Saturday, June 14, 2008

Florida Appeals Court Nixes Foreclosure "Sale Of The Century" Of $500K Home For $1000

In Martin County, Florida, The Palm Beach Post reports:
  • It might well have been the sale of the century. But then came the lawsuit. On Wednesday, a state appeals court nixed a 2007 foreclosure sale in which a company paid $1,000 for a Martin County home worth 500 times as much. According to the order of the 4th District Court of Appeal, the home's mortgage company was the "innocent victim of the mistakes of its attorneys and agents."

  • A sales agent for Long Beach Mortgage Corp. attended the May 2007 sale, but she didn't make a bid because she lacked instructions, according to a synopsis in the court ruling. An employee of a law firm was preparing those details, but she thought the sale didn't start until 11 a.m., an hour later than its actual start time.

For more, see Court tosses $1,000 sale of $500,000 Martin home.

For the decision of the Florida appeals court, see Long Beach Mortgage Corporation v. Bebble (#4D07-3100; 4th District Court of Appeal, June 11, 2008).


For other unusual foreclosure sale stories, see:

  • $6.5 Million Property Bought At Foreclosure For $2,000 (a California case where the represenative for the foreclosing lender got stuck in traffic, and arrived late to the sale. By the time of arrival to the auction, the subject property had already been sold for $2K. A California appeals court upheld the sale. No word if the foreclosing lender's attorney had his malpractice/errors and omissions insurance policy paid up),

KC To Explore Shifting Maintenance Responsibility For Abandoned Homes In Legal Limbo To Lenders

An editorial in the The Kansas City Star observes:
  • Normally, when real estate isn’t properly maintained local officials hold the owner accountable. But if the owner has halted payments and moved out, finding a responsible party can be difficult — especially if the lending institution is dragging its feet on foreclosure. As a recent Star story reported, that’s happening to a lot of homes in Kansas City, which seem to exist in a legal limbo. Some neighborhoods are suffering as abandoned homes become eyesores.


  • The City Council is examining ways to lessen the problem, including an ordinance that would more clearly move the maintenance responsibility to lenders. The legal issues may prove to be complex, but the council is right to explore this approach. [...] Some lenders reportedly may be holding off on foreclosure to avoid taking additional losses on their books.

For more, see Dealing with the problem of homes in legal limbo (no longer available online).

Go here for other posts on the problems associated with homes in legal limbo; when the foreclosing lender fails to complete foreclosure or fails to record its deed after foreclosure sale. responsibility code violations foreclosure

More On Fires & Foreclosures

The following links are to recent stories on homes in foreclosure that are going up in smoke:

  • Grayson County, Texas: Homeowner facing a foreclosure sale in a month gets five years after being found guilty of torching home. She had recently renewed the insurance policy on the home after the policy had lapsed for non-payment. See Pottsboro woman sentenced in arson conviction; see also district attorney press release;

  • Owings Mills, Maryland: Homeowner faces charges of arranging to have someone set fire his home in foreclosure for $10,000, so that he could collect the insurance. The home was burned and a firefighter who responded to the fire was injured when he fell through the floor into the basement. See Owings Mills Man Charged In The Arson Of His Home (U.S. Dept. of Justice press release),

  • Deltona, Florida: A $2,500 reward is being offered for information on a Deltona fire that destroyed a house in foreclosure. It took 17 firefighters to knock down the flames Friday night. One was even hurt during the firefight. Investigators said arson and foreclosure is becoming a critical issue across Central Florida and say increasingly, arson is where area homeowners are turning. See Rise In House Fires Could Be Attributed To Foreclosure Rates,

  • New Bedford, Massachusetts: In one South End neighborhood last month, four vacant tenements were torched. The South End tenement fires occurred weeks after four vacant apartment buildings in the North End also were destroyed or heavily damaged in apparent cases of arson. Officials said the arson problem is worsening as the rising number of abandoned, foreclosed homes become sitting targets for vandals or desperate homeowners looking to recoup their losses. See Arson becoming growing problem for police, fire as foreclosures continue,

  • Salinas, California: Possible arson is being investigated as the cause of a fire that destroyed an unoccupied house, firefighters said. Salinas fire battalion chief said the estimated cost of damages to the recently foreclosed home is $100,000. See Suspicious cause in fire in east Salinas home.

Torching property in an attempt to escape unaffordable loan payments is not limited to homes, as this story illustrates:

  • Baltimore, Maryland: Two local residents with unaffordable payments on their auto notes each arranged to have their cars torched and collected on the insurance. One, a former Maryland Transit Authority cop, got a year and a day in prison plus three years supervised release; the other, an ex-MTA bus driver, got two years probation. Both were also ordered to do community service. The torcher that they hired, also a former MTA cop, got five years in prison. See Former MTA Police Officer And Bus driver Sentenced In Arson And Insurance Fraud Scheme (U.S. Dept. of Justice press release).

For anotherstory on the Maryland cases, see WBAL-TV Channel 11 (Baltimore, Maryland): Arsons Due To Foreclosures Increasing, Experts Say (Bail Set For Md. Man Accused Of Arson At His Home)- if link expires, try here for the same story.

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

Friday, June 13, 2008

State AG, Housing Advocates Advise Western New Yorkers Of Foreclosure Rights, Options

In Rochester, New York, the Rochester Democrat and Chronicle reports:


  • Panelists urged consumers to open their bills, discuss issues with their lenders and seek help if needed. But they also warned people to avoid foreclosure-rescue scams, which pose as help. Carlos Rodriguez, deputy attorney general, said rescue scams tell borrowers not to talk to lenders or lawyers. They then ask for money and fees and ask the homeowners to sign over their deeds. "Tell consumers not to sign any paperwork that has to do with the property deed," Rodriguez told the Monroe County Bar Association audience.

For more, see Foreclosure crisis looming in western New York, experts say.

Feds Charge Eight In Alleged Metropolitan Money Store Equity Stripping, Foreclosure Rescue Scam; Indictment Says $35M+ In Fraudulent Loans Involved

(originally posted 6-12-08; modified 6-13-08)
In Greenbelt, Maryland, The Associated Press reports:

  • Federal prosecutors have charged a Maryland mortgage foreclosure rescue company in a fraud scheme that allegedly involved more than $35 million worth of fraudulent loans and mortgages. Joy Jackson, the president of the former Lanham-based Metropolitan Money Store, and Jennifer McCall, the company's CEO, are among eight people named in an indictment released Thursday in U.S. District Court on charges that include conspiracy, mail fraud and money laundering. Metropolitan was a foreclosure rescue operation that claimed to help strapped homeowners at risk of losing their homes.

  • It allegedly convinced homeowners to sign over their homes to people with strong credit to keep the homes from foreclosure. Homeowners were told that they could keep their homes and repair their credit, get better mortgages and eventually buy back the homes. But prosecutors allege once it took control of the homes, Metropolitan would borrow heavily against the properties, sucking out any equity the original homeowners had built up. Many couldn't buy back the homes. Prosecutors say homeowners lost more than $10 million in equity.

Source: Feds file charges in Md. foreclosure rescue scheme.

See also, The Washington Post - Prince George's Woman Arrested in 'Massive' Mortgage Fraud:

  • [Joy J.] Jackson, 40, and [her husband, Kurt] Fordham, 38, both of Fort Washington, were charged with conspiracy to commit mail and wire fraud, six counts of money laundering and 15 counts of mail fraud to obtain money and property from homeowners and lenders.

  • Also arrested today were Jackson's business partner, Jennifer McCall, 46, and her husband, Clifford McCall, 47, McCall's daughter, Chandra Jones, 30, Wilbur Ballesteros, 32, all of Lanham; and Fordham's sister, Katisha, 35, and Ronald Chapman, both of Washington. All are facing mail and wire fraud charges, and Jennifer and Clifford McCall and Jones are each charged with one count of money laundering.

Go here for other posts on the alleged Metropolitan Money Store foreclosure rescue scam.

Go here for criminal prosecutions of foreclosure rescue operators.

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

More On The Alleged Metropolitan Money Store Foreclosure Rescue Scam

(originally posted 6-12-08; modified 6-13-08)
The following video clips are from TV reports on the alleged Metropolitan Money Store equity stripping, foreclosure rescue scam. These clips were televised months ago, and not in connection with Thursday's announcement of the indictment of eight individuals implicated in the alleged scam, among whom are company head Joy Jackson and her husband, Kurt Fordham:

  1. Former Stripper Joy J. Jackson Ran Foreclosure Rescue Scam (story of one victim of alleged foreclosure rescue scam; WMAR-TV Channel 2 (Baltimore, Md) - posted on website, Daily Motion; go here for the transcript of the report),
  2. Vulnerable homeowners target of scams (contains clips of Joy Jackson and Kurt Fordham's reported $800K wedding) (NBC Nightly News),
  3. Homeowners sue mortgage company (NBC Nightly News),
  4. Some Homeowners Fall Victim To Foreclosure Scams (CBS Evening News).

For the Maryland U.S. Attorney's press release announcing this week's indictment in the alleged Metropolitan Money Store foreclosure rescue scam, see Eight Indicted In Major Mortgage Fraud Scheme (Obtained Over $35 Million in Fraudulent Loans and Mortgages).

See also: WBAL-TV Channel 11 - Group's Mortgage Fraud Scheme Duped 100, Feds Say (Feds Say 8 Used Mortgage Fraud Profits Lavishly).

For updates on a previously filed Federal class action lawsuit against these foreclosure rescue operators, check with the Metropolitan Money Store Class Action website.

Go here for criminal prosecutions of foreclosure rescue operators.

Go here for other posts on the alleged Metropolitan Money Store foreclosure rescue scam.

Formal Plea Entered In Baltimore Tax Sale Bid Rigging Investigation; Target Agrees To Cooperate With Feds In Continuing Probe

In Baltimore, Maryland, The Baltimore Sun reports on the winner of the race to the Maryland Federal prosecutor's office in connection with an ongoing probe into alleged monkey business at the county tax sale auctions:
  • A veteran Baltimore real estate investor could serve up to 18 months in prison for conspiring to rig bids at Maryland tax sale auctions under a plea deal that obligates him to cooperate with a continuing criminal investigation of the auctions. Steven L. Berman, in a plea agreement filed yesterday in U.S. District Court in Baltimore, admitted to a single felony count of bid rigging. Berman, 50, also agreed to pay a $750,000 fine.


  • The bid-rigging case is the first to stem from a broad federal investigation that became public knowledge in August. [...] Though Berman is the sole investor charged in the case, FBI agents in court filings have identified other subjects of the investigation as Baltimore County attorney Harvey M. Nusbaum, 70, and his longtime business partner Jack W. Stollof, 73, of Stevenson. Both men have denied wrongdoing through their attorneys.


  • The tax sales often ensnare the same low-income homeowners as has [the local] ground rent [system]. Both collection systems, some critics argue, can force homeowners into costly court battles to keep from losing their homes, sometimes over a few hundred dollars of delinquent taxes, water and sewer fees or bills for sidewalk and alley repairs.

For more, see Investor admits rigging tax sale bids (Plea deal could bring 18-month sentence for Pa. businessman).

Go here for other posts related to the problems associated with the Baltimore tax sale system.

Thanks to Lance Gay for the tip on the story. baltimore tax sale bidding

Northern California Prosecutors Continue Uncovering Victims In Busted Upfont Fee Foreclosure Rescue, Fractional Interest Transfer, Bankruptcy Scam

In Northern California, the Lathrop-Manteca Sun Post reports:

  • Two women were arrested in Livermore on March 26 on suspicion of defrauding 14 homeowners in Alameda County, and prosecutors say they are continuing to uncover victims from counties throughout the Bay Area and the Central Valley.

  • Victims of the scam are told they can stop their foreclosures if they pay a few thousand dollars in up-front fees followed by smaller monthly payments, according to Alameda Deputy District Attorney David Lim, who filed the charges.

For more, see Foreclosure scam snares local homeowners.

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

Long Island Closing Agent Cops Plea To Pocketing $13M+ In Refinancing Proceeds Intended To Pay Off Existing Mortgages

In Central Islip, New York, Reuters reports:

  • A former president of the National Settlement Agency pleaded guilty on Thursday to charges of stealing $13 million in refinanced mortgage loan proceeds, the U.S. Justice Department said.

  • Steven Leff, acting as a settlement agent for numerous FDIC insured banks, embezzled the proceeds of several refinance loans, which should have been used to pay off the outstanding principal amounts on the prior mortgages, the Justice Department said.

  • "Leff was entrusted with large sums of money intended to be disbursed to others in the refinancing process. In simple terms, he stole much of it," FBI official Mark Mershon said in a statement. As part of his guilty plea entered in federal court in Central Islip, New York, Leff admitted that, in total, he stole more than $13 million in refinanced loan proceeds. Leff, 45, faces a maximum sentence of 30 years in prison.

Source: Settlement agent guilty in mortgage fraud scheme.

Go here for other posts on Steven Leff.

Go here, Go here, and Go here for other stories of trust account / escrow account theft of funds. sneaky slick escrow agents gamma

Blunt Signs Missouri Mortgage Fraud Bill Into Law

In Missouri, the Springfield Business Journal reports:
  • Gov. Matt Blunt on Wednesday signed a bill that tightens laws against mortgage fraud. House Bill 2188, sponsored by Rep. David Pearce, creates civil and criminal penalties for fraudulent mortgage practices and makes consumers more aware of the mortgage process.


For more, see Gov. Blunt signs mortgage fraud bill.

Thursday, June 12, 2008

Homeowners Beat Banks To Court As South Florida Attorney Files 25 Federal Suits Alleging Fraud, Violations Of Lending Laws; Seeks To Undo Lousy Loans

In South Florida, The Miami Herald reports:
  • Some South Florida borrowers who are in default on their home loans aren't waiting around for their lender to begin foreclosure. They have beaten their lender to the courthouse by filing lawsuits that allege the institutions committed fraud and violated federal lending laws by overstating the borrowers' incomes to qualify them for loans, changing the loan terms just before closing, and failing to disclose the loan costs.

  • ''These [borrowers] are basically sheep among the wolves,'' said Frank J. Ingrassia, a Margate lawyer who last week filed about 25 lawsuits on behalf of the borrowers against various lenders in U.S. District Court in Miami and Fort Lauderdale.

  • The suits mark the latest salvo against the subprime lending industry, which consumer advocates contend recklessly extended loans to borrowers and fed a buying frenzy that led to the real-estate bust.


  • Legal Services of Greater Miami is taking a similar tack -- alleging lenders committed fraud -- in defending homeowners in some foreclosure cases, said Carolina Lombardi, a senior attorney for the agency.

For more, see Troubled borrowers sue mortgage lenders (Some South Florida homeowners have sued their mortgage lenders, alleging the institutions committed fraud in making loans that borrowers couldn't afford to pay) (if link expires, try 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

FBI Orders Shift In Resources To Focus On Mortgage Fraud Probes

Bloomberg News reports:

  • The U.S. Federal Bureau of Investigation, confronting a surge in mortgage fraud, has ordered more than two dozen of its field offices to stop probing some financial crimes so agents can focus on the subprime crisis. Kenneth Kaiser, chief of the bureau's criminal investigative division, issued the directive late last week on a video conference call with the heads of 26 offices in areas where mortgage crime is rampant, said Bill Carter, an FBI spokesman in Washington.

  • Carter said the shift was made after an analysis of how agents are spending their time. The FBI traditionally has moved investigators to address urgent needs, he said. About 150 agents were working on more than 1,300 mortgage cases before the change.

For more, see FBI Halts Some Financial Cases to Investigate Mortgage Fraud.

Victims Of The Southern California Foreclosure Rescue Land Grant Program Come Forward

In Southern California, reports on the stories of a couple of homeowners who were scammed by a group that was allegedly running a foreclosure rescue, land grant program. Legal action, both criminal and civil, was brought against the alleged members of the group about three weeks ago. A description of the scam:
  • Under the alleged scam, homeowners in foreclosure attended seminars and filled out paperwork to deed over their homes to the defendants' companies -- Federal Land Grant Co., Land Grant Services and KBS Resources. Under the banner of an old land grant program last used during the Mexican-American war, the agents allegedly promised to help homeowners facing foreclosure to keep their homes. The agents said signing the homes over to a government program would shield them from the banks and, in four years, the homeowners could reclaim their homes, according to prosecutors. All the while, they'd be able to stay in the homes.
For the victims' stories, see How Desperate Homeowners Got Caught Up in an Alleged Scam.

Homeowner "Buy & Bail" - The New Housing Scam?

The Wall Street Journal reports:
  • Next month, Michelle Augustine plans to walk away from her four-bedroom house in a Sacramento, Calif., subdivision and let the property fall into foreclosure. But before doing so, she hopes to lock in the purchase of another home nearby. "I can find the same exact house as what I live in right now for half the price," says Ms. Augustine, 44 years old, who runs a child-care service out of her home.


  • In markets hit hardest by falling home prices and rising foreclosures, lenders and brokers are discovering a new phenomenon: the "buy and bail," in which borrowers with good credit buy a new home -- often at a much lower price -- then bail out of the "upside down" mortgage on their first home.

  • Homeowners are able to pull off this gambit -- which some lenders and real-estate agents call mortgage fraud -- by taking advantage of mortgage-lending practices that allow them to buy a new primary residence before their existing residence has been sold. And with the lending industry in disarray as it tries to restructure millions of mortgages, some boast they are able to pull off the strategy with ease.


  • While buy-and-bail is on the rise, the practice doesn't appear to be widespread.

For more, see Some Buy a New Home to Bail on the Old (Fannie Plans Rules To Avoid Practice Described as Fraud).

Go here for other posts on "Buy and Bail" home purchases. BuyAndBail

Hidden Cameras Now In Use In Deed Theft Battle Against Recording Phony Title Transfers

In Michigan, The Detroit News buries in a recent article the following note on a new method being used in fighting deed theft by Ruth Johnson, Oakland County's clerk and register of deeds:
  • [J]ohnson's office installed hidden cameras to record everyone who files deeds and created a way for residents to check if anyone has filed fake deeds or documents against their property. Last year, there were 39 formal complaints and this year, Johnson said, they're on pace to exceed that number. "It's the new street hustle," she said.

For more, see Mortgage fraud high in Mich., FBI says (Group wants Attorney General Cox to resign over effort on foreclosures).

JALA To Utilize Foreclosure Diversion Model

In Jacksonville, Florida, The Florida Times Union has this note buried at the end of a recent story:
  • Jacksonville Area Legal Aid consumer attorney April Charney also works alongside families in the trenches every day. At any given time, Charney might be handling 100 foreclosure cases. And while Charney said "anything done is a worthy effort," she wishes [Florida Attorney General Bill] McCollum's task force had discussed better ways to deal with people facing losing their home. "We would have liked to have a foreclosure moratorium to set up an alternate resolution process," Charney said.

  • Next month, Charney said, Legal Aid will have its own diversion model: a panel of pro bono lawyers trained to help with the deluge of foreclosure cases. The volunteer group begins organizing next week.

Source: Report: Florida, Georgia saving homes (Each state is grading high for its attorney general's effort to prevent foreclosures). undo mortgage loans TILA batallion

Loan Officer Cops Plea In Alleged $25M Mortgage Fraud, Kickback Scam Involving 200+ Home Buyers

In Columbus, Ohio, The Columbus Dispatch reports:
  • A Michigan woman admitted [yesterday] that she approved fraudulent mortgage loan applications for Columbus homes and might have been responsible for as much as $1 million in losses. Kenyatta Johnson, 28, pleaded guilty in U.S. District Court in Columbus to conspiracy and wire fraud in connection with a $25 million mortgage scam that affected more than 200 home buyers.

  • In a plea agreement, Johnson admitted that, as a loan officer for a bank in Ann Arbor, Mich., she approved loans brought to her by Dwayne L. Carter of Reynoldsburg that she knew included inflated, fraudulent employment information. In exchange, Carter wired her kickback money.

  • Johnson is the seventh of nine defendants to plead guilty in the conspiracy case. [...]
    The nine are accused of using bogus appraisals of more than 500 properties to obtain mortgages beginning in 2002.

For more, see Woman admits she Ok'd fraudulent loan applications in Columbus mortgage scam.

Wednesday, June 11, 2008

Two Decade Old City Lawn Mowing Lien, Clerical Error Create Heartache For Homeowner

In Garland, Texas, The Dallas Morning News reports:

  • It will be a while longer before Maria Gutierrez finishes paying off her little house on Glenfield Drive. The terms are easy, about $300 a month, which is pretty much all she and her adult daughter, a disabled dialysis patient, can afford.

  • So she lies awake at night worrying about the $2,000 [$272.95 plus 20 years of accrued interest] the city says she must pay or risk losing her home. She's scared. That figure stems from a 20-year-old mowing lien incurred before Mrs. Gutierrez had ever laid eyes on the little clapboard house.

For more, see Garland homeowner shouldn't have to pay for mistake she didn't make.

For story update, see Garland woman won't lose home over 20-year-old lien.

Editorial Note:

This story serves as another reminder of the importance of obtaining a title insurance policy when buying an interest in real estate. code enforcement lien

Shaq To Rescue Orlando Homeowners Facing Foreclosure?

In Orlando, Florida, the Orlando Sentinel reports:

  • Shaquille O'Neil says he wants to build a legacy -- literally -- in Orlando. The NBA star said he is working on plans for real-estate-development projects in Orlando, with an eye toward helping those who are facing foreclosure on their homes. "I want to come in not to kick them out, but to work with them and save them so they can stay in their homes," O'Neal told the Orlando Sentinel during an impromptu stop Tuesday at Orlando City Hall.

  • Attorney Mark NeJame, who arranged the visit along with longtime friend and Realtor Curtis Cooper, said the star center wants to buy the mortgages of homeowners who have slipped into foreclosure because of high interest rates. He would sell the homes back to those troubled buyers with more affordable terms, hoping to make a small profit.

For more, see Shaq: I can help homeowners fight off foreclosure.

See also, Shaq's Heart Still Here. . .With Town He Deserted.

Day One Of Philly Foreclosure Diversion Program "A Madhouse"

In Philadelphia, Pennsylvania, The Philadelphia Inquirer reports on the first day of the implementation of the local court's Residential Mortgage Foreclosure Diversion Pilot Program, a program that housing advocates around the nation reportedly say is among the most innovative they've seen, because it involves the court, consumer advocates and mortgage lawyers.

  • It was a madhouse in City Hall courtroom 676 yesterday. There began day one of a court pilot program to help financially troubled homeowners avoid foreclosure by talking - talking directly to the lawyers who represent lenders and working out deals, on the spot, to begin paying regularly or to give up and move on.

  • Gone was the usual silent, churchlike decorum, replaced instead with knots of lawyer volunteers conferring in corners with brand-new clients, ever-growing stacks of files piled precariously on tables, mortgage lawyers answering calls on cell phones, and dazed-looking homeowners hoping that out of all the chaos would emerge a way for them to keep foreclosed homes that had been destined for a sheriff's sale. And it will continue today and the rest of the week.

For more, see Homeowners offered relief in Philadelphia program.

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

Texas Cops Seek Alleged Scammer For Renting Out Homes He Doesn't Own To Tenants

In Desoto, Texas, WFAA-TV Channel 8 reports:
  • [P]olice are looking into a former mayoral candidate who they say is renting homes he doesn't even own. Officers showed up in a DeSoto neighborhood to search a home for information on Morris Mosley. [...] Now there's a warrant out for his arrest. Investigators say he broke into multiple homes that are in foreclosure or up for sale and rented them out for profit. "To go into someone else's home and then rent it to someone else when you don't have the property - that's pretty bold," said Corporal Ted May from DeSoto Police.

For more, see Former mayoral candidate accused of illegal renting.

For the story of one homeowner facing foreclosure who vacated her home while putting it up for sale, only to find illegal tenants living in the home (and who allegedly rented the home from Morris Mosley) when she stopped by to check on it, see DeSoto woman finds people living in her house.

Go here and go here for other posts on tenant victims of rent hoaxes. unwitting tenant rent scam yacht

New York Closing Agent Charged With Pocketing $500K Earmarked For Existing Mortgage Payoffs

In Suffolk County, Long Island, Newsday reports:
  • An Islip Terrace woman who worked as a title insurance agent has been indicted after she swindled at least two homeowners out of $500,000, Suffolk prosecutors said.Christina Cidoni, 43, was arrested on May 28 and charged with second-degree grand larceny, according to Suffolk County District Attorney Thomas Spota.


  • According to prosecutors, Cidoni swiped and cashed several multi-thousand dollar checks in 2003 while working on two deals for Fidelity National Title Insurance Co. of New York. Typically, such insurance provides lenders and homeowners peace of mind while a title transfer is pending. Instead of safeguarding those checks -- which were earmarked to pay off mortgages -- Cidoni cashed and spent them, prosecutors said. Cidoni also is accused of allegedly pilfering $15,000 in an escrow account, and of writing a bad check for title insurance computer software.

For the story, see Title insurance agent charged with larcenies.

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

Go here, Go here, and Go here for other stories of trust account / escrow account theft of funds. sneaky slick escrow agents gamma

Denver Pastor With History Of Civil Lawsuits Accusing Him Of Swindling People Out Of Homes & Savings To Cop Plea In Insurance Fraud Case

In Denver, Colorado, The Rocky Mountain News reports:
  • The Rev. Acen Phillips, a longtime activist in Denver's black community, is expected to plead guilty in an insurance fraud case Thursday under a deal that will allow him to avoid jail. Colorado Attorney General John Suthers had charged Phillips with 12 felony counts of forgery, theft and attempted theft involving more than $575,000 from AIG Life Insurance Co.


  • The cases highlight a career in which Phillips has been known for controversy almost as much as for outspokenness. A review of court documents shows a string of nearly 30 civil lawsuits against him [plus another 12 cases listed under the name "Acen Phillips" where it could not be immediately confirmed whether they can be linked to the pastor]. Most of those suits - including the active AIG suits - claimed that Phillips and his business associates either defaulted on loans or swindled people out of their homes and savings.


  • Phillips is linked to at least seven civil lawsuits in the metro area filed against D.T.P. Ministries from 1984 to 1991, according to a courts database and the lawsuits themselves. Two other suits with a slight variation on the name - D.P.T. Ministries - also list Phillips. The D.T.P. suits tell similar stories: That Phillips, working with others, used his status as minister to gain trust and trick people out of their homes.

For the story, see Pastor expected to plead guilty (Acen Phillips would get no jail time under deal in insurance fraud case).

Use Of Builder Bailout Scams To Unload Unsold Inventory Become More Discreet

Buried in an article in the San Francisco Chronicle is a description of how some builders, looking to dump accumulated inventory that they are having trouble peddling, are using discreet methods to accomplish that end.
  • [B]uilders used to give away microwaves. Now, says Jenny Brawley, fraud investigations manager at Freddie Mac, they give away cars, swimming pools, two years' worth of homeowner association dues, four years of mortgage payments, even five years of guaranteed rental income.

  • These incentives not only are built into the inflated purchase price, they are not disclosed to the loan officer or the appraiser. "In fact," says Brawley, "there is an organized effort to conceal them" from lenders, who end up providing loans for more than the property is worth. The fraud specialist also is seeing a lot more involvement in these types of schemes from real estate agents. "They're the ones shopping these loans to lenders," she said.

For the story, which describes other general, non-builder related, real estate frauds, see Mortgage fraud burgeoning with new twists.

Governor To Sign Ohio Foreclosure Law Requiring Deed Recording Within 14 Days Of Judge's Sign-Off; Allowing Courts To Perform Mediation

In Ohio, The Cincinnati Enquirer reports:
  • Gov. Ted Strickland is expected to sign state legislation this week requiring sheriffs to automatically record deeds within 14 days of a judge signing off on a foreclosure sale. The goal: to stop homes – and some homeowners – from ending up in a legal limbo in which, on paper at least, no one owns the home. When that happens, properties deteriorate, lawns go unmowed and cities don’t know who to cite. Sometimes the former owners get socked with fines or bills, even after they’ve lost the property.


  • Revisions made when the Senate passed the bill last month would allow courts to perform mediation and permit an open house on vacated or abandoned properties – a move designed to boost sale prices and preserve neighboring property values.

  • [Strickland’s Ohio Foreclosure Prevention Task Force] expressed concern about a paper-filing game often played by lenders who buy back the properties on which they’ve foreclosed. Until a deed with the new owner’s name is filed with the county recorder, code enforcers can’t hold anyone responsible for deteriorating properties. And vacant homes can attract crime and other problems, pushing down a street’s property value.

For more, see Housing limbo to shorten (Strickland to sign bill ending deed delays).

In a related post, see Foreclosing Lender Fails To Record Title To Ohio Home, Leaving Former Owner On The Hook For Criminal Building Code Charges.

Go here for other posts on code violation & other problems associated with homes in legal limbo. responsibility code violations foreclosure

Tuesday, June 10, 2008

Three Face Forgery, Other Charges For Allegedly Duping 87 Year Old Woman Into Signing Away Home, Using Straw Buyer To Pocket $775+K In Home Equity

In Pomona, California, the Los Angeles County District Attorney announced last week:
  • A church bishop and two others are due to be arraigned Monday on six felony counts each for allegedly duping an 87-year-old Claremont woman into signing over the grant deed to her home. [...] Defendant Leroy Dowd, 71, is charged [...] with two counts of grand theft, two counts of offering a false or forged instrument for recording, one count of identity theft and one count of forgery. Bessie Mae Moore, 61, and Alexander Trevino, 31, both of Los Angeles, also are charged in the complaint. The charges carry aggravated white-collar crime and excessive-taking enhancements.


  • Dowd – a self-ordained bishop who operated the now-defunct Triumph Church of God [...] in Los Angeles – met the victim through church in December 2006. He allegedly told the elderly woman that he could help her secure widow’s benefits from Medicare and Social Security. Under this guise, he allegedly tricked her into signing over the grant deed to her $800,000 home, which was paid in full.

  • Eight days later, Dowd sold the house to Moore, who is believed to have posed as a straw buyer. Moore obtained financing through Trevino, a loan officer at MortgageQwest in Glendale. Trevino allegedly falsified the financial information in Moore’s loan application and was able to obtain 100 percent financing. At closing, Dowd allegedly walked away with more than $775,000, prosecutors said.

For more, see the LA County DA press release: Church Bishop, Two Others Charged In Theft of Elderly Woman’s Home.

Florida Legal Services Firm Inundated With Foreclosure / Bankruptcy Clients; Campaign On To Raise Operating Funds

In Jacksonville, Florida, the Jacksonville Daily Record reports:
  • [Jacksonville Area Legal Aid executive director Michael] Figgins and his staff are inundated with clients seeking relief from bankruptcy and foreclosure. While the latter is grabbing the headlines these days, both issues are related and both mean standing room-only when JALA hosts its bankruptcy and foreclosure clinics.

  • While JALA’s clients face life-altering problems, Figgins is facing issues of his own: budget cuts from everywhere and not enough attorneys and staff to handle the number of cases JALA takes in on a weekly basis. Help is on the way, though, and it’s through a public/private partnership between the City, a banker and a publicist. If that sounds like a campaign in the making, you’re right. However, no one is seeking office. The goal is to raise $1 million for JALA.

For more, see Getting tough on foreclosure.

State Law Imposing Fiduciary Duties In Foreclosure Rescue Deals Has Some Washington State Real Estate Agents Howling

In Seattle, Wasshington, a blog on the Seattle Post Intelligencer reports:

  • It appears that most of the complaints about the [recently passed Washington State] equity skimming law are originating with representatives of real estate agents. [...] The reason for this is that the law impresses new duties on the agents and with the new duties the prospect of liability. Over the years there has been a good deal of marketing to get you to think of real estate agents as "real estate professionals." This law they believe is taking this idea too far.

  • The crux of this concern is that real estate agents might be characterized as "distressed home consultants" who the new law says owe a fiduciary duty to the the distressed home owner, someone facing foreclosure.

For the rest of the story, see What Are Real Estate Agents Complaining About?

See also, New law worries county Realtors.

For a related article on the new Washington State foreclosure rescue statute, see No Whining About the New Equity Skimming Legislation.

Brooklyn DA Indicts Man In Alleged Deed Theft Victimizing Dead Property Owner

In New York City, the Kings County District Attorney's Office recently announced the indictment of George Marks, 40, on several charges of Grand Larceny, and six counts of Falsifying Business Records in the First Degree. According to the Brooklyn DA's press release:
  • The indictment against Marks charges that he forged a deed claiming ownership of the deed to 243 E. 54 Street and 5501 Church Avenue, in East Flatbush, and then tried to sell the building. The actual owner had died, and her son was in the midst of sorting out her will and estate, when, in 2006, Marks filed deeds claiming he was the actual owner, according to the indictment. Supporting tax documents discovered in the investigation showed that Marks claimed to have paid $20.00 for both properties, then valued at more than $1 million. While the deed forms were backdated to show that they had been filled out before the owner died, dates printed in the margins showed that they were not created until after her death.

  • Marks is also charged with trying to sell 243 E. 54 Street to a married couple, in December 2006. The indictment alleges that he accepted a $10,000 down payment from the couple, but when questions about the deed arose, they requested their money back. Marks has not returned the payment. The indictment further charges that, in December 2006, Marks sold 243 E. 54 Street to a straw buyer, for $495,000, allowing Marks to keep the money generated in the sale and maintain ownership of the building.

Go here for the Brooklyn DA's press release.

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

Homeowner In Foreclosure Struggles Through Maze Of Legal Complexities In Attempt To Save Home

In Robertson County, Tennessee, The Tennessean reports on a four year ordeal experienced by a local homeowner who learned the hard way how difficult it is to straighten out mortgage problems, given the complexity of how mortgages are originated, sold (and resold), and serviced (and how servicing rights can be sold and resold). His problems began in 2004, when he refinanced his home loan with Ameriquest.

For more, see Borrowers who get behind struggle to regain footing (Homeowners who deal with foreclosure often face a tangled web of legal fights).

NBC Nightly News On Loan Modifications For Homeowners Facing Foreclosure

The NBC Nightly News ran a story last night on the difficulty homeowners facing foreclosure are having getting loan modifications of their home mortgages. Mentioned in the story is Iowa Mediation Service’s Mortgage Mediation Program, a joint program of the Iowa Attorney General’s Office and Iowa Mediation Service, which works with borrowers and lenders dealing with mortgage, refinancing, and foreclosure concerns.

To view the report, and the Nightly News web-only extras, see Hard Times.

Foreclosure Prevention Counselors Letting Lenders Off The Hook?

A recent article on gives an informative description of:
  • [t]he complicated and time-consuming foreclosure prevention process. Working together are mortgage servicers - the companies that manage the loans - and the borrowers, with foreclosure prevention counselors often acting as go-betweens.

For more, see The trick to getting a mortgage fixed (Foreclosure prevention is a messy business -- more art than science. Here, an inside look at why some people get a loan workout and others don't).

Editorial Note:

Unfortunately, what is not included in the article (and implicitly points to a weakness in the negotiating process for the financially strapped homeowner - the lack of participation of competent legal counsel on his/her behalf) is the need to remind lenders of the legal problems they face in connection with the enforcement of the loan agreement if a loan modification satifactory to the homeowner can't be worked out in the event:

  • the loan violated any applicable state predatory lending and/or consumer protection laws (see Fighting Back Against Foreclosure - New York Judge Denies Foreclosure Based on Alleged Predatory Lending),

  • in attempting to collect on the loan, the Federal Fair Debt Collection Practices Act (or any applicable state debt collection statutes) has been violated (see Un-Fairbanks - How West Haven sisters fell victim to a national mortgage scam, and how it could happen again).

Loan counselors who are not attorneys are obviously not in a position to practice law. Consequently, (unless working in conjunction with an attorney experienced in negotiation and familiar with the relevant legal issues ) they are unable to raise these issues during the loan workout negotiation process and will likely result in homeowners unwittingly overlooking the leverage they possibly (some may say probably) have in reaching the best possible deal they can with their mortgage lender.


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

Monday, June 09, 2008

NYC Feds Get Guilty Pleas From Two In Equity Stripping, Foreclosure Rescue Scam

In New York City, The Associated Press reports:

  • One company billed itself as a white knight that could rescue desperate homeowners from foreclosure. The other passed itself off as an honest brokerage that helped wealthy New Yorkers get mortgages to buy $1 million apartments. In reality, both firms dealt primarily in fraud, according to prosecutors.

  • Two Brooklyn mortgage specialists pleaded guilty to federal conspiracy charges this week in a pair of loosely related cases that cost banks millions of dollars and led to some people losing their homes.

  • Maurice McDowall, the owner of a "foreclosure rescue" company called Lost and Found Recovery, copped to an indictment accusing his firm of persuading scores of struggling families to enroll in a program to "save" their homes by temporarily signing them away to someone else. Mortgage broker Aleksander Lipkin admitted criminal wrongdoing in both that case and a separate fraud in which his firm, Lending Universe, used bogus paperwork to arrange more than $200 million in loans they knew would probably never be repaid.
For more, see 2 plead guilty in NY mortgage frauds targeting homeowners.

See also:

Go here for other posts on foreclosure rescue operator Maurice McDowall.

Go here for other criminal prosecutions of foreclosure rescue operators.

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

Foreclosure Rescue Statute May Prohibit Attorneys From Taking Upfront Fees In The Course Of Representing Florida Homeowners Facing Foreclosure

A recent article by Central Florida attorney Michael Alex Wasylik, of the firm Ricardo & Wasylik, PL, points to an apparent flaw in the newly passed Florida state statute, The Foreclosure Rescue Fraud Prevention Act of 2008.

The flaw relates to the ability of attorneys, engaged in a typical attorney-client relationship with a Florida homeowner facing foreclosure, to charge and collect upfront legal fees from those clients. The law prohibits "foreclosure rescue consultants" from charging and collecting upfront fees for "foreclosure-related rescue services" to homeowners facing foreclosure.

A reading of the plain language of the new statute appears to include (or ensnare) attorneys among those prohibited from charging upfront fees for their services. (See Section 501.1377(2)(b), Florida Statutes, for definition of the term "Foreclosure-rescue consultant.")

Further, the definition of the term "Foreclosure-related rescue services" in Section 501.1377(3) appears broad enough to include those services typically provided by attorneys in the course of defending clients in foreclosure actions, as well as those services in connection with Federal bankruptcy proceedings. In addition, Section 501.1377(2)(b) enumerates six persons or entities that are specifically excepted from the definition of the term "Foreclosure-rescue consultant"- attorneys are not included on the list.

Based on the reading of the plain language of the statute, it appears that a Technical Corrections Bill by the Florida legislature is in order to correct, what appears to be, an inadvertent but obvious flub in the drafting of the statute that ostensibly prohibits attorneys from charging upfont legal fees from homeowners that they represent in foreclosure-related legal proceedings.

For more, see New Florida Law May Hurt Homeowners in Foreclosure (New Section 501.1377 may make it impossible for homeowners to find lawyers to represent them in foreclosure or bankruptcy proceedings).

Postscript: The same issue was raised in Massachusetts in a January, 2008 article in connection with the state Attorney General's foreclosure rescue regulations - see Massachusetts Lawyers Weekly: Lawyers: unclear foreclosure regs forcing them to turn down business (Claim that new rule bars acceptance of retainers in certain types of cases).

More On Florida's Recently Passed Foreclosure Rescue Statute

In Southwest Florida, The News-Press ran an article by local attorney William Edy in which he provides a summary of the recently passed Florida statute, The Foreclosure Rescue Fraud Prevention Act of 2008, a law which provides strict regulation of the activities of foreclosure rescue operators in connection with homeowners facing foreclosure.

For more, see New foreclosure-rescue legislation on way.

Baltimore Tax Sale Investor Cops Plea, Agrees To Cooperate With Feds In Bid Rigging Probe

In Baltimore, Maryland, an editorial in The Baltimore Sun notes:

  • Federal investigators looking into Baltimore's tax-sale auctions have found their canary. Steven L. Berman, a veteran real estate investor from Pennsylvania, has agreed to cooperate with U.S. Justice Department prosecutors as part of a guilty plea in a bid rigging scheme. Mr. Berman is not just any canary. He has participated in tax-sale auctions in the city and five counties for several years and should be intimately familiar with the system, its vulnerabilities and payoffs.


  • Federal prosecutors allege the bid rigging scheme involving Mr. Berman occurred over several years. They say a handful of tax-sale regulars, including Mr. Berman, cut secret deals to avoid bidding against each other, benefiting from the lack of competition as they purchased sale certificates in volume.

For more, see Tax-sale shenanigans.

Sunday, June 08, 2008

Foreclosures & The Property Managers Of Last Resort: Municipal Code Enforcement Agencies

In Central Florida, the Orlando Sentinel ran a commentary on the increased workloads faced by local code enforcement agencies by reason of the vacant homes that are in various stages of foreclosure, and what some municipalities have done in other parts of the country to combat similar battles.
  • Droughts are good for one thing. They help hide the empty homes. Now summer rains are rejuvenating dried lawns. And all the houses abandoned over the winter and spring are about to reveal themselves. "I expect all that thirsty St. Augustine to go nuts and the complaints to go up," says Mike Rhodes, Orlando's code-enforcement chief. "Some are homes that sold six months ago for a half-million dollars. Now we are sending people to mow the yard." Adds Bob Spivey, his counterpart at Orange County, "It's an epidemic. We are the property managers of last resort. It's a bad situation. It's in every type of neighborhood."

For more, see Grass is often greener, taller when other side of fence is foreclosed (if link expires, try here).neighborhood destruction from foreclosures kappa

NH Feds, State AG Announce Formation Of New Hampshire Mortgage Task Force

In Concord, New Hampshire, The Associated Press reports:
  • Several state agencies are working with federal authorities to investigate mortgage fraud in New Hampshire. The New Hampshire Mortgage Task Force was announced Thursday by U.S. Attorney Tom Colantuono and [New Hampshire] Attorney General Kelly Ayotte. Their offices are working with the FBI, the U.S. Secret Service and other federal agencies to respond to the housing market crisis caused by the rising rates of foreclosures.

  • The task force already is investigating cases of suspected mortgage fraud in New Hampshire. Officials say the group will focus primarily on large-scale institutional fraud, but it will consider allegations of any type of fraud related to the granting, marketing or servicing of home mortgages.

For the story, see N.H. announces new mortgage fraud task force.

See also, U.S Attorney Press Release - Mortgage Fraud Task Force Established.

Thanks to the The Manchester Mortgage-Servicing Giant Killer, Mike Dillon of for the tip on the story.

Unbuilt Troubled "Trump Tower Tampa" Project Faces Foreclosure; Famed Builder Said To Have Merely Licensed Named To Local Developer

In Tampa, Florida, recent media articles report that the local Trump Tower Tampa condominium project that carries the name of famed developer Donald Trump has not only never gotten off the ground, but now faces foreclosure. Many who bought in are clamoring for their deposits back. In addition, they reportedly bought in to the project believing that Donald Trump was actually involved in the project only to reportedly learn that the contrary is true. Trump is claimed to have merely licensed his name to a local developer for millions of dollars and, reportedly, sued after allegedly being stiffed out of over $1 million in unpaid licensing fees, as this excerpt indicates:

  • As the start of construction was delayed over and over again, details about Trump's arrangement with SimDag/RoBEL LLC came to light, especially as Trump was being blamed for many of the tower's problems. In early 2007, he confirmed what had only been rumor before. Trump was not a developer in the project nor was he an investor. In fact, the developer, Tampa-based SimDag, was paying him millions of dollars to use his name, and he was still out more than $1 million of it.

For more on this story, see:

For story update, see:

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

Mass AG Brings Civil Charges Against Man Who Allegedly Fraudulently Obtained Mortgages & Allowed Them To Go Into Default

From the Massachusetts Attorney General's Office:
  • Attorney General Martha Coakley’s Office has filed a lawsuit against an Adams investor who allegedly obtained inflated loan proceeds by fraudulently procuring mortgages on multi-family homes and commercial buildings in Adams, Greenfield, North Adams, and Pittsfield. The lawsuit, filed in Suffolk Superior Court, alleges that Richard E. Doherty devised a scheme by which he submitted false qualifying information and documentation to obtain mortgage loans for property purchases and refinances. Doherty then failed to repay the mortgages and allowed the houses to fall into foreclosure. Doherty, 63, was served notification of the lawsuit [last week]. The Attorney General’s Office is seeking civil penalties, restitution, attorneys’ fees, and disgorgement of ill-gotten gains from Doherty.

For more, see Attorney General Martha Coakley Files Lawsuit Alleging Significant Mortgage Fraud in Western Massachusetts (Alleged Fraud Caused Numerous Properties to Fall Into Foreclosure).

For more details on the alleged scheme as set forth in the Massachusetts AG's lawsuit, see Complaint - Commonwealth of Massachusetts v. Doherty.

FBI Investigates Chicago Builder Who Left Country; Possible Sham Sales Probed

In Chicago, Illinois, the Chicago Sun Times reports:
  • A brash Chicago builder who returned home to Lithuania as unpaid debts accumulated here has drawn the interest of the FBI, two sources said. The sources said FBI agents are asking about the activities of Andrius Augunas, whose plans for remaking parts of the Near South Side ended in a tangle of liens and foreclosures.

  • Augunas was the president of Rokas International Inc., which has ceased operations. The investigation apparently is connected to FBI probes into mortgage fraud and is looking at the possibility of "sham" sales of condominiums in Rokas projects.

  • Plaintiffs in cases against him say the developer left for Lithuania earlier this year and has not been seen since. On April 29, he filed for personal bankruptcy protection under Chapter 7 of the code.

Among the creditors Augunas has reportedly stiffed include First DuPage Bank, which gave him three loans totaling $27.8 million for a condo building he never started.

For more, see FBI probing bankrupt developer ($79 MILLION IN DEBT - He fled U.S. after plan to remake Near South Side collapsed).

Go here for other posts on Andrius Augunas.

Alabama Woman Faces Forgery Charges In Alleged Deed Theft

In Demopolis, Alabama, The Clark County Democrat reports:
  • Annetta Thedford Rowser, 57, has been arrested on a number of charges relating to a property deed. Rowser represented a woman who presented a forged land deed. The deed was allegedly signed by the woman's father with an "x," however it was originally dated for Aug. 23, 2000, six months after the man had died.

  • Rowser, of Demopolis, and her accomplice allegedly marked through the original date and changed the date on the deed to April 1, the day before the man died. Rowser was charged with forgery, second degree and deceptive business practices. Her bond was set at $9,000.
Source: Demopolis woman charged with forgery, deceptive business practice.

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