Saturday, April 11, 2009

Madison Man Mad That Someone Else Now Owns His Foreclosed Home Torches Premises, Say Cops; Now Faces Arson Charges

In Madison, Wisconsin, the Wisconsin State Journal reports:
  • Upset that someone else was living in the town of Bristol house where he once lived, a Madison man stuffed a rag into a vehicle gas tank in the garage and set it ablaze, according to court documents. Derek C. Hightower, 24, only intended to burn the garage [...]. Instead, according to a criminal complaint filed Thursday, the fire spread and destroyed the garage, the house and three vehicles. Hightower was charged with arson. [Current owner] Irma Smith told police she bought the house in December from an investment firm after it had been in foreclosure. She intended to move in this summer.

For the story, see Prosecutors: Accused arsonist was mad someone else lived in his former home. ForeclosureHomeVacantBeta

Orlando-Area Cops Bag Suspect In Phony Landlord Scam; Accused Of Breaking Into Vacant House, Changing Locks, Renting Premises To Unwitting Tenant

In Orlando, Florida, WFTV Channel 9 reports:
  • A home for rent was the perfect price in the perfect place, but there was just one problem. The landlord didn't really own it. Detectives said the self-proclaimed landlord broke into a vacant home and changed the locks. He then rented it out to a single mother. He would have gotten away with it, too, if neighbors living near the home [...] didn't get suspicious.

  • Detectives said the home may not be the only vacant house the guy was using. In fact, they're concerned he may be running a similar scheme on renters all around Central Florida. It's simple enough. Put your own locks on the doors of empty homes, hand out the new keys to renters and take off with the money. Paul Mosher, 60, wouldn't say a thing about the $1,500 he swindled from an Orange County single mother. He rented her a stately Waterford Lakes home he never even had permission to enter. [...] The real owner is allowing the family to stay rent-free for another month, but that does little to calm the victim's rattled nerves.

For more, see Single Mom Swindled By Fake Landlord.

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

Ocean City Cops Warn Against Phony Landlord Rental Scam Promoted On Craigslist

In Ocean City, New Jersey, WPVI-TV Channel 6 reports:
  • Police in Ocean City, New Jersey are warning of a real estate scam. Investigators say the scammers will copy online listings for legitimate real estate sales, and then re-post them on the website Craigslist as a rental. Then, they collect rental applications, along with fees. Investigators say the contact for these listings is from a foreign country. Anyone who has information about this internet scam, or feels they have been victimized, should contact the Ocean City Police Detective Bureau at (609)399-9111.

Source: Police warn of online rental scam.

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

More Homeowner Complaints On Loan Modification Firms From Around The Country

The following links are to stories on financially strapped homeowners reporting problems with loan modification companies they hired to help resolve their mortgage problems:
  • Port St. Lucie, Florida: Treasure Coast homeowners should be wary of mortgage modification scams. Mateo Avila was watching a Spanish language network when he saw a commercial for Miami-based Lincoln Lending Services, which claimed to specialize in loan modifications for homeowners. He called the toll-free number in January and did exactly what the company asked. "They told me, don't pay for the house," said Avila, who stopped paying his two home loans with Aurora Bank and Countrywide in October. "They (Lincoln Lending) took $3,000, two checks for $1,500 to do a modification." After handing over the money, Avila couldn't get any straight answers from Lincoln Lending. When his lenders foreclosed on the home last month, he soon realized he'd been scammed and contacted the Mortgage Fraud Task Force of Florida Attorney General Bill McCollum. [...] Gifford resident Elizabeth McGriff got a pamphlet in the mail from The Foreclosure Relief Group and called the company after her husband's work hours were cut. State records show the company is owned by Brian Nierenberg in Fort Lauderdale. McGriff said the company told her to pay $1,995 to start a loan modification and also asked her to pay them $550 a month until the loan was modified. Nierenberg claims his business is simply a lawyer referral service and collected fees go to attorneys.

  • Orlando, Florida: Warning About Foreclosure Rescue Companies. Jackie Day is struggling to pay the mortgage on her Orlando condo so she wanted to lower her monthly mortgage payments. Jackie saw an ad for "The Home Savers," a California company that by phone told her it would cut her payments. But she says Home Savers wanted her to stop making mortgage payments to qualify. "What I would have to do---is not pay my mortgage for three months. I was to send $1,500 payments." A Home Savers spokesman said the upfront fee is an attorney's retainer and is a legal charge.

  • Jacksonville, Florida: Southside Foreclosure Firm Accused of Scamming Homeowners. "I thought these folks had more knowledge and different avenues to approach our mortgage company," Royce Belle, a Jacksonville homeowner who enlisted the help of National Foreclosure Counseling Services, said. "They did not." Belle's story is one state investigators say is being told and re-told all over the country by homeowners contacted by NFCS. "We recieved a letter from National Foreclosure Services stating that they were able to help us lower our payments," he tells WOKV. "The said they'd charge us $2,044 to get our mortgage modified." Belle admits he took the bait; paying the fee and hoping to clear up rising mortgage payments and keep his home. But weeks turned into months, and Belle says he never heard from NFCS. Eventually, he says, NFCS presented a re-financing plan that actually raised his monthly mortgage payment a dollar. "We told them that doesn't make any sense," he said. "Nothing changed. We told them they didn't actually do anything for us." When Belle decided to cut ties with the company and demand a refund, he claims NFCS threatened to bankrupt him. He's now suing the company in small-claims court.

  • Lake Ronkonkoma, New York: Mortgage modification mess. Back in January, homeowner Jim Gentile paid $3000 to Hope Now Modifications and a south Jersey law firm to get his mortgage modified. Jim says they told him, "We can get you a fixed rate for 5 years. (And reduce it) down to 5.25% (interest rate) which is great, cuts my mortgage in half." But Jim says all Hope Now Modifications did was tell him to stop paying his mortgage. He fell three months behind on his payments. Jim says his current mortgage company said it had never even heard of Hope Now Modifications. Jim says Hope Now Modifications led him to believe they were a non-profit agency.

  • Omaha, Nebraska: Mortgage Middleman Almost Costs Couple Their Home (Attempt to refinance leads to foreclosure). An Omaha couple decided to pay a middleman to help them negotiate a better rate. What they got instead was a mortgage mess. When their variable house payment jumped, the hardworking Booker family didn't think the big mortgage company would listen to them so they paid a middleman, but the first piece of advice was ill-advised. After making five payments totaling $3,000 to First Universal of Florida, which was supposed to negotiate a fixed rate with their mortgage company, the Bookers instead received notice of default from an attorney. Their house was on the brink of foreclosure.

  • Indianapolis, Indiana: State targets foreclosure consultants. Homeowners are hiring foreclosure consultants to prevent banks from seizing their homes, only to find themselves swindled. Vivienne Daniels paid $392 to a company called Capitol Foreclosure (for the Indiana AG's lawsuit, see State of Indiana v. Capitol Foreclosure). "I was behind. My mother died," she said. But according to Daniels, "they did nothing." Last year, the attorney general's office took four foreclosure consultants to court. The attorney general's office won judgments against three of the companies. A fourth is awaiting trial. Vivienne Daniels got an attorney, lost some money, but kept her home. "I was real lucky. I lost about $400. It would have been bad to lose your home," Daniels said.

  • Long Island, New York: Housing advocates question loan modification firms. At a recent ACORN protest of AmeriMod loan modification company in Uniondale, homeowner Claudette Broderick said the firm got her only a forbearance from her lender. Usually under forbearance, the loan is taken off the delinquency rolls and the late payments are added on top of the regular monthly ones. Broderick, laid off as a nursing assistant, said she couldn’t afford the regular $3,100 monthly bill and the forbearance would have pushed the monthly bill to about $3,600.

Another Banquet Hall In Foreclosure Shuts Down, Sending Engaged Couples Scrambling To Salvage Wedding Plans

In Holland, Michigan, WZZM-TV Channel 13 reports:

  • A Holland banquet hall that WZZM 13 On Your Side investigated in March for reneging on a refund has closed. Raleigh Woods Catering and Conference Center on James Street is closed and is in foreclosure. Now, several couples who are getting married are trying to find another place to have their receptions.

  • On Thursday, Tracy Kirgis and Philip Paauwe were busy looking for a caterer for their wedding. It's in five weeks. "Panicked and horrified that there isn't going to be anything else open on such short notice", says Tracy. She and her fiancee are one of several couples who had weddings booked at Raleigh Woods. [...] Tracy and Philip put down a $2,400 deposit. At this point, they're not expecting to get it back.

For more, see Holland reception hall closes.

For other stories on banquet hall foreclosures screwing up wedding plans, see:

Ohio Man Facing Foreclosure Barricades Himself In Home In Standoff With Cops

In Lucas County, Ohio, the Toledo Blade reports:
  • A Springfield Township man who barricaded himself in his home during a standoff with authorities that lasted three hours was indicted Tuesday by a Lucas County grand jury. Michael Swiergosz, 46, [...] was charged with two counts of felonious assault, each with firearm specifications. The grand jury did not indict him on a charge of inducing panic. Authorities said the March 10 incident was sparked by financial concerns. Mr. Swiergosz's home was in foreclosure and had been set for sheriff's sale.

For the story, see Springfield Twp. man indicted over standoff.

Go here and go here for other posts on the encounters of police and sheriff's deputies involving foreclosures and evictions. DeputyEvictionTheta

Friday, April 10, 2009

Owner Of Now-Defunct Title Company Admits Swiping Closing Proceeds Intended To Pay Off Existing Mortgages, Leaving Homeowners Facing Foreclosure

In Louisville, Kentucky, WHAS-TV Channel 11 reports:
  • In an exclusive interview with WHAS11 News, the former owner of a Louisville title company admits to misappropriating mortgage money. His actions could cost a number of people their homes.

  • Wavy Curtis Shain appeared in federal court Tuesday, but the court did not accept his guilty plea, pending a better explanation of the charges by the U.S. Attorney’s Office. Shain, 26, operated Derby City Title first as a title search company from 2001 to 2003, then as a closing agent from 2003 to 2007. Shain tells WHAS11’s Joe Arnold that the “money was misappropriated to keep the business open.”


  • When Nancy Mitchem refinanced her home through Shain, she says he kept that payout for his own use -- failing to pay off her first mortgage -- setting her up for foreclosure. [...] Homeowner Joe West adds, “We can’t even go rent an apartment because our credit scores are demolished and it’s all because of what he did.”

For the story, see Former owner of Louisville title company admits misappropriating money.

Go here for interview with Wavy Curtis Shain.

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

Tennessee Mobile Home Park Residents Temporarily Dodge Eviction As Lender Cancels Landowner's Foreclosure

In Ringgold, Tennessee, WTVC-TV Channel 9 reports:
  • Dozens of families in Catoosa County are breathing a sigh of relief Tuesday after a foreclosure and auction on their mobile home park is cancelled. Last month we visited the Pine Forest Mobile Home Park in Ringgold which was planned to be auctioned off because of foreclosure - leaving many residents with no where to go.


  • After speaking with residents in March we learned many own their trailer but pay $170 monthly rent for the lot, trash and water service. They told us moving a trailer costs between $2,500 and $4,000, along with a $500 permit. They said that kind of money to move would be very difficult, if not impossible to raise since many are retired or disabled on fixed incomes. That makes residents like Anthony Lance feel "very vulnerable, most of us can not pull up stakes and move in 30 days, nobody in here is making great money."

For the story, see Trailer Park Saved, For Now At Least.

Mobile Home Park In Foreclosure Shut Down By Authorities As Unpaid Bill Results In Water Shutoff Leaving Premises Uninhabitable; Residents Get Boot

In Southport, New York, the Elmira Star Gazette reports:
  • Chemung County and multiple agencies [Tuesday] are assisting displaced residents of a Southport mobile home park on Sherman Avenue after their park became uninhabitable. The town of Southport code enforcement officer and the Chemung County Environmental Health Department said the property was uninhabitable [Tuesday] after the Elmira Water Board shut off its water, according to a news release from Chemung County.

  • The property, managed by White Tigers LLC of Poughkeepsie, failed to make payments to the Elmira Water Board for several months and has indicated it will be unable to pay and is facing bankruptcy and foreclosure, the news release said. The park is unlikely to reopen, the news release said. The park has 28 units with approximately 25 homes occupied, the release said.

Source: Officials scramble to help residents of Southport mobile home park.

Feds Take Closer Look At Tax Resolution Companies As Complaints Parallel Those Leveled Against Loan Modification Firms

WebCPA reports:
  • The Internal Revenue Service has suspended an enrolled agent from practicing before the agency after his clients complained that he did little to help them settle their tax disputes. The IRS’s Office of Professional Responsibility suspended Richard Hargus, who worked in California for two separate, now defunct companies that specialized in tax resolution services, including the submission of offers in compromises ["OIC"] to the IRS.(1)

  • Multiple taxpayers paid the companies for Hargus to resolve their income tax liabilities through the OIC program. An OIC is an agreement between a taxpayer and the IRS that settles the taxpayer’s tax liabilities for less than the full amount owed. In many instances, however, Hargus’s clients either did not receive the services for which they paid him or received very little assistance with resolving their tax issues, the IRS said. [...] After an IRS investigation, Hargus admitted a lack of due diligence in these taxpayers’ situations. The IRS suspended Hargus on Monday from practice for at least 18 months.(2)

  • The IRS said that it is taking a closer look at tax resolution companies, and is also litigating known OIC abuses to ensure that tax professionals fulfill their legal and ethical obligations to their clients in dealing with IRS tax matters. The IRS’s parent agency, the Treasury Department, also announced on Monday an initiative to crack down on companies that claim to help people with foreclosure prevention services, but instead charge them up front while performing few services on their behalf.

For the story, see Practitioner Suspended for Bilking Taxpayers.

For a related post on dealing with unpaid federal tax problems, see IRS To Ease Up On Squeezing Financially Stressed Taxpayers Owing Back Taxes.

(1) According to the story, Tax practitioners are subject to the regulations issued under Treasury Department Circular 230, the IRS pointed out. Circular 230 provides that a practitioner must exercise due diligence in preparing or assisting in the preparation, approval and filing of tax returns, documents, affidavits and other papers relating to IRS matters.

(2) For an IRS advisory warning taxpayers to beware of promoters’ claims that tax debts can be settled for “pennies on the dollar,” see IR-2004-17: Check Carefully Before Applying for Offers in Compromise.

Grand Theft Probe Triggered By Report Of $1M In Missing Fixtures, Appliances Stripped From Foreclosed Mansion

In Encinitas, California, the San Diego Union Tribune reports:
  • After a high-profile foreclosure, the county's largest and possibly most luxurious bank-owned home is missing an estimated $1 million worth of fixtures, from antique doors to top-of-the-line toilets. So far, no suspects have been named in a grand theft probe the Sheriff's Department launched in March.

  • It's like a car up on blocks,” sheriff's Detective Steven Ashkar said. “It's been stripped.” The 16,000-square-foot Spanish hacienda-style house on 1.24 acres in rural east Encinitas cost $13 million to build and furnish. In February, it failed to sell at a bank foreclosure auction with a starting bid of $2.3 million. [...] On March 26, the bank's real estate agent [...] filed a police report citing missing “doors, windows, fixtures, toilets, cabinets and appliances,” Ashkar said.

For more, see $1 million worth of fixtures vanish from foreclosed home.

See also, ABC Good Morning America: Million-Dollar Foreclosure Theft (Recession Victim: A Vacant California Mansion Stripped of $1 Million in Fixtures).

For the Good Morning America video, see Foreclosed Homes Attract Thieves.

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

Landlord Rents Home In Foreclosure To Tenant, Then Strips The Place Of Appliances, Fixtures

In Las Vegas, Nevada, KTNV-TV Channel 13 reports:
  • Imagine signing a lease, moving in, and weeks later your landlord takes all your appliances. The dishwasher ripped out, refrigerator snagged and even the toilet is gone. "I don't understand this, but they took all the shelving units from inside the pantry," Melody Hosp says. This is all evidence a house in foreclosure. [...] "Evidently the property is in foreclosure and he came to remove all his appliances and all his belongings from the house. We still live here," Hosp says. Melody just moved in this month.

For more, see Woman still renting house when landlord comes in and takes appliances.

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

Thursday, April 09, 2009

Indiana AG Files Civil Charges Against Five Loan Modification / Foreclosure Rescue Firms

From the Office of the Indiana Attorney General:
  • Indiana Attorney General Greg Zoeller today filed lawsuits in Boone, Clark, Delaware, Grant and Marion counties against five foreclosure consultant companies alleging violations of state laws. [...] Foreclosure consultants target homeowners threatened with default and foreclosure and receive payment for services to allegedly stop or postpone the foreclosure.

  • The lawsuits filed today cite violations of three laws including the Deceptive Consumer Sales Act, Credit Services Organizations Act and the Mortgage Rescue Protection Fraud Act.

The five lawsuits filed today targeted the following companies:

  1. Foreclosure Assistance, LLC, Scottsdale, AZ,
  2. Homeownership Preservation Group, LLC (also known as Stop Foreclosure Save My Home), Melbourne, FL,
  3. You Walk Away, LLC, Carlsbad, CA,
  4. American Mitigation Group, Inc., Del Mar, CA,
  5. Foreclosure Relief Agency, LLC, Monarch Beach, CA.

For the Indiana AG's press release, see Indiana Attorney General Greg Zoeller files suit against Foreclosure Consultant Companies.

See also:

24 Suspects In Alleged Street Gang Member-Led Mortgage Fraud Scam Could Face Hard Time As California Feds Bring RICO Charges Against Group

In San Diego, California, voice of san reports:
  • Federal prosecutors on Tuesday announced unprecedented charges against individuals involved in an alleged mortgage fraud ring involving 220 properties in San Diego County, with total purchase prices topping $100 million. The 24 defendants were all charged with participating in a "corrupt enterprise" under a federal law created by the Racketeer Influenced and Corrupt Organizations (RICO) Act, which allows for charging multiple defendants with extended penalties for their participation in an ongoing crime ring.


  • The indictment describes a network of individuals allegedly masterminded by defendant Darnell Bell, or D-Bell.(1) Bell is a documented member of the Lincoln Park street gang and had already been serving time for about a year for narcotics charges when he was arraigned on the racketeering charges in federal court [Tuesday] morning, [U.S. Attorney Karen] Hewitt said.(2)


  • By recruiting members of their organization to cover every piece of the real estate transaction -- from appraiser to escrow to real estate agent to buyer -- the organization allegedly obtained millions of dollars in cash back and fraudulently obtained commissions and fees, according to the indictment.


  • Because prosecutors decided to fuse the alleged actions of all 24 defendants into the overarching racketeering charge, the individuals could each face up to 20 years in prison and fines of $250,000. The alleged racketeering activity includes charges of bank fraud, money laundering and wire fraud.

For more, see Mafia-Esque Charges Brought Against Alleged Mortgage Fraud Ring.

For the Federal indictment, see U.S. v. Bell, et al.

See also the San Diego Union Tribune:

(1) Besides Bell, the lead defendants in the case reportedly are:

  • Michael Ivy, 43, of San Diego, who prosecutors say negotiated the property transactions;
  • Stanley Gentry, a 49-year-old licensed local real estate broker, who allegedly allowed the organization to use his broker's license to facilitate the purchases, in exchange for $10,000 a month and a cut of the commissions and fees on each deal; and
  • Billie Bishop, 49, of La Mesa, an escrow officer who allegedly enabled the organization to purchase more than 100 properties.

The other defendants include several real estate professionals: Diana Jaime, 33, a public notary; Jorge Cortez, 39, a licensed real estate agent; Esteban Valenzuela, 28, a licensed real estate appraiser; Anton Ewing, 38, a CPA; and Randolph Hirsch, 43, and Dennis Tapia, 49, both registered tax preparers. Prosecutors said defendants Latashia McKinney, 35, and Marcus Dozzell, 34, rounded up some of the straw buyers. Lorena Callu, 52, worked for the organization and allegedly helped to prepare and submit loan applications. Prosecutors also name several straw buyers as participants in the corrupt enterprise: Desiree Holiday, Dexter Holiday, Keith Holiday, Gerard Holiday, Ray Logan aka Jack Nasty, David Lewis, David Lewis, Joseph Lewis, Stevie Frazier, Jorge Magana, Nicoele Watson and Daniel Williams. All of them fraudulently obtained mortgages and purchases properties on behalf of the organization, according to the indictment.

(2) According to the indictment (beginning at page 6, line 26), Bell "used his status as a long-standing member of the Lincoln Park street gang to recruit some of the "straw buyers" and to maintain discipline within the enterprise."

Manhattan DA Charges Brooklyn Man Of Using Forged POA Revocation, Bogus Deed & Mortgage In Attempt To Swipe Harlem Brownstone From Deceased Owner

From the Office of the New York County District Attorney:
  • Manhattan District Attorney Robert M. Morgenthau announced [Monday] the indictment of a Brooklyn man for filing a forged deed and other fraudulent documents in an attempt to steal a Harlem brownstone. The defendant, ENRIQUE CASTILLO, also known as ENRIQUE FERNANDEZ, 52, was indicted on charges of attempted grand larceny, offering a false instrument for filing, and criminal possession of a forged instrument.


  • [Carolyn] Todd, who died at age 57 in March 2005, was the lifelong owner of the Harlem brownstone. In January 2005, her health failing, Ms. Todd gave power of attorney to [her cousin, James] Bryant, who was then caring for her at his home in Ohio. A short time later, she conveyed the brownstone to him and his wife Debbie as joint tenants with right of survivorship. Mr. Bryant subsequently filed the deed conveying the property to him with the City Register.

  • The investigation began when Mr. Bryant contacted the District Attorney’s Office in June 2008 after learning of [a] false mortgage and “Revocation of Power of Attorney.” When he was arrested in December 2008, CASTILLO was in possession of a forged social security identification card.

Go here for the Manhattan DA's entire press release.

Go here, Go here, Go here, Go here, Go here, Go here, and Go here for other posts related to deed or refinancing scams by forgery, swindle, power of attorney abuse, etc. DeedZetaTheft

Honolulu Feds Raid Four Houses, Seize Evidence In Probe Into Alleged "Royal Hawaiian Treasury Bond" Foreclosure Rescue Scam

In Honolulu, Hawaii, the Honolulu Advertiser reports:
  • The FBI [Tuesday] raided four Maui homes as part of its investigation into allegations that several local companies bilked homeowners out of more than $300,000 on O'ahu, the Big Island and Maui with false promises to help them avoid foreclosure. The FBI executed search warrants yesterday at a home [...] in Wailuku, another [...] in Waikapu and two other locations on Maui. Agents seized computer records, boxes of files and other evidence.


  • Officials said the homeowners, many of whom are Native Hawaiian, were charged between $2,500 and $10,000 to attend seminars or counseling sessions on avoiding foreclosure, and were told they would receive bonds worth $1 million that could be used to pay off the outstanding balance of their mortgage.


  • After attending the seminars, homeowners are told that a $1 million "Royal Hawaiian Treasury Bond" will be sent to their bank with a letter explaining that it will cover the outstanding balance of their mortgage.

For more, see Homes raided in bond probe (FBI gathering evidence in scheme that targeted folks facing foreclosure).

IRS To Take Careful Look At Loan Modification Outfits Filing Bogus Applications For Non-Profit, Tax-Exempt Status

The Chronicle of Philanthropy reports:
  • The Internal Revenue Service is working to help “protect the trust and confidence” in nonprofit organizations during the current economic crisis and will be watchful of possible abuse, says Lois G. Lerner, who oversees the IRS office that monitors charities and foundations. [...] “We are trying to stay ahead of the curve to curtail predatory abuse of tax-exempt organizations,” she said.

  • For example, Ms. Lerner said, the IRS is seeing “a number of” applications for tax-exempt status from organizations that offer mortgage-foreclosure counseling and assistance. Ms. Lerner noted that the revenue service in the past has cracked down on many organizations that counsel people who amass big credit-card debts.

  • Based on our experience with abusive credit-counseling organizations, we are concerned that some of these [mortgage counseling] applicants may be using the guise of an exempt organization to profit from individuals who have been harmed by financial upheaval,” said Ms. Lerner. “Consequently, we are looking very closely at applications from new organizations, and at activity being conducted by established organizations.”

For more, see IRS Watches for Potential Abuses as Charities Grapple With a Bad Economy, Agency Official Says.

State Regulator Orders Loan Modification Firm To Cease Business Activities In Idaho

From the Idaho Department of Finance:
  • The Idaho Department of Finance has issued a cease and desist order against a Nevada-based business, Your Credit Angel, LLC, which purports to assist distressed homeowners in avoiding foreclosure by offering mortgage loan modification services.

  • "A person engaged as a third party in mortgage loan modification activities in Idaho must be licensed as a credit counselor," said Gavin Gee, director of the Idaho Department of Finance. Gee said the unlicensed activities of "Your Credit Angel" were brought to the department’s attention by an Idaho customer who reported paying an upfront fee of $1,495 to that company. The customer could not obtain a refund and reported that he got nothing for his money. In the cease and desist order, the director ordered "Your Credit Angel" to immediately stop offering mortgage modification services in Idaho without a license.

For the entire press release, see Las Vegas Mortgage Modification Company Ordered To Cease And Desist (Address is Nothing More Than a Mail Drop Box).

For the cease and desisit order, see State of Idaho v. Your Credit Angel LLC, a division of Coronwa Investments, LLC.

Oregon AG Fielding More Complaints Against Loan Modification, Foreclosure Rescue Operators

In Portland, Oregon, The Oregonian reports:
  • Complaints in Oregon about [mortgage and foreclosure repair] operations are way up, according to Attorney General John Kroger's office. [...] So far this year, Kroger's office has received 209 contacts from consumers -- most of them complaints -- about mortgage repair services, department spokeswoman Jan Margosian said on Monday. That's on pace to easily surpass last year's total of 277.

  • "It is mostly lack of proper disclosures, practicing law without a license and just taking folks money and not producing anything," Margosian said about the complaints. In September 2008, the office was given jurisdiction over "foreclosure consultants" and "foreclosure equity purchasers" and has opened the following investigations under that new authority: Smith & Jordan, Inc., National Homeowners Assistance Services, Turning Point Equity Group, Oregon Home Savers, LLC, and Capital Securities Mortgage, Inc.

Source: Mortgage and foreclosure repair scams in Oregon.

Wednesday, April 08, 2009

Brooklyn Hotline For Victims Of Deed, Mortgage, Other Real Estate-Related Fraud

In Brooklyn, New York, the Kings County District Attorney announced:
  • Kings County District Attorney Charles J. Hynes [...] announced the creation of a telephone hotline victims can use to contact the District Attorney’s new Mortgage Fraud Unit. The 12-person unit will investigate deed fraud, mortgage fraud, predatory lending and other real estate-related fraud. The number is (718) 250-2311.

Source: Kings County District Attorney Announces Real Estate And Mortgage Fraud Hotline.

Go here, Go here, Go here, Go here, Go here, Go here, and Go here for other posts related to deed or refinancing scams by forgery, swindle, power of attorney abuse, etc. DeedZetaTheft

Some Law Firms Begin Temporarily Farming Out High-Priced, Surplus Junior Attorneys By Placing Them On Loan With Public Interest Practices

The Associated Press reports:
  • [A]cross the country, the junior end of the law firm hierarchy has been taking the brunt of layoffs, pay freezes and furloughs as business shrinks and firms trim their payrolls. Summer associate programs are being scrapped or reduced, and many spring law school graduates who were promised positions for the fall are being asked to delay their start date for as long as a year.

  • But one silver lining is the altruistic use to which some firms are putting their surplus lawyers, seconding them to defend the poor, champion worthy causes or provide full-time pro bono lawyering.


  • Public-interest work fellowships are being offered to a handful of associates in Los Angeles and Chicago as the firm searches for productive ways of weathering the economic downturn, said Anne E. Rea, managing partner of the California offices of Sidley [Austin LLP], a global firm with 1,800 lawyers.

For more, see Law firms give associates a chance to build skills while doing good (Rather than lay off junior lawyers, some firms are lending them to public interest practices where they can handle weightier issues and gain courtroom experience).

NC Central's Foreclosure Prevention Project Offers Free Legal Counsel To Homeowners Facing Loss Of Home

In Durham, North Carolina, The Herald Sun reports:
  • Homeowners facing foreclosure should know they can get free legal representation that is among the best available for their types of problems, says the leader of the Foreclosure Prevention Project at the N.C. Central School of Law.

For more, see Free legal help available to those facing foreclosure.

Indiana AG To Announce Civil Charges Against Five Loan Modification Firms

In Indianapolis, Indiana, The Associated Press reports:
  • Indiana Attorney General Greg Zoeller says he will sue five foreclosure consultant companies for collecting fees in exchange for promises to keep state residents out of foreclosure.The attorney general's office said Tuesday that Zoeller will announce details of the legal action at a news conference Thursday at the Statehouse.

Source: State plans to sue 5 foreclosure consultants.

Missouri AG Files Lawsuit Against California Firm Allegedly Peddling Bogus Loan Modification Services

The St. Louis Business Journal reports:
  • Missouri Attorney General Chris Koster filed a lawsuit Tuesday against an Anaheim, Calif., company that allegedly defrauded Missourians looking for help avoiding mortgage foreclosure. Koster said the company, U.S. Foreclosure Relief, took money from victims but did not provide any help.

  • The suit, filed in Kansas City, seeks an injunction to stop the company from continuing to defraud consumers as well as restitution and penalties. In most instances, U.S. Foreclosure Relief charged homeowners a fee of $1,850 for its services, along with a processing fee of $500. The company also demanded payment upfront, Koster said. He urged victims of fraudulent mortgage-relief companies to call the state consumer hotline at 800-392-8222.

Source: Koster sues company over alleged foreclosure scam.

See also, Missouri Attorney General press release: Attorney General Koster files lawsuit to stop company from cheating consumers facing mortgage foreclosure.

50+ Unit Owner-Investors Accuse Condo Converter Of Pocketing Rent, Using Apartments As Loan Collateral Without Consent

In League City, Texas, The Galveston County Daily News reports:
  • More than 50 investors, most from Israel, went to court last week in attempt to save condominium units from foreclosure as they sue a group of companies and people they say defrauded them in a real estate venture. The lawsuit claims the defendants kept revenue generated by the venture that should have gone to pay debt and used property owned by the plaintiffs as collateral in obtaining a loan of almost $23 million that benefited the defendants. The investors together own 114 units in Fairways at South Shore, 3045 Marina Bay Drive, in League City.(1) The former 432-unit apartment complex was converted into condominiums about three years ago.

For more, see Condos embroiled in litigation.

(1) Reportedly, the investors never intended to live in the units but instead were seeking to generate income by renting them to others, according to the lawsuit. Through agreements, the units owned by the investors were put in a rental pool managed by the defendants, according to the lawsuit.

Slow-To-Foreclose Mortgage Lenders Creating Havoc For Condo, Homeowner Association

In a column in the Naples Daily News, Florida attorney Rob Samouce writes:
  • Under the current real estate economic client in Florida, many banks and other financial institutions holding first mortgages are contributing to the delinquency of condominium and homeowners’ associations’ assessment funds by stalling to initiate foreclosure actions and then by failing to timely complete their foreclosures once their cases have been filed.


  • During this whole process, units or homes are either being trashed or run down by the delinquent owner or tenant, or are sitting empty with the possibility of being turned into mold factories because of utilities not being paid.

  • In addition, no assessments are being paid by anyone on these units. This puts a financial strain on associations operating the condominium or homeowner association as most of the associations’ expenses are constant; meaning the remainder of the unit owners will be forced to pick up the assessment delinquency slack.

For more, see Banks contributing to the delinquency of associations.

Another Mortgage Servicer Screw-Up Throws Tennessee Woman's Home In Foreclosure, Despite Proof Of Payments

In Wilson County, Tennessee, WSMV-TV Channel 4 reports on another case of a mortgage lender/servicer screw-up that resulted in a homeowner being thrown into foreclosure, despite the fact that she was current on her payments and had her bank statements to prove it. Channel 4 tried to intervene in the case; however, phone calls to the lender, Saxon Mortgage, and the attorneys handling the case, Johnson and Freedman, were not returned.

For the story, see Woman's Home Foreclosed, Sold By Mistake (Mortgage Statements Show Payments Current) (read story) (watch video).

Go here and go here for other posts on foreclosure screw ups involving improperly changed locks, removal of belongings, etc. ScrewUpsLockOutsInForeclosure

Tuesday, April 07, 2009

FTC Announces New Lawsuits Against Upfront Fee Loan Modification Firms

On the heels of yesterday's "declaration of war" (see 'We Will Find You and We Will Punish You') by the Federal government against loan modification scams, the Federal Trade Commission announced the filing of three new lawsuits against firms it accuses of making false representations in conncetion with the improper clipping of homeowners for upfront fees, only to do little or nothing with regard to modifying their home loans. The new lawsuits involve:

  • Federal Loan Modification Law Center(1) (FedMod). FedMod markets mortgage loan modification and foreclosure relief services to homeowners who are in financial distress, delinquent on their mortgages, or in danger of losing their homes to foreclosure. In radio advertisements, the FTC alleges, FedMod induces homeowners to call its toll-free number by misrepresenting that it is part of or affiliated with the federal government, although it is not.

For the lawsuit, filed in Los Angeles, California, see FTC v. Federal Loan Modification Law Center LLP, et al.

  • According to the FTC’s complaint, defendant Thomas Ryan used a foreign Internet registrar to falsely register two sites – and The sites were used to entice financially strapped consumers to seek mortgage loan modification services under the guise that the services were associated with, or were actually, the U.S. government, including HUD and the Treasury Department.

For the lawsuit, filed in the District of Columbia, see FTC v. Ryan.

  • Home Assure d/b/a Expert Foreclosure.(2) In this case, the FTC alleges that the defendants promise consumers facing imminent home foreclosure that they can stop the foreclosure, regardless of the amount the consumer owes his or her lender. The defendants are charged with falsely claiming that they have special relationships with lenders, have helped thousands of consumers avoid foreclosure, and will provide a 100 percent satisfaction money-back guarantee. They typically charge consumers an up-front fee of $1,500 to $2,500 but, the FTC alleges, do little or nothing to help them avoid foreclosure and fail to give refunds when foreclosures are not stopped.

For the lawsuit, filed in Tampa, Florida, see FTC v. Home Assure, LLC, et al.

The FTC press release also contained a reminder of two additional lawsuits filed at the end of March against New Jersey outfits Hope Now Modifications LLC (go here for lawsuit) and New Hope Property LLC d/b/a New Hope Modifications LLC (go here for lawsuit), alleging that the defendants misled consumers about their ability to provide mortgage loan modification and foreclosure relief, and misrepresented that they were affiliated with or part of the HOPE NOW Alliance, the non-profit, HUD-endorsed organization that is a broad-based coalition of credit and home ownership counselors, lenders, and other mortgage market participants. These are the same two firms that were also recently sued by the New Jersey Attorney General for similar allegations.

The FTC notes:

  • This brings to 11 the number of loan modification and mortgage foreclosure rescue scams brought by the FTC in the last year. More than 20 state law enforcers also have taken actions against companies engaged in these types of deception, including 22 brought by Illinois Attorney General [Lisa] Madigan.

  • The FTC also announced [yesterday] that it has sent warning letters to 71 companies who may be deceptively marketing mortgage loan modification or foreclosure rescue services. The FTC identified these companies through a nationwide review of Internet and other advertisements and warned these companies that their ads may violate federal law. State law enforcers also have sent warning letters to companies that are potentially engaging in such illegal practices, including more than 60 warning letters sent by Attorney General Madigan.

For the entire FTC press release, see Federal and State Agencies Crack Down on Mortgage Modification and Foreclosure Rescue Scams (FTC, State Enforcers Sue Scammers, Warn Others; Announce Education Campaign Designed to Reach Borrowers Directly).

(1) The defendants in this case are: Federal Loan Modification Law Center LLP doing business as Federal Loan Modification Law Center and under other various other names; Anz & Associates, PLC; LegalTurn, Inc.; Federal Loan Modification LLC; Boaz Minitzer, Nabile "Bill" Anz, and Jeffrey Broughton.

(2) The defendants in this case are: Home Assure, LLC, B Home Associates, LLC, doing business as (dba) Expert Foreclosure, Michael Grieco, Michael Trimarco, Nicholas Molina, and Brian Blanchard. The defendants also have been the subject of law enforcement actions or investigations by the Minnesota, North Carolina, and Florida Attorneys General, according to the FTC press release.

Illinois AG Files Civil Charges Against Two More Loan Modification, Foreclosure Rescue Operators; Lawsuit Tally Now Up To 24

From the Office of the Illinois Attorney General:
  • Attorney General Lisa Madigan has filed two lawsuits in Cook County Circuit Court against Chicago-area mortgage rescue fraud schemes seeking temporary restraining orders to immediately stop the defendants from providing mortgage rescue services. Madigan made the announcement as part of a press conference [yesterday] in Washington, D.C., with U.S. Treasury Secretary Timothy Geithner, U.S. Attorney General Eric Holder, Federal Trade Commission Chairman Jon Leibowitz and U.S. Housing and Urban Development Director Secretary Sean Donovan, to discuss a coordinated effort by federal and state authorities to protect at-risk homeowners from mortgage foreclosure rescue fraud.


  • Madigan filed complaints against Centurion Loss Mitigation Group, a Chicago-based operation and its owner Carlos A. Gomez, and Cash VIP, a Melrose Park, Ill.,-based operation and its owner Fernando Rios, also known as Fernali Ferrice.(1) With these new filings, Madigan has brought lawsuits against 24 mortgage rescue fraud schemes. Of those, the Attorney General, to date, has received judgments in nine cases, including more than $1.8 million in restitution for homeowners.

For the entire Illinois AG press release, see Madigan Files Two Mortgage Rescue Fraud Lawsuits, Seeks Immediate Ban on Companies' Operations (Illinois Attorney General Joins U.S. Treasury Secretary, U.S. Attorney General, Federal Trade Commission and HUD Leaders in Coordinated Plan to Protect At-Risk Homeowners).

(1) In the Cash VIP lawsuit, Madigan alleges the defendants sell credit and foreclosure “orientation” services, which require consumers to enroll in a one-year “membership club” and pay an upfront $575 application fee, $50 enrollment fee and a monthly fee of $69-89, as well as a final “success fee” that ranges from one to two percent of the loan amount, according to the AG's press release.

Massachusetts AG Tags Four With Civil Charges In Alleged Loan Modification Scam

In Boston, Massachusetts, the Boston Business Journal reports:
  • Attorney General Martha Coakley’s Office filed a lawsuit and obtained a temporary restraining order against four defendants for their alleged involvement in a foreclosure scam.

  • The complaint, filed Monday in Suffolk Superior Court, alleges that Loan Modification Group Corp., Mitigation LLC, the company’s principal Daniel H. Fox and Web site operator Chris Fuelling sought to capitalize on the foreclosure crisis and prey upon Massachusetts residents facing the loss of their homes.

  • In the lawsuit, Coakley’s Office alleges that the defendants offered services to assist homeowners as “loss mitigation specialists” who are able to negotiate loan modifications to avoid foreclosure. The complaint further alleges that the defendants’ business practices were unfair and deceptive, in violation of the Massachusetts Consumer Protection Act, because they solicited fees in advance of services, failed to disclose the precise details of the services offered and how they would assist homeowners in avoiding foreclosure, and would guarantee a loan modification that would improve the homeowner’s financial situation dramatically and save the home from foreclosure.

For more, see AG files suit against foreclosure scams.

For the Massachusetts Attorney's press release, see AG Coakley Obtains Temporary Restraining Order against Perpetrators of Loan Modification Scam; Warns Public About Scams Targeting Homeowners:

  • [D]efendants would claim to be attorney-based, loan modification experts that could guarantee drastically reduced interest rates. In one telephone solicitation, a representative claimed that Fox’s firm was one of fourteen law firms recruited by the government to help people avoid foreclosure and help them stay in their home, when that was not the case.

Lack Of "Hard Time" On Conviction Lures Some Street Gangs Away From Drug Trade, Into Deed & Refinance Scams

Buried in a recent story in The Journal Gazette (Fort Wayne, Indiana) is this excerpt on deed and refinancing scams where perpetrators use forged deeds, stolen I.D.s, crooked notaries (or an unwitting notary and a stooge) to swipe homes, borrow against them, pocket the proceeds, and walk away undetected:
  • [T]he scam is so lucrative in Chicago that street gangs found it preferable to dealing drugs, the Chicago Tribune reported. Those schemes became so sophisticated that the gangs would reportedly hire title researchers and notaries for their efforts and either invent identities for the mortgages, steal identities from others or con people into signing documents. They also found that while drug sales brought hard time if they were caught, white-collar crime such as mortgage fraud often does not.

  • Why get locked up for selling drugs when you can get involved in a mortgage, get your money and walk away?” asked Askia Abdullah, spokesman for Eugene Moor, Cook County recorder of deeds. “They had active teams doing this.”

For the story, see Mortgage fraud: It’s so simple, it’s scary.

Sleazy Practices By Process Servers Wreak Havoc On Consumers In Debt Collection Lawsuits

A June, 2008 report by MFY Legal Services, Inc. of New York City shines some light on questionable practices engaged in by process servers when serving notices of debt collection lawsuits (many brought by "debt scavengers" on debts purchased for pennies on the dollar that are beyond the statute of limitations) on defendants that, arguably, are leaving them without the properly required notification of suits against them, and offers some recommendations with regard to improving the system. An excerpt from the summary of the report's findings:
  • In 2007, MFY Legal Services provided advice, counsel and representation to more than 350 clients who were being sued in debt collection cases. Of these, none had been served properly with a summons and complaint and most did not know that a lawsuit had been filed against them until their bank accounts had been restrained.

  • Default judgments due to improper service wreak havoc on the lives of many of MFY’s clients, most of whom have low-income wages or rely solely on Social Security, SSI, Veterans Benefits or pensions for support.

  • The civil justice system is based on the principle that defendants will have an opportunity to be heard in court before a judgment and action to collect on a purported debt is taken against them. It appears that nine out ten New Yorkers who are sued in the Civil Court of the City of New York are being denied their right to be heard because of possibly illegal process serving practices.(1)

For the entire report, see Justice Disserved (A Preliminary Analysis of the Exceptionally Low Appearance Rate by Defendants in Lawsuits Filed in the Civil Court of the City of New York).

Go here and go here for other posts on lawsuits involving faulty notifications to property owners; and here for posts on "sewer service" (a reference to the illegal process server practice of filing a sworn affidavit of proper service in court when none was actually made).

(1) According to the report, MFY staff examined a random sample of 91 consumer debt collection court files to determine the method of service. In a preliminary test, they reviewed court files of cases filed in Queens and Kings counties. Because collection companies tend to purchase a large number of index numbers at a time, they attempted to look at multiple cases handled by the same process serving company. MFY picked three process serving companies at random.

The files indicated that personal service was rarely made. Service to a person of suitable age and discretion accounted for 54 percent of the cases, while “nail and mail” service was the standard practice in 40 percent of the cases, and personal service comprised only 6 percent. Notably, process servers for two of the companies did not make personal service on any defendants, while one company managed to do so only in 18 percent of cases. Further, the type of service effected by one company in 93 percent of its cases was by “nail and mail,” while another process server company served defendants by leaving the summons and complaint with a person of suitable age and discretion in 83 percent of cases. foreclosure faulty notice SewerServiceAlpha

Monday, April 06, 2009

Feds To Announce Joint Effort To Attack Loan Modification Scams

The Washington Post reports:
  • The Obama administration will announce [today] a multi-agency effort to combat loan modification scams. As the country's foreclosure rate rises, companies have popped up offering to help borrowers save their homes. But banks and consumer advocates complain that the fees, which can reach thousands of dollars, do not translate into results and many of the programs are scams.


  • According to a government statement, the effort will align responses from federal law enforcement agencies, state investigators and prosecutors, civil enforcement authorities and the private sector to protect homeowners.

For more, see Government to Offer Plan to Fight Home Loan Scams.

For story update, see Government Rolls Out Plan to Fight Loan Scams:

  • [S]ometimes, these scams use names similar to legitimate groups offering help. For example, many companies use the word "Hope" in their title, similar to Hope Now, an alliance of mortgage lenders, and Hope for Homeowners, a foreclosure prevention program run by the Department of Housing and Urban Development, according to federal officials.

Florida AG Continues Cranking Out Lawsuits Against Upfront Fee Loan Modification Firms

In Fort Lauderdale, Florida, the South Florida Sun Sentinel reports:
  • Attorney General Bill McCollum sued a South Florida loan modification firm and its affiliated companies this week, alleging they violated state law by charging fees for foreclosure rescue services. The civil lawsuit was filed in Broward County Circuit Court on Thursday, against Keep Your Property, its owners William R. Colon and Carlos A. Hernandez, and Centro de Prevencion y Educacion Corazones Unidos H.I. Visida Inc., a nonprofit organization, and Economic Alliance Group.

  • The suit alleges they violated state laws prohibiting deceptive and unfair trade. Colon and Hernandez couldn't be reached to comment. Consumers told state investigators that they paid an upfront fee of $2,200 and monthly fees of $550(1) after the company guaranteed to file all the paperwork required to prevent foreclosure action or lower mortgage payments.(2) But many consumers found later that the company failed to contact lenders and take any action on behalf of homeowners.

Source: State sues South Florida home loan modification firm over fees.

For more from the Florida Attorney General's Office, see:

(1) The lawsuit alleges that the fee was for “membership” with KEEP YOUR PROPERTY, INC. This “membership” fee is a device by which Defendants seek to evade the requirements of Florida Statute §501.1377, according to the suit. See Lawsuit - paragraph 27.

(2) The lawsuit also alleges that Defendants’ business in offering legal services to the public directly, or indirectly through Florida licensed attorneys which Defendants engage or otherwise involve and/or compensate, constitutes the unauthorized practice of law in accordance with the principles of the Florida Supreme Court pursuant to The Florida Bar v. Consolidated Business and Legal Forms, Inc., 386 So.2d 797 (1980); and that Defendants solicited, advertised or otherwise offered legal services to Florida homeowners for mortgage foreclosure defense and/or foreclosure-related rescue services, and made it a business to solicit or procure legal business for attorneys, in violation of Florida Statutes, §877.02(1). See Lawsuit - paragraphs 31-36. UnauthPractOfLawTheta

Eight Down, Two To Go In Metropolitan Money Store Foreclosure Rescue Scam As Maryland Feds Get Another Guilty Plea

From the Office of the U.S. Attorney (Maryland):
  • Kurt Fordham, age 39, of Ft. Washington, Maryland, pleaded guilty [Friday] to conspiracy to commit mail and wire fraud in connection with a mortgage fraud scheme that falsely promised to help homeowners facing foreclosure keep their homes and repair their damaged credit, announced United States Attorney for the District of Maryland Rod J. Rosenstein.(1)

  • Kurt Fordham ripped off homeowners and mortgage lenders by submitting fraudulent paperwork to support over $13 million in loans that were never intended to be repaid,” said U.S. Attorney Rod J. Rosenstein. “Instead of helping financially distressed homeowners keep their homes as promised, he stole their home equity and used it to buy luxuries for himself, including art, cars, domestic and international trips, and to pay gambling expenses and over $800,000 on his luxury wedding.”

For the press release, see Eighth Metropolitan Money Store Conspirator Pleads Guilty in over $35 Million Mortgage Fraud Scheme (Fordham Personally Responsible for Over $13.5 Million in Losses to Mortgage Lenders and Used Over $800,000 of Fraudulently Obtained Proceeds to Pay for His Wedding).

For the indictment, see U.S. v. JoyJackson, et al.

(1) According to the press release, Kurt Fordham is the eighth defendant to plead guilty in the Metropolitan Money Store mortgage fraud scheme. Joy Jackson, age 41, and Jennifer McCall, age 47, both of Ft. Washington, Maryland, a chief executive officer of Metropolitan Money Store and owner of JC and JC Investments LLC; Katisha Fordham, age 35, of Washington, D.C., a loan processor at the Metropolitan Money Store; Richard Allison, age 37, of Camp Springs, Maryland, an attorney and employee of the U.S. Census Bureau; Clifford McCall, age 47, of Lanham, Maryland, president of Burroughs & Smythe Financial Services, Inc., based in Lanham and a director of the Fordham & Fordham Investment Group, Ltd., a foreclosure consulting and credit servicing business based in Lanham and Greenbelt, Maryland; Carlisha Dixon, age 31, of Hyattsville, Maryland, vice president and a director of Burroughs & Smythe Financial Services, Inc.; and Chandra Jones, age 31, of Lanham, Maryland, the daughter of co-defendants Jennifer and Clifford McCall, each pleaded guilty to the conspiracy and are facing a maximum sentencing of 30 years in prison. Two defendants remain scheduled for trial on July 7, 2009.

Deed, Refinancing Scams By Forgery Has County Recorders Seeking Help To Protect Property Owners

In Fort Wayne, Indiana, The Journal Gazette reports:
  • It took The Journal Gazette less than an hour to “steal” the 300-foot-tall Lincoln Tower. With a little research, a typewriter and an $8.99 form from a local office supply store, the newspaper was able to prepare a deed transferring ownership of the city’s most iconic building from its current owners to the city’s most iconic citizen, John Chapman, better known as “Johnny Appleseed.”

  • The deed was not recorded, so ownership of the building was never in jeopardy. But Allen County Chief Deputy Recorder Anita Mather examined the notarized deed and said her staff would have no choice but to accept and record it, even though the reporter who signed the document had no right to transfer ownership in the 79-year-old art deco building and no money changed hands.


  • Why would someone want to steal a building? Experts say thieves are not interested in the property at all – they’re interested in showing ownership so they can get a fraudulent loan and disappear with the money. That can leave the true property owner holding the bag, and it has county recorders asking for help to prevent the practice.(1)

For more, see Mortgage fraud: It’s so simple, it’s scary.

Go here, Go here, Go here, Go here, Go here, and Go here for other posts related to deed or refinancing scams by forgery, swindle, power of attorney abuse, etc.

(1) Reportedly, local officials fear a wave of scams where senior citizens lose their homes before anyone knows what happened. It could be possible for someone to never know what had taken place until the house they had paid off years ago is threatened with foreclosure. Technically, the bank that made the loan would be the victim, but the homeowner would first have to prove that the “sale” was fraudulent and have it voided. For a story where a homeowner claimed to have her home equity ripped off from out from under her through forged documents, and then still lost her home to foreclosure when the payments on the allegedly forged mortgage went unpaid, see Oshawa mother faces eviction after alleged mortgage scam. DeedGammaTheft

Now-Defunct Title Company Accused Of Failing To Pay Off Existing Mortgage On Refinance; Owner Now Left Facing Foreclosure With Two Home Loans

In Cincinnati, Ohio, WKRC-TV Channel 12 reports:
  • A local homeowner who refinanced his mortgage two years ago appears to be the victim of fraud and is now facing foreclosure. The man afraid he'll lose his home even though he's been faithfully paying his new mortgage company. Rodney Everson is afraid he'll lose his Forest Park house because someone stole the money that was supposed to pay off his first mortgage company when he refinanced. This happened in October 2007, after he contacted a local mortgage broker to get a new loan.


  • The title company, Preferred Choice Title, was to have paid off that loan. But a month later the lender called to say it never got the money. [...] Local 12 has learned the title company that was supposed to pay off the mortgage, Preferred Choice Title, was closed down late last year after it took the money but failed to pay off another $100,000 mortgage.


  • Unfortunately, although the new lender required Everson to buy title insurance to protect it, he failed to buy his own policy to protect him. And now, as a result, he may end up losing the house.

For the story, see Forest Park Man Believes He Is Victim of Mortgage Fraud.

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

Sunday, April 05, 2009

Northern California DA's Office "Blown Away" After Meeting With Realtor Group On Mortgage Scams; Will Seek Approval For Real Estate Fraud Unit

In Shasta County, California, the Redding Record Searchlight reports:
  • [L]ast month, state Attorney General Jerry Brown reported mortgage fraudsters are using the forged letterhead of major lenders to con vulnerable individuals into paying thousands of dollars for bogus loan modification services. [...] On Tuesday, the Shasta County District Attorney's Office will ask supervisors to approve what would be the county's first-ever real estate fraud unit.

  • Shasta County District Attorney Jerry Benito realized the need for such a program after meeting with north state real estate agents. "We were blown away with the comments we heard," Benito said of his meeting with the Shasta Association of Realtors. "There was a large contingent of victims of frauds over the years, and they were extremely vocal about frauds occurring in Shasta County."

For more, see Mortgage scams on the rise.

Florida AG Joins Illinois, Minnesota Counterparts In Tagging Jacksonville Upfront Fee Loan Modification Firm With Suit; Alleges Deceptive Practices

In Jacksonville, Florida, WJXT-TV Channel 4 reports:
  • Florida's attorney general has sued a Jacksonville company, claiming it's defrauding homeowners who are facing foreclosure. According to the lawsuit, National Foreclosure Counseling Services targeted homeowners and charged them up-front fees to modify their loans, in violation of Florida law.(1) The Attorney General's office said the company collected an average of $2,000 in up-front fees, and charged $125 an hour. The lawsuit also claimed that the company failed to perform the services following payment.

  • State investigators also said the company lured homeowners using mailings which implied they were coming from a government agency. The mailings claimed the consumers had been selected for special programs by "Government Insured Institutions," and stated the mailings were a last attempt to assist the homeowners before foreclosure.(2)

  • The Attorney General also requested the Duval County Circuit Court issue an injunction against the company, requiring it to immediately stop demanding up-front fees from customers before providing services. The company offers services nationwide and has already been sued by the attorneys general of Illinois and Minnesota.

Source: State Sues Foreclosure Rescue Company.

For more from the Florida AG's office, see:

(1) Also named as defendants in the lawsuit are: Raymond Paulk, Robert V. Dallavia, and American Foreclosure Counseling Center.

(2) In addition, the lawsuit alleges that, since October 1, 2008, the defendants "required homeowners who want their services to sign statements asserting that they are not "IN ANY WAY CONFUSED ABOUT ANY PART OF THE WORKING AGREEMENT," that they are not victims of the Defendants under the Florida Deceptive and Unfair Trade Practices Act, that they are "CONFIDENT THEY [ARE] NOT BEING VICTIMIZED ... IN ANY WAY WHAT-SO-EVER" and that the defendants are "NOT ATTEMPTING TO DUPE, MISLEAD, SWINDLE OR CHEAT" them." (Obviously, a not-so-subtle attempt to get the homeowners facing foreclosure to waive their legal rights under the statute.) The suit also alleges that the defendants "employ a sales force of approximately 140 persons and bringing in approximately $500,000 in fees each month." See Lawsuit - paragraph 26-27.

The lawsuit also alleges(at paragraphs 28-33) that the defendants' mailings:

  • give the impression they come from a government agency,
  • refer to the Defendants as "housing counseling community service[s],"
  • state that the homeowner's property "has been selected for special programs by the Government Insured Institutions,"
  • tell the recipients to contact an "Advisor for Duval County" or another Florida county, and that a representative for Duval [or other] County is available" to talk to the homeowner,"
  • state that they are an "urgent notification" and constitute a "last attempt to assist you,"
  • state that the property in question "qualifies" for loan modification.

Tampa Foreclosure Defense Seminar Attracts Lawyers, Judges From All Over State

In Tampa, Florida, the St. Petersburg Times reports:
  • At the start of class, April Charney makes one thing clear. "This is very dense, complicated work,'' she warns. "If you don't get it, raise your hand and ask questions because the chances are others don't get it either.'' Charney pauses for emphasis. Casually dressed, dark hair streaming down her back, she could be a high school teacher introducing a bunch of kids to physics and calculus.

  • But these are lawyers and judges from all over Florida. And they've come to this seminar in Tampa to learn from the woman many consider the nation's foremost expert on fighting fore­closure.

For more, see Lawyer has strategy to fight foreclosures, and shares it.

Indiana Chief Justice Speaks On Statewide Training Effort For Lawyers, Judges Handling Foreclosure Cases

In Indianapolis, Indiana, WISH-TV Channel 8 reports:
  • More attorneys, judges and mediators are being trained on how to handle mortgage foreclosure cases. It's a statewide effort to help families who are on the brink of losing their homes. The Indiana Supreme Court has already co-sponsored two previous training sessions. Indiana Supreme Court Chief Justice Randall Shepard was on Daybreak Friday morning to talk about the need for more training.

For the story and link to the interview with Chief Justice Shepard, see Lawyers, judges trained on foreclosures (A statewide effort to help familiesin jeopardy).

San Diego DA Seeks Realtor Help In Fight Against Loan Modification Scams

In San Diego, California, the San Diego Union Tribune reports:
  • San Diego County District Attorney Bonnie Dumanis [last week] urged members of the San Diego Association of Realtors to help track down and prosecute cases of real estate fraud. Foreclosure consulting and loan modification scams are rising as distressed borrowers struggle to keep their homes, Dumanis said during the Realtor group's annual expo and trade show. About 1,500 people attended the one-day event at the Town and Country Resort and Convention Center. “We can't do it all,” Dumanis told a group of about 70 attendees during a 90-minute training session on real estate scams. “You are our eyes and ears. We have gotten many of our tips from real estate agents and escrow agents.”

For more, see Dumanis asks Realtor group to help her office fight fraud ('We can't do it all,' D.A. says at session).