Saturday, April 12, 2008

Bay Area Multi-Site Indoor Pot Farm Operation Yielding Millions Busted, Say San Leandro Cops; Suspected Ringleader On The Lam

In Northern California, Inside Bay Area reports:
  • San Leandro police raided multiple East Bay locations Thursday morning in a blockbuster marijuana bust that yielded millions of dollars in drugs and cash, authorities said. Authorities seized approximately 1,000 marijuana plants and more than $150,000 in cash, firearms and advanced indoor growing equipment, San Leandro police Lt. Tom Overton said. The Drug Enforcement [Administration] assisted police in the bust, which Overton said was the culmination of a two-month investigation. "It's one of the biggest busts I've seen in 23 years," Overton said.

  • Authorities made six arrests, but the sophisticated indoor growing operation's suspected ring leader eluded authorities, Overton said. Brian Molitaris, 30, leapt from a steep 25-foot embankment into rugged terrain near his luxurious Berkeley hills home, Overton said. Molitaris remains at large.

For more, see Oakland homes raided in major pot bust ('It's one of the biggest busts I've seen in 23 years,' cop says) (if link expires, try here).

Go here and go here for other posts on Marijuana Grow Houses. pot grow ops alpha

Increase In Abandoned Homes Raises Safety Concerns In Central Ohio

In Marion, Ohio, The Marion Star reports:
  • With the economy slowing and foreclosure rates up, Ohio is seeing its fair share of abandoned homes and vacant properties. Marion isn't isolated from that trend and local authorities say it presents a potentially dangerous situation for safety forces and residents -- fires. "I see in driving around the community more and more empty houses," said Al Gruber, chief of the Marion City Fire Department, noting an increase in the number of fires within city limits that involve vacant properties.


  • Gruber's concern is two fold -- vacant homes are not always structurally sound and vacant homes are not always vacant. "Kids play in them, animals seek shelter in them and even the homeless squat in them," he said. During the colder months, Gruber said fire departments traditionally see an increase in fires of vacant structures, likely started by homeless members of the community. Neighborhood youths using vacant structures as "club houses" proves even more problematic, Gruber said. "They're starting little fires in there and they think it's fun," he said. "It's just a worry. If we can keep them out of there, that's something we want."

For more, see Abandoned homes rising safety concern (Potential for problems grows as number of vacant houses increases).

Go here and go here for other posts on vacant homes leaving its mark on neighborhoods.

For other stories on fires & foreclosures, go here , go here , and go here. foreclosure arson xerox neighborhood destruction from foreclosures zach

Alleged Washington State I.D. Theft Duo Accused Of Using Vacant Home Addresses On Bogus Credit Card Apps

In Kennewick, Washington, the Mid Columbia Tri City Herald reports that bank vice president Cynthia Jean Walker, 54, and her real estate agent daughter Cassidy R. Janosky, 35, face multiple federal charges in an alleged identity theft scheme. According to the story:
  • Janosky, a vice president and business development officer at Bank of the West, is accused of obtaining personal information from bank customers and using that information to open credit cards in the customers' names, according to the federal indictment. Walker, who was a licensed real estate agent with Coldwell Banker, would then identify vacant homes for sale in the area and use the addresses on the credit card applications, court documents said.

For more, see Kennewick mother, daughter face federal charges in scheme.

Another Racketeering Lawsuit Filed Against "Hard Money" Massachusetts Mortgage Lender

In Worcester, Massachusetts, the Worcester Telegram & Gazette news reports:
  • A fourth federal lawsuit accusing prominent city businessman David G. “Duddie” Massad and a business associate of running a racketeering enterprise through lending companies has been filed in U.S. District Court. A federal judge rolled the three previous civil cases making similar extortion allegations into one action in February, and yesterday ruled against motions by the defendants to dismiss that case. In the new lawsuit filed Tuesday, bankrupt developer Bernard J. Laverty Jr. of Marshfield alleges Mr. Massad and Marcello M. Mallegni of Southboro “used the threat of foreclosure and bodily harm to force the borrowers to agree to their fraudulent loan terms” and “used their position to force borrowers to pay them kickbacks in the form of cash and ownership interest in the various projects.”

For more, see Fourth racketeering lawsuit filed (Massad, Mallegni accused by Marshfield man).

Go here for other posts related to this story. LBM Financial

Illinois AG Indicts Man In Alleged Foreclosure Investment Ponzi Scheme

From the Illinois Attorney General's office:
  • Attorney General Lisa Madigan announced her office has charged Kenneth Bivens, 43, of Homewood, Ill., with securities fraud, theft and violating an order of prohibition for continuing to operate an illegal real estate scheme and drawing in new victims even while being prosecuted for the scheme.


  • In November 2007, Cook County Circuit Court Judge John Fleming found Bivens guilty of four counts of violating an Illinois Secretary of State (SoS) order prohibiting him from selling securities and four counts of securities fraud for failing to inform his victims of the SoS order. [Last week], the court sentenced Bivens to serve 5 years in the Illinois Department of Corrections and pay restitution to his victims.


  • The new indictment alleges that while the initial case proceeded in court, Bivens continued the scheme by soliciting seven additional investors, in clear violation of his bond order.

For more, see Homewood Man Indicted For Real Estate Investment Scheme.

Key Figure In Indianapolis Arson Scam Gets Four Years; Ring Accused Of Buying Low Cost Homes, Torching Them, Pocketing Insurance Cash

In Indianapolis, Indiana, The Muncie Star Press reports:
  • Kenneth Allen blamed "greed and arrogance" for his serial arson-for-profit spree that resulted Wednesday in a four-year prison term and an order to pay more than $1 million in restitution to eight insurance companies.


  • Allen pleaded guilty to conspiracy to using arson to commit mail fraud, a federal charge that carried a maximum 20 years in prison and $250,000 fine. He was described by authorities as the mastermind of the scheme and became the first to be sentenced following federal indictments last fall. Other alleged conspirators face state charges in Delaware County courts. [Federal Judge Sarah Evans] Barker weighed Allen's past criminal history -- including a 2000 conviction for dealing in cocaine -- and federal prosecutors' recommendation of a five-year prison term in sentencing Allen to four years in prison along with the restitution.

  • "This is quite a balancing act for the court," said Barker, reading court documents that said the scheme involved more than 37 arsons and in excess of $1 million in claims.


  • Authorities said Allen and others would buy low-priced houses either as their own or for others, set them ablaze and collect insurance settlements.

For more, see Arson-for-profit kingpin gets four years. foreclosure arson xerox

New Jersey Man Facing Foreclosure Charged With Animal Cruelty; Remains Of 64 Animals Found In Home

In Barnegat Township, New Jersey, The Press of Atlantic City reports:

  • The explanation from an Ocean County man as to why 64 dead animals were found in his home was that he was running a rescue operation, authorities said Tuesday. Matthew Teymant, 29, was arrested Tuesday morning at his parents' home in Toms River on animal cruelty charges, authorities said. Yesterday, police made the gruesome discovery of dozens of dead animals at a township home on Potomac Court that was last owned by Matthew and Amanda Teymant.


  • SPCA Sgt. Thomas Yanisko said Tuesday the 64 dead animals found in the home included dogs, cats, hamsters, guinea pigs and turtles, all in different stages of decomposition. [...] "During an interrogation, Matthew Teymant basically said they were ...(rescuing) ... and adopting them out," [spokesman for the state Society for the Prevention of Cruelty to Animals Matt] Stanton said. "This is your typical case of a person who thinks they are a rescue operation and tries to do the right thing and goes crazy." [...] Ocean County public records include notice of foreclosure on the property through Countrywide Home Loans on June 14, 2007.
For more, see Police charge couple after 64 dead animals found in Barnegat home.

See also:

For more on "foreclosure pets", go here and go here. petsII and foreclosures

Friday, April 11, 2008

Some Out-Of-Work Mortgage Brokers Now Training To Undo The Unaffordable Loans They Once Originated

National Public Radio reports on the story of some unemployed mortgage brokers who have found work with the non-profit housing advocate Neighborhood Assistance Corporation of America, or NACA.
  • NACA is working with borrowers facing foreclosure all over the country, refinancing or restructuring their unaffordable subprime loans. Bruce Marks heads up NACA and now helps retrain former subprime loan brokers. Who better to untangle these unaffordable loans than the brokers who helped set them up, he says. The former brokers understand the "exploding ARM loans" and the "pick-a-pay loans," Marks says. "They are the experts, because they were a part of that industry, and they know that business inside and out."
NPR speaks with three ex-subprime mortgage brokers now with NACA who comment on some of their experiences with their former employers who, according to them, encouraged fraudulent conduct. One broker commented on the incentives thrown at loan originators to get borrowers into exploding adjustable rate mortgages:
  • "The bottom line is that the lender offered an incentive of 3 percent to the broker if they put [a client] into that particular loan," [broker Amber] Barbosa says. On a $500,000 home in California, brokers could make $15,000 to $20,000 or more in kickbacks on every single one of these risky loans. "Obviously, tons of people got pushed or thrown in that direction," Barbosa says.
Another ex-subprime broker commeneted on the need to sometimes obtain a supporting letter from a certified public accountant to get a mortgage application through:
  • According to [broker Anthony] Narag, an account executive from the now bankrupt lender New Century told brokers like him not to worry about that letter. "He would tell people, 'I have a CPA in my back pocket if you need one,'" Narag says. Narag says that meant he could get brokers bogus accounting letters so that fraudulent loan applications could get approved. New Century declined to comment for this story.

  • Narag says he also observed brokers printing fake bank statements or other income documents, and that there was a black market for these items. Everybody — including the lenders and banks buying these loans — looked the other way, Narang says, because the money was so good.

For more, see Ex-Subprime Brokers Help Troubled Homeowners.

HUD Stops Sale Of $1 Foreclosed Homes In Ohio, Michigan

In Ohio, The Cleveland Plain Dealer reports:
  • Federal authorities have stopped Ohio and Michigan communities from buying and renovating hundreds of foreclosed houses, leaving local officials stuck with - and frustrated by - neighborhood eyesores. The U.S. Department of Housing and Urban Development said in a memo dated Tuesday that it has delayed the sales because it wants to review the program, and it might clear it within a month. The government's problem: There are more of these sales pending in Ohio and Michigan right now than there have been nationwide in the program's five-year history. The sheer volume in Michigan and Ohio raised alarms.


  • The federal government was going to sell the houses for $1 each, through a HUD program designed to give new life to foreclosed properties lingering on the market for six months or more.

For more, see:

Butte County DA Issues Warning On Local "Fractional Interest" Foreclosure Rescue Scam

In Oroville, California, the Chico Enterprise Record reports:
  • Local property owners who may be in the process of foreclosure are being warned by the Butte County District Attorney's and Clerk-Recorder's offices about a possible scam. The scheme is supposed to work by having the property owner grant a fractional interest in the property to a sham business entity, according to the District Attorney's Office. The property owner is also asked to pay the person who gains the fractional interest a monthly fee. The fractional owner then files bankruptcy for the sham business to stop foreclosure. The bankruptcy is found to be fraudulent, the foreclosure continues and the owner loses the property as well as the fees they paid to the scam artist.

  • County Clerk-Recorder Candace Grubbs heard of the scheme from other county recorder offices and checked Butte County records. She found at least one suspicious case, referring it to District Attorney Mike Ramsey, whose office is investigating the circumstances. Ramsey said the case has ties to a similar scheme out of Alameda County.

  • In Alameda, the district attorney has brought charges against two people who have gained fractional interests from property owners in Alameda, Fresno and Napa. The U.S. Attorney in Sacramento has indicted 19 people on similar charges, according to Ramsey. Property owners who may be approached in this manner are encouraged to contact Butte County's economic crime unit, 1-866-323-7283 [...].

Source: Foreclosure scam may be operating locally.

Go here for other posts on fractional interest deed transfer, foreclosure rescue bankruptcy scams.

Surge In Foreclosure Rescue Scams A Byproduct Of Housing Crisis

Reuters recently ran a story that reminds us that there's big money in running foreclosure rescue scams.
  • Among the byproducts of the U.S. housing crisis is a surge in scams that cheat people out of their money, their homes, or both, under the guise of offering to rescue them from foreclosure. "There is a lot of money to be made if you are good at committing fraud," said Debra Zimmerman, an attorney at Los Angeles-based Bet Tzedek Legal Services, which provides free legal assistance to stricken home owners. "Foreclosure rescue scams are big business right now." Groups like Zimmerman's say that as soon as borrowers end up in foreclosure -- a matter of public record in the United States - they are bombarded with calls, leaflets and knocks on the door from people armed with fraudulent offers of help.

For more, see Troubled US homeowners fall prey to "rescue" scams.

More On The FBI's "Operation Homewrecker" Foreclosure Rescue Investsigation

CNBC reports:
  • It doesn't get much sadder than the "funny business" I'm reporting today. More than a hundred homeowners in 23 states have lost their homes, not because they intentionally stopped paying their mortgages, but because the company which promised to help them instead may have robbed them blind. Charles Head ran a financial services company in Orange County, California. He is now charged with being the ringleader in what a federal investigation has dubbed "Operation Homewrecker."

For more, see "Operation Homewrecker" May Be Lowest Blow Of Housing Crisis.

Go here for earlier posts as well as available updates on the Head nationwide foreclosure rescue operation.

South Florida Contractor Gets 10 Years As Habitual Offender For Pocketing Customer Cash & Doing Little/No Work; Still Faces More Charges

In Miami, Florida the South Florida Sun Sentinel reports:
  • South Florida businessman John T. Pluto, whose company has been the subject of more than 100 consumer complaints and a criminal investigation, pleaded guilty Wednesday to charges of forgery, grand theft and violating probation. Pluto, who entered a guilty plea as a habitual offender in Miami-Dade County Circuit Court, was sentenced to 10 years in prison.

  • Pluto is also facing charges in Broward County Circuit Court of fraud and six counts of third-degree grand theft. No date has been set for the hearing in Broward, said Assistant State Attorney T. Don TenBrook. The charges against Pluto, 46, stem from complaints filed by Broward and Miami-Dade consumers who signed contracts with his company, the now-defunct All American Driveways and Pool Decks Inc. Investigators claim Pluto defrauded consumers by entering into construction contracts, requesting up-front payment, then doing little or no work.

For more, see Hollywood contractor gets prison for taking cash, not doing work.

For other posts on homeowners left in the lurch due to actions by builders/contractors, go here and go here. contractors stiff subs customers zeta

Minnesota Homeowner Loses Home In Copper Theft As Severed Gas Line Causes Explosion

In Minneapolis, Minnesota, the Minnesota Post reports on the destuctive effect that copper thieves are having on the city's North Side. The following excerpt decribes the predicament of one local homeowner who literally lost her home as a result of the actions of one or more copper thieves intent on scoring a couple of hundred bucks worth of copper:
  • Sean McKenna, an arson investigator with the Minneapolis Police Department, points to the nightmare story of 3500 N. Fourth St. In December 2006, while homeowner Keili Mac was overseas on an extended vacation, a burglar severed a gas line in the basement, causing the house to fill with gas and explode. By the time Mac returned to the country, the house had been razed by the city because it was a hazard. To add insult to injury, McKenna said, Mac found herself mired in a contentious struggle with her insurance company, which balked at her claim because it didn't have the opportunity to evaluate damages before the demolition. McKenna is unaware of the final resolution of the case. Mac could not be reached for comment.

For more, see On Minneapolis' North Side, copper-theft epidemic adds to mounting housing problems.

For other stories on stolen copper, see Copper Thefts I and Copper Thefts II.

Go here and go here for other posts on vacant homes leaving its mark on neighborhoods. neighborhood destruction from foreclosures zach copper metal theft yak

Thursday, April 10, 2008

Northern Virginia Woman Charged In Real Estate "Open House" Thefts

In Loudon County, Virginia, The Washington Post reports:
  • A Leesburg woman posed as a home buyer at dozens of open houses in Loudoun County and stole items, including prescription drugs, jewelry and firearms, from four of them while real estate agents were elsewhere in the homes, law-enforcement officials said yesterday. Lauren E. Cooke, 24, who worked for a local moving company as a marketer, also burglarized four houses that were not on the market, officials said. She has been charged with 34 counts, including grand larceny, burglary, possession of a controlled substance and credit card fraud in the theft of items totaling nearly $200,000, they said. She is being held without bond at the Loudoun County Adult Detention Center.


  • [Loudoun County Sheriff's Office spokesman Kraig] Troxell said open houses can present an opportunity for criminals to roam freely in a home with little supervision. He urged sellers to hide valuables before showing their homes.

For more, see Woman Charged in Thefts at Open Houses (Homes Not on Market Were Also Targeted, Authorities Say).

Retirement Accounts Being Depleted In Attempts To Save Homes from Foreclosure reports:
  • Struggling to save their homes from foreclosure, more Americans are raiding their 401(k) retirement accounts to pay their bills -- and getting slammed with taxes and penalties in the process. Rather than borrow money from their 401(k) accounts, which would have to be paid back, a growing number of beleaguered families have been cashing out, according to retirement plan administrators. [...] Merrill Lynch found that [at plans that it administers] the primary reason for the rise in hardship withdrawals was to prevent foreclosure or eviction.
For more, see Homeowners Raiding Retirement Accounts to Avoid Foreclosure (Fees and penalties for early withdrawals can be severe).

Six Charged In Indianapolis Mortgage Fraud Racket Involving $38M In Mortgages & 568 Homes, Say Authorities

In Indianapolis, Indiana, The Associated Press reports:
  • Six men have been charged with theft and fraud in the purchase and resale at inflated prices of hundreds of homes in Indianapolis. Authorities say the men took out almost $38 million in mortgages under fake companies they created, buying and then reselling 568 homes across the city. Investigators say they never paid the mortgages on the homes they bought, sending properties into foreclosure. Authorities identified the six men as Mehran Valiyi of Indianapolis, Brian Beach of Greenwood, Marcus Ward of Carmel, Ladarius Patrick of Fishers, Omar Dillard of Fishers and Preston Forte of Chicago. A Marion County Jail officer says Forte and Patrick had not been taken into custody, and the others were released on bond.

Source: Six charged with fraud in purchase of hundreds of properties.

See also, WISH-TV Channel 8: Six men charged in mortgage fraud schemes.

Texas AG Shuts Down State Business Operations Of Florida-Based Foreclosure Rescue Firm

From the Texas Attorney General's Office:
  • Texas Attorney General Greg Abbott has shut down a fraudulent “foreclosure rescue” firm that preyed on hundreds of struggling Texas homeowners. An order by the Bexar County District Court requires Foreclosure Assistance Solutions Inc. of Florida, and its principal operators, Herb Zerden and Adolfo Quintero, to return $370,000 to 338 Texas homeowners. Additional defendants J.W.W. Services Inc. of California and owner John Woodruff are also included in the judgment. Another $105,000 will be held in escrow to assist remaining homeowners who can demonstrate they were victimized by this scheme.


  • Today’s settlement requires the defendants to pay $100,000 in civil penalties and $175,000 in attorneys’ fees. The judgment also prohibits the defendants from conducting Texas-based mortgage foreclosure mitigation in the future.

For the entire Texas AG press release, see: Attorney General Abbott Obtains Judgment That Brings Relief To Foreclosed Homeowners (Foreclosure Assistance Solutions and owners must return $475,000 to harmed homeowners).

See also:

St. Paul "To Turn The Screws On Lenders" For Blight Caused By Vacant Foreclosures

In St. Paul, Minnesota, the Pioneer Press reports:
  • The city of St. Paul, grappling with a growing list of abandoned buildings now 1,700 homes long, is taking a swing at national lenders in a stepped-up effort to tackle the foreclosure crisis. A highlight of the city's game plan, announced Wednesday, is hiring a lawyer from the St. Paul-based Foreclosure Relief Law Project to advise on legal strategies to turn the screws on lenders such as Wells Fargo & Co., U.S. Bancorp and Deutsche Bank AG. The city said a small group of large lenders is responsible for many of the abandoned properties St. Paul is struggling with, neglecting the buildings and leaving them to deteriorate. "We want to be clear: If they don't come to the table, we're going to go after them," St. Paul Mayor Chris Coleman told reporters.


  • St. Paul appears to be borrowing a page from the foreclosure playbook used by the cities of Cleveland and Buffalo, N.Y. Those cities have sued major lenders and servicers in recent months, accusing them of failing to take care of properties after foreclosure.

For more, see St. Paul goes after national lenders in effort to battle foreclosure blight.

See also:

Go here for posts on the approach taken by the City of Buffalo, NY towards foreclosing lenders and its vacant houses.

To view Buffalo's lawsuit against a host of lenders on account of the blight caused by the abandoned houses in foreclosure, see City of Buffalo v. ABN Amro Mortgage Group Inc., et al. (3.67 MB; available online courtesy of the law firm Skadden, Arps, Slate, Meagher & Flom LLP). If there's a problem with this link, email me at and I'll email it to you (please put "City of Buffalo v. ABN Amro" in the subject line).

Go here for posts on Cleveland's lawsuit against 21 investment banks involving neighborhoods blighted by vacant foreclosures.

Go here and go here for other posts on vacant homes leaving its mark on neighborhoods. neighborhood destruction from foreclosures zach

Title Insurance Agent Charged With Writing Bogus Policies After Being Fired

In Central Florida, The Tampa Tribune reports:
  • An insurance saleswoman was arrested [last week] on charges she stole roughly $38,000 by writing bogus title insurance policies. Sharon H. Jhagroo, 41, used to work for Old Republic National Title Insurance, but that relationship was severed as of March 31, 2007, said Lt. John Womer of the state Department of Financial Services' insurance fraud division. Jhagroo, however, continued to write title insurance policies, from April, 2007 through January, as if she were still working for Old Republic, according to investigator Steven E. Firestone. She wrote 48 bogus policies and collected $38,104.29 in premiums, which she kept for herself, documents show.The St. Petersburg woman was charged with grand theft and selling insurance without a license. The latter charge is applicable when an insurance agent is no longer working for a company, Womer said.


  • According to arrest affidavits, Jhagroo left real estate buyers and lien holders in a lurch after selling them the bogus policies. Womer said Old Republic made the victims whole once the fraud was discovered, and will assume the loss.

For more, see Insurance Agent In St. Pete Charged With Grand Theft.

St. Louis Feds Get Guilty Plea In Mortgage Scam

In St. Louis, Missouri, the St. Louis Business Journal reports:
  • Christopher Rakel, a real estate broker in St. Louis, Mo., pleaded guilty to fraud charges involving a scheme to defraud banks and other mortgage lenders, U.S. Attorney Catherine Hanaway said Thursday. Rakel, 29, of St. Louis County, pleaded guilty to one felony count of conspiracy to commit bank, wire and mail fraud, and one felony count of money laundering in a scheme that involved dozens of properties, and a number of co-conspirators, including investors, mortgage brokers and appraisers, according to a release from Hanaway's office.

For more, see Rakel pleads guilty to fraud, money laundering.

Broker Intimidation Used To Illegally Harass Tenants Out Of Foreclosed Homes, Says Oakland Lawsuit

In Northern California, The Oakland Tribune reports:
  • The city of Oakland filed suit Monday in Superior Court against [Walnut Creek's Tri-County Properties licensed real estate broker Craig] Jarvis, accusing him of forcing tenants from foreclosed properties through intimidation and harassment. Oakland City Attorney John A. Russo said Jarvis' citing of the Civil Code was bogus while the City's Just Cause Ordinance expressly forbids eviction of tenants from a property that has been foreclosed. Jarvis could not be reached for comment. The attendant who answered his phone said he was "in court on eviction hearings."


  • Russo estimated at least 10 families were treated in similar ways. He said the bigger concern, however, is how many other real estate brokers are doing the same thing — pushing tenants out so lenders can dispose of their foreclosed properties more quickly. "This is the worst type of bottom feeding," from which real estate and mortgage brokers and banks win tremendous profits, said Russo.

  • The suit accused Tri-City Properties of engaging in practices that put honest practitioners at a competitive disadvantage. It cited Jarvis' violations including intimidating tenants to take paltry "cash for keys" offers that do not reflect the actual cost of the move for the tenant; turning off tenants' heat and electricity; refusing to return tenants' phone calls in reply to notices to vacate; refusing requests for information about the foreclosure or the identity of the new property owner; claiming to have instituted eviction proceedings against the tenant or threatening to do so if they do not comply with his demands; and citing incorrect legal authority to lend an aura of legitimacy to his demands.

  • Russo urged Oakland tenants so threatened as well as homeowners who risk foreclosure to call the Oakland City Attorney's hot line: 510-BE-ALERT or 510-232-5378.

For more, see Suit: Broker harassing Oakland tenants (City alleges 10 families may have been intimidated) (if link expires, try here).

See also, San Francisco Chronicle: Oakland sues landlord, claims illegal evictions.

Go here for posts on illegal evictions in violation of the "just cause" ordinance (Prop EE).

Wednesday, April 09, 2008

Queens Homeowners Facing Foreclosure Begin To Fight Back; Are In "Better Position Than Ever" To Get Court Sympathy, Says Local Housing Advocate

In New York City, The Daily News reports:

  • For years, the rapid judgments in favor of banks by Queens judges led housing activists and lawyers to grimly dub the process a "foreclosure mill." Even if the lenders were fly-by-night operations, borrowers rarely showed up in court to challenge them, said Josh Zinner, co-director of the Neighborhood Economic Development Advocacy Project.

  • "The judges never looked carefully at these loans," Zinner said. But with new attention on the subprime lending meltdown, victims of shady mortgage brokers are more likely to see favorable judgments, advocates said. "The way the courts are seeing it right now, if there's fraud involved, you're in a repairable situation," said Peggy Morris, director of Jamaica Housing Improvement, an advocacy group. "If you have some money, you can stand your ground," said Morris, who has steered many homeowners to private attorneys. Morris said owners are in a better position than ever to get sympathy from the courts.
  • [Attorney Howard] Sherman, who has handled 40 cases in Queens and charges a set fee, said judges have come to "understand that the people who were wronged were the borrowers." "One judge summed it up: '14,000 Queens residents can't be wrong,'" Sherman said.

For more, see Justice on side of loan victims.

For other posts on homeowners using Federal & state consumer protection statutes to try and undo bad mortgage loans, Go Here, Go Here, and Go Here. undo mortgage loans TILA batallion

Illinois AG Files Civil Charges Against Mortgage Broker For Deceptive Practices; Homeowners Facing Foreclosure Among Those Targeted

From the Office of the Illinois Attorney General:
  • [A]ttorney General Lisa Madigan [...] filed a lawsuit in Cook County Circuit Court against a Chicago-based mortgage broker for engaging in deceptive lending practices that have resulted in the loss of at least one consumer’s home. Madigan’s lawsuit, filed against Advantage Mortgage Consulting, Inc. and President Robert Enright, alleges that the defendants employed a variety of schemes to convince consumers— including many on the brink of foreclosure—that they would pay lower monthly mortgage payments when, in fact, their monthly rates later increased significantly. Specifically, the defendants used deceptive refinancing schemes, padded loans with higher than stated fees, failed to disclose prepayment penalties and brokered adjustable rate mortgages with consumers who believed they were agreeing to fixed-rate mortgages, according to the complaint.


  • Attorney General Madigan’s Consumer Fraud Bureau has received 20 complaints against Advantage Mortgage Consulting. The lawsuit seeks a court order prohibiting Advantage Mortgage Consulting from engaging in deceptive business practices and imposing a civil penalty of $50,000 for each violation committed with the intent to defraud and a $10,000 penalty for each instance where a violation was committed against a person 65 years of age or older. Further, the suit asks the court to rescind the contracts signed as a result of these deceptive practices and offer full restitution to affected consumers. Finally, Madigan’s suit asks the court to order the defendants to pay all costs associated with the investigation and prosecution of the lawsuit.

For more, see Madigan Files Suit Against Chicago Mortgage Broker For Deceptive Practices.

NY AG Charges Niagara Falls Man With Grand Larceny, Seeks Criminal Contempt Of Court Order In House Flipping Scam; Craigslist Ads Used To Find Victims

From the New York Attorney General's office:
  • Attorney General Andrew Cuomo today announced his office is seeking a criminal contempt-of-court order against a Niagara Falls man who tried to defraud investors through a Western New York house-flipping scheme after he was ordered not to. He is also being charged with Grand Larceny for allegedly taking nearly $52,000 from one investor.

  • Joseph Furan, 39, of Lockport Road in Niagara Falls, faces criminal contempt of court for 13 violations of a prior court judgment by fraudulently advertising properties on the popular Internet classified site Craigslist. Each violation can carry a maximum jail term of 30 days and a $1,000 fine. Furan is also facing the felony charge of Grand Larceny in the Third Degree for selling two properties to an investor over the Internet – and then not providing the titles.

For more, see Attorney General Cuomo Seeks Jail For Fraudulent, Habitual Western New York House-Flipper.

For details of Furan’s original scheme, see Cuomo files suit against Niagara Falls man who tried to sell bogus properties in and around Buffalo (Attempted to defraud investors through an eBay house-flipping scheme).

Foreclosure Moratorium "Not Required Or Legal", Local Judge Tells Philly City Council

In Philadelphia, Pennsylvania, the Philadelphia Daily News reports:

  • Common Pleas President Judge C. Darnell Jones told City Council yesterday that a moratorium on sheriff's sales is not "required or legal, quite frankly," to deal with home foreclosures prompted by subprime mortgages. Jones said that the First Judicial District instead is developing a program to offer legal, financial and housing counseling to homeowners at risk for foreclosure. Council last month passed a resolution calling on Jones to approve a moratorium. Sheriff John Green postponed this month's sheriff's sales and said that he would ask Jones to approve a halt to the auctions for six months. "Realistically, it's simply not the answer, because it doesn't help anyone," Jones said after yesterday's Council hearing on the judicial system's budget. [...] "It is unfair to the lenders to paint with a broad brush this need for a moratorium on foreclosure sales," Jones said. Sheriff's sales are due to resume on May 6.

For more, see Judge Jones sees help coming for homeowners.

See also: The Wall Street Journal: Philadelphia Works on Plan To Help Avoid Foreclosures (if no subscription, try here, then click link); and The Philadelphia Inquirer: Phila. plan would spare homeowners facing foreclosure:

  • Philadelphia will not impose a moratorium on foreclosure sales, but it will slow the legal process to try to help borrowers avoid the loss of their homes, Common Pleas Court President Judge C. Darnell Jones II said yesterday. Recognizing that anything longer than Sheriff John D. Green's current one-month stay of foreclosure sales would not withstand a legal challenge, Jones announced to City Council a novel plan for a court-supervised process exclusively for owner-occupied properties. diversion program

Foreclosed Property Owners Trashing Homes On The Upswing In South Florida

In South Florida, the Sun Sentinel reports:

  • Some South Floridians who lose their houses to foreclosure try to get even. They'll strip the plumbing, ruin the carpets and rip out doors. At a home [...] in Cooper City, listing agent Craig Green found the top of the toilet tank missing, the door to the dryer ripped off, the garage filled with junk and a wall in the master bedroom with a large hole in it. Jim Banford, broker-owner of Real Estate Asset Disposition Corp., saw roofing tar in the toilet of a house [...] in West Palm Beach. A 2-foot fish and cement were poured down the toilet at another of his listings nearby.


  • Exasperated lenders are getting wise to the ruse and offering "cash for keys" deals, essentially paying homeowners as much as $2,000 not to take out their frustrations on their properties before leaving. Roughly half of all foreclosed properties are returned to the bank with substantial damage, according to a national survey of 1,500 real estate agents by Campbell Communications, a marketing and research firm in Washington, D.C. "Until you see and smell these properties, you don't really understand the problem," said Tom Popik, a partner at Campbell Communications and a market researcher in the mortgage industry for 15 years.


  • In Davie, a homeowner who lost the property in Foreclosure left behind a caged dog."Your eyes would water when you went in there," said Jane Caro, an agent for Prudential Florida WCI Realty who toured the home. "The lender had to put new drywall in because the smell wouldn't come out."

For more, see Ex-owners around South Florida trash foreclosed homes before leaving.

Tuesday, April 08, 2008

Illinois AG Levels Foreclosure Rescue Charges Against Purported "Faith Based Organization" In Civil Suit

In Chicago, Illinois, WLS-TV Channel 7 reports:
  • In the last year, the Illinois attorney general's office has sued or investigated about a dozen foreclosure rescue services. The AG's office says the latest one it's suing violated the Consumer Fraud and Deceptive Business Practices Act and used religion to sell its services. [...] At first, Reverend Walter C. Armstrong wouldn't answer questions about his company's promises to save people like Evelyne Allen from foreclosure. Armstrong is a bishop and a reverend at Prayer of Faith Church on the city's West Side. He also ran Victory Consulting, a now defunct company that the AG says went door to door, passing literature to prospective clients.


  • In this lawsuit, the attorney general alleges Victory Consulting gained consumers' trust by saying the company was a faith-based organization. "So the consumer isn't likely to answer a lot of questions, isn't likely to demand documents because of this sort of aura of faith and trust," said [said Illinois Ass't AG Michelle] Garcia. The lawsuit says homeowners in foreclosure would sign their home over to a "surrogate owner" and then continue to pay the mortgage to the surrogate owner.

For more, see Foreclosure Chasers (They claim they'll save your home if you're being foreclosed on, but local authorities say most so-called foreclosure rescue services are rip-offs).

To view the Illinois AG's lawsuit, see State of Illinois v. Victory Consulting & Investments, Inc., et al.

For the Illinois AG's press release, see Attorney General Madigan Files Suit Against Chicago Mortgage Rescue Fraud Company (Deceptive Tactics Sent Five Homeowners into Foreclosure).

Florida AG Slaps Suit Against Clearwater Upfront Fee Foreclosure Rescue Operator

In Clearwater, Florida, the St. Petersburg Times reports:
  • State Attorney General Bill McCollum on Thursday sued a Clearwater foreclosure rescue operation, accusing it of engaging in deceptive and unfair business practices. The lawsuit alleges that Law & Associates pitched services to homeowners facing foreclosure in Florida and across the country through direct mail and various Web sites. Those who responded were charged an up-front cash fee of $1,500 to $2,000 for guidance and help negotiating with lenders, but the services never materialized, according to the suit.


  • The attorney general's office reviewed more than 65 consumer complaints about the company, which began operating in Clearwater in 2004. In none of those cases did the company actually prevent foreclosure of a home, the lawsuit says. [...] McCollum's lawsuit alleges six counts of violating the state's Deceptive and Unfair Trade Practices Act.

The Florida AG seeks to:

  1. shut down the company's foreclosure rescue operations,
  2. nail it for at least $10,00o in penalties for each violation of the law,
  3. recover its attorney's fees,
  4. force a return of all fees paid by the homeowners,
  5. among other things.

For more, see:

Ohio Governor, Mortgage Servicing Companies Engage In Publicity Stunt Affecting Homeowners In Foreclosure

In Columbus, Ohio, Bloomberg News reports:

  • Citigroup Inc., HSBC Finance Corp., and seven other mortgage companies agreed to help delinquent Ohio borrowers avoid foreclosure in the first such accord between a state and home-loan servicers, Ohio Governor Ted Strickland said. [...] The companies signed non-binding compacts agreeing to notify borrowers four to six months before their adjustable-rate mortgages reset, said Kimberly Zurz, director of Ohio's Department of Commerce. Seven agreed to lock in adjustable rates for qualified borrowers for as long as five years, she said.


  • The other companies that signed agreements were GMAC RESCAP/Homecomings Financial, Carrington Mortgage Services, Ocwen Financial Corp., Option One Mortgage, Saxon Mortgage Services, Select Portfolio Servicing and Litton Loan Servicing, Strickland said in a statement.

For the rest of the story, see Citigroup, HSBC, 7 Others to Assist Ohio Homeowners.

Editorial Note:

It's hard not to believe that the loan servicers who agreed to this non-binding agreement (which, in law, is no agreement at all) are simply giving lip service to take the heat off them in Ohio. Given the facts that:

  • Ohio recently announced that qualified homeowners in foreclosure may have free legal representation available to them,

  • the same announcement informs us that Ohio foreclosure defense training for attorneys representing homeowners in the state has reportedly been made available through the Ohio Bar Association,

  • it is no secret that foreclosing mortgage holders and servicers are having a tough time finding and filing the proper documentation in court proving their right to bring foreclosure actions,

  • a recent media report informs us that an Ohio appeals court ruled last month that a foreclosing mortgage company is not entitled to a foreclosure judgment if they can't prove their ownership of the promissory note and how they came about owning the mortgage (see Everhome Mtge. Co. v. Rowland, 2008-Ohio-1282; (10th Dist. Ct. App.; March 20, 2008)), and

  • other Ohio appellate court decisions also seem to point to the apparent need for a foreclosing mortgage lender to prove that it is the owner of the promissory note and, thererfore, the real party in interest to initiate the legal action (see First Union Natl. Bank v. Hufford (2001), 146 Ohio App.3d 673; 3rd Dist. Ct. App. ; and Washington Mut. Bank, F.A. v. Green (2004), 156 Ohio App.3d 461; 7th Dist. Ct. App.),

the loan servicers are obviously feeling enough pressure to participate with the Ohio governor in this publicity stunt. Everyone appears to come away looking good, but it seems to me that unless the loan servicers can physically produce the promissory note, and prove that there were no violations of the Federal Truth In Lending Act ("TILA", as well as any applicable state consumer protection law) when the loan was originated, the homeowners really have little incentive to agree to a loan workout (unless, of course, the terms of any such loan workout are highly favorable to the homeowners and reflect the fact that promissory notes are missing and "TILA" violations were committed).

Now that there are attorneys involved who are representing homeowners, it appears to me that those attorneys have now taken up the obligation to assure their clients/homeowners that all the laws affecting their mortgage loans and all the rules governing the legal procedure in foreclosure cases have been complied with. I expect that these attorneys will not let the mortgage companies off the hook on their obligations, unless of course, they are prepared to make significant concessions to the homeowners when ironing out a loan modification.


For more on mortgage companies' obligations in foreclosure actions, see Fight Foreclosure: Make ‘Em Produce The Note!.

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.

For other posts on homeowners using Federal & state consumer protection statutes to try and undo bad mortgage loans, Go Here, Go Here, and Go Here. undo mortgage loans TILA batallion missing mortgage foreclosure docs beta

Fight Foreclosure: Make ‘Em Produce The Note!

For video aficionados, there is a short video called Fight Foreclosure: Make ‘Em Produce The Note! that is floating around in cyberspace. Nothing technical; don't know who made the video; but I got a kick out of it. It's a "must see" video, in my judgment, for anybody currently facing foreclosure, or who may be in the future. I stumbled into it from a link on the home page of the website of Tampa, Florida law firm, James, Hoyer, Newcomer & Smiljanich, PA.

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.

June 15, 2008 update:

The person on the video is attorney Chris Hoyer, of James, Hoyer, Newcomer & Smiljanich, PA. missing mortgage foreclosure docs beta

Foreclosures Hitting Northern Virginia McMansions

In Loudon County, Virginia, Reuters reports:
  • Million-dollar fixer-upper for sale: five bedrooms, four baths, three-car garage, cavernous living room. Big holes above fireplace where flat-screen TV used to hang. The U.S. housing crisis has come to McMansion country. Just as the foreclosure crisis has hollowed out poorer neighborhoods, "for sale" signs are sprouting in upscale developments so new they don't show up on GPS navigation screens.


  • The crisis has hit especially hard here in Loudoun County, Virginia, where upscale developments have supplanted horse farms over the past fifteen years. About an hour's drive from Washington, Loudoun is one of the nation's most affluent counties, with a median household income of $98,000, more than double the national figure. [...] These houses are sometimes nicknamed "McMansions," disparaging both their extravagance and their look of mass production -- like hamburgers from a McDonald's restaurant.

For more, see Foreclosures come to McMansion country.

Monday, April 07, 2008

Suspect In Minneapolis-Area Alleged Home Flipping Scam Cops Plea, Agrees To Sing

The Minneapolis Star Tribune reports:
  • A key figure implicated in a suburban mortgage fraud and property flipping scam has pled guilty to racketeering, and has agreed to work with authorities who are investigating two others involved in the scam, the Hennepin County Attorney's office said. Celeste Skaar, of Orono, entered her plea and will forgo a jury trial, the attorney's office said. Skaar is the owner of New Day Capital and was charged in September with conspiring with two others to defraud banks through false loan applications and for finding straw buyers for properties that were bought and resold, often the same day and for a big gain in price, a criminal complaint said.


  • The complaint also names Scott R. Rosenlund, president of 10Spring, Inc., a home building and development company, and Shinon Lindberg, a business associate of 10Spring. They were charged in September with racketeering and theft by swindle.

Source: Two charged in mortgage fraud scam due in court today (Men face charges of theft by swindle and racketeering in connection with a home mortgage fraud scam).

Go here for other posts on this story.

Arizona AG Settles Civil Charges Against Four Straw Buyers In Foreclosure Rescue Equity Stripping Scheme; Case Continues Against Other Defendants

(original post 4-5-08)
In Phoenix, Arizona, The Associated Press reports:
  • Four Phoenix-area residents who acted as "straw-buyers" in a foreclosure rescue scheme have agreed to pay $89,000 to settle a civil suit filed by Arizona Attorney General Terry Goddard's office. Goddard's office says the four participated in a scam scheme designed to skim equity from the residences of distressed homeowners. They obtained millions of dollars in mortgages and left the homeowners even further in debt. The defendants did not admit guilt but agreed not to engage in similar practices in the future. Other defendants are still being sued by the state under provisions of Arizona's Consumer Fraud Act and its Racketeering Act.

Source: Arizona AG settles case with "foreclosure rescue" buyers.

For the Arizona AG press release, see Terry Goddard Announces Settlements in Foreclosure Rescue Scheme (The case, Arizona v. Peter Hou, Yanjun Hou, and Stress Free Equity Corp., et al., is pending against other defendants in Maricopa County Superior Court).

Chase Memo Details How To Push Thru Dubious Loans

In Portland, Oregon, The Oregonian recently reported:
  • A newly surfaced memo from banking giant JPMorgan Chase provides a rare glimpse into the mentality that fueled the mortgage crisis. The memo's title says it all: "Zippy Cheats & Tricks." It is a primer on how to get risky mortgage loans approved by Zippy, Chase's in-house automated loan underwriting system. The secret to approval? Inflate the borrowers' income or otherwise falsify their loan application.


  • The document, a copy of which was obtained by The Oregonian, bears a Chase corporate logo. But it's unclear how widely it was circulated or used within Chase. Bank spokesman Tom Kelly confirmed that the "Cheats & Tricks" memo was e-mailed from Chase but added that it does not reflect Chase corporate policy.

For more, see Chase mortgage memo pushes 'Cheats & Tricks' (The bank says it never backed the strategies, which detail how to get an iffy loan approved) (when link expires, try here or try here).

Go here for a reprint of the Zippy Cheats & Tricks memo (when link expires, try here).

Erie Feds Close To Bagging Third Plea In Local Mortgage Fraud Scam Involving Almost 200 Properties

In Erie, Pennsylvania, the Erie Times News reports:
  • A third defendant in the federal probe of a widespread local mortgage-fraud scheme appears ready to enter a guilty plea. Gregory M. Finney originally entered a plea of not guilty in the case. But Finney’s lawyer, Daniel Brabender, said last week that Finney will likely change that plea in the next few weeks, in large part because of a prior conviction for delivery of cocaine. [...] Finney, who was indicted by a federal grand jury on Feb. 12, was president of A&M Homes, a now-defunct home-redevelopment business. [...] Brabender, who said he and Finney have discussed a plea change, said that if Finney were convicted in the mortgage fraud case, his prior cocaine conviction could weigh heavily against him at sentencing under federal guidelines.

For more, see:

Go here for other posts related to the Erie, Pa. FBI mortgage fraud probe. Robert Dodsworth

Class Action Against Countrywide Alleges Abuse Of Hurricane Victims Behind In House Payments

According to a press release from the James, Hoyer, Newcomer & Smiljanich, PA Law Firm:
  • In response to Countrywide Home Loans refusal to fulfill promises made to Gulf Coast hurricane victims, the James Hoyer Law Firm announced [last month] the filing of a new class action lawsuit against the mortgage company. The suit was filed in the United States District Court in the Southern District of Mississippi. The suit alleges Countrywide took advantage of these disaster victims by offering them mortgage deferrals with no penalties attached and then reneging on that promise.


  • After Hurricanes Rita & Katrina, Countrywide offered 90-day mortgage payment deferrals to homeowners affected by the devastation and in many cases 6-month deferrals. Countrywide represented this as a good deed to help people in their time of suffering and even issued a press release to promote its actions. Homeowners were told by agents over the phone their deferred payments could be tacked onto the end of their mortgages. They were assured they would not face penalties like late fees, interest and reports to the credit bureaus. Countrywide went so far as to tell homeowners who wanted to pay, not to do it. In some cases, they even returned checks. Struggling hurricane victims accepted the offer of help, some reluctantly, when assured they would not be economically penalized by late fees, penalties or credit reporting.

  • When homeowners followed up later to resume payments, they discovered Countrywide was reneging on its promise. The company said it could not add the payments to the end of the loan, without penalty, after all. Instead, Countrywide told homeowners they would either have to pay the lump sum owed immediately or face a loan restructuring which would cause them to pay thousands of dollars more over the life of their loan.

  • The suit, filed on behalf of victims in Mississippi, is in addition to two suits already pending in Louisiana and Texas.

For the press release, see Countrywide Class Action Suit: Hurricane Victims Feel Betrayed.

Go here for:

To view the lawsuit, drop me a line at and I'll e-mail it to you (be sure to put "Brumfield v. Countrywide Home Loans" in the "Subject" line).

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

More On Staten Island Foreclosure Halted For Violations Of NYS Ant-Predatory Lending Law

ABC News ran a story last week on David and Karen Shearon, the Staten Island, New York couple who, in a court case involving the attempted foreclosure of their home, received a favorable ruling by the presiding judge in which he:

  1. found that the state's predatory lending laws were violated when the Shearon's home mortgage was originated,
  2. denied the bank's bid for foreclosure, and
  3. ruled that the Shearons may be entitled to a refund of their mortgage payments and attorneys fees.

Reportedly, the trial judge has agreed to rehear arguments about his decision to stop the foreclosure, and the foreclosing mortgage lender has appealed the decision.

To read more, see Fighting Back Against Foreclosure (New York Judge Denies Foreclosure Based on Alleged Predatory Lending).

For the court 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 this story.

Pennsylvania Woman Gets Prison For $194K I.D. Theft; Damage Included Pocketing Mortgage Proceeds On Victims' Home

In Pennsylvania, the Bucks County Courier Times reports:
  • A Hulmeville woman who systematically stole more than $194,000 from a hearing impaired Upper Southampton couple in an identity theft scam was sentenced Tuesday to 18 months to 10 years in a state prison. Nancy Hellyer, 41, of Main Street told Bucks County Judge Albert Cepparulo that she learned a lot from her arrest and hoped, as part of a community service sentence, to help others by leading seminars on how to avoid con artists like herself. Cepparulo told her to forget it.


  • Without the couple's permission, she changed the mailing address on some of their credit cards, added her name to the accounts and charged more than $100,000 in goods, services and cash advances. She also opened a second mortgage on their Charles Street home, acting as the couple's “agent” when speaking to bank officials.

For more, see Hulmeville woman sentenced in $194,000 identity theft scam.

Sunday, April 06, 2008

Newark "Anti-Foreclosure Scam" Volunteers Sweep Thru City Distributing Warning Fliers, Ripping Down "We Buy Houses" Road Signs

In Newark, New Jersey, The Star Ledger reports on the first day of foreclosure outreach organized by the Newark/Urban Essex Foreclosure Task Force, a coalition of community organizations, government officials and nonprofit groups. Dozens of volunteers met after canvassing the city, ripping down "foreclosure rescue" signs and distributing information warning against such scams:
  • Michael Heard was part financial consultant, part city code enforcer yesterday afternoon as he spoke to Newark residents about home foreclosures and ripped down signs. "I'm angry," he said shortly after taking down two signs in his neighborhood in the West Ward of Newark that claimed to get people out of foreclosures or offered to buy homes on the cheap. [...] Heard was one of dozens of volunteers in bright orange T-shirts who swept through all five wards of the city yesterday armed with fliers and door hangers to warn citizens against foreclosure and mortgage scams designed to prey on the elderly or the desperate.


  • "I'm tired of driving around my city and seeing these signs," Booker said, pointing to the dozens of blue, red, yellow and green signs volunteers had torn down around the city and brought to the meeting. He said he was so sick of seeing them, he stopped at Home Depot to buy a crowbar that he keeps in his car. He tears down signs whenever he sees them. It's illegal to post any kind of sign on utility poles and trees.

For more, see Newarkers try to stem foreclosure scams (Groups remove signs, hear Mayor Booker).

Go here for other posts on the battle against the ubiquitous "We Buy Houses", "Stop Foreclosure", etc. road signs.

Massachusetts AG Scores In Housing Discrimination Rental Cases

Excerpts of three press releases from the Massachusetts Attorney General's Office. In the first case:

  • Attorney General Martha Coakley’s Office obtained a judgment against Thomas Dooley, III, a Beacon Hill real estate broker and his company, Y2K Realty, Inc. dba Louisburg Properties, which resolves claims that he and his company violated state antidiscrimination laws by discriminating against a prospective tenant who had a housing subsidy. “Realtors, brokers and landlords in Massachusetts need to understand that discrimination against housing subsidy holders is illegal,” said Attorney General Coakley.

  • The complaint [alleged that the landlord] rejected a prospective tenant who responded to an advertisement for a Beacon Hill apartment because he held a Section 8 housing assistance voucher. Under Massachusetts law, it is illegal to discriminate against housing applicants because they receive public assistance.

For more, see Attorney General Martha Coakley Obtains Judgment Against Realtor In Housing Discrimination Case.

In the second case:

  • Attorney General Martha Coakley’s Office entered into a consent judgment with two Malden landlords resolving claims that they violated state anti-discrimination and lead paint laws by discriminating against a family and their young son who lived in the landlords’ property. [...] The complaint, [...] , alleges that landlords Michael McCarthy, and his wife Marijane, discriminated against the family by attempting to evict them after a lead inspection revealed illegal and hazardous levels of lead in the family’s apartment, and after the family filed a housing discrimination complaint against them with the Massachusetts Commission Against Discrimination (“MCAD”). The complaint further alleges that after the McCarthy’s were ordered to remove the lead, they attempted to raise the family’s rent by nearly double.

  • Under Massachusetts law, it is illegal to discriminate against persons because their household includes children under the age of six. It is also illegal to retaliate or discriminate against persons because their presence requires compliance with the lead paint laws. The law requires that landlords abate lead conditions when a child under six resides on the premises.

For more, see Attorney General Martha Coakley Obtains Judgment Against Malden Landlords In Housing Discrimination Case.

In the third case:

  • Attorney General Martha Coakley’s Office filed a consent judgment late [Monday] to resolve claims that a Roslindale landlord violated state antidiscrimination laws by posting a rental advertisement on the internet that discriminated against recipients of Section 8 housing subsidies in order to avoid compliance with the Commonwealth’s Lead Paint Law. The judgment [...] requires the landlord to pay $10,000 in compensatory damages. The judgment also requires the landlord to abate any lead paint hazards in the rental unit.

  • Under Massachusetts law, it is illegal to discriminate against housing applicants because they receive public assistance. It also is illegal for a landlord to refuse to rent to a prospective tenant because the unit may contain lead paint hazards, or because the rental would trigger duties under the Massachusetts Lead Paint Law or regulations.

For more, see Attorney General Martha Coakley Obtains Judgment Against Roslindale Landlord In Housing Discrimination Case.

Connecticut Attorney Surrenders Law License After Allegedly Pocketing $850K In Closing Proceeds Due On Existing Mortgages

In Wilton, Connecticut, the Connecticut Law Tribune reports:
  • [J]oseph Kriz, 44, of Wilton resigned from the [Connecticut] bar on Thursday, March 27, and waived his right to reapply for admission after investigations revealed that he failed to pay off more than $850,000 in mortgages after handling house sales and refinances. [...] That may not be the last of his problems. Assistant Disciplinary Counsel Patricia King said she is forwarding information about the case to the FBI, which is reportedly investigating the missing money.


  • Kriz's case is one of a growing number involving lawyers and missing money in real estate deals. Last year, the FBI released a study that showed mortgage fraud involving lawyers to be a significant problem in states where attorneys remain involved in the real estate closing process.

For more, see Wilton attorney loses license over real estate closings.

See Theft Of Escrow Funds I and Theft Of Escrow Funds II for other stories of trust account / escrow account theft of funds. sneaky slick escrow agents beta

Some Vacant Foreclosures Worth Less Than The Copper Inside

Reuters reports on the problems copper thieves are inflicting on neighborhoods that have a growing inventory of foreclosed homes. A couple of excerpts:
  • [I]n areas hit hardest by foreclosures, such as the Slavic Village neighborhood of Cleveland, Ohio, copper and other metals used in plumbing, heating systems and telephone lines are now more valuable than some homes. "We're in an incredibly unfortunate time where the nonferrous metals commodities market for scrap is at an all-time high. Houses are getting stripped pretty quickly once they go through the foreclosure process," Cleveland city councilor Tony Brancatelli said. "We're seeing houses sold for $100 that are distressed houses that should not be recycled," he said. Some boarded-up homes in his Slavic Village community have "No copper, only PVC" painted on the boards to stop would-be thieves.


  • "The problem is there's almost no security. Does this look like anybody lives here?" [one broker said], gesturing to the boarded-up home with chipped yellow paint and a "notice of foreclosure" letter affixed to its door. "It's like a big billboard saying 'come and take me,'" he added. "It's an epidemic." [...] Jonathan Osman, a broker in Charlotte, North Carolina, said growing numbers of banks are balking at lending to prospective buyers of foreclosed homes that are stripped of copper pipes and other metals, further depressing housing prices. [...] Along with copper, he often sees air conditioners and garbage disposals torn out. "I don't know what the solution is other than for the banks to not put a sign in the window saying the house is vacant," he said, "or maybe keep tenants there."

  • At least 15 U.S. states -- from California to New York -- drafted legislation in the past year to deal with the problem, from tighter regulations on scrap metals' traders to tougher penalties for metal theft, local authorities and metals industry officials say.

For more, see Some homes worth less than their copper pipes.

Reportedly, there are homes in in one upstate New York city that sell for as little as $1. See Reuters: Cities grapple with surge in abandoned homes:

  • [S]yracuse, New York, began selling vacant homes last year for $1 each to non-profit groups who promise to tear them down or renovate them. Last month, Syracuse Mayor Matthew Driscoll extended the deal to private companies.


For other recent copper theft stories, see:

For other stories on stolen copper, see Copper Thefts I and Copper Thefts II. copper metal theft yak

Home Based Meth Labs Pose Threat To Homebuyers, Investors, Foreclosing Lenders Alike

An article in (formerly REO Magazine) addresses the problem that clandestine meth labs pose to unsuspecting homebuyers, real estate investors and foreclosing mortgage lenders:
  • Unfortunately, it may be difficult for a potential buyer to know that a property has been used as a clandestine lab. Even if an interested party is aware that a property has been used as a lab, they may not understand the health and monetary risks associated with it. It is essential that parties involved in real estate transactions be knowledgeable about identifying labs, the health effects associated with meth labs, state remediation and disclosure guidelines, and the costs of rehabilitating a property to avoid a toxic pitfall.


  • The cost of decontaminating a property can range from several thousand dollars to tens of thousands of dollars. Large labs that produce speed by the pound, rather than by the gram, can exceed $100,000 in clean-up costs. When Arizona law enforcement busted a super lab in Mohave County it took only several days to clean the site. But the cost to remove the contaminated soil, dispose of left-over chemicals and tear down the structures on the property was more than $100,000. Even a small time operation can run into the tens of thousands of dollars. A local Colorado savings and loan discovered that a home it had loaned money on left enough toxins to cost $30,000 to $40,000 to remediate. The amount remaining on the loan in addition to the clean-up cost put the bank upside down on the property value, leaving the bank with the option to demolish the home and sell the lot for $10,000, or abandon the property.

For more, see Attorney Warns REO Community About Meth Labs.

Go here and go here for other posts on home-based methamphetamine labs. meth lab yak