may seem like a hassle you don't deserve, but it's worth it."

Go here to watch the Channel 11 TV report, or to read the online report, see She Rents a Place that's in Foreclosure -- So She Contacted Mika Highsmith for Help.

For other stories on tenants unknowingly renting homes in foreclosure, go here, or here, or here. unwittingly equity skimming beta

Another Landlord Pockets Rent While Home Goes Into Foreclosure; Tenant Faces Imminent Move

In California, the Tracy Press reports on the story of a tenant who:

  • "is one of the indirect casualties of the sharp downturn in the housing market. She’s rented the same house with her kids for two years, but not for much longer, as the home she lives in is being hit by the foreclosure bug. [... She] learned recently that her home will be sold [at a trustee's sale] at the San Joaquin County Courthouse next week."
Reportedly, the landlord is trying to find a solution, but if one isn't found, a search for new living accomodations for the tenant and her five children, ages 5 through 18, may be imminent. For more, see Hit by a bank shot.

For other stories on tenants unknowingly renting homes in foreclosure, go here, or here, or here. unwittingly equity skimming beta

Alleged Equity Skimming Forces Illinois Couple To Move From Rented Foreclosed Home On Short Notice

Daily Southtown recently reported the story of a husband and wife who say they faithfully paid $1,400 in rent each month to their landlord on a lease that was to run until August, 2008. They recently received court papers giving them and their four children until September 15 to move out. The reason: the couple's landlord stopped making the mortgage payments and the bank acquired title to the home in a foreclosure sale (the landlord happened to be the husband's sister). For more, see Alsip family losing home because of landlord's refusal to make mortgage payments.

For a story update, including the landlord's rebuttal, see Readers reach out to Alsip family forced out of home (Landlord says she hasn't seen payment in almost a year).

A new Illinois statute (effective 1-1-2008) providing tenants in this situation 120 days to find new living accomodations can be found either at Public Act 95-0262, or at 735 ILCS 5/15‑1701.

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

New Illinois Law To Ease Foreclosure-Eviction Trouble On Unwitting Tenants

In Illinois, Daily Southtown reports:
  • "Renters who live in buildings under foreclosure will be protected from eviction if their landlords default on mortgage payments thanks to a new law sponsored by Sen. Maggie Crotty (D-Oak Forest). The legislation allows tenants who are up-to-date on rent payments to stay in their homes for 120 days after notice of a foreclosure hearing. Tenants could be evicted with little or no warning under previous law. "If somebody is making their rent payments and unbeknownst to them the landlords themselves aren't making their mortgage payments, I didn't think that's fair to give no notice to the renters," Crotty said."

The law, which takes effect January 1, 2008, was passed in response to the equity skimming practices engaged in by some real estate investors who, in getting in over their heads financially with an investment property, decide to cut their losses by stiffing the mortgage lender out of its mortgage payments while renting out the premises to a tenant, pocketing the monthly rent until the mortgage lender initiates foreclosure proceedings that culminate in a public auction of the premises. The tenants, unaware of the ongoing legal process in many cases, have been left with little time to move out and find new living accomodations.

For more, see New law gives foreclosure notice to help renters (Legislation inspired by Daily Southtown columns allows tenants to stay in their homes for 120 days if their landlords default on mortgage payments).

The actual Illinois statute can be found either at Public Act 95-0262, or at 735 ILCS 5/15‑1701.

For a related story of tenants finding themselves with having to vacate a rented foreclosed home on short notice, see Alsip family losing home because of landlord's refusal to make mortgage payments.

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

Fires & Foreclosures

The following are excerpts from three stories of property in foreclosure that caught fire under suspicious circumstances.

Minnesota Woman Facing Foreclosure Charged With Torching Home

The Prior Lake American reports:

  • "A 48-year-old Prior Lake [Minnesota] woman was charged with first-degree arson in Scott County District Court on Aug. 15. Tammie Wells-Clark Narveson allegedly started her home ... on fire at approximately 11:33 p.m. on Oct. 6., 2006, according to the criminal complaint. [...] Narveson told police that she had been served with divorce papers by her husband a week earlier. She told police her husband still lived at the home but slept in the basement. [...] When officers spoke with Narveson’s husband, he told them the house was in foreclosure. However, Narveson herself told police that their bills were up-to-date and their finances were in good shape, and the house was insured."

For more, see Woman charged with arson.


Georgia Home in Foreclosure Goes Up In Flames

The Macon Telegraph reports:

  • "For the fifth time in two weeks, Byron firefighters were once again called to a Byron area residence this morning. And this time, the fire destroyed the home. [...] The state fire marshal's office and the Peach County Sheriff's Office already have been investigating an earlier fire at the same home, which is the subject of a foreclosure, [the Peach County fire chief] said."

see Byron house fire under investigation.


Fire In Vacant House In Foreclosure Labeled "Suspicious"

In Michigan, the Adrian Daily Telegram reports:

  • "An unoccupied house was heavily damaged by what a fire official called a suspicious blaze. [...] According to Lenawee County property records, both parcels ... were in foreclosure ..."

For more, see Friday afternoon fire damages vacant home on Seneca Highway.

For other posts on fires & foreclosures, go here and go here. zebra

Sunday, September 02, 2007

Helen The Pig Found Living Alone In Foreclosed Barn; Now Recuperating

The Express-Times recently ran a story on Helen the Pot Bellied Pig, a 5-year-old swine that had been living alone in a barn on a 10 acre property containing the barn and a farmhouse that a bank foreclosed on. Reportedly, the farm's former owner had been cleaning her shelter, changing her water and feeding her a steady diet of dog food, pizza, doughnuts and frozen waffles. Her diet not only undoubtedly spoiled Helen's figure, as she weighed in at about 20-30 pounds overweight (120-130 lbs. vs about 100 lbs.), but the excess weight is causing her some physical problems. With the help of the Pig Placement Network, a nonprofit pet pig rescue and adoption service, it is expected that she'll take off the excess weight, hopefully overcome her health problems, and be ready for adoption in about a year. For more, see:

Go here for other posts on Helen The Pig.

For more on potbellied pigs, see the North American Potbellied Pig Association (NAPPA).

For another story on the health problems of a pig who was allowed to get overweight, see Woman Claims Pet-Sitter Made Her Pig Fat (A woman wants abuse charges filed against an acquaintance who was pet-sitting for her potbellied pig and allowed the animal to get fat. Michelle Schmitz said her pig, Alaina Templeton, weighed 50 pounds when Schmitz left her with a co-worker who offered to care for the animal in February, when Schmitz went on medical leave to recover from ankle surgeries. Nine months later, the pig weighed 150 pounds and it took veterinarians 4 1/2 hours to surgically remove the animal's collar, the Winona Daily News reported).

Go here for more on pets and foreclosures.

Cat Count Up To 142 At NJ Mansion Bought At Foreclosure Sale For $2.6M

(revised 9-3-07)
In a story that still has legs, the Bergen Record reports:
  • "Animal control officials continue to extract cats from a borough home where scores of roaming felines and the carcasses of 23 dead and bagged dogs and cats were found more than two weeks ago. "We still have cats in there," said Carol Tyler of Tyco Professional Animal Control in Midland Park, where most of the cats have been sheltered. 'There are at least four that we've seen, and there may be more. We're up to a count of 142 that were in the house so far.' [...] The home was in foreclosure and had been bought by restaurateur Michael Acciardi, 47, who lives next door and has said he bought it for $2.6 million without seeing the interior. He said he did not get a look at the inside until Aug. 23 after he returned from vacation and immediately said he wanted to cancel the deal."

For more, see Officers discover more cats hiding in Saddle River home.

Go here for other posts and links to online reports on this story.

Go here for a picture of the front of what is reportedly the $2.6 million mansion.

Washington Post Reminder On Metropolitan Money Store

There is a short 7-line blurb on today's "Week In Review" page (page C04) of The Washington Post on foreclosure rescue operator Metropolitan Money Store. Nothing new - just a reminder that there are now two lawsuits pending against the company, Joy Jackson, Kurt Fordham, and others - the class action lawsuit filed in Maryland, and the more recent lawsuit file in the District of Columbia by the D.C. Attorney General. Also a reminder that the U.S. Secret Service and the FBI are investigating. To read the blurb, see Claims Against Lender Increase (Managers of Pr. George's Firm Lived High Life).

Metropolitan Money Store & Metro Dream Homes, Metropolitan Grapevine

For readers looking for posts on one or both of two big, but unrelated, stories coming out of Maryland, I have provided two links below that may be of some help to those looking for the several posts on these stories.

  • Go here for posts on the two Metropolitan Money Store cases (Joy Jackson, Kurt Fordham, et al.); one a class action suit brought by private individuals; the other brought by the District of Columbia Attorney General,
  • Go here for POS Metro Dream Homes & Metropolitan Grapevine (includes links to Andrew Williams' video reponse to the recent articles in The Washington Post about the company).

For story update on Metro Dream Homes, see Federal Court Denies "Dream Homes" Request To Lift Cease & Desist Order (10-2-07).

Long Time Owners Losing Homes To Subprime Foreclosures

WTOV-TV Channel 9 in Steubenville, Ohio reports on an 85-year-old Clarington woman who has lived in her home for 40 years and was left with no choice but to move out because she couldn't afford the mortgage payments. The woman decided to refinance her home mortgage to pay for repairs, but the mortgage payments became unaffordable. Go here to watch the WTOV Channel 9 report, or to read the online report, see Elderly Woman's Home Being Taken Away.

KGO-TV Channel 7 in the San Francisco Bay area reports on a 74-year-old retired operating room nurse who has lived in her home for 39 years. The home is now in foreclosure, thanks to a sea of paperwork and a subprime mortgage loan leaving her unable to make the $2700 monthly payment. Fo more, see Oakland Subprime Victim Fights Back In Washington (74-Year Old Faces Foreclosure).

Cleveland Attorney Indicted Of Stealing $178K From Clients

In Ohio, a Cleveland Plain Dealer blog reports:
  • "A Cleveland attorney was indicted [Thursday] in Cuyahoga County Common Pleas Court on theft charges accusing her of stealing more than $178,000 from an East Side church and a probate estate. Cynthia D. Smith, 53, is accused of stealing $100,000 from the Eternal Security Baptist Church and more than $78,000 from a representative of a probate estate administered in Connecticut when she sold a property in Cleveland."

For more, see Cleveland lawyer charged with theft.

Missouri Mortgage Broker Pleads Guilty To Federal Conspiracy Charge In Flipping Scam

The St. Louis Post-Dispatch reports that Bennie Clark, 33, of Lake St. Louis, and owner of World Wide Financial LLC, pleaded guilty Friday in a St.Louis Federal Court to a conspiracy charge in a fraud scheme that cost mortgage lenders as much as $1 million and could cost him up to three years in federal prison. According to the story:

  • "Clark ... admitted that he and a Hazelwood man named Michael Jackson used straw buyers and rigged appraisals and financial information to inflate the prices of properties in St. Louis and St. Louis and St. Charles counties before reselling them, according to prosecutors and court documents."
The others involved in the conspiracy were: Jackson (guilty plea to a felony fraud charge; not yet sentenced), Donna Brown, an employee at Clark's firm (guilty plea in March; four years' probation and 100 hours of community service), straw buyer Robert Casey (five years probation, $132,929 restitution order), and appraiser Reginald Mays (not charged in case, but sentenced earlier to three years' probation; $2.1 million restitution order in another mortgage fraud case). For more, see Mortgage broker pleads guilty of fraud scheme.

For story updates, see:

Ohio Man & Neighbors Save Foreclosed Cincinnati Cat House And Its 62 "Residents"

WKRC-TV Channel 12 in Cincinnati, Ohio reports:
  • "Three months ago, the owner of 251 Strader in the East End moved out, but left behind more than 60 cats. The bank foreclosed on the property and it was facing the wrecking ball. But ... the house has been spared and so has a neighborhood facing a serious cat problem. 251 Strader is still a little rough, but it's a long way from where it was in May, abandoned, except for 62 cats living on both floors and in the attic."
Michael Bolan, who purchased the house from Fannie Mae after it got stuck with it after a foreclosure and had to unload it, had quotes from three wrecking companies to demolish the house. He stuck it out instead and, with the help of some of his new neighbors, cleaned the house, successfully eliminated the horrific smell (Bolan found a Cincinnati-based company, OdorXit, whose products are designed for such challenges), and, with planned renovations, can be inhabited. The cats and kittens have all been saved with the heroic efforts of some animal rescue groups, veterinarians, and others, although more than 40 of them are still looking for homes (those looking to adopt or donate can check out

For more, see (stories no longer available online):
  • Cat House Gets New Lease On Life,
  • East End celebrates homes, garden, rescue (Cincinnati Post),
  • Horrific 'cat house' cleaned up (Cincinnati Enquirer).

Go here to view Channel 12 TV report.

Go here for more on pets and foreclosures.

Neighbors Raising "Stink" Over Foreclosed Homes From Coast To Coast


KOVR-TV Channel 13 in Sacramento, California reports on a house that has been stinking up the neighborhood for the last two years. Reportedly, the former owner abandoned the home about three nonths ago, leaving about a dozen cats behind. The mortgage lender recently foreclosed on the home and has arranged for the house to be cleaned out. The cats were rescued from the house and are now in the care of animal control officers. For the people living around the problem property, their two year fight to get rid of the stench may soon be over. For more, see House Stinks Up Orangevale Neighborhood.

Go here to watch the Channel 13 TV report, Stinky House.


North Carolina

WXII-TV Channel 12 in Winston-Salem, North Carolina reports on an abandoned home recently acquired by a foreclosing mortgage lender that was left by the prior owner with so much garbage, the stench can be smelled around the neighborhood. Dog feces, stacks of garbage and empty dog food bags are among the items found inside the home. Reportedly, the house could be condemned, and if the problems aren't fixed, code enforcement could go to the city council to ask for a demolition order. For more, see Residents Raise Stink Over Filthy House.

Go here to watch the Channel 12 TV report, Dirty House In Foreclosure.



Homeowners In Foreclosure Sue Town For Wrongful Demolition Of Garbage-Filled, Rat Infested Structures

The Kennebec Joutnal reports:

  • "The town of Palermo maintains it followed correct procedures to demolish a garbage-filled house, vehicles and outbuildings ... in June. The former occupants of the property, Donald Clark Sr. and his wife, Terri Clark, sued both the town and the town's attorney ... a month after some 200 tons of rubbish were removed by court order. Neighbors had complained about both the odor emanating from the garbage and the infestation of rats."

For more, see Town defends demolishing of Clark property.

Ohio Inmates To Begin Mowing Lawns At Vacant Homes

The Tribune-Chronicle reports:
  • "With the area’s foreclosure rate one of the highest in the nation, the city of Warren and Trumbull County are joining forces in an attempt to tackle at least some of the blight issues. County Sheriff Thomas Altiere said non-violent male inmates from the county jail will soon be mowing the grass at vacant homes in the city. As a result, the offenders will receive one day off their sentence for each day they mow. [...] The city also has an agreement with Trumbull Correctional Institution for non-violent female workers to help mow grass, pull weeds and plant flowers."
For more, see Warren, county reach deal on grass mowing.