Saturday, October 18, 2008

"No One Leaves Campaign" Takes To Boston Streets As Students Spread Word To Protect Tenants From Illegal Practices In Foreclosure Evictions

In Boston, Massachusetts, The Boston Globe reports:
  • Today, 106 Boston law and college students plan to join community activists to walk the streets of Dorchester, Hyde Park, and South Boston, to advise tenants to stand their ground and stay in their homes. Calling it the "No one leaves campaign," students aim to advise tenants of their legal rights to stay in their homes, even after foreclosure. That will help slow abandonment and blight in vulnerable neighborhoods. They are focusing on the 28 zones in Boston and Chelsea with the most foreclosures.

  • "Tenants have an amazing amount of rights and a lot of ability to fight these evictions," said Harvard Law School student Nick Hartigan, 25, one of the main organizers. "Banks should do the responsible thing and allow people to stay."


  • [Tracie Tyler, a 47-year-old administrative assistant fighting her eviction] is energized to have student involvement in what she sees as the important quest of getting the news out. "They are young, they are vibrant, they inspire us older folks," Tyler said. "There are people that are afraid who don't know where to go."

For more, see Students take to the streets to aid displaced tenants.

See also, Harvard Law Record: Harvard Law's foreclosure taskforce tackles housing crisis (Legal Aid Bureau leads effort to stop eviction of tenants in foreclosed properties). BetaTenantRentSkimming

Saginaw County Cops Warn Against Scammers Posing As Tax Collectors Approaching Delinquent Homeowners Demanding Payment

In Saginaw County, Michigan, The Saginaw News and Newhouse News Service report:
  • [P]olice and Saginaw County sheriff's deputies have received at least three reports of people approaching home owners whose taxes are in arrears and asking for payments of Saginaw County taxes, sheriff's Lt. Mark Garabelli said.


  • Investigators have yet to obtain a description of the man-woman duo in Saginaw County. Police only know that they are white, and they show up at residences that have unpaid tax balances. [...] "It sounds like they are telling the people that if they don't have the full amount owed, just give them some of the money and they will not foreclose right now," Garabelli said.

For more, see With ailing economy, scammers target homeowners.

90 Jacksonville Tenants Face The Boot In Foreclosed Apartment Complex As Renters Receive Eviction Notices

In Jacksonville, Florida, First Coast News reports:
  • "I found this notice here on my door. Basically it's saying that we have 15 days to move," says Jasmine Taylor. Wednesday night, Taylor found out she had less than a month to find a new place to live, and she's not the only one. About 90 other residents of Watermark Marina Apartments at 2039 Niblick Drive, got their own letters saying the complex was shutting down.

  • According to management staff, back in August, the complex owned by South Fork out of California, went into foreclosure. For the last two months, Heritage Bank of North Florida has had direct contact with the apartment management, but management also says this comes as a shock to them.

For the story, see Residents of A Westside Apartment Have 15 Days To Move Out. BetaTenantRentSkimming

Lenders At Foreclosed Home Auction Stiff Winning Bidders; Refuse To Sell, Claiming Highest Bids Weren't High Enough

In Salt Lake City, Utah, local media stories report:
  • It drew hundreds of spectators and willing buyers, but it turns out, a recent real-estate auction was a bust. The bank turned down offers from the highest bidders, even though the properties were foreclosures. There is no reason to believe it was a scam, but there is some evidence that perhaps the banks got really nervous and disappointed a lot of buyers. For more, see Bidders Won't Get The Properties They Won At Auction.


  • An auction that netted $7.5 million in bids on 56 distressed Utah properties fell through last week after the owners -- three banks and two private lenders -- decided they may get a better deal by holding out for the government's bailout plan. [...] "This has never happened before. In the 25 years we've conducted lender-owned auctions, we've consistently closed over 95 percent of all high bids," [an auction company rep] said. "The stock market's historic drop last week and the bailout plan are some of the main reasons why the lenders rejected the bids," he said. For more, see Utah foreclosure auction flops.

Fire Problems In Homes Facing Foreclosure Continue

The following stories report fires in foreclosed homes from around the country:

  • Marion, Ohio: A firefighter was injured when responding to a fire in a vacant home on the north side of the city Sunday evening. Firefighter Mike Crabtree was injured and taken to the Marion General Hospital Emergency Room for a neck injury when part of the ceiling fell on him. He was treated and released. The home was believed to be in foreclosure and listed CitiMortgage as the owner. Damage is estimated at $50,000. "We've had more than our share [of vacant house fires," Fire Chief Al Gruber] said. See Firefighter injured from collapsed ceiling.

  • New Haven, Connecticut: A powerful explosion and fire destroyed a Fair Haven home overnight Thursday, the third fire in the neighborhood in just over a week. Fire officials are calling all three suspicious. [...] All three houses that burned since last week were in various states of foreclosure. [...] Heat from the fire was so intense it melted vinyl siding on two nearby houses, including one across the street and about 40 feet away. See Blast, fire destroys 3rd foreclosed home in just over a week.

  • Sedona, Arizona: A house fire in Sedona is being treated as a crime scene after flames broke out twice in the empty house this weekend. The home at 200 El Camino Drive was valued at $1.2 million, but had been foreclosed upon. See Arson suspected in foreclosure house fire.

  • Flint, Michigan: [Gordon] Yoesting had been squatting inside the house with his cat Mustard for the past 10 months but he had hopes it would soon be his. But that dream went up in flames Wednesday morning when fire engulfed the small home near Lewis Street, trapping Yoesting inside. Yoesting had been living in the home since December after the owner [...] decided it was too costly and let it slip into foreclosure. See Flint fire kills Gordan Yoesting, squatter in foreclosed home.

  • Fort Wayne, Indiana: A 36-year-old Fort Wayne man admitted Tuesday to setting his foreclosed home on fire. [...] The house was to have been sold April 17 because of the foreclosure, according to court documents. [The fire was set April 15]. See Homeowner admits to arson.

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

Friday, October 17, 2008

Chicago-Area Foreclosure Evictions To Resume Monday; Court System Implements Added Procedural Protections To Address Sheriff's Concerns

In Chicago, Illinois, the Daily Herald reports:
  • Cook County Sheriff Tom Dart said Thursday he will resume evictions at foreclosed homes and apartment buildings beginning Monday, confident that he and the court system have put adequate protections in place to protect renters' due process. "We've been given adequate assurance that we're not going to be asked to evict innocent tenants," said Dart in announcing the move.


  • Dart said that even though representations [by foreclosing lenders] were sometimes made that notice had been given [to tenants], it often wasn't. [...] To illustrate how untruthful some of the representations had been in the past, Dart displayed a picture of a piece of property from which he was court-ordered to evict tenants. When his deputies arrived, they discovered the property had burned down five years ago, unbeknown to bankers or the court.


  • Dart believes the problem has been addressed because Cook County Chancery Division Presiding Judge Dorothy Kinnaird worked with him to provide new forms that must be sworn to by bank representatives or their lawyer before an eviction can begin. The new form, says Dart, gives him what he wanted: "somebody who signed a piece of paper (who has) something to lose."

For the story, see Sheriff says he's changed the system, will restart evictions.

For a description of the new requirements imposed on lenders involved in foreclosure actions in Cook County, Illinois, see Cook County Sheriff's press release: Safeguards Added to Eviction Process (Cook County Judiciary introduces protections for tenants, taxpayers). BetaTenantRentSkimming

Washington State AG Settles Civil Charges With Florida Foreclosure Rescue Operator

The Office of the Washington State Attorney General announced earlier this week:

  • The company is now out of business. Owners did not admit any liability, but agreed to a consent decree that prohibits them from engaging in alleged violations in the future. According to the state’s civil complaint and the settlement, filed [Wednesday] in Spokane County Superior Court, United Home Savers advertised to Washington homeowners that the company can rescue homeowners from foreclosure. The company charged $1,200 or more up front and promised a refund if their services weren’t successful.

  • But Assistant Attorney General Jack Zurlini said the majority of homeowners received little or no help, and the company routinely refused or failed to refund money. [...] United Home Savers is also under fire from the Federal Trade Commission in a lawsuit filed in U.S. District Court for the Middle District of Florida.

For more, see Attorney General says United Home Savers is a misnomer (Florida company accused of charging homeowners for empty promises).

Con Man Gets 5+ Years For Victimizing Widow, Pocketing $2M In Refinance Scam

In San Francisco, California, The Recorder reports:
  • Michael Edison, a con man who stole $2 million from the widow of a legendary law firm founder, has agreed to spend more than five years in jail. [...] Michael Edison admitted targeting Jean Phleger, widow of Brobeck, Phleger & Harrison founder Atherton Phleger, in a financial swindle. Originally introduced to Phleger by her son-in-law, the actor Don Johnson, Edison agreed to refinance Phleger's house, pay down her old mortgage, and use $2 million in leftover cash to pay Phleger's bills. But Edison instead used the money for a private jet, a boat docked in Malta, cars, and goods at Kmart, Foot Locker and other stores, according to court filings.

For more, see Con Man's Plea May Spare His Wife.

For earlier story announcing the indictment, see the San Francisco Chronicle: Man indicted in $2 million fraud.

Three Indicted In Alleged Cleveland Mortgage Scam Involving 78 Homes; Nearly All Ended Up In Foreclosure

In Cleveland, Ohio, WKYC-TV Channel 3 reports:
  • Indictments have been filed against three people accused of being responsible for $5.8 million in fraudulent loans on 78 properties. The Cuyahoga County Mortgage Fraud Task Force annnounced the indictments against Beverly Cody, and Antoinece Boyd, and licensed mortgage loan officer Mark Kellogg, called "the poster child for mortgage fraud in America" by Cuyahoga County Prosecutor Bill Mason.


  • Charges in the 73 count indictment include theft, forgery, receiving stolen property, telecommunications fraud, tampering with records, money laundering, theft by deception, securing writings by deception, and falsification. The three are also charged with engaging in a pattern of corrupt activity, a first degree felony.

  • Nearly all 78 homes in the Slavic Village area eventually ended up in foreclosure as a result of the activity of those indicted, according to the charges. [...] Prosecutor Mason accused Kellogg of "causing the demise of this once proud community," and creating "carnage" in Slavic Village.

For the story, see Prosecutor: Three indicted for Slavic Village mortgage fraud.

See also, The Cleveland Plain Dealer: 3 charged in mortgage fraud that involved Slavic Village homes (Councilman helped unravel scheme involving 78 homes).

Go here for more on the decimation of Cleveland's Slavic Village from mortgage fraud scams.

Foreclosing Lenders Stiffing Condo Association Adds To Financial Squeeze On Non-Defaulting Unit Owners In One Miami-Area Building

In Surfside, Florida, WFOR-TV Channel 4 reports:
  • [Carlisle on the Ocean condominium association president Colin Hendrick] says 60 percent of the unit owners are being forced to pay 100 percent of the [maintenance] fees. And there's another problem: getting the banks to pay up. Hendrick and the association have been forced to file liens against the banks, who are supposed to pay six months of condo fees if a unit owner falls into foreclosure. "The banks, who created the problem, are the biggest defaulters on paying condo fees and they are just making what was a bad situation a nightmare."

For more, see Condo Owners Find Themselves Paying Extra Fees.

For WFOR-TV video, see Banks Make Good Condo Owners Worse (45 out of 115 units are delinquent or have been foreclosed).

In a related story, see The Miami Herald: Condo boards want banks' 'free ride' to end (Condo owners and local politicians who accuse banks of delaying foreclosures on units to avoid association fees want to change state law in order to stop it).

North Carolina Attorney Disbarred For Swindling Clients; Among Victims Was Homeowner Who Paid $7K To Defend Foreclosure & Lost Home Anyway

In Charlotte, North Carolina, WCNC-TV Channel 36 reports:
  • Charles Alston, Jr., can no longer practice law in the state of North Carolina, and there are dozens of clients he allegedly swindled who are cheering the news. [...] One woman lost her home [...] after paying Alston more than $7,000 to handle her foreclosure.

For the story, see Attorney disbarred for stealing from clients.

Thursday, October 16, 2008

"Sewer Service" One Reason Why Unwitting Tenants Unaware Of Foreclosure Proceedings?

In New York City, a story in Metro New York suggests one possible reason why tenants unwittingly renting homes in foreclosure are unaware of the ongoing legal proceedings, only to get caught by surprise when sheriff's deputies show up at their front door to carry out an eviction:
  • [S]ome [tenants] don’t even know their landlords are in foreclosure until the bank brings them to court. Three notices are supposed to be served before eviction, but many tenants never receive papers. “A lot of buildings have problems with mail, and there is ‘sewer service,’” [lawyer and director of the City-Wide Task Force on Housing Court Louise Seeley] said, referring to unscrupulous process servers who dump papers instead of delivering them.

Source: Beware broke landlords (Foreclosure crisis leading to more renters dealing with evictions).

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

Go here for other posts on alleged fraud in the serving of court papers.

Go here for other posts on process server screw ups. ScrewUpProcessServing SewerServiceAlpha BetaTenantRentSkimming

Texas Man Faces Theft From Elderly Charge; Allegedly Conned Dementia-Suffering Widow Into Signing Away Deed To Home For Less Than 15% Of Value

In Houston, Texas, FOX 26 reports:
  • Joseph Kelly Lecureux, 39, is charged with theft from the elderly; authorities are accusing him of trying to take advantage of an elderly widow whose home was on the verge of foreclosure. [...] According to Marian Rosen, [the homeowner's] attorney, the elderly widow was suffering from dementia when she signed the deed to her home over to Lecureux, selling it for less than 15 percent of it's value.

According to the FOX 26 video coverage, the widow's attorney filed a successful civil suit voiding the deed and restoring title to the home in the name of the widow. Sometime thereafter, local law enforcement authorities filed the criminal charges against Lecureux.

For more, see Man Faces Theft From Senior Charge (read story) (watch FOX 26 video report).

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. FinancialAbuseOfElderlyAlpha deed theft xenon

Four Month Foreclosure Moratorium, Mediation Program Looming In Miami?

In North Miami, Florida, WFOR-TV Channel 4 reports:
  • Miami-Dade County is dubbed the foreclosure capital of the state, and now the county could be taking on the most drastic housing relief effort to date. If Miami-Dade's chief judge approves this moratorium, it could stop all foreclosures for four months, starting as soon as November 1st. It's a measure that could eventually be adopted in all counties across the state.


  • [North Miami Mayor Kevin] Burns wants a countywide moratorium on foreclosures, oddly enough one that even the banks could support. The program is mirrored of what Philadelphia started this summer that has remarkably saved 80% of their homes in foreclosure.

  • "If they can do it in Philadelphia, the City of Brotherly Love, I think they can do it the City of North Miami but also in Miami-Dade County," said Burns. "And I assure you that if the Chief Judge approves it here in Miami-Dade County, they'll do it throughout the state of Florida."

  • The plan is pretty simple: There would be a 120 day halt to all existing foreclosure filings, and new filings would be sent to mediators within 45 days of the filing. Essentially banks and homeowners would be forced to meet to work something out.

For the story, see North Miami Mayor Proposes Foreclosure Moratorium.

26 Buyers Sue Attorney/Escrow Agent For Unrefunded Deposits In Failed Condo Project

In West Palm Beach, Florida, The Palm Beach Post reports:
  • More than two dozen buyers trying to recover deposits on the failed Palladio Terrace condo have filed a $2.5 million lawsuit against the Gunster Yoakley law firm, claiming the firm failed to properly guard their cash when it served as the condo's escrow agent.

  • Merco Group of the Palm Beaches, Palladio Terrace's developer, abandoned plans to build the West Palm Beach luxury condo two years ago, but it has not returned all $10 million in deposits it obtained from would-be buyers. These and other buyers have lobbed lawsuits against Merco, seeking the return of their money. Some judgments have been reached but not paid by Miami-based Merco.

  • Now, 26 would-be Palladio Terrace buyers are pointing the finger at Gunster Yoakley, saying the firm was negligent in releasing their money to Merco in the first place.

For more, see 26 sue law firm over West Palm Beach condo money.

For other posts on homeowners left in the lurch due to actions by builders/contractors, go here, go here, go here, and go here. StiffingContractorsZeta

Two Victims Of Maryland Mortgage Payment Scheme Ensnared In Another Allegedly Bogus Plan

In Prince George's County, Maryland, The Washington Post reports:
  • It's happened again. Some of the same people who lost money last year to the Metro Dream Homes mortgage-payment scheme lost tens of thousands of dollars more to another debt-payment plan before it was shut down by the Maryland securities commissioner this month. The commissioner has ordered Edward Offutt and his Offutt Group companies, located in Silver Spring, to cease and desist from selling securities and engaging in investment advisory activities pending a hearing. Calls to Offutt's offices were not returned.


  • Two people who invested in Offutt's plan told me they did so because they were trying to avoid foreclosure on homes they bought in Prince George's County -- at inflated prices -- through the Dream Homes plan, run by a Laurel company, Metropolitan Grapevine, which doesn't appear to be associated with Offutt.

For more, see Another Losing Proposition for Homeowners.

Wednesday, October 15, 2008

Chicago-Area Sheriff Moves Closer To Resuming Foreclosure Evictions

In Chicago, Illinois, the Chicago Sun Times reports:
  • Cook County Sheriff Tom Dart said he's a step closer to ending his prohibition on foreclosure evictions, a move that grabbed national media attention last week. Cook County judges on Tuesday began using a new court document for foreclosure evictions that specifically names tenants living at the foreclosed property and states how long they are allowed to remain in units -- the length of their lease or 120 days, which ever is shorter -- before deputies haul out their belongings.

  • The new language in court eviction orders aims to quell Dart's concern that renters might not get proper notice their landlord had lost the property in foreclosure.

For more, see Dart a step closer to resuming evictions.

Another Upfront Fee Foreclosure Rescue Operator Faces The Heat As Ohio AG Files Civil Suit Alleging Violations Of Multiple State Laws

In Wood County, Ohio, WNWO-TV Channel 24 reports:
  • In a continuing effort to fight consumer fraud fueled by the mortgage foreclosure crisis, the Ohio Attorney General filed a lawsuit Monday to stop a mortgage rescue scam from victimizing consumers in Auglaize, Hancock and Wood counties.

  • The lawsuit is based on consumers who complained that Schmidt and Dwelling Assurance led them to believe that they could help save their homes. Instead, the complaint alleges the defendants took the homeowners’ money up front, without performing any services to stop the foreclosures.

For more, see Attorney General sues mortgage rescue company.

To view the lawsuit, see State of Ohio v. Schmidt.

Minnesota Feds Probe Alleged Mortgage Scam Involving Condo-Converted Buildings That Left Straw Buyers Holding The Bag

In Minnesota, the Minneapolis Star Tribune reports:
  • Federal officials are investigating a Hastings couple in a new twist on mortgage fraud -- converting apartment buildings in Rochester, Sauk Rapids and Spicer into condominiums and then allegedly using phony buyers and bogus bank records to secure more than $5.5 million in financing.


  • The leaders of the alleged scheme, James and Teresa Hoffman, are accused by the FBI of selling dozens of condos "at substantial profit" to a handful of buyers who never intended to live there and never really had to pay for them.

  • Instead, the couple supplied the buyers' downpayments, propped up their bank accounts and falsified their mortgage applications, the FBI alleges. They then used rent from the condos to cover the straw buyers' mortgage payments, according to a search warrant affidavit filed in federal court.

For more, see New twist on mortgage fraud: Did rent money 'prop it all up'? (The FBI is investigating mortgage fraud that allegedly left straw buyers of condominiums holding the bag. No one has been charged).

Sacramento Feds Indict Two In "Cash Back" Straw Buyer Scam Involving $11.3M+ In Fraudulently Obtained Loans, 16 Homes

In Northern California, The Sacramento Bee reports:
  • A "cash back" mortgage swindle involving in excess of $1 million in stolen funds and more than $11.3 million in fraudulently obtained loans on 16 homes in the Sacramento region was alleged Friday in a federal indictment. Derek Davis of Sacramento, described in court records by those who have dealt with him as a smooth-talking con artist, and Dino Rosetti, a Roseville mortgage broker, are charged in the indictment. They are accused of inflating purchase prices, securing 100 percent financing with bogus paperwork, and then kicking back part of the money to straw buyers.


  • The kickbacks were either concealed from the mortgage lenders or falsely disclosed as credits meant for improvements to the properties, the indictment states. The kickbacks ranged from approximately $42,000 to nearly $138,000 and totaled "in excess of $1 million," [Assistant U.S. Attorney Courtney] Linn said.

For more, see Fraud charged in home loans in three counties.

See also, U.S. Attorney press release: Two Indicted In "Cash Back" Mortgage Fraud Scheme.

Thanks to Tim McDaniel for the heads up on the story.

Monthly Payments For Criminal Restitution In Minnesota Developer's Straw Buyer Scam Could Go On For 660 Years

In Minneapolis, Minneosta, the St. Paul Pioneer Press reports:
  • A federal judge Thursday ordered five people and a defunct corporation to pay more than $5.4 million to victims in what has been called the state's biggest mortgage fraud case. Under the plan set up by U.S. District Judge Ann Montgomery, though, it'll take 660 years for the defendants to pay the restitution if each makes the minimum $150-a-month payment.

  • The money is a fraction of the $20 million to $50 million the government says the defendants scammed in the four-year con. The restitution amount — $5,467,705, to be exact — represents the total in claims filed by victims in the case.

  • Officials believe the scheme involved $100 million in fraudulent financing for 240 homes currently in some stage of foreclosure. The brains behind the scam were Michael Alan Parish and Ardith Ann Parish, a couple who lived in Eagan. Their company, Parish Marketing and Development Corp., had become one of the metro area's most highly regarded homebuilders.

For more, see Judge orders mortgage scammers to pay $5.4 million (Restitution set for five in massive mortgage fraud).

See also, Minneapolis Star Tribune: Judge orders Parish fraud ring to pay victims.

Go here for earlier posts on the now-defunct Eagan, Minnesota homebuilder Parish Marketing and Development.

Another Florida Court Moves To Mitigate Foreclosures; Creates Procedural Rules For Mediation / Loan Modification

In West Palm Beach, Florida, The Palm Beach Post reports:
  • [T]he pace of foreclosures prompted [Palm Beach County's] Chief Judge Kathleen Kroll to consult with judges, clerks, attorneys, lenders and housing counselors. On Friday, Kroll signed an order intended to make foreclosures on homesteaded property less painful and more efficient. The order goes into effect on Nov. 1.

For more, see New rules aim for smoother defaults.

For the court order, see 15th Judicial Circuit of Florida: Administrative Order No. 3.305 - 10/08 - In Re: Homestead Foreclosure Actions By Institutional Lenders.

Philly Uses Door-To-Door Program To Get Out Word On Foreclosure Diversion Program

In Philadelphia, Pennsylvania, The Philadelphia Inquirer reports:
  • [A]rmed with a list of homes headed for sheriff's sale, [Emily Carlson and Edith Dixon] the two community organizers from Southwest Community Development Corp. went door to door, escorted for safety by Philadelphia police officer Joseph Young. They handed out information about the city's new program to forestall foreclosures. Homeowners who've missed payments can get legal counseling and go to a court session aimed at working something out with their mortgage companies. [...] The city started the door-to-door program in May. It's making the extra effort, in part, to protect neighborhoods from blight.

For more, see Spreading hope for homeowners.

Tuesday, October 14, 2008

Firefighters Find Homeowner In Foreclosure With Gunshot Wound While Responding To House Fire; Detectives Are Treating Case As A Possible Suicide

In Pasadena, California, the San Gabriel Valley Tribune reports:
  • A Pasadena woman distraught over the pending foreclosure of her home may have lit her house on fire and killed herself, police said. Neighbors reported smoke coming from a home in the 1000 block of North Wilson Avenue shortly before 5 a.m. Monday morning. Firefighters arrived and found [the homeowner], 53, in her bed suffering from a gunshot wound. "Some of the neighbors said she was going to be evicted this weekend," said Lt. John Dewar, the detective investigating the case. "We're looking at this as possibly a reason this tragedy occurred."

For the story, see Woman distraught by foreclosure may have killed self, burned home.

See also, Los Angeles Times: Pasadena woman facing eviction may have killed herself.

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

Flint-Area Sheriff Declares Two Week Eviction Moratorium; Expresses Concern Over Unwitting Tenants Renting From Landlords In Foreclosure

In Flint, Michigan, WJRT-TV Channel 12 reports:
  • Amid a national mortgage meltdown, Genesee County's sheriff is taking an unusual step to fight foreclosure. Sheriff Robert Pickell says renters won't be evicted for the next two weeks. The eviction moratorium is drawing fire from landlords and praise from tenants.


  • Last week, the sheriff in Chicago announced a similar moratorium. [...] Pickell says his deputies evict 50 to 60 families a week. About five of those, he says, are renters who have paid their bills on time.

For the story, see Local sheriff puts halt on evictions (Controversial moratorium will last two weeks).

See also, The Flint Journal: Foreclosures prompt Genesee County Sheriff Robert Pickell to call off evictions of renters.

For story update, see Genesee County moratorium on evictions scaled back to include only renters in foreclosed homes. BetaTenantRentSkimming

State Attorneys General Urge Lenders To Follow Countrywide Loan Modification Model

Legal Newsline reports:
  • Attorneys general from 10 states are coordinating efforts to shore up the country's mortgage crisis following news that the rate of foreclosures continue to rise. On Wednesday, a task force - The State Foreclosure Prevention Working Group -- that includes attorneys general from Illinois, California, Arizona, Ohio, Texas, Iowa, North Carolina, Colorado, Massachusetts, Michigan issued a letter to 16 mortgage lending companies urging them to follow the loan modification model put forth in the multi-state settlement with Countrywide Mortgage Corp., announced on Monday.

For more, see Foreclosure workouts not working, AGs tell banks.

Foreclosing Lenders Getting Hammered In Chula Vista; Fines From Blight-Prevention Ordinance Soar; Law May Be Nat'l Model As Other Cities Follow Suit

In Chula Vista, California, the San Diego Union Tribune reports:
  • [O]ver the past year, the [Chula Vista blight-preventio, foreclosed home] ordinance written by [city code-enforcement manager Doug] Leeper has become a national model for communities overwhelmed by spikes in foreclosures, analysts say. Hit hard by the mortgage market meltdown, Chula Vista has taken a strong stance against lenders and loan servicers who allow abandoned houses to become neighborhood eyesores.


  • So far, the city has levied $850,000 in fines and penalties and collected a little more than $200,000. In addition, Chula Vista has brought in about $77,000 through vacant-home registration fees imposed by the ordinance. Uncollected fines become liens against foreclosed properties, payable at resale.


  • Leeper said more than 300 jurisdictions nationwide have contacted him to learn more about the ordinance over the past year. Although most are in California, inquiries have come from such distant cities as Boston, Milwaukee and Dallas.

For more, see Blight-prevention law emerges as a national model (Chula Vista forces lenders to maintain foreclosures).

Maryland Builder Charged With Pocketing $1M+ Of Customer Money & Failing To Construct Homes

In Prince George's County, Maryland, The Gazette reports:
  • Three people were indicted Thursday on charges of accepting more than $1 million for homes in Upper Marlboro that were never built, according to the Office of the State's Attorney for Prince George's County.


  • [Leon and Emma Coleman, who ran a company called Opportunity Investment Group] face 57 counts of theft over $500 and charges of violating the state's Homebuilder Act, [...]. Kathy Ridley of Ellicott City, who allegedly vouched for the Colemans' reliability and helped their clients secure bank loans, faces 13 counts of theft and conspiracy [...].


  • The Homebuilder Act requires builders to keep clients' payments in escrow accounts that are separate from their personal accounts and to hold the funds in trust for their clients. "This is our first foray into the homebuilder stuff from the criminal side," said [Assistant State's Attorney Doyle] Niemann. "We prosecute somebody who mugs somebody on the street for $50. Here these people lost a million."

For more, see Homebuilders, broker indicted for not developing Upper Marlboro lots (Duped homebuyers left with thousands in debt and no house to show for it).

For other posts on homeowners left in the lurch due to actions by builders/contractors, go here, go here, go here, and go here. StiffingContractorsZeta

Utah Builder Gets Three Months In Jail For Stiffing Subs, Resulting In Construction Liens Being Slapped On Customers' New Homes

In Salt Lake County, Utah KUTV Channel 2 reports:

  • The Salt Lake County developer who was accused of jilting both homeowners and a contractor is spending 3 months in jail. The sentence brings to an end our investigation after calls to Get-Gephardt from home buyers. [...] Calls came from people who had closed on mortgages to move into their brand new homes on South Mountain...only to find out contractors were charging them again because construction bills were not paid.

For the rest of the story (video only), see Jail for a contractor accused of bilking homeowners.

See also, Utah Attorney General press release: Home Developer Sentenced To Jail:

  • [J]udge [Judith] Atherton ordered [developer Brian K.] Brady to send $3,000 each month to the Attorney General's Office until the victims are made whole. The largest amount----$262,745---will go to the [Utah Residence] Lien Recovery Fund, a fund set up by the state to pay subcontractors and material providers when a general contractor fails to make payments for services and material for a home. Brady also must pay $61,506 to three subcontractors who could not recover from the Lien Recovery Fund.

For other posts on homeowners left in the lurch due to actions by builders/contractors, go here, go here, go here, and go here. StiffingContractorsZeta

Stiffing Subs In Wisconsin Can Land Builders In Jail, State High Court Holds

In June of this year, the Office of the Wisconsin Attorney General announced the decision of the state Supreme Court in a case involving the state's "theft by contractor" law.
  • State v. Angela and Matthew Keyes [2008 WI 54] involves the interpretation of Wisconsin’s theft by contractor law. Under the law, money paid to a prime contractor by an owner for work on a building contract is held “in trust” by the prime contractor until all “claims” by subcontractors have been paid. If the funds held in trust by the prime contractor are insufficient to satisfy the subcontractors’ claims, he must satisfy those claims proportionally. Any “use” of the trust fund by the prime contractor before all claims have been paid in full or proportionally in cases of deficiency is considered “theft” by the prime contractor under Wisconsin law.

  • The Keyes decision reiterates the basic principle that both owners and subcontractors are to be protected by the occasional self-dealing of unscrupulous prime contractors,” said Wisconsin Attorney General J.B. Van Hollen.

For the Wisconsin AG's press release, see Prime Contractor Commits Theft By Contractor If Payments Made By The Project Owner Not Used To Satisy Subcontractors First, Wisconsin Supreme Court Holds. StiffingContractorsZeta

Monday, October 13, 2008

NJ Homeowners Claim Fraud In Sale Leaseback, Foreclosure Rescue Lawsuit; Pattern Of Activity Should Qualify As Racketeering, Says Attorney

In Central New Jersey, the Asbury Park Press reports:
  • [Little Egg Harbor resident Michael] Moreno says he was stripped of nearly $70,000 in equity in the February 2006 [sale leaseback, foreclosure rescue] deal, and he faces eviction from the house he thought he saved. He also is one of two former homeowners suing [Robert] Heath and related companies in an attempt to undo deals they claim are fraudulent.(1) Their attorney, Kevin Carlin of Hamilton, said the documents on the deals list transactions that never happened, a violation of federal law. Carlin also said there are more than 40 similar real estate transactions involving Heath in the state. In the lawsuit, Carlin argues "the pattern" of activity should qualify as racketeering.


  • Deborah and Lawrence Mayo of Brick also have joined the lawsuit against Heath, and they also claim there was a fraudulent transaction. Carlin said at least three other families have contacted him about allegedly bad deals with Heath's businesses. Two of those families already were evicted from their homes, Carlin said.


  • "On paper it looks like a typical real estate transaction with a purchase and a sale, but when you look behind the paper — which is what courts of equity will do — what you see is that the transaction was actually the granting of an equitable mortgage; they were really just refinancing the property," Carlin said. "And they accomplished it by using an attorney who gave the appearance of a disinterested party while she was the wife of the principal [Heath]."

For more, see Eviction looming, man sues over deal (He, others say they feel cheated).

(1) According to the story, Heath's Marlboro-based company, MGT Group, would offer to sell the home back to Moreno at a later date.

71 New Charges Filed Against San Diego Suspects In Alleged "Land Grant" Foreclosure Rescue Scam

In San Diego, California, KGTV Channel 10 reports:
  • Five people accused of victimizing hundreds of San Diego County homeowners in a home foreclosure rescue scam were arraigned Friday on 71 new charges, including conspiracy and grand theft. Alleged ringleader William Hutchings, 62, his wife Xiaoke Li, 45, and Shawna Landis, 36, along with Diego Gil and Edgar Martinez, now face a total of 172 charges, including felony civil code violations alleging rent and foreclosure fraud, said Deputy District Attorney Stephen Robinson. The additional charges reflect counts against new victims and so-called "rent skimming," the prosecutor said.


  • At a hearing in May, Robinson said the defendants allegedly offered to help homeowners keep their property by placing them in "land grants," when in fact the transactions were bogus and left the victims even worse off than they were before.

  • Two methods were used to get owners of residences in foreclosure to participate in the so-called land grant program, Robinson said. One method required homeowners to pay a one-time fee of up to $10,000 to put their property in a land grant. The second method was a lease-back scheme in which homeowners transferred their property to the defendants and then paid rent to stay in their homes. In both scenarios, homeowners were eventually foreclosed on anyway and evicted and retained no legally recognized title to the property. In addition to losing their homes, the victims were swindled out of hundreds of thousands of dollars, authorities said.

Source: New Charges Filed In County Foreclosure Scam.

WaMu Next In Line For San Diego As City Attorney Files Civil Suit Alleging Unlawful Lending Practices; Another Suit To Follow Against Unnamed Lender

In San Diego, California, XETV Channel 6 reports:
  • City Attorney Michael Aguirre filed a lawsuit Friday against Washington Mutual, alleging that the bank engaged in unlawful subprime mortgage lending practices. The lawsuit seeks civil penalties and an injunction to stop further lender foreclosures on subprime mortgages statewide.


  • It is the second lawsuit filed against a major mortgage lender by the San Diego City Attorney's Office in recent months. Aguirre said his office will bring another lawsuit against an undisclosed home loan company by Tuesday. [...] Aguirre sued Countrywide Financial Corp. and new parent company Bank of America in July, also alleging unlawful lending practices.

For more, see San Diego Sues Washington Mutual for Predatory Lending.

For a copy of the lawsuit, see People of the State of California v. Washington Mutual Inc.

Mississippi Homeowner Files Suit Accusing Freddie, Fairbanks Of Bad Acts; Loses Home To Foreclosure Despite Having Been Given Payment Plan, She Says

In Hattiesburg, Mississippi, the Hattiesburg American reports:
  • A Forrest County woman claims Freddie Mac, the federal home mortgage corporation, unlawfully foreclosed on her property. Lisa Willis said [it] failed to return the property to her after she received a financial settlement from the corporation and agreed to a deferred payment plan on her mortgage, according to court documents filed Tuesday in U.S. District Court in Hattiesburg. Court documents state that Willis' home loan was serviced by Fairbanks Capital Corp. on behalf of Freddie Mac.


  • Willis claims in the lawsuit, which represents only one side of the issue, that Fairbanks Capital Corp. imposed and collected "unnecessary and excessive fees and charges not authorized by the loan documents or by applicable law." [...] Willis said in the lawsuit that the foreclosure should be set aside and the property titled in her name.

For more, see Woman files lawsuit against Freddie Mac.

Failure To Decontaminate Homes Busted As Meth Labs Shocks Subsequent Homeowners

In Jefferson County, Missouri, the St. Louis Post Dispatch reports:

  • Jason Dowdell and Michelle DiLorenzo thought the three-bedroom ranch along a quiet, winding Jefferson County road would be the perfect place to start their life together. They envisioned a nursery in one bedroom. Toys in the backyard. Perennials in the planters. But all that was put on hold two years later when they learned the home was contaminated with enough methamphetamine residue to be condemned in more than a dozen states.


  • The Post-Dispatch tested five homes police busted for meth and where new families are living. [...] Months and, in some cases, years had passed since meth labs in the homes were busted, according to police reports. The tests revealed residue levels in all five homes high enough to be condemned in 13 of the 18 states.


  • Cleanup companies along with national and local health experts say it's common for meth labs that haven't been cleaned to test positive for residue — no matter how long after police busts. "It doesn't just go away over time," said Michael Frakes, who co-owns Chicago Crime Scene Cleanup LLC, a company the newspaper commissioned to collect samples.

  • The newspaper's findings shocked the residents, who said they did not know they were living in former meth labs until they were contacted by the Post-Dispatch.

For more, see Are you living in a former meth lab? (if link expires, try here).

Go here and go here for other posts on home-based methamphetamine labs. meth lab yak

Sunday, October 12, 2008

Bar Associations Ramp Up Nationwide Pro Bono Efforts In Fighting Foreclosures

The National Law Journal reports:
  • [L]awyers across the country are doing their share to help homeowners facing foreclosures stemming from the subprime mortgage crisis. From Massachusetts to California, bar associations have formed task forces and organized pro bono projects offering services such as hotlines and free consultations regarding foreclosures, an issue many lawyers say could only get worse.

For more, see Bar Associations Nationwide Bulk Up Pro Bono Efforts in Foreclosure Cases.

Lenders Are Failing In Obligation To Identify All Occupants In Homes When Requesting Foreclosure Evictions, Says Chicago-Area Sheriff

According to a press release from Cook County, Illinois Sheriff Thomas J. Dart's office:
  • [W]hile mortgage companies are supposed to conduct a basic due diligence investigation before requesting an eviction – identifying all occupants – sheriff’s deputies are regularly finding no work done by the mortgage company in advance, leaving the identifying work to deputies working at taxpayer expense.

  • These mortgage companies only see pieces of paper, not people, and don’t care who’s in the building,” Dart said. “They simply want their money and don’t care who gets hurt along the way. On top of it all, they want taxpayers to fund their investigative work for them. We’re not going to do their jobs for them anymore. We’re just not going to evict innocent tenants. It stops today.”


  • [Dart] wants mortgage companies to be forced to provide sufficient information to the Sheriff’s Office in order to conduct an eviction. That will provide greater notification to tenants that their building is in foreclosure and will require mortgage companies and their attorneys to do more leg work in advance of an eviction.

For more, see Cook County Sheriff Suspends Foreclosure Evictions (Move comes in wake of growing mortgage crisis).

In related stories, see:

San Bernardino Deed Theft Suspect Nabbed In Georgia

In San Bernardino County, California, the county district attorney's office recently announced:
  • [H]oward Jerome Edwards was arrested by the Henry County Police Department at his residence in Locust Grove, Georgia. Edwards was arrested on the outstanding felony warrant that included charges of forgery, identity theft, and filing forged documents with the San Bernardino County Recorder’s Office.

According to the DA's office press release, Edwards and co-defendant John Foster, 50, of Riverside, forged the victim's signature on a Grant Deed and Deeds of Trust for property located in Fontana. Subsequently, Edwards and Foster sold the Fontana residence for $675,000.

Source: Man Arrested in Georgia on Real Estate Fraud Charges.

NJ Lawmakers Consider Clipping Lenders With $2K Tax When Filing Foreclosure Actions

In Trenton, New Jersey, Reuters reports:

  • A panel of New Jersey legislators on Monday approved a measure to make mortgage lenders pay $2,000 before taking a homeowner into foreclosure. The measure, which is opposed by some banks, is believed to be the first of its kind. It joins a growing list of local and national efforts to stem a tide of home foreclosures.

For more, see NJ may bill mortgage lenders $2,000 per foreclosure.

See also, McHose: Assembly Action Places The Response To A Crisis In The Wrong Hands.

  • [T]he legislation, A-2517, establishes a “Foreclosure Prevention Revolving Trust Fund” and collects a $2,000 tax on every foreclosure action initiated by a creditor against a borrower under a covered mortgage.

More On The Squeeze Felt By Homeowner Associations Resulting From Defaulting Homeowners

Several recent media reports describe the problems foreclosures are causing on the budgets of local homeowners' associations around the country, and its effects on those association members who are current on their homes' financial obligations:

  • Prince William County, Virginia: One homeowners group with almost 8,000 members, is losing $20,000 a month because of delinquent fees related to foreclosures. That amounts to $240,000 of its annual $4 million budget. See Associations Suffer as Homeowners Do (With Residents in Foreclosure or Not Paying Their Dues, Groups Face Hard Choices);

  • Cook County, Illinois: Residents of a condominium complex in unincorporated Maine Township are in danger of having their gas service shut off unless they can pay the $276,000 their homeowners associations owe Nicor gas. A soaring number of foreclosures within the complex are primarily to blame for the associations' inability to pay the gas bills. About 30 percent of the 354 units in the complex are vacant due to foreclosure. See Nicor threatens to shut off gas to 53 condos;

  • Miami, Florida: "I have a constant battle every month to pay a light bill, a phone bill, just the operational costs of the condominium," [condo Association President Colin] Hendrick told CBS4 Reporter Carey Codd. That's not to mention the $1,200 a month insurance bill for the building. Hendrick says the foreclosure crisis has forced the association to raise monthly fees for unit owners by about 35 percent. On top of that, they've charged thousands in special assessments to make repairs, like fixing the elevators. He says 60 percent of the unit owners are being forced to pay 100 percent of the fees. See Condo Owners Find Themselves Paying Extra Fees.