Saturday, July 19, 2008

Protest Seeks To Block Countrywide From Booting Elderly Disabled Woman From Home Of 45 Years

In Detroit, Michigan, WWJ Newsradio 950 reports:

  • Dozens of people gathered at the home of an elderly disabled woman to protest the foreclosure of her home in Detroit. Organizers say 72-year old Rubie Curl-Pinkins is one of the latest horror stories in the foreclosure crisis that is devastating Metro Detroit.

  • According to Oak Park City Councilwoman, Angela Diggs Jackson who helped organize the protest, Countrywide and their law firm, Trott & Trott, have decided to evict Curl-Pinkins from her home of 45 years, rather than accept full payment through a reverse mortgage.

  • Diggs Jackson says Curl-Pinkins is suffering from numerous physical disabilities. Her doctor has stated that being evicted from her home could have a devastating effect on her health. Her daughter, who also lives in the home on Holden Street, is also disabled, suffering from congestive heart failure and on oxygen to help her breathe.

  • Vanessa Fluker, attorney for Curl-Pinkins, says she was able to get an emergency extension to allow her client to stay in the home until July 25th. Countrywide Home Loans has yet to comment on Curl-Pinkins case and the local law firm representing Countrywide, Trott and Trott said they could not comment.

Source: Protest Over Elderly Woman Losing Home.

See also:

Phony Attorney Pockets $150K+ Home Sale Proceeds; Fails To Pay Off Existing Mortgage, Leaving Owner In Foreclosure

In Staten Island, New York, the Staten Island Advance reports:
  • The son of a retired judge is accused of pretending to be an attorney in order to sell a woman's home, then keeping the money for himself. Police say Renauld Gregg, 29, the son of retired administrative law judge Ronald Gregg, played the role of an attorney well enough to close the sale of an acquaintance's Stapleton home -- then kept the $156,877 and left his victim in foreclosure.


  • He was successful with the sale, police say, but didn't use the $156,877 in proceeds to pay off Ms. White's mortgage, instead keeping the cash for himself. Ms. [Robina] White discovered her home had been sold when she received a notice of foreclosure, said [District Attorney Daniel] Donovan's spokesman, William Smith. The lender stopped foreclosure proceedings after learning Ms. White was the victim of a crime.

  • Gregg was arraigned [Thursday] on charges of second-degree grand larceny, unauthorized practice of a profession and resisting arrest. The most serious charge carries up to 15 years in prison for a conviction at trial.

For more, see Will Imposter Attorney Defend Himself? (Judge's son held in fraud; cops say he sold restaurateur's home, then kept the money).

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

NBC Nightly News On Evictions Of Foreclosed Homeowners

In Prince William County, Virginia, the NBC Nightly News ran a story earlier this week in which they accompanied a local deputy sheriff conducting an eviction of a homeowner who had recently lost his home in foreclosure.

For the story, see When the deputies come (video only)

For a related story on Florida deputies carrying out evictions after foreclosure, see Deputies delivering eviction notices sometimes find job hard to deal with.

Go here for other posts on Police involvement in foreclosures. SheriffDeputiesForeclosureAlpha

Increased Caseload Of Abandoned Homes Leaves Code Enforcement, Cops With Hands Full

The following links are to stories describing the beating being taken by code enforcement officials and other municipal workers around the country as they grapple with unattended homes abandoned by their owners:

Go here, go here, and go here for other posts on vacant homes leaving their mark on neighborhoods. neighborhood destruction from foreclosures kappa

Two Inch Fish "An Awesome Ally" In Battle Against "Green Pools"; Dwindling Supply Has One County Concerned

In Orange County, California, ABC News reports:

  • [A]s the foreclosure crisis deepens by the day, an unsightly and potentially deadly consequence of homes without owners are neglected swimming pools. An abandoned pool can become contaminated with algae within two weeks. Shortly after that, the mosquitoes follow … in the millions. It's a mess far too pervasive to stave off without daily work with a skimmer and a dash of chlorine.

  • It's times like these that neighbors and homeowner associations turn to a 2-inch fish with a big appetite. Gambusia affinis, more commonly known as mosquito fish, have been used in this way since the 1920s. They are released into green pools in small batches of about 100, and they breed and eat hundreds of mosquito larvae a day. "These fish are an awesome ally," said Jon Miller a 22-year veteran technician at the Orange County Vector Control District. "I've had to treat over 200 pools in the last three months and with these [fish] I don't need to come back."

For more, see Mosquitoes, Fish, Pools and Foreclosure (What Do These Four Have in Common? More Than You Might Think) (Go here for entire story on one web page).

Regarding the growing shortage of these mosquito fish, see North County Times: Too many pools and too few fish; that bugs county vector control:

  • Facing a record number of slimy swimming pools behind foreclosed homes and a shortage of the fish used to prevent the mosquito colonies that inhabit them, the [San Diego] county employees who combat disease-carrying pests have their work cut out for them. Their challenges come amid concerns that the mosquito-borne West Nile virus is unusually active in the county this year.

"Billy Bob The Goat" Seeks New Home As Owner Loses Farm To Foreclosure

In Woodbury, Minnesota, the Minneapolis Star Tribune reports:
  • Until recently, Billy Bob led a comfortable life with a loving family on a farm in rural Minnesota. Then his family lost its farm in the foreclosure mess that's sweeping the nation. Reluctantly, they sent their pet goat packing.

  • Today Billy Bob's life has truly gone to the dogs. The 5-year-old lives next to several canines in a kennel at an animal shelter in Woodbury. "They said he's like a dog with horns," said Stacy Arvidson, manager of the Woodbury animal shelter.

  • Animal Humane Society officials said Billy Bob is the latest casualty of the economic downturn that's not only hurting humans but also leaving thousands of dogs, cats, birds and farm animals across the nation and the Upper Midwest without homes.


  • In recent months the society has been getting more inquiries from hobby farm owners who are facing foreclosure or other economic hardships. Many can no longer afford to feed their horses or donkeys. Unlike Billy Bob the goat or the occasional city-bred pet chicken, those animals are too large for most shelters, [Animal Humane Society's Cindy] Johnson said, so their owners are steered to rescue groups such as the Minnesota Hooved Animal Rescue Foundation in Zimmerman.

For more, see Billy Bob the goat is feeling a little gruff: He's homeless.

For other posts on foreclosure pets, go here, go here and go here. ForeclosurePetsAlpha

Friday, July 18, 2008

Foreclosure Defense Causing Some South Florida Attorneys To Refocus Practices To Meet Increasing Demand?

In South Florida, The Miami Herald reports:
  • As foreclosures continue to mount, borrowers who have run out of options are turning to attorneys to fight back -- and they're living mortgage-free for months in the process. Although the chances of ultimately keeping a foreclosed home are slim, for $1,500 to $3,000 some lawyers are offering to defend borrowers in court, causing the wheels of justice to turn more slowly. Duking it out can add months and sometimes years to a foreclosure process that in Florida already takes an average of seven months to complete.


  • Foreclosure defense is proving popular enough that some South Florida bankruptcy and real estate lawyers said they were refocusing their practices to meet the growing demand.


  • While a foreclosure may seem straightforward -- a borrower doesn't pay and the bank takes back the home -- lawyers say there are numerous ways to fight. One way is forcing the lender to prove it owns the debt behind the mortgage by producing a promissory note. A mortgage is a security instrument pledging property as collateral for a loan if a borrower defaults, but it is not the promissory note itself. As mortgages were bought, bundled and sold off to investors, notes got lost in the shuffle, landing in vaults or warehouses around the country. Physically retrieving them can be difficult and sometimes impossible.


  • Some lawyers also ask lenders to produce all the documents in a loan file, transcripts of phone conversations with the borrower and copies of written correspondence, which can take up to a year or more to compile. Several businesses are involved, and some may have gone out of business.

For more, see Foreclosure defense buys homeowners time (Homeowners facing foreclosure are hiring lawyers to defend them in court against their lenders, during which time they can stay in their homes without paying a cent) (if link expires, try here).

In a related story, see "Florida Attorneys Saving Homes" Sets Up Hotline To Place Homeowners Struggling With House Payments With Free Lawyers.

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 gamma

California AG Alleges "Shocking New Details" Of Countrywide Lending Practices In Amended Lawsuit Against Lender

From the Office of the California Attorney General:

  • California Attorney General Edmund G. Brown Jr. [yesterday] disclosed “shocking new details” about Countrywide Financial’s deceptive business practices which included ignoring their own underwriting guidelines and rewarding employees for selling risky home loans. "These shocking new details provide further evidence of Countrywide's dangerous lending practices, which included ignoring borrowers' low credit scores and rewarding employees for selling risky loans," Attorney General Brown said. "In one case the company approved an adjustable rate mortgage to an 85-year-old disabled veteran with such a low credit score and high debt that he defaulted in less than six months."

  • On June 20, 2008 Attorney General Brown sued Countrywide for engaging in deceptive advertising and unfair competition by pushing homeowners into risky loans for the sole purpose of reselling the mortgages on the secondary market. [Yesterday] Brown filed an amended lawsuit in Los Angeles Superior Court which reveals twenty new details about the company's scheme to deceive consumers into taking out dangerous mortgages. The information had been previously withheld from the complaint.

For more, see:

For a story in The Wall Street Journal on the California AG's amended lawsuit, see Countrywide Filing Shines Light on Loans (may require subscription; if no subscription, try here - then click link for story, then refresh page if necessary).

Go here, Go here and Go here for more on other Countrywide lawsuits & other problems. countrywide consumer problems

Colorado Attorney Succeeds Again In Getting Another Foreclosure Action Thrown Out As Lender Fails To Establish Legal Standing To Sue

In Douglas County, Colorado, Centennial Citizen reports:
  • [Dewey] Gibbs and his wife of 31 years were on the verge of losing their home to foreclosure when he read about a couple who successfully fought a foreclosure in Douglas County District Court. He decided to pick up the phone, figuring, “What have we got to lose?” [...] The phone call was to Castle Rock attorney Michael Robinson, who successfully argued a case for a Larkspur woman in a similar situation. [...] In Robinson’s eyes, Dewey and Diane Gibbs faced a similar situation.


  • On July 9, Douglas County District Court Judge Nancy Hopf found in the Gibbs’ favor in a Rule 120 hearing, a standard hearing designed to give the borrower his or her day in court. Her reason? Deutsche Bank could not prove its interest in the house. “[Deutsche Bank] has failed to show that it is the real party in interest in this matter,” according to Hopf’s order of dismissal. “Only the real party in interest may bring an action such as this Rule 120 action.”

  • On the day the Gibbs walked out victorious, 20 other Rule 120 cases went unheard because the borrowers did not respond to the foreclosure notice, Robinson said. "People just give up,” he said. “And they really don’t have to.”

  • Robinson has three similar cases in the works and had to turn away a handful of people who called after reading about the Sadler case. Their phone calls came after the Rule 120 hearing date expired, by which time it was too late to file a response, he said. “There’s this little window of opportunity once you get a Rule 120 notice,” Robinson said.

For more, including how the Gibbs reportedly reached an agreement on their mortgage with Option One by sending the lender $3,035 on June 24 in an effort to save their home, only to receive a notice of foreclosure the next day in connection with the same mortgage from Deutsche Bank saying it had, on June 16, begun foreclosure proceedings against their home, see No more ‘grasping at straws’ for couple.

For the post on the earlier Douglas County foreclosure action that was successfully thrown out of court, see Colorado Judge Jams Foreclosure Attempt Due To Lender's Failure To Prove "Legal Standing"; Company Official Found Not Credible.

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 gamma

One More Suspect Added To List Of Defendants In Alleged Metropolitan Money Store Foreclosure Rescue Scam

In Greenbelt, Maryland, The Associated Press reports:
  • A ninth person has been charged in what prosecutors describe as a $35 million dollar scheme to defraud homeowners facing foreclosure. Thirty-six-year-old Richard Allison of Camp Springs has been charged with conspiracy to commit mail and wire fraud. Federal prosecutors say Allison was part of the Metropolitan Money Store scam. He provided legal services to JoyJackson, president of the Lanham-based business, and others prosecutors say were part of the conspiracy. [...] Allison is accused of acting as a straw buyer on two properties and creating loan documents with false financial and personal information.

For the story, see 9th person charged in Money Store scam.

See also, U.S. Attorney's Press Release: Additional Defendant Charged in Metropolitan Money Store Mortgage Fraud Scheme.

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

New Hampshire Couple Entangled In Alleged Foreclosure Rescue, Sale Leaseback Scam

In Sandwich, New Hampshire, New Hampshire Public Radio reports:
  • Irwin and Inger Young are fighting to save their home. The family is just one of thousands to struggle with the mortgage foreclosure crisis. But the couple isn’t in this position because they lived in a house they couldn’t afford. They were- allegedly- victims of a home mortgage rescue scheme.


  • [T]he Young’s lawyer, Elliot Berry says his office- New Hampshire Legal Assistance- has received a number of complaints against [Houston Finance and Leasing, the Manchester foreclosure rescue operator reportedly involved].

For more, see Sandwich Couple Allegedly Swindled Out of their Home.

Nebraska Law Regulating Foreclosure Rescue Transactions With Financially Strapped Homeowners Goes Into Effect

In Lincoln, Nebraska, The Associated Press reports:
  • Dozens of laws passed by the Nebraska Legislature this spring go into effect [today].

  • [One] law is designed to protect desperate homeowners facing foreclosure from so-called foreclosure consultants. Some of the consultants reportedly have encouraged people who get foreclosure notices to sign over their homes.

Source: Dozens of new laws to go into effect on Friday.

Go here for the Nebraska Foreclosure Protection Act.

NFL's Patriots, Fed To Host Foreclosure Prevention Workshop At Gillette Stadium

In Boston, Massachusetts, WCVB-TV Channel 5 reports:
  • The New England Patriots Charitable Foundation and the Federal Reserve Bank of Boston will host a foreclosure prevention workshop at Gillette Stadium in August. The free workshop will be held on Tuesday, Aug. 12, from 1 p.m. to 8 p.m. The event is an opportunity for homeowners who are in financial distress or concerned about foreclosure to sit down with their lender face-to-face and avoid foreclosure, if possible.

  • "We host many events at Gillette Stadium, but this one is especially meaningful," said Robert Kraft, chairman and CEO of The Kraft Group. "Many New Englanders are struggling with mortgage difficulties. We hope this workshop will help homeowners resolve issues and remain in their homes. We're happy to support this event and provide Gillette Stadium as the venue."

For more, including the list of usual suspects from the mortgage lending & servicing "rackets" expected to attend, see Gillette To Host Foreclosure Workshop (Event Free, Open To Public).

Thursday, July 17, 2008

Judge Orders Mediation With DC Homeowners Snagged In Alleged Metropolitan Money Store Foreclosure Rescue Scam

In Washington, D.C., The Washington Post reports:
  • A D.C. Superior Court judge ordered prosecutors and mortgage lenders yesterday to begin mediation with District residents who were among 400 Washington area homeowners caught in an alleged mortgage scheme operated by a Prince George's County company.


  • D.C. Superior Court Judge Joan Zeldon ordered the District's prosecutors and the 13 attorneys representing various mortgage lenders to enter into mediation with owners of 25 D.C. homes and 20 area residents who became straw buyers in the scheme. The mediation is designed to quickly return houses to the original owners.

  • Prosecutors said Metropolitan [Money Store] never paid the agreed-upon mortgages and left the houses, some of which have since gone into foreclosure, with the straw buyers. Seven of the straw buyers who attended yesterday's hearing agreed with the judge's decision. District prosecutors have said that once the houses are returned to the owners, they will not pursue charges against the straw buyers.

For more, see Mediation Is Next To Save Homes (Houses Went to Straw Buyers).

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

Brooklyn Trial Judge Nixes "Rubber Stamp Method" Of Adjudicating Foreclosures; Lenders, Lawyers Lacking Legal Standing To Bring Actions Get Bounced

In a recent article in the National Law Journal, Brooklyn Supreme Court Justice Arthur M. Schack, in connection with his approach to the apparent sloppy paperwork being filed by foreclosing lenders and their attorneys, was quoted as follows:
  • "I deny more foreclosures than I approve," [...]. "I want to see the servicing agent's power of attorney, I want to see all the paperwork before I approve it. If the paperwork is garbage, I deny it. If you're going to take away someone's home, it should be done properly."
After a review of some of his foreclosure cases, it appears that he wasn't kidding. Certainly, he has opted against using the ever-popular "rubber stamp method" of adjudicating foreclosures that many of his judicial colleagues around the country have found so handy when in a hurry to clear their respective caseloads.

Further, in most of the cases listed below, the homeowner facing foreclosure either was not represented by an attorney, or didn't bother to show up to court at all. Inspite of this, Justice Schack took out his fine tooth comb anyway, went through all the documents, and asked a lot of questions that the lenders were going to have a tough time answering.

Among the issues Justice Schack points to in some of his decisions when denying a foreclosure because the alleged plaintiff did not have legal standing to file the action are:
  1. defective powers of attorney,
  2. faulty affidavits,
  3. failure to file pooling and servicing agreements with the court,
  4. conflicts of interest of individuals signing assignments, affidavits, etc. as officers for various mortgage companies,
  5. defective verified complaint,
  6. assignments of the mortgages being foreclosed subsequent to the commencement of the foreclosure action,
  7. failure to record corporate resolution, and
  8. no evidence of alleged assignments.
He has also shown no reluctance in admonishing lenders' attorneys by giving terse warnings of sanctions for filing actions that may be frivolous, in that, by filing foreclosure actions for companies that lacked standing to sue, the actions appear to be a waste of judicial resources, typically discussing the Part 130 Rules of New York law, which give the courts a remedy to deal with frivolous conduct.

In rendering these decisions, he gives this reminder to the lenders and their attorneys of the requirement that if they don't have legal standing to sue, they have no business bringing the foreclosure actions and wasting judicial resources:
  • The Court of Appeals (Saratoga County Chamber of Commerce, Inc. v Pataki, 100 NY2d, 901, 812 [2003]), cert denied 540 US 1017 [2003]) held that "[s]tanding to sue is critical to the proper functioning of the judicial system. It is a threshold issue. If standing is denied, the pathway to the courthouse is blocked. The plaintiff who has standing, however, may cross the threshold and seek judicial redress." In Carper v Nussbaum, 36 AD3d 176, 181 (2d Dept 2006), the Court held that "[s]tanding to sue requires an interest in the claim at issue in the lawsuit that the law will recognize as a sufficient predicate for determining the issue at the litigant's request." If a plaintiff lacks standing to sue, the plaintiff may not proceed in the action. (Stark v Goldberg, 297 AD2d 203 [1d Dept 2002]). "Sine [sic] standing is jurisdictional and goes to a court's authority to resolve litigation [the court] can raise this matter sua sponte." (Axelrod v New York State Teachers' Retirement System, 154 AD2D 827, 828 [3d Dept 1989]).

HSBC Bank USA, N.A. v Yeasmin, 5/02/2008, 2008 NYSlipOp 50924(U) [19 Misc 3d 1127(A)]; Decided May 2, 2008.


In Ameriquest Mtge. Co. v Basevich, 6/26/2007, 16 Misc 3d 1104(A), 2007 NYSlipOp 51262(U), (among other cases), Justice Schack writes:

  • Professor David Siegel, in NY Prac, § 136, at 232 [4th ed] instructs that: [i]t is the law's policy to allow only an aggrieved person to bring a lawsuit . . . A want of "standing to sue," in other words, is just another way of saying that this particular plaintiff is not involved in a genuine controversy, and a simple syllogism takes us from there to a "jurisdictional" dismissal: (1) the courts have jurisdiction only over controversies; (2) a plaintiff found to lack "standing" is not involved in a controversy; and (3) the courts therefore have no jurisdiction of the case when such a plaintiff purports to bring it."(1)

The following is a compilation of links of some of Justice Schack's decisions over the last year and a half or so in which he has denied foreclosure because of the questionable and/or faulty paperwork submitted in a foreclosure action that led him to the conclusion that the alleged plaintiffs in the following foreclosure actions did not have legal standing to bring suit:

  1. American Brokers Conduit v Zamalloa, 9/11/2007, 2007 NYSlipOp 32806(U);

  2. Ameriquest Mtge. Co. v Basevich, 6/26/2007, 16 Misc 3d 1104(A), 2007 NYSlipOp 51262(U);

  3. Aurora Loan Servs., LLC v Sattar, 10/09/2007, 17 Misc 3d 1109(A), 2007 NYSlipOp 51895(U);

  4. Bank of New York v Mulligan, 6/03/2008, 2008 NYSlipOp 31501(U);

  5. Bank of New York v Orosco, 11/19/2007, 2007 NYSlipOp 33818(U);

  6. Countywide Home Loans, Inc. for the Benefit of DB Structured Products, Inc. v Persaud, 01/15/2008, 2008 NYSlipOp 30076(U);

  7. Deutsche Bank Natl. Trust Co. v Castellanos, 5/11/2007, 15 Misc 3d 1134 (A), 2007 NYSlipOp 50978(U);

  8. Deutsche Bank Natl. Trust Co. v Castellanos, 1/14/2008, 18 Misc 3d 1115(A), 2008 NYSlipOp 50033(U);

  9. Deutsche Bank Natl. Trust Co. v Clouden, 9/18/2007, 16 Misc 3d 1140(A), 2007 NYSlipOp 51767(U);

  10. Deutsche Bank Natl. Trust Co. v Maraj, 1/31/2008, 18 Misc 3d 1123(A), 2008 NYSlipOp 50176(U);

  11. EMC Mtge. Corp. v Batista, 6/05/2007, 15 Misc 3d 1143(A), 2007 NYSlipOp 51133(U);

  12. Fremont Inv. & Loan v McBean, 11/26/2007, 17 Misc 3d 1132(A), 2007 NYSlipOp 52229(U);

  13. GE Capital Mtge. Servs., Inc. v Powell, 11/13/2007, 18 Misc 3d 228, 2007 NYSlipOp 27463;

  14. HSBC Bank USA v Perboo, 7/11/2008, 2008 NYSlipOp 51385(U);

  15. HSBC Bank USA, N.A. v Betts, 4/23/2008, 2008 NYSlipOp 31170(U);

  16. HSBC Bank USA, N.A. v Charlevagne, 11/15/2007, 2007 NYSlipOp 33673(U);

  17. HSBC Bank USA, N.A. v Cherry, 12/17/2007, 18 Misc 3d 1102(A), 2007 NYSlipOp 52378(U);

  18. HSBC Bank USA, N.A. v Valentin, 1/30/2008, 18 Misc 3d 1123(A), 2008 NYSlipOp 50164(U);

  19. HSBC Bank USA, N.A. v Yeasmin, 5/02/2008, 2008 NYSlipOp 50924(U);

  20. NYCTL 2006-A Trust v Kin Kan Wong, 1/09/2008, 2008 NYSlipOp 30037(U);

  21. NYCTL-1 Trust v Cruz, 6/07/2007, 15 Misc 3d 1144(A), 2007 NYSlipOp 51144(U);

  22. NetBank v Vaughan, 6/13/2007, 15 Misc 3d 1147(A), 2007 NYSlipOp 51197(U);

  23. Nomura Credit & Capital, Inc. v Washington, 4/30/2008, 2008 NYSlipOp 50883(U);

  24. Perla v Real Prop. Solutions Corp., 4/28/2008, 2008 NYSlipOp 50846(U);

  25. U.S. Bank National Association v Maynard, 11/26/2007, 2007 NYSlipOp 33766(U);

  26. U.S. Bank National Association, Trustee v Grant, 11/09/2007, 2007 NYSlipOp 33631(U);

  27. U.S. Bank Natl. Assn. v Bernard, 2/14/2008, 18 Misc 3d 1130(A), 2008 NYSlipOp 50247(U);

  28. U.S. Bank v Videjus, 4/29/2008, 2008 NYSlipOp 50851(U);

  29. Wells Fargo Bank, N.A. v Farmer, 2/04/2008, 18 Misc 3d 1124(A); 2008 NYSlipOp 50199(U);

  30. Wells Fargo Bank, N.A. v Farmer, 6/05/2008, 2008 NYSlipOp 51133(U);

  31. Wells Fargo Bank, N.A. v Guy, 5/01/2008, 2008 NYSlipOp 50916(U);

  32. Wells Fargo Bank, Natl. Assn. v Reyes, 6/19/2008, 2008 NYSlipOp 51211(U).

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.

(1) If a court grants a foreclosure judgment in a case where it is subsequently determined that the plaintiff mortgage lender lacked standing (and accordingly, the court lacked jurisdiction over the case), does this mean that the foreclosure judgment is void? If so, does this mean that everything devolving from that judgment (ie. the subsequent foreclosure sale, and any subsequent private sales or other conveyances of the foreclosed property) is also void? Can anyone imagine the mess that may currently exist with defective real estate titles around the country that have a recent foreclosure in its chain of title where the court lacked jurisdiction because of mortgage lenders and their attorneys who were as sloppy as those described in the above list of cases? I can only imagine that this is an issue that title insurance underwriters and agents don't want anyone thinking or asking about. missing mortgage foreclosure docs beta missing mortgage foreclosure docs gamma SloppyForeclosuresAlpha

WaMu Temporarily Blocked From Booting Tenants In 17 Duplexes As Foreclosed Landlord Files 11th Hour Bankruptcy

In Grand Rapids, Michigan, The Grand Rapids Press reports:
  • Call it a stay of eviction. Tenants expecting to be evicted from some foreclosed Northeast Side apartments as soon as today received a 30-day reprieve, according to the bank holding the mortgage. Washington Mutual Bank dropped its court plans Tuesday to claim properties once owned by Tom and Melody Jacobs and force eviction of tenants from apartments in the 900 block of Maybelle Street NE.


  • "The borrower filed Chapter 7 bankruptcy, which stays all proceedings. For the tenants, it means they are not in danger of being evicted. At the minimum, there is a 30-day wait before anything can happen," said bank attorney Marshal Isaacs from his Troy office. Lawyers say the monthlong window is expected to extend to tenants in other of the Jacobses' foreclosed properties who recently were slapped with last-minute eviction notices at 903-911 Diamond Ave. NE and the Northfield Apartments at 1239-1245 Northfield St. NE.

For more, see Evictions on hold at foreclosed apartment units.

For an earlier post on this story, see Tenants In 17-Unit Complex Face Foreclosure Eviction; Offered $1,000 To Leave Or Face The Boot. equity skimming unwittingly digamma

As Code Enforcement Caseload Grows In One Upstate NY Municipality, Prosecutors Seek Foreclosed Owners' Help In Going After Lenders

In Lockport, New York, the Lockport Union Sun & Journal reports:
  • A fresh batch of housing cases involving financially strapped property owners has emerged in Lockport City Court. [...] Nearly half the new cases involve property that is being taken by a lender or was deserted by an owner for lack of means to maintain it.


  • [D]efendants claiming their mortgages were foreclosed must bring proof of that, so the city can see lender identities and contact information and start hitting them up for repair commitments. [...] Initially [local prosecutor Michael] Brooks took the prosecutorial stance that the owners of problem properties remain responsible for code violations even if they’ve been ousted by a foreclosing lender or don’t have the financial means to deal with them.

  • Now Brooks is asking foreclosed owners’ help to secure justice from lenders, who arguably have some ownership interest in property even if they don’t possess the titles. He’s doing so at the direction of Mayor Michael Tucker, who objected strongly to the outcome of a recent case involving an impoverished owner and a reluctant bank.

For more, see HOUSING COURT: City is seeking lender information.

Go here for other posts on code violation problems associated with homes in legal limbo; when a foreclosing lender is reluctant to complete a foreclosure action or fails to record its deed after foreclosure sale to avoid getting clipped with housing fines. responsibility code violations foreclosure

Vacant Foreclosed Home Being Used As A Local Dump; Clean-Up Without Court Order Would Be Criminal Trespass, Says City

In Centennial, Colorado, CBS4 reports:
  • People who live in one Centennial neighborhood are worried more piles of trash could end up in front of foreclosed homes as owners are evicted and banks take over after mortgages are defaulted. The front yard of one home has turned into a dump after the family moved out. [...] "People are coming through and using it as a dump now, there's more there now then there was to start with," said [...] another neighbor.


  • As for the trash pile, Centennial's code enforcement spokesperson said Fidelity Bank now owns the property. The city said trespassing to clean it up would be a crime. [...] A judge would have to give approval for anyone else besides the bank to clean up the trash.

For the story, see Trash Piles Up Outside Foreclosed Centennial Home.

Orlando-Area HOA Refusing To Rent To Gays, Unmarried Couples?

In Orange County, Florida, WFTV Channel 9 reports:
  • An East Orange County subdivision is facing a dilemma. Several residents say the Homeowner's Association at the Rybolt Reserve subdivision in Orange County is discriminating against renters. "The Homeowner's Association is totally out of control," said Suzane Musashe of Jander Property Management. Musashe leases homes for investors in Rybolts Reserve. She said the association is refusing to rent to gay couples or other adults who are not married.

For more, see HOA Won't Allow Homes To Be Rented To Homosexuals, Unmarried Couples (read story) (watch video).

Wednesday, July 16, 2008

No Bail For Brooklyn Developer Charged In Alleged NYC Condo Scam; Residents Continue Fighting Eviction

In Crown Heights, Brooklyn, the New York Daily News reports:
  • A Brooklyn developer accused of swindling some 40 Crown Heights families out of millions was ordered held without bail Tuesday night after returning from his Israel hideout. Eliyahu Ezagui, 47, pocketed $15 million in mortgages on condos he sold to families living in two buildings he developed in the Brooklyn neighborhood. Authorities said it was the biggest local case of subprime mortgage fraud on record.


  • Robert Tolchin, lawyer for 17 tenant families facing eviction, said litigation with mortgage lending banks and Ezagui is continuing in Brooklyn Civil Court. Numerous foreclosure notices have been served, but no tenants have been evicted.

For more, see No bail after fugitive developer busted, charged in massive condo scam.

For earlier media reports on this story, see:

Countrywide Settles Case Accusing It Of Abusive Practices In Almost 300 Mortgage Loans Overseen By Pittsburgh Bankruptcy Court

In Pittsburgh, Pennsylvania, The New York Times reports:

  • Countrywide Home Loans has agreed to pay $325,000 to the Chapter 13 bankruptcy trustee in Pittsburgh, settling a case that accused the lender of abusive practices in almost 300 mortgage loans overseen by the court.

  • The settlement, which has been filed with the court and must be approved by the federal judge overseeing it, arose out of motions filed last October by Ronda J. Winnecour, the chapter 13 trustee for the district of Western Pennsylvania. Saying that the company had lost or destroyed more than $500,000 in checks paid by homeowners in foreclosure from December 2005 to April 2007, Ms. Winnecour asked the bankruptcy court to sanction Countrywide, the nation’s largest loan servicer.

For more, see Countrywide Settles Lending Suit in Pennsylvania.

Go here for other posts on the Countrywide matter in the Pittsburgh federal bankruptcy court.

"Dare To Dream" Investment Program Results In Ghost Town, Leaving Investors Holding The Bag

In Grantsville, Utah, The Salt Lake Tribune reports:

  • The ads said, “Dare to Dream,” and Jeff Denison was among dozens who did. Now his dream is a nightmare. All he had to do to get into Utah's red-hot real estate market in 2006 was sign a contract with Dare to Dream Investments. That signature allowed his good credit to underwrite the purchase of a building lot and construction of a house. He didn't have to lift another finger. Dare to Dream would do it all for him: Find the lot, hire the contractor, sell the house. He would get 55 percent of the profit right off the top. No muss, no fuss. Denison liked the program so much, he signed up for two houses.

  • Now he's left holding the bag on two $300,000 mortgages beyond the one he owes on his actual home. [...] Making matters even worse, the structures have piles of liens against them by subcontractors who didn't get paid. [...] His houses are among 42 built in Grantsville's Silver Fox development by Dare to Dream investors. All but three remain empty, creating a modern-day ghost town.

For more, see Investors: 'Dare to Dream' real-estate deal became a nightmare (They say firm misled them with inflated land appraisals).

More Financially Strapped Americans Hitting Up Their Retirement Plans, Insurance Policies For Quick Cash

The Wall Street Journal reports:
  • A growing number of Americans, maxed out on credit cards and unable to get home-equity loans because of tighter lending standards, have found a new source of emergency cash: retirement plans and insurance policies. While tapping these funds may seem like a convenient way to address an immediate need, such as a looming medical or tuition bill, financial advisers urge caution. They say that consumers should carefully weigh the ramifications -- the possibility of a big tax bill and far less savings in retirement, for example -- before dipping into a 401(k), Individual Retirement Account or life-insurance policy.

For more, see Cashing Out (Retirement plans and insurance policies offer a way to get money quickly. But there are real disadvantages).

Mortgage Lender Erroneously Sends Out 9,000 Default Notices To Customers

In Clarksville, Tennessee, WSMV-TV Channel 4 reports:
  • [A] computer glitch was cited as what caused thousands of certified letters to be sent out alerting US Bank mortgage holders that they were late on their payments and that if it wasn’t current in 30 days, the bank would be inspecting their properties for foreclosure and public sale. [...] US Bank issued a statement that said the accidental mailings stemmed from a computer error and were limited to a group of customers in Tennessee.
For more, see 9,000 Mistakenly Warned Of Mortgage Default (Bank Says Computer Glitch Led To Error).

Tuesday, July 15, 2008

The Secret's Out: Foreclosing Lenders Around The Country Continue To Get Hammered Over Missing, Inconsistent Mortgage Docs

The National Law Journal reports:
  • Alarmed by the dramatic rise in housing foreclosures across the nation, judges have taken a variety of actions to slow the pace, ranging from outright dismissals for incomplete work to mandated mediation to threatening attorneys with sanctions.


  • A number of suits have accused banks of allegedly taking shortcuts to rush foreclosures through, often using so-called "foreclosure mills" — law firms that handle a high volume of foreclosure actions — to handle the cases, according to foreclosure defense lawyers, bankruptcy lawyers and consumer rights groups.


  • In Ohio, which has been particularly hard hit by foreclosures, a consortium of plaintiffs' attorneys last month filed a class action against Deutsche Bank A.G. on behalf of Ohio homeowners facing foreclosure. The suit alleges that the bank lacks standing to bring foreclosures throughout Ohio and is missing key mortgage documents. Whittiker v. Deutsche Bank National Trust Co., No. 1:08cv00300 (N.D. Ohio).(1)

One Brooklyn, New York trial judge's approach to the apparent sloppy paperwork being filed by foreclosing lenders and their attorneys is described in these excerpts:

  • "I deny more foreclosures than I approve," said Justice Arthur Schack(2) of Kings County, N.Y., Supreme Court, in Brooklyn. "I want to see the servicing agent's power of attorney, I want to see all the paperwork before I approve it. If the paperwork is garbage, I deny it. If you're going to take away someone's home, it should be done properly."


  • In a blistering opinion in June, Schack, the Brooklyn judge, threatened Mary McLoughlin, an attorney at Rosicki, Rosicki & Associates of Carle Place, N.Y., with sanctions for filing a foreclosure on behalf of Wells Fargo. After doing his own research in the [computer-accessible New York City public records], Schack discovered that Wells Fargo never owned the mortgage. Schack denied the foreclosure and further set a hearing for Aug. 1 to afford her a chance to explain why she should not be sanctioned for "frivolous conduct." Wells Fargo Bank v. Reyes, No. 5516/08 (Kings Co., N.Y., Sup. Ct.) [2008 NY Slip Op 51211(U) [20 Misc 3d 1104(A)]; Decided June 19, 2008].(3)

For the whole story, see Judges, attorneys work to stanch foreclosures (As actions surge, so do dismissals, mediation orders) (no subscription required).

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.

(1) The suit alleges that, because Deutsche Bank lacked standing to bring foreclosure actions, its attempt to do so constituted violations of the Federal Fair Debt Collection Practices Act, as well as Ohio RICO, R.C. 2923.32 Engaging in pattern of corrupt activity, both on its part as well as on the part of its attorneys filing the foreclosure actions. In addition to damages and other relief, the homeowners seek the return of their homes lost to foreclosure, and request that the attorneys representing Deutshce Bank fork over all the fees they collected on the foreclosure actions.

(2) Ina recent case, Deutsche Bank Natl. Trust Co. v Maraj 2008 NY Slip Op 50176 (U); [18 Misc 3d 1123(A)]; January 31, 2008; Justice Schack, in denying a foreclosure, wondered if he was the target of a corporate "Kansas City Shuffle" (a reference to the 2006 film, Lucky Number Slevin, in which the term is explained by a hitman played by Bruce Willis) in that the paperwork filed by the foreclosing mortgage lender raised questions in his mind the answers to which weren't readily apparent to him, and which created the appearance of possible fraudulent activity, according to his written opinion. See earlier post, Brooklyn Judge Presides Over A Corporate "Kansas City Shuffle" In Foreclosure Action?

(3) In other gems by Justice Schack in which he denies foreclosure to other foreclosing mortgage lenders for submitting questionable paperwork, see HSBC Bank USA v Perboo, 2008 NY Slip Op 51385(U); Decided last Friday - July 11, 2008; and also a 2007 decision, Deutsche Bank Natl. Trust Co. v Castellanos, 2007 NY Slip Op 50978(U) [15 Misc 3d 1134(A)]; Decided on May 11, 2007, a foreclosure action in which he subsequently again denied foreclosure in the opinion in Deutsche Bank Natl. Trust Co. v Castellanos, 2008 NY Slip Op 50033(U) [18 Misc 3d 1115(A)]; Decided January 14, 2008. missing mortgage foreclosure docs beta missing mortgage foreclosure docs gamma Arthur M. Schack ForeclosureMillAttorneysAlpha SloppyForeclosuresAlpha

Brooklyn Judiciary To Establish Mandatory Settlement Conferences In Certain Foreclosure Actions; Law Students To Participate In Process

In Brooklyn, New York, the Brooklyn Daily Eagle reports:
  • In the Brooklyn Supreme Court’s continued effort to fight the foreclosure crisis that is wreaking havoc across the country and ripping homes away from thousands of families, Administrative Judge Abraham Gerges met with community-board leaders last week to discuss the court’s role.


  • According to Gerges, he and other members of the judiciary will be meeting with various community boards throughout the borough, as well as the mortgage lenders. A system to have certain plaintiffs and defendants meet for mandatory settlement-conferences will be established, and students from Brooklyn Law School across the street are being enlisted to help in the legal process.

For more, see Foreclosure Talks Continue at (not in) Court (Brooklyn Supreme ‘One of the More Progressive Courts Across Country’).

NFL Punter Among Many Who Are Out $60K+ As 21 Story Charlotte Luxury Tower Goes Into Foreclosure

In Charlotte, North Carolina, WCNC-TV reports:
  • The Park [condominium tower] first started pre-selling units in 2004. By early 2008, a source close to the development confirms more than 80 units were under contract. But court documents show problems with financing led to bills not being paid, and now the main lender trying to foreclose. Where does this leave buyers? That’s a question Carolina Panther’s punter Jason Baker asked. He bought into the project last October, putting $62,500 down on a unit on the 18th floor.


  • Baker isn’t alone. WCNC has been contacted by numerous buyers, many of whom are also out more than $60,000 and fear their money is gone.

For more, see Lawsuit, foreclosures haunt Uptown condo project.

For story updates, 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

Cops Nab Two Suspects In "Phony Landlord" Rent Scam Using Vacant Foreclosures, Craigslist Ads To Pocket Cash From Unwitting Tenants

In Carlsbad, California, the San Diego Union Tribune reports:
  • Police unraveled an elaborate scheme Friday involving two men who allegedly posed as landlords and then collected up to thousands of dollars in payments from unsuspecting renters, authorities said. According to police, the men entered at least two vacant Carlsbad homes that were in foreclosure and then listed them for rent on the Web site Craigslist.

  • They collected possibly thousands of dollars in security deposits and rent from several people, according to paperwork that officers found on the men.

For more on how the scam fell apart, see 2 men arrested in scam with foreclosed homes.

See also, Police arrest two in connection with Internet rental scam.

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

Monday, July 14, 2008

FDIC Halts IndyMac Mortgage Foreclosures; Aggressive Pursuit Of Loan Modification Strategies To Follow, Says Agency Chairman

In Washington, D.C., Reuters reports:
  • The Federal Deposit Insurance Corp has temporarily halted any foreclosures on the $15 billion of bank-owned mortgage loans found in IndyMac's portfolio, FDIC Chairman Sheila Bair said on Monday. Bair has scolded mortgage lenders for being too slow to help distressed borrowers restructure their home loans. "Modified loans will be worth more than foreclosed loans," she said in an interview on CNBC television. IndyMac, which the FDIC took over after it failed on Friday, had a $200 billion mortgage servicing portfolio.

For more, see FDIC halts foreclosure on IndyMac mortgages.

See also, The Wall Street Journal: IndyMac Reopens, Halts Foreclosures on Its Loans:

  • [F]ederal Deposit Insurance Corp. Chairman Sheila Bair, who has been one of the most outspoken officials calling for banks to ease up on struggling homeowners, said that the agency is "really focused" on keeping borrowers in their homes for both their sakes and to maximize IndyMac's value for taxpayers. "We will very aggressively pursue loan-modification strategies for unaffordable loans to make them affordable on a long-term, sustainable basis," Ms. Bair said in an interview Monday.

Discounted Mortgage Notes The Key To Addressing Foreclosure Crisis?

In a column on Bloomberg News, commentator John F. Wasik writes:
  • [W]here politicians and bankers see vexing liabilities in defaulted mortgages and foreclosures, Robert Lee sees opportunities as he picks up the pieces of the housing bust. [...] Buying defaulted mortgages at a discount, Lee encourages and enables owners to stay in their properties and avoid foreclosure. His company buys the loans, not the homes, then employs a "work- out, not kick-out" approach in working with homeowners.

  • Unless a comprehensive federal bailout reduces foreclosures, areas with the highest defaults will continue to show dramatic price declines as more properties fall into the hands of lenders and courts. The idea of discounting notes to reflect realistic market values may be the key to getting the market on its feet.

For more, see Discounted Mortgage Notes Can Stop Foreclosures.

Oregon Cops Seek Suspect In Alleged "Mortgage Watchdog" Scam

In White City, Oregon, the Mail Tribune reports:

  • Police are asking the public to be aware of a man involved in a mortgage scam that has cost at least one White City resident $300 and opened her up to identity theft. A White City woman was approached recently by a man claiming to work for a mortgage "watchdog" group. The suspect said he could look over mortgage paperwork to spot potential errors that could save the buyer thousands of dollars, Jackson County Detective Sgt. Colin Fagan said. "He charges a $300 fee for this bogus service," Fagan said. "Also, he takes the paperwork with him and does not return."


  • Mortgage paperwork gives a criminal a wealth of financial information that could be used to drain a bank account or open credit cards in the victim's name, Fagan said. "Mortgage papers contain your social security number, full name and date of birth," Fagan said. "That's all an identity thief needs to get started. People under foreclosure are vulnerable to begin with and this is the last thing they need." Police believe the suspect is Bart Arthur Blahosky, 50, who has a long history of fraud spread over Utah, Nevada and Idaho. "Our victim said he was dressed very nicely and sounded like a lawyer," Fagan said.

For more, see Mortgage scam is front for identity theft (Medford police believe they have an identified suspect, but he remains at large).

For story update, see: More victims surface in 'mortgage watchdog' scam (Suspect poses as a mortgage watchdog, then acquires information for identity theft, sheriff's deputies say).

Mezuzah Not Protected Under Fair Housing Act, Federal Appeals Court Rules

In Chicago, Illinois, the ABA Journal reports:
  • A federal appeals court has ruled that the Fair Housing Act does not protect the right of condominium owners to display mezuzot on their doorframes. The Chicago-based 7th U.S. Circuit Court of Appeals said the federal law requires accommodation for the handicapped but not for religion, the New York Sun reports. Content-neutral regulations that have the effect of banning religious displays are permitted, the court said in a 2-1 opinion (PDF).


  • The majority opinion by Judge Frank Easterbrook said the regulation was content-neutral. "It bans photos of family vacations, political placards, for-sale notices and Chicago Bears pennants."

  • Dissenting Judge Diane Wood said the rule operated as a constructive eviction of observant Jewish residents.

Source: Housing Law Doesn’t Protect Right to Mezuzah, Appeals Court Rules.

For the decision, see Bloch v. Frischolz (7th Cir., July 10, 2008).

Go here for other posts on condo association problems with mezuzot.


In disagreeing with her colleagues in the majority, Circuit Judge Wood made her feelings known by issuing a 17-page dissenting opinion in response to the 6-page majority opinion. A few of her comments are included in this excerpt from the New York Sun article:

  • In dissent, Judge Diane Wood said enforcement of the rule amounted to a "constructive eviction" of observant Jewish residents, as well as an effective bar on Jews moving into the housing complex. "Hallway Rule 1 operates exactly as a redlining rule does with respect to the ability of the owner to sell to observant Jews. No such person could buy a unit at Shoreline Towers," she wrote. "The Association might as well hang a sign outside saying 'No observant Jews allowed.'"

Landlord Hit With $24K+ In Fines For Failure To Maintain Rentals; Believed Foreclosure Actions On Homes Would Force Court To Dismiss Code Violations

In Winnebago County, Wisconsin, the Oshkosh Northwestern reports:
  • A Winnebago County Circuit Court judge fined an Oshkosh landlord more than $24,000 for building code violations he did not address over a two-year period. Judge William Carver fined Kelly Burnett a total of $24,325 [June 30] for city building code violations that went largely unattended to since January, when Burnett pleaded no contest to the charges and was given six months to make progress on the violations. Carver on Monday said he saw little improvement to dangerous situations that included unsafe electrical conditions, failure to maintain units to minimum building code regulations, failure to provide adequate heating and failure to obtain building permits.


  • He [...] said he pleaded no contest in January because he believed pending mortgage foreclosures on the majority of his properties — 30 foreclosure actions are either in progress or complete — would force the court to dismiss the code violations.
For more, see Landlord fined $24,000 for code violations.

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

Sunday, July 13, 2008

IndyMac Seized By Federal Regulators

Bloomberg News reports:
  • IndyMac Bancorp Inc. became the second- biggest federally insured financial company to be seized by U.S. regulators after a run by depositors left the California mortgage lender short on cash. The Federal Deposit Insurance Corp. will run a successor institution, IndyMac Federal Bank FSB, starting [Monday], the Office of Thrift Supervision said in an e-mail yesterday. The regulator blamed U.S. Senator Charles Schumer for creating a "liquidity crisis'' after a letter on June 26, in which he expressed concern that the bank may fail. The Pasadena, California-based lender specialized in so-called Alt-A mortgages, which didn't require borrowers to provide documentation on their incomes.


  • After peaking at $50.11 on May 8, 2006, IndyMac shares lost 87 percent of their value in 2007 and another 95 percent this year. The stock fell 3 cents to 28 cents at 4 p.m. New York time [Friday].
For more, see IndyMac Seized by U.S. Regulators; Schumer Blamed for Failure.

For a recent Center for Responsible Lending investigative report on this lender, see IndyMac: What Went Wrong? (How an "Alt-A" Leader Fueled its Growth with Unsound and Abusive Mortgage Lending).

IndyMac Subprime Related Lawsuits

For those interested in the kinds of allegations being made in subprime-related lawsuits brought by homeowners and others from all over the country involving IndyMac Bank as one of the named defendants, the following links will take you to copies of some of the actual lawsuits filed against this lender. These lawsuits are made available online courtesy of the Center for Responsible Lending ("CRL"), and are all referenced in an investtigative report CRL recently issued on IndyMac.

Alleged Bait & Switch Tactics (among other allegations):

  1. Ferguson v. IndyMac Bank, U.S. District Court for the Eastern District of New York, February 14, 2008;
  2. Howard v. Countrywide Home Loans Inc., U.S. District Court for the District of Columbia, 2008;
  3. Elouise Manuel v. American Residential Financing, Inc., et al, Superior Court of Gwinnett County, Georgia, 2008;
  4. Zurawski v. Mortgage Funding Corp., U.S. District Court for the District of New Jersey, 2008;
  5. Hartman v. Deutsche Bank National Trust Co., U.S. District Court for the Eastern District of Pennsylvania, 2007;
  6. Mitchell v. IndyMac Bank, U.S. District Court for the Eastern District of Virginia, 2008;
  7. Brannan v. IndyMac Bank, U.S. District Court for the District of Colorado, 2006;
  8. Darling v. IndyMac Bancorp, U.S. District Court for the District of Maine, 2006;
  9. Harris v. Vinson Mortgage Services, U.S. District Court for the Eastern District of Missouri, 2008;
  10. George v. IndyMac Bank, U.S. District Court for the Central District of California, 2008;
  11. Thomas v. DCI Mortgage Bankers, U.S. District Court for the District of New Jersey, 2007;
  12. Glover v. Equity Source, U.S. District Court for the District of New Jersey, 2007;

Alleged Racial Discrimination:

  1. Mables v. IndyMac Bank, (seeks class action status) U.S. District Court for the Northern District of Illinois, 2008;

Alleged Inflated Appraisals:

  1. Cedeno v. IndyMac, U.S. District Court for the Southern District of New York, 2006;

Alleged Falsified Paperwork:

  1. George v. IndyMac Bank, U.S. District Court for the Central District of California, 2008;
  2. Ware v. IndyMac Bank, U.S. District Court for the Northern District of Illinois, 2007;

Alleged Funding of Loans For Developer in an Area Known as a Hotbed for Mortgage Fraud Without Proper Due Diligence:

  1. Gaines v. Parisi, U.S. District Court for the Middle District of Pennsylvania, 2006;

Shareholder Class Action Lawsuit citing Alleged Questionable Lending Practices:

  1. Tripp v. IndyMac Bancorp, Inc., U.S. District Court for the Central District of California, 2007.

For the recently issued CRL report on IndyMac Bank, see IndyMac: What Went Wrong? (How an “Alt-A” Leader Fueled its Growth with Unsound and Abusive Mortgage Lending).

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 subprime lawsuits, subprime lender lawsuits

85 Year Old Widow Facing Foreclosure Sues Wachovia / World Savings For Unaffordable "Pick A Payment" Mortgage

In Oakland, California, KPIX-TV Channel 5 reports:
  • [A]dvocate [Maeve Elise] Brown at HERA [Housing and Economic Rights Advocates] has filed a lawsuit on [85 year old widow] Dollie Ross' behalf. In it, Brown says World Savings should have known Mrs. Ross would not have been able to afford the loan. "From the prior loans, World Savings knew the household income and knew that the 2006 refinance was beyond (Ross') ability to pay," the complaint reads. In fact, the complaint alleges that not only could Ross not afford the minimum payment, the regular principal and interest option on the loan was actually "two to three times (Ross') total income."

  • Her daughter Sally said, "When they came to see her, she was alone, she was suffering from pneumonia, she had vision problems and hearing problems, and she really was in no condition to understand what they were talking about."

For more, see Wachovia Sued Over 'Pick-A-Payment' Loans (read story) (watch video).

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

Ex-World Savings Loan Originator Sues Company For Retaliation For Reporting Alleged Improper Lending Practices

In Oakland, California, a story originally aired by KPIX-TV Channel 5 in May reports:
  • A former employee of Oakland's World Savings is suing the company (now owned by Wachovia) and its former principals, saying he was fired in retaliation for his reporting of improper practices and violations of state and federal laws [...] by World in selling loans in San Francisco and the Bay Area.


  • In the complaint, [ex-loan consultant Paul] Bishop claims World "preyed upon" desperate borrowers who were "enticed into bad/predatory loans…without being told the complete truth about the loans" and that "borrowers were not told the full story about the terms, assumptions or risks of their loans".


  • The complaint says Bishop began working for World in November of 2002 and in 2004 began to observe practices such as World brokers "helping outside brokers to circumvent underwriting guidelines" through classes where "it walked brokers through (World's) loan application and specifically told them to be sure borrowers qualify for loans, even indicating the necessity to overstate income, if need be, to get a borrower qualified."


  • The complaint further alleges that "World managers routinely overruled underwriting guidelines that would hae prevented loans from being approved" by using what the filing calls an "exception to policy" to get those loans approved. It says some decisions to deny loans were "overridden" by senior loan originating executives.

For more, see Oakland Bank's Lending Sparks Ex-Employee Lawsuit (read story) (watch video).

For a CBS "60 Minutes" interview with Paul Bishop (aired 2-15-09; 13+ minute video), see World of Trouble (read story) (watch video).

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

Ex-HUD Official Gets Unwittingly Snagged In Real Estate Scam

In Denver, Colorado, the Rocky Mountain News reports:
  • You would be hard-pressed to find someone more knowledgeable about foreclosures than Kevin Marchman. The Denver resident is a former top official at the Department of Housing and Urban Development, led the Denver Housing Authority for four years and heads a Washington, D.C., based nonprofit group, the National Organization of African Americans in Housing.

  • That agency serves as an advocate for affordable housing and for cracking down on "shady lending practices that have burned many of the nations riskiest subprime borrowers." Yet, Marchman, and his wife, Desiree, got caught up in a foreclosure action. "I feel like I have an obligation to talk openly about this," Marchman said. "I want people to read this and think, 'If it can happen to Kevin, it can happen to anybody.' "

To read what happened, see Expert snagged in subprime trap.

California Woman Under Probe For Alleged Foreclosure Rescue Scam Charged In Unrelated Case; Pocketed $66K From Senior In Phony Refi, Says Prosecutor

In Santa Cruz County, California, The Mercury News reports:
  • A Watsonville woman under investigation in Monterey County for allegedly duping dozens of defaulting homeowners out of thousands of dollars has been jailed in Santa Cruz County for unrelated grand theft charges. Melissa Dawn Garcia, 27, has pleaded not guilty to one count of elder financial abuse and one count of forgery in Santa Cruz County Superior Court. Garcia [...] allegedly convinced a 76-year-old Salinas woman to invest tens of thousands of dollars through Garcia, according to prosecutor Bill Atkinson.

  • "Basically this was a loan investment opportunity," Atkinson said. "Allegedly, Garcia said she was going to give it to a homeowner who was doing a remodel. To protect the victim, Garcia said the homeowner would give them a deed of trust to the home. Therein lies the rub. The homeowner was fictitious, the property that supposedly secured the loan was fictitious and the $66,000 never got past Melissa Garcia."

For more, see Watsonville woman suspected in $66K elder abuse scheme, separate loan refinancing scam (no longer available online).