Saturday, December 13, 2008

Three California Men Cop Pleas On Charges Of Purchasing Home With Stolen I.D.

In Southern California, the San Bernardino County District Attorney's office announced the sentencing of:
  • real estate agent Jose Oliva, 33, of Fontana (grand theft, 180 days in county jail, 3 years probation);
  • Gabriel "Carlos" Hernandez, 36, of Victorville (forgery, 180 days in county jail, 3 years formal probation for forgery); and
  • real estate agent Luis Robles, 46, of San Bernardino, (forgery, county jail and 16 months state prison, suspended).

According to the DA's press release:

  • In 2003 and 2004, the three conspired to steal the victim's identity for the fraudulent purchase of a home in Victorville. The victim discovered the fraud when he attempted to refinance his own Santa Ana residence. The victim found that his signature had been forged on numerous loan documents.

For the DA's press release, see Real Estate Agent Sentenced in Real Estate Fraud Scheme.

Court-Appointed Conservator Convicted Of Milking Elderly Man Of Assets, Leaving Him Facing Foreclosure

In Lakeport, California, Lake County News reports:
  • Following a five-week trial a local woman has been convicted of felony financial elder abuse and neglect. On Wednesday, a jury convicted Glenhaven resident Shauna Michelle Brewster, 53, of one count of felony financial elder abuse and one felony count of elder abuse/neglect, according to Senior District Attorney Rachel Abelson [...].


  • The crimes allegedly were committed over a year-and-a-half-long period against 75-year-old Glenhaven resident Lawrence Russell, for whom Brewster became private conservator in early 2003, said Abelson.


  • The financial abuse came to light when Russell's medical bills, mortgage and other bills went unpaid, said Abelson. Russell's home had gone into foreclosure after payments were not made for seven months, and almost no money was left in Russell's checking account. Brewster, as Russell's conservator, had the authority and responsibility to control his finances for his benefit, said Abelson.

For more, see Jury convicts woman of financial elder abuse, neglect.

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

Another Fresno Man Sought For Allegedly Renting Out To Unwitting Tenants Vacant Foreclosed Homes Belonging To Others

In Fresno, California, KMPH-TV Channel 26 reports:
  • Fresno police are warning valley residents of another foreclosure scam artist. At least three families have now come forward, saying they are out thousands of dollars after renting homes from a man named Joe Rodriguez.(1)


  • Amanda and Jacob Jinapuck filed a report with Fresno Police on Saturday. That's when the Jinapucks found out the home they were renting didn't belong to the man they thought was the owner. [...] Police say two more families have filed complaints against Joe Rodriguez with the Fresno County Sheriff's Department.

For more, see Second Suspect Sought in Foreclosure Scam.

Go here, go here, and go here for posts on phony landlord rent scams.

(1) Fresno man Sam Haley was arrested recently for allegations of similar conduct (see Fresno housing scam uncovered (Police say man rented homes to victims who didn't know he was not the owner)). PhonyLandlordScamZeta

Providence Housing Activists Threaten Foreclosed Home Blockades In Attempt To Halt Evictions

In Providence, Rhode Island, WPRI-TV Channel 12 reports:
  • Housing advocates are threatening to begin blockading foreclosed homes if banks try to evict rent-paying tenants who live there.

For more, see Tenants to stage foreclosure protest (Threaten to blockade homes if bankstry to evict).

See also, The Providence Journal: Tenants protest eviction practices.

Rent Scams Hitting Northern Virginia

In Northern Virginia, The Washington Post reports:
  • [I]n the past 18 months, the foreclosure debacle has pushed tens of thousands of area residents into the rental market, many with crippled credit and a desperate need for housing. Waiting for them is a new cast of swindlers, cheats and real estate sharks ready to prey on the weak and needy. Scams of various stripes are thriving in the foreclosure mess and flourishing at the margins of landlord-tenant laws.


  • Collecting money on a property you no longer own or signing a long-term lease on a property headed for foreclosure could lead to felony charges of obtaining money under false pretenses, authorities said.


  • In recent months, [Kristi] Cahoon, [an attorney with Northern Virginia Legal Services] said her office has been swamped with so many calls about rip-offs and scams, "they don't even faze me anymore." Police in the region do not specifically track fraud or theft cases that stem from rental housing, so the trend is difficult to chart.

For more, see Foreclosure Epidemic Infecting Rental Market (Tenants, Lenders Are Exposed to Various Scams). ThetaTenantRentSkimming

Rent Scams Target Landlords As Well As Tenants

In Santa Cruz County, California, the San Jose Mercury News reports:
  • With foreclosures rising and affordable rentals hard to find in Santa Cruz County, scammers are teasing prospective tenants and landlords with offers on Craigslist that are too good to be true. "It's getting outrageous there are so many scams," said Robin Gysin of the Santa Cruz County District Attorney's Office. "There is no sheriff on the site -- it's buyer beware."


  • Gysin related a situation where a tenant claimed to be a professor coming from Africa to teach at UC Santa Cruz. He sent the property manager a cashier's check for more than $8,000 to cover first and last month's rent and the cost of furnishing the empty house, then asked the manager to send him the unspent portion. All of their communications were by e-mail, and the property mangaer lost $5,000.

For the story, see For rent scams increasing in Santa Cruz; Craigslist shoppers beware. PhonyLandlordScamZeta

Friday, December 12, 2008

Alleged Arson Ring Charged With Scheming To Torch Homes For Insurance Cash

The U.S Attorney's Office in Miami, Florida recently announced that defendants Iraida Alvarez, Adiaris Figuerola, Alexis Perez, Erlin Oswaldo Perez, Carlos Stewart and Rosa Stewart, were charged in a criminal complaint with conspiracy to commit arson in connection with an insurance fraud scheme. An excerpt from the press release:
  • According to the criminal complaint, the defendants worked together during the three-month period from August to October 2008, to plan to burn a home in Sunrise, Florida, to collect the insurance proceeds. The target home's coverage on the policy with State Farm Insurance Company amounted to almost $400,000.

  • According to the complaint affidavit, the defendants claimed to have experience burning homes. Alexis Perez and Figuerola confirmed that they were efficient and competent at this scheme, and Figuerola bragged that they "do this all the time," and that some fires had been used to conceal other crimes, including murder.

  • One defendant, Alvarez, even admitted to burning down her own home in June 2007 to walk away from the mortgage and to collect the insurance proceeds. As payment for their services, the defendants would receive a total of $6,000 plus 20% of the insurance settlement.

For more, see Six Defendants Charged In Arson Scheme To Collect On Home Insurance Policy. ArsonForeclosureAlpha

Major Builder Uses "Rent To Own" Program In Effort To Unload Unsold Inventory

Reuters reports:
  • Toll Brothers Inc., the largest U.S. luxury builder, [last month] said it was expanding its rent-to-own program to Hoboken, New Jersey, across the river from Manhattan.


  • Toll Brothers has a rent-to-own program in one of its Brooklyn condos and will start such a program in a Hoboken building as well, Chief Executive Robert Toll said during a company conference call. The company also has similar programs in Scottsdale, Arizona; Singer Island, Florida; Washington, D.C. and Pennsylvania, Toll said.

For the story, see Toll Brothers expands rent-to-own program.

Texas AG, State Legislator Propose Law Targeting Upfront Fee, Sale Leaseback Foreclosure Rescue Scams

From the Office of the Texas Attorney General:
  • Texas Attorney General Greg Abbott and state Sen. Craig Estes (Wichita Falls) announced a legislative initiative that will help protect Texas homeowners from foreclosure rescue scams. If enacted, the proposal would enhance the Attorney General’s enforcement authority, provide new protections for homeowners, and place new restrictions on foreclosure prevention consultants.

For the rest of the press release, see Attorney General Abbott, Sen. Estes Propose Bill To Protect Texans From Foreclosure Rescue Scams (Foreclosure Rescue Fraud Prevention Act to strengthen penalties for scams).

Utah AG Raids Foreclosure Rescue Operator's Office, Home; Investigators Mum About What They're Looking For

In Midvale, Utah, KUTV Channel 2 reports:
  • Investigators from the Utah attorney General's Office spent over nine hours searching inside the offices of Utah Financial in Midvale. What they were searching for, they would not say. The officers also searched a nearby building which houses Legends Title. The investigators removed several boxes of what appeared to be documents from both buildings.

  • Utah Financial is reportedly owned by Brendan Cassity of Murray. The same state investigators spent about 2 hours searching his house Wednesday morning. They took bags of evidence from the home too.


  • Customers and employees of Utah Financial were shocked to find the building closed by investigators. Customer Raul Leon said he was there to make a payment. Leon said that the company advertises heavily to Latinos, promising to help them avoid foreclosure.

  • Leon says Utah Financial gave him a loan to help him keep his house. He showed documents and said he signed a Quit Claim Deed, then a lease agreement. He says he rents the house back from Utah Financial and they make the mortgage payments for him.

For the story, see Utah Mortgage Business Temporarily Shut Down By State Investigators.

For story update, see Utah Attorney General's press release: Midvale Mortgage Company Owners Charged With Fraud.

California Homeowner In Foreclosure Loses $1K To Purported Loan Modification Firm

In San Luis Obispo, California, New Times SLO reports:
  • [Homeowner Donna] Scarpa said a self-described foreclosure prevention consultant with a company calling itself U.S. Foreclosure Freedom met with her and her husband in August. Scarpa paid $997 up front by credit card to save the house; that was originally scheduled to be in September. But later, Scarpa said, she had trouble contacting the representative and became concerned she wasn’t getting what she paid for.


  • She said when she confronted her foreclosure prevention consultant, the representative grew defensive. Scarpa independently managed to get an extension on the foreclosure sale until Jan. 8. She’s still unnerved, however, and worries how much she’ll be able to accomplish in a month.

  • The representative could not be reached for comment. The phone number for U.S. Foreclosure Freedom was disconnected, and an e-mail to the company bounced back as undeliverable. Messages left with another phone number Scarpa provided for the representative weren’t returned.

For more, see If it sounds too good to be true... (Experts warn that a rash of foreclosures is bringing consultants out of the woodwork • but not all of them are as much help as they promise).

Las Vegas Man Cops Plea In Foreclosure Rescue Scam

From the Office of the Nevada Attorney General:
  • Nevada Attorney General Catherine Cortez Masto announced [...] that Mathew Marlon, age 64, of Las Vegas, pled guilty [...] to nine (9) gross misdemeanor counts of Making False Representations Regarding Title and one (1) gross misdemeanor count of Making a Fraudulent Conveyance in connection with a mortgage foreclosure rescue scam involving Las Vegas victims.

According to an earlier media story, Marlon was reportedly accused of getting the rightful owners out of their homes under false pretenses, and he would put renters in the houses in many cases. In the process, he falsely represented to the Recorder's Office that the sales were exempt from transfer taxes (see Accused foreclosure scam artist behind bars).

For the Nevada AG press release, see Attorney General Announces Guilty Plea In Mortgage Loan Scam.

For story update (2-17-09), see Man ordered to pay $130,000 in mortgage fraud case.

Disabled Michigan Woman Fighting Eviction After Being Screwed In A Sale Leaseback, Foreclosure Rescue Scam

In Sturgis, Michigan, Workers World reports the story of a disabled homeowner who is now fighting off eviction after being victimized by mortgage fraud when she attempted to save her home after she fell behind on payments due to medical expenses. From the story:
  • A bogus mortgage company, which subsequently had its license revoked, tricked Brown into signing her house over to them. She continued making what she believed were the mortgage payments.

  • Recently, after being served with eviction papers, Brown learned she had been scammed and the house was in foreclosure. She discovered she had lost her property rights and was only a tenant in her own home. She filed complaints with the FBI, police and the State Office of Financial Services.

For more, see Help stop eviction of disabled woman.

Thursday, December 11, 2008

Are Attorneys The Target Of I.D. Theft By Rogue Operators Of Pirate Web Sites?

A recent article in The Florida Bar News describes a fake law firm whose operators have stolen the identities of real attorneys and include them in the bogus firm's website to perpetrate scams on the public. According to the article:
  • [T]he Web site is part of the recent problem in which scam artists impersonate real lawyers to gain credibility. In this case, the site promoters attempt to get money by convincing people they have won sweepstakes, but need to pay various fees to collect the prizes. It’s a high-tech enhancement of a scheme that has popped up across Florida recently (See story in the October 1 Bar News.)

  • The Bar became aware of the site because potential victims called the Attorney/Client Assistance Program. Those calls in turn generated an investigation by the Bar’s Unlicensed Practice of Law [UPL] Department, and the site also was reported to the Florida Department of Law Enforcement.


  • Bar UPL Counsel Lori Holcomb said the scammers’ method of operation is to work outside the country, while claiming to be a Florida law firm, and then contact only potential victims in other states.

For more, see Con men steal identities, pirate attorney Web sites.

Another "Money Store" Defendant Falls; Maryland Feds' Tally Reaches Four In Equity Stripping, Foreclosure Rescue Scam Prosecution

From the Office of the United States Attorney (District of Maryland):
  • Katisha Fordham, age 35, of Washington, D.C., pleaded guilty [yesterday] to conspiracy to commit mail and wire fraud in connection with a mortgage fraud scheme that falsely promised to help homeowners facing foreclosure keep their homes and repair their damaged credit, announced United States Attorney for the District of Maryland Rod J. Rosenstein.(1)

For the U.S. Attorney's press release, see Metropolitan Money Store Loan Processor Pleads Guilty In Mortgage Fraud Scheme (Under the Scheme Conspirators Took Title of Homes from Financially Distressed Homeowners and Secretly Used Home Equity for Personal Benefit).

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

Go here for criminal prosecutions of foreclosure rescue operators.

(1) According to the press release, Katisha Fordham is the fourth defendant to plead guilty in the Metropolitan Money Store mortgage fraud scheme. Richard Allison, age 37, of Camp Springs, Maryland, an attorney and employee of the U.S. Census Bureau; Clifford McCall, age 47, of Lanham, Maryland, president of Burroughs & Smythe Financial Services, Inc., based in Lanham and a director of the Fordham & Fordham Investment Group, Ltd., a foreclosure consulting and credit servicing business based in Lanham and Greenbelt, Maryland and Carlisha Dixon, age 31, of Hyattsville, Maryland, vice president and a director of Burroughs & Smythe Financial Services, Inc.; each pleaded guilty to the conspiracy and are facing a maximum sentencing of 30 years in prison. joyjackson

Lawyer Successfully Squeezes Settlement From Insurer For Client's Damage Claim From Unknown Meth Lab

In Loveland, Colorado, the Denver Daily News reports on a story of a local couple who rented out a basement apartment to their son-in-law, only to have their entire home subsequently condemned as a result of contamination caused by the son-in-law's clandestine meth lab operation on the premises. Local officials promptly kicked the couple out of their home because, until the the contamination could be remediated, the premises was deemed uninhabitable.

Reportedly, after having their insurance claim for the damage denied, and after having their case turned down by a number of attorneys unwilling to go after the insurance company, the homeowners found legal counsel willing to take the case and who successfully obtained a satisfactory settlement from the insurer for the meth lab damage.

An excerpt from the story regarding how to handle a meth contamination claim with an insurance company:
  • The trick is showing that homeowners had been the victim of mischievous behavior or vandalism — an unknown meth lab would fall under that category, said [Attorney Brett A.] Buccheit [with the Denver-based Frankl Law Firm].

  • The contamination exclusion is solid, you can’t get around it. No amount of fancy lawyering is going to change the words of the policy,” he said. “But if the property is treated in a manner inconsistent with the homeowners’ rights, such as malicious mischief or vandalism, then that is covered.” [...] The [homeowners] say they were able to settle for an amount that paid most of their costs.

For the full story, see Lawyer fixes meth mess (Denver-based Frankl Law Firm aids family with no other options).

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

Missouri Feds, State AG, Local Cops Raid "Contract For Deed" Operator; Firm Subject To Numerous Complaints; Company Issues Public Statement

In Springfield, Missouri, reports:
  • Springfield police, the FBI and the Missouri Attorney General's office raided the Springfield office of Greenleaf Companies Tuesday. The company, which has been accused of real estate fraud, acts as a go-between, between home buyers and sellers - some buyers say Greenleaf never submitted their payments to the seller, sending the homes into foreclosure.

For the story, see Greenleaf Offices Raided by FBI.

See also:


Story update:

The Springfield News Leader reports that Greenleaf Companies and its sister company, The Real Estate Co., issued a statement Wednesday afternoon addressing Tuesday's search of their Springfield offices by the Missouri attorney general's office. For their statement, see:

See also, Greenleaf defends business after authorities search its offices.


Go here for other "contract for deed" problems involving Greenleaf Companies. Arkansas

Texas AG Gets Permanent Injunction Against Upfront Fee Foreclosure Rescue Operator; Firm To Pay $1.55M

Buried in a recent press release is the following announcement from the Office of the Texas Attorney General:
  • [A]ttorney General Abbott revealed the results of a recent enforcement action against a mortgage rescue fraud scheme. Arizona-based Abell Mediation, Inc., and its president and vice-president, Elizabeth Cory and Michael Cory, respectively, were charged with fraudulently claiming that their company could save homeowners from imminent foreclosure. Homeowners who were delinquent on mortgage payments responded to the defendants’ solicitation cards and Web site. The defendants’ cards claimed that “Abell Mediation, Inc. has saved over 7,000 homes from foreclosure,” boasted about a “staff of highly trained loss mitigation specialists” with established relationships with mortgage lenders and banks nationwide and promised to “achieve results that no one else can.”

  • Under an agreement secured by the Attorney General, the defendants are permanently enjoined from conducting a foreclosure mitigation business in the future. The defendant is also required to pay a total of $1.55 million in fines, restitution and attorneys’ fees.

Go here for the Texas AG 12-10-08 press release.

Go here for the Agreed Final Judgment with Abell Mediation, Inc.. loan modification

Business Is Booming For Federal Prosecutors Targeting Mortgage Fraud; "We're Running Out Of Bodies To Handle These Cases!" Says One U.S. Attorney

The Associated Press reports:
  • Investigations into the collapse of financial titans such as Lehman Brothers, Bear Stearns and Washington Mutual have attracted most of the attention in the ongoing unraveling of the nation's mortgage-backed security mess.

  • Lost in the headlines are prosecutions proceeding quietly on the local level against smaller players. In dozens of jurisdictions around the country, federal prosecutors are charging hundreds of people with originating the bad loans that helped derail the world's financial markets.


  • "We're running out of bodies to handle these cases," said [Sacramento-based U.S. Attorney MacGregor] Scott, calling on Congress to approve more money for investigators and prosecutors. "We're just being overwhelmed."

For more, see Mortgage fraud is booming business for prosecutors.

Recent South Florida Federal Mortgage Fraud Prosecutions

The U.S. Attorney for the Southern District of Florida has made the following recent announcements in connection with its prosecutions of mortgage fraud:

  • December 4, 2008: Three Palm Beach County Residents Sentenced For Mortgage Fraud,
  • November 19, 2008: Miramar Woman And Miami Man Sentenced On Mortgage Fraud Scheme,
  • November 07, 2008: Former Palm Beach Resident Indicted In Bankruptcy, Mortgage And Structuring Scheme,
  • October 30, 2008: Palm Beach County Man Sentenced To 240 Months On Mortgage Fraud And Tax Evasion Charges,
  • October 21, 2008: Leader Of $10 Million Mortgage Fraud Scheme Pleads Guilty,
  • October 15, 2008: Four South Florida Men Charged In Multi-Million Dollar Mortgage Fraud Schemes.

Wednesday, December 10, 2008

Ohio Homeowner Hits Jackpot; Lender Loses Right To Foreclose On Delinquent Mortgage Due To Violation Of Procedural Rule, Says State High Court

In Canton, Ohio, The Repository reports:
  • A city man took his foreclosure dispute to the state’s highest court, and according to a ruling issued today, he won. What that means for Giuseppe Gullotta is that he gets to remain in his house without a mortgage. What it means for homeowners around the state remains to be seen.

  • The case involved a rule that limits plaintiffs to one re-filing after a civil lawsuit has been voluntarily withdrawn. During a two-year period, U.S. Bank filed three foreclosure actions against Gullotta, [...]. The bank voluntarily dismissed the first two complaints.

  • In 2005, it filed a third. Gullotta said that broke the re-filing rule, but the trial court and 5th District Court of Appeals said the foreclosure was legal. In March, the Ohio Supreme Court heard arguments. U.S. Bank argued that the third case wasn’t the same as the first two because it didn’t try to collect payments and interest owed before April 2005, which the other cases did.

  • But Gullotta’s attorney said the complaints were essentially the same. The court justices agreed in a 5-2 vote.

According to the court decision, the amount owed at the time of the start of the foreclosure action was $164,390.91, plus interest at the rate of 7.35 percent per year.

For the story, see North Canton man wins foreclosure case in Ohio Supreme Court.

For the decision of the Ohio Supreme Court, see U.S. Bank Natl. Assn. v. Gullotta (2008-Ohio-6268, slip op., December 10, 2008). UndoMortgageLoans TILAdelta SloppyForeclosuresAlpha

Butler County Sheriff Puts The "Freeze" On Evictions Of Those Without A Place To Go

In Hamilton, Ohio, the Cincinnati Enquirer reports:
  • Forced evictions in winter weather and during a recession are "just heartless," Butler County Sheriff Rick Jones says - and he's ordering his deputies to disregard eviction orders when people have nowhere else to live.

  • "This is like serving a death sentence, when you're evicting someone from their home in the winter - and I'm not going to do it," Jones said Tuesday. "These situations are going to go back to the courts and be resolved some other way. ... There has to be a moratorium - please - before someone dies this winter."


  • Jones is ordering his deputies to ensure that anyone who is evicted has a place to live. "If you determine that these persons will not have shelter, you are to halt the service of the forced eviction and return the paperwork to the courts," said Jones' order, issued Tuesday.

For more, see Cold evictions blocked (Jones tells deputies to ignore orders).

For story updates, see:

Subprime Loans That Lenders Knew Or Should Have Known Were Unsustainable Are Illegal, Says Massachusetts High Court

The Boston Herald reports:
  • The Bay State’s highest court has issued a landmark ruling tentatively declaring whole classes of subprime mortgages unfair under Massachusetts law. “Originating loans with terms that in combination would lead predictably to . . . default and foreclosure (is) within established concepts of unfairness,” state Supreme Judicial Court justices unanimously ruled yesterday. The decision upholds a lower-court injunction issued against subprime-lending giant Fremont Investment & Loan.

  • Suffolk Superior Court Judge Ralph Gants handed down the injunction in February, declaring - apparently for the first time in state history - that some subprime-mortgage terms automatically violate Massachusetts law.

  • Ruling in a lawsuit brought by state Attorney General Martha Coakley, Gants found that many of Fremont’s Bay State subprime loans seemed “doomed to foreclosure” from the start. The judge ordered Fremont to give Coakley’s office a chance to object before foreclosing on any of 2,700 Massachusetts subprime mortgages with terms Gants deemed “structurally unfair.”

  • Last month, the judge issued a similar injunction against Option One Mortgage, which oversees another 8,000 questionable Massachusetts subprime loans. Although Gants’ rulings are preliminary, and subject to change as cases work their way through courts, experts still see yesterday’s SJC move as precedent-setting.

  • We think this is an important milestone not just for Massachusetts, but also for other states that want to use their consumer-protection powers against unfair and deceptive (mortgage) marketing,” Coakley said.

For the story, see High court hits subprime lenders.

See also:

For posts that reference the failure of some mortgage lenders and their attorneys to prove ownership of the promissory note when starting foreclosure actions, Go Here, Go Here, Go Here, and Go Here. missing mortgage foreclosure docs gamma SloppyForeclosuresAlpha

Loan Modification In Bankruptcy To Be On The Table If Foreclosure Frustration Continues: Frank

MarketWatch reports:
  • House Financial Services Committee Chairman Barney Frank on Monday said that if foreclosures are not on the decline early next year he expects lawmakers to revive efforts to change bankruptcy law and let judges adjust the terms of mortgages.

  • "If we come back in February and there is frustration that efforts at reducing foreclosure are not working, we can do bankruptcy law changes to get at the problem," Frank told participants in an Office of Thrift Supervision conference. "Bankruptcy cuts through that." [...] Should lawmakers consider the measure again, it would give judges the authority to modify mortgages such as reduce principal or interest rates or lengthen the amount of time to pay back the mortgages.

Source: Frank: Bankruptcy law changes could be on the table next year.

Three Face Criminal Charges In Las Vegas-Area Alleged Foreclosure Rescue Scam; Homeowners Paid Upfront Fees To Avoid Losing Homes, Says State AG

In Las Vegas, Nevada, KLAS-TV Channel 8 reports:
  • One person is under arrest and two others are still at large for allegedly operating a foreclosure scam that bilked desperate homeowners out of money.(1)


  • The alleged scheme involved the collection of upfront fees for the purpose of assisting the victims with avoiding foreclosure on their homes. The suspects, under the business of Federal Housing Aid, allegedly charged the victims between $899 to $1500 for foreclosure rescue services and offered a 100% money back guaranty, claiming their company would refund the money if the foreclosure could not be stopped. The state says the company did not follow up on its promises.

For the story, see Arrest Made in Las Vegas Foreclosure Rescue Scam.

See also, KTNV-TV Channel 13: Arrests Made in Foreclosure Rescue Scam.

(1) According to the story, Attorney General Catherine Cortez Masto announced that William Vargas has been arrested and warrants have been issued for Paula Luna, who is believed to be in California and Michael Sinclair who is believed to have fled to the Philippines. KTNV-TV Channel 13 reports, the three defendants are each charged with multiple felonies including: One (1) felony count of Theft of a Person 60 Years or Older; seven (7) felony counts of Theft by Material Misrepresentation; and eight (8) misdemeanor counts of Deceptive Trade Practice. loan modification

Central Florida Lawyer Gets 15 Years Probation For Stealing Foreclosure Surplus Funds From Clients

In Orlando, Florida, WFTV Channel 9 reports:
  • An Orange County lawyer can no longer practice law and is on probation for 15 years after taking advantage of foreclosure clients. Investigators said Norman Sanders Moss took advantage of the foreclosure crisis and kept money from auctions of foreclosed homes.(1) Moss pleaded guilty to grand theft and offered one of his victims an apology.


  • Moss was ordered to work 40 hours a week in order to pay the victim, Nicholas Cabrera, back the $31,000 he stole from him. However, the former attorney will have to obtain a job that doesn't allow him to handle money or practice law.

Source: Lawyer Apologizes For Stealing Victim's Money.

(1) This money, commonly referred to as Foreclosure Surplus Funds, are proceeds generated from the sale of a home at a foreclosure, trustee's, or sheriff ’s sale over and above the balance owed on the foreclosing mortgage. Where a foreclsoure sale yields such a surplus, the foreclosed homeowner may be entitled to the money, provided there aren't any secondary liens on the foreclosed property, in which case these lien holders could have priority in their claims to the surplus. In some cases, this surplus could total thousands of dollars, although in the current real estate market, the vast majority of foreclosure sales are not attracting third party bidders, are being acquired by the foreclosing lenders, and consequently, are not yielding surpluses.

Arizona AG: Complaints About Loan Modification Firms On The Upswing

From the Office of the Arizona Attorney General:
  • The Attorney General’s Office has experienced a recent increase in complaints from consumers who have been contacted by individuals claiming to have "connections" and expertise in negotiating with mortgage lenders to reduce consumers’ monthly payments and/or prevent foreclosure. These individuals charge consumers high upfront fees and say they can modify mortgage terms to make them more affordable.

For more, see Terry Goddard Warns of Fraudulent Mortgage ‘Assistance’ Businesses.

South Florida Feds Nail Two Area Title Agents For Roles In Mortgage Fraud Schemes

In two separate cases, the U.S. Attorney for the Southern District of Florida recently announced:
  • Title Agent Sentenced To 41 Months In Prison For Participation In Mortgage Fraud Scheme: Ishmett Nazario was sentenced to forty-one months in federal prison in connection with her participation in a mortgage fraud scheme. In addition, Nazario was ordered to pay restitution in the amount of $1,442,000. Nazario was arrested in July 2008 for her involvement in the fraudulent sale of residential property located in Coral Gables, Florida. The property was flipped three times within a one year period, almost doubling the price of the property from $780,000 to $1,400,000. Nazario served as the title agent in the third sale and, through her title company Blue Coast Title, fraudulently released the lender's funds from escrow to fund the straw buyer's down payment on the property.

  • Broward County Title Agent Convicted On Fraud Charges: Howard Gaines, an attorney and licensed title agent, was convicted after trial on one count of conspiracy to commit mail and wire fraud and two counts of mail fraud. Gaines' conviction was the sixth conviction in this matter, following five guilty pleas by other conspirators in the case. According to the evidence presented at trial, Gaines was a licensed title agent at Your Title Choice, Inc, in Deerfield Beach. Gaines, as a title agent, aided co-conspirator Anthony Dehaney and others to close on fraudulent loans. Among the fraudulent documents presented at closings were HUD-1 Settlement Forms, which falsely represented that buyers were using their own money to close on the purchases. The evidence showed that Gaines helped Dehaney close more than $10,000,000 in loans during 2004, 2005, and 2006, including $5,000,000 in fraudulent mortgages.

City Of Memphis, Shelby County Consider Lawsuits Against Predatory Lenders

In Memphis, Tennessee, WHBQ Fox-TV Channel 13 reports:
  • The city and county mayors are considering drastic action because of the area's foreclosure epidemic. The idea is still in the early stages, but Memphis and Shelby County leaders are heavily researching a plan to sue mortgage companies. Leaders blame these loans for Memphis having the highest foreclosure rate in the state.

  • Similar lawsuits are underway in another part of the country. The City of Baltimore is overrun with foreclosed homes. Leaders there saw predominately African American neighborhoods with extremely high foreclosure rates. The situation is similar in Memphis, where 10 percent of some neighborhoods have foreclosed homes.

For more, see Local Leaders Consider Suing Mortgage Companies.

See also:

For lawsuits alleging predatory lending filed by officials in Baltimore, Maryland, and the state of Massachusetts, see:

Tuesday, December 09, 2008

Erosion Problems At Unbuilt Westchester County Project In Foreclosure Creating Havoc For Neighboring Residents, Lender, Say Suits

In Yonkers, New York, The Journal News reports:
  • Investors have gone to court to foreclose on the proposed Velocity at Greystone apartment project, and a receiver has been named by the court to oversee the gaping pit at the Warburton Avenue site.


  • Warburton Avenue neighbors have been upset with the persistence of the large pit at the site. A series of landslides and mishaps have delayed the project, and erosion on the hillside caused a nearby single-family home to become uninhabitable, leading to a lawsuit from that home's owner.

  • In papers filed last month in state Supreme Court, investors said they were foreclosing on the property because Kaiser had defaulted on certain terms in the loans. Specifically, investors said that the developer missed a Feb. 15 deadline for completing the footings and foundation of the building, and had failed to put up an additional $1.1 million to cover cost overruns.

  • In an affidavit filed with the case, one of the investors said there are "serious issues" concerning the stability of the foundation because the land abutting the site had collapsed at one point. [...] Debra Cohen, an attorney who represents residents of an apartment building at 1085 Warburton Ave., said this week that the foreclosure action "puts gasoline on the fire of my clients' concerns."

For more, see Velocity at Greystone development in Yonkers faces foreclosure.

See also, Yonkers Tribune: Running Afoul of the Yonkers Department of Engineering.

For story update (2-9-09), see Yonkers co-op residents want to join suit on landslides against development.

Tennessee High Court Calls On Attorneys To Step Up In Effort To Ease Burdens On Legal Aid System

In Nashville, Tennessee, The Tennessean reports:
  • The Tennessee Supreme Court is calling on every attorney in the state to step up and help out in the face of a mounting crisis in the legal aid system. More and more low-income Tennesseans are running into deep legal troubles — unemployment, bankruptcy, eviction, foreclosure, unpaid bills and predatory lending practices. And most of them are forced to navigate the courts alone and undefended because they cannot afford an attorney.


  • [T]his new initiative comes at the urging of the Tennessee Bar Association, Legal Services and a raft of other legal groups to call for more access to civil legal aid for those Tennesseans who need it most.

  • "Equal justice under the law, if it means anything, it meant that we, as lawyers, ought to step up to the plate," said retired Chief Justice William Barker. "Even if you're a corporate lawyer and have never set foot in a courtroom, we can find something for you to do."

For more, see Lawyers urged to help the poor (Chief justice says too many forced to tackle legal troubles on their own).

NYC Pro Bono Effort Training Lawyers In Fight Against Foreclosures

In Brooklyn, New York, the Brooklyn Daily Eagle reports:
  • The Volunteer Lawyers Project hosted a two-day workshop last week on foreclosure prevention law. The event, organized by the Center for NYC Neighborhoods and led by Legal Services for New York, was held at the Brooklyn Bar Association headquarters and educated attorneys about foreclosure issues ranging from litigation practice and sub-prime mortgages to predatory lenders and common scams.

For more, see VLP Teams Up With South Brooklyn Legal Services To Fight Foreclosure.

Infantry "Basic Training" In Foreclosure Battle Continues In NYC

From the Brooklyn Daily Eagle:

  • Topics: The foreclosure process; predatory lending practices; role of the settlement conference; how to hold off foreclosure; recent legislative initiatives to help resolve defaults; negotiating resolutions short of foreclosure. New state rules require settlement conferences in foreclosure actions. [Go here for formal agenda].

Held at the Queens County Bar Association, 90-35 148 St., Jamaica, New York. For information or to register, contact the New York State Bar Association.

Source: Upcoming Events in the Legal Community.

Miami-Area Mortgage Broker Caught In Cops' Crosshairs

In Homestead, Florida, The Miami Herald reports:
  • After years of writing millions of dollars in mortgages based on bogus information, Homestead broker Yvette Valdes is under investigation by the county's fraud task force. Miami-Dade detectives said they will start examining Valdes' records, a day after The Miami Herald revealed she was a key figure in the network of a New York lender convicted in a massive, mortgage-fraud scheme.

  • While at least eight in the Tampa area have been convicted in the case, Valdes still sells loans from a storefront office [...].

  • Police are expected to examine more than 100 mortgages that Valdes and co-workers wrote at Sandkick Mortgage between May 2004 and September 2005. The newspaper found the documents are rife with red flags: non-existent employers, grossly inflated salaries and sudden increases in the borrower's net worth.

For more, see Police probe loan broker's actions (Miami-Dade police are investigating Homestead mortgage broker Yvette Valdes, a key figure in the network of a New York banker convicted in a mortgage-fraud scheme).

NY Times Considers Possible Sale Leaseback Of Its Free & Clear Interest In 52-Story Headquarters; Seeks "Rescue" From Potential Cash Flow Squeeze

In New York City, The New York Times reports:
  • The New York Times Company plans to borrow up to $225 million against its mid-Manhattan headquarters building, to ease a potential cash flow squeeze as the company grapples with tighter credit and shrinking profits.

  • The company has retained Cushman & Wakefield, the real estate firm, to act as its agent to secure financing, either in the form of a mortgage or a sale-leaseback arrangement, said James M. Follo, the Times Company’s chief financial officer.

  • The Times Company owns 58 percent of the 52-story, 1.5 million-square-foot tower on Eighth Avenue, which was [...] completed last year. The developer Forest City Ratner owns the rest of the building. The Times Company’s portion of the building is not currently mortgaged, and some investors have complained that the company has too much of its capital tied up in that real estate.(1)

For more, see Times Co. to Borrow Against Building.

(1) Unlike the average homeowner in foreclosure, The Times is affirmatively and publicly expressing its interest in a possible sale leaseback with potential funding sources, and has retained the services of professionals to seek out such a transaction. The Times, with its access to sophisticated legal and financial advisers, has the kind of bargaining power that makes it an unlikely target for an equity-stripping scam. See generally, DREAMS FORECLOSED: The Rampant Theft of Americans' Homes Through Equity-stripping Foreclosure 'Rescue' Scams.

Accordingly, such a transaction, should it take place, probably runs a minimal risk of being recharacterized as an equitable mortgage. See generally, When is a Sale-Leaseback an Equitable Mortgage?

Fannie: OK To Modify Non-Delinquent Mortgage Loans

Housing Wire reports:
  • In a move likely to be echoed by Freddie Mac, and perhaps a blueprint for changes in the private-party mortgage market, housing finance giant Fannie Mae said late Monday that it had taken a series of steps to allow servicers to intervene in troubled mortgages before a borrower becomes delinquent, the latest in a series of changes at the GSEs designed to help head off a flood of residential mortgage defaults.

For more, see Servicers Can Modify Current Loans, Fannie Mae Says.

See also, Reuters: Fannie Mae removes obstacles to loan modifications.

Compelling Loan Modifications A Violation Of Investors' Constitutional Rights? Not So, Says One Expert

David Dana, professor of law and associate dean for academic affairs at Northwestern University School of Law writes in The Huffington Post:
  • In recent years, mortgages have been carved up into so many pieces that the re-working of mortgages -- and the saving of homes from foreclosure -- is not happening even when there are responsible homeowners who are willing and able to make reasonable payments.

  • Regulators and politicians have done nothing yet to compel the re-working of mortgages, in part because they fear that they will be labeled as trampling upon the constitutional rights to property of the investors who own parts of these troubled mortgages.


  • Our property law and property rights tradition simply does not require, or even allow, our lawmakers to sit back while the ill-advised chopping up of property into competing interest creates a gridlock that undermines national prosperity. As Abraham Lincoln famously remarked, the Constitution is not a suicide pact.

For the case Professor Dana makes in support of his position, see The Feudal Mistake.

NYS Appeals Court To Review County's Foreclosure Attempt Where Owner Failed To Include $25 Late Fee With Tendered Tax Payment; Faulty Notice An Issue

In Canandaigua, New York, the Daily Messenger reports:
  • A panel of nine judges with the state Appellate Division’s Fourth Department will hear arguments Monday in the case of a man battling Ontario County to keep his Monks Road property off the auction block.The eight-acre wooded parcel overlooking Canandaigua Lake was to be auctioned this past May 14 at Ontario County’s annual foreclosure auction for unpaid property taxes.

  • But property owner Bruce Middlebrook took the county to court, claiming he had tried to pay the amount he was told he owed by the due date, however, the county refused to accept his payment because it lacked a $24.74 late fee.

  • Middlebrook’s attorney, David Whitcomb, said he will argue two points. The first is the county failed by giving Middlebrook wrong information about the amount owed. Additionally, Whitcomb will argue, it failed to notify Middlebrook the foreclosure process had begun in January 2006, because Middlebrook did not receiving notice of the back taxes until October 2007, four months before the final date to pay his bill Jan. 18, 2008.

For more, see County, homeowner battle over auction.

For story update, see Canandaigua landowner wins county foreclosure case.

For another report on a lawsuit involving the issue of giving faulty notice to a property owner in an Ontario County, NY tax foreclosure action, see Court Denies Dismissal Of Suit Accusing County Of Screw Up In Giving Proper Notice To Owner In Tax Foreclosure Action. foreclosure faulty notice

Countrywide Attorney: MBS Fund Lacks Standing To Sue Lender

Reuters reports:
  • A fund representing bond investors seeking to force Bank of America-owned Countrywide Financial to repurchase thousands of mortgages failed to satisfy requirements to sue under contracts governing the securities, according to Countrywide attorneys.

  • John Beisner, a laywer at O'Melveny & Myers LLP, in a Dec. 8 letter asserted Greenwich Financial Services "lacks standing to sue" under contracts that limit lawsuits unless conditions are met, including that 25 percent of bondholders request such litigation.

For more, see Bond investor group "lacks standing" to sue: Countrywide-counsel.

Go here for More On Hedge Fund Suit Against Countrywide Over $8.4B Bank Of America Loan Modification Settlement.

South Florida Developers Under Attack By Their Lenders?

The South Florida Business Journal reports on downstate Florida developments involving unsold new housing units, condo conversions, and unfinished projects that appear to have possibly run aground and now face foreclosure:
  • Club Caribe faces foreclosure: Club Caribe in Coconut Creek has joined the widening club of South Florida developments facing a foreclosure lawsuit from Miami-based Ocean Bank. The notice of foreclosure filed in Broward County targeted the 150 units still held by the developer. It exempted the 227 units in Club Caribe the developer has sold. Club Caribe Associates bought the former apartment complex in 2005 for $63 million and obtained a $59 million mortgage from Ocean Bank. It started selling units the following year.

  • Fort Lauderdale’s La Preserve faces foreclosure: La Preserve, an upscale, single-family home project in Fort Lauderdale, is facing a foreclosure lawsuit from Wachovia Bank. The 67-home project offered homes priced from $700,000 to more than $1 million. According to Broward County property records, La Preserve LLC still owns 33 single-family homes and home sites in the development.

  • Holiday Inn Fort Lauderdale faces foreclosure: The Holiday Inn hotel near the beach in Fort Lauderdale faces a foreclosure lawsuit from Fifth Third Bank. It is the latest in a line of South Florida hotels slipping into foreclosure amid the recession. The Comfort Inn in Palm Beach Gardens has been scheduled for a foreclosure sale. The developer purchased the Holiday Inn Fort Lauderdale in July 2007 for $15 million. It developer took out a $12.6 million first mortgage and a $13.7 million second mortgage.

  • Little Havana condos in foreclosure sale: A foreclosure sale has been scheduled for Feb. 13 to auction off 56 units in the Altos de Miami condominium in Miami's Little Havana neighborhood. The mixed-use project, has 134 units and 10,000 square feet of ground-floor commercial space. The developer started closings in spring 2007 and sold 78 units. The units that did not sell will be up for public sale.

  • Banks foreclose on Havana Lofts: HSBC Bank and Great Florida Bank have filed a foreclosure lawsuit regarding the Havana Lofts project in Miami’s Little Havana neighborhood. The notice of foreclosure applied only to the 75 unsold units in the 90-unit high-rise.

  • Miami’s Wind by Neo condo in foreclosure: The developer of Wind by Neo, a 42-story, 498 unit condo along the Miami River is facing a foreclosure lawsuit from Wachovia Bank. In February, the Business Journal reported that the project was one of 191 that BankUnited would not write mortgages for – a result of declining market value and high investor concentration. The lawsuit exempts the 214 residential units and four commercial units the developer has already sold from the foreclosure action.

  • Ocean Bank seeks foreclosure on Hallandale Beach project: Miami-based Ocean Bank filed a $2.3 million foreclosure lawsuit against a developer who converted a 32-unit building in Hallandale Beach into condos. Only four of the units sold, and 15 could not be rented out, according to the complaint, filed in Broward County Circuit Court.

  • Regions files against Miami Beach projects: Regions Bank has filed new foreclosures against two Miami Beach condominium projects, Terra Beachside Villas and Terra Beachside Villas II. The foreclosures complete a triple play of foreclosure actions against Miami-based BSG Development. (A previous foreclosure was filed in October on BSG’s Cabana on Collins project.) The developer had taken $98.2 million in mortgages from Regions. Terra Beachside Villas is a 117-unit project has been stalled in mid-construction for months. Terra Beachside Villas II is a vacant parcel that was scheduled to be the second phase of BSG’s condo project. Cabana on Collins was expected to be a 210 unit complex when completed.

Monday, December 08, 2008

Foreclosure Of Unbuilt 1,712-Acre NW Vegas Development Good News For Slow Growth Advocates

In Las Vegas, Nevada, the Las Vegas Review Journal reports:
  • For northwest Las Vegas residents in favor of slowing growth, there is a silver lining in the recession-driven foreclosure of Kyle Canyon Gateway. Wachovia Bank foreclosed on the 1,712-acre development owned by Focus Property Group and several homebuilders on Sept. 23. The land is located off U.S. Highway 95 near Highway 57, the turnoff to Mount Charleston and the Spring Mountain National Recreation area. Focus and its partners purchased the land for $150 million at a Bureau of Land Management auction in 2005.

For more, see Kyle Canyon Gateway foreclosure slows northwest development.

MBA Report: 10% Of Mortgaged Homeowners 30+ Days Late On Loan Payments

Bloomberg News reports:
  • One in 10 American homeowners fell behind on mortgage payments or were in foreclosure during the third quarter as the world’s largest economy shed jobs and real estate prices tumbled. The share of mortgages 30 days or more overdue rose to a seasonally adjusted 6.99 percent while loans already in foreclosure rose to 2.97 percent, both all-time highs in a survey that goes back 29 years, the Mortgage Bankers Association said in a report [Friday].

For more, see Mortgage Delinquencies, Foreclosures Rise to Record.

See also Mortgage Bankers Association press release.

Fear Of Investor Lawsuits Impede Loan Modification Efforts

In Bradenton, Florida, a column in the Bradenton Herald offers a view on why mortgage lenders are so reluctant to offer loan workouts on delinquent home mortgages:
  • [T]hat's because most lenders sold their mortgages, which were soon packaged with others and the packages sold in shares. Now, ownership and securitized stakes in the expected profits are in the hands of multiple institutions and retirement funds and such.

  • According to April Charney, a lawyer who teaches other lawyers about this stuff, some institutions don't even own what they invested in. It is a huge problem for our country that, systemically, a Ponzi scheme was at work as, she said in an e-mail, "originating lenders failed to legally transfer notes and mortgages, leaving the investors in these trusts (us, our states, our schools, our pensions, the Bank of China, etc.) owning air. Sliced and diced air."

  • That ownership web can make it hellish to find anyone who dares restructure a mortgage. Often no one is sure who has authority to make a deal, let alone thousands of deals. Mortgage servicers fear being sued by investors if they exceed contractual authority, and the contracts with different investors vary.
For more, see Why won't the lenders try to cut a deal? missing mortgage foreclosure docs gamma MortgageServicingIssuesAlpha

Report: Mortgage Company VP Tutored Brokers On The Art Of Fraud; $550M+ In Florida Loans Originated; More Than 1 In 3 Ended In Foreclosure

The Miami Herald reports:
  • Orson Benn, once a vice president at the nation's largest subprime lender, spent three years during the height of the housing boom tutoring Florida mortgage brokers in the art of fraud. From his office in New York, he taught them how to doctor credit reports, coached them to inflate income on loan applications, and helped them invent phantom jobs for borrowers.


  • The Miami Herald found that Benn's network approved more than $550 million in home loans from Tampa to West Palm Beach to Miami, according to an analysis of court records. In Miami-Dade County alone, Benn's office approved more than $349 million in loans on 1,913 homes -- more than one in three have since fallen into foreclosure, the analysis shows.


  • With so many of Benn's loans now in foreclosure, Miami-Dade County is littered with still more empty homes. Squatters inhabit some; crack dens occupy others. At least one has been stripped to the ground, leaving only the foundation.

Benn has recently begun an 18-year prison sentence.

For more, see Exec had mortgage racket down to an art (Orson Benn has gone to prison for falsifying applications, but a former associate in Homestead still sells mortgages).

Feds, State Authorities Bust Global I.D. Theft Ring For Allegedly Hijacking Homeowner HELOCs; Millions In Equity Drained Out Of Homes

The Washington Post reports:
  • Federal authorities [last month] announced a series of arrests and convictions in connection with a global identity theft ring that stole millions of dollars by hijacking home-equity lines of credit issued to thousands of consumers.


  • The cases highlight what the FBI calls an "emerging scheme" afflicting the struggling real estate and mortgage market. In such crimes, thieves target people with good credit and large, untapped home-equity lines of credit, digging through public records -- such as property deeds and mortgages -- as well as publicly available Internet databases to obtain credit applications, credit reports and victim signatures.

  • "Home-equity lines of credit are an expanding front in the battle against mortgage fraud," said New Jersey U.S. Attorney Christopher J. Christie. "Homeowners should carefully review their statements to make sure their hard-earned equity is not disappearing from under their noses."

For more, see Thieves Stole Identities to Tap Home Equity.

Sunday, December 07, 2008

Atlanta-Area County Marshal Continues Annual Tradition - Declares Moratorium On Holiday Evictions

In Fulton County, Georgia, WABE Radio 90.1 FM reports:
  • Fulton County will suspend forced evictions over the holidays. Starting December 19th, through January 5th, the County Marshal has said he will not execute writs of possession.

  • Fulton County Marshall Antonio Johnson says the holiday moratorium has become an annual tradition over the last several years. But considering how much the foreclosure rate has risen, he says more families will benefit from the temporary relief this year.

Source: Fulton County Suspends Evictions over Holiday.

AZ R/E Agent Admits Forgery On Subordination Agreement Making Seller-Held Note Junior To New Financing; Both Loans Now In Default

From the Office of the Arizona Attorney General:
  • Attorney General Terry Goddard [last week] announced that former real estate agent Roy Keith Fife, 47, of Tucson, pleaded guilty to fraud and forgery charges at a hearing in Pima County Superior Court [...].

  • At the hearing, Fife admitted forging the signature of a client for whom he served as a residential real estate sales agent. Fife forged the signature on loan documents to facilitate the sale of the client’s property. Through this sale, Fife obtained a commission of more than $100,000.

  • As a result of Fife’s forgery, his client’s carryback loan was made junior to a million-dollar equity loan taken out by the buyers. The seller specifically required in the sales contract that his carryback would be in first position. The buyers of the property have since defaulted on both loans.

For the press release, see Tucson Real Estate Agent Pleads Guilty to Fraud, Forgery.

Go here, go here, go here, and go here for other posts related to deed or refinancing scams by forgery, swindle, etc. DeedTheftAlpha

Forged Deed & Subsequent Refinance Leaves Bronx Homeowner Facing Foreclosure, I.D. Theft Victim's Credit In Ruins

In The Bronx, New York, the New York Daily News reports:
  • Phillip Powell, who lives in Baldwin, L.I., never even laid eyes on a house on E. 215th St. in the Bronx when one day he learned that he owned it. He received mail saying he owed payments on a $370,000 mortgage he had taken out on the single-family home.


  • Paula Penrose, who lives at the east Bronx property that she bought in 2002, was equally shocked when she learned Powell owns her home.


  • In a classic case of deed theft, someone stole Powell's identification and forged a deed transferring ownership from Penrose to Powell.

  • Then, the person pretending to be Powell used the forged deed to take out a $370,000 mortgage from New Century Mortgage Co. on the E. 215th St. home. Because neither the real Powell nor the fake Powell were making monthly mortgage payments, New Century began foreclosure proceedings against the property, and Penrose and her family face eviction.

For more, see You own a house - but we're taking it. DeedTheftAlpha

San Antonio Feds Charge Foreclosure Rescue Operator For Allegedly Pocketing Upfront Fees & Allowing Clients' Homes To Be Lost In Foreclosure

In San Antonio, Texas, the San Antonio Express News reports:
  • On Thursday — almost 15 years after she first was put on notice over alleged fraud — FBI agents arrested [Rosario Castro - aka Rosie] Divins on charges she ran a foreclosure-rescue scam that swindled [Isaac and Christina Vela](1) and at least three other families out of thousands of dollars and sometimes vehicles. All lost their homes to foreclosure.

  • A federal grand jury Wednesday indicted Divins on four counts of mail fraud and four counts of criminal contempt for disobeying bankruptcy court orders(2) instructing her to stop her misrepresentations.


  • Janie Anderson, 58, feels the Velas' pain. Anderson, who was diagnosed with cancer, and her husband, Rene Rodriguez, who needed an operation, turned to Divins in 2006 during their medical crises to help them avoid foreclosure. They're out almost $10,000, Anderson said. Not a penny of it went to pay the mortgage debt, the indictment said. The couple, like the Velas, haven't seen any of their money returned.

For more, see Local woman is arrested in foreclosure scam.

(1) Reportedly, court records show that the Velas gave Divins $6,800, but she never made a payment to the mortgage company.

(2) Since 2000, Divins has been warned by bankruptcy judges to stop sending out fliers claiming that she could “stop” foreclosures, according to the story. loan modification

More Trouble For Missouri "Contract For Deed" Operator As Homeowners File Federal Suit Seeking $60M In Damages

In Springfield, Missouri, the Springfield News Leader reports:
  • A Nixa couple and a Nixa man sued by Greenleaf Cos. of Springfield for not paying rent have in turn sued Greenleaf and its affiliates in federal court, saying they have engaged in real estate fraud and conspiracy.

  • Timothy and Marcia Thompson, as well as Donald Wright, filed separate suits Monday in the U.S. District Court Western District of Missouri. The Thompsons are seeking $10 million in punitive damages against the defendants, while Wright is demanding $50 million.


  • Both the Thompsons and Wright bought their homes in Nixa from Greenleaf on a contract for deed. [...] In their lawsuit, the Thompsons say they bought their home from Greenleaf in December 2007 only to find out accidentally that the home belongs to [alleged straw buyer] Robert Marti. In June, the Thompsons learned of an impending foreclosure on their home, according to court documents. [...] Wright made similar allegations in his lawsuit.

For more, see Greenleaf sued for millions in new cases (Company partner says legal action groundless).

Go here for other "contract for deed" problems involving Greenleaf and The Real Estate Co.

For more on problems with "Contract for Deed," "Rent To Own", and "Lease / Option" real estate deals, go here and go here. Arkansas

Widow Faces Foreclosure As Lender Claims Coverage On Husband's Mtg. Life Policy Expired, Despite Continued Acceptance Of Premiums

In Tallahasse, Florida, the Tallahassee Democrat reports:
  • Eight months after her husband Ralph's death, retiree Joyce Aiello is facing the loss of the couple's Tallahassee home — something they had taken deliberate steps to avoid. [...] Vanderbilt Mortgage and Finance Inc. of Maryville, Tenn., has the loan on the couple's double-wide mobile home. In checking with the company, [Joyce] found out that the 10-year term life insurance policy on Ralph had reached its time limit. She wasn't actually covered, even though the couple had been paying the $11.25 premium each month since 1997.


  • Vanderbilt continued, however, to take her monthly insurance premium of $11.25 for a year and four months after the term had ended. They said they applied the money to the principal balance on the loan, Joyce said she was told by the company.

For more, see Tallahassee woman fighting to keep her home.

For story update, see Facing foreclosure, Tallahassee retiree able to keep home for holidays.