Saturday, July 26, 2008

San Diego City Attorney's Lawsuit Against Countrywide The Target Of Satire

In a satirical commentary on the recent efforts of San Diego City Attorney Michael Aguirre in bringing a predatory lending lawsuit against Countrywide Financial to create a sanctuary in the city where foreclosures can be put on hold while people are helped to obtain affordable terms on their mortgages and stay in their homes, The Spoof! reports:
  • City Attorney Michael Aquirre announced plans today to designate this coastal city as an official Mortgage Foreclosure Sanctuary, and declared the national financial crisis over.


  • Aquirre said his bill would allow any mortgage holder in the country in danger of default due to predatory lending practices to apply for, and receive, an honorary homestead exemption making them eligible for sanctuary status. Among the first to file were Chairman of the Banking Committee, Senator Christopher Dodd (D. Cn), and Senator Kent Conrad (D. ND). Both Senators had received multiple preferential loans through contact with Country Wide Financial founder Angelo Mozilo. While both loans were below accepted market standards and prevailing rates, the Senators claimed they were "tricked" into signing the loans and that they were thereby "null and void" and all financial obligations should be waived.


  • Aguirre said there would be some limits on sanctuary coverage.

For more, including the limitations on sanctuary coverage set forth in the "Aguirre bill", see San Diego Declares Banking Crisis Over, Creates Mortgage Sanctuary for Deadbeats and Politicians.(1)

(1) Requires sense of humor.

California AG Settles Suit With Firm Accused Of Knowingly Using Unaffordable "Lease To Own" Agreements As Device For Pocketing Renters' Downpayments

In a July 18, 2008 press release:
  • California Attorney General Edmund G. Brown Jr. [...] announced a $150,000 settlement for aspiring homeowners who had their entire down payments unlawfully seized by Lease2OwnHomes for missing rent on a lease-to-own agreement. "We have obtained restitution for renters who were ripped off by an unscrupulous landlord who illegally seized down payments that were part of a lease-to-own home scam," Attorney General Brown said.

  • Under California law, if a renter misses a monthly payment in a lease-to-own program, the landlord may only seek eviction and unpaid rent. In this case, the landlord unlawfully seized the entire down payment for the purchase of the home in addition to seeking the eviction and unpaid rent.

According to his press release, among the activities Attorney General Brown accused Lease2OwnHomes of was providing a lease and option to purchase agreement when the company knew that consumers were not financially capable of meeting monthly payments required to successfully purchase a home.

For more, see Brown Obtains Restitution For Lease2OwnHomes Renter Rip-Off.

Fairfax Cops "Sting" Suspect In Another Alleged Rent Scam Using Vacant Foreclosures, Craigslist Ads To Reel In Unwitting Renters

In Fairfax County, Virginia, WRC-TV Channel 4 reports:
  • Detectives arrested a suspect in a series of rental home scams, according to the Fairfax County Police Department. Between July 13 and July 18, four prospective tenants reported that they were defrauded of money after singing [sic] contracts to rent homes. In each case, they found the rentals on Craigslist, contacted Richard Hiner, toured the homes and signed contracts that included payments, according to police. Later, they learned the homes were bank-owned and in foreclosure and Hiner had no affiliation with the properties.

  • Detectives posed as prospective tenants and responded to an online ad, setting up a meeting with Hiner, 31, police said. Hiner was arrested Thursday night when police determined he was not connected with the property. Hiner is charged with four counts of grand larceny by false pretense and three counts of burglary.

For the story, see Suspect Charged In Rental Home Scams (Prospective Renters Defrauded Of Money In Virginia).

In story update, see Pregnant Woman Among Victims Of Rental Home Scam (Man Accused Of Offering Homes Under Foreclosure For Rent) (go here for video report).

In a related story on D.C.-area vacant home rent scams, see WTTG-TV Fox 5: Foreclosure Rental Scam Makes a Comeback.

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

Fingers Point To "Elvis" Impersonator In Possible "Squatters' Rights" Rent Scam Using Vacant Vegas Homes In Foreclosure

In Las Vegas, Nevada, the KLAS-TV Channel 8 I-Team reports:
  • On one hand, he impersonates Elvis. But some say what he's doing isn't so entertaining. Real state agents Kristina Pearson and Harry Hall are trying to sell a house. It's in default and going through the foreclosure process. [...] A few months ago, someone broken in, switched the locks and then rented out the house. According to the rental agreement, a woman named Dawn Spencer has been living in the house since late April, paying $850 a month in rent.


  • "They rented the property from this Elvis Nargi," said Hall. We caught up with Nargi in his office with American Executive Realty. At first he told us he knew about the house, then denied it. [...] Eventually, Nargi admitted his company changed the locks and rented out the house, "You really, you really have -- it's written into the state constitution, you have civic right to make that property look good."


  • Sue Naumann heads up the Greater Las Vegas Association of Realtors. She says Nargi is abusing the squatter's rights law, "It sounds like a scam." While Nargi finally admitted to the allegations, he blames his staff. "There was a mistake made," he said.

For more, see:

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

Connecticut AG Claims Deed Theft In Civil Suit Against Alleged Church Thief; Seeks To Void Title Transfer & $1.15M Mortgage

In an April, 2008 press release:
  • [Connecticut] Attorney General Richard Blumenthal [...] announced a lawsuit(1) against a man who fraudulently posed as pastor of a Hamden church, transferred the church property title to his own church and then took out a $1.15 million mortgage on the property that ultimately defaulted.


  • "This imposter pastor has literally attempted a church hijacking," Blumenthal said. [...] My office will fight vigorously in court to restore title and interest in Macedonia's property to its own members."


  • Blumenthal's lawsuit seeks a court order declaring the illegal land transfer and mortgage null and void. He has also asked the court to declare that the title and interest in the Butler Street property remain exclusively with Macedonia. [...] Blumenthal has also filed a lis pendens on the land records for Macedonia's Hamden property to inform the public that the fraudulent property title is in dispute.
For more, see Attorney General Sues Man Who Posed As Pastor To Hijack Church Property.

Go here, go here, and go here for other posts related to deed theft by forgery, swindle, etc.

(1) According to the press release, Blumenthal's lawsuit names Willie E. McKay of West Haven, Love Temple Church of Christ in Prayer, Inc. of West Haven, and Foundation Capital Resources, Inc. of Georgia. While not accused of wrongdoing, Foundation Capital is named because of their legal interest in the property as mortgage holder. deed theft xenon

Cops' Eviction Attempt Results In 3+ Hour Standoff With Foreclosed Family; "Rescue" Operator Screwed Them Out Of Money, Says Homeowner

In Middleburg, Florida, First Coast News reports:
  • A Clay County couple barricaded themselves in their home for more than three hours. Police say it was a standoff over a foreclosure. George and Bonnie Mangum's home on Long Horn Road had gone through foreclosure. Police say they refused to come out Wednesday afternoon when police tried to deliver an eviction notice. [...] Deputies say when they came to the door George Mangum threatened to shoot someone.


  • They surrounded the house and evacuated neighbors. Deputies were able to convince Mangum to come out by promising to investigate possible fraud in his foreclosure. The Mangums say a company promised to help them out of foreclosure, but just made it worse and took their money.

  • George Mangum is charged with interfering with a civil process and aggravated assault.

For the story, see Middleburg Standoff Over Foreclosure (go here for video).

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

Phoenix Cops Find Foreclosed Home Being Used As "Drop House" For Human Smugglers

In Phoenix, Arizona, KNXV-TV Channel 15 reports:

  • Phoenix police discovered 10 undocumented immigrants on Tuesday afternoon after an escapee reported a drop house to officers. A Hispanic male contacted police just after 1 p.m. and reported that he had been held against his will at gunpoint and was beaten at a nearby drop house [...].


  • Two suspected human smugglers fled the scene before detective arrived, according to police. Investigators say the victims told them that they had crossed the border into Arizona on July 12th and were taken to the house where they have been held. They also told investigators that the smugglers demanded $3,200 from each of them to secure their freedom.

  • Neighbors told ABC15 that the home was a foreclosure that had recently been sold. Police say that two other drop houses have been discovered in the same neighborhood within the past few weeks.

Drop houses, a key link in human smuggling operations, are where smugglers hide illegal immigrants as they collect their fees and make their travel arrangements.

For the story and link to the video, see Escapee leads Phoenix police to drop house, 10 others found.

Housing Inspector Hits Landlord In Foreclosure With $6K Fine For Failure To Provide Water, Remove Garbage

In Haverstraw, New York, The Journal News reports:
  • A village woman and her children have been living in a rental house under foreclosure that hasn't had water since May, health inspectors said [Wednesday]. Officials from the Rockland Department of Health have been trying to contact the owner of 55 New Main St. for months.


  • Public health law prohibits anyone living in a home without drinkable water. [...] No one has been able to locate [owner Charles] Polanco, who also has an address in the Bronx. [Wednesday], the [Board of Health] assessed a $6,000 fine against him for failing to provide water to the home and for failing to clean garbage from the property. A bank is in the process of foreclosing on the home, but it is still owned by Polanco.

For more, see Haverstraw family rents home with no water since May.

For other posts involving the problems tenants face in rented homes in foreclosure, go here, go here, go here, go here, go here, and go here. equity skimming unwittingly digamma

Flames Claim Tenant-Occupied House In Foreclosure Owned By Ex-Firefighter; Renter Unhappy With Investigation

In Scranton, Pennsylvania, The Scranton Times Tribune reports:
  • [A] month after fire engulfed his apartment at 1021 Mark Ave., [renter Chuck] Smith says his telephone messages to police and fire officials have gone unreturned. “I’m still trying to find out what happened and getting the runaround,” he said Wednesday. “I would really like to know what caused the fire, to take the necessary steps ... No one wants to say anything. It’s hush-hush.”

  • The fire started shortly before 2 p.m. on June 17, destroying an adjoining garage — which contained a Cadillac Escalade — before spreading to an apartment building at 1023 Mark Ave. The blaze displaced about a dozen residents. Charred timbers of the garage remained at the scene Wednesday, and the burned-out Escalade was still on the property.

  • The 1021 Mark Ave. property is owned by Tom and Martha Gervasi, who were facing a mortgage foreclosure on the property, according to a civil suit filed in Lackawanna County. [...] Mr. Gervasi, a former city firefighter, was on the scene evacuating his tenants after the fire broke out. His brother is firefighter union Vice President Lt. David Gervasi.

For more, see Scranton Fire victim demands answers. foreclosure arson whale

Foreclosed Homeowner Takes Life; Reportedly Faxed Note Informing Mortgage Lender Of Intent

In Taunton, Massachusetts, WHDH-TV Channel 7 reports:
  • A woman took her own life after she lost her home to foreclosure. Carlene Balderrama, 53, reportedly fax her mortgage company a letter telling them that when they showed up to foreclose on the home, they would find her dead. Police say that a suicide note, which was left inside of the home, told family members to take the insurance money and pay off the debt.

For more, see Woman takes her own life after home foreclosed.

See also:

Go here for other posts on foreclosures and suicide. suicide homeowner foreclosure zeta

Friday, July 25, 2008

Housing Bailout Bill May Have Something for Everyone

A column in The New York Times notes:
  • If you are ignoring the housing bailout bill because you think it benefits only troubled homeowners, you may miss out on a windfall. The bill, expected to be passed by the Senate in the next few days and then signed by President Bush, does offer incentives to certain overextended borrowers and their mortgage lenders. But it also includes many handouts to first-time homebuyers, longtime homeowners, returning veterans and senior citizens seeking to tap their home equity without getting hit with big fees. Millions of people have the potential to benefit in some way.

For more, see A Housing Bill That Has Something for Nearly Everyone.

NY AG Hits Lender For $1M To Resolve Charges Of Alleged Discriminatory Lending Practices

The New York Attorney General's Office announced last week:
  • Attorney General Andrew M. Cuomo [...] announced that his office has issued more than $900,000 in restitution to approximately 270 African-American and Latino borrowers who experienced discriminatory lending practices by GreenPoint Mortgage. Further, the office is proceeding with its investigation into potential discriminatory pricing by various mortgage brokers that did substantial business with GreenPoint. Greenpoint is a subsidiary of Capital One Financial Corporation. The restitution comes from a groundbreaking fair lending agreement reached between the Attorney General’s office and GreenPoint totaling approximately $1 million.


  • The Attorney General’s office initiated an inquiry into GreenPoint after reviewing Home Mortgage Disclosure Act (HMDA) data showing that GreenPoint’s African-American and Latino customers were more likely than white customers to receive high-priced loans in New York.

For more, see NY AG Press Release: AG Cuomo Obtains Approximately $1 Million For Victims Of Greenpoint's Discriminatory Lending Practices.

Go here and go here for other posts on alleged race bias in real estate transactions. PredatoryLendingRaceBias

PBS' Nightly Business Report On Minorities & Subprime Loans

A story appearing on PBS' Nightly Business Report on Tuesday made this observation:
  • Nationwide, African-Americans and Hispanics hold twice as many sub-prime loans as whites. Sub-prime loans are also concentrated in minority neighborhoods. George Washington University sociologist Gregory Squires has researched sub-prime loans issued around the country. He says borrowers' credit worthiness doesn't explain the disparity.
For more, see program transcript, Did Minorities Get Submarined By The Sub-Prime Mortgages?

Go here and go here for other posts on alleged race bias in real estate transactions.

Editor's Note:

The U.S. Department of Housing & Urban Development ("HUD") rolled out a public service announcement last week featuring actor Dennis Haysbert that is part of a national campaign to raise public awareness about lending discrimination.

Some Homeowners In Foreclosure Resort To Stripping Homes, Unloading Goods Online

In Phoenix, Arizona, KPHO-TV Channel 5 reports:
  • Before a bank takes possession of a foreclosed home, many owners are leaving with every penny they can get by selling their furnishings and appliances online. Realtors in Phoenix reported the new trend is showing up more and more in a city with one of the highest foreclosure rates in the nation. "It's quite often I see a lot of the appliances taken out," said Christian Broadwell, a local Realtor.

  • Broadwell said he is trying to sell more than 300 homes in the Valley in foreclosure, and many are stripped of cabinets, countertops, appliances, toilets and even a fireplace. "The dishwasher, stove are taken out," he said. "Window blinds. Any upgrades the owner has done." Many of the items end up on Web sites like Craigslist, Broadwell said.


  • The homes that are stripped are usually sold "as is." Even if the buyers are ready to do the repairs, they may have a hard time getting a loan because many banks won't loan money to pay for a stripped home, Realtors said.

For more, see Realtors: New Twist In Foreclosures.

Go here for other posts on pre-foreclosure homeowner fixture stripping. foreclosure fixture stripping apple

Landlords In Foreclosure, Their Tenants, Water Shut Offs, No Trash Pickups

The following links are to stories on the problems of water shut offs and curtailed garbage pick-ups that are often faced by tenants with landlords in foreclosure who stop paying the utility bills:

For other posts involving the problems tenants face in rented homes in foreclosure, go here, go here, go here, go here, go here, and go here. equity skimming unwittingly digamma

Foreclosure Cases Swamp Non-Profit Legal Services Offices

The following links are to stories of how some non-profit law offices have their hands full handling foreclosures for the poor, disabled, and elderly:

(1) According to their website, Legal Aid of North Carolina's Mortgage Foreclosure Project ("MFP") includes a "team" of attorneys and staff who are located in LANC offices (and other legal services organizations) and who specialize in foreclosure defense and predatory lending law. The MFP team acts on referrals from Legal Aid of North Carolina offices and community organizations throughout North Carolina. Go here for MFP brochure.

Thursday, July 24, 2008

Illinois AG Files Civil Charges Against Upfront Fee Foreclosure Rescue Operator

The Illinois Attorney General announced:

For more, see Illinois AG Sues Ohio Company For Mortgage Rescue Fraud (Madigan Alleges Company Takes Advantage of Homeowners on the Verge of Losing their Homes to Foreclosure).

(1) According to her press release, Madigan filed suit against Foreclosure Solutions, LLC and company president Timothy Buckley of Maineville, Ohio, based on allegations that the defendants falsely promised to help consumers save their homes after falling behind on their mortgage payments. The defendants charged consumers $1,250 and promised to provide mortgage foreclosure rescue services, which either were never performed or proved to be ineffective, according to the complaint.

Maryland Law Firm To Donate 1,000 Pro Bono Hours To Help Homeowners Hit By Foreclosure Crisis

According to their recent press release:
  • Joseph, Greenwald & Laake, P.A. (, the largest law firm in Prince George’s County, has created The Thousand Hours Project, to assist local homeowners hit by the exploding foreclosure crisis. JGL will donate 1,000 hours of pro bono legal services to help local homeowners.


  • While our initial efforts will center on cases referred from HIP [Housing Initiative Partnership, Inc., in Hyattsville] or Civil Justice,” said [JGL partner, Barbara A.] Jorgenson, “we anticipate doing cases throughout our practice areas in Montgomery, Prince George’s, Frederick, Anne Arundel, Howard, and the Southern Maryland counties.” Case referrals will also be accepted through the Community Legal Services of Prince George’s County, from which JGL received the award for Outstanding Pro Bono Service in 2007.

For more, see Maryland Law Firm Announces Formation of 1000 Hours Project to Assist with Nation's Foreclosure Crisis.

Miami Judge Orders Foot-Dragging Lender To Foreclose & Take Title To Condo Or Start Paying Maintenance Fees

In Miami, Florida, the Miami Daily Business Review reports:
  • As bills mounted and revenue shrank, the board of Miami Beach's luxury Bentley Bay condo knew it had to take drastic action. [...] In one instance, the condo association took legal action against a lender that it said was dragging out the foreclosure process to avoid paying maintenance fees.


  • Unit 212 at the Bentley was mired in a drawn-out foreclosure process, and fees were mounting. The cash-strapped condo association finally asked Miami-Dade Circuit Judge Daryl Trawick, who was overseeing the foreclosure case, to force U.S. Bank to take title to the unit or immediately start paying maintenance fees.

  • In his June 1 order, Trawick gave U.S. Bank, the trustee for Citigroup Mortgage Loan, two choices: Don't foreclose and start paying maintenance fees on a unit it doesn't actually own, or foreclose and pay thousands of dollars in past-due fees.

For more, including links to the condo association's court filing requesting that the bank be compelled to foreclose, and Judge Trawick's order directing the lender to do so, see Desperate times call for desperate measures for condo associations.

For Attorneys:

In the condo association's court filing (at paragraph 12 of the motion to compel), the Florida court case F.D.I.C. v. Venture Corp. of Sarasota, Inc., 622 So. 2nd 581, 582 (5th DCA 1993) is cited as precedent in support of the proposition that in Florida, a trial court exercising its equitable powers can compel a mortgage holder to either proceed with a foreclosure sale or to pay the condominium association's monthly assessments. In his order compelling the lender to foreclose, Judge Trawick scribbled in the citation to this case (See Order, paragraph 1). responsibility code violations foreclosure

Erie Predatory Loan Victim May Be Closer To Keeping Home As Settlement In Civil Suit Reached With Three Defendants

In Erie, Pennsylvania, the Erie Times News reports:

  • An area appraiser, a now-indicted mortgage broker and a mortgage company are the latest defendants(1) to settle a court case that helped reveal the depth of a federal mortgage-fraud probe in the city of Erie. The settlements are expected to allow the plaintiff, Eloise Woodsbey, to keep her house at 618 E. Ninth St. Woodsbey risked losing the single-family residence, which she bought for $49,900 in 2004, because of what she claimed was a fraudulent $45,000 variable-rate mortgage with terms she could not afford, including an initial interest rate of 11.75 percent.


  • Woodsbey claimed the defendants used a falsely inflated appraisal and other fraudulent practices to sell her the house and help her secure the mortgage. In her suit, Woodsbey claimed the developers in the deal helped her qualify for the mortgage by misrepresenting -- unbeknownst to her -- the amount of money she had in her bank account.
  • The lawyer for Woodsbey, Kevin Quisenberry, of the nonprofit Community Justice Project in Pittsburgh, declined to comment on the terms of the tentative settlements. Based on prior court filings, another lawyer for Woodsbey, Margaret Schuetz, also of the Community Justice Project, filed the suit so that Woodsbey could keep her house and get money to repair it.
For more, see 3 more settle in mortgage-fraud case.

For an earlier Erie Times News report on this story, see Fraud suit nears end (Tentative deal with Deutsche Bank likely to stop foreclosure against eastside woman).

(1) The defendants who most recently reached tentative settlements with Woodsbey are Meritage Mortgage, of Jacksonville, Fla., the initial lender; Hurlburt Appraisal Service, of Meadville, which did the first appraisal of Woodsbey's house; and Francis R. Conti, of Waterford, the mortgage broker on the deal. Deutsche Bank, which took over Woodsbey's account from Meritage in a purchase of a pool of mortgage-backed securities, said in February that it had settled with Woodsbey.

Judge Stalls Foreclosure As Homeowner, Allegedly Duped Into Signing Away House In Equity Stripping Deal, Claims Violations Of NY Home Equity Theft Law

In Nassau County, Long Island, the New York Law Journal (appearing at reports:
  • Applying a recently passed New York state law to a "questionable" transaction, a Nassau County judge has halted a foreclosure to give the homeowners a chance to prove they were tricked into selling their house. In Washington Mutual Bank v. Sholomov, [...] Supreme Court Justice Daniel R. Palmieri denied a motion by Washington Mutual to foreclose and sell the Glen Cove, N.Y., residence of Frank and Vincenza Dizazzo.


  • Here, the decision required Palmieri to apply New York's Home Equity Theft Prevention Act, which went into effect on Feb. 1, 2007. In doing so, the judge weighed "the rights of both homeowners claiming to have been duped out of their home and the lending institution now seeking to foreclose on a mortgage made to the party the homeowners claim was part of the scheme."


  • Frank Mitchell Corso of Jericho, N.Y., represented the Dizzazos. In an interview, Corso characterized the decision as important to banks that lend money to purchasers who may be involved in mortgage fraud schemes, as delineated in the state act. "The banks now have to be extremely careful as far as following procedure because they may become a party to the fraud," Corso said.

For the entire story and details, see Foreclosure Halted for Couple Who Say They Were Tricked Into Selling Home.

For the case, see Washington Mut. Bank v. Sholomov; 7/10/2008, 2008 NYSlipOp 28250.

Go here for the statute in question, the New York Home Equity Theft Prevention Act, or go here for consumer information on the law (available online courtesy of the New York State Banking Department).

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.

Editor's Note:

The issue of whether the straw buyer involved in the equity stripping arrangement (Sholomov) and the lender providing the financing in the transaction (Washington Mutual) were "bona fide purchasers for value" was raised in the case, according to this excerpt in the article:

  • It is "certainly questionable" that Sholomov, who also was in default, was a "bona fide purchaser for value," wrote the judge, as the Dizzazos continue to reside in their Glen Cove home, and the transaction only required a down payment of $1,000 for a home worth roughly 600 times more.

  • In turn, while Washington Mutual "is not directly implicated as 'equity purchaser'" because of its loan to Sholomov, Palmieri held the bank "still must be charged with knowledge, through its agent, of the possible application of the statute and of its violation."

I would point out that the New York Court of Appeals (the state's high court) decision in Phelan v. Brady, 119 N.Y. 587; 23 N.E. 1109; (NY 1890) supports the proposition that, because the homeowners (the Dizazzos) were in possession of the home at the time Washington Mutual acquired its mortgagee's interest in the property, it (WaMu) is deemed to be on notice of the homeowners rights, and therefore, is not a bona fide purchaser for value, without regard as to whether WaMu had an authorized agent involved in the deal from whom knowledge could be imputed to it.(1) Accordingly, its mortgagee's interest in the home would arguably be inferior to any interest that the homeowners can establish.(2)

(1) Excerpt from Phelan v. Brady, 119 N.Y. 587; 23 N.E. 1109; (NY 1890):

At the time of the execution and delivery of the mortgage to the plaintiff, the defendant Mrs. Brady was in the actual possession of the premises under a perfectly valid but unrecorded deed. Her title must, therefore, prevail as against the plaintiff. It matters not, so far as Mrs. Brady is concerned, that the plaintiff in good faith advanced his money upon an apparently perfect record title of the defendant John E. Murphy. Nor is it of any consequence, so far as this question is concerned, whether the plaintiff was in fact ignorant of any right or claim of Mrs. Brady to the premises. It is enough that she was in possession under her deed and the contract of purchase, as that fact operated in law as notice to the plaintiff of all her rights.

It may be true, as has been argued by the plaintiff's counsel, that when a party takes a conveyance of property situated as this was, occupied by numerous tenants, it would be inconvenient and difficult for him to ascertain the rights or interests that are claimed by all or any of them. But this circumstance cannot change the rule. Actual possession of real estate is sufficient notice to a person proposing to take a mortgage on the property, and to all the world of the existence of any right which the person in possession is able to establish. [emphasis added] ( Governeur v. Lynch, 2 Paige, 300; Bank of Orleans v. Flagg, 3 Barb. 318; Moyer v. Hinman, 14 N. Y. 184; Tuttle v. Jackson, 6 Wend. 213; Trustees of Union College v. Wheeler, 61 N. Y. 88, 98; Cavalli v. Allen, 57 id. 517.)

(2) For a dissenting view from one in the title insurance industry, see Rifkin, Bernard M., Chicago Title Insurance Company, "Possession as Constructive Notice of Rights of Tenants:Arcane, Possibly Archaic" - last visited July 24, 2008. undo mortgage loans TILA batallion

State AGs Target Housing Discrimination In Mobile Home, RV Parks

In two unrelated stories, attorneys general in Massachusetts and Florida have recently issued announcements in connection with their efforts to prosecute housing discrimination in civil lawsuits.


  • Attorney General Martha Coakley’s Office has filed a housing discrimination and consumer protection complaint against Leisure Woods Estates, Inc., (Leisure Woods) the owner of Leisure Woods Mobile Home Park in Orange, Massachusetts. The complaint [...] alleges that Leisure Woods violated state anti-discrimination laws by refusing to allow a disabled homeowner to have her [49-year old] daughter reside with her as a caretaker on the grounds that the daughter was under the age of 55. [...] The complaint alleges that Leisure Woods attempted to impose the age requirement even after its request to become an age-restricted park had been denied by the [state ...]. A separate and unrelated [Massachusetts AG] discrimination lawsuit against Leisure Woods [...] is currently pending. That complaint alleges that the owner of the manufactured housing community failed to permit a disabled homeowner to install a handicap ramp to enable the homeowner to enter his property.

For more, see AG Coakley Files Second Lawsuit Against Park Owner for Housing Discrimination.


  • Attorney General Bill McCollum [...] announced that his Office of Civil Rights has reached an agreement with a Sarasota County RV park, resolving allegations of potential civil rights violations against a former resident of the park. [...] Numerous events, some involving her young grandchildren, led [former resident Francis] Gregory to file the complaint alleging racial and familial status discrimination in violation of the [Florida] Fair Housing Act. [...] At the time of the finding of reasonable cause, the park had been sold to Myakka River RV Resorts. The new owners met with the Attorney General’s Office of Civil Rights and agreed to revise the rules which were the subject of the complaint. Under the agreement reached with the Attorney General’s Office, the company also agreed to pay $7,500 in damages to Gregory and to reimburse the state $2,500 for attorneys’ fees and costs.

For more, see:

Wednesday, July 23, 2008

The Piling On Continues As City Of San Diego Civil Suit Charges Countrywide With Predatory Lending Practices; WaMu, Wells Fargo, Wachovia May Be Next

In San Diego, California, the San Diego Union Tribune reports:

  • San Diego City Attorney Mike Aguirre is taking on the lending industry, filing suit Wednesday against Countrywide Financial, which he accuses of engaging in unlawful and fraudulent predatory lending that victimized numerous San Diego home buyers.

  • His suit, which follows similar litigation filed against Calabasas-based Countrywide last month by State Attorney General Jerry Brown, seeks to halt foreclosures that are tied to risky, adjustable-rate loans made by the lender. It also seeks civil penalties of $2,500 per violation against each of the named defendants. Also targeted in the suit is Bank of America, which recently purchased Countrywide.

  • In a press conference held in front of a vacant, partially burnt Skyline home that has recently been taken over by Countrywide, Aguirre said he hopes his suit will be a way to bring other lenders together to work out settlements with borrowers who are about to lose their homes or who already have been foreclosed on.


  • While Aguirre said he also plans litigation against other lenders, including Washington Mutual, Wells Fargo and Wachovia Corp., he said his main goal is to resolve the issue of growing foreclosures “in an orderly way.”

For more, see Aguirre sets his sights on Countrywide.

See also, Reuters: San Diego sues Bank of America to halt foreclosures.

To view today's lawsuit brought by the City Attorney for the City of San Diego, see People v. Countrywide Financial Corp., et al.

City Attorney Aguirre has set up a hotline for all San Diego residents who are stuck with a Countrywide subprime mortgage. San Diegans facing foreclosure by Countrywide can call 619-533-5679 or go to the city attorney's Web site and click on the "Foreclosure Crisis" link. See Hotline Offered For Homeowners Facing Foreclosure With Countrywide.

For links to recent lawsuits filed by states targeting Countrywide, see Recap Of Recent State Actions Against Countrywide Financial.

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

Financially Strapped California Couple Gets Rewritten Countrywide Mortgage At 1% For Five Years

In Fullerton, California, The Orange County Register reports:
  • John and Grayce Coffman got a killer deal on their Fullerton home's mortgage – just 1 percent interest for five years. That's a rate any homeowner can envy. But it came after six months of complex, sometimes contradictory, negotiations with the nation's largest home lender to avoid foreclosure. They couldn't afford their previous loan.


  • Most borrowers probably can't get as sweet a deal as the Coffmans. The reason: it was a mistake. Countywide Financial wanted to help, but not with 1 percent interest for five years. It meant to offer 1 percent for the first year, with the rate increasing one percentage point for each of the next four years. It later decided to honor the error.

For more, see Loan modification saves home (Fullerton couple benefits from lender's mistake. Experts say most struggling homeowners aren't so lucky).

NY AG Gets Jail Time For Rogue Home Repair Contractor In Action Originally Brought As Civil Lawsuit

A series of press releases from New York Attorney General Andrew Cuomo shows how his office successfully got jail time for a rogue home repair contractor in a matter that started as a civil lawsuit. After entering into a consent order with the NY AG in the civil case in which he agreed to refrain from certain conduct, the contractor promptly went out and got nailed for engaging in the conduct he promised he wouldn't take part in, prompting the NY AG to bring criminal contempt of court charges for willfully defying the civil court order.

For more, 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 Cuomo hammers contractors

Bakersfield Couple Falls For Alleged Foreclosure Rescue "Short Sale" Scam

In Bakersfield, California, KGET-TV Channel 17 reports:
  • After living in their Northeast Bakersfield home for about three years, Frank and Debra Sloan are facing foreclosure. So when they received a letter from a company promising to end their mortage woes, they made what they now call a "big mistake."


  • In hopes of saving their home, they responded to a letter from a company promising to help them avoid foreclosure. The Sloans say the company had them fill out a packet of paperwork and told them they could negotiate a short sale with their lender for about $1,800. But after paying the bill, the couple says they could not reach anyone by phone and a short sale was never reached.

For more, see Couple Warns of Foreclosure Scams.

Atlanta Cops Form Vacant Home Burglary Detail In Attempt To Control Vandalism Problem In Empty, Foreclosed Homes

In Atlanta, Georgia, CNN reports:
  • When Atlanta police officers Bryan Ernest and Bernatt Collins get a burglary call, they know the house they walk into will probably be stripped, right down to the materials inside the walls. They are part of a special burglary detail formed to watch the increasing number of vacant houses resulting from unpaid mortgages.

  • Drawing their guns, the officers approach an empty house and shout "Atlanta police!" before entering. It's a burglary call and they have to expect the worst. But the officers usually get to a home long after the thief has gone, leaving behind Sheetrock hanging from the walls like shredded cardboard, giant holes in the ceilings and exposed wiring minus its valuable copper parts.


  • Across the country, law enforcement officials report more empty houses are being burglarized. Developers are unable to sell newly built homes and landlords have trouble renting properties. Atlanta is one of the few police departments that has formed a special vacant home burglary team.
For more, see Police fight a rash of vacant home burglaries (read story) (watch video). neighborhood destruction from foreclosures kappa

$20M+ In Uncollected Property Taxes Forces One County To Borrow Cash To Pay Bills

In Merced County, California, the Merced Sun Star reports:
  • [I]n yet another sign that fallout from the foreclosure crisis is still far from over, about one in 12 Merced County landowners failed to pay tax bills this fiscal year. That means about $20.4 million in property taxes -- or about 8.3 percent of what the county billed -- are now past due.

  • As a result, the county has had to borrow about $5 million to make payments to school districts, cities and other agencies to which it hands down property tax revenue, according to the county auditor's office. "I've never seen a situation like this -- a situation with so many delinquencies," said county treasurer-tax collector Karen Adams. "No one here has. We're trying to ease through it as best we can, but there's no question that we're in trouble."

For more, see Property taxes late; county has to borrow (Money has to be paid to other agencies but little's coming in).

In a somewhat related story in Merced County, California, see Merced Sun Star: Nearly 1 in 20 homes in Merced lost to foreclosure (County has highest rates in U.S., report says).

Non-Profit Legal Services Groups Take Funding Hit As Interest Rates Drop

The Philadelphia Business Journal reports:
  • Nonprofit legal service organizations are facing dramatic budget shortfalls after a major funding source was cut because of precipitous drops in interest rates. Pennsylvania's Interest on Lawyers Trust Accounts (IOLTA) board of directors said its grants have dropped by 33 percent, or $7.3 million, for the fiscal year that began July 1. There will be $23.5 million in grants for the 36 legal aid organizations that count on the funding for their annual budgets.

  • All lawyers and firms are required to establish accounts with banks where they place money they are holding in a trust for a client. Banks pay interest on those accounts that is collected by IOLTA staff, who report directly to the Pennsylvania Supreme Court. Each state has its own IOLTA program. The board approves grant applications submitted by organizations providing legal services to the poor. When interest rates are high, the fund has lots of money. But when the Federal Reserve cut rates earlier this year, less interest can be earned.

For more, see Falling interest rates hit nonprofit legal services groups (subscription required for the rest of the story).

Tuesday, July 22, 2008

Maryland High Court Adopts New Foreclosure Rules

In Annapolis, Maryland, The Daily Record reports:
  • New foreclosure-procedure rules go into effect Wednesday that require lenders to provide direct notice to delinquent homeowners before taking possession of and selling their homes. The new rules, adopted by the Court of Appeals without objection Tuesday morning, bring residential foreclosure procedures into conformity with a Maryland law enacted this spring amid a foreclosure crisis expected to affect about 50,000 Maryland homeowners, according to judiciary estimates. But the chairman of the committee that drafted the new rules said its work is not finished.

For more, see Foreclosure rules take effect Wednesday.

Supporters Of 72 Year Old Disabled Woman In Foreclosure Protest Ouside Bank Offices In Downtown Detroit; Predatory Loan May Claim Home Of 45 Years

In Detroit, Michigan, WDIV-TV Channel 4 reports:

  • A protest was held Tuesday afternoon for one local 72-year-old woman who is about to lose her home to foreclosure. Friends of Rubie Curl-Pinkins protested outside Bank of America’s offices in downtown Detroit, claiming Countrywide and the law firm Trott and Trott are evicting her instead of accepting her payments.


  • Curl-Pinkins said she was lured into a predatory loan in exchange for a mortgage on her paid-off home. This, in addition to mounting medical bills between her daughter and herself, caused her to fall behind on payments. There is paperwork to prove that Curl-Pinkins has been in and out of court with the bank and its foreclosure attorneys, Trott and Trott.

  • She obtained a reverse mortgage on the last day before foreclosure, but because of paperwork issues, the bank still foreclosed. Curl-Pinkins said after review, the bank still could have accepted the $43,000 as payment, but refused to. Curl-Pinkins said she was intimidated and under pressure from the attorneys, and ended up signing a consent judgment – one that ordering her to be out of her house by July 25.

For the story, see Local Woman, Friends Protest Eviction (read story) (watch video).

See also:

Maryland Foreclosure Rules Changes On State High Court Agenda Today

The Baltimore Sun reports:
  • Maryland's highest court will convene today for a hearing on changes to foreclosure rules that would conform with new legislation that gives homeowners more notification and a longer waiting period before their homes are sold. The hearing by the Court of Appeals follows a top judiciary subcommittee meeting yesterday in which officials discussed further reforms and changes to help ease a foreclosure crisis that is engulfing the state and country.


  • The crisis has also sparked judicial intervention. In a letter urging Maryland's lawyers to help those in distress, Chief Judge Robert M. Bell of the Court of Appeals wrote, "This is one of the most important pro bono initiatives of our time. In its absence, the thousands of individuals and families now at risk would almost surely move from being homeowners to becoming homeless."

For more, see Foreclosure in court (Judges consider changes to rules).

Thousands With Criminal Backgrounds Legally Selling Loans In Florida Without Being Licensed

In Part 2 of a 3-part investigative report published yesterday on what can be described as the betrayal of Florida home loan borrowers by state regulators, The Miami Herald I-Team reports:
  • Gary Kafka, former body builder with a long rap sheet and violent past, wrote millions of dollars in mortgages in South Florida without ever applying for a state license. Fresh out of prison after serving time for bank fraud, he never went through a criminal background check before selling loans. He never took a competency exam. He never had to.

  • More than half the mortgage professionals registered in Florida -- 120,563 -- entered the industry this decade without being licensed by the state, The Miami Herald found. Known as loan originators [loan officers employed directly by mortgage lenders], they perform the same job as mortgage brokers but aren't bound by the same rules.


  • While The Miami Herald found breakdowns in the state's licensing system for mortgage brokers, the lack of controls over originators created even more problems for an industry steeped in the highest fraud rate in the nation.

For more, see Thousands with criminal records work unlicensed as loan originators.

In related reports published as part of Part 2 of The Miami Herald investigative report, see:

  • States act to license loan originators,
  • Florida regulators shun licensing for loan originators,(1)
  • Mortgage regulator's resignation sought (''I am outraged by the facts presented in today's Miami Herald article on mortgage broker licensing,'' [Florida Chief Financial Officer Alex] Sink said in a statement Sunday afternoon. She added: ''Floridians depend on the state to protect them from criminals, and it is inexcusable that state regulators were asleep at the switch.''),
  • Showdown over criminal brokers is imminent ("The call for [Florida regulator Don] Saxon's ouster was prompted by a Miami Herald investigation that showed more than 10,000 criminals have been allowed to peddle home loans in Florida since 2000. Among them are bank burglars, cocaine traffickers and identity thieves who have gone on to commit at least $85 million in mortgage fraud, the newspaper found.").

(1) Some may say the regulators are too busy passing out licenses to convicted felons working for mortgage brokerages to be bothered with regulating the unlicensed loan officers / loan originators who work directly for mortgage lenders.

NJ Woman Charged With Forgery In Alleged Taking Of Property Co-Owned With Brother, Then Pocketing Refinance Proceeds

In Stafford Township, New Jersey, the Press of Atlantic City reports:
  • A 50-year-old township woman was charged with forgery, theft and fraud after, police said, she forged a deed transfer for a property into her name and then took out a loan against the property.

  • Kathleen Turak was arrested Friday after police discovered that she forged a deed transfer document to transfer a portion of a home she co-owned with her brother entirely into her name, for $1, without her brother's permission, according to police. Turak then took out a loan against the property worth $145,000, police said. After a brief investigation, Turak's accounts at the Wachovia bank on Route 72 were frozen, and she was later arrested outside her home.

Source: Stafford Township woman accused of taking part of property from brother.

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

"Habitat" Homeowners The Target Of High Pressure Pitches To Refinance?

In an opinion column, The Grand Rapids Press notes:
  • Housing advocates say unscrupulous brokers and lenders are preying on the owners of Habitat homes, bombarding them with offers to refinance out of their original interest-free loans. Local and national Habitat officials should issue special warnings to their clients, who often are cash poor and naive about financial matters. Unfortunately, the combination makes them tempting targets.


  • Habitat agencies in many large cities require homeowners to take out a "silent" second mortgage in addition to their primary Habitat mortgage, often a 20-year loan. The second is forgiven when the first matures, but both must be paid if the house is refinanced or sold early. The second mortgage, which costs the homeowner nothing, is a means to lessen the attractiveness of the home's equity and to keep sleazy lenders at bay. [...] Habitat affiliates in Indianapolis and Columbus, Ohio, say many clients are getting mail solicitations that look to be from Habitat but are not.

For more, see Hustlers home in on easy prey.

Florida AG OKs Collecting Upfront Fees By State Bar Members When Representing Homeowners In Foreclosure

The Florida Foreclosure Fraud Weblog reports that Florida Attorney General Bill McCollum has taken the position that the prohibition against collecting upfront fees by "foreclosure rescue consultants" when working with homeowners facing foreclosure shall not apply to Florida attorneys when such attorney provides legal representation to a client with respect to a foreclosure. The prohibition against the collection of upfront fees was included in the recently passed Foreclosure Rescue Fraud Prevention Act of 2008, which will go into effect on October 1, 2008.

For more, see Florida Attorney General Bill McCollum takes action to fix flaws with 501.1377.

Go here to view the letter by the Florida Attorney General to Florida Bar President Jay White in which he expresses his position (letter available online courtesy of The Florida Foreclosure Fraud Weblog).

NY AG Reaches Settlement With Credit Agencies In Ongoing Mortgage Industry Investigation

In connection with a New York Attorney General investigation(1) into all aspects of the mortgage industry for more than a year, including lenders, securitizers, due diligence providers, and credit rating agencies, a June 5, 2008(2) press release announced:
  • Attorney General Andrew M. Cuomo [...] announced that he has reached landmark agreements with the nation’s three principal credit rating agencies that will fundamentally reform the Residential Mortgage-Backed Securities (“RMBS”) market. The agreements with Standard & Poor’s (“S&P”) Moody’s Investors Service, Inc. (“Moody’s”), and Fitch, Inc. (“Fitch”) will dramatically increase the independence of the ratings agencies, ensure that crucial loan data is provided to the agencies before they rate loan pools, and increase transparency in the RMBS market.

  • Under the agreements with Attorney General Cuomo, the credit rating agencies will fundamentally alter how they are compensated by investment banks for providing ratings on loan pools. In addition, the ratings firms will all now require for the first time that investment banks provide due diligence data on loan pools for review prior to the issuance of ratings. This will ensure that significant data, which was not previously disclosed to the rating agencies, will be received and reviewed by them before any bonds are rated.

For more, see AG Cuomo Announces Landmark Reform Agreements With The Nation's Three Credit Rating Agencies (Standard & Poor’s, Moody’s, and Fitch Agree to Change Fee Structures, Obtain Due Diligence Information for the First Time, and Create Due Diligence and Lender Standards for Residential Mortgage-Backed Securities).

(1) On March 3, 2008, Attorney General Cuomo entered into agreements with the Office of Federal Housing Enterprise Oversight and the two largest securitizers of home loans in the United States -- Fannie Mae and Freddie Mac -- requiring them to buy loans from banks that meet new standards designed to ensure independent and reliable appraisals.

In addition, AG Cuomo has sued First American and eAppraiseIT for allegedly colluding with the largest savings and loan in the country to inflate the appraisal values of homes, and allegedly otherwise allowing the savings and loan to strong-arm them into a system designed to rip off homeowners and investors alike, according to this NY AG Press Release, and this NY AG civil lawsuit.

NY AG prosecutors have also sent subpoenas to Wall Street firms seeking information related to the packaging and selling of debt tied to high-risk mortgages, and has reportedly given one firm immunity from prosecution in return for help in learning whether debt-rating firms and investors got enough information about the loans being sold.

(2) I recognize that a seven week-old story may be a bit stale, but it's news to me - better late than never.

NYC Municipal Employees Union Consumer Law Unit Steps Up To Aid Members In Foreclosure

In the Woodlawn section of The Bronx, the New York Daily News reports:
  • Leonard Kirkland, a janitor at Harlem Hospital, is six months behind on his mortgage payments and about to lose his home. But because he is a city employee, he has a chance to save it. As the subprime mortgage crisis pummels neighborhoods across the city, the 150,000 members of District Council 37, the municipal employees union, have extra armor and ammunition in the fight against scheming mortgage brokers and adjustable interest rates.


  • In 2006, attorneys from the union did not handle any mortgage delinquency or foreclosure cases, but between 2007 and 2008, they have assisted in 151 such cases as adjustable interest rates ballooned.


  • "We see it all the time. They make these kind of mistakes," said Carla Latty, supervising attorney for the union's consumer law unit. "The mortgage people are in the community. The clients get to trust this mortgage broker. Sometimes, they steer them away from going to the union. They say, 'We have everyone under the roof,'" Latty said. "Some things would have been avoided if we would have talked to them," she added.
For more, see District Council 37 keeping homebuyers from paying dearly for missteps.

Monday, July 21, 2008

FDIC Engaged In Subprime Lending After Bank Seizure, Then Unloaded Bad Loans On Another, Says Lawsuit

The Wall Street Journal reports:
  • Federal officials heap much of the blame for the subprime mortgage mess on lenders, claiming they recklessly made too many high-cost home loans to borrowers who couldn't afford them.

  • It turns out that the U.S. government itself was one of the lenders giving out high-interest, subprime mortgages, some of them predatory, according to government documents filed in federal court. The unusual situation, which is still bedeviling bank regulators, stems from the 2001 seizure by federal officials of Superior Bank FSB, then a national subprime lender based in Hinsdale, Ill.

  • Rather than immediately shuttering or selling Superior, as it normally does with failed banks, the Federal Deposit Insurance Corp. continued to run the bank's subprime-mortgage business for months as it looked for a buyer. With FDIC people supervising day-to-day operations, Superior funded more than 6,700 new subprime loans worth more than $550 million, according to federal mortgage data. [...] Hundreds of borrowers who took out Superior subprime loans on the FDIC's watch -- some with initial interest rates higher than 12% -- have lost their homes to foreclosure, data on the loans indicate.


  • The Superior situation could be costly for the FDIC. Texas-based Beal Bank SSB, which bought a portfolio of Superior loans, about half of them originated under the FDIC, is suing the agency in U.S. District Court in Washington. The suit claims many of the loans were made improperly and are plagued with problems.

In the lawsuit, Beal Bank lays out its position against the FDIC in this court filing.

For more, see FDIC Faces Mortgage Mess After Running Failed Bank (Subprime Lender Made Problem Loans On Regulators' Watch) (if link expires, try here, then click link for story, then click to refresh web page if necessary.).


According to the story:

  • An undated internal FDIC assessment that Beal Bank obtained and filed in court in June, the FDIC acknowledged "numerous appraisal deficiencies" in the portfolio it sold to Beal and discussed its legal vulnerability. Points of interest: Pages 8-11 summarize the final report of an outside expert; pages 16-18 discuss appraisal, fraud and other problems; pages 26-27 consider the FDIC's "poor" legal situation. The handwritten notes were in the version filed in court; it's unclear who added them;

Investigative Report: Crooked Mortgage Loan Originators Have A Field Day in Florida As State Regulators Snooze, Pass Licenses Out To Nearly Anyone

In Part 1 of a 3-part investigative report published yesterday on what can be described as the betrayal of Florida home loan borrowers by state regulators, The Miami Herald I-Team reports:
  • [S]ince 2000, [Florida] regulators failed to weed out people with criminal histories, monitor scam operations and discipline crooked brokers, a Miami Herald investigation found.

  • State regulators allowed thousands of ex-convicts to enter a profession that gave them access to the most sensitive and personal financial information: credit cards, bank accounts and Social Security numbers. Those criminals went on to commit nearly $85 million in mortgage fraud, the newspaper found. They stole their customers' identities. They stole their money. They even stole their homes.


  • Beyond the licensing, regulators routinely overlooked or ignored complaints, allowing rogue brokers to flourish amid one of the biggest housing booms in state history. As the median home price reached an all-time record in Florida, and the Miami skyline erupted with gleaming new residential towers, fortune seekers rushed into the mortgage business in unprecedented numbers.


  • Don Saxon, commissioner of the Office of Financial Regulation, said he didn't know why his staff issued licenses to bank robbers and racketeers, but would look into the cases cited by The Miami Herald. ''You're asking me to get into the heads of the people who made those choices,'' Saxon said. He added: "Certainly we are not proud of the fact that these people have gone on to do bad things.''

For more, see Borrowers Betrayed (During Florida's housing boom, state regulators allowed thousands of mortgage professionals with criminal records into the industry - costing consumers millions).

In related reports published as part of Part 1 of The Miami Herald investigative report, see:

SW Florida Real Estate Agent Battles Civil, Criminal Fraud Charges Involving Different Failed Real Estate Projects

In Lee County, Florida, The News Press reports:

  • Daniels View was the crown jewel in rising real estate star Samir Cabrera’s ambitious group of investments in 2006, a chance for investors to get in on a hot land deal in Lee County. Two years later, investors are settling for pennies on the dollar and level allegations of fraud in a civil suit against Cabrera involving the 80-acre project along Daniels Parkway in south Fort Myers.

  • The allegations in the civil suit bear striking similarities to those made last month in a federal indictment charging Cabrera with four counts of fraud involving two other properties along nearby Fiddlesticks Boulevard. Daniels View is also what’s driving Lee County commissioners to call for an investigation into whether County Manager Don Stilwell — Cabrera’s father-in-law and an investor — lied about his involvement in the project.


  • According to court documents [in the criminal case], Cabrera bought two properties on Fiddlesticks Boulevard in south Fort Myers through one company, then sold the properties on the same day to another company he controlled. The indictment alleges Cabrera profited from the sales and didn't disclose to investors that he owned both companies. [...] Some investors in Daniels View tell a similar story, saying they did not know that property was flipped or that Cabrera controlled both companies.

For more, see Daniels View, crown jewel of properties, has yielded only tarnish.

See also:

1) Naples Daily News: More investments gone sour plague indicted real estate agent, which reports:

  • While Fort Myers real estate agent Samir Cabrera was allegedly mismanaging two property investments along Fiddlesticks Boulevard in a way that would later lead to federal fraud charges, he also was attracting investors to launch a larger deal on the land next door. That deal was called Daniels View.

2) Naples Daily News: Stilwell had ties to third development by indicted son-in-law:

  • [I]nitially, when asked last year about his financial stake in Daniels View — a project at the southwest corner of Daniels Parkway and Interstate 75 that lacked good road access — Stilwell said he had no involvement. [...] But after his son-in-law, Cabrera, was indicted in June on four counts of wire fraud involving two land deals along Fiddlesticks Boulevard, Stilwell provided more details.

3) Naples Daily News: Samir Cabrera case: Story of real estate ventures gone awry (The free-spending lifestyle of Samir Cabrera may have allowed his business partners to force a payout that ruined the chance for his real estate deals to succeed).

Another Brooklyn Trial Judge & His Aversion To Sloppy Paperwork From Foreclosing Mortgage Lenders

In a recent article in the National Law Journal, Brooklyn Supreme Court Justice Jack Battaglia, in connection with his approach to the apparent sloppy paperwork being filed by foreclosing lenders and their attorneys (and not unlike the approach taken by his colleague on the Brooklyn bench, Justice Arthur Schack), was described as expressing concerns over shortcuts being taken by them in their filings with the court. A review of three of his cases in which he denied foreclosure (with leave to renew in conformity with his decision) reveal a number of the problems Justice Battaglia found and that is apparently the cause for his concern:

  1. resorting to the improper use of "nail & mail" method of service of process without first exercising due diligence in determining Defendants' whereabouts; no indication that the process server made any effort to determine defendants' business address in order to attempt personal service there at pursuant to CPLR 308(2) before resorting to ‘nail and mail’ service - mortgagee would be expected to have a business address for its mortgagor;
  2. Affirmation of Merit and Amount Due was executed and notarized in outside New York State and not accompanied by a certificate of conformity;
  3. the submission to the court included numerous documents that purportedly support the relief sought, but many of the documents are not identified by anyone with personal knowledge, and are not authenticated or otherwise rendered admissible as evidence - they are not incorporated in any affidavit or affirmation;
  4. no proof of service of the notice of default;
  5. non-military affidavits were based upon information obtained from an underage person,
  6. affidavit executed by a person who is not an officer or employee of either Plaintiff or the original mortgagee, and who was, therefore, not qualified to testify as to the material facts upon which the action must proceed, particularly since the assignment purportedly giving
    Plaintiff ownership of the note and mortgage was not executed until after commencement of the action;
  7. Affidavit of Merit made by an “attorney in fact” who does not assert personal knowledge or facts from which personal knowledge might be inferred,
  8. court noted that a Limited Power of Attorney held by the alleged plaintiff did not confer testimonial competence;
  9. no explanation for attempted service of Defendants at one location when the default letter was addressed to a different location,
  10. notice of default from company who is neither the lender or mortgagee;
  11. notice of default failed to identify the lender, the date of the note and mortgage, or even the property;
  12. non-military affidavit executed as part of the affidavit of service of the summons and complaint was premature;
  13. no evidence of compliance with the additional-mailing requirement of CPLR 3215(g)(3)(i);
  14. in one case, the assignor under the Assignment of Mortgage was Mortgage Electronic Registration Systems, Inc., but there is no evidence of the assignor's ownership of the
    note and mortgage, or its right or power to make the assignment.

For more on the three cases, see:

  1. New Century Mortgage Corporation v Trench, 03/28/2007, 2007 NYSlipOp 30653(U);
  2. US Bank National Association v Lockridge, 11/27/2007, 2007 NYSlipOp 33886(U);
  3. Wall Street Mortgage v Lorence, 03/19/2007, 2007 NYSlipOp 30224(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. missing mortgage foreclosure docs gamma SloppyForeclosuresAlpha

California Class Action Alleges City Intimidation, Harassment Of Minority Section 8 Tenants

In Antioch, California, The National Law Journal reports:
  • The mortgage crisis has spawned an unusual federal class action by African-Americans in Antioch, Calif., a San Francisco suburb, alleging city intimidation and harassment of minorities who rent homes using federally subsidized Section 8 housing vouchers in an effort to force them out of the area.


  • The real estate foreclosure crisis hit Antioch hard. In response, landlords and homeowners turned to renting homes to pay mortgages, often renting to tenants using federal rent subsidy vouchers, known as Section 8, according to [Brad] Seligman, [of The Impact Fund, a public interest law firm in Emeryville, Calif.].

  • By 2006, the inability of homeowners to sell homes allowed Section 8 participants to use their benefits to move out of urban centers to the suburb 40 miles west of San Francisco and to larger homes that might otherwise sit vacant, according to the suit.


  • The suit, brought by five African-American women who rent homes using Section 8 vouchers, alleges that the city and police focused attention on people renting homes using the vouchers. The women say police looking for Section 8 violations subjected residents to warrantless searches of their homes. Police allegedly made threats to landlords who continued to accept the vouchers and they also allegedly intimidated renters with potential loss of benefits.

For more, see Mortgage Crisis Spawns Class Action Alleging Harassment of Minorities.

To view the lawsuit, see Williams v. City of Antioch, No. C08-2301BZ (N.D. Calif.) (available online courtesy of The Impact Fund).

See also:

Go here and go here for other posts on alleged race bias in real estate transactions. race bias predatory lending