Saturday, August 30, 2008

"Teed Off" Consumer Activists Plan Pickets At Bay State Deutsche Bank Golf Tournament

In Norton, Massachusetts, the Boston Herald reports:
  • Activists plan to picket the Deutsche Bank Championship golf tournament in Norton today, saying they’re teed off about the sponsor’s role in the Bay State foreclosure crisis. “Deutsche Bank was the biggest forecloser and evicter in Massachusetts last year by quite a bit,” charged Steve Meacham of protest organizer City Life. “We feel we can’t have them sponsor a high-profile golf tournament without saying something to them.” Protesters intend to rally outside the PGA event, which features Phil Mickelson, V.J. Singh and other top golfers.


  • Deutsche Bank counters that it’s just a mortgage middleman, with little power over home seizures even though its name often appears on foreclosure papers.

For more, see Activists to protest at golf tourney.

Vacant 10-Unit Foreclosed Building Goes Up In Smoke; Authorities Blame Arson

In Western Pennsylvania, the Pittsburgh Tribune Review reports:
  • A fire that destroyed an abandoned Jeannette row house early Friday morning was arson, fire officials said. "Someone lit them. It was an arson," said Jeannette fire Chief Mike Bertolino. "There's no power, no gas, no nothing to it." [...] No injuries were reported. Bertolino said the two-story row house containing 10 units was vacant for several years. It is in foreclosure, he added.


  • The structure was demolished after the fire was extinguished, Bertolino said. Officials will contact the bank that foreclosed on the building to get the company to clean up the debris, he said.

For more, see Jeannette row house fire ruled arson.

For other stories on fires & foreclosures, go here, go here, go here, go here, and go here. ArsonForeclosureAlpha

Ex-Homeowner Charged With Ripping Off $42K+ From Foreclosing Lender's Attorney's Bank Account

In Farmington, Connecticut, The Bristol Press reports:
  • Police said a former Colchester man found a creative way to get back at the company who foreclosed on his home - he stole its account number during the proceedings and used $40,000 of their money to pay off his other bills. Arthur Bruce, 31, [...] turned himself in Tuesday to face a charge of first-degree larceny.

  • Local police began investigating Bruce after a law firm with accounts at Farmington Savings Bank noticed someone had racked up thousands in fraudulent transactions. [...] In all, Bruce was able to transfer by wire more than $42,000 from the law firm's account to generate 39 fake transactions from early June to late July. The scheme unraveled when police realized he had received a letter in May from the law company about the foreclosure that detailed wiring instructions to their account to make delinquent loan payments.

For the story, see Man gets even with mortgage company.

Foreclosure Filings A Handy Tool For Job Site Thieves In Identifying Easy Targets

A recent story in The New York Times on the increase in thefts at construction sites included this blurb on the use of foreclosure notices by some thieves in locating targets:
  • Builders in Chapter 11 and lenders foreclosing on properties still under construction aren’t as diligent about security,” said Mark Ouimette, managing director at Beecher Carlson, an insurance company based in Atlanta that underwrites policies for homebuilders. Indeed, police officials from Tucson to Miami report that thieves often peruse foreclosure filings to find idle and unsupervised projects. Insurers like Beecher Carlson said that theft has forced them to increase homebuilders’ insurance rates by 10 percent to 15 percent in the last two years.

For the story, see Boom Times for Job Site Thieves.

Alabama Man Nearing Foreclosure Charged With Having Home Torched To Pocket Insurance Cash

In Pell City, Alabama, The Daily Home reports:

  • A man was arrested and charged with the July 21 arson of his mobile home. Authorities identified the man as Sheldon Dale Franklin, 47, [...]. He was charged with the second-degree arson of his home.


  • [St. Clair County Sheriff Terry Surles] said the sheriff’s department received a tip that authorities needed to take a closer look at the July 21 house fire, which destroyed the double-wide mobile home Franklin resided. Surles said the mobile home was about to go into foreclosure, and Franklin allegedly paid some people to burn his home down to collect the insurance money. “He already received some insurance money,” Surles said.

For the story, see Man charged with arson of his mobile home.

For other stories on fires & foreclosures, go here, go here, go here, go here, and go here. ArsonForeclosureAlpha

Friday, August 29, 2008

Florida Feds Obtain Indictment In Alleged Mortgage Scam Involving 79 Homes, $24M In Fraudulently Obtained Loans, $5M In Lender Losses

The U.S. Attorney for the Southern District of Florida (and others) announced yesterday that:
  • Magile Cruz, a/k/a “Maggie Cruz,” a/k/a “Magile Cruz-Rodriguez,”a/k/a “Magile Araujo,” a/k/a “Ros Rodriguez,” was charged in a multi-million fraud scheme that resulted in more than $24,000,000 in fraudulent mortgage loans, and losses of more than $5,000,000 to lenders. Cruz was charged with conspiracy to commit mail fraud and wire fraud, [...] and with substantive counts of mail and wire fraud, [...].

According to the U.S. Attorney press release:

  • Between 2005 through 2007, Cruz was engaged in a scheme to obtain fraudulent mortgage loans for the purchase of 79 properties in Miami-Dade and Broward Counties. To execute the scheme, Cruz would identify residential properties for sale through [two of her companies]. Cruz and other co-conspirators would recruit and pay straw buyers for the selected properties. Cruz and her co-conspirators would then prepare and cause to be prepared fraudulent mortgage loan applications on behalf of the straw buyers. The applications included false employment verifications, pay stubs, verification of income and funds on deposit, and IRS Forms W-2.

For the rest of the story (ie. alleged identity theft, bogus / double HUD-1s, "cash back" transactions, multiple mortgages on the same property), see De Facto Owner Of Mortgage Companies And Title Agencies Charged In Multi-Million Mortgage Fraud Scheme.

Next Door Neighbor Threatened With Jail For Sprucing Up Vacant, Abandoned Home In Foreclosure

In North Las Vegas, Nevada, KLAS-TV Channel 8 reports:
  • The foreclosure crisis has left thousands of homes in Clark County sitting empty. Those vacant properties soon become eyesores. A North Las Vegas man is doing his part to try to prevent an abandoned home from becoming a neighborhood nuisance. Now, he says he was threatened with jail time. The owners abandoned the place a few weeks ago because they couldn't afford it. The grass was overgrown and the pool collecting debris. The man next door had enough, so he decided to spruce up the place. But the bank that owns the home threatened him with jail.


  • The home will likely sit empty for months. [Said the alleged serial criminal trespasser living next door trying to maintain the neighborhood:] "There are three houses right around there that are. Their yard has been that way for two years -- no landscape, broken windows, and I don't want this house to turn out like that."

For more, see Foreclosed Homes Create Messy Eyesore (read story) (watch video).

"Operation Family Tree" Busts Network Of 18 Marijuana Grow Houses In Central Florida; All Said To Be Rental Homes

In Pinellas County, Florida, The Tampa Tribune reports:
  • After a months-long investigation prompted by an anonymous tip, authorities [last week] swooped down on 18 marijuana grow houses they say were coordinated by one man. Eighteen people were arrested and about $31,000 was seized, said Pinellas County Sheriff's Office spokeswoman Marianne Pasha. Detectives also dismantled the operations, confiscating more than 850 plants along with humidifiers, air conditioners, lamps and filtration systems used to grow them. [...] The operation was given the name Operation Family Tree because many of the suspects are related by blood or marriage or were friends.


  • Rental homes were used for the grow operations, he said. Some were found today to contain as few as 23 plants; some had up to 100. Investigators say the coordinated effort annually could have produced a harvest worth more than $4 million.

For more, see;

For a recent story on marijuana grow house busts in neighboring Hillsborough County, Florida, see Sheriff's Grow House Crackdown Bears Fruit. Go here for Hillsborough pot farm map for Marijuana grow houses busted by the Hillsborough County Sheriff's Department.

Go here for Suburbs the New Hot Spot For Pot Growers, a story originally published in the Daytona Beach News Journal of a Central Florida pot farm operator who set up his operation using dozens of suburban homes rented from landlords before ultimately landing in the slammer.

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

Georgia Lawmakers Close Class Action Loophole On Little Known Law Allowing Homeowners To Hammer Sloppy Lenders After Paying Off Mortgage

In Atlanta, Georgia, The Atlanta Journal Constitution reports:
  • Here's an obscure law that mortgage lenders would probably rather you didn't know about: Georgia statute 44-14-3. The reason is, it can cost mortgage lenders $500 or more if they didn't properly finish the paperwork for a homeowner who paid off his or her loan. The law has been on the books for decades, but because of a recent amendment, more folks are likely to be hearing about it as they pay off their mortgages, refinance or sell their homes.


  • Under Georgia law, lenders are required to notify the county clerk within 60 days after a mortgage is paid off. But about a third of the time, they don't, estimates [title insurance agency president Michael] Watkins, which means his company's employees often see deed records that falsely indicate a property has more than one loan outstanding.


  • As the result of an amendment enacted in May, lenders are now required to notify homeowners who pay off their mortgage that they can collect $500 if their lender doesn't send the proper paperwork to clear up their property title within 60 days. The amendment, to forestall class-action lawsuits against lenders, also requires the homeowner to make that demand in writing after waiting at least 60 days.(1) Georgia law has long allowed homeowners and other real estate owners to demand $500 in damages from lenders who didn't meet the deadline, but most people didn't know about the law, [Atlanta attorney Jennifer] Fitzgerald(2) said.


  • Joe Brannen, president of the Georgia Bankers Association, said the trade group sought the amendment to remove the threat of several class-action lawsuits, agreeing to the extra notification as "part of the negotiation."

For the story, see Little-known law can snag lenders.

(1) Prior to the law's amendment, homeowners weren't required to send a formal written notice demanding that the lender record the satisfaction of mortgage prior to commencing a lawsuit. The requirement of first sending a lender a a written demand before bringing a lawsuit will obviously make the lenders less likely to screw up when complying with their obligations post-mortgage payoff, thereby making it tougher for:

  • homeowners to sue the mortgage lenders for their 500 bucks, and
  • homeowners' attorneys to obtain court-ordered attorney fee awards, the bill for which has heretofore been footed by the lenders.

(2) Reportedly, Fitzgerald said she has filed "several hundred" lawsuits on behalf of homeowners in recent years. In addition to the $500 the homeowner is entitled to, lenders that fail to comply with the law are also liable for homeowners' legal fees.

Thursday, August 28, 2008

Northern Indiana Legal Services Firm Launches Foreclosure Defense Project

In South Bend, Indiana, the South Bend Tribune reports:
  • [W]ith funding from the IFLA [Institute for Foreclosure Legal Assistance(1)], Indiana Legal Services Inc. has launched its new Indiana Foreclosure Legal Assistance Project to provide free legal help to eligible Northern Indiana homeowners who face losing their homes through foreclosure. Indiana Legal Services was awarded a $240,000 grant over three years from IFLA located in Washington, D.C.

  • The Indiana not-for-profit organization was one of 27 legal aid offices throughout the country to receive funds from the national competition. "The mortgage foreclosure issue is significant throughout Indiana, but also in northern Indiana and in the general South Bend area," said Ron Gyure, resource development director for Indiana Legal Services.


  • ILS' new project will initially target the South Bend area and northwest Indiana, where there are a high number of subprime mortgages, many of which are predicted to go into default. In the grant's first year, ILS will have two attorneys in its South Bend office and one attorney in its Gary office to perform foreclosure defense work.(2) [...] In the grant's latter stages, ILS expects to expand its foreclosure work into the Fort Wayne area.


  • ILS can provide direct legal representation to homeowners by reviewing their mortgage documents to see whether they include provisions that are abusive or predatory, negotiate new terms with their lenders or take other appropriate legal actions.

For more, see Project to aid homeowners (Indiana Legal Services program in South Bend aims to avoid foreclosures).

For information on upcoming foreclosure defense training:

(1) The Institute for Foreclosure Legal Assistance, a project of the Center for Responsible Lending and managed by the National Association of Consumer Advocates, made the awards to nonprofit groups that demonstrated that they already had successful foreclosure prevention programs but needed more resources.

(2) The ILS South Bend Regional Office serves clients in St. Joseph, Elkhart, Fulton, Kosciusko, Lagrange, LaPorte, Marshall, Noble, Pulaski and Starke counties. From its Gary office, the ILS legal staff serves Lake, Porter, Jasper and Newton counties.

SW Florida Real Estate Broker Hit With Eight New Federal Fraud/Money Laundering Charges

In Lee County, Florida, WZVN-TV Channel 7 reports:
  • New charges have been filed against commercial real estate broker Samir Cabrera. He was indicted by a grand jury Wednesday afternoon on eight new charges on top of four charges filed two months ago. The new charges include two counts of wire fraud, one of mail fraud and five counts of money laundering. [...] Federal prosecutors allege Cabrera recruited investors, acquired their money, bought land, and then sold the land, on the same day, to another company that he controlled. The investors say Cabrera never told them about his interest in the deal.

For more, see Broker facing additional federal charges.

For the newly filed superceding indictment, see U.S v. Cabrera.

In related stories, see:

1) Stilwell received checks in indictment of son-in-law (One commissioner expects county manager to be indicted also):

  • Two of the money laundering charges now facing real estate agent Samir Cabrera involve payments to Lee County Manager Don Stilwell. In the spring of 2006, two checks — one for $76,731.24 and one for $50,000 — went to Stilwell, who is Cabrera’s father-in-law.

2) Daniels View investors not happy with settlement:

  • A [civil court] settlement was made for investors in the controversial Daniels View Project - the Lee County land deal that spawned an investigation of County Manager Don Stilwell. The deal was organized by his son-in-law, real estate broker Samir Cabrera, who has been federally indicted and accused of misappropriating investors funds in other deals.

Go here for earlier posts, and any available updates, on this ongoing story.

Fannie, Freddie Imposter The Subject Of BBB Warning

From The Better Business Bureau of Southern Arizona:
  • The Better Business Bureau (BBB) of Southern Arizona is warning consumers to be cautious of an organization posing as Fannie Mae and Freddie Mac mortgage lending companies. The scammers are sending letters nationwide announcing a lottery that gives people who lost a home a bogus chance to buy another. According to the letter, the F & F Equity Draw has $50 million to give away, and recipients “have emerged a winner…of $5 million.”

  • When a BBB representative contacted the phony Fannie Mae and Freddie Mac, he was told to use Western Union to wire $850 to a Las Vegas location. Individuals who fall for this scam will lose the money they send in, and will receive nothing in return.

For the rest of the news release, see BBB Warns of Latest Mortgage Lottery Scam.

12 Families In Milwaukee Rental Building Avoid Boot As Foreclosing Lender Turns On The Gas

In Milwaukee, Wisconsin, WTMJ-TV Channel 4 reports:
  • An orange notice is tacked up on the main entrance to 6372 N. 89th Street. It informs tenants of the 1970’s era apartment building they must be out by September 5. [... Oscar] Jordan said he has always paid his rent on time. His gas is supposed to be included in that rent, but eight days ago, the gas was shut off. Seems the landlord, embroiled in foreclosure proceedings, stopped paying the gas bill. Without gas coming into the building, the city deemed the structure uninhabitable. “A lot of people in here got kids,” Jordan said of the eleven other families sharing the building. “You can’t buy school clothes and then turn around and relocate, pay rent, security deposit.”


  • Late Tuesday, tenants may have earned a reprieve. A representative of Waterstone Bank, which holds the note on the property, told Jordan the institution is taking over the property and indicated the gas would be turned back on.

For more, see 12 Families Facing Eviction.

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

Hialeah Housing Authority Employee Facing Foreclosure Charged With Stealing Tenants' Rent Checks

In Hialeah, Florida, Miami New Times reports on Hialeah Housing Authority employee/rent collector Delma Mercado, who allegedly came up with a novel attempt avoid foreclosure of her home:
  • As media across the county reported last week, the 54-year-old Puerto Rican got nailed for forging her signature on 40 Hialeah Housing Authority checks and pocketing almost $14,000 in poor residents' rent payments.

  • What nobody has reported is the reason: Mercado divorced her husband in March 2007, inheriting the mortgage on their $161,000 home near Miami's Sewell Park, public records show. Her bills weren't adding up, apparently, because the bank moved to foreclose on the house in June.

  • Even in adversity, she found opportunity. Mercado's job involved collecting rent checks from poor and elderly Hialeahans. Sometime before March, Mercado began scratching her name onto the checks, taking them to a check-cashing shop, and keeping the change. The residents, in turn, were entered into the system as having missed a rent payment.

Reportedly, the alleged scam was caught early enough so that none of the tenants got screwed. As for Mercado, in addition to her mortgage problems, 82 counts of forgery, fraud, and grand theft have reportedly been added to her legal problems.

For the story, see Hialeah Woman Delma Mercado Steals from the Poor to Pay Her Mortgage.

Raise The Red Flag On Craigslist-Advertised Rentals Too Good To Be True

In Seattle, Washington, KOMO-TV Channel 4 reports:
  • Here's a word of warning for anyone looking to rent a house or apartment: some of the ads you see may be planted by scammers. The houses are real, but the rest is smoke and mirrors. As high as rent is getting around Seattle, when you see a nice place that's reasonable, you have to jump on it. Just make sure the person you're dealing with is really the landlord. It could be slick trick in the name of God.


  • The imposters pose as missionaries or other devout Christians forced to transfer to West Africa. They say they had to leave on short notice and as a result, have to handle the rental themselves, long distance. They're looking for an honest tenant who they can trust to take care of their home.
For more, see Too-good-to-be-true rentals featured on Craigslist are usually just that (read story) (watch video).

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

Code Enforcement Program To Clip Lenders For Fines On Vacant Property "Not Going Well" In One Town

In Hollister, California, the Hollister Free Lance reports:
  • Hollister Code Enforcement Officer Mike Chambless [...] said a program to make overseas banks more accountable for neglected properties "is not going well." Chambless had told the Free Lance in May officials were starting the program to heighten accountability of banks, based in places such as Japan and Germany, which own unkempt properties here. Officials had been responding to increased reports of such homes falling into dangerous levels of disrepair, while others were being broken into for drug use and other criminal activity.

  • The city sent letters in April and May warning that a $1,000 a day fine could result if compliance is not met by owners. The maximum penalty is $100,000, but securing any fines from overseas banks has been problematic.

For more, see Program to target neglectful, overseas banks 'not going well'.

New Ohio Law Aimed At Preventing Lenders From Keeping Deteriorating Foreclosed Homes In Legal Limbo

Buried in a recent article in the Mansfield News Journal is this blurb on a new Ohio law requiring the prompt recording [14 days after the balance due on the foreclosure sale is paid] of foreclosure deeds after public auctions, thereby precluding some foreclosing lenders from dragging their feet when recording the title to property, thereby keeping homes in legal limbo for the purpose of avoiding code enforcement hassles on deteriorating homes.
  • [Sheriff Steve] Sheldon, civil division deputy sheriff Kathy West and Clerk of Courts Lin Frary [...] discussed House Bill 138, which requires sheriffs to file deeds for foreclosure sales. The law that goes into effect Sept. 11 was designed to help properties from being in limbo if deeds aren’t filed. It gives local governments more tools to get control of vacant tax-delinquent parcels.

Source: Jail, foreclosures keep sheriff’s office busy.

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

Wednesday, August 27, 2008

Feds Warn Thrifts In Response To Complaints From Hot Homeowners Feeling Screwed Over By Frozen HELOCs

In Washington, D.C., a syndicated article from the McClatchy Newspapers reports:
  • After a rash of consumer complaints, the federal agency charged with regulating savings and loans warned lenders that they cannot arbitrarily change the terms of home-equity loans.


  • The Office of Thrift Supervision issued a six-page letter of guidance to the institutions, called thrifts, spelling out their obligations on home-equity lines of credit [HELOCs]. These revolving lines of credit were popular during the housing boom of 2001 to 2005, when people could easily borrow against the equity in their homes to pay for college tuition, build a garage or remodel a kitchen. [...] Now, many borrowers own homes worth less than the value of their loan, and home-equity lenders are tightening up amid rising defaults.

  • As national housing problems worsened, the federal agency began fielding complaints that some of the 830 thrifts under its supervision were freezing the credit promised to borrowers and altering rules for accounts that weren't supposed to be changed.

For more, see Thrifts told not to alter loans (Complaints rise as lenders freeze home equity lines of credit).

See also: The Washington Post: A Wake-Up Call on Home Equity Loans.

For the six-page OTS letter of guidance, see Home Equity Line Of Credit Account Management Guidance (discusses violations of Truth in Lending Act (TILA) / Regulation Z ); fair lending issues under The Equal Credit Opportunity Act (ECOA) and its implementing Regulation B; a Fair Credit Reporting Act issue, and possible allegations of Unfair or Deceptive Acts or Practices).

Go here for other posts on Frozen HELOCs.

NYC Condo Developer Opts Against Marketing Units; Unloads Entire Building To Columbia University; Students, Faculty To Live In Luxury

In The Bronx, New York, The Wall Street Journal reports:
  • Thanks to the slowdown in the New York City condo market, some Columbia University students and faculty will be bunking in high style. Columbia recently bought 127 high-end condos from a developer and has converted the building, called The Arbor, into housing for graduate students and faculty. The building is located in Riverdale, an affluent section of the Bronx not far from Columbia's uptown Manhattan campus.

  • L&M Development Partners decided to unload the entire building to Columbia for about $69 million, a 20% discount from what the developer had hoped to obtain by selling the condos individually, says Vincent Carrega, executive managing director, at Grubb & Ellis Co., which represented L&M in the deal.

For the story, see From a Doorman to Dorm Rooms.

Ex-EMC Employee Spills The Beans On Loan Servicing Secrets

Consumer Warning Network has a video on YouTube of an interview with a former loan servicing employee with EMC Mortgage Corporation, who spills the beans on what was once an industry secret servicers didn't want the public to know.
  • The secret mortgage servicers don't want you to know is they can make MORE money off of homeowners when they keep your loan in default. A former employee of loan servicer EMC tells the inside story why so many people can't get their loan out of default.
For the video, see Mortgage Servicers' Secret.

Go here, go here, and go here for posts on questionable mortgage servicing practices. questionable mortgage servicing practices tactics xero MortgageServicingIssuesAlpha

Inability To Unload Excess Inventory Forces Condo Developers To Rent Units To Avoid Foreclosure

In Des Plaines, Illinois, the Daily Herald reports:
  • Real estate sales in the suburbs are so bad that developers of condominium buildings - as well as owners of existing units - are renting apartments to avoid foreclosure. In Des Plaines, a developer whose for-sale building is almost finished is negotiating to restructure his construction loan and switch the units to rentals.


  • The 60-unit building [...] in Des Plaines owned by Sphinx Chicago Properties is 90 percent finished, said Kymn Harp of the Chicago law firm Robbins, Salomon & Patt Ltd., which represents the developer. Fifth Third Bank has filed a foreclosure suit in Cook County Circuit Court, and the developer is negotiating to extend the loan so the building can be finished as rental apartments.


  • Another example is marketing announcements from Residential Homes of America. Fifteen new townhouses are available for rental at Alleghany Trail at Village Station in Grayslake, the builder said. Rent-to-purchase options are also available there as well as at the Residences of Fountain Square condominiums in Lombard.

For more, see Condos going rental amid housing downturn.

In a related story, see Des Plaines mayor wants answers from condo developer.

Real Estate Investor Sues Lender For Dragging Feet In Failed Short Sale

In San Diego County, California, North County Times reports:
  • A North County real estate company has sued a lender for a failed short sale, a transaction that has become increasingly popular while home prices tumble. [...] The buyer in the stalled short sale, Ribsy Productions, a real estate company based in Solana Beach, filed suit on Friday against Aurora Loan Services, a Littleton, Colo., mortgage lender, for not following through on a short sale. The lawsuit seeks suspension of any foreclosure proceedings on the Arizona property and other reparations.


  • The Solana Beach company is suing Aurora for breaking a contract and several other charges after the lender did not respond to requests from the buyer, Ribsy Productions, for an approval letter. "We don't have to prove intent. They have responsibilities on the contract, and they didn't follow through on those obligations," said Ajay Gupta, the lawyer representing Ribsy Productions. "This is a straight breach-of-contract case." [...] Aurora holds a $587,000 loan on the Tucson, Ariz., home and accepted the short sale offer of $158,000, a 73 percent drop in value, according to the lawsuit.

For more, see Buyer sues lender over short sale (In an apparent first, a lawsuit comes from the frustrating type of purchase).

Victim Or Suspect: NBA Player Finds Himself At Center Of Detroit Cash Back Mortgage Fraud Investigation

In Detroit, Michigan, The Detroit News reports:
  • A Waterford Township man says veteran Detroit Pistons guard Lindsey Hunter was a key figure in a mortgage fraud that left him broke, ruined his credit rating and wrecked his marriage. "If this had been anybody else, you know I wouldn't have gone for this," Bruce McClellan said of a deal in which he said he was promised a $350,000 profit for signing documents in connection with the purchase of a pricey home in Bloomfield Hills. "I just figured he wouldn't do anything like this," said McClellan, who was interviewed by the FBI in July.

  • Hunter, who could not be reached for comment Monday, has complained to the Wayne County Sheriff's Department that he was a victim -- not a perpetrator -- of fraud, a Sheriff's spokesman and Hunter's attorneys said Monday. "We do have an open investigation that involves some business dealings that involve Lindsey Hunter as a potential fraud victim," spokesman John Roach said. The complaint was made in February by either Hunter or someone representing him, Roach said.

For more, see Hunter: Mortgage fraud victim or suspect? (Conflicting reports place Detroit Pistons guard at center of FBI investigation into questionable deal).

See also The Detroit Free Press: FBI probing Lindsey Hunter's role in real estate deal (Waterford man charges he was duped into buying house).

Illinois Cops Nab California Deed Theft Suspect On Outstanding Warrants; Man Shipped Back To Face Multiple Felony Charges

In Southern California, San Bernardino County District Attorney Michael Ramos announced last week:
  • In May 2008, felony charges were filed against John Christopher Foster, 50, formerly of Rancho Cucamonga, involving several felony counts of Real Estate Fraud related offenses. In 2005 and 2006, Foster forged the victim's signature on a Grant Deed and Deeds of Trust for property located in the city of Fontana. Subsequently, Foster sold the Fontana residence for $675,000.

  • Investigators from the San Bernardino County District Attorney’s Real Estate Fraud Unit found that Foster had fled California in January 2008. On August 14, 2008, Illinois State Troopers arrested him while driving through Douglas County, Illinois. Foster was arrested on the outstanding felony warrant, which included charges of: Forgery, identity theft, and filing forged documents with the County Recorder’s Office.

  • On Wednesday, August 20, 2008, DA Investigators from the San Bernardino County District Attorney’s Real Estate Fraud Unit extradited Foster, via airplane, back to California from the state of Illinois.

For the DA's press release, see Rancho Cucamonga Man Extradited From Illinois on Real Estate Fraud Charges.

Tuesday, August 26, 2008

Loan Servicers' Contractual Obligations Create Opportunity For Buyers Of Mortgage-Backed Junk Paper

Barron's reports:
  • YOU KNOW THOSE TOXIC SUBPRIME-MORTGAGE-BACKED securities that priced at par just a year ago, but now are quoted at pennies on the dollar? Well, a few hedge funds are buying them, in anticipation of a sweet payoff. Seriously.

  • "Mention subprime mortgages, and the connotation is so negative that just the sound of them makes people cringe," says Steve Persky, chief executive officer at investment-advisory firm Dalton Investments. "That's the hallmark of a great distressed opportunity."

  • OK. Getting real, Persky doesn't expect to see much principal, if any. But subprime and Alt-A asset-backed securities, or ABS, do pay interest. And even when a homeowner stops paying, the mortgage-servicer has to step in and pay interest and principal to a trust until the home is sold in foreclosure. The trust pays the bondholders.

  • The timeline is the key. Persky's strategy is to buy the ABS at 4 to 4½ cents on the dollar and break even in about a year. A typical foreclosure takes as long as 18 months. "It will pay interest significantly longer than the price [of the distressed debt] indicates," he says.

For more, see Junk Mortgages for Just Cents -- and Just a Year (Opportunities in subprime-mortgage-backed securities). (Might require subscription; if no subscription, try here - then click link for story, then "Refresh" web page if necessary). MortgageServicingIssuesAlpha

Feds Warn NYC Landlords On Apartments Not Accessible To Those With Disabilities; May Cost Tens Of Millions To Comply With Law

In New York City, The New York Times reports:
  • [The status of thousands of disabled tenants] took the spotlight last week with the news that developers and landlords in New York City — potentially facing lawsuits from the federal government — may have to spend tens of millions of dollars to renovate more than 100,000 apartments built since 1991 to comply with federal housing laws barring discrimination against tenants who use wheelchairs.

  • The United States attorney’s office in Manhattan has sent letters to some of the city’s most prominent landlords and architects, saying they risk prosecution under the Fair Housing Act because, the prosecutors said, their buildings are not accessible to people with disabilities.

For more, see Accessible Homes? Not Really, Say Disabled Residents.

Sunken 30-Foot Fishing Boat Behind $1.1M Foreclosed Home Has Neighbors In Affluent Florida Community In Uproar; Legalities Leave City's Hands Tied

In Hallandale Beach, Florida, the South Florida Sun Sentinel reports:
  • A 30-foot fishing boat that went down more than a month ago is still tangled in legal red tape. The city has been trying to figure out how to get rid of the unnamed vessel, now almost completely submerged behind a foreclosed home in the affluent Golden Isles neighborhood. Neighbors, many living in mansions and with mega-yachts docked nearby, are outraged by the barnacle-encrusted hulk visible from the Sunset Drive bridge. "It's a real mess, major mess," said Marvin Wellen, who lives next door to the foreclosed, $1.1 million home in the 500 block of Oleander Drive. The owner of the house, who also co-owned the boat, is missing.


  • According to property records, Deutsche Bank National in California took possession of the house in February. It is partially boarded up, and a cloud of mosquitoes hovers over the dark, mucky pool. Police and neighbors said rain helped sink the boat after someone snatched its batteries and water pump.


  • Nearly every city department has worked on the problem. They called the U.S. Coast Guard, but officials said the vessel isn't blocking marine traffic or posing any hazards, so they can't help.

For more, see Down with this ship: Hallandale Beach and neighbors want sunken vessel removed (City and neighbors want to get rid of a sunken boat).

See also, WFOR-TV Channel 4: Neighbors Wants City To Remove Sunken Eyesore; or for Channel 4 video, see Unusual Foreclosure Eyesore Battle.

Tax Collector, Loan Servicer Payment Screw-Up Leaves Blameless Homeowner Facing Foreclosure

In Slate Hill, New York, the Times Herald Record reports:
  • The foreclosure notice was the ultimate insult. After four months of battling with the Town of Wawayanda, Orange County and her mortgage company over an error she didn't make, Andria Housell got the letter last week: The mortgage company was threatening to foreclose on her house because she "owed" them the town and county taxes they had paid on the wrong property. "They keep calling me for the balance due, and harassing me," Housell said. "My credit card limits have been lowered. Obviously, it's affecting my credit report."


  • "The bank sent the wrong amount of money to them, and the tax collector applied it to the wrong account," said John McCarey, real property tax director for Orange County.

For more, see Woman stuck in mortgage mess (Bank wants her to pay for taxes applied to the wrong property).

Brooklyn Man Cops Plea For Role In Home Swindle Of Dementia-Suffering Senior; 2nd Suspect On The Lam; Civil Litigation Ongoing To Undo Fraudulent Sale

In New York City, the Queens District Attorney's Office announced last Friday:
  • Queens District Attorney Richard A. Brown today announced that a Brooklyn man has pleaded guilty to fifth-degree criminal possession of stolen property in connection with the fraudulent sale of a retired New York City correction officer’s Cambria Heights house. The defendant [...] was charged in the case along with his brother [...]. The brother is a fugitive who is being sought internationally.(1)

  • District Attorney Brown said, “This defendant took advantage, allegedly along with his brother, of an elderly man’s poor health by swindling him out of his home. Fortunately, the victim, who suffers from dementia, was able to remain in his home and civil litigation is underway to ensure that he may remain there as the rightful owner. Fortunately, the scheme was uncovered after the victim’s eldest daughter, a New York City police officer, became suspicious of various transactions and reported the matter to my Economic Crimes Bureau.”

  • He was sentenced to pay $50,000 in restitution and his check in that amount was personally delivered to the victim hours later by the prosecution.

For the details of the scam, see Brooklyn Man Pleads Guilty In Connection With Fraudulent Sale Of Retired Correction Officer's Home (Immediately Pays $50,000 in Restitution).

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

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

(1) According to the press release, the DA identified the defendants as Moses Brach, 31, of 182 Lynch Street in Brooklyn, and his brother, Joel Brach, 27, who lived at 137-68th 70th Avenue in Flushing and is believed to have fled to Israel. FinancialAbuseOfElderlyAlpha deed theft xenon

Foreign National Cops Plea To Stealing, Using Another's I.D. To Purchase, Move Into Home; Immigration Feds To Give Her The Boot

In Southern California, San Bernardino County District Attorney Michael Ramos announced last week:
  • On Thursday, August 21, 2008, Fanny Velasquez, 54, of Victorville, pleaded guilty to forgery and was sentenced to 16 months (suspended) in state prison as part of a plea agreement where she is released to INS and deported to her native Columbia. The issue of restitution has been reserved.


  • In October 2006, the victim contacted the San Bernardino County District Attorney's Office, Real Estate Fraud Unit. District Attorney Investigators conducted an extensive investigation into the victim's complaint and learned Velasquez had illegally used the victim's identity to purchase [a] home, thus encumbering the victim's credit.(1) Investigators also learned that Fanny Velasquez was living in the residence with her family.

For the DA's press release, see Victorville Woman Pleads Guilty to Real Estate Fraud.

(1) According to the DA's press release, the victim checked her credit report and discovered she had two mortgage loans in her name, for which she never applied. The total amount of both loans was $177,000.

Monday, August 25, 2008

Add Indiana AG To The "Sue Countrywide Hit Parade" - Seeks to Void Loans Originated Thru Deceptive Practices, Up To $15.5K Per Violation Of Law

From the Indiana Attorney General's Office:
  • Indiana Attorney General Steve Carter has filed a lawsuit against the country’s largest mortgage lender, Countrywide Home Loans, Inc., and its parent company, Countrywide Financial Corporation. Carter alleges that Countrywide engaged in deceptive and misleading practices that led to borrowers obtaining potentially risky and costly loans. The lawsuit has been filed in Steuben County Court.


  • Carter is requesting that the court order Countrywide to end the deceptive practices listed, void the prepayment penalties on Countrywide originated loans, and void any portion of the Countrywide originated loans resulting from deceptive acts.


  • The state is also seeking civil penalties of up to $15,500 per violation, as well as investigative costs and consumer restitution in an amount to be determined at trial. The penalties are allowed under the Home Loan Practices Act, Indiana Code 24-9-8 which took effect July 1, 2005, and the Indiana Deceptive Consumer Sales Act, Indiana Code 24-5-0.5.

For more, see Indiana AG takes Action against Mortgage Lender Countrywide for Unfair Practices.

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

Lehman Bails Out Of Fancy Beach Condo; Unloads Loans On Eager Bad Debt Buyer; Construction Liens Pile Up As Builder Accused Of Stiffing Subs

In Miami Beach, Florida the Daily Business Review reports:
  • The Canyon Ranch Living condominium and condo hotel looked like a safe bet two years ago when Lehman Brothers assumed more than $400 million in construction loans tied to the ultra-luxury Miami Beach project. But even ultra-luxury projects backed by brands like Canyon Ranch aren’t safe in this housing meltdown. Now, embattled Lehman has sold the loans – which weren’t paid when they came due – to an investment group that specializes in buying bad debt and other distressed assets. In May, Fortress Investment Group acquired two Canyon Ranch construction loans totaling about $400 million from Lehman.


  • Canyon Ranch developer WSG Development didn’t pay off the two construction loans when they came due. It also continues to pile up liens by contractors who claim they’re owed millions for construction work done and material supplied. Lehman Brothers in April agreed to give WSG another year to pay off the loans instead of foreclosing on the mortgages. But the next month Lehman, which is struggling under massive loan defaults, unloaded the debt.

Adding to this ugly picture is the fact that local court records show about two dozen suits involving buyers who don’t want to close on their contracts for condos at the Canyon Ranch project, according to the story. Presumably, there are at least some buyers who can't close because they're having trouble lining up a lender to fork over the financing on what may now be overpriced property and are reluctant to walk away from their deposits.

For more, see Condo Meltdown: Bailing out of Canyon Ranch.

Law Regulating Foreclosure Rescue Among Financing-Related Homeowner Protection Bills Signed By Delaware Governor

In Wilmington, Delaware, The News Journal reports:
  • Gov. Ruth Anne Minner signed into law [last] Tuesday four bills aimed at helping homeowners avoid foreclosure, including a measure that for the first time licenses and regulates all loan originators. The legislation, which grew out of the recommendations of a foreclosure-prevention task force chaired by Lt. Gov. John Carney, licenses and regulates mortgage loan originators and foreclosure consultants, requires independent counseling for seniors considering reverse mortgages and raises money for a state-run fund that provides short-term loans to help homeowners make mortgage payments.

For more, see Minner OKs foreclosure prevention bills.

According to the synopsis of one of the new laws, the Mortgage Rescue Fraud Protection Act, which regulates foreclosure purchasers and foreclosure consultants:
  • Each month foreclosure proceedings begin on about one house in every 1,000 nationwide. The growing foreclosure rate has led to a wave of equity stripping and foreclosure rescue scams. This bill regulates foreclosure consultants and foreclosure reconveyances in order to protect homeowners from foreclosure rescue schemes that deplete the homeowner’s equity.

Among the highlights of the law is that it makes a violation of any provision a crime punishable as a Class A misdemeanor (see section 2428B(d) of the new law).

Go here for Delaware's Mortgage Rescue Fraud Protection Act; and go here for legislative history of the new law. The law goes into effect on January 1, 2009.

Breathing Life Into A Stale, Time-Barred Truth In Lending Act Claim

Earlier this year, an article in the law firm Stroock, Stroock & Lavan's Subprime Task Force Special Bulletin(1) contained a discussion on the 2008 California Federal Court decision in Monaco v. Bear Stearns Residential Mortgage Corp.(2) which, it appears to me, illustrates a way how, in California and possibly other states having similar state laws, claims for damages on account of conduct that constitutes violations of the Federal Truth In Lending Act ("TILA") can be pursued even if the one-year TILA statute of limitations has expired. A few excerpts from the article:
  • In Monaco, a federal court in California found that standard option-ARM loan documents are “ambiguous,” potentially subjecting the lender to liability for trying to enforce the loan’s terms. Making matters more difficult for the lender, the court further held that the lender’s alleged violation of the federal Truth In Lending Act (“TILA”) could create liability under California’s Unfair Competition Law (“UCL”), which provides for greater penalties than allowed under TILA, even though the borrower’s TILA claim was barred by the statute of limitations.


  • Plaintiffs [Monaco & others] seek to rescind their loans by reason of alleged violations of TILA, including failure to disclose the actual interest rate and negative amortization, and, using the alleged TILA violations as a predicate, demand damages and restitution under California’s UCL.


  • Bear Stearns moved to dismiss the TILA claims on the grounds that plaintiffs were not entitled to have their loans rescinded because the option-ARMs were refinancings of prior loans and because TILA’s one-year statute of limitations had expired. Second, defendants moved to dismiss the UCL claims on the grounds that TILA preempts California’s UCL and will not permit plaintiffs to win damages and penalties not permitted under TILA.


  • Although the California court agreed that plaintiffs could not use TILA to rescind their loans and the TILA claim was barred by the statute of limitations, it nevertheless rejected defendants’ preemption argument:

  • A State law is inconsistent with TILA if it requires a creditor to make disclosures or take actions that contradict the requirements of the Federal law. Here, Plaintiffs’ second cause of action under the UCL is based solely on Defendants’ alleged TILA violations. Nowhere do Plaintiffs suggest that Defendants failed to make certain disclosures or take certain actions not encompassed by TILA. Plaintiffs invoke the UCL solely for the additional remedies offered thereunder. Additional penalties are not inconsistent with TILA, but merely provide greater protection to consumers. (Monaco, page 7, at lines 9 through 17).

  • Thus, the UCL’s longer statute of limitations enabled the Monaco plaintiffs to pursue their otherwise time-barred TILA claim and to obtain penalties that would not be permitted under TILA.(3)

For more, see Courts Act to Protect Borrowers on Option-ARM and Subprime Loans.

For the court decision, see Monaco v. Bear Stearns Residential Mortgage Corp.

For those of you who are interested, the article also contains a discussion of another pro-borrower decision referred to in this blog earlier this year, the New York decision in LaSalle Bank, N.A. v Shearon, No. 100255/2007 (Sup. Ct. Richmond County, Jan. 28, 2008).

See The Stroock Public Service Project for more on the firm's service to pro bono matters, organizations and advocacy. The Public Service Project provides a broad array of legal assistance, with a special focus on underserved and under-resourced communities in New York City.

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.

(1) By Julia B. Strickland, a Partner in the Class Action/Financial Services Litigation Practice Group of Stroock & Stroock & Lavan LLP, and Curtis C. Mechling, a Partner in Stroock’s Litigation Practice Group, both of whom are members of Stroock’s Subprime Task Force.
(2) No. CV 07-05607 SJO (CTx) (U.S.D.C. Central District of California, Jan. 28, 2008).

(3) My guess is that, if TILA violations can be used as a predicate for damages under state consumer protection laws of other states, a similar result could be reached in those other states. UndoMortgageLoans TILAdelta

Erie Homeowner Hurt In Mortgage Scam Settles Suit; 40%+ Cut In Loan Balance, Interest; Non-Profits Reviewing 50 Other Cases Say Class Action Possible

In Erie, Pennsylvania, the Erie Times News reports on the settlement of a predatory lending case brought in an Erie Federal Bankruptcy Court by local resident Eloise Woodsbey, who nearly lost her home to foreclosure:
  • [I]n the main provision of the settlement, the principal on Woodsbey's mortgage was cut from $44,900 to $25,000, and the interest rate was set at 5 percent, over 30 years. That rate had been as high as 11.75 percent.

  • Using the Woodsbey case as a guide, the statewide legal-aid organization that represented her is working with local groups to try to help hundreds of other Erie homeowners caught up in the same Erie subprime mortgage scam, which was at the center of a federal criminal probe. Among those indicted in the case were the mortgage broker and developer involved in selling Woodsbey her house.


  • "It is a good result for her," said one of Woodsbey's lawyers, Kevin Quisenberry, of the Pittsburgh-based Community Justice Project. "I wish there was a way to get relief for the other 100 people who bought these homes." He said the nonprofit Community Justice Project has been receiving information from St. Martin Center Inc. and other Erie-based groups on other homeowners who might need assistance.


  • Dave Pesch, the housing counseling manager at St. Martin Center Inc. [...] said that he and lawyers from the Community Justice Project are reviewing the mortgages of about 50 Erie residents who purchased houses from the defendants in the criminal case. [...] When asked if the review could result in a class-action suit involving some of those homebuyers, Pesch said, "I certainly think that is a possibility." Quisenberry said he hopes that local lawyers and other officials can provide the resources to review the cases of other homeowners to see if they merit legal action. "What would be really great is if we can get a dedicated pool of attorneys who would be available for cases that would be referred to them," Quisenberry said.

For more, see Woman settles mortgage fraud suit. UndoMortgageLoans TILAdelta

Sunday, August 24, 2008

Appraisers Still Feel The Pressure To Jack Up Home Values

Syndicated real estate columnist Kenneth R. Harney writes:
  • Have the real estate valuation shenanigans and inflated home appraisals that characterized the boom years disappeared from the marketplace? Are mortgage loan officers and realty agents — even individual home sellers — continuing to influence or attempting to interfere with appraisals despite new federal rules that ban such behavior?

  • Ask appraisers and many will tell you: It's still business as usual. Attempts at encouraging inflated appraisals continue to be commonplace, though in some cases the techniques have become subtler.

For more, see Appraisers Still Feeling Pressure.

Tenant Pockets $4K; Landlord Accused Of Rejecting Children, Rent Subsidy In Separate Massachusetts AG Housing Discrimination Actions

In two separate legal actions, the Massachusetts Attorney General's Office announced this month:
  • Attorney General Martha Coakley’s Office has obtained a consent judgment resolving claims that a Fitchburg landlord discriminated against a tenant and her children by terminating her tenancy because he did not want to comply with laws requiring him to de-lead the apartment for the safety of the children. The judgment [...] permanently prohibits the landlord, Farag Mohamed, from discriminating against tenants or any person applying for housing and requires the landlord to pay the victim $4,000.


  • The complaint alleges that [...] Mohamed attempted to terminate the victim’s tenancy after a lead paint test revealed the presence of lead throughout the apartment where the victim and her three children resided. [...] The complaint alleges that Mohammed refused to abate the lead hazard and subsequently told the victim that he no longer wanted to work with Section 8, and asked her to move out of the apartment.(1)

For more, see AG Coakley Obtains Consent Judgment Against Fitchburg Property Owner in Housing Discrimination and Lead Paint Case.

In a second case:

  • Attorney General Martha Coakley’s Office filed a housing discrimination complaint against Inna Bogina, the owner of a three-bedroom rental property in Quincy, and her daughter Tatiana Bogina, the rental agent for the property. The complaint [...] alleges that the Boginas violated state antidiscrimination laws by refusing to rent to recipients of housing subsidies and a family with children.(2)


  • According to the complaint, the Boginas twice refused to rent the Quincy property to women who held Section 8 federal housing subsidies, including a family with three children. [...] The complaint further alleges that the current tenant informed the victim that Tatiana Bogina told him she did not want to deal with "those kinds of people" and further stated that her family did not want to rent to people with children because they feared the children would "wreck the place."

For more, see AG Coakley Sues Quincy Landlord For Housing Discrimination.

(1) According to the AG's press release, under both Massachusetts lead paint law and the terms of the tenant’s Section 8 rental subsidy, administered by the Rural Community Assistance Program, the landlord is required to abate lead hazards. Under Massachusetts antidiscrimination law, it is illegal to discriminate against a person because he or she is a recipient of a housing subsidy or because of that person’s familial status. It is also illegal for a landlord to refuse to rent to someone because the landlord does not want to comply with the health and safety requirements of a housing subsidy program.

(2) According to the AG's press release, under Massachusetts law, it is illegal to discriminate against housing applicants because they receive public assistance. It is also illegal to discriminate against individuals who intend to reside with children.

NY AG Undercover Sting Uncovers Buffalo Property Manager Routinely Screwed Section 8 Tenants Out Of Housing Opportunities; Firm To Fork Over $10K

The New York Attorney General's Office announced this month:
  • Attorney General Andrew M. Cuomo [...] announced his office has stopped a Western New York real estate management company from denying housing to potential tenants because they receive government housing subsidies, including Section 8.(1)

  • Under an agreement with the Attorney General’s Office, the managers of Buffalo’s Camelot Court Apartments, Clover Management, Inc., must designate future available units for recipients of government housing subsidies, and provide an apartment to an individual who was initially denied housing because he was a Section 8 recipient. The company must also pay $10,000 to the Attorney General’s Office to be principally used for outreach and education of anti-discrimination laws.


  • Undercover HOME [Housing Opportunities Made Equal - a Buffalo non-profit fair housing group] testers went to Camelot Court seeking apartments. However, when the testers revealed they were Section 8 recipients, the Property Manager told them that the complex did not accept Section 8. The Attorney General’s investigation confirmed that Camelot Court routinely turned Section 8 recipients away.

For more, see AG Cuomo Stops Buffalo Apartment Complex Owner From Discriminating Against People Receiving Financial Housing Assistance.

(1) According to the AG's press release, the City of Buffalo enacted a law in 2006 that makes it illegal for any landlord or property manager to refuse to rent housing to anyone because of their source of income (Chapter 154 of the Code of the City of Buffalo, Discrimination). The settlement marks the first government law enforcement action under the 2006 Buffalo law designed to increase the availability of housing for low- and moderate-income tenants. It is one of several local laws in New York state that prohibit housing discrimination based upon an individual’s source of income, including public assistance, pensions, annuities and government rent subsidies such as Section 8. New York City, Nassau County, Hamburg, and West Seneca have passed similar laws.

Six Cop Guilty Pleas In Alleged $17M Miami Mortgage Fraud; Charges Against Nine Others Still Pending

From a Florida Attorney General press release:
  • Attorney General Bill McCollum [...] announced that six South Florida individuals have pleaded guilty to their roles in a criminal mortgage fraud operation that defrauded several financial institutions out of more than $17 million. The six were among 15 who were arrested in July after a 10-month investigation conducted by the Miami-Dade Police Department's Mortgage Fraud Task Force, the United States Secret Service and the Attorney General's Office of Statewide Prosecution. The defendants faced charges of racketeering, conspiracy to commit racketeering, mortgage fraud, grand theft, identity theft and money laundering.


  • Authorities believe the scheme involved the use of two separate title companies located in Miami-Dade County. The conspiring title agents would prepare fraudulent HUD-1 statements on behalf of the other co-conspirators which would then be provided to the lender. [...] Many of the HUD-1 statements involved in this case contained fraudulently inflated sales contract prices. [...] Upon receiving the fraudulent HUD-1 statement, the lender would fund the loan believing the property sold for the inflated sales price. The title agent, acting on behalf of the other co-conspirators, would then transfer the fraudulently obtained profits into a bank account of either a third party or a shell company controlled by one of the co-conspirators.(1)

For more, see 6 Miami-Dade Mortgage Fraud Defendants Plead Guilty To Roles In $17 Million Mortgage Fraud Enterprise.

(1) According to the press release, those copping guilty pleas were: Monica Fergusson, Diana Diaz, Mari Matilde Leony Rodriguez-Triana, Raisa Diaz, Mario Lubian, and Marlene Norono.

Report On Cities' Battle Against Problems From Vacant & Abandoned Properties

A June 2008 report prepared for The United States Conference of Mayors compiles the "best practices" in place to combat problems of vacant and abandoned properties in each of 27 cities across the country.

For the 42 page report, see Vacant and Abandoned Properties: Survey and Best Practices (2008).

For other resources regarding U.S cities' struggle with vacant & abandoned properties:

Go here, Go here, Go here, and Go here for posts on vacant homes leaving their mark on neighborhoods. ForeclosuresDestroyNeighborhoodsApple

An In-Depth View Of Minneapolis Home Demolition Program

In Minneapolis, Minnesota, the Twin Cities Daily Planet reports:
  • [S]o far this year, the city has razed 21 homes. With a $1.25 million grant from Hennepin County, it hopes to demolish 100 in all by the end of the year. Since 2005, home demolitions by the city have increased a whopping 95 percent. City officials say the increase is directly attributable to the foreclosure crisis. Like many streets in north Minneapolis, the entire 2900 block of Dupont has been under attack for years: First by drugs and crime. Then by foreclosures. Then by arsonists. And now by the implacable arm of a Bobcat.


  • Yet the costs to the city go well beyond the actual demolitions: If there is major asbestos contamination, for example, that can add on another $5,000 or so to the $17,500 average. And if the banks or homeowners appeal the demolition orders—which around 20 percent do, according to [director of inspections for the city of Minneapolis Henry] Reimer—that adds significant costs in attorney’s fees and city workers’ time. Reimer says that nearly 70 percent of the time the mortgage holders cough up the money for the demolitions, attorney’s fees, and subsequent care of the lot.

For mor, see Home demolitions: Can North Minneapolis avoid becoming a Little Detroit?

Go here, Go here, Go here, and Go here for other posts on vacant homes leaving their mark on neighborhoods. ForeclosuresDestroyNeighborhoodsApple

California Homeowners: Beware Of Requests For Upfront Fees

In California, the San Diego Business Journal reports:
  • Requests for fees to be paid in advance should send up red flags to homeowners, says [California] Department of Real Estate spokesman Tom Pool. Only a select group of companies can charge upfront fees, only because they have signed “an advance-fee contract” with the department that explains exactly what services they will provide.

  • The way the advanced-fee law works is they can collect an advance fee if they put the money into a trust account. The money cannot be expended until the service is provided,” said Pool. “We want to make sure the contract used by the broker meets those minimum requirements.” [...] Once a notice of default has been issued, no consultant can take an advanced fee for modification services, according to Pool.

For the story, see Foreclosure Deals Sound Too Good to Be True? They Probably Are (Homeowners Should See Red Flags When Businesses Demand Upfront Fees).

Attendance Triples At Louisville Legal Aid's Weekly Foreclosure Clinics

In Louisville, Kentucky, Business First of Louisville comments on the local Legal Aid Society's Foreclosure Prevention Project, which provides education and legal assistance to low-income individuals facing foreclosure:
  • The project helps clients negotiate with lenders regarding the terms of their loans. Solutions include reducing the interest rate, replacing an adjustable rate with a fixed rate, reducing the amount of the mortgage balance and waiving fees and penalties. Legal Aid, a nonprofit group that provides free legal services to low-income persons, has seen attendance triple at its weekly foreclosure clinics.

Source: Legal Aid receives $25,000 grant for foreclosure program.