Saturday, January 24, 2009

Lawyer On Trial Accused Of Placing Phony $160K Mortgage On Employee's Home Forces Mistrial; Fires Defense Attorney, Then Claims Depressed Mental State

In Barrie, Ontario, The Barrie Examiner reports:
  • After just two days at trial, a Barrie lawyer facing criminal charges has insisted he can't go on with his trial because he is depressed and mentally unstable, a court heard yesterday. "I'm not operating on all cylinders," Myles McLellan said.

  • McLellan, 55, [...] began his jury trial this week to face eight criminal charges, including forgery and criminal breach of trust in connection with a false mortgage scheme.(1)


  • His jury trial began [last] week, but after the first witness testified, McLellan suddenly dismissed his lawyer, Eginhart Ehlers. [...] Under lawyer-client privilege laws, he is not obliged to tell the court why. "I can't possibly go ahead," he said. "We are talking about my life here. I've got to assert my rights."

  • After his lawyer was gone, McLellan then asked the judge for a mistrial, stating he could not represent himself because he is "heavily medicated" and emotionally unstable. [...] In the end, Justice Jane Ferguson said she had to declare a mistrial and sent the jury home. "I know the Crown and the police have put tons of effort into this case," the judge said. "But this could aggravate his mental condition. We all know mental illness is a serious problem."

For more, see Mistrial declared in fraud trial (Crown doesn't buy suspect's argument).

Go here for related posts on this story.

(1) Reportedly, The Crown claims McLellan fraudulently registered a $160,000 mortgage against the home of one of his employees without the knowledge or consent of that employee. McLellan was arrested in September 2006 and has been out on bail ever since. KappaDeedTheft

Fire Inspector Gives Residents In 40-Unit Building In Foreclosure The Boot As Water From Burst Frozen Pipes Floods Premises

In Dayton, Ohio, the Dayton Daily News reports:
  • The freeze-thaw cycle from the recent cold spell apparently caused pipes in an apartment building to burst on Thursday, Jan. 22, sending water cascading through ceilings and displacing as many as 10 residents. Dayton firefighters dispatched to 27 Central Ave. at 4:07 p.m. found water gushing throughout the 40-unit, three-story building and at least 3 feet of standing water in the basement.

  • Fire Inspector Andrew Steele told all the residents to leave and firefighters shut off the water, electric and gas service to the three-story building. Steele said residents told him that pipes froze last week, apparently were never repaired, and residents were using bottled water to flush toilets, bathe and eat.

  • At least two adult residents have requested assistance from the Red Cross, which will help with housing and clothing and other necessities. According to Steele, the owner of the building lives in California and the building went into foreclosure recently. There was no immediate estimate of the damage caused to the building or its contents.

Source: Pipes at apartment building burst, force out residents.

Go here for more on freezing pipes in vacant homes. frozenpipetheta ForeclosureHomeVacantBeta

Failure To Winterize Homes, Indoor Floods Due To Burst Frozen Water Pipes Tying Up Fire Department Resources

In Columbus, Ohio, NBC4 reports:

  • Pipes in vacant homes are causing problems for fire departments around Central Ohio. Battalion Chief Doug Smith said that when utilities aren’t turned off and homeowners or banks don’t properly winterize, fire crews end up getting tied up with a major mess and not able to answer other calls, NBC 4‘s Mikaela Hunt reported.

  • In those situations another fire station has to pick up the slack. Some of the vacant properties are due to foreclosure.

  • Hunt visited a vacant house in Genoa Township, where the chief there said the water probably had been running for a week. The ceiling fell in and water was spilling out the door.

Source: Frozen Pipes Cause Problems In Vacant Homes.

See also, The Columbus Dispatch: Weather has pipes bursting (Frozen lines common as vacant homes increase):

  • [F]irefighters have responded to 69 calls of damaged pipes so far this month, compared with 33 calls during January last year, [battalion chief Doug] Smith said.

Go here for more on freezing pipes in vacant homes. frozenpipetheta ForeclosureHomeVacantBeta

Arson Suspected As Vacant Home In Foreclosure Burns To The Ground

In Alvin, Texas, The Facts reports:
  • Alvin fire officials suspect arson as the cause of a blaze that destroyed a vacant two-story home and led to a firefighter’s injury early Monday morning. Fire officials received the call about 1 a.m. Monday, and once they arrived at the 3,500-square-foot house [...], it was engulfed in flames, Alvin Fire Chief Rex Klesel said. “The second floor collapsed down into the first floor,” he said. “There was a garage we were able to save.”


  • The detached, two-story garage had living quarters inside, but the home has been vacant because it’s been involved in foreclosure proceedings for several months, fire officials said. [...] The home had no electricity turned on nor was there any lighting Monday morning, which is why officials believe the fire was set intentionally.

For more, see Vacant house burns to ground; arson suspected.

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

Church Finance Director Facing Foreclosure Charged With Pocketing $37K In Bank Deposits

In St. Paul, Minnesota, the Pioneer Press reports:
  • A former finance director for the Church of St. Bernard in St. Paul has been charged with embezzling $37,000 from church deposits and covering her tracks by moving money from church reserve accounts. Debra Ann Thompson, 44, of St. Paul, was hired in 2006 as a bookkeeper and was promoted the following year to director of business and finance, according to a complaint filed Thursday by the Ramsey County attorney's office. Among her duties: delivering church deposits to the bank.


  • When questioned by police, Thompson said her family owed $12,000 to the IRS, more than $15,000 to creditors and a large amount in medical bills. She admitted she altered deposit slips and took money for herself because of her financial turmoil but believed the total amount stolen was no more than $10,000. She said that most of the money she took went toward bills or mortgage payments, that her house was in foreclosure and that she had no food.

For more, see Finance director at St. Paul church charged with embezzling $37,000 (Family was having financial trouble, priest told cops).

Loan Modification Foreclosure Scams On The Upswing In Montana

Montana's News Station reports:
  • Foreclosure scams are becoming more frequent in Montana. That's according to Consumer Credit Counseling Service Branch Director Beverly Johnston who warns about companies that promise to get people out of a foreclosure by charging enormous fees. If a company charges an up front fee, it's most likely a scam, she said.

For more, see MT foreclosure scams becoming more frequent.

Foreclosed Homeowner Fights Back - Files Police Complaint Reporting Burglary After Mortgage Firm Employee Was Sent To Change Locks On Home

In Lake Oswego, Oregon, the following blurb is buried on the Police Blotter under "Burglaries" appearing in The Lake Oswego Review:
  • 1/15/09 11:45 a.m. Homeowners on Summer Woods reported a burglary when a mortgage company employee was sent to the home to change the locks following a foreclosure.

Source: Police Blotter - Burglaries.

Friday, January 23, 2009

Swastikas Painted On Vacant Foreclosed Home Creates Eyesore In Upstate NY Town, Leaves Neighbors Angry

In Monroe, New York, the Times Herald Record reports:
  • For more than two months, neighbors and passers-by have had to endure the sight of three big, red swastikas, spray-painted on the front of an empty house on Dug Road. Neighbors have complained to the state police and the real estate broker who's been trying to sell the house, which was seized through foreclosure six months ago. But to their growing chagrin, nothing has been done to remove the ineptly drawn Nazi symbols from the gray vinyl siding.(1)

  • "To just see a lack of concern about it — it hurts," said Paul Dreyfus, who lives a short distance away. "I would imagine this is the act of some idiot kids who don't really know what it means. But regardless of who did it and why, it shouldn't stay there."

For more, see Swastikas mar vacant house in Monroe.

(1) Coincidentally, property records indicate the house belongs to German financial giant, Deutsche Bank National Trust, which foreclosed on the four-bedroom colonial July 10, according to the story.

St. Louis Builder Faces Charges Of Bank Fraud; Lenders, Subs, Homebuyers Take $10M+ Hit, Say Prosecutors

In St. Louis, Missouri, the St. Louis Post Dispatch reports:
  • [L]ongtime, high-end west St. Louis County home builder [Edward A. Levinson, 49,] has been indicted on bank fraud charges after his attempts to prop up his struggling business cost banks, subcontractors and home buyers more than $10 million, federal prosecutors said this morning.

In addition to the losses allegedly taken by the lenders, Levinson is accused of stiffing his subcontractors out of about $1.5 million, and pocketing $500,000+ in homebuyer deposits, according to the story.

For more, see St. Louis home builder indicted for bank fraud.

NY Landlord Fined Nearly $10K For Taking Tenant's Toilet To Force Move; Social Services Helps Relocate Woman, Child

In Spring Valley, New York, The Associated Press reports:
  • A landlord was fined nearly $10,000 for removing the toilet and other fixtures from a basement apartment to get his tenant to move out. The Rockland Board of Health issued the fine to Fausto Pinos on Wednesday. He had been charged with 24 housing code violations for conditions in the building in Spring Valley, a town north of New York City.


  • Pinos, of Bushkill, Pa., did not appear at the meeting, but his brother, Jesus Pinos, speaking on his behalf, said the landlord did not dispute the charges. He said Pinos thought that removing the toilet, bathtub, sink, oven and countertop would force the woman and her child to move.


  • The Department of Health issued emergency violations letters to Fausto Pinos on Nov. 5, according to records. When inspectors visited the apartment again Nov. 17, they discovered that the toilet and other fixtures had been removed.

  • The tenant told inspectors that Pinos removed the items the day before and told her to leave. But she said she had no other place to go. The Department of Social Services helped relocate the woman and her child.

For more, see NY landlord fined $10K for taking tenant's toilet (if link expires, try here).

Section 8 Mom, 4 Kids May Face Illegal Foreclosure Eviction

In West Palm Beach, Florida, WPEC-TV Channel 12 reports:
  • It's a dire situation more and more renters are facing--losing your rental home to foreclosure. But for one West Palm Beach mother--her future looms. "If I'm not out early Friday morning than they are just going to come in and throw my stuff out," said renter Barbara Wright.

  • Yesterday when Wright opened her door she found a 48-hour eviction notice in the hands of deputies. The single mother of four is a section 8 housing tenant(1) who has rented the same house for more than five years. But last year her landlord could no longer pay the mortgage.The home went into foreclosure, now she is desperately looking for a new place to live. "I'm trying to pull a miracle out of a hat," said Wright. Meanwhile her four kids have no idea they may be homeless Friday morning.

For the story, see Single Mother and Children Losing Rental Home to Foreclosure.

(1) According to a 2007 Boston Herald story, Section 8 tenants renting homes in foreclosure have rights under federal law that prevent them from getting kicked out of a home because of any change in ownership, including a foreclosure:

  • Chris Norris, executive director of [Metropolitan Boston Housing Partnership, a nonprofit group that administers Section 8 housing programs for the federal government], and legal experts say Section 8 tenants have their rights - and can fight eviction attempts by new building owners snapping up properties at auctions. Under federal law, Section 8 tenants with proper leases can’t be immediately tossed out of their units because of a change in ownership, experts say.

  • Federal laws trump state laws, so (Section 8 tenants) can stay,” said Rafael Mares, an attorney at Harvard Law School’s WilmerHale Legal Services, which is helping tenants during the current foreclosure crisis. Even if a tenant’s Section 8 lease has expired, federal law requires that property owners must prove they’re being economically harmed by having a tenant remain in a building, said Mares. Non-Section 8 renters, who have also been hard hit by the foreclosure crisis, also have rights that require court approval before an eviction can take place, Mares said. But Section 8 tenants are better protected, he said. [...] But many Section 8 tenants panic and don’t fight eviction notices, not realizing they have rights, said Mares.

It may be that a lack of affordable legal counsel knowledgeable in Section 8 tenant issues may result in this family being illegally bounced out of their home. For the specific federal regulation on this point, see 24 CFR 982.310(d)(1). Go here for the regulations (24 CFR 982) regulating the Section 8 rent subsidy program, generally. SkimmingKappaRent

B of A Gives California Congresswoman The "Telephone Bounce Around" In Her Attempt To Seek Loan Modification Help For Constituents

ABC News Nightline reports:
  • In a revealing example of what she says the average homeowner faces, a California Congresswoman spent more than two hours on the phone trying, without success, to find someone at the Bank of America who could help a struggling constituent modify his mortgage payments. ABC News "Nightline" cameras were rolling as Congresswoman Maxine Waters (D-Ca.) was repeatedly put on hold for long stretches, disconnected, transferred to extensions that did not work and ultimately switched to a recording which directed her to the bank's website.

For more, see: On Hold: Even Congresswoman Gets the Runaround on Bank Help Lines (Rep. Maxine Waters Dials and Redials Attempting to Get Help for Constituents).

Improvements Sought In Philly Foreclosure Diversion Program

In Philadelphia, Pennsylvania, the Philadelphia Business Journal reports:

For more, see ‘Model’ foreclosure program seeks ideas for improvement.

NYC Man Accuses Sister Of Tricking 80-Year Old Mom Into Signing Over The Deed To Her $1.2M Home

In Forest Hills, Queens, the New York Post reports:
  • A Queens man says his sister bamboozled their elderly mother out of the deed to a $1.2 million house in exclusive Forest Hills Gardens, according to court papers. James Leong said his sister, Jean Tom, told their mother, Poy Fong Leong, 80, that the deed she was signing over was a "document designed to ensure that Mother Leong would be cared for as she got older," according to the suit filed last month in Queens Supreme Court. Tom did not comment.

Source: Bro: Sis Stole Mom's Home.

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

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

Illegal Loan Modification Firms Beware

Appearing on the MortgageOrb website is, what appears to be, a press release announcing:
  • A new investigative firm has been created to contend with the growing number of illegally run loan modification and foreclosure rescue companies. MFI-Mod Squad, founded by MFI-Miami LLC head Steve Dibert, is a privately funded loan modification company based in Boynton Beach, Fla., that aims to expose companies that charge troubled homeowners large up-front fees in exchange for promising to save their homes from foreclosure.


  • Once MFI-Mod Squad completes its investigation, a report will be posted on its Web site and a copy will be immediately sent to state and federal law enforcement officials and regulators for further action.

For the press release, see New Firm Investigates Illegal Mod Companies.

Miami Feds Bust Mortgage Fraud/Marijuana Grow House Operation; 10 Of 18 Homes Financed With Fraudulently Obtained Loans Used As Indoor Pot Farms

In Miami, Florida, the U. S. Attorney's Office (Fla. Southern District) announced last week the indictment of nine Miami residents(1) allegedly involved in a mortgage fraud scheme used to finance the purchase of a number of homes used in a marijuana grow house operation. An excerpt from the press release:
  • [A]s set forth in the Indictment, from on or about March 2, 2004, and continuing through about May 1, 2008, [eight of the defendants] were the buyers and sellers of real estate in St. Lucie County, Miami-Dade County, Lee County, Columbia County, and Marion County, Florida. At least ten of the houses were purchased through fraudulent mortgage applications, and after purchase, were used and maintained as marijuana grow houses. The defendants made false representations of material facts in mortgage applications, thereby causing mortgage companies to issue mortgages for the purchase of 18 houses.


  • The Indictment further alleges, on a number of the fraudulent transactions, the loan officer was defendant Magalys Fajardo, a/k/a Magalys Rodriguez, who was employed by mortgage brokers, LendAmerica Home Loans, Bluetrust Capital, and Monster Mortgage, Inc.(2) [...] The aggregate dollar amount of all loans procured fraudulently by the defendants from the mortgage lenders exceeded six million dollars.

For the U.S. Attorney press release, see Miami Residents Indicted In Marijuana Grow House, Mortgage, And Money Laundering Scheme.

Go here and go here for other posts on Marijuana Grow Houses.

(1) The indicted defendants are: Manuel Pupo, a/k/a Tata, Elieser Pupo, Serguey Pupo, Elmer Pupo, a/k/a Elmes, Maritza Perez, Noel Albanes-Gomez, Omar Cardenas, Zenaida Rodriguez and Magalys Fajardo, a/k/a Magalys Rodriguez.

(2) Reportedly, as part of the mortgage lending process, the defendants, via Magalys Fajardo, a/k/a Magalys Rodriguez, allegedly submitted fraudulent Uniform Residential Loan Applications, Requests for Verification of Employment, Requests for Verification of Deposit, IRS Forms W-2, payroll stubs, bank statements, as required by the mortgage lenders, through the mortgage broker to the lender for review and credit worthiness approval. pot grow ops beta

Thursday, January 22, 2009

Trump Tower Tampa Going Down The Tubes?

In Tampa, Florida, the (Un)Real Estate blog at the St. Petersburg Times reports:
  • The fading hopes of Trump Tower Tampa just got fainter. A Tampa bankruptcy judge has ruled that Colonial Bank, owed $3.5-million by tower developer SimDag LLC, can proceed with its foreclosure against the project’s riverfront lot at 100 S. Ashley Drive.


  • Trump Tower was supposed to be the region’s tallest skyscraper, but could never get a $200-million construction loan. Its namesake, New York mogul Donald Trump, canceled his licensing agreement with the project in September.

Source: Trump Tower Tampa fated for foreclosure?

Title Closing Company Owner Gets 10+ Years In Cash Back Mortgage Scam

In Miami, Florida, the South Florida Business Journal reports:
  • A Miami woman was sentenced in federal court on Thursday to more than 10 years in prison and ordered to pay more than $6 million in restitution for her role in a multimillion-dollar mortgage fraud scheme. Magile Cruz, who also went by several aliases, pleaded guilty in November to charges that she engaged in a scheme to obtain fraudulent mortgage loans on properties in Miami-Dade and Broward counties.(1)

For more, see Miami woman sentenced in multimillion-dollar mortgage fraud.

Go here for the U.S. Attorney press release: De Facto Owner Of Mortgage Companies And title Agencies Sentenced In Multi-Million Dollar Mortgage Fraud Scheme.

For earlier post and more details on this case, see Florida Feds Obtain Indictment In Alleged Mortgage Scam Involving 79 Homes, $24M In Fraudulently Obtained Loans, $5M In Lender Losses.

(1) Reportedly, Cruz, who owned several mortgage and title companies, along with other co-conspirators, would recruit and pay straw buyers for the properties. They then would prepare fraudulent loan applications on behalf of the straw buyers, using false financial documentation. Once the mortgage applications were approved, the lenders would wire the loan proceeds to her companies for closing.

Civil War Amongst Interest Holders Of Securitized Mortgages May Be On Horizon As Investors Begin To Fight Over Foreclosure, Loan Modification Issues

In Boston, Massachusetts, The ABA Journal reports:
  • A default on debt tied to Boston’s John Hancock Tower highlights the kind of legal fights that will likely break out among investors who have varying rights to repayment after property foreclosures.

  • When mortgages are pooled and securitized, the investors purchase bonds that are grouped by payment priority known as tranches. Those with the lowest risk are first in line for payment if some of the receivables go into default. Once they are paid, those at the next risk level have a right to payment, and so on down the line in a “waterfall” of cascading payments.

  • In the Hancock Tower dispute, investors who believe they will be in the money because of more senior rights to repayment are seeking an immediate foreclosure, the Wall Street Journal reports (sub. req.). Those with lesser rights believe that declining real estate values mean they won’t get paid after foreclosure. This group is instead urging extended time for repayment of the debt, the story says.

  • The securitization agreement anticipated a fight over foreclosure decisions, and provided that the most junior creditor still in the money has the right to decide whether to foreclose. But the creditors are arguing over which one meets the agreement’s definition of “controlling holder” with the right to make the foreclosure decision, the story says.

  • John Zizzo, a real-estate lawyer at Cadwalader, Wickersham & Taft, told the Wall Street Journal that the mortgage crisis is bringing the legal issues to the fore. "Tranche warfare is starting," he said. "It has never been tested before this current market meltdown."

Source: Mortgage Meltdown Results in ‘Tranche Warfare’

For The Wall Street Journal story, see Hancock at Center of 'Tranche Warfare' (subscription required; those without a subscription, go here for a copy & pasted version of the entire story).

For more on the trouble facing the Hancock Tower, see:

Owners Desperate To Rent Out Their Homes The Target Of Anti-Tenant Neighbors, Municipalities

A recent column at gives a look at the problems facing homeowners in rental-restricted communities - whether it be those who need to move, can't unload their home, and want to bring in some quick cash by renting to tenants; or those who remain and wish to limit rentals, arguing that a failure to do so will result in the neighborhood's quality of life will go down the tubes:
  • [F]or owners who have to move or who own houses as investment properties, short-term rentals can bring in some cash and keep them from having to sell at a big loss. But instead of greeting renters with hosannas, many towns and subdivisions are barring their doors, arguing that tenants usher in neglect, misbehavior and even violent crime. Almost 60 million Americans live in developments governed by homeowners associations, and by some estimates as many as 40 percent of those communities enforce restrictions that keep owners from becoming landlords.

For more, see New Battle Affects Home Values: No-Rental Rules.

Owners Desperate To Rent Out Their Homes The Target Of Overseas "Cash Back" Rent Scams

In Nashville, Tennessee, WSMV-TV Channel 4 reports:
  • Police said they have seen an increase in scammers hoping to make money from desperate property owners during the current recession. Many people are looking for renters to help them make their mortgages and avoid foreclosure, but that is putting them in a vulnerable position to be bilked.

For more on a story of a homeowner desperate to rent out her home, who received a $5,000 check from a prospective tenant from overseas, with instructions to deposit the check, keep $1,900 for the lease, and wire back the balance, see Police See Increase In Home Rental Scams (Home Owners Become Desperate To Rent Property).

Federal Law Protects Against "Due On Sale" Clauses When Inheriting Mortgage Property From Relatives

A Real Estate Mailbag Q&A article by attorney and syndicated columnist Benny Kass serves as a reminder of the Federal law that protects those who inherit a mortgaged home of 4 units or less from relatives. Specifically, it prohibits lenders from demanding that the new owner(s) immediately fork over the entire outstanding balance on the loan by exercising a "due-on-sale" clause in the mortgage, even though all the payments are current.
  • Federal law - called the Garn-St. Germain Depository Institutions Act of 1982 - protects you. [...] According to that law, a lender "may not exercise its option pursuant to a due-on-sale clause upon ... a transfer to a relative resulting from the death of a borrower."(1)


  • Congress recognized that the due-on-sale clause was unfair to many people, especially in situations [...] where you inherited the property - and the existing loan. You should send your lender a copy of [the deceased owner's] death certificate, and merely advise that you will be taking over the mortgage payments. There is absolutely nothing that the lender can do to hurt you.

For the column, see Federal law protects those who inherit homes.

(1) For the Federal law, see 12 USC 1701j–3(d)(5) - Preemption of due-on-sale prohibitions (Exemption of specified transfers or dispositions).

Fannie To Tack On 3/4% Fee On All Condo Loans Made With Less Than 25% Downpayment

The Chicago Tribune reports:
  • With many lenders already casting a wary eye on condo loans because of their default rate, Fannie Mae has upped the ante by adding a fee of .75 percent of the loan amount of a 30-year fixed mortgage, for borrowers who put down 25 percent of the purchase price or less, effective April 1. In simple math, for a condo priced at $300,000, with a mortgage of $240,000 (a 20 percent down payment), if Fannie will be purchasing the loan from your lender, it will assess the buyer an additional $1,800.

For more, see Fannie Mae's added fee to crunch condo buyers.

Wednesday, January 21, 2009

Free County Bar Walk-In Legal Clinic For Queens Homeowners Facing Foreclosure

In New York City, The Queens Gazette reports:
  • Queens homeowners facing foreclosure can get free legal advice from lawyers trained by the Queens County Bar Association at the association's free, walk-in legal clinic, Wednesdays, 5 to 8 p.m. or Fridays, 9 a.m. to 4 p.m. No appointment is necessary.

  • Homeowners should bring all papers relating to the purchase of their residence and all communications from the lender. You may be referred to certified not-for-profit housing counselors who can work with lenders in an attempt to modify their mortgage.(1)


  • This volunteer legal service is made available by the Queens County Bar Association's pro-bono legal service program. Homeowners needing assistance are urged to take advantage of this offer on Wednesdays or Fridays, at the Queens Civil Court, Room 160, 89-17 Sutphin Blvd., Jamaica. For more information, call 718.291.4500.

Source: Bar Association Has Pro Bono Assistance For Homeowners.

(1) Homeowners with an upcoming court-mandated foreclosure settlement conference may be assigned an attorney who will voluntarily represent you at the settlement conference. Or, a homeowner's case may be taken by a legal service program to represent them in the entire foreclosure litigation process. Staff from the Legal Aid Society and Legal Services to the Elderly will be there to help.

Kansas Feds Nail Two In Upront Fee, Fractional Interest Deed Transfer Rescue Scam; Bogus Bankruptcy Petitions Filed To Stall Foreclosure Actions

The U.S. Attorney's Office in Topeka, Kansas announced:
  • [Isaac Yass, 42, and co-defendant Robert Andrew Blechman, 39, both of Los Angeles, California] have been convicted of running a scam in which homeowners who were behind on their mortgage payments paid them to hold off foreclosure by filing fraudulent bankruptcy petitions.
According to the U.S. Attorney press release, evidence showed that:
  • Yass solicited homeowners who were going through foreclosure proceedings. He told them that for a fee he could help them keep their houses.
  • The defendants filed fraudulent bankruptcy petitions in federal bankruptcy courts in Topeka, Wichita and Kansas City, Kan. The petitions were filed in the name of nonexistent individuals with businesses that claimed to be part owners of properties that were in foreclosure.
  • The result was an automatic stay in the foreclosures, halting any further actions by creditors against the properties.
The Feds also alleged:
  • The defendants used the U.S. Postal Service to deliver fraudulent petitions to the bankruptcy court. The petitions contained false names and Social Security numbers, and addresses for the creditors that were in fact mailboxes or UPS Store locations in Kansas.
For the press release, see Los Angeles Men Convicted On Charges Of Filing False Claims In Kansas Bankruptcy Courts (Isaac Yass claimed that for a fee Stopco could keep homeowners in foreclosure from losing their homes).

For a report issued by a California Federal Bankruptcy Court task force detailing the types of foreclosure scams involving the abuse of the bankruptcy courts, see Final Report Of The Bankruptcy Foreclosure Scam Task Force.

Go here for other posts on fractional interest deed transfer, foreclosure rescue bankruptcy scams. loan modification

California Woman Gets 12+ Years In Ponzi Scheme Scamming 600+ Into Investing $18M+ In Phony Firm Purportedly Helping Homeowners Facing Foreclosure

In Los Angeles, California, The Associated Press reports:
  • [J]eanetta Standefor, 40, of Altadena, was sentenced to 151 months in prison and ordered to pay more than $8.6 million in penalties. [...] Prosecutors said Standefor ran a Ponzi scheme between 2005 and 2007 that lured more than 600 investors in California, Nevada and Georgia into investing money in her company, which purported to use the funds to help homeowners facing foreclosure get current on their mortgage payments.(1)

For more, see Calif woman sentenced in real estate scheme.

See also U.S. Attorney (Los Angeles) press release: Woman Who Promised To Help Homeowners Avoid Foreclosure Sentenced To Over 12 years In Prison For Taking millions From Investors In Fraudulent Scheme.

(1) According to the U.S. Attorney's Office, Standefor’s fraud was what is commonly called “affinity fraud,” that is, a fraud directed at a particular community. Standefor and AFG targeted investors in the African-American community through a now-defunct Web site, word of mouth, real estate seminars and testimonials by other seemingly successful African-American investors. She reportedly cheated investors out of $18 million.

Woman, Disbarred Attorney Among 3 Charged In Theft Of Dead Grandfather's Home; Accused Of Pocketing $100,000+

Illinois Attorney General Lisa Madigan announced [last week]:
  • [W]arren Nickel, 59, of Tinley Park, Adrian Garner, 37, of Calumet Park, and Chiffon Mars, 38, formerly of the Chicago area, each face four counts of theft over $100,000 and four counts of theft over $10,000. Nickel also faces a charge of false impersonation of an attorney, and Garner faces one charge of forgery.

  • An attorney general's office investigation revealed Nickel and Garner allegedly executed a series of fraudulent documents in December 2005 as part of the sale of Jack Anderson's Chicago home after his 2004 death.

  • Mars, who was Anderson's step-granddaughter and a beneficiary of Anderson's estate, sold Anderson's property to a third-party in December 2005, without the knowledge and consent of the Anderson estate executor or Mars' co-beneficiary. Nickel served as her attorney in the transaction, even though he was disbarred from practicing law in 2004.(1)

For the Illinois AG press release, see Madigan: Three Charged With Fraud And Forgery In Real Estate Scam.

(1) According to the Illinois AG press release, Nickel and Garner face additional pending charges in a separate Cook County case based on a similar scheme in which they allegedly forged documents in fraudulent real estate transactions in an effort to put an elderly victim out of her home. Nickel is serving 30 months felony probation in Cook County for his previous conviction on five counts of forgery for stealing more than $93,000 from an estate. And in 2004, the Attorney Registration and Disciplinary Commission disbarred Nickel from the practice of law. He is also serving 30 months felony probation for a second conviction on six counts of false impersonation of a lawyer.

NYC Proposed Statute Would Impose Licensing-Related Requirements On Upfront Fee Loan Modification Firms

In New York City, the Brooklyn Daily Eagle reports:
  • The City Council has proposed legislation that will increase the regulatory requirements for distressed property consultants. This bill, when signed into law, will crack down on people attempting to prey upon homeowners facing foreclosure.


  • The proposed legislation would give authorities a way to determine who is offering a legitimate consulting service by requiring licensing.(1)

For more, including what else the proposed bill does, see City Tackles Those Who Prey on Homeowners (New Legislation Will Require Licensing of Property Consultants).

(1) For those loan modification firms who purport to review homeowners' loan documents in search of violations of consumer lending laws, as well as violations of other laws relating to bringing foreclosure actions, there already are licensing requirements. Such work requires a law license. Providing these so-called forensic audits of loan documents directly to the consumer without either being an attorney, or without being under the direct supervision and control of an attorney, arguably constitutes the unlicensed / unauthorized practice of law.

Go here and go here for other posts on issues relating to attorneys, loan modifications, and the unlicensed/unauthorized practice of law. See also, Unlicensed Practice Of Law Becomes An Issue With Some Loan Modification Firms.

Middle Class Joining The Poor In Inability To Find Affordable Legal Help, Says Iowa Chief Justice

In Des Moines, Iowa, the Des Moines Register reports:
  • Iowa’s state courts face higher costs, greater language barriers, a bare-bones workforce and more needs for low-income residents as they strive to ensure justice, the state’s top judge said [last week]. Iowa Supreme Court Chief Justice Marsha Ternus acknowledged the state’s budget problems in her annual address to lawmakers and promised to reduce operating costs as the courts continue to serve Iowans.

One of the serious challenges for Iowa’s courts, as outlined by Justice Ternus, is:

  • A growing number of Iowans have unmet needs in civil court because they cannot afford a lawyer, Ternus said. The problem lacks a simple solution, she said, but will probably require a combination of government aid and help from the legal community. “We have long recognized that the cost of legal representation is beyond the reach of the poor, but it is now often beyond the reach of the middle class,” Ternus said. “The end result: we have equal justice for some, but certainly not for all.”

  • Ternus asked lawmakers to maintain current funding levels for legal organizations that serve low-income Iowans, which she said are more important than ever as the economy staggers.

For more, see Chief Justice: Iowa courts stretched 'painfully thin.'

Tuesday, January 20, 2009

Investigative Report Links High Foreclosure Rates To Small Number Of Real Estate Pros

In Southern California, North County Times reports:
  • A tiny number of real estate brokers is associated with an inordinately large number of foreclosures in North County, raising questions about how just a few salesmen could play a role in sending hundreds of families into foreclosure and causing millions of dollars in losses for lenders.


  • Certainly, no single real estate office or group of agents can be blamed for the economic meltdown. However, great financial losses seem linked to the activities of a small number of professionals.

  • A North County Times investigation into thousands of foreclosure records, along with interviews with buyers, reveals a pattern that suggests some real estate agents specialized in clients ---- chiefly Latinos ---- who couldn't afford to buy homes, and helped them buy as many as possible.

For the rest of this investigative report, see HOUSING: Handful of brokers linked to glut of local foreclosures (21 real estate offices had huge rates of failure among buyers).

2009: The Year Of Really Bad "Rent-To-Own" Home Purchase Contracts?

In Newport, Minnesota, Minnesota Public Radio reports:

  • Melissa Joseph, 28, thought her rental house in Newport was a lucky break. She and her fiance have shaky credit, so they can't easily qualify for a mortgage. They thought buying a house with a rent-to-own agreement was an easier path to homeownership. Instead, they are involved in a dispute with a landlord who Joseph said hasn't repaired the leaky roof as he promised. Joseph said she and the landlord have argued over who said what.


  • But now, who promised what is beside the point, because the home has fallen into foreclosure. Under current law, that means Joseph's contract, and the thousands of dollars she put down, are gone. There is nothing in Minnesota law governing such rent to own deals. And that, said Lutheran Social Services' Dan Williams, is a big problem.

  • "I really worry that we are going to look back on 2009 and say this was the year of really bad contract-to-own agreements and really bad contract for deeds," he said.(1)

For more, see Rent-to-own homebuying on the rise, and so are problems.

Go here and go here for stories on how easy some tenants found it in getting screwed over in lease/option, "rent to own" and "contract for deed" real estate deals.

(1) Acording to the story, Williams said the surplus of foreclosed homes in bad condition is attracting people looking for a cheap deal on a house. For many buyers, the only option may seem to be a rent-to-own arrangement or contract for deed with a cash-strapped seller. There are no hard numbers tracking this trend but there are widespread reports that these deals are on the rise. rent to own lease purchase option scams yellowstone

Condo Residents Forced From Homes As HOA's Failure To Pay Utility Bills Results In Water & Electric Shutoffs, Causing City To Condemn Building

In Danville, Virginia, reports:
  • Cabin Lake Apartments have been emptied of residents, the doors have been boarded up and its fate — and the fate of people who owned the apartments — is uncertain. The complex was condemned when majority owner Raymond Pyant failed to pay the utility bill, even after Danville Utilities gave him extensions and set up payment plans to bring his account up to date.

  • Pyant, who also was president of the Unit Owners Association, collected money from the residents to pay utilities that were used cooperatively by the residents. [...] Tenants and owners all had to move out as soon as the building was condemned for not having water.(1)

For more, see Cabin Lake boarded up, residents out.

For story updates see:

(7-2-09) Danville apartment complex fire ruled arson:

  • A fire at a Danville apartment complex Thursday morning has been ruled arson. The fire started a little before 4 a.m. at the former Cabin Lake Apartments. According to a news release, the building was unoccupied and was under renovation at the time. Investigators believe the fire started on a second floor deck. Police say a man wearing dark clothes and a white hoodie was seen leaving the area shortly before the fire was spotted. He was traveling on foot towards Piney Forest Road. Cabin Lake was auctioned off in March after the former owner, Raymond Pyant, failed to pay several months worth of water bills to the city of Danville. Those defaulted payments led to the condemnation of Cabin Lake and the foreclosure auction.

(7-2-09) Cabin Lake fire ruled arson:

  • The fire damaged or destroyed 24 units. Those units were unoccupied and under renovation at the time of the fire. No one was injured, said Bryan Shields, acting assistant chief for the Danville Fire Department.

(3-16-09) Cabin Lake apartment complex to be sold to highest bidder today:

  • Pyant, who lives in Richmond and owned 48 units at Cabin Lake Apartments, was responsible for the condemnation of the complex when he failed to meet his agreement with the city to pay several months’ worth of water bills in January. Problems at Cabin Lake began in October. Residents said they were surprised when their utility services were suddenly cut off by the city since the cost of utilities was included in the rent. Though many units were owned privately, Pyant was responsible for paying the water bill on all units, none of which had private water meters, and the power bill on some that didn’t have their own electricity meters, city officials said.

(3-17-09) Cabin Lake units under new ownership:

  • Properties owned by R&C Investments and its representative, Raymond Pyant, were auctioned off yesterday as a result of foreclosure proceedings by the note-holder, Springfield Financial Company LLC.

(1) Reportedly, one resident who has owned his apartment for thirty years expressed concerns over (a) how unit owners will cope with having to make mortgage payments on those apartments while having to live elsewhere, (b) pipes that will burst during the cold weather, and (c) how there is no lighting at all at the complex, which will make the complex even more of a target for looters as the vandalism has already begun.

Indiana To Lead U.S. In Most Trained Judges, Pro Bono Lawyers & Mediators To Fight Foreclosures, Promises State Chief Justice

In Indianapolis, Indiana, WTHR-TV Channel 13 reports:
  • [S]upreme Court Chief Justice Randall Shepard in his annual state of the judiciary Wednesday pointed out that last year Indiana saw more new foreclosure lawsuits than new divorce lawsuits. Now he has pledged to get the judiciary involved in the Indiana Foreclosure Prevention Network headed up by Lt. Governor Becky Skillman.

  • "I've told the Lt. Governor the Judicial branch would like to join in this campaign and she has agreed and whatever else we are able to contribute I promise you this, by next summer Indiana will have trained more judges and pro bono lawyers and mediators to help people who are facing foreclosure than any other state in America," said Shepard.

Source: IN chief justice: Indiana sees more foreclosures than divorce lawsuits.

Northern California Woman Faces Eviction After Foreclosure Rescue "Life Preserver" Turns Out To Be An Anchor

In Northern California, the Redding Record Searchlight reports on the story of a local homeowner who was facing financial trouble and looking for help to save her home from foreclosure. Facing mounting debts, she took a step that would ultimately cost her her home.
  • "I saw this ad on TV saying, 'We can help you,' " she said. "So I called them because I was in trouble." Next thing she knew, she was in a Redding title company in April 2006 deeding her home to a Redding man and signing a lease-option contract. She said she got $3,000 out of the deal that went to pay bills. "All of a sudden I realized I was giving them total control of the property, but if I hadn't done that we would have been out," [she] said. She hoped to buy the property back after two years. [... She] acknowledges her decision may not have been the best, but she acted under the extreme pressure of mounting debt.

She now faces a February 8 eviction date.

For the story, see Redding woman's efforts to save her home end in foreclosure.

Monday, January 19, 2009

Countrywide Faces Civil RICO, RESPA Charges In Washington Class Action Suit; Accused Of Using Do-Nothing Subsidiary To Inflate, Pocket Appraisal Fees

In Seattle, Washington, the law firm Hagens Berman Sobol Shapiro LLP announced last week:
  • A group of Washington homeowners this week filed a lawsuit against Countrywide, a wholly owned subsidiary of Bank of America (NYSE: BAC) and the nation's largest mortgage company, claiming the mortgage giant illegally rigged the appraisal process in a scheme to boost profits at the expense of homeowners and independent appraisers.

  • Filed under the Racketeering Influenced and Corrupt Practices Act (RICO), the suit claims that Countrywide forces homeowners to use its wholly owned subsidiary LandSafe, for appraisals. The company then turns around and subcontracts the work to independent appraisers while charging homeowners as much as 200 percent of the actual cost of the appraisal.


  • The lawsuit, filed in U.S. District Court in Seattle, seeks to represent all homeowners who purchased or refinanced their home through Countrywide and LandSafe, and asks the court to award plaintiffs damages. [...] The lawsuit cites violations of federal law under RICO and RESPA. Other counts include unjust enrichment, breach of fiduciary duty and violation of California unfair competition law. You can learn more about this case by visiting

For the press release, see Hagens Berman Files Class Action Against Lending Giant Countrywide.

For the lawsuit, see Clark v. Countrywide Home Loans, Inc., et al.

Thanks to Mike Dillon at for the heads-up on the story.

Twice-Jailed "Priest" Accused Of "Preying" On Builders, Leaving Them "On Their Knees" After Clipping Them For Upfront Fee$ On Sour Loan Promises

Much like financially strapped homeowners trying to save their homes, it appears that some builders and developers whose financing sources have dried up can be equally vulnerable to upfront fee, finance-related deals that may not be kosher. In this light, the St. Petersburg Times recently reported the story of THIS MAN:
  • [T]he Very Rev. Father Barney Canada, who ran Providence Funding, a self-proclaimed faith-based commercial lender headquartered near the University of Notre Dame. In his black clerical garb and white collar, Canada claimed to be a priest from a shadowy 19th-century offshoot of the Roman Catholic Church.


  • "He comes across as legitimate and knowledgeable with the correct connections. We played the game,'' [one Miami developer who claims Canada clipped him for $300,000] says. "I've been burned by four or five other people, too. But not anywhere near that amount.''

  • Canada used his priestly routine to take developers across Florida and beyond for upward of a million dollars in fees the past year, records show. Not a single loan has closed, and none of the applicants knew that Canada had been incarcerated twice in the 1990s for running "advance fee" lending scams that defrauded businessmen just like themselves.

For more, see Father Barney takes fees, leaves a "host" of developers behind.

Financially Strapped Builder Charged With Stripping Appliances From Unsold Homes Encumbered By Bank Lien

In Gloucester, Virginia, the Daily Press reports:
  • Embattled Gloucester developer George Woodhouse was arrested on charges of grand larceny Tuesday, less than a month before he is due in court to answer to 10 felony counts of forgery.(1)

  • Woodhouse, 39, of Hayes, was charged with grand larceny in connection with a Dec. 22 incident at Dunston Hall, one of several unfinished housing subdivisions planned by Woodhouse in Gloucester. Several items, including microwaves and ceiling fans, were removed from two unoccupied houses, said Commonwealth's Attorney Robert Hicks.

  • The items, as well as 17 lots at Dunston Hall, are subject to a lien filed by EVB bank against Dunwood Holdings, a company formed by Woodhouse and his wife, Abigail. The bank won a $7 million judgment in September against Dunwood and since has been foreclosing on company assets. S. Miles Dumville, a Richmond attorney representing EVB, said the bank has yet to foreclose on Dunston Hall properties. Dumville contends that no one is allowed to remove items from the houses because of the lien.

For more, see Embattled developer charged with larceny (George Woodhouse is accused of taking items subject to a lien from two unoccupied houses).

Go here for other posts on pre-foreclosure homeowner fixture stripping.

(1) A special grand jury in July charged him with forging five certificates of occupancy, actions that resulted in 10 felonies. The documents allowed Woodhouse to close on the sales of houses and receive money from his lender, EVB Mortgage, before the county would have issued real certificates. See Forgery trial for Gloucester developer scheduled for Feb. foreclosure fixture stripping apple

Mortgage Fraud Flood Flowing Through Fort Worth DA's Office

In Fort Worth, Texas, the Fort Worth Star Telegram reports:
  • Three years ago, it was rare for a Tarrant County prosecutor to see a case alleging mortgage-loan fraud. Now, the district attorney’s office is covered up in them. "We have been hit with a tsunami of mortgage fraud," said Joe Shannon, chief of the economic-crimes unit of the Tarrant County district attorney’s office.

  • Investigators estimate that they have identified more than $42 million in mortgage scams in Tarrant County. The district attorney’s office now has an investigator who works full time on such cases. Last week alone, seven new cases were referred to the economic-crimes unit. And the FBI doesn’t even consider Texas to have a "significant mortgage-fraud problem." That designation goes to California, Florida, Michigan, Nevada and Utah, among other states.

For more, see Mortgage-fraud cases are flooding into Tarrant County district attorney’s office.

Sunday, January 18, 2009

Streetlights To Entire Subdivision Shut Off For Failure To Pay Electric Bill; Lower Maintenance Fee Collections Leaves HOA Low On Cash, High On Crime

In Mecklenburg County, North Carolina, The Charlotte Observer reports:
  • Streetlights have been dark for months in Hathaway Hills, a 4-year-old subdivision in west Mecklenburg County. But it took a tragedy to highlight the problem's urgency. When Louis Navarre was shot to death in his home Jan. 2, the killers escaped by running down the pitch-dark streets.


  • Duke Energy cut the lights off in October, after the homeowners association stopped paying the electricity bill. The darkness has encouraged home burglaries and car break-ins, residents said. It has alarmed parents whose children wait for the school bus before dawn. It's also a sign of Mecklenburg County's foreclosure crisis. “It's one of the little things that can cause a major problem,” said Mayor Pat McCrory. “It shows the foreclosure situation has an impact on other things that most people wouldn't think of.”


  • The [foreclosing] banks do not pay homeowner dues, and often absentee landlords don't either, property management officials say, so basic services start to go, including lighting, landscaping and security patrols.

For more, see What happens when the lights go out (Hathaway Hills can't afford to keep the streetlights on. In the dark, there have been more break-ins. Now a neighbor is dead).

Lease-Options, "Rent To Own" Gaining In Popularity As A Way To Unload An Unsold Home?

The South Florida Sun Sentinel reports:
  • In South Florida's depressed housing market, some people are taking a wait-and-see approach by renting with an option to buy later. Leasing is still more common with cars, but the concept is spreading. Sellers are willing because they're struggling to unload their properties, and a rent-to-own contract brings in cash. Prospective buyers also are game because credit is tight, and they can build equity while they take time to qualify for mortgages.

For more, see Rent-to-own home leases becoming more popular (Lease-to-own agreements risky for owners, tenants).

For a somewhat critical view of rent-to-own deals, see Minnesota Public Radio: Rent-to-own homebuying on the rise, and so are problems.

Go here and go here for stories on how easy some tenants found it in getting screwed over in these lease/option, "rent to own" and contract for deed real estate deals. rent to own lease purchase option scams yellowstone

Attorney Declared Competent To Stand Trial On Charges Of Stealing Refinancing Proceeds From Two Clients

In Fayette County, Pennsylvania, The Herald Tribune reports:
  • Although a Fayette County judge found that a former deputy prosecutor has experienced declined intellectual function because of his ailing health, he ruled the former attorney is competent to stand trial. Mark F. Morrison, 51, of Hopwood is accused of stealing nearly $100,000 from two clients. State prosecutors alleged he stole money from mortgage refinancing for two clients in 2005.

For more, see Morrison ruled competent to stand trial.

For earlier report on this story, see Ex-attorney Morrison's ability to face theft trial disputed.

For story update (3-3-09), see: Lawyer's theft trial delayed.

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

Connecticut Man Faces Charges Of Fleecing Elderly Woman Out Of $125K+, Leaving Home In Foreclosure With $15K+ In Back Taxes

In New London, Connecticut, the Norwich Bulletin reports:
  • [R]ichard K. Wallace, 55, faces the charge of first-degree larceny for conning Dorothy Dinallo out of at least $125,000, police said. Wallace claims he is a longtime family friend and was taking care of the family and managing their finances after the death of Dinallo’s husband.


  • At the time, Wallace had power of attorney and lived with Dinallo and her two daughters. Police said Dinallo owes more than $15,000 in back taxes and the home was in the process of foreclosure.

For the story, see Accused con man has motion denied (Police say 55-year-old defrauded elderly woman).

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

More On Fires & Foreclosures

Recent stories on fires & foreclosures:
  • Lynn, Massachusetts: Acting Fire Chief James Carritte said an explosion in a natural gas line may have ignited the three-alarm fire in a home housing eight people. Several residents at home in the triple-decker at the time, including children, escaped unharmed. Ten others live in the neighboring home, which was exposed to heavy smoke and spraying water but did not catch fire. A fire investigator said he spoke to a man who identified himself as the building owner and said the property is in foreclosure proceedings. "He said he was giving it back to the bank Monday," the investigator said, adding the man said the building was not insured. See Gas explosion eyed as cause of Lynn fire.

  • Youngstown, Ohio: A fire deliberately set at the former Nyabinghi bar did $5,000 damage to the property, reports show. Utilities were off prior to the fire called in. Records show the building involved in a bank foreclosure and delinquent taxes of $2,898. Firefighters said footprints could be seen in the snow going to and from a side door. Files show the bar’s last night was New Year’s Eve. See Bar fire deliberately set, fire department says.

  • Cleveland Heights, Ohio: The foreclosure crisis is leaving thousands of abandoned and vacant homes in northeast Ohio neighborhoods, and if a fire breaks out in any of them, it can quickly turn into a death trap. Now the Cleveland Heights fire department has created a new policy concerning fires at vacant homes, and it is triggering a debate. Chief Kevin Mohr came up with a new procedure for fires at abandoned and vacant homes, which in some cases will stop fire crews from taking the offensive. See Vacant Home Fire Policy Raises Questions.

  • Fitchburg, Massachusetts: Fire investigators say a fire at a vacant apartment building was arson. Firefighters arrived to find the wooden building engulfed in flames, said Deputy Fire Chief James J. Belliveau. There were no injuries. “The heavy fire showing in the front of the building was threatening an exposed building on the left-hand side. Parts of that building were only several feet from the other building. The other building was brick,” he said. The partially occupied brick structure, an apartment building, had to be cleared during the fire. The residents, to keep warm, huddled in idling ambulances for several hours before it was safe for them to go back to bed, the deputy chief said. The building was sold to an Illinois bank for $143,792 in February 2008, likely because of a foreclosure, according to Fitchburg tax records. See Fire in empty building ruled arson.

  • Coram, New York: A small fire at a Long Island strip mall led to an explosive find: dozens of homemade bombs hidden throughout the building. Firefighters responded to the flames at the Coram strip mall Tuesday night as employees and residents still filled the area. Who would plant homemade bombs in a shopping center? Volunteer firefighters responding to a pizzeria blaze and discovered bottles of flammables in the kitchen and inside ceiling tiles and skylights. On the rooftop, vents had been pried open above each of the seven stores to find Molotov cocktails stuffed in. The devices had to be taken carefully apart. Matthew Bidwell, a former employee of the pizza place, blames it on the economy and wonders if the mall was in financial trouble. "The talk around was that they were going to put themselves into foreclosure," Bidwell said. See Mall Of Bombs: Molotovs Found In L.I. Buildings (Police, Firefighters Extinguish Potentially Catastrophic Situation In Coram; Some Sense Elaborate Inside Job).

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

More Stories On Tenants With Landlords Facing Foreclosure

The following is an assortment of stories on tenants and the problems arising when landlords find themselves financially overextended:
  • Sioux City, Iowa: Tenants of many apartments owned by KJM Properties and Meyer Company are getting the boot from their foreclosed buildings in the coming weeks, but in the meantime they're just doing what they can to stay warm. Boiler and maintenance issues are closing down the apartments at 1529 Grandview in Sioux City. Tenant Starla Thomas says her apartment's main radiator hasn't worked since she moved in. Thomas and other tenants were told by the property owners to use space heaters. See Foreclosed Buildings Offer No Heat For Some Tenants.

  • St. Petersburg, Florida: A 65-year-old Vietnam Vet who is paralyzed from the waist down and is current on his rent is served with a foreclosure notice and has recently had his water shutoff after the landlord reportedly failed to pay the bill. He said, "I've got to bathe at least twice a day. I'm on 28 medications three times a day and with the medications I've got to keep clean and without water, I'm stuck." See Frustrated renter deals with water shutoff and foreclosure.

  • Valdosta, Florida: Dwayne and Gail Floyd and Ella Lowe are among more than 20 apartment renters that are being forced to move because the bank foreclosed on their building. "We was paying our rent on time. We thought the landlady was doing what she was supposed to do but apparently she wasn't. One morning I heard a knock at the door, we opened the door, there was a guy there telling us we had to get out," said Lowe, 65, an evicted renter who [...] suffers from heart disease and takes insulin. See Tenants Evicted in Valdosta Foreclosure Crisis.

  • New Britain, Connecticut: Warren Hinze is a tenant operating a music store in the Raphael building, located just a block from City Hall. The landlord left the country without paying the mortgage and now that building is in foreclosure. Hinze and the other tenants figure the building might be worth something. But one tenant has already left. "They're moving out now," Hinze said. The tenants also have no heat. To tolerate the cold, Hinze put a space heater on the floor behind the counter and he wears a heavy jacket. Earlier in the winter, the tenants pooled money to buy oil for the furnace but it has not lasted. See Looking for a Landlord (A downtown New Britain building still has tenants, but no one to run the building).

  • Florida: Florida State Senator Mike Fasano recently authored Senate Bill 454, a proposed law to provide a penalty up to $10,000 for property owners who dupe tenants into leases without first disclosing that the home is in, or headed for, foreclosure. Victims could recoup "reasonable" attorney fees. In addition, the proposed law would require an extra form to be added to the rental agreement. The property owner would have to sign the sheet, either verifying the house is not involved in foreclosure or at least disclosing any legal proceedings to potential renters. The bill will go to Senate committees for consideration when the Legislature begins its 2009 regular session, March 3, 2009. See Legislation Targets Dirty Foreclosure Practices.

  • Arizona: State Senator Leah Landrum Taylor has filed a bill to mandate landlords facing foreclosure action to provide tenants with a written notice at least 30 days before the date of a foreclosure sale. Under S1108, a landowner who knowingly fails to provide a notice could be charged with a Class 1 misdemeanor. "I've had more than my share of constituent phone calls - of folks just beside themselves because they have only had five days to move out of a property that they had been paying rent on," Landrum Taylor said. "I could not hear about another family going through this." See Phoenix senator files bill to protect renters from foreclosure on landlords.

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