Saturday, December 27, 2008

Judge Tells Convicted Foreclosure Rescue Scammer To "Take A Hike" In Response To Request For Relief From Sentence

In Newark, Ohio, the Newark Advocate reports:
  • A man convicted of preying on homeowners facing foreclosure was in prison for slightly more than two weeks before his first chance at early release presented itself. Common Pleas Judge Thomas Marcelain [last week] denied Harry Blausey an opportunity for placement in a state program that could have allowed him to move first to a halfway house or immediately be released on parole, [...].

  • Blausey was convicted Nov. 3 of nine counts of grand theft, a fourth-degree felony; 13 counts of securing writings by deception,(1) a fourth-degree felony; and four counts of theft, a fifth-degree felony.(2)

Blausey was sentenced to four and half years in prison.

For more, see Blausey denied entry into early-release program.

For stoty update (1-27-09), see Judge rules Blausey must pay for lawyer.

Go here for other posts on foreclosure rescue operator Harry Blausey.

(1) Sec. 2913.43(A), Ohio Rev. Code: "No person, by deception, shall cause another to execute any writing that disposes of or encumbers property, or by which a pecuniary obligation is incurred."

(2) According to the story, the state successfully argued Blausey deceived 13 couples and individuals into signing over deeds to their homes on the premise that he would negotiate with their mortgage companies to avoid defaulting on their home debts.

"Foreclosure Chaser" Charged In Alleged Scam To Screw Lenders Financing His Buys; Accused Of "Playing The Gap" Leaving Title Insurers Holding The Bag

In Denver, Colorado, The Denver Post reports:
  • A man described by the Denver grand jury as a "foreclosure chaser" has been charged with multiple counts of theft and forgery for allegedly stealing money from various financial institutions in the Denver area. Indicted was Jay Donovan Jost, 63, who owned a series of companies, including Broomfield Lending LLC; MI-T Investments LLC; and Y-ZER Investments LLC.

  • According to the indictment, Jost is a "foreclosure chaser," who — through his various companies — obtains title to properties in foreclosure by establishing a redemption position. This is usually done by buying out a debt against the property.


  • The grand jury alleged that beginning in April 2005, Jost — using his companies — devised a scheme in which he defrauded those who were lending him the money to redeem the properties. Unknown to the lenders, said the grand jury, Jost had often already encumbered the properties. As a result, the deeds of trust offered for security often left the lender in an inferior position to another title holder.

  • In many of these cases, said the indictment, Jost was "playing the gap" — the time period between when legal documents from a closing on the property are presented to a county recorder and when the county actually records them. The gap in Colorado can be from five days to two weeks. During this gap period, title companies are unable to discover whether someone else holds title to a particular property.

  • Jost would use this "gap" to take out a mortgage from a second lender on a property that he, through one of his corporations, had recently purchased, the grand jury said. In some instances, Jost signed affidavits swearing the properties were unencumbered when, in fact, they were, said the indictment. As a result, the lenders were left without repayment on their loans to Jost.

  • Not only were the lenders deceived, said the grand jury, but so were the title companies involved in the closings with the lenders and Jost. The title companies guaranteed the entity making the loan that the properties were unencumbered. As a result of Jost's alleged trickery by playing the gap, said the grand jury, they were unable to discover that Jost had encumbered the properties. The title companies were then obligated to pay the lenders for the money lost as a result, said the indictment.

For the story, see Denver grand jury indicts 'foreclosure chaser.'

NYS Contractor Pleads Guilty To Grand Larceny For Squeezing $80K+ From 88-Year Old Widow For Shoddy, Substandard Home Repairs

From the Office of New York Attorney General Andrew Cuomo:
  • Attorney General Andrew M. Cuomo [last month] announced the guilty plea of a Western New York home improvement contractor(1) who repeatedly pressured an 88-year-old widow into paying more than $80,000 for home improvements that were never done or done in a way described by outside experts as “grossly substandard.”


  • According to court papers, in October 2007, [Bryan] Boone, doing business as Urban Residential Maintenance, contacted the victim by phone offering to make inexpensive repairs to her Cheektowaga home. She accepted and over the next seven months he made repeated requests for payments. Using fear and intimidation,(2) Boone was able to convince the victim to write him a total of 70 checks for $82,158.


  • All of the work Boone did was careless and incomplete. [...] Independent experts who reviewed Boone’s work at the request of the Attorney General’s office declared it to be grossly substandard and of little value to the homeowner. They estimated the cost of labor and materials to be between $11,000 and $13,000.(3)

For the NY AG press release, see AG Cuomo Secures Guilty Plea From Home Improvement Contractor For Scamming Western New Senior Out Of More Than $80,000 (88-year-old widow pressured into writing more than 70 checks over seven months for work described by outside experts as ‘grossly substandard’).

Go here for other posts on other home improvement contractors hammered by the NY AG's office.

(1) According to the press release, Bryan Boone, 47, of Kenmore, pleaded guilty to Grand Larceny in the third degree (class D felony). He faces up to seven years in prison.

(2) Reportedly, the homeowner told investigators: “When I would complain about how the work was progressing, he would sometimes get very angry and assure me the work was first-rate. As I felt intimidated, I always relented. Similarly, if I questioned a demand for payment, he would sometimes become angry and I would relent.”

(3) Besides doing the shoddy and incomplete work, Boone also failed to meet the legal requirements for home repair work, including obtaining the proper permits, providing a written contract to the consumer, and depositing payments into a trust account, according to the NY AG press release. Cuomo hammers contractors

City Of Cincinnati Sues Lenders In Connection With Costs Incurred With Blighted Foreclosed Homes

In Cincinnati, Ohio, area media outlets are reporting:
  • The city of Cincinnati is expanding its fight against bank-owned properties by suing Deutsche Bank and Wells Fargo to force repairs on four vacant buildings in Westwood, Camp Washington and Northside.

  • The Dec. 22 lawsuit is the city’s second legal assault on bank-owned vacant buildings. In August, the city joined a Price Hill neighborhood group’s lawsuit against Deutsche Bank and others, with a cross claim that alleged the bank owes more $112,000 in fees and files for failing to comply with the city’s building code.


  • The city wants repayment for boarding up, demolishing and the other work done to Deutsche and Wells Fargo properties. The suit didn’t specify an amount. “This lawsuit is one attempt to end the abuse of our local neighborhoods and the loss of value associated with the foreclosure crisis,” according to a statement released by the city Tuesday.

For more, see:

Miami Housing, Legal Aid Advocates Help Get Deal With Incoming Landlord On Behalf Of 24 Families In Foreclosed Building

In Miami, Florida, The Miami Herald reports:
  • After a year of organizing, pleading and protesting, 24 families that endured unbearable living conditions after their landlord abandoned their apartment complex to foreclosure have reached an accord with the incoming owner. The tenants have been promised their old units at affordable rents and assistance finding short-term housing while the buildings undergo badly needed repairs.


For more, see Liberty City renters, new owner strike bargain (Renters at two Liberty City apartment buildings in foreclosure will be home for the holidays, thanks to new agreements with the incoming owner).

Friday, December 26, 2008

More On The Yanking Of The Presidential Pardon Of HUD Housing Scammer

The New York Daily News reports:
  • President Bush turned Brooklyn's Isaac Toussie into a poster boy for outrageous presidential pardons, granting, then rescinding, the order in 24 hours.

  • The mystery is how the administration ignored Toussie and his father's background - a tale of payoff and corruption allegations spanning more than 45 years - in pardoning the son for a massive housing scam.

  • White House officials did an about-face after they learned - by reading it in the Daily News - the father of scamster Isaac Toussie donated $28,500 to the Republican National Committee.

For more, see Toussies' trail a doozie: Bush missed half-century of corruption, scam claims against father and son.

See also, New York Daily News: Dream homes of Toussie victims were nothing but nightmares.

Go here for earlier posts on HUD housing scammer.

NJ To Crack Down On Tactics Used To Illegally Intimidate Tenants Into Moving From Foreclosed Buildings

In Newark, New Jersey, The Jersey Journal reports:
  • On the heels of recent stories in The Jersey Journal about tenants being forced out of buildings going through foreclosure, state officials announced [Tuesday] several steps they are taking to combat the illegal practice.(1)

  • At a press conference in Newark, New Jersey Public Advocate Ron Chen said landlords who force tenants out without a legal eviction order face both civil and criminal charges. Under state law, a landlord who does that can be arrested as disorderly person.

  • "This is a tragedy," Chen said. "Folks don't know it, but they don't have to leave." State Banking and Insurance Commissioner Steven Goldman said tenants are being forced out because many lawyers, real estate agents, mortgage lenders, police and judges also are unaware of the 2006 law.


  • Earlier this month, The Jersey Journal wrote about a "cash for keys" scheme two property owners were using to get Hudson County tenants to leave buildings going through foreclosure. The tenants were sent notices implying they had to leave and were offered money to facilitate their move.

For more, see Following Hudson County's lead, state to crack down on owners trying to evict tenants in buildings going through foreclosure.

See also, The Star Ledger: State says landlords in foreclosure cannot evict tenants. ThetaTenantRentSkimming

Tenant Intimidation Continues In SF As Renters In Rent-Controlled Foreclosed Buildings Often The Targets Of Illegal Eviction Attempts

In San Francisco, the San Francisco Chronicle reports:
  • [S]ome renters are being told that if their landlord defaults on the mortgage during this foreclosure crisis, they must move out - even if they've been making their rent payments on time. The fact is, in San Francisco that is simply not true.

  • "Tenants in rent-controlled buildings in San Francisco are protected by the need for a 'just cause' for eviction," said Darlene Wolf, executive director of the rent board. "And foreclosure is not just cause."

  • To make that point, the assessor's office will send letters to tenants in buildings that are in default. The letter will say, "According to San Francisco law, it is illegal for the new owner (typically the bank that has foreclosed on the loan) to ask you to leave without just cause or shut off your utilities." The hope is that the letter will help stop the unsavory practice of intimidating tenants into vacating.

For more, see Renters' eviction notices often illegal in S.F.

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

Oakland Moves To Protect Renters From Utilities Shutoffs In Foreclosed Rental Properties

In Oakland, California, KGO-TV Channel 7 reports:
  • The City of Oakland announced a new plan to help renters who face the shut-off of their heat and electricity this winter because the building they live in has been foreclosed. During a Monday morning press conference Oakland officials announced the details of a plan meant to protect people who were suddenly blindsided by their landlord's foreclosure and left with no services.

  • Now, they are not only going to get notice but they will also get some time to deal with it as well. The City of Oakland is declaring that shutting off water, heat or electrical services at rental properties poses a threat to public health and safety.


  • The city began looking into this after hearing some horror stories about rentals ending up in the hands of banks that have discontinued services sometimes without any warning at all.

For more, see Plan protects renters facing foreclosure (A new declaration makes it illegal to shut off utilities in multi-unit buildings). ThetaTenantRentSkimming

New Minnesota Laws Offer Protection For Tenants In Foreclosed Homes

In Minneapolis, Minnesota, Minnesota Public Radio reports:
  • [T]housands of renters in Minnesota are living in foreclosed properties and the state has already tried to ease the burden on them by passing a set of laws designed to protect renters' rights. And so far, it seems to be working.

For more, see Are laws protecting tenants in foreclosure working? ThetaTenantRentSkimming

Maryland Pro Bono Organizers Seek Another Wave Of Attorneys To Step Up In Foreclosure Defense Effort

The Washington Post reports:
  • When Maryland's chief judge asked the state's lawyers to help homeowners facing foreclosure over the summer, hundreds of lawyers across the state stepped forward, agreeing to provide free legal assistance.(1)

  • Now, with state officials expecting a fresh surge in foreclosures in the coming weeks and months, organizers of the pro bono project say they are going to need more lawyers.

For more, see Lawyers Sought to Help in Foreclosure Cases (Homeowners Get Pro Bono Assistance).

(1) Reportedly, the attorneys were given a few choices: They could provide basic advice at workshops for homeowners, or they could sign on to defend individuals against lenders. Another option was to serve as in-house counsel to the housing counseling organizations, only a couple of which have lawyers on staff. Initially, most of the lawyers signed up to help out at the workshops, opting for the most manageable of the assistance opportunities, [executive director of the Pro Bono Resource Center of Maryland Sharon E.] Goldsmith said. But after meeting with homeowners at the workshops, many lawyers agreed to go a step further and represent a homeowner in dealings with a lender. "It really struck a chord with them," Goldsmith said.

Kentucky Legal Aid Programs Face Fin'l Squeeze As Governor Puts Hatchet To State Funding; Federal, Private, IOLTA Funding Also Down

In Lexington, Kentucky, the Lexington Herald Leader reports:
  • [T]he state typically provides $1.5 million in funding for four legal aid organizations in Kentucky [...].(1) But this fiscal year that was cut to $500,000 divided among the four agencies. Then last week, Gov. Steve Beshear proposed cutting that $500,000 to $250,000. The additional cuts to legal aid were part of a package of proposed cuts to make up for a projected $456.1 million shortfall in the state budget.(2)


  • Before the cuts, legal aid groups turned away many who needed help fighting foreclosure or dealing with other housing problems, and signing up for Medicaid and prescription drug benefits. [...] With the economy in tatters and more people facing foreclosure, more people are turning to legal aid groups to help save their homes.

For the story, see Legal aid faces major budget cuts.

(1) Kentucky Legal Aid, Legal Aid of the Bluegrass, the Legal Aid Society in Louisville and the Appalachian Research and Defense Fund.

(2) Reportedly, federal funding for the four programs has remained flat or slightly decreased. Private foundation giving is also down. The state's four legal aid groups also depend on interest payments on lawyers' trust accounts for funding. Interest rates are at historic lows, which means yet another drop in funding.

Thursday, December 25, 2008

White House Wakes Up; Revokes Pardon Of NY Developer Who Scammed HUD; Pop Donated $28.5K To RNC

Bloomberg News reports:
  • President George W. Bush withdrew a pardon he granted a day earlier to a New York real-estate developer after the White House learned his father made the maximum $28,500 donation to the Republican National Committee months earlier.(1)

  • Isaac Robert Toussie of Brooklyn, one of 19 people pardoned [Tuesday], pleaded guilty in 2001 to using false documents to get federally insured mortgages and in 2002 to mail fraud for selling land to Suffolk County at twice its appraised value.

For more, see Bush Cancels Pardon After Campaign Donation Disclosed.

See also:

(1) According to the story, his father, Robert Toussie, also of Brooklyn, contributed $28,500 to the Republican National Committee on April 25 and the maximum $2,300 to Senator John McCain’s presidential campaign five days later. In October, he made $2,300 donations to two Republican U.S. senators in close races, Norm Coleman of Minnesota and Gordon Smith of Oregon. The Center for Responsive Politics, a Washington-based research group, has no records of any earlier donations by Robert Toussie.

Protection For NYC Residents From Deed Theft

In New York City, the Daily News reports:
  • There's no foolproof way to stop someone from stealing your property with a fake deed - just as there's no certain way to stop a skilled thief from stealing your car. But there are some things you can do to protect yourself.

For more (applies to NYC residents only), see Protect yourself and your property.

Fannie Mae Reminders On Home Loan Modification, Foreclosure Eviction Policies

Syndicated real estate columnist Kenneth R. Harney gives this reminder on Fannie Mae's recent change in its loan modification policy:
  • [Y]ou no longer have to miss two to three months of payments before your mortgage company can modify the loan terms you can no longer afford. Starting immediately, Fannie Mae, the mortgage giant that has an estimated 18 million home loans in its portfolio or in mortgage bond pools it guarantees, will allow borrowers who face imminent difficulties to request "early workout" loan alterations, even if they have never been late.


  • Under Fannie Mae's revised approach, servicers of the company's loans nationwide will be required to inform borrowers that if they are "reasonably" certain that changes in their income will cause them to miss mortgage payments, they might qualify for an advance loan modification -- before they fall behind.

For more, see Get Mortgage Relief at the Yellow Light Rather Than Red.


The Connecticut Law Tribune reports:

  • [Fannie Mae] Officials informed legal aid agencies that it had decided to suspend eviction proceedings against tenants in good standing who live in properties facing foreclosure. And starting on Jan. 9, the renters will be able to enter into a new lease with Fannie Mae and stay at least until a buyer is found for the property.

  • The goal of the suspension is to ensure that no renters are put out of their homes during this period” until Jan.9, said Brian Faith, a Fannie Mae spokesman. “We estimate that 7,000 to 10,000 families have been able to stay in their homes as a result of the foreclosure and tenant eviction suspension.”

For more, see Tenants Stay In Homes For The Holidays (Legal aid agencies win eviction concessions from Fannie Mae).

HOA Passes $75K Per Unit Special Assessment; Homeowners Respond With Lawsuit

In Torrance, California, The Daily Breeze reports on an area condominium association that has levied a $75,000 special assessment on each of around 180 homeowners to pay for a $13.5 million exterior renovation project that more than a few of the homeowners are finding unaffordable. Reportedly, more than 20 of them expressed their objections to being hit up in such a manner by banding together in November and filing a lawsuit against the homeowners association.

For the story, see Condo tenants fight for their homes in Torrance (if link expires, try here).

Vandals Hit 25 Cars In Condo Parking Lot; Management Blames Lack Of Security On Shortage Of Funds Due To Unit Owners Delinquent On Maintenance Fees

In North Miami, Florida, WTVJ-TV Channel 6 reports:
  • At least 25 car owners were left without radios, baby strollers and children's Christmas presents after the items were stolen from their cars Monday morning, residents said. [...] Two different high-rise communities were attacked on the dead-end street. Security fences were breached and car windows were broken throughout open-air parking lots.


  • Residents of Keystone Towers, one community that was robbed, are blaming building management for the mess. With 40 percent of the two buildings unoccupied and many owners in foreclosure, they said that condo fees don't support necessary security for the residents. [...] On Tuesday, Keystone's management notified residents they do not carry adequate insurance to cover Monday's losses.

For the story, see 25 Cars Broken Into In One Day At North Miami Neighborhood.

Wednesday, December 24, 2008

Presidential Pardon Purchase Possible As Bush Gives Pass To Developer Convicted In Mortgage Scam Screwing HUD While Daddy Gives $28K To RNC

On Long Island, New York, Newsday reports:
  • Isaac Robert Toussie, the Brooklyn developer who served time in prison for masterminding a massive Suffolk real estate scam, was pardoned by President George W. Bush yesterday, effectively wiping his criminal record clean.


  • Toussie pleaded guilty to charges in two separate cases. In one, he admitted in 2001 that he had made false statements to the U.S. Department of Housing and Urban Development, pleading guilty to a count of falsifying loan documents that illegally qualified about 100 home buyers for the HUD-backed mortgages.


  • [Isaac Toussie's father] Robert Toussie donated $28,500 to the Republican National Committee this year, according to Federal Election Commission filings.

  • The pardon shocked and outraged lawmakers and homeowners, some of whom who say they were victims of the Toussies. "In a climate where foreclosure is at its highest in history ... this guy who contributed to that foreclosure gets a pardon?" said Maxine Wilson, 42, one of five who filed [a civil lawsuit] on behalf of 400 home buyers.(1)

  • "It's almost as if our pain and our hurt and our hardship really doesn't matter," added Wilson, who moved to Atlanta in 2006. "Some rich kid whose dad can buy his way out of anything can get it erased as though it never happened, as if we're so insignificant it didn't matter."

For more, see Bush pardons man involved in Suffolk real estate scam.

For story update (12-25-08), see:

(1) According to the story, a civil lawsuit is pending in federal court claiming homes built by the developers were shoddy and overpriced.

S. Florida Man, Others Charged With Using Unwitting Mother-In-Law's I.D. & Submitting Simultaneous HELOC Applications To Suck The Equity From Her Home

The U.S. Attorney's Office in Miami, Florida announced the return of a five count grand jury indictment charging eight participants(1) with a bank fraud scheme that resulted in the approval and disbursement of two home equity loans, totaling approximately $1 million. The U.S. Attorney's office said:
  • According to the indictment, "Benny" Benach [and three others] decided to submit simultaneous applications for fraudulent home equity lines of credit (“HELOCs”) to Bank of America and Wachovia for the total amount of $1 million, requesting $500,000 from each bank. Each HELOC application listed Benach’s mother-in-law as the purported borrower, and a home owned by Benach’s mother-in-law as the collateral. To prepare and process the HELOC applications, Benach’s mother-in-law’s name and social security number were used without her knowledge, input or authority. [...] At the time of the submission of the fraudulent HELOC applications, neither bank was made aware of the other pending HELOC application.

Among the participants charged were employees of the lenders who allegedly accepted and processed bogus loan applications.

For more, see Two Bank Insiders And Six Others Charged In Bank Fraud Scheme To Defraud Bank Of America And Wachovia Of $1M.

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

(1) Charged were Bienvenido “Benny” Benach, Jr., Ramon Puentes, Danny Flores, Rolando Alfonso, Jorge Nobrega, Jorge Arrieta, Sebastian Kishinevsky, and Adriana Cruz. KappaDeedTheft

No Heat, Hot Water For 18 Cincinnati Families Living In Building Facing Foreclosure

In Cincinnati, Ohio, WLWT-TV Channel 5 reports:
  • It's going to be a cold Christmas for 18 families in Avondale because their furnace has been broken for three months and the soonest it'll be fixed is New Year's. "It’s just real cold in this building, but we survive. To us, we're all right. We leave the oven on all night,” apartment resident Lake McCowan said. The McCowan family said they've been forced to boil water and leave the oven on all night.

  • They know it’s a fire hazard, they even have a scorched floor to prove it, but they said they don’t have a choice. They said the building's owner hasn't paid his mortgage in about six months and as it heads into foreclosure [...].

For more, see Avondale Apartment Complex Hasn't Had Heat In Three Months (Families Keep Ovens On, Use Space Heaters To Stay Warm). Go here for WLWT-TV video. ThetaTenantRentSkimming

Closing Agent Gets 33 Months For Swiping $1.2M+ In Escrow Cash, Leaving Existing Mortgages Unpaid

The U. S. Attorney's Office in Miami, Florida recently announced the sentencing of closing agent John Mohan, 38, of Delray Beach, FL, to 33 months’ imprisonment in connection with his September guilty plea to a one-count Information charging him with wire fraud. An excerpt from their press release:
  • According to the Information, court documents, and statements made in court, Mohan worked as a mortgage broker and closing agent who assisted buyers in real estate transactions. As the closing agent, Mohan would collect funds from buyers and lenders, and would represent to the parties engaged in the transaction that these funds were being held in escrow to be disbursed for various specified purposes, including the satisfaction of pre-existing mortgages.

  • In fact, Mohan misappropriated the escrowed funds for his personal use and to make additional personal investments. Over the course of the scheme, Mohan misappropriated more than $1.2 million in client funds. In an effort [to] conceal the fraud and prevent immediate foreclosure of the property, Mohan would sometimes make some payments on the homeowner’s original mortgage.

For the press release, see Delray Beach Mortgage Broker Sentenced For Fraud.

Go here, Go here, Go here, and Go here for other stories of trust account / escrow account theft of funds. EscrowRipOffAlpha

Florida Closing Attorney Gets 63 Months For Pocketing $3M+ In Escrow Money Intended Mostly For Payoff Of Existing Mortgages

The U.S Attorney's Office (Southern District of Florida) recently announced the sentencing of attorney Joseph J. Weisenfeld to 63 months in prison based, following his guilty plea to wire fraud charges. An excerpt from the press release:
  • According to the Information and statements made during the plea hearing, Weisenfeld, a licensed attorney, represented individuals and/or entities (mostly buyers) in real estate transactions. As the closing agent in many of these transactions, Weisenfeld would collect funds from buyers and lenders, and would represent to the parties engaged in the transaction that these funds were being held in escrow to be disbursed for various specified purposes, including the satisfaction of pre-existing mortgages. In fact, however, Weisenfeld misappropriated the escrowed funds for his use and benefit. Over the course of the scheme, Weisenfeld misappropriated over $3 million in client funds from his attorney trust account.

For the press release, see Local Real Estate Attorney Sent To Jail On Fraud Charges.

Go here, Go here, Go here, and Go here for other stories of trust account / escrow account theft of funds. EscrowRipOffAlpha

Architect Of Cash Back, Straw Buyer, "Rent-A-Credit" Scam Gets 10+ Years; Involved $3M+ Of Fraudulent Loan Activity, Says DA

In Ventura, California, the Ventura County District Attorney's office announced last month the sentencing of Manuel “Manny” John Perez, Jr. to a term of 10 years, 8 months following his convictions in an alleged cash back, straw buyer scam under the guise of his wholly-owned businesses, Case Bonita Realty, Creative Mortgage Solutions and Elite Escrow. The scam also allegedly involved his former girlfriend and co-defendant, Michele Galindo, a licensed real estate agent. From the DA's press release:
  • The pair utilized a fraudulent “Rent-A-Credit” program to seek buyers for homes in which the buyers were purportedly helping others achieve home ownership. Galindo represented the buyers in real estate purchase transactions by submitting offers to purchase homes listed for sale. The employment and income information of such buyers to occupy the homes was misrepresented to lenders so the buyers could qualify to purchase the homes with 100 percent financing.

  • After the transactions closed, Perez continued to maintain control of the properties for leasing to prospective tenants or his and Galindo's own use. Moreover, the loan amounts utilized to purchase the homes were increased by tens of thousands of dollars above the actual contract sales price by use of inflated appraisals and phony sales contracts reflecting higher purchase prices.

Go here for the Ventura County DA's press release.

Tuesday, December 23, 2008

Elderly Victim Of Equity Stripping Deal Wins Hollow Victory As Court Ruling Comes Too Late To Allow Recovery Of Home; Scammers Claim To Be Broke

In Minneapolis, Minnesota, the Minneapolis Star Tribune reports:
  • Telsche Paulson, 86, lost her south Minneapolis duplex and now lives in a rented house in Farmington. A suit against a mortgage firm that offered to help Paulson avert foreclosure, alleged that the “refinancing” was really a sale, and the firm stripped $155,000 in Paulson’s equity in the deal.


  • This month, a federal judge ruled that the now-divorced couple at the center of the scheme, Timothy Beliveau and Shelley Milless, had "tricked" and "deceived" Paulson out of her home, equity and subsequent monthly payments. Paulson's situation is part of a case that federal investigators say encompassed 35 properties in Minnesota and drew in a number of Northwest Airlines pilots as investors.

  • The judge's ruling was bittersweet for Paulson. In September, as she turned 86, she moved out of 4231 Pleasant Av. S. as a bank moved forward with foreclosure. She had lived there since 1958.


  • On Dec. 1, U.S. District Judge Patrick Schiltz [...] handed Paulson her victory in her civil case against Tim Beliveau and Shelley Milless. But the couple, who split up last year, claim in court papers to have nothing left. Beliveau, whose million-dollar home in Mound is being repossessed, disagreed with the judge's ruling, saying Paulson knew what was happening the whole time.

  • He didn't put up a defense in the civil case, Beliveau said, because he didn't want to damage his defense against any criminal charges, which he expects.

For the full story, see Bittersweet victory for victim of swindle (A court ruled that Telsche Paulson had indeed been cheated out of her south Minneapolis home, but it's too late to recover it).

For the court's order, see Paulson v. Beliveau, et al.

For earlier story from the Minneapolis Star Tribune, see NWA pilots say they were misled in foreclosure venture (A Minnesota couple's investment and real-estate programs are under federal investigation).

For story update, see State Recovery Fund To Cough Up $116K+ To Compensate Elderly Victim Of Bogus Sale Leaseback Equity Stripping Scam Involving Licensed Real Estate Agent.

Central Florida Foreclosure Rescue Operators With Massachusetts Connections Charged With Grand Theft, Racketeering In Alleged Equity Stripping Scam

From Fall River, Massachusetts and Orlando, Florida, The Herald News reports:
  • Father and daughter John and Shastine Pavao, along with other family members, participated in a four-year criminal scheme to strip equity from needy people’s homes, steal their homes and evict them, defraud lenders and resell the properties, Florida law enforcement officials allege.

  • Two of at least a half-dozen alleged victims were 83 and 90 years old, while the Pavao family, with deep roots in Fall River, “appropriated more than $3 million from various lenders,” Florida’s Bureau of Financial Investigations says in a 57-page affidavit provided Monday.

  • The criminal justice investigative unit released those details following news of the arrest Friday of John, 42, Shastine, 22, and her mother, Debra Pavao, 39, all of Windermere, Fla., on some 28 counts of first-degree grand theft over $100,000 and racketeering.


  • On Monday afternoon, Fall River police cooperating with Florida authorities arrested Debra Pavao’s brother George Rego, 43, and sister-in-law Cindy Rego, 46, of 203 College Park Road, on related charges, Toledo said. According to police and Orange County Clerk of Courts records, each are charged with two first-degree grand theft felonies and violating the Florida Communications Fraud Act.


  • A sixth person, Nancy Shine of Cape Canaveral, Fla., an employee of JPS Investments Group Inc. run by the Pavaos, was expected to turn herself in, Toledo said. She faces nine felony counts.

  • Florida authorities called John and Shastine Pavao the ringleaders, with JPS Investments in Ocoee and a second company, SCJ Investment Group LLC in Windermere, the two companies they operated. [...] “Evidence obtained during the course of this investigation revealed that John Pavao and Shastine Pavao were orchestrates of a ‘foreclosure rescue scheme’ that deliberately tricked victims into signing warranty deeds and other documents in an effort to steal their properties,” documents summarize.

  • Mr. Pavao stole their property out from under them by having them sign documents,” Toledo alleged. [...] Debra Pavao used her background as a mortgage company employee to obtain fraudulent larger loans without homeowners’ knowledge, investigators say.

For more, see Pavao family accused of scamming homeowners.

See also, Orlando Sentinel: Windermere family, 3 others face racketeering charges.

For story updates:

(1-2-09) see Pavaos’ bond set at $1 million:

  • Three members of the Pavao family accused of numerous criminal schemes to defraud dozens of people across Florida were arraigned in Orange County Superior Court earlier in the week and ordered held on $1 million bond each. In addition to the bond, John Pavao, 42, his wife, Debra Pavao, 39 and their daughter Shastine, 22, were also ordered held on $50,000 for each of twelve counts of first degree grand theft over $100,000 and racketeering.

(1-6-09) see City couple extradited to Florida:

  • A city couple, who along with relatives are charged with a multimillion dollar mortgage fraud scheme in Central Florida, was extradited and is being held without bail in that jurisdiction. Cindy Rego, 46, and George Rego, 43, were arrested one week ago on two Florida charges each of first-degree grand theft greater than $100,000 and violating the Florida Communications Fraud Act.

Let Courts Modify Bad Loans Says Consumer Bankruptcy Group; Quality, Sustainability Of Current Modifications Depends On The Individual Servicer

The Philadelphia Inquirer reports:

  • With fresh evidence that voluntary mortgage modifications aren't working, a national lawyers' group is urging the government to let the courts fix bad loans. "Court supervision of loan modification is needed, and unlike so many of the responses to the foreclosure crisis so far, there will be no cost to the taxpayer," Henry Sommer of Philadelphia, president of the National Association of Consumer Bankruptcy Attorneys, said Thursday.

  • Of the 21,000 of these delinquent loans modified, two-thirds saw an increase in principal, called "negative prepayment," which added an average of $11,000 to loans of $210,000, White said. [...] "There is a tremendous variation in the number and quality of modifications, and the chance of getting one depends on the servicer," White said, adding that the monthly payments on 45 percent the 21,000 loans modified actually increased.

For more, see Lawyers: Let courts fix bad loans.

See also:

Fine Print Buried In Debt Relief Firm's Contract Leaves Orlando Couple Screwed Out Of Thousand$

A recent story in the Orlando Sentinel warning against phony debt relief companies and other scams targeting people with financial trouble contained this excerpt on how one area couple was left screwed over after dealing with one of these firms:
  • [Orlando bankruptcy lawyer Anne-Marie Bowen] recently worked with a young couple as clients who had paid a debt-relief company thousands of dollars to fend off creditors. But the company never paid their creditors a dime, Bowen said.

  • When Bowen looked at the deal her clients had signed, she found a clause tucked in the fine print stating that the first 11 payments would go directly to the company itself as the fee for its "service." The company didn't negotiate at all with the couple's creditors, who continued to charge them late fees and turned them over to bill collectors.

  • "They had gotten so many harassing phone calls and had been burned so badly," Bowen said. "By the time they came to me, they were at wits' end."

Source: Beware of bogus debt relief.

California Lawmaker Urges AGs For Probe Into Loan Modification Firms Targeting Distressed Homeowners Charging High Fees, Producing Low Results

In Riverside County, California, The Desert Sun reports:
  • [C]iting complaints from constituents about fraudulent and suspicious mortgage-reduction schemes, [California Congresswoman Mary] Bono Mack sent a letter to U.S. Attorney General Michael Mukasey and California Attorney General Jerry Brown, urging that comprehensive steps be taken to address the problem and ensure those who commit mortgage crimes be held accountable.


  • Bono Mack noted that local residents have contacted her office about fraudulent individuals and companies who continue to approach homeowners with promises of mortgage loan modifications or interest rate reductions. These individuals have been charging large up-front fees and offering little to no service to homeowners.

For the story, see Bono Mack presses for probe on homeowner scams.

Alabama Issues Warning On Dealing With Loan Modification Firms / Foreclosure Rescue Operators; Charging Upfront Fees In State Prohibited

In Birmingham, Alabama, the Birmingham Business Journal contained this warning in an excerpt on a story on loan modification firms targeting Alabama homeowners:
  • The [State of Alabama Banking Department's] Bureau of Loans Supervisor Scott Corscadden said consumers must [...] watch out for predatory behavior [from individuals or companies offering mortgage loan modification assistance]. “Unfortunately, nationwide there is an increase in cases where individuals or companies are promising to assist consumers in obtaining a mortgage loan modification and charging up front fees and performing little or no services for those fees,” he said.

  • Alabama does not allow companies to charge any upfront or advance fee.

Source: State warns of new mortgage schemes.

Portland Cops Warn Homeowners Facing Foreclosure Of Shady Offers Of Help

A recent story contained this blurb on how one police department is getting involved in an attempt to protect its residents from foreclosure rescue / loan modification scams:
  • The situation has gotten so bad that, in some cities, the state police are getting proactive. Local police in Portland, Ore. now automatically send a letter to homeowners who enter foreclosure warning them that they will be inundated with shady offers of help.

Source: Don't Become a Victim of These Mortgage Scams.

In a related story, see Rescue Me (A Portland Cop is targeting foreclosure vultures) (‘Mortgage Rescue’ is really aggravated theft, says Portland, Oregon cop. “What these people are doing is a crime,” she says).

Monday, December 22, 2008

Nothing Civil In Civil Court As Schoolyard Brawl Breaks Out Between Attorneys In Rival Class Actions; Colleagues Jump Into Fray To Bust Up Donnybrook

In New Orleans, Louisiana, The Times Picayune reports :
  • Two attorneys competing for clients, prestige and a bounty of legal fees opened a hearing at Orleans Parish Civil District Court [last week] with a schoolyard brawl that shocked the buttoned-up crowd and ended with one led away in handcuffs on charges of contempt.

  • The courtroom was filled with the early morning murmur of shuffled papers and crinkled newspaper when fisticuffs broke out between attorneys Madro Bandaries and J. Robert Ates, who were pushing rival class-action suits about the late handling of insurance claims.

For more, see Brawl erupts between two lawyers at civil court.

Texas Legal Aid Firm Files Suit Alleging Developer Tricked Seven Families Into Signing Over Deeds To Property They Just Agreed To Buy

In San Juan, Texas, The Monitor reports:
  • Seven families are suing a developer, saying he tricked them out of the property they had just agreed to purchase. The lawsuit against William Schwarz alleges he used deceptive practices to trick low-income, Spanish-speaking families into signing the titles to their property over to him the same day the families made down payments on the land.

  • None of the families mentioned in the suit have lost their homes at this point, but the developer is moving in that direction, said Corinna Spencer-Scheurich, an attorney for the South Texas Civil Rights Project who filed the suit on behalf of the families. She said the closing documents they signed could allow the developer to evict them from the property at any time.(1)


For more, see Lawsuit filed against developer alleges fraud.

See also, Texas Civil Rights Review: STCRP Attorney: Warranty Deeds Cheat Colonia Residents.

(1) According to the story, area community organizers have been meeting with families in two local subdivisions to try to determine how widespread the practice may have been, Spencer-Scheurich said. She suspects hundreds of families were affected.

Denver Pastor Charged In Flipping Scam; Used Two Unwitting Churchmembers As Straw Buyers On 8 Homes Ultimately Ending In Foreclosure, Say Authorities

In Denver, Colorado, KMGH-TV Channel 8 reports:
  • A Denver pastor, indicted for alleged mortgage fraud, turned himself into authorities late Thursday. The indictment alleges that Harold Joe Hicks used surrogates to purchase property and then falsified mortgage applications to get lower interest rates.

  • "He would bring nearly completed mortgage applications... and (would) have the surrogate buyer simply sign off without reading it," said Lynn Kimbrough of the Denver District Attorney's office.

  • Pastor Harold Joe Hicks, 64, of Mount Carmel Community Baptist Church was formally charged, Thursday, with eight counts of theft and eight counts of forgery.(1) The two surrogates listed in the indictment attended Mt. Carmel. According to court documents, Hicks told both Richard Martin and Sherri Wrightsil that he would rent the properties, pay the mortgages, taxes, insurance and other expenses.

For more, see Grand Jury Indicts Pastor In Alleged Mortgage Fraud Scheme (Eight Properties Purchased Through Surrogates End Up In Foreclosure).

See also:

  • Rocky Mountain News: Minister indicted on 16 counts (Harold Hicks accused of stealing $80,000 in mortgage scheme) - "It is one of the most heinous examples of real estate fraud I've ever seen," said Jim Spray, a mortgage fraud expert familiar with details of the Hicks case. "To use his level of trust and abuse it severely, and hurt people so deeply that it shatters their faith . . . heinous doesn't even describe it."

  • Rocky Mountain News (July 7, 2007): Signing on faith (Ex-church members say pastor misused trust to conduct shady real estate deals).

(1) It should be noted that the forgery charges relate to the signatures appearing on the allegedly fraudulent mortgage applications used to obtain the loans. According to the indictment, the signatures are alleged to be the authentic signatures of the unwitting straw buyers; Pastor Harold Joe Hicks, while accused of filling out the mortgage applications with fraudulent information, has not been accused of actually signing these documents. Notwithstanding, he is facing the forgery charges in connection with those signatures.

Regardless of whether forgery convictions are obtained against Hicks, this case should serve as a reminder that, in Colorado as well as in some other states, the act of forgery need not be done by the hand of the person being charged; fraudulently procuring the signature of another to an instrument which the signer either has no intention of, or is otherwise tricked into, signing constitutes forgery on the part of the procurer in some states. It is sufficient that the forgerer caused or procured it to be done. See also:

  • May 27, 2008 post (1): New York Court Decisions A Reminder That Viable Forgery Claim May Arise When Homeowner Is Tricked Into Signing Deed; and
  • May 27, 2008 post (2): California Appeals Court Says Genuine Homeowner Signature On Instruments In Foreclosure Rescue Scheme Not A Bar To Scammer's Forgery Conviction.

By the way, in the State of Ohio, the crime of tricking someone into signing any writing that either conveys an interest in property, or creates a monetary obligation, is called "Securing Writings by Deception." Sec. 2913.43, Ohio Rev. Code. ForgeryGenuineSignatureKappa

Little Known Defense In Foreclosures Of FHA-Insured Mortgages Highlighted In Florida Homeowner's 4-Year Fight To Save Home

In Jacksonville, Florida, reports on the story of Vickie Lewis, an area homeowner fighting a foreclosure action filed against her by Washington Mutual, and who has been living with the uncertainties of being in foreclosure limbo for the last four years.
  • [F]or the past four years, Lewis, 48, has seen her name on dozens of legal documents and spent hours in court as her mortgage holder, Washington Mutual Bank, pursued foreclosure on the only home she has ever owned. And she has no more idea now than when this began where or how it all might end.


  • Lewis is one of scores of clients represented by [April] Charney, an attorney with Jacksonville Area Legal Aid who has developed numerous foreclosure defenses that have kept many of the troubled borrowers she represents in their homes for years.

  • Charney’s defense of Lewis has been based largely on claims that Washington Mutual did not follow federal regulations by offering her a “reasonable opportunity to get current” and “a face-to-face meeting” before three monthly mortgage installments went unpaid, among other requirements.(1)

  • According to court filings, prior to foreclosure, WaMu never discussed any options with Lewis other than demanding all back mortgage payments in full.(2) The bank is now demanding the entire balance, which had since ballooned by thousands of dollars with the addition of “illegal and outrageous” charges for attorney’s fees, collection costs and insurance, the filings allege.

For more, see When foreclosure limbo becomes a lifestyle (Like millions in U.S., Florida woman lives with housing uncertainty). (For the entire story on one web page, try here).

(1) These requirements apply to FHA-insured mortgages. According to the story, the FHA program is intended to provide a chance at home ownership for low-income and credit-challenged buyers. There’s a built-in expectation that FHA borrowers may have more trouble staying current on their payments than so-called prime borrowers, and so the borrowers pay hefty insurance premiums that protect the lenders for the life of the loan. Because of this, the FHA demands that lenders follow its extensive rules about dealing with borrowers who are in default.

(2) According to the story, Charney said lenders’ disregard for federal loss mitigation procedures and default loan servicing rules is just one sign of a larger problem: a mortgage-lending industry that ran wild for years under scant government review, inflating appraisals, overstating borrowers’ credit and income and creating such a maze of trusts and securities that the ownership of millions of mortgages is now almost impossible to establish.

Ohio AG Files Suit Against Loan Modification Firm For Violations Of State Consumer Statutes; Homeowners Clipped For Upfront Fees Averaging $650

From the Ohio Attorney General's Office:
  • The Ohio Attorney General filed a lawsuit [last Friday] to stop a foreclosure rescue business from continuing to victimize consumers throughout the state. The lawsuit, filed in the Cuyahoga County Court of Common Pleas, alleges that James R. Van Putten, doing business as “Please Save My Home” in Conneaut, Ohio, violated Ohio’s consumer protection laws by engaging in unfair and deceptive practices. The complaint alleges violations of the Consumer Sales Practices Act, the Telephone Solicitation Sales Act, and Debt Adjusters Act.

  • Van Putten obtained the names of homeowners in foreclosure from court records and used direct mail to solicit his services. The mailing stated: “Regardless of your present mortgage or loan situation, we will be able to assist you by arranging a repayment plan to bring your loan current” and “Call Today & Save Your Home.”

  • Van Putten then entered into contracts through which he promised to save the consumers’ homes from foreclosure by obtaining and providing loan modifications, legal representation, and forbearance agreements. Consumers paid, on average, $650 for Van Putten’s services. The Attorney General’s investigation found that consumers did not receive the promised services.

For the press release, the accompanying lawsuit, and copies of the correspondence and contract used by the foreclosure rescue operator (Exhibits A thru D), see Mortgage Rescue Company Sued for Consumer Fraud.

Illinois AG, Cook County SA Say Firm Filed Phony Mechanics Liens & Started Foreclosure On Homeowners Refusing To Be Squeezed

From the Office of the Illinois Attorney General:
  • Attorney General Lisa Madigan and Cook County State’s Attorney Anita Alvarez [Wednesday] both filed lawsuits against a Chicago mechanic’s lien filing service for filing invalid liens against property owners and for intimidating homeowners either to pay debts they don’t owe or to overpay for debts incurred with contractors.


  • According to the Attorney General’s complaint, Contractor’s Lien Services (CLS) and its founder, Steve Boucher, analyze, prepare and file mechanic’s liens on property on behalf of general contractors and subcontractors. CLS allegedly misrepresents to contractors that it has valid cause for filing mechanics liens against homeowners when, most often, those contractors do not actually have valid claims under state laws.

  • CLS also allegedly files liens without the knowledge of some contractors and, in other instances, CLS files liens against homeowners when contractors have not performed work at the properties in question.

  • After filing foreclosure liens, CLS allegedly files foreclosure actions against consumers who don’t pay off the debts. Some contractors claim that CLS collects money on behalf of contractors but then fails to redistribute the collected debts to them.

For the Illinois AG press release, see Attorney General Madigan, State's Attorney Alvarez Sue Chicago Lien Filing Service For Fraudulent Practices.

For what sounds like a similar matter recently resolved by the Massachusetts Attorney General's Office, see Mass AG: Firm Agrees To Remove Mechanics Liens On Houses (Resolves Complaints By Paid-In Full Homeowners Of Improper Squeezing By Contractor, Supplier).

Go here for other posts on suspected mechanics lien scams. StiffingContractorsTheta MechanicLienScamTheta

Sunday, December 21, 2008

Attorney Accused Of Pocketing Closing Funds Due To Lien Holders Seeks "Free Pass" From Prosecution As Psych Pros Contest Competence To Stand Trial

In Pittsburgh, Pennsylvania, the Tribune Review reports:
  • Two mental health experts had differing opinions Wednesday on whether a once-prominent Fayette County trial attorney is competent to stand trial on theft charges.

  • Adam Sedlock, a Uniontown psychologist, testified [...] that crippling physical ailments have reduced Mark F. Morrison of Hopwood to functioning at the level of a seventh-grader. He said Morrison's condition is permanent and he will never be able to assist in his own defense.


  • Morrison, 51, is accused of stealing about $99,000 in mortgage-settlement payments from two elderly Hopwood couples.(1) Instead of settling outstanding mortgages on the two properties, Morrison allegedly paid off smaller mortgages and diverted most of the money.

For more, see Ex-attorney Morrison's ability to face theft trial disputed.

For story update (1-15-09), see Morrison ruled competent to stand trial.

Go here, Go here, Go here, and Go here for other stories of trust account / escrow account theft of funds.

(1) Reportedly, Morrison is charged with two counts each of:

  • theft by failure to make required disposition of funds received,
  • forgery,
  • tampering with records or identification, and
  • misapplication of entrusted property. EscrowRipOffAlpha

Arrest Warrant Issued For Unlicensed California Contractor Suspected Of Illegally Slapping Phony Mechanics Liens On Homes In Foreclosure

In Vallejo, California, the Vallejo Times Herald reports:
  • A $30,000 arrest warrant has been issued for a Benicia man who officials believe has been trying to profit illegally from Vallejo's foreclosure crisis. A team from the Solano County District Attorney's Office and Vallejo Police Department on Wednesday went to arrest James Paul Jones in the Vallejo home he's been occupying and found him gone, said Deputy District Attorney Laura Undlin.

  • Jones, 53, also known as James King and King James, is suspected of contracting without a license and filing false or forged documents, Undlin said. The false document charge is a felony, she said.

  • Jones has filed mechanic's liens against several foreclosed Vallejo homes he claims to have done work on for which he wasn't paid.(1) [...] Reached by phone Friday, Jones appeared surprised to hear about the warrant, and insists he's done nothing wrong.(2)

For the rest of the story, see Man trying to cash in on foreclosures, officials say.

Go here for other posts on suspected mechanics lien scams.

(1) If Jones actually did what he is suspected of doing, he possibly felt that having the mechanics liens would facilitate a claim on his part to all or part of any surplus funds generated by a subsequent foreclosure sale, in the event the home sold at auction for more than what was owed to the foreclosing lender.

(2) Reportedly, in one case, Jones seems to have contracted for $40,000 worth of water damage repairs with a relative of Jones's who owned the property before it was foreclosed on, according to Deputy DA Undlin. Jones is then said to have then filed a $75,000 mechanics lien six days later. "We don't believe that such extensive work could be done in six days, and, in fact, we have a witness that says he saw work being done for six to eight weeks after the lien was filed," Undlin said. StiffingContractorsTheta MechanicLienScamTheta

New Los Angeles Ordinance Prohibits All Tenant Foreclosure Evictions Until Property Is Sold To New Owner

In Los Angeles, California, CBS2 reports:
  • Renters whose residences have gone into foreclosure cannot be evicted until the property is sold to a new owner under a city law signed Friday by [Los Angeles] Mayor Antonio Villaraigosa. The one-year ordinance, spearheaded by Council President Eric Garcetti, will impact 300,000 apartment buildings and single-family homes. [...] Renters [in Los Angeles] who are being evicted as a result of foreclosure were urged to contact the city's Housing Department at (866) 557-RENT.

For the story, see Mayor Passes New Rental Foreclosure Law. ThetaTenantRentSkimming

Pittsburgh Assisted Living Retirement Community Faces Foreclosure; 150 Elderly Residents Paying $300K To Get In Face Loss Of Home, Investment

In Pittsburgh, Pennsylvania, KDKA-TV Channel 2 reports:
  • Some local senior citizens who thought they were set to live out their golden years in the lap of luxury are facing a frightening reality. The assisted living community where they live, Covenant at South Hills, is in foreclosure and they may lose their homes and considerable investments.

  • Residents paid a $300,000 deposit to get into the community and pay a $3,000 monthly living fee for upscale living conditions and quality extended medical care.


  • Now, seven years after it opened, Covenant is only 40 percent occupied and the non-profit board that runs the facility can't pay the bills.

For more, see South Hills Senior Living Community In Foreclosure.

For story update, see:

Colorado Regulator Brings Administrative Charges Against Two Alleging Cash Back, Mortgage Scam Involving $45M In Fraudulent Loan Activity

In Denver, Colorado, the Rocky Mountain News reports:
  • The state's Division of Real Estate has sent "notices of charges" to two brokers the agency claims are the masterminds behind a $45 million Front Range mortgage fraud scheme.

  • Erin Toll, director of the real estate division, alleges the two brokers would sell homes at inflated values based on an inflated appraisal. Then, at closing, a large sum of money would be given to a management company with the understanding that they would improve the home.

  • The management company instead would return the money to the buyer, minus a commission. No payments were made on the house, and banks are ending up holding the bag in a foreclosure. The brokers are Jerrold Minney and Steven Scott Werner.

For more, see State accuses two brokers of mortgage fraud scheme.

Man Facing Foreclosure Jerked Around In Attempt To Reinstate Loan; Servicer Allegedly Pocketed $3,200 Payment, Then Failed To Honor Workout Agreement

In Cincinnati, Ohio, the WCPO-TV Channel 9 reports on the story of Yusuf Salaam, an area homeowner who fell behind in his mortgage payments, and the alleged jerking around he received from his loan servicer. According to the story:

  • Salaam's case began when he got behind in his mortgage payments and sought help. He got it by calling the foreclosure prevention phone-a-thon in June. [The Home Ownership Center of Greater Cincinnati] Program Manager LaKicia Roseman was assigned to the case.

  • Roseman got in touch with [loan servicer American Servicing Company] and worked out a new loan with the help of over $3,200 from the Ohio [Home] Rescue Loan Fund. The deal was signed in July. However, ACS allegedly refused to accept Salaam's payments and held on to the Ohio check.

  • Legal Aid Attorney Elizabeth Tull was brought in to file suit to have ACS honor its agreement. "If we weren't in Mr. Salaam's case, his house would have went to sheriff's sale," Roseman said.

For more, see Foreclosure Prevention Fraud Worries Home Experts.

For story update, see: WCPO-TV Helps Roselawn Family Keep Their Home:

  • [T]hanks to WCPO-TV, the Home Ownership Center and Legal Aid, [Yusef Salaam's] wish came true. After months of wrangling, Salaam has a new mortgage with a monthly payment that is $133 less than before.