Saturday, January 01, 2011

Ohio AG Urges Continued Vigilance By The Courts In Foreclosure Robosigner Cases

From the Office of the Ohio Attorney General:
  • In a letter sent [] to Ohio judges, Attorney General Richard Cordray has requested that the state courts continue to pay close attention to foreclosure cases that may have affidavits signed by robo-signers. In support of continued vigilance, Cordray highlights several courts that have taken action to address the situation.

  • "In tracking these cases throughout the state, we have found that judges are finding different ways to handle them," said Cordray. "Judges from Cuyahoga to Trumbull to Butler Counties have all found ways to deal with affidavits that may be fraudulent. I strongly urge other courts to consider options that will work best for them as our office decides how to handle the individual cases."

  • In the letter, Cordray highlights the following decisions by Common Pleas Judges:

    In Butler County, Judge Charles Pater issued an order denying GMAC's motion to ratify a judgment because "neither the Ohio Civil Rules nor the local rules of this court provide a procedure for or authorize a court to 'ratify' a final appealable order" and stating that "the proper course of action would be for GMAC to first file a motion to set aside its judgment and then, once the court grants that motion, to refile its motion for summary judgment with a correctly executed affidavit in support."

    In Cuyahoga County, Judge Nancy Russo has scheduled a hearing requiring a foreclosure plaintiff "to provide the court with proof of integrity of all documents submitted."(1)

    In Franklin County, Judge John Bender issued an order in a foreclosure case requiring that foreclosure counsel "personally certify the authenticity and accuracy of all documents submitted in support of judgment."

    In Trumbull County, Judge Andrew Logan sent a letter to foreclosure counsel requiring that affidavits state that the signatory "has personal knowledge of the file and has personally reviewed the documents."

Source: Ohio Courts Take Action in Foreclosure Cases.

Go here to view the Ohio AG's letter to Ohio judges in full.

(1) The Ohio AG's letter notes a recommendation made by the Cuyahoga County Court of Common Pleas for dealing with robosigned affidavits:

  • The Cuyahoga County Court of Common Pleas has issued a policy on foreclosure affidavits, recommending that its judges issue an order requiring a lender who submitted a robo-signed affidavit, pre or post-judgment, to show cause why the case should not be dismissed without prejudice. In the future, counsel for a lender in a foreclosure proceeding must sign an affidavit attesting that counsel has reviewed the file and confirmed with his or her client that the client reviewed the file. The policy, which is currently under review, and template affidavit are available [here].

Stern Makes "Dirty Dozen" List Of South Florida Despicables For 2010; Scores Perfect 10 On New Times' "Dirt Meter"

In South Florida, Broward-Palm Beach New Times reports that foreclosure mill king David J. Stern has made its "Dirty Dozen" list of most despicable South Florida people for the year 2010.

In rating the bad guys from one to ten (with ten being the worst) on its special Dirt Meter (distinguishing mere scamp from pure unadulterated scoundrel), Stern scored a perfect ten. He is said to potentially be the poster boy for the entire foreclosure quagmire in this country, and the story ends its description of Stern by saying that "If Americans ever do take to the streets in violent revolt, it's people like Stern who will be hunted."

For the story, see The Dirty Dozen: 2010's Most Despicable People.

Lawsuit: Insurer Stiffed Homeowner On Claim After Hard Freeze Allegedly Led To Ruptured Water Pipe, Causing Shift In Foundation, Damage To Structure

In Galveston, Texas, The Southeast Texas Record reports:
  • A Santa Fe couple alleges that American Security Insurance Co., Assurant Inc., Claim Adjustment Specialists and adjuster Michael Bower have failed and refused to fully honor their claim over a water line rupture at their residence, recent court documents say.

  • In a lawsuit filed Dec. 16 in Galveston County District Court, complainants James and Karen Wingate accuse the defendants of wrongfully denying the claim for property repairs as well as withholding timely payment of the disputed damages.

  • A hard freeze on Jan. 6 earlier this year caused the water line running from the pump well into the rear of the house under the slab of the patio enclosure and into the house to burst. "As a result, the Wingates' foundation was pushed up and the Wingates' home was substantially damaged," the original petition says. "As a result, the interior, exterior, roof and other structures of the home were damaged."

  • The plaintiffs subsequently filed a claim with American, asking the carrier to handle the repair costs. American handed the claim to Assurant, which turned it over to CAS and Bower for further investigation. According to the suit, the defendants underestimated the damages thus turned down the claim. Repairs were not able to be conducted to the home since the damage, the Wingates say.

  • They insist the continuous delays of payment have inflicted significant economic impact, worry, distress and continuing economic and physical damage.

Source: Couple sues insurer, adjuster over water line rupture at home.

Lawsuit: Landlord's Failure To Fix Water Leak Forces Tenant To Flee Apartment, Citing Mold Damage That Caused Health Concerns, Damage To Possessions

In Jefferson County, Texas, The Southeast Texas Record reports:
  • A Jefferson County man wants to be reimbursed for items he says he lost when mold infested them following a recurring water leak at his apartment. Leonard Lewis filed a lawsuit Dec. 13 in Jefferson County District Court against Kiran Housing Group, doing business as Alabama Garden Apartments.

  • Lewis claims he lived at Alabama Garden Apartments, an apartment complex at 4905 Wyatt in Beaumont owned by Kiran, when the incident occurred. While under lease at the apartments, Lewis discovered a water leak coming from one of his neighboring apartments and repeatedly informed the defendants of the problem, according to the complaint.

  • However, Kiran failed to remedy the problem, the suit states. "It was then discovered that the water leakage caused mold to accumulate on Plaintiff's possessions, requiring them to be destroyed," the complaint says. "Further, due to the unsafe condition of the apartment, and danger to his health and safety, the Plaintiff was forced to move out of his residence and seek alternative shelter."

  • Because of the water leak, Lewis claims he sustained personal property damages and inconvenience. Lewis blames Kiran for causing his damages, saying it negligently violated the Texas Deceptive Trade Practices Act, breached express or implied warranties and engaged in an unconscionable action.

Source: Beaumont man sues apartment owners over mold damage.

Friday, December 31, 2010

BofA Continues Its Reckless Conduct By Threatening Foreclosure & Ruining Homeowners' Credit Despite Acknowledging That Mortgage Is Not In Default

In West Hartford, Connecticut, Connecticut Watchdog reports:
  • In one of the more bizarre foreclosure cases, Bank of America is threatening to throw a West Hartford family out of their home even though the couple never missed a mortgage payment.

  • The largest bank in the United States earlier this month notified Shock Baitch and his wife Lisa (Friedman) Baitch that foreclosure action will start today – Christmas eve – unless the couple agrees to put their home up for a forced sale.

  • Why? Because another unit of Bank of America erroneously reported to credit agencies that the family was seeking a loan modification, ruining their credit rating and as the result putting their mortgage into default.

  • All this is happening even though the bank – after admitting it erred and sent a letter of apology in September – handed this case to a special unit at Bank of America that is charged with dealing with severe customer issues. It promised to notify the credit reporting agencies that the couple were not deadbeats, but were good credit risks.


  • [The couple's attorney Wendell] Davis, a member of the Ct Bar Association’s foreclosure committee, said he is preparing a lawsuit to protect his clients because it’s the only way to hold Bank Of America accountable for its actions.

For more, see Bank Of America’s Christmas present: Foreclose Even Though Not A Payment Missed.

Jailed Son Scores $1.1M Inheritance From Deceased Mom, Despite Getting Ten Years For Neglect, Abuse, $115K Ripoff Before Her Death

In Louisville, Kentucky, The Louisville Courier Journal reports:
  • Filthy, frail and suffering from dementia, 81-year-old Harriet Robbins was removed from her Cherokee Gardens home in late 2006 after police found the retired church bookkeeper alone and in “deplorable condition,” with no heat or power, according to court records.

  • Her son and caregiver, John Jackson Robbins Jr., later pleaded guilty to charges of neglect, abuse and stealing $115,000 from her. Robbins, 53, was sentenced to 10 years in prison in 2008 and is incarcerated at the Kentucky State Reformatory.

  • But he's now a wealthy man — having inherited his mother's $1.1 million estate after she died in 2008. Advocates say it's a prime example of why Kentucky needs a law that prevents people who exploit or abuse elderly or vulnerable adults from inheriting their estates when they die — similar to the state'sslayer statute,” which bars killers from financial gain as a result of their crimes.

For more, see Preying on Seniors Relatives abuse, but still inherit.

Go her for more on Preying on Seniors.

"Granny Snatching" Expected To Soar As A Prime Form Of Elder Abuse, Allowing Perpetrators To Hijack Control Over Aged Relatives' Assets

The Connecticut Watchdog reports:
  • Granny Snatching. What is it? It’s an ugly phrase and an uglier practice and it is increasingly affecting more and more American families. Granny Snatching occurs when younger family members take custody of an elder relative under false pretenses, convince a judge to declare the elder person incompetent, allowing them to then force their aged relative into a nursing home or similar institution, and strip them of their assets. In the coming decades trillions of dollars will be at stake as America’s population ages, and we must prepare now to defend ourselves and our finances in the future.
  • We hear about these incidents when they involve rich or famous people with lots of money at stake, but not the day-to-day incidents involving regular folks with modest incomes or nest eggs. Yet according to advocates for the elderly, incidents of Granny Snatching are growing exponentially across the US and in Canada. With the first Baby Boomers turning 65 in March 2011, Granny Snatching is expected to quickly become one of the prime forms of elder abuse.(1)
For more, including an account of the author's experience with his own siblings' attempt to "snatch" their own mother by attempting to commit her to a nursing home and hijack control over her assets, see GRANNY SNATCHING: Ron Winter’s New Weekly Blog.
(1) For other resources on "granny snatching," see:

Thursday, December 30, 2010

Real Estate Investor Agrees To Pay $47K+ To Settle Civil Charges Of Foreclosure Auction Bid Rigging Brought By NC AG

From the Office of the North Carolina Attorney General:
  • A Virginia man and his company are barred from rigging bids on public auctions and must pay civil penalties and consumer refunds for trying to fix foreclosure sales of properties in Durham and Mecklenburg counties, Attorney General Roy Cooper announced [].


  • The Attorney General alleges that Bruce Olvin McBarnette of Sterling, Virginia and his company, Summit Connection LLC, entered into agreements to rig bids on four foreclosed properties being auctioned in Durham County in 2009 and 2010:

    McBarnette told a local pastor that he would continue bidding against her for property her church wanted to purchase unless she paid him $1,200.

    A man trying to purchase a home for his mother paid McBarnette $800 after McBarnette told him he would lose the auction unless he paid the money.

    A pastor who wanted to help revitalize his church’s neighborhood paid McBarnette a total of $2,900 so that his company wouldn’t keep bidding on two properties

  • In seven other property auctions, Cooper contends that McBarnette attempted to get competing bidders to pay him not to bid against them but the bidders turned him down. Four of those auctions involved Durham County properties, and three involved Mecklenburg County properties.

  • Wake County Superior Court Judge Donald Stephens [] approved Cooper’s request for a consent judgment against McBarnette and Summit Connection. Under the judgment, McBarnette and Summit Connection must pay $47,400.(1)

For the NC AG press release, see Attorney General stops scheme to rig bids on foreclosure auctions (Company sought to illegally manipulate sales of Durham, Mecklenburg properties).

(1) This guy appears to have gotten off pretty easy. Compare this case with another North Carolina case where the Feds brought criminal charges against a foreclosure auction bid rigging racket, as reported in a recent U.S. Department of Justice press release: North Carolina Real Estate Speculator Pleads Guilty to Bid Rigging in Real Estate Foreclosure Auctions ("Anyone with information concerning bid rigging or fraud related to real estate foreclosure auctions should contact the Antitrust Division’s Atlanta Field Office at 404-331-7100 or visit").

Go here for other posts & links on bid rigging at foreclosure and tax sale auctions.

Attorneys Face Elder Abuse, Negligence Suit For Alleged 'Involvement' In POA Abuse Leading To Fleecing Of Cancer Victim's Home, Estate

In Multnomah County, Oregon, Willamette Week reports:
  • Two Portland lawyers are being sued for elder abuse and negligence after allegedly helping two women steal from an ailing relative in her 80s. According to the suit filed Dec. 17 in Multnomah County Circuit Court, lawyers Stacy Fletcher and James Dodge were hired in 2008 to prepare a power of attorney for Evelyn Roth, who was 81 at the time and had recently been diagnosed with esophageal cancer.

  • According to the lawsuit filed on behalf of Roth, the people who hired the lawyers were Kathleen Jingling and Virginia Kuehn, Roth’s niece and cousin respectively. Roth believed they needed power of attorney simply to pay routine bills while Roth underwent medical treatment, the suit says.

  • Jingling and Kuehn were later each sentenced to one year in jail for placing Roth’s house up for sale, selling off her belongings and stealing from her estate.(1)

  • The lawsuit claims Fletcher and Dodge should have known elder abuse was taking place. The suit, filed by Portland lawyer Sibylle Baer, seeks three times the amount of the money stolen—$682,974 total. Dodge says Fletcher was involved in the Roth case and that he himself was not. Fletcher has not yet responded to a request for comment.

Source: Going After the Lawyers for Allegedly Aiding Elder Abuse.

See Cousin, Niece Get Year & A Day After Copping Pleas To Abusing POA To Loot Accounts, Sell Home Out From Under Senior Thought To Be On Deathbed.

Duo Face Felony Charges In Theft From Now-Deceased, Dementia-Stricken Man; One Suspect Scored POA & Had Herself Inheriting Victim's House, Assets: DA

In Lake County, California, Lake County News reports:
  • Two local women have been charged with grand theft and theft from an elder. Karen Lee Allen, 51, and Wendie Christine McRae, 46, both of Lower Lake, were arrested by a District Attorney's Office investigator on Dec. 15. Both women are charged with felony theft from an elder and grand theft exceeding $400 for activities alleged to have taken place in November 2008, according to court records.


  • Senior Deputy District Attorney Rachel Abelson said the two women are alleged to have been involved with accessing the estate of an elderly man with dementia. McRae was a certified nursing assistant at the hospital where the man was receiving care. Abelson alleged that McRae was getting money from the man while he was still alive.

  • Within a month of meeting him, McRae is alleged to have gotten power of attorney and within two months was inheriting from his estate, Abelson said. Abelson said McRae was set to get stocks and a house as part of the inheritance, and between $10,000 and $35,000 in cash.

For more, see Women face charges in case alleging theft from elder.

Wednesday, December 29, 2010

BofA Tagged With Suit Alleging That Countrywide Misrepresented Risks On $700M+ In Crappy Mortgage Securities It Unloaded On Insurance Company

Reuters reports:
  • Allstate Corp has sued Bank of America Corp, its Countrywide lending unit and 17 other defendants for allegedly misrepresenting the risks on more than $700 million of mortgage securities it bought from Countrywide.

  • Allstate, the largest publicly traded U.S. home and auto insurer, alleged it suffered "significant losses" after Countrywide misled it into believing the securities were safe, and the quality of home loans backing them was high. The lawsuit also names several former Countrywide officials as defendants, including longtime Chief Executive Angelo Mozilo.

For more, see Allstate sues BofA, Mozilo over Countrywide losses.

GMAC To Pay $462M To Avoid Fannie Buyback Demand On $292B In Crappy Loans

Reuters reports:
  • Ally Financial Inc, the lender formerly known as GMAC, on Monday said it agreed to pay $462 million to Fannie Mae to avoid having to repurchase poorly underwritten mortgages sold to the housing finance giant.

  • Ally, which is majority-owned by U.S. taxpayers, said the agreement releases its Residential Capital LLC mortgage unit from any liability related to bad underwriting on $292 billion worth of loans sold to Fannie Mae, itself about 80 percent owned by the government. Residential Capital owns GMAC Mortgage and Ditech Funding.

For more, see Ally Financial in $462 million settlement with Fannie.

Indiana Homeowner Caught In Middle Of Tug-Of-War Between Two Banks Both Claiming To Own Same Mortgage

In Bloomington, Indiana, WRTV-TV Channel 6 reports:
  • Bickering between banks over who owns the mortgage to a Bloomington home could force the family living there into foreclosure. Jonathan Partlow said he was trying to modify his family's loan with Washington Mutual when he received a notice from La Salle Bank seeking to foreclose on his property, 6News' Rafael Sanchez reported. “We never received a notice, not even a 'You owe us money. Pay us,'" said Partlow, who claims the family has never done business with La Salle Bank.

  • But both banks maintain they own the home and each claim they're owed more than $1.5 million. JP Morgan Chase also believes it has a stake in the home because it is seeking to buy bankrupt Washington Mutual and its assets, a deal that's at the center of a separate legal battle. The Partlows have filed a lawsuit in Monroe County Circuit Court against the banks seeking to stop the foreclosure.

  • "As a matter of common sense, two banks can't have rights to a single debt,” said the family's attorney, Joe Williams. He said he's upset his family, including their three children, are being dragged into the middle of the banks' dispute. "We wake up every day and we are afraid to leave because people are coming to their homes and the locks are changed,” Partlow said. “I hate to call them banksters, (like gangsters) but that's what they are. Somebody has take a stand and say enough is enough." The Partlows resume their legal fight on Jan. 14.

Source: Mortgage Mix-Up Could Cost Family Their Home (2 Banks Say They Own Same Home).

Media Probe Reveals Illegal Evictions At Indiana Nursing Homes; Weak Rules Enforcement Leads To Booting As Cheap, Easy Way To Unload Unwanted Patients

In Indianapolis, Indiana, The Indianapolis Star reports:
  • Nursing homes are allowed to evict residents, but only for certain reasons. And only after telling the residents they have a right to appeal. And only if the nursing home has found another suitable home for the residents. That's the law. But the law isn't always reality.

  • An investigation by The Indianapolis Star found numerous examples of what the state's ombudsman for long-term care calls "a major problem": nursing homes evicting patients without regard for their rights.

  • In one case, an Auburn facility dumped a resident at an emergency room and refused to take him back, leaving him stranded at the hospital for three weeks until he could find another home. In another case, a Bedford home tried to evict a brain-damaged teenager who had no safe place to go.(1)

  • The Star also found that the state almost never punishes nursing homes, even after it has been made aware that a facility is violating state and federal laws. "I think if we had a better enforcement system or a more punitive enforcement system, people would quit" wrongly evicting residents, said long-term care ombudsman Arlene Franklin of the state's Family and Social Services Administration. "If there were a harsher penalty for that, they wouldn't do so many inappropriate discharges."

  • The eviction rules, based on two-decade-old federal legislation, aim to protect residents from being capriciously tossed out or threatened with eviction. Instead, said Franklin -- the top state official charged with representing the interests of nursing home residents -- a lack of state enforcement has made eviction a cheap and easy way for understaffed Indiana nursing homes to get rid of patients who are too expensive, too troublesome or too likely to report problems to health inspectors.(2)

For more, see Nursing homes breaking the law (Residents' rights ignored in evictions; penalties are rare).

(1) Reportedly, a nursing home attempted to evict Jacob Householder, a brain-damaged teenager who needed round-the-clock care -- without ever finding a place to put him. The home did list another facility on Jacob's discharge notice, but it was a nursing home that already had said it would not take the teen. When the Householder family appealed to the state, Garden Villa denied that it had a duty to make sure Jacob had a place to go where he would be cared for, the story states. The state eventually ruled that the discharge was unsound, but only after the teen's mother, Angela Householder, fought through nearly a year of appeals hearings, during which she -- unable to afford a lawyer -- devoted several hours a day to learning the law. The issue was finally resolved when the home changed administrators, and Jacob was allowed to stay. The home was never cited, according to the story.

(2) According to the story, some states already provide greater protections for residents, but advocates say Indiana homes can easily circumvent their legal obligation to receive approval from a resident's doctor when a home says it can't meet the resident's needs. Florida, however, requires the doctor to actually sign the discharge notice, and Michigan requires nursing homes to give residents counseling before an eviction and provides for the state to offer counseling afterward, the story states.

Tuesday, December 28, 2010

Florida Trial Judges Continue Sloppy Work In Foreclosure Actions; Rubber-Stamped Judgments Tainted By Sewer Service Reversed By State Appellate Courts

The Palm Beach Post reports:
  • Improperly served foreclosure notices may be the mortgage industry's next roadblock to repossessing homes. The Florida attorney general's office is investigating two of the state's largest companies that serve court summonses on homeowners, while at the same time [appellate court] judges are throwing out rulings based on faulty deliveries. This month, appeals courts in Miami and Palm Beach County sided with homeowners in foreclosures where judges agreed their summonses were not appropriately served.(1)

  • In the Miami case, the homeowner said she was recovering at her mother's home after surgery when the person serving her the summons swore he personally handed it to her at her residence. But the server's own notes on the file showed he left the documents at the door after seeing curtains move and assuming someone was home. The homeowner later said she had no knowledge of the foreclosure until a final judgment was entered against her.(2)


  • An attorney for one of the firms under investigation [by the state], Miami-based Gissen & Zawyer Process Service Inc., said the company plans to cooperate with the attorney general, which launched its inquiry Dec. 10. He acknowledged that in the tens of thousands of summonses served, there have likely been mistakes.


  • It was Gissen & Zawyer that served the foreclosure summons to a Palm Beach County homeowner who won an argument Dec. 15 in the Fourth District Court of Appeal. The Royal Palm Beach law firm Ice Legal defended the homeowner, showing in its arguments scribbled notes that included one illegible grouping of numbers — either the server's identification number or the time of service. Both are required by state statute.(3)

  • While the omission may seem like a technicality, it's a violation of law, said attorney Tom Ice. "Those rules are designed to stop the 'sewer service' so rampant in foreclosures," said Ice, referring to the slang term given bad process service.(4) "Once we accept the notion that some laws don't need to be enforced, where do we draw the line?"

For more, see Problems with foreclosure notices loom as next flaw in process.

(1) It should be noted that in both of the rulings, Florida appeals courts reversed rulings of lower courts which had earlier OK'd the patently obvious defective work of sloppy process servers. The guilty trial judges whose screw-ups were reversed: Miami-Dade County Circuit Court Judge Ronald M. Friedman, and Palm Beach County Circuit Court Judge Meenu Sasser.

(2) In Bennett v. Christiana Bank & Trust Co., No. 3D09-2653, (Fla. App. 3d DCA, December 1, 2010), Miami-Dade County Circuit Court Judge Friedman entered an order finding that the service was “questionable,” but that there was no meritorious defense to the foreclosure. He then denied the motion to vacate the foreclosure judgment. In reversing Friedman's ruling, the three-judge appeals court panel made the following statements of Florida law (bold text is my emphasis, not in the original text):

  • Strict construction of, and compliance with, statutes governing service of process is required. Shurman v. Atl. Mortgage & Inv. Corp., 795 So. 2d 952, 954 (Fla. 2001). Without proper service, a court may not proceed in the matter. Re-Employment Servs., Ltd. v. Nat’l Loan Acquisitions Co., 969 So. 2d 467, 471 (Fla. 5th DCA 2007) (citing Henry P. Trawick, Jr., Florida Practice and Procedure §8:20 (2007 ed.)). “A summons properly issued and served is the method by which a court acquires jurisdiction over a defendant.” Seymour v. Panchita Inv., Inc., 28 So. 3d 194, 196 (Fla. 3d DCA 2010). In analyzing whether service is proper, the return of service is the point of departure.

    A process server’s return which is regular on its face is presumed valid absent clear and convincing evidence to the contrary. Bank of Am. v. Bornstein, 39 So. 3d 500 (Fla. 4th DCA 2010); TelfCorp. v. Gomez, 671 So. 2d 818, 818 (Fla. 3d DCA 1996). Moreover, a simple denial is insufficient to impeach the validity of service. Telfcorp. However, in this case, Ms. Bennett raised more than her own sworn denial. The process server’s own notes, an admission against the interest of his principal, see § 90.803(18)(d), Fla. Stat. (2009), prove the insufficiency of service. The process server’s last entry reflects that he “Saw Curtains Move, Read Aloud Docs, SVP Docs at Door.”

    Christiana Bank argues that there is no testimony to explain what “SVP” means, but “Docs at Door” is quite self-explanatory. Curtains may move because of the wind or curious cats, and not just because some prospective defendant is attempting to avoid service.


  • Far more troubling is the fact that Christiana Bank and its attorneys ignored this discrepancy in the return of service. In its motion for summary judgment Christiana Bank lleges that the “Defendant(s) were duly and regularly served with process.” The Bank’s proposed Final Judgment of Foreclosure, prepared by its attorneys, stated: “Service of process having been duly and regularly obtained over DEBBIE BENNETT . . . .”

    Once a defect in the return of service is shown, the burden of demonstrating regular service is on the party seeking to invoke the court’s jurisdiction. Bornstein, 39 So. 3d at 503; BoatFloat, LLC v. Cen. Transp. Int’l, Inc., 941 So. 2d 1271 (Fla. 4th DCA 2006). That burden was not met here. Christiana Bank, its trial court attorneys, and Christopher P. Mas of the process serving entity Pro-Vest LLC offered no testimony or other competent evidence to address the deficiency in service identified by Ms. Bennett’s counsel. Nor did Christiana Bank examine the process server’s notes after they were specifically called to its attention by Ms. Bennett’s newly-retained counsel, confess error by stipulating to the vacation of the final judgment, and allow Ms. Bennett to file and serve a responsive pleading.

    Where no in personam jurisdiction is obtained over a defendant, the defendant is not required to demonstrate a meritorious defense to set aside the default. Ubilla v. L&W Supply, 637 So. 2d 994 (Fla. 3d DCA 1994); Gamboa v. Jones, 455 So. 2d 613 (Fla. 3d DCA 1984). The trial court should not have required Ms. Bennett to demonstrate a meritorious defense to the action once it became clear that the summons and complaint were never properly served.


It should be noted that there might have been some evidence of illegal, inflated billings by the foreclosing lender in this case, as highlighted by this excerpt from the appeals court ruling:

  • Finally, an examination of the final judgment and supporting affidavit reveals an array of fees and charges that merit attention on remand. Charges for over $6,400 of force-placed insurance, “forbearance interestof over $11,300 (above and beyond $14,817.73 in accrued interest from alleged default to the date of judgment), and unitemized, conflicting foreclosure expenses” were contained in Christiana Bank’s affidavit and the final judgment without reference to the applicable provisions of the loan documents.

    While we express no opinion regarding the validity or invalidity of these charges, we call them to the parties’ and trial court’s attention so that they can be addressed.

Representing the homeowner in this case was Joseph J. Pappacoda, Fort Lauderdale, FL.

(3) The appeals court in Kwong v. Countrywide Home Loans Servicing, L.P., No. 4D10-1129 (Fla. App. 4th DCA, December 15, 2010), kept its ruling short and sweet, as evidenced by its one-paragraph reversal:

  • James Kwong and Lifen Li Kwong appeal from a non-final order denying their motion to quash service of process. They claim that service was defective because the process servicer failed to note, among other things, the time of service on the copy of the complaint served. Because strict compliance with statutory requirements of service is mandated, we conclude that failure to make the obligatory notations renders the service defective. We therefore reverse and remand for further proceedings. See Vidal v. Suntrust Bank, 41 So. 3d 401 (Fla. 4th DCA 2010).

    Reversed and remanded.

(4) Go here for more posts on sewer service.

Northern NJ Couple's Suit Says Loan Servicer Duped Them Into Making Temporary Loan Mod Payments w/ Bogus Assurances That Deal Would Be Made Permanent

In New Milford, New Jersey, The Bergen Record reports:
  • Luis and Maria Valenzuela of New Milford struggled to pay their mortgage after a cascade of setbacks — including illness, a car accident, their daughter's layoff, and a granddaughter's autism diagnosis. The family's mortgage company agreed to a temporary loan modification, which lowered their monthly payments (including property taxes) from $3,250 to $2,156. But the Valenzuelas say that although they paid faithfully, their mortgage company refused to make the modification permanent.


  • The Valenzuelas have filed suit in Superior Court in Bergen County, accusing their mortgage servicer, Wells Fargo, of violating a contract — as well as consumer protection laws(1) — by refusing to grant them a permanent loan modification.(2)


  • Mario Blanch, the Valenzuelas' lawyer, acknowledges that there was no written agreement to make the temporary loan modification permanent. But he said Wells Fargo employees told the family they were on track for a permanent lowering of their monthly charges.

  • Moreover, he said, by accepting the family's modified mortgage payment for 11 months, the lender led the family to believe the deal would become permanent. As a result, he said, the family did not pursue other possible solutions, such as declaring bankruptcy. "They were given a promise, and that promise was breached," Blanch said.(3)

For more, see Family says lender did not deliver the mortgage relief it promised.

(1) A ruling by a New Jersey appellate court earlier this year held that unfair or deceptive practices by a lender or loan servicer in connection with the negotiation of an agreement to cure a default in a mortgage following the entry of the judgment of foreclosure is subject to the provisions of the New Jersey Consumer Fraud Act. Gonzalez v. Wilshire Credit Corp., 411 N.J. Super. 582, 988 A.2d 567; 2010 N.J. Super. LEXIS 16 (N.J. Sup. Ct. App. Div. 2010). See also Unfair, Deceptive Practices In Connection With Post-Foreclosure Judgment Loan Workout Negotiations Subject To NJ Consumer Fraud Act.

(2) For similar HAMP-related lawsuits brought against lenders & loan servicers for allegedly stringing borrowers along with empty loan modification promises, see:

(3) By giving the family assurances that the temporary loan modification would become permanent, causing them to abandon the pursuit of other possible solutions, the lender could open itself up to a defense of promissory estoppel which, if a court agrees, could make a lender's oral promises enforceable, even absent consideration given by the borrower in exchange for those assurances.

A California appeals court made the following observations with regard to the defense of promissory estoppel in a foreclosure action earlier this year in Garcia v. World Savings FSB, 183 Cal. App. 4th 1031 (2010) (bold text is my emphasis, not in the original text; all case law links may require free registration at

  • As a general rule, a gratuitous oral promise to postpone a foreclosure sale or to allow a borrower to delay monthly mortgage payments is unenforceable. (Raedeke, supra, 10 Cal.3d at p. 673; California Securities Co. v. Grosse (1935) 3 Cal.2d 732, 733; Secrest v. Security National Mortgage Loan Trust 2002-2 (2008) 167 Cal.App.4th 544, 547; Sutherland v. Barclays American/Mortgage Corp. (1997) 53 Cal.App.4th 299, 312; Karlsen v. American Sav. & Loan Assn. (1971) 15 Cal.App.3d 112, 121; Stafford v. Clinard (1948) 87 Cal.App.2d 480, 481.) fn. 9


  • The absence of consideration or benefit to the promisor does not, however, defeat a claim based on promissory estoppel. fn. 10 The doctrine of promissory estoppel "make[s] a promise binding under certain circumstances, without consideration in the usual sense of something bargained for and given in exchange." (Youngman v. Nevada Irrigation Dist. (1969) 70 Cal.2d 240, 249; accord, Raedeke, supra, 10 Cal.3d at p. 672.)

  • "Under this doctrine a promisor is bound when he should reasonably expect a substantial change of position, either by act or forbearance, in reliance on his promise, if injustice can be avoided only by its enforcement." (Youngman v. Nevada Irrigation Dist., supra, 70 Cal.2d at p. 249.)

  • "'The vital principle is that he who by his language or conduct leads another to do what he would not otherwise have done shall not subject such person to loss or injury by disappointing the expectations upon which he acted.'" (Wilson v. Bailey (1937) 8 Cal.2d 416, 423, quoting Carpy v. Dowdell (1897) 115 Cal. 677, 687.)

  • "'In such a case, although no consideration or benefit accrues to the person making the promise, he is the author or promoter of the very condition of affairs which stands in his way; and when this plainly appears, it is most equitable that the court should say that they shall so stand. [Citations.]'" (Wade v. Markwell & Co. (1953) 118 Cal.App.2d 410, 420.)

See also, Wrongful foreclosure – verbal assurance that foreclosure sale will be postponed may be enforceable (requires paid subscription; if no subscription TRY HERE, or TRY HERE, then click link for the story).

Parade Of Homeowners Bringing HAMP Lawsuits Continues; Missouri Class Action Says BofA Refuses To Follow Loan Mod Rules Despite $25B TARP Cash Grab

In St. Louis, Missouri, Courthouse News Service reports:
  • The seemingly endless string of class actions against Bank of America's foreclosure policies continued here in Federal Court. The class claims that BofA and BAC Home Loans Servicing refuse to participate in foreclosure prevention programs despite taking $25 billion in Troubled Asset Relief Program money.(1)

  • Lead plaintiff Susan Fraser says Bank of America, by accepting the TARP money, agreed to participate in at least one TARP-authorized program to minimize foreclosures. The complaint echoes similar complaints filed last week by the attorneys general of Arizona and Nevada.(2) BAC Home Loans Servicing is also named as a defendant in the St. Louis complaint.


  • The class consists of all eligible homeowners who have been serviced by one or both defendants who have not received a permanent modified loan. The class seeks an injunction and damages. It is represented by Michael Flannery with Carey Danis & Lowe.

For more, see Bank Slammed With Another Class Action.

For the lawsuit, see Fraser v. Bank of America, N.A., et ano.

(1) "Though Bank of America accepted $25 billion in TARP funds and entered into a contract obligating itself to comply with the HAMP directives and to extend loan modifications for the benefit of distressed homeowners, Bank of America has systematically failed to comply with the terms of the HAMP directives and has regularly and repeatedly violated several of its prohibitions," the complaint states.

(2) See The New York Times: Two States Sue Bank of America Over Mortgages.

For the lawsuits, see:

(3) For a sampling of other similar HAMP-related lawsuits brought against lenders & loan servicers for allegedly stringing borrowers along with empty loan modification promises, see:

Recent Law School Grads Recruited By Foreclosure Mills Attract Cloud Of Suspicion For Roles In Alleged Widespread Document Manufacturing Racket

The Palm Beach Post reports:
  • Recently out of law school and looking for work, scores of young Florida attorneys found steady paychecks in burgeoning firms whose business is based on repossessing the American dream. Today, more than 260 attorneys work at four of Florida's largest foreclosure firms, and 48 percent of them have been practicing law for less than three years, according to Florida Bar records obtained by The Palm Beach Post.

  • Of 156 attorneys who started the year churning out foreclosures at the massive Plantation-based operation of David J. Stern but have since left or been laid off, half had been practicing law for less than four years.

  • With this fall's allegations of forged foreclosure documents, fraudulent notarizations and questionable affidavits submitted in tens of thousands of foreclosure cases, those nascent lawyers are now under a cloud of suspicion.

  • Some may face Florida Bar investigations that could end their careers, while homeowner advocates wonder whether the foreclosure crisis would have reached its state of disorder if it weren't for legions of novice lawyers doing the legwork.


  • Lack of experience could have led young lawyers to follow their employer's lead, unaware they may be committing an offense, said Matt Weidner, an outspoken St. Petersburg foreclosure defense attorney, who nonetheless believes lawyers share a large portion of blame in the foreclosure fracas. "The attorneys are the key; they played an essential, critical role in all of this," Weidner said. "But I know the younger attorneys had no idea what they were doing."(1)

For more, see Novice Florida lawyers draw suspicion in foreclosure mess (Nearly half of those working at the state's four largest foreclosure firms have practiced law for less than three years).

(1) Recent law school graduates appear to make for handy, but regrettably vulnerable dupes in perpetuating the alleged rackets by foreclosure mills, particularly if the recent grad is 'ball & chained' with big student loan payments for the debt that financed his/her education and can't otherwise find employment in a more respectable area of the legal profession.

Monday, December 27, 2010

Ex-Chase Mid-Level Exec Files Whistleblower Complaint Alleging Robosigner, Other Illegal Practices Involving Its Credit Card Debt Processes

AOL's Daily Finance reports:
  • Linda Almonte, a former employee of JPMorgan Chase who is suing the bank for wrongful termination, has just upped the ante: She has now also filed a whistleblower complaint with the Securities and Exchange Commission. The core allegations add context to her lawsuit, and they charge Chase with grotesque and illegal practices involving its credit card debt processes, including robo-signing. Chase denies her claims. Almonte's allegations are detailed in the Nov. 30 letter sent to the SEC.


  • Concerning robo-signing, Pressly wrote:

    "On numerous occasions, Ms. Almonte witnessed these Affidavit Signers work through at times 3-feet tall stacks of Judgment Affidavits at once during weekly multi-hour long, non-related company meetings. The notaries were not present at these meetings. The Affidavit Signers simply relied on hourly workers to reconcile amounts owed and then treated the actual execution of the affidavits as busy work to be performed while the Affidavit Signers could focus on other matters."


For more, see Chase Hit With SEC Whistleblower Complaint Over Credit Card Practices.

Go here for Ms. Almonte's SEC Complaint.

Fla F'closure Mills Now Use 'Robo-Verifiers' As 'End Run' Around New State High Court Rules As Some Trial Judges Continue To Yawn & Snooze

The Daily Business Review reports:
  • Lenders and their law firms are violating new procedures implemented by the Florida Supreme Court intended to address a controversy over botched foreclosure cases, according to attorneys for homeowners.

  • After a national foreclosure scandal that resulted in a moratorium, new procedures implemented by lenders and their law firms are still falling short of requirements set by the state's high court, the defense lawyers say.

  • The attorneys for homeowners claim that so-called robo-signers, who signed off on foreclosure paperwork en masse, have been replaced by "robo-verifiers" in the wake of the new Supreme Court rules. They contend that lenders are still failing to ensure that the foreclosure cases they pursue are accurate and that they own the loan in question.


  • In a deposition conducted in early December by an attorney with the Ice Legal firm, a Wells Fargo employee detailed the bank's "verification" process. The employee, Alden Berner, said he and two other "legal process specialists" were in charge of verifying all of Wells Fargo's foreclosure cases filed in Florida. Berner declined to estimate how many cases he verified on a daily basis. "He got the message not to come out sounding like a robo-signer," said foreclosure defense attorney Thomas Ice.


  • Berner's role as a verifier differs from that of a robo-signer. Critics say robo-signers sign foreclosure documents without having knowledge of their contents. In Berner's case, he testified that he uses a computer only to verify the name of the lender or loan servicer against the name of the investment entity that owns the loan. That still falls short of the intent of the Supreme Court ruling, critics say.


  • Ice said he has encountered several cases in which foreclosure attorneys signed as verifiers of documents to "pretend" they were complying with the rule. "The purpose of this is for the lenders and servicers to check what the attorneys are doing," Ice said. "So in the end they will be responsible for mistakes and won't be able to say, 'I thought my attorney did it right.' " An attorney's signature on a complaint is already considered a verification, according to Florida Bar rules. "This was intended as an extra layer of precaution," he said.


  • While some judges have accepted complaints verified by attorneys, at least one judge in Pinellas County recently criticized the practice and dismissed a case because of what he considered to be an unverified foreclosure complaint. "The Supreme Court clearly indicates in its opinion that one of the primary purposes of the rule change is to have the plaintiff appropriately investigate and verify its allegations," according to 6th Circuit Court Judge Anthony Rondolino's ruling. "An attorney should not become a witness substituting for these essential client verifications."

For the story, see Defense lawyers raise new issue: 'Robo-verifiers'.

Private Investors Score Big Profits In Tax Lien Ripoffs As County Process Allows For One Homeowner's $291 Delinquent Tax Bill To Grow To $8,200

In Fulton County, Georgia, The Atlanta Journal Constitution reports:
  • Robin Gordon didn’t know about the tax lien Fulton County placed against her apartment until the county sold the lien to a private company, foreclosed and sold the property at a sheriff’s auction.

  • Now, to keep her property, she must pay $8,200 to satisfy the $291 she initially owed in delinquent taxes and penalties. “It’s just seems too ludicrous to be true,” Gordon said. That’s a profit of 2,700 percent for Vesta Holdings and KOR Holdings, the sister companies that purchased Gordon’s lien, ordered the sheriff’s office to auction her apartment and then bought her property at the auction.

  • While most Georgia counties prohibit this practice, Fulton and Gwinnett counties routinely sell tax liens to private third parties who can pump up the lien value and use foreclosure to collect the debt.

  • Proponents say selling tax liens to private businesses lowers counties’ collection costs. But critics say the tactic is an abdication of a county’s tax collection responsibility, removes due process protections for homeowners and places unnecessary financial burdens on taxpayers. Putting the process in private hands, critics say, flips the creditor’s incentive at the property owner’s expense.

  • County tax collectors are interested in efficient, quick revenue collection, they argue. For-profit businesses make more money by delaying, running up the debt with penalties or foreclosing on the property and selling it at auction.

  • The imposition of taxes is one of the most feared powers of government, and when that power is transferred to a private entity, not only are they not accountable like the government, but their incentives are entirely different,” said Frank Alexander, a law professor at Emory University who specializes in Georgia real estate and foreclosure law. "The investor’s only incentive is to maximize profits.”

  • That is why DeKalb County does not sell tax liens, said Andrew Booth, deputy tax commissioner and director of delinquent collections division. “There’s no accountability to taxpayers and residents by the purchasers of the tax lien,” he said.(1)

For more, see Tax lien sales
shock, dismay.

(1) For similar "tax lien-inflating" rackets reportedly going on elsewhere, see:

Sunday, December 26, 2010

Florida Judiciary Unable To Keep Up With Out-Of-State Counterparts When Forcing Lenders To Comply With The Law In Foreclosure Actions

AOL's Daily Finance reports:
  • In the face of banks' rampant disregard for the law in pursuing foreclosures with false paperwork, the judiciary has started to emerge as the great defender of due process and the rule of law.

  • This list of judges standing up for the system is hardly exhaustive. In each case, the judges made clear they weren't picking sides. They were merely enforcing the rules, making sure the banks didn't get special exceptions unavailable to anyone else.

  • Unfortunately, not all judges are responding to the foreclosure mess this way. Those in Florida have been particularly notorious, and new rulings show at least some members of the Florida judiciary seem more committed to speeding foreclosures through to completion than anything else.

For more, see The Foreclosure Mess: Florida Judges Can Do Better.

SEIU's "Where's The Note" Campaign Meeting With Hostility By Note-Lacking Lenders?

A recent campaign by the Service Employees International Union ("SEIU") encouraging its homeowning members, whether facing foreclosure, having an underwater mortgage, or who are simply concerned over home lenders' rampant inability to account for the whereabouts of the original promissory notes, to contact their bank and demand to see the original note on their mortgage has apparently been met with a bit of hostility by the banks, as evidenced by this excerpt appearing on the SEIU website:

Source: Demand to see your mortgage note.

See also:

Seattle-Area Man Faces Felony Attempted Theft Charge For Allegedly Trying To Sell Foreclosed House After Filing Phony Claim In Home Hijacking Racket

In King County, Washington, the Seattle Post Intelligencer reports:
  • A former real estate agent who landed in the news for assisting squatters who'd taken over a Kirkland mansion(1) may be headed to the big house, after prosecutors filed felony charges against him.

  • Filing attempted-theft charges earlier this month, King County prosecutors contend Edmonds resident James C. McClung tried to use a bogus legal action to sell a home he didn't own to a young couple. Prosecutors claim the move by McClung came to light in October when one of the Shoreline home's new owners stopped by and found McClung's "tenants" around the house.


  • In the current case, prosecutors claim McClung acted as an intermediary for the Shoreline home's former owner, who lost the house through foreclosure earlier in the year. McClung, prosecutors claim, filed a false claim to the house and began renting out the residence.

  • Writing the court, Senior Deputy Prosecutor David Seaver noted that McClung has cast himself in public statements as an enemy of the banks and a friend to the little guy. "The defendant has acknowledged to a number of media outlets that he is engaged in a self-proclaimed 'mission' to interfere with financial institutions," Seaver told the court.(2)


  • According to [King County Detective Robert Inn's] account, McClung said he was "taking advantage of confusion in the lending industry" and could sell the property. The Edmonds man offered that the foreclosure sale during which Chase bank bought the home was illegal, and suggested he had as much right to sell the house as the bank.(3)

For more, see Charge: Man who helped Kirkland mansion squatter tried to bilk Shoreline couple (Edmonds man claimed to be on a 'mission' to hurt banks, tried to break young couple, prosecutors claim).

(1) According to the story McClung, 42, had caught the attention of Kirkland police in June after they arrested a woman -- Jill Lane -- squatting in a bank-owned $3.2 million mansion. According to charging documents, McClung, a former real estate agent, had signed his name to a bogus claim filed by Lane.

(2) For earlier reports on this home hijacking racket, see:

(3) Reportedly, Detective Inn found, among other things, a self-titled 'deed of release' taped to a front window of the home McClung was allegedly trying to unload, purporting to identify him as the representative of the lawful owner of the property.