Saturday, September 13, 2008

Maryland's "De Facto" Foreclosure Moratorium Slows New Actions By 20%+

In Maryland, The Washington Post reports:
  • The number of foreclosure events in Maryland has fallen more than 20 percent since the state enacted legislation to address the housing crisis, state officials told members of the Board of Public Works yesterday. But Thomas E. Perez, secretary of the Department of Labor, Licensing and Regulation, warned that foreclosures are expected to rise in the near future as a "de facto temporary moratorium" that extended the foreclosure period from 15 to 150 days ends for many homeowners.

For more, see Foreclosure Events Decline in State (But Officials Warn That Number Should Rise as Moratorium Ends).

Minneapolis Moves Forward With Dilapidated Vacant Home Demolition Program

In Minneapolis, Minnesota, Minneapolis Public Radio reports:
  • As the number of home foreclosures continues to rise, so does the number of properties that are vacant and boarded. The city of Minneapolis has started demolishing 100 of the most dangerous, and residents in neighborhoods with mulitple vacant homes are welcoming the sight of bulldozers.


  • Vacant homes like these are easy targets for vandalism. Copper thieves make off with the wiring, causing gas explosions and water leaks. And the longer they sit empty, the more hazardous they become. That's why Tom Deegan, who runs the demolition program, said they've got to come down.

For more, see Minneapolis clears vacant, dilapidated homes to curb dangers. ForeclosuresDestroyNeighborhoodsApple

Tracy Cops Score 392 Pot Plants In Grow House Bust

In Tracy, California, the Tracy Press reports:
  • Three months of surveillance netted police 392 marijuana plants and three suspected growers during a [...] morning raid on a Tracy house [last week]. Four undercover and three uniformed officers closed in on a home at 1999 Monique St. at about 10 a.m. after the suspects tried to drive away from the house.


  • Tracy city spokesman officer Matt Robinson said the suspects had put a lot of time and effort into their operation. "The electricity had been circumvented to bypass the electrical box," Robinson said. "They had quite the setup."


  • Mold could be seen on the windows and on the walls as well as a grow light through an upstairs window from the side of the house. [A] neighbor also said a strong smell of mold drifted out of the house when police opened the windows after the raid. "It’s probably a hazard right now," the neighbor said.(1) "But we had no idea, that’s for sure. We had never seen any activity at the house."

For the story, see Pot bust perp walk.

(1) Condolences to the lucky lender stuck holding the mortgage on this home.

California Budget Crisis Creates Financial Crunch For Central Coast Non-Profits

In Santa Maria, California, KSBY-TV Channel 6 reports:
  • The budget situation in Sacramento is causing problems for some nonprofit service providers on the Central Coast. Good Samaritan Services is a nonprofit that helps the homeless and needy in Santa Maria. However no budget, means no funding, and fewer programs for those who need help now more than ever. For Good Samaritan Services in Santa Maria, functioning without a state budget means program cuts could be on the way. "We're here to really serve those who are in need and it would be devastating," Executive Director Sylvia Barnard said.


  • The current is not helping, shelters are packed with people facing foreclosure and families with nowhere else to go. "We actually have more and more families coming through our doors than we've ever seen before, so the economy is really effecting the services we provide," said Barnard.

For more, see State budget crisis creating tough times for nonprofits on the Central Coast.

Add Abandoned Arizona Tortoises To List Of Four-Legged Foreclosure Victims

In Phoenix, Arizona, KNXV-TV Channel 15 reports:
  • Pet tortoises are now the latest victim of the Valley's foreclosure crisis. Officials at the Herpetological Society in Phoenix said they've taken in 25 tortoises just in the past two weeks -- a number they normally see in six months. "We're finding them abandoned, dumped or brought to us," said Daniel Marchand who serves as curator. "Or they call and say they're going to lose their house at the end of the month and have to get rid of their tortoise." Marchand said 80 percent to 90 percent of the tortoises his sanctuary receives are there because of home foreclosures. [...] The Phoenix Herpetological Society finds homes for tortoises it takes in, reminding people not to release a tortoise since it can't fend for itself.

Source: Abandoned Valley tortoises are latest foreclosure victims.

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

Friday, September 12, 2008

Foreclosure Lists To Be Used In Vote Supression Effort?

On Wednesday, The Michigan Messenger reported:

  • The chairman of the Republican Party in Macomb County Michigan, a key swing county in a key swing state, is planning to use a list of foreclosed homes to block people from voting in the upcoming election as part of the state GOP’s effort to challenge some voters on Election Day.

  • We will have a list of foreclosed homes and will make sure people aren’t voting from those addresses,” party chairman James Carabelli told Michigan Messenger in a telephone interview earlier this week. He said the local party wanted to make sure that proper electoral procedures were followed.

For more on this story, see Lose your house, lose your vote (Michigan Republicans plan to foreclose African American voters).

For follow-up reports on this story, see:

Go here for other posts on this story.

Bloomberg: Loan Payments On 15%+ Of Securitized Alt-A Mortgages Made Since 2006 Are At Least 60 Days Late

Bloomberg News reports:
  • [H]omeowners lured by low introductory rates to Alt-A mortgages, which typically require little or no proof of a borrower's income, may fuel the next wave of foreclosures and further delay a recovery from the worst housing decline since the 1930s. Almost 16 percent of securitized Alt-A loans issued since January 2006 are at least 60 days late, data compiled by Bloomberg show. Defaults will accelerate next year and continue through 2011 as these loans hit their three- and five-year reset periods, according to RealtyTrac Inc., an Irvine, California-based foreclosure data provider.

For more, see Alt-A Mortgages Next Risk for Housing Market as Defaults Surge.

Illinois Feds Charge Man In Alleged Refinance Scam, Used Land Trust In Purported Foreclosure Rescue, Say Authorities

In McHenry County, Illinois, the Daily Herald reports:
  • Federal authorities Wednesday took over the case against a Lake Barrington Shores man accused of scamming the elderly and the unsuspecting out of their homes and property. In the process, the feds added numerous accusations against Charles H. Landwer Jr., 45, alleging he preyed on no fewer than 17 people, taking a total of $2.4 million in assets.


  • Federal authorities did not itemize Landwer's alleged swindles, but detailed one Kendall County scheme in which Landwer, using his company Accurate Financial Group of Bloomingdale, led a pair of Yorkville homeowners to believe that he was helping them refinance their home to avoid foreclosure. Landwer then convinced them the home needed to be put in trust while he worked out the financing with the mortgage holder. In fact, the complaint alleges, Landwer controlled the trust and then transferred the home to his name before refinancing it and trying to take out $230,000 in equity.

For more, see Lake Barrington man led massive swindle, feds say.

Maryland Lawmaker Violates State Foreclosure Rescue Law, Says Judge

In Maryland, The Annapolis Capital reports:
  • A judge last week ruled Del. Tony McConkey violated state law in 2006 when he bought the home of a Pasadena woman facing foreclosure. Circuit Court Judge D. William Simpson, a retired judge from Wicomico County who was assigned to this case to avoid any conflict of interests, said the Severna Park Republican was acting as a foreclosure consultant to 44-year-old Teresa Milligan and was therefore not allowed to buy her house.

  • "The whole purpose of (the Protection of Homeowners in Foreclosure Act) is to make such actions unlawful," Judge Simpson said Friday in the county courthouse on Church Circle. "I find his obtaining the title was illegal and against public policy."


  • Judge Simpson declared Mr. McConkey's deed to the house null and void, but left open the question of how much Ms. Milligan should be paid in damages. A jury trial is scheduled to begin Nov. 18, 2008. That jury will rule on additional allegations of fraud and misrepresentation and determine final damages.


  • Mr. McConkey, who was elected to the House of Delegates in 2002 and is a member of the Judiciary Committee, settled a similar lawsuit in January 2006.

For more, see Judge says McConkey violated state law (Jury to determine damages in suit against delegate).

North Carolina AG Shuts Down Alleged Real Estate Investment Scam

From the Office of the North Carolina Attorney General:
  • A Fayetteville real estate investment scheme has been shut down after leaving dozens of unsuspecting consumers with loans they cannot afford and rental properties that are worth far less than what they paid for them, Attorney General Roy Cooper announced [this week].


  • Cooper contends that Jenkins and the other defendants told consumers they could help them make a profit by purchasing houses and renting them out without having to pay any money down. Jenkins funded his scheme by misrepresenting the value of the properties he sold to consumers and by causing consumers to take out mortgages and lines of credit for more than the properties are worth.


  • According to Cooper’s complaint, the defendants promised to manage the rental properties and cover consumers’ monthly mortgage payments, taxes, and insurance on the homes as well as to pay them $500 profit a month per house. However, the defendants did not charge enough rent to cover all of the promised payments. In some cases, houses were not rented at all or were too damaged to be inhabitable.

For more, see Cooper unravels Fayetteville property investment scheme (Scheme left consumers deep in debt on overvalued properties) (Press release date: Sept.10, 2008).

12 Confessions Of A Home Mortgage Collector

In an interview with The Consumerist, a loan servicing employee lists what are described as the confessions of a home mortgage collector.

For more, see 12 Confessions Of A Home Mortgage Collector.

Virginia Man Gets 2+ Years In Equity Stripping, Refinance Scam

In Henrico County, Virginia, the Richmond Times Dispatch reports:
  • Raymundo Geraban pitched a familiar spiel, promising that he meant to pay back tens of thousands of dollars lost in mortgage deals he arranged. But [this week], Geraban, 37, was talking to Henrico Circuit Judge George F. Tidey, a solemn, white-haired figure with fragile patience, instead of a distressed, unwary homeowner. The judge didn't buy the pitch and sandbagged defense pleas that Geraban be spared prison time; the restaurant waiter turned investment adviser will serve 2½ years.


  • Geraban pleaded guilty in July to charges of grand larceny, conspiracy and making false statements in a loan application in connection with properties he handled in Henrico. He would pay homeowners a few thousand dollars and would promise to refinance their homes after taking control of the deed, [Henrico Commonwealth's Attorney Wade] Kizer said. Kizer said Geraban did not keep up the mortgage payments and allowed the homes to go into foreclosure, in at least one case plundering the equity value of the home for his own use.

For more, see Judge sentences man to prison for defrauding struggling homeowners.

Thursday, September 11, 2008

Scammers Prosecuted In Mortgage Fraud Scheme Involving 24 Homes, Despite Fact Property Values Increased & Defrauded Lender Ended Up Paid In Full

In Covington, Kentucky, the Cincinnati Enquirer reports:
  • A 54-year-old Middletown man was sentenced Monday for his involvement in a scheme to defraud Countrywide Financial. Gregg Russell was sentenced to three years probation. U.S. District Judge Danny Reeves also ordered Russell to spend three months of his probation in a halfway house and pay a $5,000 fine.

  • He had previously pleaded guilty to one count of conspiracy to commit wire fraud. The scheme involved the sale of 24 rental units four years ago in Kettering, Ohio. Russell loaned the down payment money to the buyers, Georgia Bowling and her son William Bowling Jr., without disclosing that to Countrywide.


  • Assistant U.S. Attorney Ben Dusing said what made the case unusual is that the rental units appreciated in value. He said the buyers were able to resell all 24 properties for an amount in excess of the inflated loan amount and that Countrywide got paid back in full. “We are pleased that there were no losses incurred by Countywide, as the ultimate foreclosure sale resulted in payment in full,” Rubenstein said. Dusing compared the fraud to a teller stealing money from the bank, betting on a horse at the track, having the horse come in first and applying the winnings back to the bank. “No one lost money, but it is still fraud,” he said.


  • The Bowlings will be sentenced on Oct. 27 to charges of conspiracy to commit wire fraud.

For the story, see Man gets probation for fraud.

See also, Middletown Journal: Local Realtor gets fine, probation in mortgage fraud scheme (Judge says Gregg Russell played 'minor' part).

Southern California Man Gets 7+ Years For Forgery, Grand Theft, Filing Phony Deeds, Rent Skimming In Real Estate Scam Operation

In San Fernando County, California, My Fox-TV Channel 11 reports:
  • A Mission Hills man who masterminded a real estate foreclosure and investment fraud was sentenced Monday to seven years and eight months in state prison. San Fernando Superior Court Judge Alice Hill imposed the maximum term on James Anthony Rojas, 51, according to Deputy District Attorney David Fleck. Jurors deliberated about an hour before convicting Rojas on Aug. 11 of 14 felony charges of grand theft, forgery and attempting to file false or forged grant and trust deeds. He also was convicted of three misdemeanor counts of rent skimming.
For more, see James Anthony Rojas Sentenced in Real Estate Fraud Case.

Go here for earlier posts on James Anthony Rojas.

New Jersey Moves To Minimize "Foreclosure Surplus" Scams

In New Jersey, The Jersey Journal reports:
  • [A] common [foreclosure] scam involves urging a homeowner to transfer a property deed for a minimal payment in exchange for a few thousand quick bucks and a promise to transfer the deed back after some conditions are met. The con artist can then let the home go to a foreclosure sale and collect surplus funds, the difference between the sales price and what is owed to the mortgage holder.


  • New state court procedures involving foreclosures went into effect Sept. 1 and should offer additional protection to homeowners. The state Office of Foreclosure will now handle applications for surplus funds itself, according to Tammy Kendig, a spokeswoman for the state courts. "That's going to give us a better assurance that the person applying for funds is actually the person they say they are," she said.

For the story, see Beware of scams offering to 'help'.

NJ Man Files Suit Claiming Bank Falsely Reported Him Delinquent To Credit Bureaus On Fully Paid Off Home Loan

In Branchburg, New Jersey, reports:
  • For township resident Nikolaos Renieris, his one-man legal fight against one of the country's largest banks is a matter of both principle — and interest. Renieris [...] recently filed a lawsuit [...] against Bank of America. Renieris, representing himself in the case, is claiming the bank libeled him by falsely reporting to credit agencies that he was in default on a home loan that he had already paid in full. Because of those reports, Renieris said his credit score has been damaged and he is assessed 2 to 2.5 percent more in interest on loans and credit cards.


  • Renieris said he decided to file the lawsuit after repeated unsuccessful attempts to have the bank correct the mistakes. Renieris said he suspects the "bureaucratic" mix-up could be connected to the title company in the property transaction.

For more, see Branchburg man represents self in suit against bank.

Wednesday, September 10, 2008

In Memoriam: Erskin Radford (1954-2008)

In Loving Memory
Erskin H. Radford
December 31, 1954 - September 10, 2008
I will miss you.
Rest In Peace.

ABC News On "Buy & Bail" Method Of Ditching Unaffordable Mortgage On "Upside Down" Home By Homeowners Forseeing Financial Woes

ABC World News reports:
  • Just a few weeks ago Jim Eble lived in his dream home in Las Vegas. It now sits empty because he owed the bank more money than the house was worth and the bank was threatening foreclosure. "It's tough to come back here now," said Eble, looking at his dream house. But Eble has found an answer to his financial problem: buying a new home. Although it's hard to imagine with one house near foreclosure, his solution is to buy a second house at a bargain price and simply walk away from the old house.

  • "Buy and bail" is becoming a growing trend in the hardest hit real estate markets.

For more, see In Foreclosure? Buy a Second Home ('Buy and Bail' Is the Answer Some People Have Found to Threat of Losing Home) (read story) (watch ABC World News video).

Go here for other posts on "Buy and Bail" method of ditching unwanted mortgages & "upside down" homes.

Prince George's Prosecutors Score $162.5K Grant To Set Up Real Estate Fraud Unit; Real Estate Scammers To Be Targeted

In Prince George's County, Maryland, The Gazette reports:
  • For proof that Prince George's County homeowners are getting ripped off, look no further than the signs posted along roadways, said Del. Doyle L. Niemann (D-Dist. 47) of Mount Rainier. "It's a cottage industry," he said. "We even have people coming in to teach seminars to others on how to rip people off."


  • Starting this fall, Niemann, an assistant state's attorney, and other county prosecutors will make a more concerted effort to target con artists capitalizing on the real-estate market. Using a $162,500 state grant, county prosecutors announced Tuesday a new unit tasked with targeting cases of mortgage fraud in Prince George's. [...] "I was never able to give it as much attention as I should have," Niemann said. "Now we can."


  • One case that is getting a lot of attention now in federal court involves the Metropolitan Money Store, a Lanham-based business whose owner and employees have been charged with wire fraud and theft.


  • The case is currently in federal court, where eight people are charged for their alleged transactions in Northern Virginia, Washington, D.C., and Maryland. But it started in Prince George's, where six of the defendants lived, county prosecutors say. "We were the ones who first started getting calls," said Isabel Cumming, an assistant county state's attorney who specializes in fraud cases. "But when we got to more than 100 victims, we realized it was too big for us." The new fraud unit hopes to take on similar cases using three attorneys and an investigator to concentrate solely on mortgage cases.

For the story, see New unit takes on foreclosure fraud (State grant allows county prosecutors to focus on real estate scammers).

See also, WRC-TV Channel 4: Prince George's Receives State Aid to Prosecute Predatory Lenders ("The money will be used to hire a prosecutor and investigator to crack down on people preying on homeowners facing foreclosure").

Ohio Upfront Fee Foreclosure Rescue Operator Snags Another Target

In Salem, Ohio, WYTV Channel 33 reports:
  • "I had the place almost paid off and I refinanced it because I wanted to make it nicer on the inside, now I'm gonna lose it. It's crazy, it's all crazy", says Richard Singer of Salem. After thirty years in their Salem home, Richard Singer and his family are facing foreclosure. A fixed income and additions to the house have him in over his head. Then in April, a letter came from a company called Foreclosure Solutions out of Cincinnati. All they needed was twelve hundred eight five dollars from Singer to help save his home. [...] Singer says the company rep who came to his home even prayed with him. Turns out he was just preying ON him. Both the money, and the company are nowhere to be found.


  • Foreclosure Solutions is one of several companies sued by former Attorney General Marc Dann in August 2007 for violating consumer laws and lying to Ohioans with false promises of saving their homes from foreclosure. Just this week, a letter came from the company telling Singer his house would go up for a Sheriff's Sale. Singer called the Attorney General's office to file a complaint, and warns other Ohioans not to fall into the same trap.

For the story, see Foreclosure Scam Finds Another Victim.

For the civil lawsuits alleging Foreclosure Solutions of screwing over homeowners facing foreclosure, see:

FL Short Sale Buyers May Be Clipped For Extra "Doc Stamps" As State Claims Calculation Of Amount Due To Reflect Any Debt Forgiveness On Seller's Loan

In Florida, the South Florida Daily Business Review reports:
  • Imagine buying a house for much less than its market value only to discover you’ll incur an additional tax bite of hundreds or thousands of dollars. State revenue collectors now say buyers of short sales, the term used for houses that sell for less than the mortgage owed on them, must pay more in real estate transfer taxes called documentary stamps ["doc stamps"].


  • In a short sale, lenders agree to the transfer of a property and generally forgive the unpaid mortgage amount, though some require a promissory note from the seller for the unpaid balance.

  • In an August letter to a title insurance attorney, a tax specialist for the state Department of Revenue (DOR) said buyers should pay transfer taxes on the short-sale purchase price plus the forgiven debt amount. Whether the department’s position will stand is the subject of considerable discussion among real estate attorneys and title insurers. The department is expected to issue what’s called a binding opinion within two weeks, said spokeswoman Renee Watters.(1)

For more, see Real Estate: What’s the future of short sales? (may require free registration).

In a related story, see The Tampa Tribune: Tax 'Mess' Muddles Short Sales Of Homes.

(1) Are any other states having this problem?

Cuyahoga County Treasurer Expresses Concern Over Area Homes Being Flipped On eBay

In Cuyahoga County, Ohio, The Cleveland Plain Dealer reports:
  • ["T]hey're the next round of vultures," Cuyahoga County Treasurer Jim Rokakis said. "They have no interest in the neighborhood. They have no interest in revitalization. They have no interest in Cleveland."

  • In the last year, entrepreneurs in and out of state began buying vacant houses from sheriff's sales, banks and the U.S. Department of Housing and Urban Development, then selling them on e-Bay's Internet auction site, often to folks who have never been to Cleveland.

  • The practice tricks bidders into buying wrecks they can't imagine, and sometimes even homes that no longer exist, officials say. It traps neighborhoods in a chain of apathy. And it leaves the city to trace strings of owners, so it can write building code citations and collect fines for boarding up windows or demolishing homes.

For more, see eBay auctions become house flippers' tools. ForeclosuresDestroyNeighborhoodsApple

Tuesday, September 09, 2008

Ohio AG Targets Two Mortgage Brokers In Separate Suits For Alleged Violations Of Predatory Lending Laws

From the Ohio Attorney General's Office:
  • The Ohio Attorney General's Office and the Ohio Department of Commerce [last month] filed two complaints against mortgage brokers for violating Ohio’s predatory lending laws. The lawsuits were filed against Columbus companies Magellan Mortgage Corporation and Highland Banc, Inc. along with an individual loan officer and appraiser, accusing them of engaging in unfair, deceptive and unconscionable acts and practices. The complaints were filed in the Franklin County Court of Common Pleas.

  • The lawsuits against Highland Banc and Magellan Mortgage raise many violations of the Ohio Homebuyers Protection Act, in addition to multiple violations of the Ohio Mortgage Broker Act (OMBA), and the Real Estate Settlement Procedures Act (RESPA). The suit against Magellan also alleges that the company violated the Truth in Lending Act (TILA). Some of the allegations in the suits were that a mortgage broker arranged loans with undisclosed fees and loans that resulted in no net tangible benefit for homeowners who had no reasonable ability to repay the loans.

For the press release, and to view the lawsuits,(1) see Ohio Attorney General Accuses Mortgage Brokers Of Predatory Lending Practices.

(1) State of Ohio v. Highland Banc, Inc., et al. begins at p.3 of press release. State of Ohio v. Magellan Mortgage Corporation, et al. begins at p. 23 of press release.

Washington State Homeowners File Lawsuit Against Countrywide Alleging Violations Of State Consumer Protection Act, Seek Class Action Status

In Seattle, Washington, the Seattle Post Intelligencer blog recently reported:
  • Add one more lawsuit to Countrywide's list of legal woes. Illinois and California have sued, accusing the lender of deceptive sales practices. Now borrowers, represented by the Seattle law firm of Hagens Berman Sobol Shapiro, have sued in U.S. District Court in Seattle, accusing the lender of knowingly steering customers into high-risk loans and not disclosing the risks associated with them.

  • They allege in the complaint that the lender misrepresented the terms of ARMs (adjustable-rate mortgages), marketed risky complex loans by emphasizing low teaser rates while misrepresenting later steep monthly payments and routinely encouraged borrowers to refinance only months after an affiliated broker sold them a loan.

For more, see Homeowners sue Countrywide.

For the lawsuit, see Buckley v. Countrywide Home Loans, Inc.

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

Advocates: NYC's Growing Foreclosure Crisis Outstripping Pro Bono, Government-Subsidized Lawyers' Ability To Handle Problem

In New York City, the New York Daily News reports:
  • [T]he city's growing foreclosure crisis has outstripped pro bono and government-subsidized lawyers' ability to handle the problem, advocates said. "There are thousands of people out there who might be in need of legal assistance, and we just don't have the capacity," said South Brooklyn Legal Services foreclosure unit director Jessica Attie.

  • Legal Services had so many foreclosure cases last year it had to stop taking new ones, she said. The group has now expanded its foreclosure unit. But even with an enlarged foreclosure practice, they can only take a fraction of the cases, Attie said.

  • There is one more complication to finding free legal assistance for homeowners in trouble. Pro bono lawyers from elite city law firms are also not much help to homeowners facing foreclosures: Many of the firms represent the banks that are trying to take their homes.

For the story, see Nonprofit 'Common Law' trains homeowners to be their own lawyers.

Housing Activist/Community Organizer Responds To Republican Mockery

An excerpt from the first post of the newly published blog, Community Organizers Fight Back, contains the response from a housing activist / community organizer to the mockery directed at community organizers from those at last week's Republican National Convention:
  • Community organizers work in neighborhoods that have been hit hardest by the failing economy,” said John Raskin, founder of Community Organizers of America and a community organizer on the West Side of Manhattan. “The last thing we need is for Republican officials to mock us on television when we’re trying to rebuild the neighborhoods they have destroyed. Maybe if everyone had more houses than they can count, we wouldn’t need community organizers. But I work with people who are getting evicted from their only home. If John McCain and the Republicans understood that, maybe they wouldn’t be so quick to make fun of community organizers like me.”

For more, see Community Organizers Fight Back.

Former Condo Treasurer Gets 20 Years For Bilking $900K+ From Homeowners' Association

In Davie, Florida, The Miami Herald reports:
  • A Broward County man who stole nearly $1 million from a condominium community made up primarily of trusting senior citizens will spend the next 20 years in prison and will have to pay the money back with interest, a judge ruled Friday. Christopher Winkelholz, 27, preyed on the residents of the Whitehall Condominium Association in Davie for more than two years before he was caught as he was about to flee the country to Argentina in 2007, prosecutors said.


  • Police found that Winkelholz befriended neighbors at the condominium, [...] and was elected treasurer of the board, which gave him access to the group's funds. He then set up a fake cleaning-service company and wrote checks from the condo association's account to the phony company, forging the names of some residents. He was caught when one of the names he forged on a check was that of a deceased, former resident.

  • In total, Winkelholz stole $920,000, which he used to take expensive trips, buy fancy cars and live a lavish lifestyle, prosecutors said. He was convicted of grand theft and forgery earlier this year.

For the story, see Broward condo swindler gets 20 years in prison.

Monday, September 08, 2008

19 Named In 106 Count Indictment Alleging Straw Buyer Scam Involving 16 Akron-Area Homes

In Summit County, Ohio, the Akron Beacon Journal reports:
  • Defendants named in a 106-count indictment concerning mortgage fraud crimes stole more than $1 million from lending institutions and destabilized area neighborhoods, local and state authorities said today. The indictment concerns allegations that fraudulent information was used on loan documents to get mortgages on 16 Akron-area houses, authorities said. Almost all of the purchasers were ''straw buyers'' who were ''in on the crimes'' and had no intention of paying off the loans, said Keith Thornton, chief of investigations for the Summit County Sheriff's Office, shortly before a news conference this afternoon.(1)


  • Nineteen defendants were named in the indictment(2) — handed down Thursday — that covers more than 200 felony charges, including engaging in a pattern of corrupt activity, money laundering, forgery, falsification, theft and receiving stolen property.

For more, see Authorities say mortgage scheme netted more than $1 million.

(1) Thornton said the indictment is separate from the ongoing Evergreen mortgage fraud case, now in Summit County Common Pleas Court. Evergreen Corp. President DavidB. Willan was charged Dec. 19, along with others, in a 147-count indictment alleging widespread Akron-area securities and mortgage fraud.

(2) According to the story, those named in the indictment include Garrick Feaster, Sarina Elmore, Naketia Johnson, Donte Gibson, Monte Pitts, Crystal Tyler, Anthony Ramsey, Karmen Beckett, Lizrae Benford, Michael Dowdell, Edwin Cain, Richard Turner and Alfred Jones, all of the Akron area. Also named were Adam J. DeStefanis and Brian DeStefanis of Medina County; Steve Sikorski of Cuyahoga County; Angie Rodgers and Shanika Jordan of the Youngstown area; and Richard Putnam of Stark County.

Financial Trouble Forces Feds To Step In, Take Over Fannie, Freddie

The Wall Street Journal reports:
  • In its most dramatic market intervention in years, the U.S. government seized two of the nation's largest financial companies, taking direct responsibility for firms that provide funding for around three-quarters of new home mortgages. Treasury Secretary Henry Paulson announced plans Sunday to take control of troubled mortgage giants Fannie Mae and Freddie Mac, replace the companies' chief executives and provide up to $200 billion in capital to restore the firms to financial health.
For the full story, see U.S. Seizes Mortgage Giants (Government Ousts CEOs of Fannie, Freddie; Promises Up to $200 Billion in Capital).

MBA Survey: 9%+ Of All Mortgages On 1-4 Family Homes Are Delinquent Or In Foreclosure

The Wall Street Journal reports:

  • The rate of U.S. home mortgages overdue or in foreclosure rose again in the second quarter as housing markets weakened, particularly in California and Florida, and more borrowers defaulted on so-called prime loans. Among mortgages on one- to four-family homes, 9.16% were at least a month overdue or in the foreclosure process in the second quarter, according to the latest survey by the Mortgage Bankers Association, a trade group. That is up from 6.52% a year earlier and is the highest level since the MBA began such surveys 39 years ago.


  • For prime loans, 5.35% of loans were past due or in foreclosure in the latest quarter. For subprime, the rate was about 30%.

For more, see Foreclosures, Overdue Mortgages Increase Again (Troubles Extend Into Prime Loans Via Option ARMs).

"Frank" Advice Given As Lawmakers Re-Issue Warnings To Uncooperative Loan Servicers During Tour Of California's "Ground Zero" Of Home Foreclosures

In Stockton, California, the Central Valley Business Times reports:
  • Four members of Congress saw from bus windows Saturday the face of foreclosure in the Central Valley. The tour of abandoned, boarded up homes preceded a congressional hearing on the foreclosure crisis where a powerful member of Congress warned the mortgage industry to listen to lawmakers now, lest stricter controls are imposed.

  • Foreclosures are the single biggest cause of economic problems we are in,” said Barry Frank, D-Mass., chairman of the House of Representatives’ Committee on Financial services. And then he sent a warning to the lending industry not to hide behind the law and fail to do all possible to ease the problem.

  • If people in the lending industry want to avoid some very severe, much more restrictive legislation, it would be in their interest to cooperate with us,” Mr. Frank said. San Francisco Bay Area congresswoman Jackie Speier went further. “Those who have violated the law … need to be held accountable,” says Ms. Speier. “We should encourage local DAs … to act. No one has been held accountable.”

For more, see Blunt warnings to housing industry from Congressional hearing.

Trial Of Central Florida Couple Charged With Duping Senior In Foreclosure Out Of Home Derailed As State Lawmaker Sends Judge Improper Communication

In New Port Richey, Florida, The Tampa Tribune reports:
  • Under normal circumstances, State Sen. Mike Fasano's Thursday morning fax to Circuit Judge Jack Day might have amounted to nothing more than another person's opinion about an ongoing case. Judges get them all the time.

  • But this was different. Day was presiding over the trial of a couple accused of cheating 91-year-old Eloise Mudway out of her house and assets. Unlike most criminal cases, which are decided by juries, the judge alone was to determine whether Joe and Cynthia Clancy were guilty and, in the event he did, what their sentences should be.

  • That made Fasano's letter(1) condemning the Clancys and suggesting they receive the harshest possible sentences grounds for a recusal, defense attorneys argued. Day granted the request, prematurely ending a trial that has been on the docket since October 2005.

  • Now the case must be assigned to another judge and retried from the beginning. The case must come to trial within 90 days, unless the Clancys waive their right to a speedy trial. "This is just a shame," said Assistant State Attorney Mary Handsel as she left the courtroom.

For the rest of the story, see:

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

(1) According to the story, Fasano wrote: "If Joseph and Cynthia Clancy have done even half of what they are alleged to have done, they should get the strongest possible sentence. Too often we read of deadbeat individuals in this state taking advantage of our elderly residents. Enough is enough!" FinancialAbuseOfElderlyAlpha

Some Seniors Look To Pro Bono Attorneys To Undo Damage Done In Real Estate Scams

A recent article in Newsday recounts two stories in downstate New York of elderly victims of real estate scams who have sought help from local attorneys working on a pro bono basis to recover some of what they have been swindled out of.

In a Nassau County case involving a foreclosure rescue scam:
  • Attorneys Douglas Good and Jennifer Hillman of the Uniondale firm Ruskin Moscou Faltischek worked pro bono to arrange a settlement for [homeowner Priscila] Nano in which she eventually got back most of the value of her home. Additionally, the "mortgage broker" who scammed Nano has been told by the courts to pay her a $3.5 million judgment, although he has few documented assets.

In a Queens County case involving alleged deed thefts of two homes through forgery from an elderly man suffering from Alzheimer's:

  • Artee McKoy, 94, had two homes stolen "out from under him," according to Queens District Attorney Richard Brown (see Queens County DA's news release). [... The two suspects] are charged with multiple counts of grand larceny totaling $800,000 and are out on bail.


  • Ann Goldweber, director of the Elder Law Clinic at St. John's University School of Law, is working for convictions in McKoy's case and to have McKoy's finances made whole again. "Our position is he should get back title to both homes and not be responsible for paying back the mortgage, which is held by HSBC. Anything McKoy signed should be voided because of his lack of competency," said Goldweber.

For the story, see Seniors, be wary of scam artists who target you.

New NYC Non-Profit Legal Clinic Gives Homeowners Foreclosure Self-Defense Training

In New York City, WNYC Radio 93.9 FM (820 AM) reports:
  • A new legal clinic is claiming great success in helping homeowners fight off foreclosure of their homes. [...] In July, [a] Brooklyn businesswoman was sued by her bank after missing payments. Now she's headed to court. [She's] been trained in foreclosure law by a new nonprofit called Common Law.(1) Co-founder Karen Gargamelli says it's a program born of necessity. "Because there are only a handful of people that even understand the foreclosure laws, people have to represent themselves against the bank," [she said.]

  • A spokesman for the state Bar Association confirmed that very few attorneys in New York practice foreclosure law. Gargamelli says each of the 50 or so homeowners her group has advised have convinced the court to not foreclose on them.

For the story, see New Legal Clinic Helps Homeowners Fighting Foreclosure.

In a related story, see New York Daily News: Nonprofit 'Common Law' trains homeowners to be their own lawyers.

(1) According to this City University of New York (CUNY) Law School Alumni News report, Common Law Inc. is a non-profit consortium of three CUNY Law alums from the class of 2006, who created a clinic to help homeowners in foreclosure. At the clinic, homeowners listen to the situations faced by nearby residents. At a following meeting, they describe their own situations. Then, experts in foreclosure help them with paperwork so they can represent themselves in court.

Texas Homeowner Files Suit Alleging Race Bias, Truth In Lending Violations In Predatory Refinance

In Baytown, Texas, The Houston Chronicle reports:
  • Nanette Lewis refinanced her mortgage to get peace of mind. Instead, she says, she got a bait-and-switch, predatory loan and heartbreak. Now far less naive, the Baytown woman decided to fight back. In a lawsuit she filed against her lenders in federal court last week, she alleges she was targeted for a loan with onerous terms because she's black. Her suit mirrors one filed by the attorney general of Massachusetts and another by the city of Baltimore.

  • All three accuse lenders of "reverse redlining" — targeting minority loan applicants for the worst possible mortgage deals. Lewis' lawsuit may be the first of its kind in Texas. She is represented by a legal aid lawyer and seeking primarily, she said, to get the word out about what happened and to remove the lien from her property, though she still would be responsible for repaying the mortgage.


  • When she was laid off, Lewis worried she'd miss a mortgage payment and lose the house. She went to Lone Star Legal Aid to see how she could keep the home safe. Lawyer Sapna Aiyer said she was surprised at Lewis' "horrible, horrible" mortgage terms. Aiyer said the lawsuit cites the federal Home Ownership and Equity Protection Act and the Texas Constitution, which bar lenders from excessive points and fees (more than 8 percent) and from certain changes in loan terms at closing.(1)

For more, see Lawsuit over signing shock (Baytown woman sues lenders, says she was a victim of predatory lending practices because she's black).

For the homeowner's lawsuit described in this story, see Lewis v. Alpha Mortgage, et al.

The non-profit legal services firms representing the homeowner are Texas RioGrande Legal Aid (Austin, Texas; provides free legal services to low-income and disadvantaged clients in a 68-county service area that covers the southwestern third of the state, including the entire Texas-Mexico border region) & Lone Star Legal Aid (Houston, Texas; serves 72 counties in the East Region of Texas and 4 counties in Southwest Arkansas).

For the race bias-related lawsuits referenced in the story filed by Massachusetts & Baltimore City, see:

For a July, 2008 study on Mortgage Lending & Race, see the National Community Reinvestment Coalition Study: Income Is No Shield Against Racial Differences in Lending.

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

(1) The lawsuit alleges violations of Home Ownership and Equity Protection Act (15 U.S.C. §§ 1602(aa) and 1639); the Truth in Lending Act (15 U.S.C. § 1601 et seq. and § 1640(a)); the Equal Credit Opportunity Act (15 U.S.C. § 1691- 1691 (f)); the Fair Housing Act (42 U.S.C. § 3605); and the Texas Constitution, Article 16, §50(e)(2). PredatoryLendingRaceBias

Countrywide, Pittsburgh Ch. 13 Bankruptcy Trustee Submit New Settlement Proposal In Legal Action Alleging Abusive Loan Servicing Practices

In Pittsburgh, Pennsylvania, Reuters reports:
  • Countrywide Financial Corp and a U.S. bankruptcy trustee have submitted a new proposal to convince a federal judge to resolve claims over alleged abusive practices by what was once the nation's largest mortgage lender. The proposed terms were filed on Wednesday with the U.S. Bankruptcy Court in the Western District of Pennsylvania, which is overseeing cases of nearly 300 Countrywide borrowers in foreclosure in that region.

For the details of the new proposed settlement, see Countrywide proposes new Pa. lending settlement.

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

Sunday, September 07, 2008

Fannie, Freddie & The Feds

In Washington, D.C., Unconfirmed Sources (satire) reports:
  • With no fanfare, the Bush administration late this afternoon quietly announced that it would be initiating foreclosure procedures on both Fannie Mae and Freddie Mac, insisting that the properties therein would be sold at auction. This was a sudden turn of events as the government had merely stepped in to assess and stabilize the status of both lending institutions early this morning. Realty signs were placed on both properties directing interested parties to the White House switchboard.

For more of this satirical report, see White House Forecloses on Fannie Mae and Freddie Mac (Realty signs went up late this afternoon on the properties of both Fannie Mae and Freddie Mac).

Dealing With Income Tax Implications Of Home Mortgage Debt Cancellation Drives Some Foreclosed Homeowners To Non-Profit Taxpayer Clinics For Help

In Tucson, Arizona, the Tucson Citizen reports:
  • The Tucson Low Income Taxpayer Clinic is seeing more foreclosure clients(1) as more homeowners tackle the tax issues that go along with owning and then losing a home. "We always saw a couple in the last couple (of) years, but not like now," said Liz Thomey, program director for the Tucson clinic, [...]. "We're seeing a lot more."

  • The tax clinic operates all year and actually does less business during tax season, Thomey said. The clinic is primarily for those who: (1) Have back taxes to figure out and pay, (2) Need legal assistance to help deal with the Internal Revenue Service or set up payment plans, (3) Need to figure out other complicated tax problems.


  • "[The clinic] is not to do your taxes, but to get help if you have tax problems," she said. Thomey added that recent changes to tax laws regarding foreclosures can make it confusing for homeowners to sort out which taxes they have and haven't paid. [...] There are three clinics in Arizona: in Tucson, Window Rock and Phoenix. [Go here to contact a Low Income Taxpayer Clinic (LITC) in Arizona].

For the story, see Foreclosures push people to tax clinic (may require free registration).

See also IRS Publication 4681: Canceled Debts, Foreclosures, Reposessions and Abandonments.

For LITC clinics throughout the country, see IRS Publication 4134 - Low Income Taxpayer Clinic List (listed by state).(2)

(1) My guess is that qualified homeowners who have had a portion of their home mortgage loan cancelled by a lender as a result of a "short sale" or loan modification are also making use of the LITC service.

(2) According to IRS Publication 4134, while the LITCs receive partial funding from the IRS, LITCs, their employees, and their volunteers are completely independent of, and are not associated with, the federal government. These clinics are operated by nonprofit organizations or academic institutions (ie. law schools & business schools). Qualified taxpayers can get help from a LITC either for free or at a nominal cost.

Washington State AG Takes Page Out Of Scammer Playbook To Identify, Warn Potential Foreclosure Scam Targets

In Seattle, Washington, KOMO-TV Channel 4 reports:
  • Pending foreclosure listings are a matter of public record. Anyone can get the information through your county property tax division. That's how scammers find vulnerable homeowners desperate for help.

  • Now, the [Washington] State Attorney General is taking a cue from the scammers, using public records to reach homeowners before they become targets. Starting this month, homeowners facing foreclosure will get a letter warning about foreclosure rescue scams. The letters will highlight warning signs and share horror stories from people who've lost their homes through a foreclosure rescue scheme.

  • Some 14,000 letters went out this week to homeowners who missed mortgage payments. Many county treasurers will start including scam warnings when they mail certified foreclosure notices to people who haven't paid property taxes.

For more, see State officials take cue from scammers to help protect those facing foreclosure (read story) (watch KOMO-TV video).

Go here for the Washington State AG's foreclosure rescue warning letter.

Former Motown Cop, Tax Assessor Charged By Detroit Feds In Alleged Flipping Scam Involving 35+ Homes

In Detroit, Michigan, The Detroit News reports:
  • A former Detroit police officer and a city appraiser are among three defendants named in a $2.1 million mortgage fraud and real estate "flipping" indictment announced Friday by the U.S. Attorney's Office in Detroit.(1) More than 35 Detroit homes were "flipped" -- sold and quickly resold based on inflated appraisals -- as part of the scheme between 2004 and 2006, the indictment alleges. The indictment details close to $600,000 in fraudulent loans allegedly taken out on nine Detroit properties and alleges conspiracy, bank fraud and wire fraud.


  • In many of the transactions, Greene bought dilapidated properties, obtained fraudulently inflated appraisals, and arranged for "straw buyers" such as Danyell Robinson to obtain the fraudulent mortgages, the indictment alleges. The loans were not repaid and many of the homes went into foreclosure, the indictment alleges.

For more, see Former Detroit officer among those accused in mortgage scheme.

In other recent straw buyer, flipping fraud indictments obtained by the Detroit Feds, see:

  • Four Indicted By Federal Grand Jury For Mortgage Fraud (According to the DOJ press release, Hassan Nagi, 30, of Dearborn Heights, Ali Haidous, 24, of Dearborn, Safi Bzeih, 35, of Dearborn, and Hussein Aoun, 23, of Dearborn Heights conspired to secure fraudulent mortgages on 16 properties between April 2005 and April 2008. The value of the mortgages totaled $1.9 million.),

  • Detroit Resident Indicted On Mortgage Fraud (According to the DOJ press release, Nishon Johnson, 37, of Detroit, a loan originator, and others were allegedly involved in a scheme to defraud mortgage companies. After buying a single-family house, Johnson allegedly recruited a buyer to purchase the house at an inflated value. As alleged in the indictment, Johnson submitted false loan applications to the mortgage companies which overstated the borrower's income, and understated his liabilities. In one case, the alleged borrower was not even aware of the loan, and his signatures were forged.).

(1) Named as defendants are: Pierre Greene, 27, who was a Detroit police officer at the time of the alleged offenses; Jacque Miller, 37, who is Greene's uncle and worked as a city of Detroit appraiser and tax assessor; and Sandy Robinson, 50, an associate of Greene's. Cities of residence for the defendants were not available Friday from the U.S. Attorney's Office. It was not clear whether Jacque is still employed with the city. Danyell Johnson, who is Greene's sister-in-law, was charged separately in the case. Her age and place of residence were not available Friday.

Cleveland-Area Title Agent Gets 7 Years For Role In Mortgage Fraud Involving 31 Homes

In Cleveland, Ohio, The Cleveland Plain Dealer blog reports:
  • The president of a title company was sentenced to seven years in prison for her role in mortgage fraud that involved 31 houses in Cleveland, East Cleveland and Garfield Heights. Clarissa Foster, 35, of Macedonia, was sentenced Friday in Cuyahoga County Common Pleas Court following a six-day trial. Foster was found guilty on 44 mortgage fraud counts. The jury found her mother, Bettie Simpson, not guilty. Foster was sentenced to two years in prison to run consecutive to her five-year prison sentence from her first trial in June. Foster was the president of Shaker Title Services, which is now defunct.

  • Foster's scam enabled 13 buyers to purchase 22 houses for a total of $1.2 million using fraudulent loans totaling $956,800, according to Cuyahoga County Prosecutor Bill Mason. Seventeen houses were located in Cleveland and five in East Cleveland. Most of the houses fell into mortgage or tax foreclosure.


  • In a previous case in June, Foster and Simpson went to trial with mortgage broker Corritha Wells. On June 11, all three were each found guilty of mortgage fraud related charges regarding the purchase of nine houses for a total of $846,000 using loans totaling $746,450. One house was located in Garfield Heights, one in East Cleveland, and seven in Cleveland. Six of these houses fell into foreclosure.

For more, see Company president sentenced in mortgage fraud case.

California Man Gets 120 Days In Case Involving Alleged Forgery Of Judgment Holder's Signature On Lien Satisfactions

The San Bernardino County District Attorney's Office announced last week:
  • James Badalian, 45, of Fontana, was sentenced Wednesday, August 27, 2008, to felony charges connected to forged documents. Badalian appeared in San Bernardino County, Central Division, Superior Court, and was sentenced to 120 days county jail for the crime of accessory to a forgery, a felony, as part of a plea agreement. The issue of restitution has been reserved.

  • On two separate occasions, in 2002 and 2004, Badalian allegedly forged the victim’s names on two different Acknowledgment of Satisfaction of Judgment documents and later recorded them at the San Bernardino County Recorder’s Office. The documents were notarized utilizing false notary stamps.

For the DA's press release, see Fontana Man Sentenced in Forgery Case.