Saturday, February 09, 2008

Financially Strapped PTO President Charged With Pocketing Group's Cash To Catch Up On House Payments

In Mars, Pennsylvania, the Pittsburgh Tribune Review reports:
  • The president of the Mars Elementary School Parent-Teacher Organization will have a preliminary hearing March 5 on charges she took $3,000 from the group to make back payments on her mortgage. Paula McDade, 40, of Lowery Drive, Valencia, faces five counts in the case, including theft, receiving stolen property, fraud, tampering with records and misusing entrusted property.
For more, see Mars PTO president charged with theft.

"One-Pot Method" Blamed For Increase In Home-Based Meth Labs, Say SW Michigan Cops

In Kalamazoo, Michigan, The Grand Rapids Press reports:
  • Police found components of a "one-pot" methamphetamine lab Monday in the basement of a home in the city's Vine neighborhood, authorities said. Police in southwestern Michigan have said meth-lab busts, which have been on the decline since 2005, are spiking again in the region thanks to the one-pot method, a quick new recipe that allows meth manufacturers to make the drug in as little as a half hour using pseudoephedrine, discount-store ingredients and a couple of pop bottles.

For more, see Kalamazoo meth lab busted.

Go here for some methamphetamine information resources.

Go here and go here for other posts on home based meth labs. meth lab zeta

Grand Rapids Fire Displaces 101 Households, Leaving Many Financially Squeezed, Homeless

In Michigan, the Grand Rapids Press reports:
  • Like many others who lost everything to a spectacular fire two weeks ago, Betsey Chase went to a housing fair [recenty] to get help toward rebuilding her life. She quickly learned it will not be easy. Yes, keep making mortgage and association payments on the two-bedroom condominium you lost, she was told. And no, insurance payments probably would not come in time to help cover the initial rent for government-subsidized senior housing -- that's assuming her application is approved. "I feel like I'm being pulled in so many directions," said the 87-year-old Chase, holding her head in her hands and fighting back tears. [...] The Jan. 20 fire [...] displaced 101 households.


  • [Extension office community development specialist Carol] Townsend said while some, such as Chase, were lucky to have relatives take them in, others have relied on the Red Cross for temporary housing. But the rescue organization's resources have been stretched by the needs of the 70 to 85 cases opened in the wake of the fire, she said.

For more, see Condo fire victims get advice at housing fair.

Home In Foreclosure Suffers $25K In Fire Damages; Blaze Not Considered Suspicious

In Brookfield, Wisconsin, the Milwaukee Journal Sentinel reports:
  • Fire caused about $25,000 in damage Sunday night to a home owned by Town Supervisor Robert Flessas, a residence on which he is facing a foreclosure action and has said he wants to turn into a bed and breakfast. Fire Chief Andy Smerz said Monday that the fire was a routine chimney fire that originated in the flue and spread to the walls nearby on the second floor and was not considered suspicious. The fire caused smoke damage throughout the home [...] he said.

For more, see Fire damages supervisor's home (House facing foreclosure suffers $25,000 in damage).

For other stories on fires & foreclosures, go here , go here , and go here. foreclosure arson xerox

Blaze Hits Vacant Home In Foreclosure; Declared "A Total Loss"

In Aurora, Colorado, the Rocky Mountain News reports:
  • Aurora firefighters put out an intense house fire [Monday] morning near East Jewell Avenue and Interstate 225, but the structure was declared a total loss. [...] The house was vacant and had been on the market for six months, [Capt. Mark Turley of the Aurora Fire Department] said. According to real estate listings, it had been in foreclosure and was on the market for $160,000. The notice said the four-bedroom, three-bath house needed "major cosmetic work."


  • "We did an initial attack, went in and with our crews inside," Turley said. "But within a few minutes of being on the scene, the whole roof was getting ready to collapse and that's a real problem for us. So we did an emergency evacuation." A portion of the roof soon collapsed into the structure. Firefighters then concentrated on preventing the flames from spreading to a nearby evergreen tree, where they feared it might then spread to an adjacent house. Turley said no one was hurt in the effort. Investigators stayed on the scene to begin sifting for clues to the cause of the fire.

For more, see Intense blaze destroys Aurora home.

For other stories on fires & foreclosures, go here , go here , and go here. foreclosure arson xerox

Industry Analysts Divided On Any Link Between Increasing Foreclosures & Arson

A recent story in MSN Moneycentral explores the possibility of a link between the increase in home foreclosures and the increase in arson.
  • [A]cross the U.S., homeowners are searching for ways to escape from mortgages they can't pay -- or don't want to. A few are turning to arson, but it's too soon to turn anecdotes into meaningful statistics. Consumer pressure and state laws require speedy settlements, which means insurance companies are quick to pay up and slower to complete complex arson investigations. Definitive answers will come later.

For more, see Broke homeowners linked to arsons (Authorities in economically stressed cities see an increase in torched houses. Is the nation's mortgage mess transforming more Americans into criminals?)

For other stories on fires & foreclosures, go here , go here , and go here. foreclosure arson xerox

Friday, February 08, 2008

Foreclosure Crisis Report Released

From the Ohio Attorney General's Office:

  • Ohio Attorney General Marc Dann, along with 10 state attorneys general and several state banking regulators, released a report [yesterday] revealing major shortcomings in the response of subprime mortgage loan servicers* to the foreclosure crisis. “Across the country, hundreds of thousands of people are losing their homes to foreclosure,” said Attorney General Dann. “Yet we’ve found that servicers’ efforts to help at-risk borrowers fall seriously short of need.”

  • The group, the State Foreclosure Prevention Working Group, met last summer to work with servicers of subprime mortgage loans to identify ways to work together to prevent unnecessary foreclosures; situations where it is in the financial interests of both the secondary market investors and the borrower to modify the loan.

For some of the key findings in the report, see the Ohio AG's press release: Foreclosure Crisis Report Released (Major shortcomings in efforts by servicers to stop foreclosure crisis).

For the actual report, see Analysis Of Subprime Mortgage Servicing Performance.

Goring Gets 10 Years In Straw Buyer, Flipping Operation

In Pueblo, Colorado, The Pueblo Chieftain reports:
  • A budding real estate mogul whose operation grew beyond his grasp and deteriorated into shady appraisals, forged documents and fraudulent collection of loan proceeds was sentenced Wednesday to 10 years in prison. In October, District Judge Rosalie Vigna found Maurice Goring, 41, guilty of two counts of racketeering under the Colorado Organized Crime Control Act.
  • Goring enlisted acquaintances he met at church to serve as the listed owners on distressed properties he purchased. Goring then pocketed the mortgage loan proceeds, often taking out a second mortgage immediately at closing. He let the houses lapse into foreclosure. Along the way, he ruined the credit of the people who agreed to serve as the registered owners of the homes.

For more, see Man gets 10 years in real-estate scam.

Go here for earlier posts on Maurice Goring's straw buyer, flipping operation.

Twin Cities Alleged Mortgage Fraud Ring Growing "Like A Fungus"

In Minnesota, the Pioneer Press reports:
  • It all started in 2006 when a Plymouth man called police after finding a mortgage notice in his mailbox, addressed to him, for a house he'd never heard of. Three arrests later, investigators now are sifting through the paperwork on some 80 closings done at title companies in Shoreview and Burnsville in an alleged mortgage-fraud ring that they say just keeps growing. "Everywhere you turn, it's like a fungus," said Detective Cory Cardenas of the Bloomington police.

  • The investigation originally centered on 53-year-old Larry D. Maxwell of Minneapolis, according to a search warrant affidavit filed last week in Ramsey County District Court. In November, Maxwell was arrested and charged in Hennepin County District Court with 10 counts, including racketeering, theft by swindle, identity theft and aggravated forgery related to real estate deals made in 2006. He was released after posting bail of $250,000 and a pretrial hearing is being scheduled. The new search warrant indicates the case has broadened, and describes a long list of records detectives wanted to collect from two title companies in Shoreview and Burnsville where two associates of Maxwell handled closings.

For more, see Mortgage-fraud probe grows (Arrests, search warrants related to millions in real estate deals).

NC Man Cops Conspiracy Plea In Alleged Ponzi Scheme-Like Fraud Costing Investors $100M+

In Charlotte, North Carolina, The News & Observer reports:
  • The former president of a company involved in a failed real estate project that cost investors more than $100 million pleaded guilty [yesterday] to one count of conspiracy in U.S. District Court in Charlotte. Neil O'Rourke, 40, of Apex, held various positions at companies involved in the mountain development known as the Village of Penland, located about an hour northeast of Asheville. He became president of Peerless Real Estate Services in in 2004. O'Rourke pleaded guilty to a conspiracy charge that included making a false application and statements in relation to loans, mail fraud, wire fraud, bank fraud and securities fraud. O'Rourke appeared today in Charlotte to formally enter a guilty plea.


  • According to the statement [issued by the Feds], O'Rourke participated in a conspiracy of investment and mortgage fraud: "The investment fraud scheme was carried out in a Ponzi scheme fashion, where new investor funds in the Village of Penland were diverted to make mortgage payments for other investors."

For more, see Apex man pleads guilty in real estate fraud case (no longer available online).

Go here for other posts on the alleged scheme underlying the failed North Carolina Village of Penland project. Tony Porter

Brand New 164 Unit Madison Condo Tower Faces Foreclosure

In Madison, Wisconsin, the Wisconsin State Journal reports:
  • The second phase of Downtown Madison 's largest private housing project is in default to the tune of more than $26 million, its lenders said in court documents that seek foreclosure of its three mortgages. The fate of the newly completed Metropolitan Place II, a 164-unit condominium tower facing West Mifflin Street, could indicate that national housing trends are reaching Madison, thought by some to be more immune than most places to twists and turns in U.S. economy. [...] According to city property records, only 61 of the building 's 164 units -- about 37 percent -- have been sold.

Reportedly, Metropolitan Place II developer Cliff Fisher and his company, Buckingham LLC, currently has two other major apartment projects before the city of Madison for consideration. For more, see 2 banks seek foreclosure on Metropolitan Place II.

For story update, see Metro Place II may soon get back on track. (3-7-2008)

Ohio AG Sues Home Repair Outfits Alleging Incomplete, Shoddy Work; Elderly, Poor Among Those Targeted With Deceptive Practices, Say Suits

In Franklin County, Ohio, The Columbus Dispatch reports:

  • Three central Ohio home-improvement companies were sued yesterday by the Ohio attorney general's office, which accused them of taking customers' money but not doing the work they promised. Appleby Painting of Hilliard, Ohio Homeowner's Rehab of Worthington and the Concrete Crew Co. of Gahanna were accused of taking payments for uncompleted improvements and of doing "shoddy work" on projects they did complete, according to a series of lawsuits filed by Attorney General Marc Dann. The suits, filed in Franklin County Common Pleas Court, also said the companies routinely didn't honor warranties and "targeted low-income and elderly consumers with deceptive practices."


  • "Consumers were misled into believing that they would be eligible for government grants to fund their projects," he said. That caused "them to take out mortgage loans to pay for work that was never performed."

For more, see 3 local companies bilked homeowners, state says.

For the Ohio AG's Press Release, see Attorney General Dann Seeks to Stop Home Improvement Fraud (Alleges multiple violations of consumer protection laws).

To view the lawsuits, alleging violations of the Consumer Sales Practices Act, the Home Sales Solicitation Act , and the Magnuson Moss Warranty Act, see:

City Demolishes Resident's Home Without Giving Proper Notice, Says Suit

In Port Arthur, Texas, The Southeast Texas Record reports:
  • Port Arthur resident Herman Anderson Jr. has filed a lawsuit against the city, claiming city officials had his home demolished without giving him proper notice. [...] Although a demolition permit was issued on June 26, 2007, Anderson says did not receive a 104 Letter notifying him that a demolition permit had been issued. The suit states his home was demolished on June 26, the same day the permit was issued. Anderson claims he had visited city hall three times prior to the demolition, and that several city officials mislead him about when his home would be demolished.

For more, see PA homeowner says house demolished without notification.

Thursday, February 07, 2008

Boston To Consider Ordinance Requiring Registration Of Foreclosed Homes To Control Blight

In Boston, Massachusetts, WCVB-TV Channel 5 reports:
  • You see them popping up throughout the city -- vacant homes in foreclosure, falling into disrepair. The city of Boston has decided to turn up the heat on mortgage companies in an effort to get them to clean up their act. [...] To that end, Boston City Councilor Rob Consalvo will introduce an ordinance that would require companies to register foreclosed properties with the city, identify who's responsible for maintaining the home, post contact information on the property and pay an annual fee of $100 for each vacant home. [...] When lenders don't do their part, the cost of maintaining abandoned homes often falls to the city. The vacant homes also can sometimes drag down the value of neighboring properties. Similar ordinances have already been passed in other cities.

For more, see Boston May Crack Down On Owners Of Foreclosed Properties (Proposed Ordinance Would Require Lenders To Maintain Vacancies).

Legal Services Group Leads Foreclosure Fight In Florida

In Duval County, Florida, the Jacksonville Daily Record ran a story which, in part, describes some of the work of the non-profit law firm Jacksonville Area Legal Aid ("JALA") in fighting foreclosures:
  • [J]ALA is one of the more successful legal service organizations when it comes to fighting home foreclosures — with a 100 percent success rate, said [executive director of JALA Michael] Figgins. But at the same time, JALA is forced to turn away 75 percent of qualified homeowners who are facing foreclosure because it doesn’t have enough people on staff to help everyone. Figgins said his staff has saved 300 homes. Currently, there are three people on staff that are dedicated to foreclosures and one dedicated to bankruptcy law. “There is great success to be made,” said April Charney, an attorney at JALA who has been on the front lines when it comes to fighting against foreclosures.

For more, see Sink outlines foreclosure crisis in Jacksonville.

Reptiles, Horses, Potbellied Pigs, Exotic Cats Not Immune To Foreclosures

In Hesperia, California, the Victorville Daily Press reports:
  • More than 200 reptiles worth an estimated $90,000 were found abandoned in a freezing, filthy room attached to a garage in Hesperia. Most were alive, though weak. Some had died from the cold or dehydration, including two gila monsters. “This is absolutely the biggest reptile rescue I’ve ever done by far,” said Joel Almquist, owner of the non-profit Forever Wild Exotic Animal Sanctuary in Phelan.


  • Though the investigation by Hesperia Code Enforcement and Animal Control is still underway, Almquist suspects the reptiles may be the latest victims of the foreclosure epidemic sweeping across the High Desert. “I’ve been getting a lot of calls like that lately,” he said. Not long ago, a real estate agent called Almquist after finding six potbellied pigs abandoned at a foreclosed property. [...] The same thing happened with six sickly thoroughbred horses that a man brought by a few months back. [...] Almquist has also gotten calls from Norco Animal Control asking him to take an African Serval Cat, and Fish and Game about an alligator found in a foreclosed home in Fontana.

For more, see 200 reptiles abandoned in Hesperia.

For more on foreclosures and abandoned animals, see Foreclosures & Pets I, and see Foreclosures & Pets II. petsII and foreclosures

Ohio Lawsuit Alleging Title Insurance Homeowner Ripoff Certified As Class Action

In Toledo, Ohio, the Toledo Blade reports:
  • A federal judge in Toledo granted class-action status [last week] in a lawsuit that could result in refunds for tens of thousands of Ohio homeowners who may have been overcharged for title insurance. A lawyer for defendant Fidelity National Title Insurance Co., which is among the nation's largest issuers of policies to protect buyers and lenders from hidden liens and other deed problems, declined to comment on the development.


  • In a practice that is the subject of suits nationwide, the [plaintiffs] allege that Fidelity failed to give them and other customers posted discounts on policies issued in mortgage refinancing transactions that took place within 10 years of the original home purchase. Typical discounts at Fidelity were supposed to be $100 to $250 a customer, the [plaintiffs'] lawyer said previously. If they win their case, up to 94,000 homeowners who bought policies from Fidelity since Feb. 15, 2000, could be affected.

For more, see Class action granted in Ohio case against title firm (Judge in Toledo cites interest of fairness).

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

Editor's Note: Fidelity Title is reportedly part of Jacksonville, Florida-based Fidelity National Financial Inc., a Fortune 500 company which, coincidentally, is located at the same street address as Fidelity National Information Services Inc., the alleged "secret puppetmaster" of creditors' lawyers recently accused in an unrelated lawsuit of ripping off bankrupt homeowners in foreclosure (see Class Action Suit Alleges Conspiracy To Squeeze Bankrupt Homeowners In Foreclosure; Fidelity An Alleged "Secret Puppetmaster" Of Creditors' Lawyers).

I wonder if there's any connection between the two companies??? title insurance legal issues

Bank Fires Employee In Retaliation For Blowing Whistle On Mortgage Fraud, Says Lawsuit

In Broward County, Florida, The Miami Herald reports:
  • A former SunTrust Bank mortgage loan coordinator contends in a lawsuit that he was fired after alerting superiors to mortgage fraud occuring at the bank. Some SunTrust loan officers fudged borrowers' incomes and approved multiple loans on investment properties that were actually reported as second homes, ensuring borrowers not only qualified for loans but got them at lower interest rates, said Alan Archambault, a five-year bank employee who was fired late last year. Archambault, 43, of Sunrise, sued SunTrust claiming his firing violated Florida's Whistle Blower Act, which bars companies from taking retaliatory action against employees for objecting to illegal conduct.
For more, see Ex-SunTrust worker challenges firing (A lawsuit accuses SunTrust Bank of firing a mortgage loan coordinator in retaliation for exposing mortgage fraud at the bank).

To view the lawsuit, filed in Broward Circuit Court, see Archambault v. Suntrust Banks Inc., et al.

Go here for other posts on whistleblower suits involving alleged fraudulent mortgage lending practices.

Another Employee Allegedly Canned For Disclosing Fraudulent Lending Practices Files Whistleblower Lawsuit

The Associated Press reports:
  • A former employee of Countrywide KB Home Loans has filed a lawsuit claiming he was wrongly fired after he reported fraudulent lending practices to superiors and refused to approve mortgages for unqualified applicants. The federal lawsuit was brought by Mark Zachary, a regional vice president and manager of the Countrywide KB Home Loans division in Houston. He seeks unspecified compensatory and punitive damages against the joint venture of mortgage lender Countrywide Financial Corp. and builder KB Home.


  • In the suit, Zachary contended he was given an excellent performance review last February then fired three months later after he blew the whistle on fellow employees and outlined instances in which appraisers were "being strongly encouraged to inflate homes' appraised value by as much as 6 percent." That resulted in buyers owing more than their home was worth, Zachary claimed in the lawsuit filed Jan. 17 in U.S. District Court in the Southern District of Texas. [...] Zachary said he was fired after he failed to meet a quota for new loan approvals because he refused to clear unqualified applicants, according to the complaint.

For more, see Fired Worker Sues KB Home, Countrywide.

Go here for other posts on whistleblower suits involving alleged fraudulent mortgage lending practices.

The Establishment, The Pigeons, & The Foreclosure Crisis

Columnist Robyn Blumner for The St. Petersburg Times recently made this observation on the subprime foreclosure mess:
  • It's the perfect crime, so big and so reeking of establishment that few recognize the inherent criminality, but the results are the same as if some street thug held us all up at gunpoint. This country is spiraling toward recession. Huge amounts of wealth have disappeared with upward of 2 million families in danger of losing their homes to foreclosure, all because of the corruption of people in suits. When someone gets mugged for the few dollars in his wallet, the thief goes to prison for years. But when bankers, mortgage brokers, credit-rating agencies and investment firms conspire to scam investors and exploit the naivete of borrowers in order to enrich themselves to the tune of billions of dollars, no one goes to jail.

For the rest of her observations, see Thugs in suits shooting pigeons (column appears in the Pittsburgh Tribune Review).

For the slightly longer, original version of Robyn Blumner's column, see the St. Petersburg Times: They ought to draw a go-to-jail card (same columnist, different headline writer).

Quest To Place Blame For Foreclosure Mess Continues

The San Francisco Chronicle recently ran a story in which it identifies six prime "suspects" (groups of suspects, actually) for the serious foreclosure problem, and a description of the "allegations" against each.

The following excerpt tells you where you can find "the mortgage disaster's bad guys":
  • [T]hey're everywhere in the mortgage food chain. Borrowers who lied about their income, mortgage brokers who flogged risky loans, appraisers who inflated home values, lenders that originated dicey mortgages, Wall Street firms that packaged them as securities and sold them, ratings firms that said those were safe investments - many participants in the market pushed the envelope, or, in some cases, may have committed outright fraud.
For more, see Mortgage Meltdown: Plenty Of Blame For Lending Mess (Suits filed, agents hunting perpetrators of loan scams that devastated the nation).

Wednesday, February 06, 2008

Freddie Reissues "YouTube" Foreclosure Rescue Video In Spanish

Freddie Mac announces:
  • Freddie Mac has re-edited the custom made video it posted to YouTube(TM) for Spanish-speaking homeowners in an effort to warn more delinquent borrowers about a widespread form of foreclosure fraud. The new Spanish language version of Freddie Mac's anti- fraud video can be found at

For more of Freddie's announcement, see Mortgage Fraud: Freddie Mac Releases Spanish Language Version of Foreclosure Scam Video on YouTube(TM).

For a direct link to the video, see Evitar el fraude.

Suspect Forged POA To Swipe $360K Of Mother-In-Law's Home Equity, Says Queens DA

(original post 2-3-08)
In New York City, the Queens County District Attorney's Office announces:
  • Queens District Attorney Richard A. Brown [Friday] announced that an international businessman who resides in Manhattan has been charged with using a forged power of attorney to unlawfully obtain a $360,000 mortgage on his mother-in-law’s condominium in the Little Neck section of Queens. [...] [T]he defendant is accused of perpetrating an elaborate scheme to drain the equity from his mother-law’s Queens condo – allegedly going so far as duping her to believing he knew someone in the Manhattan District Attorney’s Office who could help her when she became aware of the mortgage swindle.


  • The District Attorney identified the defendant as Shih Siang Shawn Liao, 31, of [...] Manhattan. [...] Liao, [...] was arraigned [...] on charges of second-degree grand larceny, second-degree criminal possession of stolen property, second-degree criminal possession of a forged instrument, first-degree identity theft, first degree falsifying business records and third-degree unlawful possession of personal identification information.

For more, see the Queens DA news release: Manhattan Man Charged With Stealing $360,000 By Surreptitiously Taking Out Mortgage On mother-In-Law's Queens Condo (Faces Up To 15 Years In Prison).

Go here and go here for other posts on deed theft by forgery, swindle, etc. deed theft yahtzee

Refinancing Scam Lands Trio In Jail; Leaves Elderly Woman Facing Foreclosure

In Denver, Colorado, the Rocky Mountain News reports:

  • Denver District Attorney Mitch Morrissey has charged three men accused of stealing thousands of dollars in a mortgage scam from an elderly woman who is now facing foreclosure. The charges were filed last week; the defendants surrendered and were booked Monday and released on $50,000 bonds. The three charged are Scott Steven Richardson, Thomas Sarantinos and Anthony Sarantinos. Each has been charged with theft from an at-risk adult. Richardson, through his company, Northglenn-based Absolute Lending Solutions, offered to refinance the woman's home to help lower her monthly payment, according to the district attorney's office. Instead, Richardson allegedly refinanced the home to take out nearly $30,000 that he and the Sarantinoses split.

Source: Three face charges in mortgage scam.

See also, The Denver Post: Trio scams at-risk adult, DA says (no longer available online):

  • The charges against the trio allege that Richardson added Anthony Sarantinos to the property title and refinanced the home, taking out about $30,000 in cash that was split among the suspects. Prosecutors also suspect Richardson of giving phony mortgage payment coupons to the victim, who was making monthly payments to Absolute Lending Solutions. The payments didn't go toward paying off the home, however, and the victim now owes nearly twice as much on her mortgage. She faces monthly payments nearly double her original loan and is facing foreclosure.

See also, CBS4, Denver: DA: Grandmother Hit By Mortgage Scam (read story) (watch video).

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

Go here and go here for other posts on deed theft by forgery, swindle, etc. deed theft yahtzee whale foreclosure rescue

Lender Violates NYS Predatory Lending Law; Judge Halts Foreclosure, May Void Mortgage

In New York City, the Staten Island Advance reports on a lawsuit filed by an area couple, who were first-time homebuyers, against a mortgage lender alleging a violation of a predatory lending provision in the New York State Banking Law when the loan was originated. According to the story:

  • In what is likely to be a precedent-setting decision in New York, state Supreme Court Justice Joseph J. Maltese agreed with the [homeowners], recently telling the bank that it could not foreclose on the couple's [Staten Island] townhouse and that it may have to pay them damages for their troubles and void the $355,000 mortgage on their [...] home. In his 11-page decision, Maltese rips the original lenders and brokers for making the high-cost loan to the [homeowners] without checking to see if the couple could repay the mortgage -- a violation of the 2002 predatory lending provisions of New York State banking law.

  • It's the first time in the state that a judge has invoked those predatory lending provisions against a lender, and it could signal a shifting tide in how foreclosures are handled, experts note. James Tierney, director of the National Attorneys General program at Columbia Law School, said trial judges across the country are beginning to question banks seeking to foreclose on homeowners in similar situations. "What I am seeing is a number of trial judges saying, 'Enough is enough, fraud is fraud.' They are kind of taking a stand," said Tierney.


  • At a hearing Feb. 28, the judge is expected to decide whether the mortgage should be voided and damages granted to the homeowners. [...] It's unclear if [the mortgage holder] will appeal Maltese's decision. [...] Margaret Becker, director of the Homeowner Defense Project at Staten Island Legal Services in St. George who represents Islanders in cases of alleged predatory lending, said many others don't have attorneys and don't challenge foreclosures. "It's good to hear a success story," she said of Maltese's decision. "It is very encouraging that judges are clearly taking the issue of predatory lending in the subprime market seriously and are willing to enforce laws to protect people from these kinds of pernicious practices."

The homeowners were represented by Cilmi & Associates PLLC, of New York City.

For more, see Stuck with a bad loan, a Staten Island family fights back.

See also, ABC News: Fighting Back Against Foreclosure (New York Judge Denies Foreclosure Based on Alleged Predatory Lending).

To view the trial judge's decision, see LaSalle Bank, N.A. v Shearon, Supreme Court, Richmond County, 2008 NY Slip Op 28032 (January 28, 2008).

Go here for other posts on homeowners using Federal & state consumer protection statutes to try and undo bad mortgage loans. undo mortgage loans TILA alpha

Western Pa. Mortgage Fraud Task Force Nails 24 With Criminal Charges

In Western Pennsylvania, the Pittsburgh Tribune Review reports:
  • Last week, investigators nabbed Marlin Sprouts Jr., 52, a middle school teacher and newly elected Uniontown councilman, as part of what U.S. Attorney Mary Beth Buchanan called a four-person mortgage fraud and property-flipping scheme. Sprouts -- whose daughter pleaded guilty in a scam that cheated financial institutions out of $1 million to $2.5 million -- was charged with conspiracy for his role in the scheme, documents show.


  • Sprouts' case was one of several Buchanan cited [last week] as she initiates the Western Pennsylvania Mortgage Fraud Task Force. The task force includes officials from Buchanan's office, the FBI, Internal Revenue Service, state Attorney General's Office and state Department of Banking. [...] The 24 people charged for scams last week represent $13 million in mortgage fraud, Buchanan said. Authorities are working on at least 50 investigations, she said.

For more, see Mortgage fraud targeted by task force.

See also, KDKA-TV Channel 2 video report: Mortgage Fraud Probe Nets 24 Arrests, Indictments.

More City Of Baltimore Suits Against Lenders May Be Looming

In Baltimore, Maryland, the Baltimore Examiner reports:
  • As foreclosures continue to mount in Baltimore City, officials said [last] Thursday that more lawsuits against mortgage lenders may be in the offing. “We become aware through our research of other lenders engaging in practices that may be actionable,” said City Solicitor George Nilson. “There are other lenders that we may be filing lawsuits against.” Nilson said future lawsuits would be similar to the city’s lawsuit against Wells Fargo Bank. “It will be the same with a twist,” he said, declining to provide further details. City officials filed a lawsuit in federal court on Jan. 7, claiming mortgage lender Wells Fargo engaged in a practice called “reverse redlining,” where neighborhoods of predominantly minority homeowners are targeted with high-price loans.
For more, see Baltimore eyes more lawsuits against mortgage lenders in foreclosure fiasco.

To view last month's Wells Fargo lawsuit:

Representing the City Of Baltimore is the Washington, D.C. law firm Relman & Dane.

Go here for prior posts on the Baltimore City fair housing predatory lending lawsuits. fair housing Baltimore

Homebuilder Stiffs Subs, Leaving Recent Homebuyers Facing Foreclosure

In Elk Grove, California, The Sacramento Bee reports:
  • Sukhwinder "Suki" Kaur bought the wrong house at the wrong time. Within months of her July closing on the two-story home in Elk Grove, work in the new subdivision stopped and the builder's parent company, Dunmore Homes, filed for bankruptcy protection. Kaur, who is paying on a $430,000 mortgage, has become the target of two lawsuits and 28 liens from unpaid subcontractors and suppliers. More than a dozen other individuals in the Monterey Village development are in similar predicaments.


  • Some homeowners are exploring the possibility their title insurance policies will pay the liens. But Kaur contacted Stewart Title Guaranty Co. and didn't get good news. A Jan. 8 letter from a Stewart Title field office says her coverage does not extend to liens filed after the policy was issued. Stewart Title issued a statement Friday saying it is working with its policyholders to "ensure … they receive the benefits of their policy."

For more, see Lien times hit Elk Grove (Lawsuits jolt new subdivision's residents).

For other posts on builders & contractors accused of stiffing customers & subcontractors, go here and go here. contractors stiff subs customers zeta

Homebuilder Stiffs Customer, Then Files Lien & Starts Foreclosing On Lot, Says Property Owner

In Palm Coast, Florida, the Daytona Beach News-Journal reports:
  • Brenda Shakes said she has, at times, felt lucky to only be out $40,000 to two Palm Coast builders facing charges of grand theft and organized fraud involving other homebuyers. She fired Herbert Heron and Noel Richardson, owners of Canterbury Estate Homes, because she said the builders weren't doing any work on her home and had not disclosed that they owned the title company that closed the loan. But now, they're after her land, Shakes said.

  • "Instead of them apologizing and trying to make things right by us, they still want to continue to put us through hell, emotionally and financially," Shakes said in an e-mail. She said she was shocked when the men filed a lien against her land and started the foreclosure process, citing breach of contract.

  • Heron, 58, and Richardson, 54, were arrested in September and accused of bilking customers and subcontractors out of more than $400,000, investigators said. They were also named in multiple related civil lawsuits that are still pending. Heron and Richardson were released from jail Oct. 4 after each posted $100,000 bail.

For more, see Woman says Palm Coast builders put her 'through hell'.

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

For other posts on builders & contractors accused of stiffing customers & subcontractors, go here and go here. contractors stiff subs customers zeta

Tuesday, February 05, 2008

Ohio State Judge Rejects AG's "Real Party In Interest" Argument; Allows Foreclosure To Continue

In Hamilton County, Ohio, The Enquirer reports:
  • Ohio Attorney General Marc Dann suffered his first setback Monday in a novel effort to slow foreclosure filings in the state – and in doing so had his ethics questioned by a Hamilton County magistrate. Dann argues that lenders can’t foreclose unless they can prove they own the mortgage they say is in default. Paperwork proving ownership often lags behind as lenders buy and sell mortgages. The result is that foreclosing lenders don’t always have the paperwork to prove that they’re the mortgage owners. Traditionally, courts have allowed the foreclosures to proceed anyway. [...] Monday, however, Common Pleas Court Magistrate Michael Bachman rejected Dann’s argument.


  • Monday’s decision comes in case filed by Deutsche Bank National Trust Co. against Telisa Barnes. She bought a $128,000 home in Northside a year ago with the help of a mortgage from Equifirst Corp. Five months later, Deutsche Bank filed to foreclose, saying she owed $127,892 – plus interest. The state of Ohio had an interest in the property because Barnes put the house up as part of a $20,000 bond in an aggravated menacing case against another defendant. Dann argued that Deutsche Bank was not a “real party in interest” because it didn’t own the mortgage paper when it filed its foreclosure case. The magistrate ruled federal precedents don’t apply because federal courts have limited jurisdiction in foreclosure cases, while state courts are required to take them.

For more, see AG's foreclosure gambit shot down.

For other posts that reference the failure of some mortgage lenders and their attorneys to file the required loan documents when starting foreclosures, Go Here, Go Here, Go Here and Go Here. missing mortgage foreclosure docs alpha

Twin Cities Lawsuit Seeks To Void / Halt MERS Foreclosures For Failure To Record Assignments

In Hennepin County, Minnesota, the Minneapolis Star Tribune reports:

  • A complaint by some borrowers that they can't learn who owns their mortgages turned into a full-blown effort to halt a substantial share of Hennepin County's foreclosures [late last month]. A Legal Aid lawsuit contends some pending and recent foreclosures don't meet requirements of state law. [...] Although Hennepin County Sheriff Rich Stanek is named as a defendant for his office's role in selling foreclosed property, the real target is a national mortgage registry formed by lenders and known as Mortgage Electronic Registration Systems (MERS). The lawsuit contends the registry hides who really owns a mortgage, creating difficulties for borrowers or their advocates trying to negotiate with lenders.


  • A 2004 change by the Legislature was intended to make clear that the registry could legally be listed as the holder of mortgages filed in courthouses. But the registry also needs to file assignment of the mortgage to new owners, said Amber Hawkins, lead attorney for the lawsuit. [...] Besides pending foreclosures, the suit also seeks to void recent Sheriff's Office sales in which the registry has initiated foreclosure. That measure would apply if the borrower is still living in the house up to six months after foreclosure, as permitted by state law. It asks damages for those who already have lost a home in a foreclosure brought by the registry.
For more, see Lawsuit seeks to block some foreclosures (Hennepin County is swept up into an action targeting lenders).

See also, Minnesota Public Radio: Lenders sued for rushing through foreclosure process.

Go here for updated posts on this story.

For other posts that reference the failure of some mortgage lenders and their attorneys to file the required loan documents when starting foreclosures, Go Here, Go Here, Go Here and Go Here. missing mortgage foreclosure docs alpha

Maryland Lawmakers To Consider Slow Down In Foreclosure Process; Ban On "Rescue" Deals

In Baltimore, Maryland, WMAR-TV Channel 2 reports:
  • Maryland's rising foreclosure rate is a top concern for state lawmakers this year and a Senate committee will consider several bills aimed at easing the trend. The Senate Finance Committee will consider proposals to extend the time before a foreclosure can become final. They'll also look at tougher requirements for becoming a mortgage broker and a ban on so-called "rescue" deals, where homeowners behind on mortgage payments are encouraged to sign away their home on the promise a lender will fix their mortgage problems.

Source: State Lawmakers to start Looking at Foreclosure Bills.

Two Seattle-Area Homeowners Unwittingly Snagged In Sale Leaseback, Equity Stripping Scheme

In Seattle, Washington, KOMO-TV Channel 4 reports on the stories of two area homeowners facing foreclosure and how they lost over $125,000 in home equity when entering into sale leaseback, equity stripping transactions with foreclosure rescue operator Godsend Security Funding.

After lawsuits were brought against Godsend, a private settlement was reportedly reached in one case and is currently being negotiated in another. Representing one of the homeowners, area attorney Melissa Huelsman commented that it was the third lawsuit that she personally filed against Godsend.

In the Washington state legislature, House Bill HB 2791 and its companion bill, Senate Bill SB 6431, are being considered by state lawmakers as ways to curb the abuses by foreclosure rescue operators.

To view the KOMO-TV Channel 4 video, see Attempts to avoid foreclosure could cost you more (go here to read transcript).

Elderly Blind Oregon Homeowner Loses Home In Equity Stripping, Foreclosure Rescue Deal; Reportedly "Made Whole" Thru Legal Settlement

In Portland, Oregon, Willamette Week recently reported that the Oregon state legislature will be considering a proposed bill targeting foreclosure rescue scams this week. Buried at the end of the article is the story of one elderly homeowner for whom the proposed bill, if passed, won't help.
  • The bill comes too late, however, for Evelyn Allen, a 73-year-old Northeast Portlander. According to a civil lawsuit last year, Jason Larry Somera and Mark Caravia saw Allen’s name on a foreclosure list. Allen owed $26,000 against a property assessed at $156,000. They offered to “lend” her $40,000 against her property, with no payments due for two years. But Allen—who is described by her attorney as “completely blind”—actually signed away her property for $40,000.

  • Defendants knew Allen was blind and took advantage of her blindness to fraudulently obtain her signature signing the title of her home over to them,” Allen’s attorney, Erin Olson, wrote in the lawsuit. Although the men refinanced the Allen’s house for $180,000 and sold it to a third party, Olson was able to get her client “made whole” as part of settling the lawsuit. Charlie Williamson, the attorney for Somera and Caravia, says his clients “could have done things better,” but adds “I don’t think they broke the law and I don’t think they defrauded this lady.” Olson disagrees. “This was really egregious behavior and extremely stressful for my client,” Olson says. “I hope the Legislature will make it more difficult for this to happen.”
For more, see Rescue Me (A Portland Cop is targeting foreclosure vultures. Next week, the Legislature will, too).

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

Class Action Suit Alleges Conspiracy To Squeeze Bankrupt Homeowners In Foreclosure; Fidelity An Alleged "Secret Puppetmaster" Of Creditors' Lawyers

In Houston, Texas, The Associated Press reports:
  • Homeowners have sued Fidelity National Information Services Inc., a giant financial data-processing company, accusing it of raising the price that cash-strapped consumers must pay to avoid foreclosure of their homes. The lawsuit, filed Jan. 16 in the U.S. Bankruptcy Court in Houston, contends that Fidelity has conspired with mortgage-servicing companies and law firms to "add to the indebtedness" of homeowners by tacking on secret fees that remain undisclosed for years.

  • "The fees the Fidelity-controlled law firms charge in Chapter 13 bankruptcies are inflated by 25 percent to 50 percent," the lawsuit asserts. The law firms, it says, then "kick back" the extra amount to Fidelity under a formal agreement under which the law firms' fees are set. "Fidelity keeps its role, as well as the kickback, hidden from the courts as a matter of systematic policy."


  • Fidelity counts Washington Mutual and Bank of America among the biggest clients of its default-management services. The company says it handles default mortgage servicing for 22 of the top 25 residential mortgage servicers, and 13 of the top 25 subprime servicers.

For more, see Suit claims Fidelity abuses homeowners.

Editor's Note:

The lawsuit also describes Fidelity's alleged role as follows (page 5, paragraph 21 of lawsuit):

  • [F]idelity’s “comprehensive” role is really that of secret puppetmaster of the law firms that appear in [the Houston Bankruptcy] Court on behalf of mortgage servicing lenders. These law firms (in the Harrises’ case, Mann & Stevens, P.C.) collect their fees by tendering their bills through Fidelity and then on to the mortgage servicer – in this case Saxon, which then charge debtors, like the Harrises, without ever obtaining this Court’s

To view the entire lawsuit, see Harris vs. Fidelity National Information Services Inc.

Go here to download Misbehavior and Mistake in Bankruptcy Mortgage Claims, a recent report on the conduct of some lenders in court proceedings when homeowners file for bankruptcy protection (by Katherine M. Porter University of Iowa - College of Law).

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

Arson Investigators Focus On Ex-Con Landlord In Foreclosure In Recent Fatal Blaze, Previous Fires; Tenant Dies In Attempt To Save Pet

In Gloversville, New York, the Schenectady Daily Gazette reports:
  • A December fire on Park Street that killed 39-year-old Debra Morris was deliberately set and Morris’ death is a homicide, Fulton County District Attorney Louise K. Sira said [last] Wednesday. Sira, flanked by numerous local and state investigators at an afternoon news conference, declared the landlord, Jeffrey E. Alnutt, who was residing in the downstairs apartment that night, a person of interest in the investigation. She said the fire started in that apartment and was incendiary in nature. She declined to elaborate on what caused the fire and she urged anyone with information about the fire to contact police or her office.

  • Morris and her boyfriend [...] rented the upstairs apartment. When the fire started shortly before midnight Dec. 21 the couple escaped but then Morris returned to rescue a cat, officials said. Her body was found on the second floor and an autopsy determined she died from smoke inhalation.

  • Sira said a number of agencies are now involved in the investigation, which will also focus on 2002 and 2004 fires that occurred at apartment houses owned by Alnutt. [...] Records kept on file in the Fulton County Hall of records show Alnutt owns nine properties in the Gloversville-Johnstown area and that a number are targets of foreclosure actions.

For more, see Death in fire called a homicide (Officials say landlord a ‘person of interest’ in fatal December blaze).

See also, Man linked to fatal fire in Gloversville has record (Landlord spent time in prison).

For other stories on fires & foreclosures, go here , go here , and go here. foreclosure arson xerox

Monday, February 04, 2008

Twin Cities Considering Legal Action Against Subprime Lenders

In Minnesota, the Minneapolis Star Tribune reports:
  • City leaders in Minneapolis and St. Paul are exploring legal action against the subprime lenders who financed the cities' explosion of foreclosed properties. While the Minneapolis Civil Rights Department is weighing action that alleges racially discriminatory lending patterns, the city attorney's office is researching lawsuits that other cities have filed against subprime lenders. St. Paul also is exploring its legal options for dealing with boarded-up housing.

  • Cleveland and Baltimore last month sued lenders, setting off what could be a wave of such actions. Baltimore alleged that Wells Fargo made predatory loans in black neighborhoods, which the lender denied.
For more, see Cities consider going after lenders (The rise in foreclosures brings calls for St. Paul and Minneapolis to follow other cities that are suing subprime lenders for damages).

Pa. Suit Alleging Title Insurance Premium Homeowner Ripoff Now Certified As Class Action

In Pennsylvania, The Legal Intelligencer (reported at reports:
  • A federal judge has certified a consumer class action suit against Commonwealth Land Title Insurance Co., brought by homeowners who claim they were overcharged for title insurance when they refinanced, because they were never told that they qualified for a discounted premium. The ruling [...] in Alberton v. Commonwealth Land Title Insurance Co. joins a growing list of courts that have certified similar class actions in Florida, Maryland, Minnesota, New York and Ohio. At issue in all of the cases are claims by the homeowners that their entitlement to a statutorily discounted premium should have been detected by the insurer during its title search.

For more, see Consumer Class Action Certified Against Title Insurance Company.

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

Virginia-Based Flipper CM Development Back In The News

In Portsmouth, Virginia, The Virginian-Pilot reports:
  • The "idea man" behind one of Hampton Roads' worst housing fraud cases may be headed back to prison because of his recent connections to CM Development. Jacques McEntee's probation officer has petitioned a U.S. District Court Judge to revoke McEntee's three-year probation because last year he solicited investors for money to help his brother's struggling company, CM Development.

  • CM Development, a Virginia Beach-based housing company, once owned more than 250 properties across Hampton Roads, many of which were left vacant and in disrepair. It is now under investigation by the FBI.

For more, see Role in CM development prompts call to revoke probation.

Go here for other posts on the CM Development flipping operation. Cary McEntee

Stockbroker Found Liable For Peddling Unsuitable Mortgage Backed Investments To Unsophisticated Investors

In West Palm Beach, Florida, The Miami Herald reports:
  • A civil jury has found Hillsboro Beach stockbroker Jamie Solow liable for running a fraudulent bond trading scheme that led to the collapse of two brokerages and caused millions of dollars in losses to hundreds of small investors. [...] The verdict, following a nine-day trial in federal court in West Palm Beach, is the latest wrinkle in the sweeping national credit crisis that is best known for costing investment banks billions in losses and putting many mortgage holders at risk of losing their homes. This time, the losers were individual investors who bought mortgage-backed investments for their retirement accounts.


  • Solow, 46, who lives in a $7 million oceanfront home on a stretch of A1A known as Millionaires' Row, got into trouble peddling arcane investments called inverse floating collateralized mortgage obligations (CMOs). Those so-called inverse floaters are highly volatile bonds typically intended for institutional investors like banks.

For more, see Jury: Stockbroker liable for fraud scheme (The SEC said it will ask a judge to take steps to kick a Hillsboro Beach stockbroker out of the securities industry) (if link expires, see if this link works.).

Sunday, February 03, 2008

Pennsylvania Attorney Gets 5 To 10 For Torching Family Home

In Pittsburgh, Pennsylvania, The Associated Press reports:

  • A 57-year-old attorney has been sentenced to five to 10 years in prison for setting fire to his family home, critically injuring his bedridden daughter. Samuel Pontier says he is remorseful and that he never intended to set his house on fire or harm his daughter, who has cerebral palsy. Pontier pleaded guilty in November to aggravated assault, arson and other charges. Pontier's attorney says the former O'Hara Township councilman was suffering from manic depression and abusing alcohol and prescription drugs when he set the Dec. 29 fire. Pontier's 17-year-old daughter Kristin suffered smoke inhalation and burns to her esophagus. Pontier's estranged wife and their other daughter were not at home when the fire started.

Source: Lawyer gets prison term for setting family home on fire.

For earlier articles on this story, see the Pittsburgh Tribune Review:

Ohio Judge Knocks $2M Off Akron-Area Fraud Suspect's Still Unaffordable Bond

In Summit County, Ohio, the Akron Beacon Journal reports:
  • A Summit County judge reduced the bond Friday to $1 million cash for former Evergreen Corp. President David B. Willan, but afterward Willan's lawyer told the court there still was ''no possibility'' that he could pay that amount to get out of jail. Willan, 37, has been held at the county jail on a $3 million bond since his Dec. 19 arrest. [...] Willan, the principal figure in a 147-count indictment alleging widespread Akron-area mortgage fraud, is charged with multiple first-degree felonies that potentially could mean incarceration for 54 to 319 years, [Common Pleas Judge Thomas A. ] Teodosio noted.

For more, see Bond is reduced for Willan (Former Evergreen executive still can't afford $1 million, lawyer says).

Foe story update, see Evergreen leader fails to raise cash for bond (Lawyer says mortgage-fraud suspect lacks funds, might stay in jail through trial).

Go here for other posts on David Willan and the Akron-area 147 count mortgage fraud indictment.

"A Parent's Love Being Taken Advantage Of" Results In Federal Fraud Indictment, Claims City Councilman

In Uniontown, Pennsylvania, The Associated Press reports:

  • A new city councilman took part in a mortgage fraud scheme run by his daughter, federal authorities charged. Marlin Sprouts Jr., 52, a substitute teacher in Uniontown, was charged Friday with conspiracy to commit bank fraud. Sprouts blamed the arrest on a failed real estate venture and vowed to clear his name. He said the charges stem from "a parent's love being taken advantage of." Tiffany Lynn Sprouts opened a brokerage firm several years ago and forged loan applications, tax returns and appraisals to help straw purchasers get more than $2.4 million in loans, authorities say.

For more, see Uniontown councilman charged in fraud.

See also:

Phoenix-Area Vacant Land Buying Spree Triggered As Builders Unload Lots

In metropolitan Phoenix, Arizona, The Arizona Republic reports:
  • Home sales are down, but there's a mini land-buying spree going on in metropolitan Phoenix. Home builders are selling off land that they can't sell homes on in the near future. Investors are buying home lots for bargain prices, which lets them hold onto the properties until the demand for homes picks back up. In the last few weeks of 2007, as many as 8,000 vacant but finished home lots ready for construction sold in the Phoenix area, according to Scottsdale-based land brokerage and consulting firm Nathan & Associates.


  • [M]any builders who operated primarily as manufacturers and not long-term land developers in the past, need to get the dirt off their books. [...] RL Brown, publisher of the Phoenix Housing Market Letter, tallied 61,000 finished lots sitting empty across the Valley.New-home buyers may not want the lots now, but investors do. The trend is also playing out in other parts of the country where builders loaded up on land during the boom. "A lot of the investment bankers have determined metro Phoenix is one of the safest place to invest based on correction figures," Nathan said.
For more, see Slump fuels home-lot sell-off.

Suspicious Flips Hurting Hernando Beach

In Hernando Beach, Florida, the St. Petersburg Times reports:
  • [S]uspicious sales have made "mortgage fraud" a buzzword in Hernando Beach the past two years. Though fraud cannot be proved without a criminal investigation, evidence of improper dealings during this period has been steadily mounting. By analyzing property records, the St. Petersburg Times found dozens of what the FBI calls indicators of mortgage fraud. These include houses, such as the one on Hibiscus, that began to slip into foreclosure almost immediately after their purchase.


  • [T]he most direct consequence is to the local real estate market. Disinterested, absentee owners often neglect their properties, bringing down the real worth of nearby houses. At the same time, fraudulent prices artificially inflate local property values and discourage buyers. [...] Dishonest investors apparently targeted Hernando Beach because its waterfront houses were expensive enough to hide inflated prices, said county Property Appraiser Alvin Mazourek.
The Times investigation found four area homes that most closely fit the pattern the FBI describes as evidence of mortgage fraud.
  • Transactions on these properties, all of which are now in foreclosure, began with a purchase by a Spring Hill investor named Kathy Schmidt or one of her companies - Soni Homes Inc. or Gulf Coast Instant Equity Inc. Schmidt then resold them to someone associated with a now-defunct Tampa company, Real Estate Exchange Partners Inc. People involved with that company included president Steven Michaelson and Robyn Michaelson, both of whom face foreclosure on properties throughout the Tampa Bay area. Though their relationship is not clear, they list several common addresses in property records. Neither could be reached by the Times at any of the several telephone numbers listed in public documents.

For more of the St. Petersburg Times investigative report, including the recent sales history of the four suspicious flips decribed in the story, see When the price is wrong (Sometimes, a sudden jump in the price of a house could indicate mortgage fraud).

See also, St. Petersburg Times Editorial on the suspicious Hernando Beach real estate transactions: Time to check rumors about mortgage fraud.

Suing A Mortgage Servicer? 20 Reasons For Having Them Fork Over The PSA

In The Bankruptcy Litigation and Consumer Rights Blog, consumer bankruptcy litigation attorney Max Gardner writes:
  • Every time I file a civil action against a mortgage servicer the very first document I want is a copy of the “Pooling and Servicing Agreement.” This is the legal document that creates the securitized trust of mortgage loans and also strictly provides for the duties of all entities who are assigned the responsiblity of servicing loans for the Trust.
For 20 of the reasons you need to request through formal discovery in any mortgage-related lawsuit the PSA Agreement and why it is relevant, see Max Gardner’s Top Reasons for Wanting a Pooling Servicing Agreement.

Go here for more posts on homeowners and their attorneys who are using Federal & state consumer protection statutes to try and undo bad mortgage loans. undo mortgage loans TILA alpha questionable mortgage servicing practices tactics yak