Saturday, May 03, 2008

New Use For Vacant Foreclosed Homes: Stash Houses For Guns, Drugs?

In Cleveland, Ohio, The Cleveland Plain Dealer reports:
  • As workers board up abandoned properties across the county, police, neighborhood activists and advocates for the homeless are seeing another ugly trend emerge in the foreclosure crisis: Gang members and criminals are using the homes as stash houses for their weapons and drugs. For gang members and street criminals, pitching a weapon or drugs in boarded-up houses is an easy way to avoid being caught with them. For the neighborhood, it's a hazard. The danger comes when neighborhood children use the houses as playgrounds or squatters make dangerous discoveries. [...] Authorities said it's impossible to get definitive numbers on how common the problem is, but they say the mere fact it's happening is worrisome. And it's not just in Cleveland.

  • In February, Pittsburgh police told reporters they seized 30 guns and ammunition from abandoned homes in one gang- ridden neighborhood. In March, police in Trenton, N.J., recovered weapons during a search of boarded-up houses. [...] Other communities in Ohio see the same thing. In Summit County, drug detectives have found methamphetamine labs and stashes of cash. "These homes are a breeding ground for crime," said Lorain Police Chief Cel Rivera. In recent years, the department has investigated slayings and a rape at abandoned homes.

For more, see Criminals stash guns, drugs in foreclosed homes.

Collier County Cops Create Community Safety Teams To Control Crime Linked To Abandoned Homes

In Collier County, Florida, WBBH-TV Channel 2 reports:

  • As the number of foreclosures increases, so does Collier County's crime rate. The sheriff's office says empty homes are attracting criminals. But they have a new campaign to fight crime and want to make sure people know how to keep their own neighborhoods safe.

  • The abandoned houses you'll find scattered all over Collier County are more than just eyesores - deputies call them targets for criminals. "It has the potential to spiral out of control downward. We are not going to let that happen," said Collier County Undersheriff Kevin Rambosk. In both 2005 and 2006, banks foreclosed on fewer than 800 homes. It grew to more than 3,000 in 2007. And so far this year through March, there have been nearly 2,000 foreclosures.


  • Deputies are now kicking off a new plan to stop the growing problem. The sheriff's office is creating community safety teams. Each team will be made up of deputies, representatives from homeowners associations, and neighbors.

For more, see Community safety teams expected to reduce crime.

See also, Collier Sheriff’s Office working with residents to clean up abandoned homes.

Foreclosed Sacramento Home Goes Up In Smoke; Insurance Fraud Suspected

In California, KOVR-TV Channel 13 reports:
  • A Sacramento home went up in flames overnight and arson investigators think this may be an example of insurance fraud. The house caught fire around midnight and by the time fire crews were able to douse the flames, the home was nothing but a charred shell. Firefighters say the house was in foreclosure and the previous residents had been evicted recently. Investigators haven't proved this fire was set by the homeowners but they say they have seen a spike in arsons as the economy has taken a dive.

Source: Foreclosed Home May Have Been Burned For Insurance.

See also, Investigators Call Fire at Foreclosed House Suspicious (read story) (watch video).

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

Dry Weeds, Brush Around Abandoned Homes, Unseasonably Warm Weather Pose Fire Threat

In Fresno, California, KFSN-TV Channel 30 reports:
  • The foreclosure crisis is having a much more dangerous effect in some of our rural areas and the foothills. The unseasonably warm weather has dried out weeds. It's one thing for neighbors to deal with unsightly yards which haven't been landscaped. Some abandoned rural homes are much more dangerous because they're surrounded by dry weeds and brush. [...] The flood of foreclosures has left many homes abandoned. Some are more than just eyesores. They also pose fire hazards.

For more, see Foreclosure Crisis Adds to Fire Season Dangers in Rural Areas.

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

Massachusetts Fire Marshal Expresses Concern On Increase In Abandoned Buildings Going Up In Smoke

In New Bedford, Massachusetts, The Standard Times reports:
  • Two vacant tenements in the North End were torched Sunday night, fire officials said, underscoring a growing concern among public safety officials that the rising number of abandoned, foreclosed homes are sitting targets for vandals or desperate homeowners looking to recoup their losses. The fires [...] occurred weeks after another apparent arson at [...] an abandoned apartment building the city had boarded up. That fire started inside the first floor, and there is evidence it was set by squatters, fire officials said.

  • Similar blazes of uninhabited, foreclosed tenements have been reported elsewhere, including Boston and Brockton, and mirror the trend from the early 1990s, during the last major recession, when arson increased as the rate of abandoned buildings skyrocketed across Massachusetts.

  • "The current foreclosure crisis has not existed long enough for us to have a good statistical basis, but it is my observation from the number of fires we're responding to at vacant buildings that there is clearly an increase in the number of fires in those types of structures," said State Fire Marshal Stephen D. Coan.

For more, see Arson in two vacant residential buildings highlights public safety risks of foreclosure crisis.

For story update, see Firefighters back on the scene of North Front Street fire.

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

Process Server Charged With Filing False Affidavits Attesting To The Service Of Legal Papers On Defendants In Lawsuits

From the office of the New York Attorney General:
  • Attorney General Andrew M. Cuomo [this week] announced the arrest of an Erie County woman who allegedly filed false affidavits of service of legal papers with the Cattaraugus County Clerk, causing default judgments to be entered against unsuspecting individuals. The Attorney General’s Office alleges she claimed to serve papers on individuals when she had not, leaving those individuals with no notice of pending court actions against them. This led to default judgments that could include wage garnishment, the seizure of bank accounts and other assets or negative impact on credit ratings. “These victims had no idea that a court action had been brought against them, and because of that, were unable to defend themselves,” said Attorney General Cuomo.


  • Annette Forte, 34, of Broadway in Alden was charged today in Little Valley Town Court in Cattaraugus County with two counts of Offering a False Instrument for Filing in the First Degree (class E felony) and one count of Scheme to Defraud in the Second Degree (a class A misdemeanor). The maximum sentence for Offering a False Instrument for Filing in the First Degree is 4 years in prison.

For more, see Erie County Process Server Accused Of Defrauding Court System Through False Affidavits (False filings of court documents led to punishment of innocent individuals).

Go here for other posts on alleged fraud in the serving of court papers.

Go here for other posts on process server screw ups. ScrewUpProcessServing SewerServiceAlpha

Friday, May 02, 2008

Florida Passes Laws Regulating Foreclosure Rescue; Awaits Governor's Signature

In Florida, The Miami Herald reports:
  • [I]n an effort to protect the growing number of homeowners [in foreclosure], the state Senate approved a foreclosure fraud bill Thursday, reining in the growing field of consultants and equity purchasers offering home-saver services to delinquent borrowers. Some have been accused of duping homeowners into signing over their property and then selling for profit or charging them stiff fees to get it back -- a scheme sometimes called equity stripping.

For more, see Foreclosure fraud bill OK'd (State lawmakers passed a bill to protect delinquent borrowers from losing their homes and money to fraudulent foreclosure rescue services) (if link expires, try here or try here).

See also the Florida Attorney General's press release on the Foreclosure Rescue Fraud Prevention Act of 2008: Attorney General McCollum Commends Legislature for Passage of Mortgage Fraud Legislation.

Go here for the new Florida foreclosure rescue fraud law (CS/HB 643E1): (bill history) (bill text). Upon Florida Governor Charlie Crist's signing the bill into law, the new law will be found in Section 501.1377, Florida Statutes and will take effect on October 1, 2008.

Cleveland Feds Indict Ex-Cops In "Cash Back" Mortgage Scam

In Cuyahoga County, Ohio, The Cleveland Plain Dealer reports:
  • Two former Lakewood police officers have been indicted on federal mortgage-fraud-related charges stemming from the purchase of 13 rental properties. Richard Alvarez, 38, of Medina, and Marcus Adkins, 32, of Lorain, are charged with conspiracy to commit wire fraud and wire fraud. Both resigned from the Lakewood Police Department last year for personal reasons. According to federal prosecutors, Alvarez and Adkins were partners in an enterprise that bought 13 properties - 11 in Cleveland, one in Garfield Heights and one in Toledo - in 2005 and 2006. All 12 properties in Cuyahoga County have since gone into foreclosure. The indictment alleges that they bought the properties at market value but inflated the purchase price on mortgage applications, claiming the money was for repairs. Title companies would then distribute money to the two men or to their company, Copper Properties Inc., the indictment said. The two men also are accused of misrepresenting the source of down payments, claiming there were false second mortgages made on the properties, and creating false leases and rental agreements.

For the story, see Ex-officers accused of mortgage-related fraud.

From the Cleveland-Area U.S. Attorney's office:

Mortgage Bankers Begin Bellyaching Over Appraisal Code Of Conduct Agreed To By Fannie, Freddie In Settlement With NY AG

DS reports:
  • An agreement to establish a standard Code for home appraisals, which was recently proposed by the Office of Federal Housing Enterprise Oversight (OFHEO), the New York Attorney General's Office and Freddie Mac and Fannie Mae, is now drawing criticism from the Mortgage Bankers Association (MBA). The MBA sent a letter to OFHEO's director and to the leaders of Fannie Mae and Freddie Mac this week, saying the proposed Home Valuation Code of Conductmust be modified to reflect MBA's concerns for safety and soundness, as well as operational and procedural complications.” The MBA urged OFHEO to reconsider provisions laid out in the proposed code and consider some of the procedural risks that could be created if the code is implemented “as is.”

For more, see MBA Not Happy with OFHEO's Proposed Appraisal Code.

Go here for other posts on the now-terminated investigation by New York Attorney General Andrew Cuomo of Fannie Mae and Freddie Mac that resulted in Fannie & Freddie agreeing to adopt the NY AG's appraisal code of conduct (effective 1/1/2009; agreed to as part of a settlement agreement between the NY AG and Fannie/Freddie to avoid a possible lawsuit and to end the NY AG investigation).

NY AG Out To "Hammer" Another Home Improvement Contractor

From the New York Attorney General's office:
  • Attorney General Andrew M. Cuomo [last week] announced his office has filed suit against a negligent Delaware County home improvement contractor that repeatedly ripped off customers, performed shoddy work and didn’t complete projects outlined in contracts.
    Attorney General Cuomo’s lawsuit seeks to make Jeffrey McGowan of Delhi pay full restitution to consumers he defrauded, post a $100,000 performance bond before he continues any home improvement contract business, and pay additional costs and penalties. [...] McGowan operated his businesses, M & M Quality Contracting and Old Homes Friend, at an office on County Highway 16 in Delhi.

The Attorney General’s Office also found that McGowan failed to:

  • place advanced payments into trust accounts as required by law,
  • inform consumers of their legal right to cancel a signed contract within 3 business days, and
  • include the estimated dates when work would begin and be completed in his contracts.

For the NY AG's press release, see Attorney General Cuomo Protects Southern Tier Homeowners From Negligent Home Improvement Contractor (Delaware County man repeatedly ripped off homeowners and performed shoddy work).

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

Go here for other posts on other home improvement contractors hammered by the NY AG. Cuomo hammers contractors contractors stiff subs customers yelbow

NYC Feds Indict Four On Mortgage & Insurance Fraud

In New York City, the North Country Gazette reports:
  • Four individuals have been indicted in Manhattan federal court on charges of participating in an associated insurance fraud scheme. Dominick Devito, Robert Didonato, John Liscio and Louis Cordasco Jr. were each charged with insurance fraud and in addition Devito and Didonato where charged in a wide-ranging scheme to commit mortgage fraud. Devito is also charged with obstruction of justice.

  • Prosecutors say that from January 2002 through November 2004, Devito was the leader of a fraudulent real estate investment scheme, which had as its primary objective the purchase of multimillion-dollar residential properties in various communities in Westchester County, including Purchase, with loans obtained through the submission of false and misleading information to banks and other lenders.


  • In addition, from January 2003 through February 2005, the four allegedly engaged in a scheme to defraud insurance companies by submitting false and misleading insurance claims and supporting documents for water damage caused by broken pipes at several of the homes purchased as part of the mortgage fraud scheme. Liscio was a licensed insurance agent who sold insurance policies to the owners of the homes purchased in the scheme and helped Devito submit insurance claims for water damage.

For more, see Four Charged In Insurance, Mortgage Fraud.

Missouri Senator Prods State AG To Target Firms Engaged In Deceptive Reverse Mortgage Marketing Practices

In Springfield, Missouri, KYTV Channel 3 reports:
  • U.S. Sen. Claire McCaskill wants more protection for senior citizens who are targeted by unscrupulous mortgage lenders. Specifically, she's concerned about lenders selling reverse mortgages. McCaskill is frustrated with companies sending misleading marketing materials that aim to rope elderly people into an expensive loan that can leave them penniless. [...] McCaskill [...] wants Missouri Attorney General Jay Nixon to do something about it. "He has authority to go after fraudulent marketing and we want him to make sure the whole story is being told and we are protecting the elderly people of our state,” said McCaskill. Specifically, she's targeting companies that market reverse mortgages as a government benefit, much like Social Security or Medicaid.

For more, see McCaskill urges Nixon to go after scam reverse mortgage marketers.

For a recent story on the New York Attorney General's office going after a firm engaged in deceptive reverse morgage marketing practices, see Attorney General Cuomo Protects Senior Homeowners From Misleading Reverse Mortgage Solicitations (Reverse mortgage company portrayed itself as community-based non-profit to mislead seniors into reverse mortgage product).

For stories related to Reverse Mortgage Problems, go here, and go here. reverse mortgage yak

Flood Of Foreclosure, Debt Related Lawsuits Put Strain On New Jersey Court System

In New Jersey, The Star Ledger reports:
  • The economic struggles of New Jersey residents are putting a strain on the state's understaffed courts as foreclosure and debt-related cases surge, the court system's director told state lawmakers [this week]. Foreclosure filings for the first three months of the year exceeded 4,000 a month, a staggering 44 percent increase over the same period last year, Judge Philip S. Carchman told the Senate Budget and Appropriations Committee. They are on track to hit 49,000 cases by the end of the year, double the number from just two years ago. Debt cases, mainly from credit cards problems in which $15,000 or less is owed, are also spilling into the courts. Carchman said 621,000 are expected this year, 100,000 more than last year.


  • Carchman said judges know by experience that family financial problems will also lead to an increase in the Family Court caseload. "Financial struggles tear families apart, possibly resulting in divorce, domestic violence, abuse or neglect of children or missed support payments," he said. "We may see the effects of increased financial strain in the criminal courts as well," he added.

  • Carchman said the court system will be hard-pressed to manage and resolve the growing caseload "while at the same time reducing staff by 300 to meet our budget reduction of $27 million."

For more, see Courts are hard-pressed to deal with hard times.

For similar stories in Minnesota & Florida, see:

Go here for posts on other court systems being squeezed by foreclosures & budget cuts. state budget cuts courts

Thursday, May 01, 2008

Law Enforcement Battles Against Indoor Pot Farms Span The Country

The Associated Press reports:
  • Officers fighting networks of indoor marijuana factories took out what they called a major operation Wednesday in a secluded back room of a house [in Miami, Florida] where a nice older lady sold ice cream to kids. The raid targeted a sophisticated pot-growing operation that could net more than $300,000 a year, authorities said. [...] Law enforcement officials from Seattle to Miami are grappling with the spread of sophisticated indoor marijuana farms, often run by ethnic gangs, that produce hundreds of pounds each year.


  • [The busts] are part of a coordinated local and federal law enforcement crackdown on indoor marijuana grow houses. Last week in Seattle, authorities arrested 15 people and raided two garden shops that were part of a Vietnamese drug trafficking group accused of operating at least 19 marijuana grow houses around Puget Sound. One San Francisco-based ethnic Chinese drug ring operated at least 50 marijuana grow houses in the Bay area that could produce pot valued on the street at $94 million, authorities claim. Major indoor marijuana rings have also been discovered recently in Atlanta, Houston and New England.

For more, see Quiet houses across the country hide pot-growing operations.

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

Massachusetts Extends Delinquent Borrower Cooling Off Period To 90 Days

In Boston, Massachusetts, The Associated Press reports:

  • A new state law provides a 90-day cooling off period for Massachusetts homeowners facing the prospect of foreclosure. The law, which takes effect Thursday, requires that lenders give borrowers 90 days after a notice of delinquency to resolve their debt. The previous law required only 30 days notice.

For the story, see New Law Extends Foreclosure Notification Period (Law Takes Effect Thursday).

Se also, Massachusetts Attorney General Press Release:

  • [U]nder the new law, Massachusetts homeowners facing foreclosure will now be entitled to a 90 day “right to cure” period. [... A] foreclosing lender must provide a notice of delinquency to the borrower and then provide 90 days to cure the delinquency. Previously, homeowners were only entitled to 30 days notice, and the lender did not have to give the homeowner an opportunity to pay the arrearage, cure the default, and avoid foreclosure. The new law applies to foreclosures initiated on or after May 1, 2008.

Feds File Civil Charges Against Ohio-Based Foreclosure Rescue Operator

The Federal Trade Commission announced earlier this week:
  • The Federal Trade Commission has charged Foreclosure Solutions, LLC and Timothy A. Buckley with operating a nationwide mortgage foreclosure “rescue” scam that charged consumers as much as $1,200 to save their homes from foreclosure but failed to do so. The FTC seeks to bar them from further law violations and make them forfeit their ill-gotten gains. According to the FTC’s complaint, the defendants market their services through direct mail to consumers named in court records of foreclosure actions and through Internet Web sites, including and (if link expires, try here).


  • According to the complaint, the defendants hire attorneys to respond to the foreclosure complaints filed against consumers. In many instances, the attorneys file the same form response to every complaint, usually without investigating consumers’ individual circumstances that might identify defenses or counterclaims unique to particular consumers.

For more, see FTC Charges Mortgage Foreclosure “Rescuers”.

To view the lawsuit and a copy of a sample solicitation (at pages 10-12 of lawsuit), see FTC v. Foreclosure Solutions, LLC, and Timothy A. Buckley.

California Man Gets 7 Years For Forging, Recording Phony Docs To Clear Title To Home

In Ventura County, California, the Ventura County Star reports:

  • A judge Tuesday sentenced an unrepentant Simi Valley man to seven years in prison — the maximum sentence — after he was found guilty of five counts of filing and recording false documents and two counts of forgery. A defiant Abulghasen Ahmadpour told the judge that he was innocent, criticized the jurors and victims and wanted the prosecutor, Miles Weiss, investigated.


  • Prosecutors say Ahmadpour was facing foreclosure on his Simi Valley residence after he defaulted on one of the loans used to finance the home. To clear the title so he could refinance the house, Ahmadpour allegedly recorded with the county Recorder's Office [...] a false reconveyance of trust deed, which contained the forged signatures of two people.

  • One of the victims was awarded a judgment over a business dispute in Los Angeles County against Ahmadpour for $151,220. To clear the title to the house, Ahmadpour recorded false documents with the Recorder's Office [...] each containing forged signatures, according to prosecutors.

  • In another business dispute, a third victim was awarded $113,900 against Ahmadpour at the conclusion of a civil trial. Another lien was filed against Ahmadpour's residence. Prosecutors said Ahmadpour recorded two false and forged satisfaction of judgment documents [...].

For more, see Judge sentences Simi Valley man to 7 years in fraud case (Defiant defendant criticizes jurors, victims).

See also, Ventura County District Attorney press release.

For earlier reports on this case, see:

California Man Gets 16 Months For Forging Elderly Mortgage Holder's Name On Subordination Agreement, Then Pocketing $110K From New Mortgage

In Fontana, California, The San Bernardino Sun reports:
  • A Fontana man received a 16-month prison sentence Wednesday for forging a real estate loan agreement. Silvestre Cortez, 45, was also sentenced to three to four years on parole and must pay $5,000 restitution as part of his plea agreement, the San Bernardino County District Attorney's Office said.

  • Prosecutors said Cortez borrowed $115,000 from an elderly woman for the purchase of her Rialto property [in 1997]. In 2000, he forged the woman's signature on a subordination agreement document, placing the loan in a secondary position. The man took out an additional $110,000 loan on the property. The victim discovered the forgery in 2006 when she learned her property was in foreclosure. Cortez was charged in July.

Source: Man sentenced in forgery case.

For the San Bernardino County DA Press Release, see Man Sentenced in Real Estate Fraud Scheme.

Homeowner Lawsuits Seeking To Undo Subprime Loans Pick Up Steam

American Association for Justice reports:
  • Amid the subprime mortgage crisis, many people across the country—with both good and bad credit—have found themselves stuck with loans that are not what they anticipated. Mortgage lenders and related institutions are under intensifying scrutiny for a wide range of illegal conduct, including misrepresenting loan terms, adding bogus fees, inflating appraisals, committing securities fraud, and discriminating against borrowers based on their race and gender. Lawsuits allege violations of the Truth in Lending Act (TILA), the Fair Housing Act, the RICO statute, and state consumer protection laws, to name a few.


  • The option ARM has proved especially problematic. “It’s a subprime product being marketed to everybody,” said Jeffrey Berns, a Tarzana, California, lawyer, whose firm has filed 60 federal class actions against major lenders over option ARMs. He noted that these clients range “from doctors and lawyers to field workers.”


  • Paul Kiesel, a Beverly Hills, California, lawyer, also represents borrowers suing over option ARMs. His firm has filed 56 class actions, most of which revolve around TILA violations, all on behalf of borrowers who stand to lose their primary residences. He estimated that half had loans with low interest rates before signing up for the option ARMs. “They were eligible for far better mortgages than they got,” he said.

  • If the terms are not adequately disclosed, a mortgage is rescindable, but the general public may not be aware of that, Kiesel said. He and his colleagues have built a consortium of firms to work together—which is necessary because “we have taken on the largest lenders in the United States, and they have unlimited resources,” he said. “We are facing such an imminent threat” of people being forced out of their homes that lawyers have a responsibility to take on this type of litigation.


  • The problem is acute in Cleveland, where foreclosure rates are among the highest in the country. Cleveland lawyer Edward Kramer and his firm have more than 25 cases pending over predatory-lending practices, most arising from foreclosure actions. [...] More recently, the Cleveland-based public-interest law firm Housing Advocates, Inc., which Kramer directs, filed a complaint with the Ohio Civil Rights Commission against Argent Mortgage Co. for racial discrimination, claiming that the company offered loans that were likely to result in foreclosure in mostly African-American neighborhoods. The commission investigated and found that the evidence substantiated the alleged discrimination claim. [...] (Housing Advocates, Inc. v. Argent Mortgage Co., (CLE)H4(38066)05212007, 05-07-0938-8 (Ohio Civ. Rights Commn. Mar. 13, 2008).) A hearing is to follow. [...] The complexity of mortgage securitization—determining which company is doing what—makes things difficult for plaintiffs, Kramer said, because “no one’s taking personal responsibility.” [...] “It’s not an easy situation,” Kramer said, but “if we could get lawyers to take a case or two, we could have a tremendous impact in the community.”

For more, see Predatory-lending litigation looms.

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.

Go here and go here for other posts on alleged race bias in real estate transactions. race bias predatory lending undo mortgage loans TILA batallion

California Man Cops Plea In Mortgage Scam; Led House-Flipping Operation Involving As Many As 100 Homes, Say Feds

In Sacramento, California, the Stockton Record reports:
  • A Stockton man accused by federal officials of spearheading a multimillion-dollar house-flipping scheme has pleaded guilty and faces a maximum prison sentence of 21/2 years, his attorney said. Iftikhar Ahmad, 36, admits he was wrong, but that he also was a symptom of a broken mortgage system failing people throughout the nation, San Francisco defense attorney John Runfola said, adding that Ahmad became the fall guy for powerful bankers and brokers who go unpunished.


  • The guilty pleas of Ahmad and three associates come amid headlines calling Stockton ground zero for the housing mortgage crisis. In many Stockton neighborhoods, "For Sale" signs on front lawns are as common as mailboxes. He admitted to U.S. District Judge William Shubb his guilt Monday on two counts of mail fraud and one count of engaging in monetary transactions involving criminally obtained property.


  • A probe into Ahmad's company, I&R Investment Properties, won prosecutors an indictment charging Ahmad in a scheme involving as many as 100 distressed Stockton-area homes that Ahmad bought cheaply and quickly sold at inflated prices. He amassed $8.6 million, they said.

Others already having pleaded guilty in the scheme are former Long Beach Mortgage loan coordinator John Ngo, 27, of San Ramon, straw buyer Manpreet Singh, 24, of Stockton, and straw buyer recruiter Jose Serrano, 44, of Stockton.

For more, see Stockton man, 36, admits to scam (He is 4th to plead guilty in scheme to flip houses).

From the U.S. Attorney's Office:

Go here for other posts on this investigation.

Statewide Proposal Targeting Foreclosing Lenders For $1000/Day Fine For Allowing Blight Makes Progress In California Legislature

In California, The Associated Press reports:
  • Banks and mortgage companies face fines of $1,000 a day if they allow foreclosed homes to become run down and a source of neighborhood blight under a bill that passed the state Senate on Monday. California has one of the highest foreclosure rates in the nation. Many communities, particularly in the Central Valley, are riddled with homes that have been abandoned by buyers who could not afford their mortgage payments when they reset to higher rates. In many cases, the vacant properties are overgrown with weeds and shrubs and have become magnets for squatters and vandals. Swimming pools often become stagnant, turning into breeding grounds for mosquitoes. Under the bill by Senate President Pro Tem Don Perata, local governments could impose the fines on lenders after giving them 14 days' notice to fix the problems.

For more, see Fines Given For Run-Down Foreclosed Homes (Banks, Mortgage Companies Could Be Penalized $1,000).

Wednesday, April 30, 2008

Bankruptcy Judge Whacks "Assembly Line" Attorneys For $150K In Sanctions For Misrepresenting Ownership Of Promissory Note In Mortgage Foreclosure

The Wall Street Journal Law Blog reports:

  • On Friday, two law firms — Buchalter Nemer and Ablitt & Charlton, along with name partner Robert Charlton — got whacked with a combined $150,000 in sanctions. In a decision regarding an order to show cause in the case, called Nosek v. Ameriquest, bankruptcy judge Joel Rosenthal found that, throughout earlier proceedings, lawyers at both firms, in representing Ameriquest, had continually represented that Ameriquest was the holder of Nosek’s mortgage, when in fact it had been assigned, at least twice, to other lenders.

  • Judge Rosenthal held: “At a time when mortgages and notes are bought and sold at a pace so swiftly that the assignor and assignee cannot keep up with the paperwork, had the attorneys at the Ablitt firm checked the firm’s file, they would have seen that Norwest was perhaps the real party interest. . . . The firm cannot shield itself from institutional knowledge.” Rosenthal fined the firm $25,000, and attorney Robert Charlton another $25,000. (The Buchalter firm was fined the remainder, or $100,000.)

According to the court order, the lender/servicer and trustee involved, Ameriquest and Wells Fargo, were also clipped for $250,000 each in sanctions. Judge Rosenthal, however, declined to sanction the two associates who assisted Charlton in the case.

For more, see Judge Has Stern Words (But No Fine) for Associates at Sanctioned Firm.

See also, The Wall Street Journal: Wells Fargo Is Sanctioned For Role in Mortgage Woes:

  • Joel B. Rosenthal, a Massachusetts federal bankruptcy judge, wrote in a decision that Wells Fargo "turned all responsibilities over" to the servicer but "turn[ed] a blind eye" to the servicer's mistakes. Had the company "shown even a modicum of oversight or review" of the servicer's behavior, "it should have been able to correct the misrepresentations" made to the court. He added: "This court will not allow Wells Fargo or any other [mortgage holder] to shirk responsibility by pointing fingers at their servicers." A Wells Fargo spokeswoman said in a statement: "We believe the judge failed to appreciate Wells Fargo's limited role as trustee in the servicing of the home loan. As a result, Wells Fargo plans to appeal the order."

For the relevant court documents in this case, see:

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 beta ForeclosureMillAttorneysAlpha

Minnesota Homeowner In Foreclosure Duped By Religious Based Foreclosure Rescue Firm

In Minnesota, the Minneapolis Star Tribune reports:
  • When Chantae Grandsberry of Brooklyn Center was looking for a company to help save her home, she thought she'd found the perfect partner: An Oklahoma firm that had biblical scriptures on its website and billed itself as a Christian-based foreclosure prevention specialist. "That was important to me and my husband," said Grandsberry, who is six months pregnant. "We didn't think that a Christian-based company would do anything wrong." But Grandsberry lost her family home last October after the company, American Foreclosure Specialists, failed to deliver -- even after collecting more than $1,200 in advance, which is a violation of Minnesota law, according to Minnesota Attorney General Lori Swanson. Earlier this month, Swanson filed suits against American and three other out-of-state companies, alleging they violated state law by collecting fees before completing the services they contracted to perform.


  • The lawsuits were filed against American; National Foreclosure Relief, a Nevada corporation with a California business address; Lewis Loss Mitigation of Alabama, which also does business as Stop Foreclosure and Lewis and Associates Consulting; D.R. Financial Services of California, which also does business as D.R. Financial and Superior Home Loans; and Mortgage Default Assistance of Florida, and Home Assure of Florida.

For more, see Foreclosure 'help' ended up bringing more debt (Homeowners tell of dealings with companies that promised to prevent foreclosure but did nothing to help -- but charged them anyway).

Go here for the Minnesota AG Press Release announcing the lawsuits against the foreclosure rescue operators for alleged violations of Minnesota consumer protection laws.

Sacramento Loan Officer Gets 15 Months For Forging Signatures, Using Phony Docs In Mortgage Scam

In Sacramento, California, KCRA-TV Channel 3 reports:
  • A former loan officer was sentenced to 15 months in prison for mortgage fraud. Sennett Swift was once employed as a loan officer with First Liberty Financial. He was also ordered to pay $8,000 in restitution. Prosecutors said Swift falsified loan applications and forged signatures without the borrowers' consent.

It was previously reported that Swift is a former employee of VFM Investment Group, the owners of which are currently under federal indictment on more than a hundred counts in an alleged scam involving defrauding investors and obtaining fraudulently obtained mortgages following a KCRA 3 investigation.

For more, see:

Go here for other posts on Sennett Swift, VFM, and its indicted owners.

Mortgage Broker, Attorney, Loan Officer Sentenced In South Florida Scam Resulting In $37+M In Fraudulently Obtained Mortgages

From the office of the U.S. Attorney - Southern District Of Florida:
  • R. Alexander Acosta, United States Attorney for the Southern District of Florida, and Jonathan I. Solomon, Special Agent in Charge, Federal Bureau of Investigation, announced that defendants Richard Weldon Crowder, II, and Gary Mark Mills were sentenced today by United States District Judge Jose E. Martinez to 108 months’ and 46 months’ imprisonment, respectively. Co-defendant Karen Lynn Sullivan was sentenced yesterday to 50 months’ imprisonment. The defendants were sentenced for their roles in a multi-million dollar mortgage fraud conspiracy.

  • Crowder is a former licensed mortgage broker and the former owner of America’s Best Mortgage Services, Inc., located in Coconut Creek, Florida. Mills is a former title attorney and the owner of Four Star Title Inc., located in Deerfield Beach, Florida. Sullivan is a former loan officer for Wachovia Bank. [...] In total, the defendants caused the fraudulent purchase of seventeen (17) different luxury condominiums at The Continuum on South Beach and at The Point in Adventura using more than $37,000,000 in fraudulently obtained mortgage loans.

For the details, see U.S. Attorney Press Release - Orchestrators Of Multi-Million Dollar Fraud Scheme Sentemced.

To view original criminal charges, see Charging Document (Criminal Information) - U.S. v. Crowder, et al.

Delinquent Property Taxes Putting Squeeze On Ohio County

In Richland County, Ohio, The Mansfield News Journal reports:
  • Delinquent property taxes in Richland County have spiked sharply during the last four years, rising from $7.3 million to $11.2 million. County Treasurer Bart Hamilton believes the trend has not crested in an economy afflicted by the foreclosure crisis. "I think our delinquency will probably go up for about the next two years," he said.


  • Deputy Treasurer Matt Finfgeld, delinquent tax collector for the county, said some loan providers, eager to work up new agreements, redesign loan arrangements so marginal customers with limited resources qualify. Borrowers then discover their property taxes -- which they believed the bank was taking care of -- are delinquent.
For more, see Rise in Richland County delinquent property taxes another sign of housing crisis.

Go here for other municipalities dealing with delinquent real estate taxes. delinquent tax problem

NY AG Seeks Jail For Buffalo-Area Home Improvement Contractor For Violating Court Order

From the New York Attorney General's office:
  • Attorney General Andrew M. Cuomo [last week] announced his office is seeking a criminal contempt of court order against a Buffalo area man who willfully defied a court order by continuing to operate in the home improvement business after he was ordered not to. Ronald Timmerman, 30, of Sowles Road in Hamburg, faces criminal contempt of court for at least 10 violations of a prior court judgment by continuing to solicit business as a home improvement contractor. Each violation can carry a maximum jail term of 30 days and a $1,000 fine.


  • According to court documents, an investigation by the Attorney General’s Office discovered that within a few weeks [of the court order], Timmerman – without paying any restitution – began working as a contractor while flouting the other aspects of the order.

For more, including examples of the allegations against Timmerman, see Attorney General Cuomo Seeks Jail For Home Improvement Contractor Who Repeatedly Defied Previous Court Order (AG Cuomo upholds orders to protect consumers, seeking criminal contempt of court to stop contractor from deceiving more homeowners).

Go here for details of Timmerman’s original scheme.

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

Philly Foreclosure Diversion Program A Model For A Larger National Program?

An editorial in the Philadelphia Daily News opines:
  • [P]hiladelphia is offering [city] homeowners and lenders caught in the crisis a practical route to resolution. A new program called the "mortgage foreclosure diversion program" provides court-sanctioned negotiations between lender and borrowers to try to resolve troubled loans to avoid foreclosure. What the program also avoids is the need for long-term foreclosure moratoriums, which provide relief for homeowners, but are legally problematic.

  • This new program puts owner-occupied properties facing foreclosure on a special administrative track that would give homeowners access to housing counseling and pro-bono legal advice. [...] Part of the new program is a hot line - 215-334-HOME - that puts callers in touch with legal and other help. [... W]e're glad that the city has officially recognized this fact and is playing an important role on the committee. [...] This program may not only provide relief for Philadelphia homeowners, but could be a model for a larger program on a national scale.

For more, see New Hope On Foreclosures (Program Gives Time And Help To Homeowners).

For more on Philadelphia plan, see Philadelphia Implements Residential Foreclosure Diversion Program.

Tuesday, April 29, 2008

Bank Of America Vows To Modify $40B In Problem Loans

The New York Times reports:
  • Bank of America will expand efforts to help Countrywide Financial borrowers avoid foreclosure on troubled mortgages, a top bank executive said Monday. The announcement came as members of the Federal Reserve Board convened two days of public hearings on Bank of America’s proposed $4.1 billion stock deal for Countrywide, based in Calabasas, Calif. The executive, Liam E. McGee, president of Bank of America’s global consumer and small-business banking operation, said the bank would modify at least $40 billion in problem loans from at least 265,000 borrowers over the next two years.

For more, see Bank of America Vows More Help for Countrywide Mortgage Debtors.

Congress To Investigate Allegations Of Mortgage Company Abuse Of Bankruptcy Court System

The New York Times reports:
  • A Senate subcommittee plans a hearing next week to investigate whether mortgage lenders are abusing the bankruptcy court system and deepening the foreclosure crisis by levying dubious fees on troubled borrowers or moving to seize their homes improperly. Senator Charles E. Schumer, chairman of the Senate Judiciary Committee’s Subcommittee on Administrative Oversight and the Courts, said he hoped the hearing on May 6 would lead to legislation intended to protect borrowers from abusive practices. “What the hearing is going to show is what an ongoing, awful enterprise some of these companies ran, not just taking advantage of the terms of the mortgage, but when they control the mortgage how they continue to squeeze and squeeze and squeeze,” Mr. Schumer, Democrat of New York, said.

For more, see Panel to Look at Foreclosure Practices.

Federal Jury Convicts D.C. Scammer Of Stealing Houses From Dead Homeowners

In Washington, D.C., reports:

  • A federal jury convicted a founder of a nonprofit on charges he forged the names of dead people to steal their houses. Duane McKinney, 35, president of Brotherhood of Men Inc., was found guilty on 11 counts of fraud, theft and illegal money transactions. He is scheduled to be sentenced July 15, and faces between seven and nine years in prison under federal sentencing guidelines, according to the U.S. district attorney for the District of Columbia. Prosecutors said McKinney used his organization to steal 14 properties and sell nine of them for a gain of $770,000.

  • Co-defendant Joe D. Liles, a notary public in Maryland, was accused of notarizing the dead people’s signatures. Liles pleaded guilty in January and will be sentenced May 30.

For more, see Nonprofit leader found guilty in home scam.

See also, U.S. Attorney for D.C. press releases:

  • Announcement of Conviction - District of Columbia man found guilty of theft, fraud, and money transaction offenses relating to forged property deeds,
  • Announcement of Indictment - Federal grand jury charges two in scheme to steal D.C. area properties from estates ofdeceased persons and others.

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

More Victims Accusing Ohio Foreclosure Rescue Operator Come Forward

In Newark, Ohio, The Columbus Dispatch reports on a local couple who were allegedly screwed over by area foreclosure rescue operator Harry Blausey.
  • The Newark man was indicted last month on 30 counts, including grand theft, securing writings by deception and engaging in a pattern of corrupt activity. Convictions could add up to 49 years in prison. Blausey is accused of conducting a foreclosure rescue scam, persuading more than 20 homeowners to sign over their property to him by promising to deal with the mortgage companies on their behalf. He then rented the properties but made no mortgage payments, according to court filings.


  • It wasn't until Blausey was indicted and released on $50,000 bail that the couple realized they had been duped. They called their lender and discovered that no mortgage payments had been made and the company was seeking foreclosure. She said Blausey had told them to have no contact with their lender so the company would have to deal with him. [...] Blausey has [also] been sued in at least 17 civil cases in Licking County Common Pleas and Municipal courts since 2006. He was found guilty and placed on probation in 2006 on misdemeanor counts of aggravated trespassing and intimidating a witness.

For more, see Too good to be true (In a pinch, they trusted him; now he faces 30 charges in mortgage deal).

For story update, see (5-4-08) Motion seeks to stop Blausey from bidding on homes (Indicted former real estate agent has almost $450,000 outstanding on sheriff's auction properties).

Go here for other posts on foreclosure rescue operator Harry Blausey.

Go here for criminal prosecutions of foreclosure rescue operators.

NY AG Forces Firm Peddling Reverse Mortgages To Reform Marketing Practices

From the New York Attorney General's office:

  • Attorney General Andrew M. Cuomo [last week] announced his office has stopped a Syracuse-area reverse mortgage lender from preying on seniors statewide through false advertising and portraying itself to be a local non-profit organization. Under a settlement reached by the Attorney General’s Office, Upstate Capital, Inc. of Basile Rowe in East Syracuse, must reform its marketing practices and indicate that it is a registered mortgage/reverse mortgage broker. The company must also pay $20,000 in costs and penalties to the state.


  • Starting in July of 2007, Upstate Capital sent flyers portraying itself as [a non-profit organization] to seniors statewide promoting a “new government program” that “protects seniors” by providing a monthly, tax-free income with no income or credit qualifications. The company also claimed that the “lifetime” program required no repayments. Consumers were directed to call the company to obtain a free packet of information on the program. They would then be contacted by an Upstate Capital representative “on behalf” of [the non-profit firm]. The solicitation, however, neglected to say that the source of the money was actually a loan, and that the product the company is peddling was actually a reverse mortgage.
For more, see Attorney General Cuomo Protects Senior Homeowners From Misleading Reverse Mortgage Solicitations (Reverse mortgage company portrayed itself as community-based non-profit to mislead seniors into reverse mortgage product).

For stories related to Reverse Mortgage Problems, go here, and go here.

Thanks to Bill Collins of Crossroads Abstract, Rochester, NY for the heads-up on this story. reverse mortgage yak

South Florida Feds Charge Three In Alleged Mortgage Scam Resulting In $6M In Fraudulently Obtained Loan Proceeds

From the office of the U.S. Attorney - Southern District Of Florida:
  • R. Alexander Acosta, United States Attorney for the Southern District of Florida, [and a host of other law enforcement officials] announced that defendants Berry Louidort, Lauren Jasky, and Ralph Michel, of Palm Beach County, were charged in a Criminal Complaint filed in federal court on April 22, 2008. [...] The defendants are charged with bank fraud [...].


  • [According to the criminal complaint], this investigation began with an audit conducted by the Florida Office of Financial Regulation into 24 sub-prime mortgage loans in the period November 2006 to June 2007. The initial audit showed that the loans included what appeared to be excessively large fees paid to defendants Berry Louidort and Ralph Michel. The fees, ranging from $29,000 to $650,000, were described as marketing and/or assignment fees. In reality, the fees were kickbacks to defendants Louidort and Michel based on inflated sales prices. The audit also revealed that the majority of the suspect loans were originated by defendant Lauren Jasky, Senior Vice President of Compass Mortgage Services, located in Boca Raton, Florida.

For more, see U.S. Attorney Press Release: Palm Beach County Residents Charged With Mortgage Fraud.

Go here for other posts on this alleged flipping scam.

Houston Homeowners Sue Builder For Allegedly Flawed Townhomes

In Texas, the Houston Chronicle reports:
  • For years, neighbors in a stylish Montrose cul-de-sac named Hyde Park Crescent fought to get something out of the developer they claim failed to fix faulty windows, water-soaked balconies and defective roofs that spawned leaks, mold and rot in their nearly new $350,000 homes. Families alleged in a lawsuit that they were sold flawed town homes and then stuck with thousands of dollars in repair bills. They also contended that the men behind the company committed a kind of corporate identity fraud to avoid responsibility and keep right on building on other fertile ground in construction-friendly Houston.

  • Over the years, the builder, and other companies associated with it, have left a trail of documented damages and unresolved consumer complaints involving at least four other Houston housing developments, according to documents reviewed by the Chronicle, including lawsuits and Better Business Bureau and government records. Texas laws offer minimal recourse for homeowners, and their complaints often drag on for years with disappointing results, advocates say. Some owners lose money fixing their homes or lose their homes because they can't afford to fix them.

For more, see Owners stuck with flawed homes (Families' costs mount, but state, builder give scant help, files show).

Ex-Brooklyn Judge Under Indictment For Stealing $160K+ From Elderly Aunt Cops Misdemeanor Plea

In Nassau County, Long Island, The New York Law Journal reports (at
  • Michael J. Garson, a former Supreme Court justice in Brooklyn, pleaded guilty [last] Tuesday to a misdemeanor with a promise of no jail time, resolving charges that could have landed him in jail for five years. County Court Judge John L. Case of Nassau County promised Garson no jail time on two conditions: that he resigns from the bar and that he pays the final $48,000 in restitution ordered by a Manhattan judge for his mishandling of an elderly aunt's finances.


  • The district attorney three years ago unveiled an indictment accusing Garson, who was a Supreme Court justice for a full 14-year term ending in 2006, of stealing more than $160,000 from his aunt, Sarah Gershenoff, while managing her financial affairs under a power of attorney. [...] Under the power of attorney, both Garson and his first cousin, Gerald P. Garson, an ex-Brooklyn justice who is in prison on a three- to 10-year term for bribery, were authorized to manage Gershenoff's finances. Michael Garson, however, took primary responsibility for handling her money.


  • With [last] Tuesday's $48,000 payment, Garson has repaid Gershenoff a total of $219,000, reflecting the $163,000 ordered by [the Manhattan judge] plus interest. Gershenoff, who was 94 when the indictment was issued in May 2005, has since died.

For more, see Former N.Y. Justice Avoids Jail With Misdemeanor Guilty Plea (Garson resigns from Bar, makes restitution).

For story update, see Ex-Judge Avoids Jail for Forgery (7-7-08).

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

For other posts on the questionable judgment exercised by some of the members of our esteemed judiciary, go here and go here. knuckleheaded judges zeta valedictorian

Monday, April 28, 2008

Boston City Council Considers Plan To Force Lenders To Rent Back Foreclosed Homes To Its Occupants

In Massachusetts, an editorial in the Boston Herald opines on a proposal being considered by the Boston city council:
  • Boston city councilors are jabbing at a wasp’s nest of problems with a plan that would force lenders to rent foreclosed properties back to previous occupants. [...] The proposal, sponsored by six city councilors in a home-rule petition to the Legislature, would require that mortgage holders allow not just renters, but delinquent borrowers themselves, to stay in a home until it is sold to a third party - or until the measure expires in 2014.

For more, see Rental plan overreaches (when link expires, try here). equity skimming unwittingly digamma

NYC Seniors Targeted In Predatory Home Equity Scams Fight To Save Homes

In New York City, a recent article in The Indypendent focuses on the targeting of senior citizens as "sitting ducks" for predatory lending, home equity scams. The article features the story of two elderly homeowners who had their equity ripped off and are on the verge of losing their homes, and the local attorneys representing them in an attempt to undo or mitigate the damage.

In the case of one Crown Heights, Brooklyn homeowner, back in 2006 the now 86-year old man suffering from dementia was sold a "new $450,000 option adjustable rate mortgage that was fairly guaranteed to put his house in foreclosure," according to the man's attorney on a home he's owned since 1975. Reportedly, South Brooklyn Legal Services has filed suit against IndyMac and loan originator Global Financial Inc. on behalf of the homeowner for violations of the Federal Truth in Lending Act, with Queens Legal Services for the Elderly acting as co-counsel.

In the case of a 93-year old man from Jamaica, Queens and a homeowner for almost 50 of those years and who also suffers from dementia, he was reportedly saddled with a $315,000 mortgage on his home without his knowledge as part of an alleged deed theft scam and is currently in foreclosure. The alleged perpetrators were recently indicted by the Queens district attorney on charges of grand larceny for fraudulently refinancing his property, but this prosecution has not slowed the foreclosure action being pursued by the current loan holder.

A student-led team at the St. John’s University Law School Elder Law Clinic in Queens, who represent the homeowner in this case, fault not only the perpetrators of the deed theft, but also the loan originator and the current mortgage holder for aiding and abetting the fraud.

  • It’s a huge warning sign when a 93-year-old man with no attorney present can take out a $300,000 mortgage,” says Professor Ann Goldweber, director of the Elder Law Clinic. “They should have used more due diligence.”

For more, see Facing Foreclosure: Brooklyn Retiree on Verge of Losing Home as Subprime Lenders Target Cash-Poor Black Seniors.

Go here for the Queens District Attorney news release on the Jamaica, Queens case.

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

Brooklyn Builder Flees Country Leaving 40+ Families In Foreclosure In Alleged $15M Mortgage Scam

In New York City, The New York Daily News reports:
  • More than 40 Brooklyn families face eviction and foreclosure on condos they bought from a developer who pulled off a massive swindle and then fled the country. The families, all Hasidim from Crown Heights, paid developer Eliyahu Ezagui - one of their own - for the apartments before they were built at two sites: 770 Lefferts Ave. and 613 East New York Ave. "We trusted him, we thought we knew him, he told us he had the blessing of the grand rabbi. We had contracts, so we gave him the money," said Jeff Minsky, who lives at 613 with his wife and six children.

  • Ezagui, 47, did not give the buyers deeds when construction was completed in what is the single biggest local case of subprime mortgage fraud on record. Instead, Ezagui deeded 64 apartments to himself, his father, his mother, his wife and two business associates. The Ezagui group then used the deeds to take out more than $15 million in owner-occupied mortgages from 15 lenders, including Ameriquest Mortgage Co., Olympia Funding and Chase. Mortgage payments have not been made and the real apartment owners have received foreclosure notices.

For more, see Builder flees & 40 Hasidic families face eviction in Brooklyn swindle.

See also, The Jerusalem Post: Defrauded Crown Heights residents fight for their homes.

Go here for story updates.

Philadelphia Implements Residential Foreclosure Diversion Program

(original post 4-27-08)
In Philadelphia, Pennsylvania, Judge C. Darnell Jones, President Judge, Court of Common Pleas and D. Webster Keogh, Administrative Judge, Trial Division, both of The Philadelphia Courts - First Judicial District, recently issued a General Court Regulation establishing a Residential Mortgage Foreclosure Diversion Pilot Program for the City of Philadelphia. Under the program, Philadelphia homeowners faced with foreclosure will have the opportunity, after seeing a housing counselor, to take part in a "Conciliation Conference" in which the parties try to work out an affordable modification of the loan or an affordable payment arrangement. According to the court's news release:
  • The Pilot Program authorizes the Sheriff Sale of non-residential and non-owner occupied premises as previously scheduled, but requires owner occupied residential premises to be scheduled for a Conciliation Conference before the Sheriff Sale can occur. [... T]he term “Residential Premises” means real property located within the City and County of Philadelphia containing not more than four residential units and shall include a residential condominium unit or a residential co-op unit.

  • The main goal of the Conciliation Conference [...] is to insure early intervention in determining eligibility under various federal, state and local programs established to facilitate loan work-out and other solutions to permit residential homeowners to retain their properties.

Philadelphia homeowners in foreclosure seeking to participate in the Pilot Program are required to call immediately upon receipt of the Case Management Order in their foreclosure case the SAVE YOUR HOME PHILLY HOTLINE at (215) 334-HOME and the Defendant-homeowner will be directed to a housing counseling agency.

The court has acknowledged and thanked the Philadelphia Bar Association for its assistance in securing competent pro bono representation of unrepresented Defendants who cannot afford to retain counsel.

For more on Philadelphia's Residential Mortgage Foreclosure Diversion Pilot Program, see:

Go here for other posts on the Philadelphia Residential Mortgage Foreclosure Diversion Pilot Program.

Thanks to attorney Donald Marritz of Regional Housing Legal Services in Pennsylvania for the heads up on the announcement and for copies of the April 16th court order and Reg No. 2008-01.

Pricey Northern Virginia Not Immune From Crime, Vandalism, Squatters Associated With Vacant Foreclosed Homes

The Washington Post reports:
  • The growing foreclosure crisis has forced suburban law enforcement agencies to tackle a new challenge: policing empty houses. As evictions mount and many houses remain unsold for months, even years, vacant properties have become havens for squatters, vandals, thieves, partying teenagers and worse, officials said.

  • In Springfield this winter, Fairfax County police found blood inside a vacant house and traced it to an injured sexual assault suspect who had been hiding there before he stole a car and fled. He was eventually caught in Maryland, police said. About the same time, a 27-year-old woman was arrested by Loudoun County sheriff's deputies after she, her husband and two children moved into a foreclosed house in Ashburn and allegedly tried to use forged documents to convince officers that she was the new owner, officials said. "These people even managed to get the electricity turned on in their names," said Sgt. Shelby Ruby, a Loudoun deputy. "That's some nerve, right there."

As far as vandalism at the homes is concerned, often caused by the foreclosed owners themselves, one local police official observed:

  • "People are angry," Loudoun Sheriff Steve O. Simpson said. "And our deputies who go to these houses to serve evictions find that people have stripped their houses of toilets and stoves and refrigerators." At [one] property, deputies found that the hardwood floors also had been stripped.

For more, see As Foreclosed Homes Empty, Crime Arrives.

For a related story in Massachusetts on the trashing of foreclosed homes by their owners, see Boston Herald: Owners trash, strip their foreclosed homes (Fixtures, cabinets, tubs, sinks, even stairways face wrath of dispossessed).

Completed & Unsold New-Home Units Accumulating As Builders Have Trouble Unloading Inventory

The New York Times reports:
  • THE prices are coming down, but new homes in the United States are still not selling, and some of them are getting old while waiting for a buyer. [...] It appears that many of the homes now being sold — and there were 51,000 sold in the month, the lowest for any March since 1991 — are coming from the supply of homes that are still being built or are newly completed. The median age of completed new homes on the market has risen to 7.4 months. Only four months ago, that figure was six months.

For more, see New Homes Turning Old as the Inventory Piles Up.

Wall Street Vultures Circling Carcasses Of Subprime Mortgage-Backed Securities

In New York City, Reuters reports:
  • The allure of rotting mortgage bonds has grown so strong that Wall Street's vultures have begun picking over their carcasses -- a signal the credit crisis has entered a crucial stage in its vicious cycle. In the past two months, these intrepid investors have begun betting billions of dollars on a hunch that mortgage security prices have fallen enough. It is a risk few have taken for a year or more as the credit crisis rooted in this very market wreaked havoc in financial markets around the world.

  • In early February, bid lists for bonds backed by middle-quality mortgages found no takers, even at what were then considered fire-sale prices, between 75 cents and 80 cents on the dollar. But the following month, though, Jeffrey Gundlach, chief investment officer at bond manager Trust Company of the West, began snapping up these same securities at 65 cents on the dollar during what he calls the "darkest moments for the markets.

For more, see Vulture subprime buyers ramp up purchases.

Sunday, April 27, 2008

Mortgage Problems A Threat To Servicemembers' Homes, Careers

National Public Radio recently ran a story on a situation that reportedly is becoming more common among military personnel.
  • [T]hough the Pentagon doesn't keep statistics on foreclosures, officials say a growing number of service members are struggling with their mortgages. Some [...] have seen big jumps in their monthly payments. Others — after being ordered to move to new duty stations — are stuck with homes they can't sell. A foreclosure can also result in other consequences for service members, including the loss of security clearances because of debt problems.


  • So many service members in San Diego are having mortgage problems that the Coronado Naval Base recently hosted a clinic where military families could meet with housing counselors, foreclosure experts and even bankruptcy lawyers. "Eighteen months ago, I might get one call a month about somebody who's worried about their mortgage," said Keith Kaufman, a manager of the Fleet and Family Support Center at the base. "If I get less than three calls a day now, that's a good day."


  • [Navy spouse Suzanne] Johnson says her family considered filing for bankruptcy or letting their lender foreclose on one of their homes. But they worry that could harm her husband's career. "My husband's security clearance is in jeopardy," she said. "A foreclosure or a bankruptcy, [any] bad marks on our record, it could directly affect him and his job. He could not be allowed to do what he does."

For more, see Downturn Puts Soldiers' Homes, Careers at Risk.

Go here for posts on the Servicemembers Civil Relief Act.

Two Sacramento-Area Men Charged With Home Repair / Reverse Mortgage Scam

This is an old story from the archives, but worth posting anyway. The Sacramento Bee reported back in March, 2006:
  • Sacramento County Sheriff's detectives are asking elderly people beware of scams involving reverse mortgages. Two men were arrested [...] on suspicion of scamming a 75-year-old woman out of more than $40,000 from her reverse mortgage, Sgt. R.L. Davis said.

  • William Patrick, 62, was presented to the woman as a financial advisor when she was looking at a reverse mortgage to help her escape financial problems. Patrick allegedly told her she needed to do some house repairs in order to qualify, Detective Rick Emerson said.
    "Patrick helped her make decisions," Emerson said.

  • He introduced her to Michael Morales, 47, who proceeded with the repairs, charging her three times the amount, Emerson said. He is not a licensed with the state, Emerson said. At one point in 2003, the woman changed her mind about the reverse mortgage but was unable to pay for the repairs and had to move forward on it. Since then Patrick allegedly forged the woman's name to an account and was able to gain access to the money from the reverse mortgage, taking more than $40,000, Davis said.

The criminal charges involved in this case are suspicion of:

  1. embezzlement,
  2. grand theft,
  3. theft from an elder,
  4. forgery, and
  5. obtaining money under false pretenses.

For more, see Pair arrested in reverse mortgage scam.

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

For stories related to Reverse Mortgage Problems, go here, and go here. valedictorian reverse mortgage yak

Why Loan Modifications For Homeowners In Foreclosure Are So Tough To Get

In a short article, The Consumerist points to the two key reasons why it is so difficult for a homeowner facing foreclosure to arrange a payment plan with a mortgage lender: lack of financial incentive on the part of mortgage servicer to rework the loans, and a system of securitization in which there could be hundreds or thousands of "owners" for each mortgage loan and no one in charge to talk to (other than the loan servicer who already may be giving the homeowner a hard time). For the article, see Why Few Seem To Be Able To Work Out Better Loan Terms.

Tangle Of Loans Feeds Foreclosure Crisis

An article published last July in The Boston Globe describes the difficulty homeowners delinquent in their house payments (on a loan that's been bundled with others and securitized by Wall Street) have in figuring out exactly who to contact in attempting to arrange some type of a payment arrangement.
  • But as foreclosures mount, the system is proving ill-suited to respond, analysts said. The reason: Spreading risk muddled responsibility. "It's perfect deniability," said Patricia McCoy, a University of Connecticut law professor who specializes in financial services. "When there's a problem, each person in line says, 'Don't talk to me, talk to the other person.' "
For more, see Tangle of loans feeds foreclosure crisis (Borrowers can't tell where to turn for change in terms).

Unwitting Family Renting Foreclosed House Finds Themselves Locked Out After Returning Home From Dinner

In Stockton, California, ABC's Good Morning America reports:

  • The housing crisis gripping the nation now has hit the renter's market. Some residents, like Beth Stoneback, are finding that their homes are being foreclosed. But Stoneback didn't own her Stockton, Calif., home. She rented the house and was shocked to find a foreclosure notice tagged to her door one day late last year. "We went out to dinner and we came home. And we couldn't get in the house. They changed the locks," said Stoneback. "We don't own a house. We don't have to worry about anything. You know, we don't own the house. I'd heard it was happening out there, but I never expected it to affect us." "Because we hadn't gotten any other notices, I assumed it was a mistake," said Stoneback's daughter Kathryn Bueche.

For more, see Housing Crisis Hits Renters Hard.

In a related story from ABC News, see Renters can't escape housing foreclosure crisis (stress of having to move on short notice may have caused tenant's miscarriage).

For other posts involving the problems tenants face in homes in foreclosure, go here, go here, go here, go here, and go here.

Go here for other posts on foreclosure services companies who have improperly change locks, remove belongings, etc. ForeclosureLockOuts equity skimming unwittingly epsilon