Saturday, September 03, 2011

Suspended Counsel Convicted Of Helping Client Break Into, Reclaim Foreclosed Home; Lawyer Faces Similar Charges In Neighboring Counties

In Orange County, California, North County Times reports:
  • A San Diego attorney whose law license has been suspended was convicted [] of helping a client break into his foreclosed Newport Beach home. It took jurors about an hour to convict Michael Theodore Pines, 59, of vandalism, attempted second-degree burglary, the attempted unauthorized entry of a dwelling and obstructing an officer, all misdemeanors.

  • After the verdicts were read, Orange County Superior Court Judge Andre Manssourian ordered deputies to handcuff Pines and take him into custody, Deputy District Attorney Pete Pierce said. [...] Pines, who has been declared ineligible to practice law, faces similar misdemeanor charges in Ventura County, and felony charges in San Diego County, Pierce said.


  • Co-defendant Rene Hector Zepeda, 72, pleaded no contest before the trial started to a misdemeanor count of trespassing. He testified that thought it was OK to break into his foreclosed home, because he relied on Pines' legal advice, Pierce said.

For more, see Foreclosure attorney convicted in Orange County.

Protestor Invasion Of Bankster Headquarters Demanding Loan Mod Yields Paltry Cash For Keys Offer; Borrower Response: Take A Hike, I'll Keep Fighting!

In Pasadena, California, the Pasadena Star News reports:
  • Bassett resident Rose Gudiel rejected a $4,000 cash offer to leave her home without a fight late Monday afternoon at a meeting with OneWest Bank officials. "It was a pretty short meeting and it was basically cash for keys," she said. "They were very adamant about not being able to do anything beyond that."

  • The meeting came just four days after Gudiel received her evection notice and 11 days after 50 protestors invaded the lobby of the Pasadena bank. Gudiel insisted she's not budging from her home [...]. A court date on the eviction notice has been set for Sept. 6 in Los Angeles Municipal Court.

  • "I'm going to keep fighting for my home and I told them that," Gudiel said. "If they bring the police to arrest me, I'm not leaving."

  • Gudiel, a state employee, has been attempting to get the bank to modify her loan, which requires a $2,456 monthly payment, for almost two years. The request came after her brother was gunned down in La Puente in 2009, causing the household income to drop, she said.

  • Although the income has long since recovered, the bank has consistently refused to give her a loan modification, she said. "They came into the meeting and basically said, 'we reviewed your paperwork and this is the best we can do,"' Gudiel recounted. "Which is nothing."

  • Gudiel secured meeting with bank officials after she and a group of 50 protesters overwhelmed security and briefly commandeered OneWest's corporate headquarters [...] Pasadena. OneWest has declined to comment.

For more, see Homeowner rejects $4,000 deal to leave her home without a fight.

Investor Owning 57 Of 112 Apartments In Rapidly-Deteriorating Condo Complex Stiffs HOA Out Of $335K In Dues, Leaving Other Unit Owners Holding The Bag

In Nashville, Tennessee, The Tennessean reports:
  • Residents of a West Nashville condominium complex could soon be forced to search for new homes because of a complicated dispute between absentee real estate investors and their homeowners association.

  • The West Meade Condominium complex, located off Charlotte Pike next to the Nashville West shopping center, has become dangerously rundown because the homeowners association doesn’t have enough money to pay for repairs.

  • A metal staircase to one of the buildings has nearly rusted through. External support beams have completely separated from the roof hanging above. Roofs to at least three of the buildings are crumbling away. During this summer’s record heat, there wasn’t even enough money to open the community pool.

  • But despite a June court ruling saying the homeowners association is owed $335,000 by Landis Ventures, which owns 57 of the 112 condos, residents say they were told at a recent board meeting that it may soon be time to search for a new place to live. Lack of funds could force the association to declare bankruptcy and sell the condo property, according to the summary of a recent board meeting.


  • A summary of the emergency meeting uncovered by The Tennessean showed that the association soon may not have enough funds to pay for its liability insurance or utility bills.

For more, see Dispute could force out residents of rundown condo (Investors owe $335,000 to homeowners association).

Negotiations To Keep Brooklyn Great Grandma In Home Of 40+ Years Stall; Activists Plan On Another Protest

In Bedford Stuyvesant, Brooklyn, Bed Stuy Patch reports:
  • Negotiations faltered again last Wednesday for Ms. Mary Ward, the Brooklyn great-grandmother whose home was sold following a predatory lending scheme. After an eviction blockade the prior Friday, August 19, organized by non-profit housing advocates and local residents, supporters were able to postpone the eviction of Ms. Ward by city marshals.

  • The successful blockade ended with Assembly member Annette Robinson volunteering to mediate a meeting on behalf of Ms. Ward and the property’s new owner, Shameem Chowdhury, set for last Monday, August 22. Lawyers for Ms. Ward submitted to Chowdhury a formal offer of $70,000—money Ms. Ward had in escrow. Additionally, Chowdury could donate the property to a land trust as a tax write off.

  • However, Chowdhury has been unresponsive. After he no-showed for the Monday meeting, and the second meeting rescheduled for that Wednesday, August 24, lawyers for Ms. Ward have started preparing a contingency plan in the likely event that the property’s new owner refuses to negotiate.


For more, see Still no Deal for 82-Yr-Old Great Grandma; Another Protest Planned (After a second no-show by the property's owner, organizers plan another protest and march).

Over Two Dozen Mobile Home Park Residents Face The Boot As Rent-Skimming Owner Loses Premises In Foreclosure Sale

In Jonesboro, Georgia, WSB-TV Channel 2 reports:
  • Nearly 30 neighbors in Clayton County say they are forced to find a new place to live, even though they have been paying rent. People living in the Royal Court mobile home park told Channel 2’s Amy Napier Viteri the bank foreclosed on the property, but no one bothered to tell them until now.

  • According to court documents, the bank foreclosed on the property in May, but neighbors say they’ve been paying their rent and water bills all along. Now, they say they have being told they need to move out and have no idea what happened to the money they paid. “How dare you? How dare you do that to us. We were blinded,” renter Kayla Kennedy said.

  • Kennedy wants to know where her money has been going. She paid rent on the lot for her trailer she bought last year. She showed Viteri the bill of sale, but said the woman from whom she bought it, who also runs the mobile home park, may not even have been the owner. “The bank told me she had not made a payment in over two years, so they were already in proceedings to do the foreclosure on the property,” Kennedy said.

  • "We have nowhere to go. We’re fixing to lose our home, everything I’ve got,” neighbor Sheila Sheffield. Sheffield told Viteri they paid monthly rent and water bills to a woman named Wanda Nguyen, who they believed owned the property. Now, a manager told them Nguyen lost the property to foreclosure and water will soon be shut off.

  • Sheffield said she and several others are on fixed incomes and live in the trailer park because it’s all they can afford. “We don’t even have a car. We don’t even have a way to leave out of here,” Sheffield said.


  • Kennedy told Viteri the bank told her they have 30 days to move out, but she is trying to get that extended. If the water company shuts off water to the park, they will have to leave even sooner than that, Kennedy said.

For the story, see Residents forced to move out while paying rent.

Judge To Developer: Falsely Luring Condo Buyers With Promises Of Panoramic NYC Views Will Cost You $4.8M+

In Jersey City, New Jersey, the New York Post reports:
  • Jamie LeFrak, heir to iconic New York real-estate company The LeFrak Organization, has been ordered to fork over $4.8 million to 16 jilted residents of one of his luxury apartment buildings in Jersey City.

  • The award closes the loop on a ruling from June that found LeFrak falsely lured buyers to his tony Shore Club condominium with promises of panoramic views of Manhattan that were soon obstructed by another LeFrak building, the 32-story AquaBlu.

  • New Jersey state court Judge Edward O’Connor’s order included $3.8 million in damages, plus interest, for the false advertising. Adding insult to injury, the judge also ordered the 38-year-old developer and his firm to cough up close to $1 million in legal fees -- bringing the final tally to close to $5 million.

  • LeFrak has 45 days to appeal. A call to a LeFrak Organization spokeswoman of wasn’t returned.

Source: LeFrak’s view screw costs $4.8M.

Tenant Suit: Flying Rodents Drove Us Out 6 Days After Coughing Up $36K In Advance For 1-Year Apt. Lease; Pair Wind Up In ER For Series Of Rabies Shots

In New York City, the New York Post reports:
  • Two Manhattan women say they fled their Washington Heights apartment in horror after discovering it was already occupied — by bats. In papers filed in Manhattan Supreme Court, Dimitra Mallarios, 56, and Irene Katehis, 23, say they were duped into paying a full year’s rent for an apartment at 640 Fort Washington Ave., only to discover that some flying rodents were already at home in the fifth floor pad.

  • The pair moved into their $2,500-a-month batcave on July 25, but soon found out they weren’t alone in the fifth-floor pad, their court papers say. Two days after they moved in, "Mallarios encountered a bat" which was "flying around one of the rooms in the aprtment," the suit says. The "very scared, nervous and upset" tenant called the building’s super, who "was able to catch the bat in a plastic bag and remove it from the premises," the suit says.

  • The pair "believed that the premises was free from bats and decided to remain in the apartment," the suit says — but the horror was just beginning. Four nights later, the pair came home and "were getting ready for bed when Malliaros noticed a weird bustling coming from her window," the suit says. "[T]he curtain covering the window was moving a lot," and when Malliaros went to investigate the sound, "a bat flew out from behind the curtain headed directly at" her, the suit says.

  • "Malliaros screamed, exited the bedroom and slammed the door, leaving her purse, money and cell phone behind." The pair stayed at a relative’s apartment, where they’ve been living in cramped quarters ever since, the suit says. "The plaintiffs have only returned to the premises to pick up some of their personal effects" and "only during daylight hours," the suit says.

  • They did get a painful souvenir from their six-day stay in their new home — their doctor noticed two marks on Katehis which they believe "were caused by a bat while Katehis was asleep in the premises."

  • As a result, they had to go the ER at Lenox Hill for a rabies vaccine. "They were each given four shorts, which were very painful and involved very large needles," and they need "to get an additional shot each week for the next three weeks."

  • The pair say they’d like to move, but "after paying $36,100 up front for the one year lease of the premises, which includes a security deposit and a broker’s fee, the plaintiffs do not have money to find substitute housing." The suit says they complained to the landlord about the bat problem, but he never returned their call.

  • The suit seeks a refund of their rent from August on, as well as $1 million in damages for their "emotional distress," "severe anxiety" and problems they’ve had sleeping since. Landlord Fairline Management did not respond to requests for comment.

  • The building’s super, Sabri Shabiu, told The Post he had taken one bat out of the apartment, but said he felt the women were exaggerating about the extent of the problem. "No infestation. No way!" he said. Other residents said they hadn’t had any bat issues in the building, although there had been problems with skunks and raccoons in the building’s garden.

Source: Bats drove us from our apartment: lawsuit.

Judge To Prosecutor: 'Nice Try, But No Dice' After Rejecting Move To Yank Bail Release For Multiple-Slay Suspect Who Stiffed Bank On Mortgage Payments

In Newark, New Jersey, The Star Ledger reports:
  • Accused killer Lee Anthony Evans remains free on nearly $1 million bail following a Superior Court judge’s determination [] that he can continue to use an Irvington property on which he balanced his bail funds.

  • Evans, 58, faces five murder counts for the Aug. 20, 1978, killings, and was released from jail last summer after posting bail in the form of three pieces of property

  • The Essex County Prosecutor's Office filed a motion earlier this month to revoke Evans' $950,000 bail, saying the lead defendant in the 1978 slaying of five Newark teenage boys violated its terms by defaulting on a five-year commercial loan on the property and failing to pay related property taxes.


  • Judge Patricia Costello, though, found that the property in question, 10-12 Melville Place, is in fact two parcels, and that just one is in default. Together with the two other properties also not in arrears, both owned by relatives, Evans meets the bail’s terms, she said.

For the story, see Man charged with killing five Newark teens in 1978 can remain free on bail, judge rules.

NYC Man Faces Grand Larceny Charges After Allegedly Pocketing Upfront Rent On Apartment He Didn't Own

From the New York Post NYPD Daily Blotter:
  • An East Village real-estate agent turned out to be one big phony, authorities said. Renato Bardini, 48, showed an apartment seeker a place on East Third Street near First Avenue last month, authorities said.

  • The victim wanted to move in and gave Bardini a $500 security deposit and a $75 “application fee.” The faux agent also showed the apartment to another victim, who gave him more than $3,000 for rent, deposits and fees. It’s not clear how the fraudster accessed the apartment.

  • Bardini was charged with third-degree grand larceny, scheming to defraud and petit larceny.

Source: NYPD Daily Blotter (Manhattan).

Friday, September 02, 2011

Accused Home Title-Snatcher Faces Charges Of Forgery, Obtaining Property By False Pretenses, Breaking & Entering For Hijacking Vacant F'closed Mansion

In Raleigh, North Carolina, the News Observer reports:
  • Police have arrested and charged a Tarboro man with squatting for at least seven months in a North Raleigh home valued at nearly $2 million.

  • The 7,664-square-foot home in Wakefield Plantation has six bedrooms, six full bathrooms, theater and game rooms, a wine cellar, vaulted ceilings and an elevator. There is also a swimming pool and a Jacuzzi whirlpool bath.

  • Thomas Everette Jr., 31, apparently enjoyed the [...] luxury home so much that he created a fake company with forged documents to transfer the property to himself at no cost, according to police reports.

  • But the scam fell apart when a concerned neighbor did some investigating and called police.


  • Everette is charged with one felony count each of breaking and entering, obtaining property by false pretenses and forgery of deeds or wills, according to arrest warrants filed at the Wake County Magistrate's Office.

  • His arrest came about two weeks after state Attorney General Roy Cooper announced that a group of Triangle residents had filed bogus paperwork at the county's Register of Deeds office to try to claim ownership of six foreclosed homes in Wake County.(1)

  • Anne Redd, a spokeswoman with the Wake County Register of Deeds, said she was contacted by the state Attorney General's Office before Everette's arrest. "They told me they were fixing to get him because he had been living there since December," she said.

  • The neighbor, who called the 911 operator last week, said he had called earlier in February about people going into the house because he thought it was a burglary. Everette avoided arrest, however, by showing paperwork that claimed he was trustee of the property to the police officer who responded, the neighbor said.

  • The house is actually owned by the New York Bank of Mellon and Bank of America after it went into foreclosure last year, according to Wake County real estate records.


  • Investigators say Everette set up a fictitious company, International Fidelity Trust, and filed it with the Secretary of State's Office on April 20. He then created a false deed that listed International Fidelity Trust as the owner of the Victoria Park Lane house, state records show.

  • Next, he filed paperwork giving the home's "occupants" 90 days to satisfy all financial obligations or waive their right to the home. The home was vacant, so there was no one to respond to the bogus claim to the home, county records show.

  • Everette filed another document with the Register of Deeds on July 13, showing that International Fidelity Trust had transferred the home to him at no cost, court records show. On that document, police say Everette forged signatures of a Bank of America official and a South Carolina notary public to gain control of the $1,941,949 property for which he never paid a dime.


  • Everette apparently is not a novice at running scams. He has a 28-page record of previous charges that include breaking and entering, trespassing, violation of a domestic violence order, impersonating a bail bondsman, identity theft, larceny, resisting arrest, obtaining property by false pretense and insurance fraud, state records show. He is being held at the Wake County jail, his bail set at $85,000, a jail spokeswoman said Tuesday.

For the story, see Man accused of being a squatter in N. Raleigh.

(1) See Criminal, Civil Charges Brought In Vacant Home Hijacking Scam; NC AG: Phony Deeds, Bogus Liens "Filled With Gibberish ... A Fraud On The Whole System".

HOA Denies Winning Bidder Title To Co-Op Unit Bought At F'closure Sale; NYS Appeals Court: Sale Subject To Association's Governing Docs, Restrictions

In New York City, Habitat Magazine reports:
  • Congratulations! You're the successful bidder at a foreclosure sale of co-op shares. But wait! Can you actually take ownership of the apartment — or do you still need permission from the co-op board? Does a co-op's governing documents trump long-established precepts of property ownership? The answer may surprise you.

  • The 2010 case that set the precedent on this was LI Equity Network LLC v. Village in the Woods Owners Corp.


  • After their eviction [for failure to pay co-op maintenance fees], [the unit owners] defaulted on their loan. The lender declared the loan in default and scheduled a public auction — in this case, a "nonjudicial" sale. LI Equity was the successful bidder — but then the co-op's board of directors said that it would not approve the transfer of shares to.

  • While LI Equity never filed a formal application with the board to obtain the shares, the board independently reviewed and rejected the company's proposal to close on the unit and then, well, sell it to a board-approved purchaser. What's the problem?

  • LI Equity, naturally, sued the co-op in May 2007 on the ground that the company was statutorily entitled to own the apartment, regardless of the terms of the co-op's governing documents.

  • It also sought damages for breach of the implied duty of fair dealing. And the company won in a lower court, which directed that the co-op transfer the shares to LI Equity. The court reasoned that the co-op board did not have the power to interfere with the transfer of the lease and shares from a "judicial" sale, so the same would hold true of "nonjudicial" sale.

  • The appellate court, however, reversed that decision.

    What, My Money's No Good?

  • That court found that LI Equity was subject to the approval requirements found in the co-op's governing documents. It further said that the co-op board properly exercised its business judgment when it applied the approval requirements to the LI Equity's request to close on the shares.

For more, see Who Owns a Co-op Apartment When You Win a Foreclosure? Maybe Not You.

For the ruling, see LI Equity Network LLC v. Village in the Woods Owners Corp., 910 N.Y.S.2d 97, 79 A.D.3d 26 (App. Div. 2nd Dept., 2010).

Despite Already Receiving Payment On Delinquent Dues, HOA Forces Foreclosure Sale On Homeowner Anyway

In Riverview, Florida, Fox 13 reports:
  • Riverview resident Stephanie Bonefont has been a homeowner for nearly 11 years, but this week she could wind up homeless. The reason why is the tricky part. The single mother is in a twisted legal fight with her homeowners association, South Pointe of Tampa, over unpaid dues. And she says "they're making off like bandits, getting paid twice for this house. Meanwhile, I have to buy it three times."

  • Back in 2008, her home was foreclosed and the title was sold. Here's the problem: Bonefont said she never got any notices. That's because they were mailed to the wrong address. Then one day she got an unexpected knock at her door. "The guy who came to my door, it wasn't in foreclosure at this point, (the house) was in his name," she said.

  • The homeowners association had sold the title to a man named Pasto Angulo for $7,400 - the amount Bonefont owned on fees. She fought it. Because the notices were sent to a wrong address, a judged reversed the sale.

  • And she said she paid Angulo more than $7,300 to get the deed back in her name. But the homeowners association says not so fast. It says it has no evidence that she repaid Angulo. His attorney confirmed the sale to FOX 13 by providing a copy of the check.

  • But since the association never received a payment directly from Bonefont, a judge will allow the home to go up for sale Friday.

  • "They are double dipping, and unfortunately, my research didn't turn up any cases where this has happened before because I don't think its ever happened, " David Jordan, Bonefont's attorney, said.

  • The homeowners association said in a written statement its moving forward with the lawsuit. "The court twice rejected the legal theories advanced by Ms. Bonefont's counsel and confirmed her property should be sold for homeowners association assessments," a portion of it read.

  • It seems Bonefont's only choice to stop the foreclosure is to write another big check, this time to the homeowners association. "How many people has this happened to that are too afraid to fight - that can't fight?" she said.

Source: Woman says homeowners association wrong for selling home.

Lawsuit: Bankster Violated Court Order Staying F'closure Proceedings; Went Forward & Took Title Anyway, Hired Contractor In Attempt To Take Possession

In Pittsburgh, Pennsylvania, the Pittsburgh Post Gazette reports:
  • A Shaler woman filed a lawsuit in U.S. District Court [] alleging that a mortgage firm and its contractors improperly took title to her house, tried to break in and posted a foreclosure notice on her front door while she was holding a party.

  • Pamela A. Vukman sued Beneficial Consumer Discount Co., the law firm of attorney Martha E. Von Rosenstiel and others, saying that actions taken in relation to her home last October violated an order by Allegheny County Common Pleas Court Judge Lee J. Mazur staying foreclosure proceedings against her.

  • Ms. Vukman's attorney, Jeffrey L. Suher, said that she won a court ruling that Beneficial had violated state law when it foreclosed, and the company has appealed that to Superior Court.

  • Despite her victory in the case, Mr. Suher said, the lender took title to her house. It then hired a company to enter her house, remove trash and change the locks. That company's agent was caught trying to break in, the complaint said.

  • Then, a contractor posted a notice of foreclosure on her front door, causing embarrassment. Mr. Suher said that Ms. Vukman is still in the house. Ms. Rosenstiel declined comment. A Beneficial spokesperson could not be reached.

Source: Shaler woman sues over house foreclosure.

Chicago Feds Take Down Dad, Kids With Convictions, Prison Sentences In Ponzi, Phony Home Mortgage Reduction Scams Screwing 2,000 Victims Out OF $10M+

From the Office of the U.S. Attorney (Chicago, Illinois):
  • A Chicago man was sentenced to 15 years in federal prison, after eight-year prison terms were imposed previously for his son and daughter, in connection with a massive "affinity" fraud scheme in which approximately 2,000 victims were swindled of approximately $10.7 million in losses.

  • The father, Roy Fluker, Jr., 56, of Highland Park, who was arrested in Florida where he fled after failing to appear for sentencing last December, received the 15-year term [...] in Federal Court in Chicago.

  • Fluker, his son, Roy Fluker, III, and his daughter, Ronnanita Fluker, were each convicted of multiple fraud counts following a trial in May 2010.(1)


  • All three defendants participated in a scheme between 2005 and 2008 in which they fraudulently obtained approximately $18 million from victims, as well as some victims’ homes, through their operation of companies called All Things in Common, LLC, which did business as More Than Enough, LLC and Locust International, LLC.

  • [In addition to a Ponzi scheme,] Defendants also marketed what purported to be a financial program called the "Housing Program," which they claimed provided a way for people to reduce their mortgage payments and to own their homes clear of any mortgage within five years.

  • The majority of victims were individuals whom Fluker and his children targeted at gatherings in Chicago area churches and hotels. Fluker and his children marketed their programs exclusively to the African-American community.

For the U.S. Attorney press release, see Father Sentenced to 15 Years in Prison, Following Eight-year Terms Imposed on Son and Daughter, for Their Roles in $10 Million Affinity Fraud Scheme That Swindled 2,000 Victims.

(1) Roy Fluker III, 31, was sentenced to eight years in prison, and Ronnanita Fluker, 34, was sentenced to an eight-year prison term last December, according to the press release. A $9 million preliminary forfeiture judgments against all three defendants was imposed and they were ordered to pay $7,336,957 in restitution.

Thursday, September 01, 2011

Nevada AG Expands Pending BofA Suit To Include Dubious Lending, Foreclosure Practices; Joins NY AG In Upping Heat On Notorious Bankster

Paul Kiel at ProPublica reports:
  • The state of Nevada dramatically expanded its lawsuit against Bank of America today, turning the narrow case it filed late last year into a broadside that targets virtually all aspects of the bank's mortgage operations. Bank of America has previously denied wrongdoing.

  • The sweeping new suit could have repercussions far beyond Nevada's borders. It further jeopardizes a possible nationwide settlement with the five largest U.S. banks over their foreclosure practices, especially given concerns voiced by other attorneys general, New York's foremost among them. (You can read the suit here).


  • According to the suit, borrowers were duped into unaffordable loans and then victimized again through a misleading mortgage modification program that homeowners tried to use to avoid foreclosure. Finally, the suit alleges, the bank filed fraudulent documents to move forward with the foreclosures.


  • The state's suit had previously been confined to the modification issue. At that time, Bank of America also said homeowners would be best served not through litigation but through reaching a multistate settlement that would "broaden programs for homeowners who need assistance."

  • By expanding the suit, Nevada's Catherine Cortez Masto joins New York Attorney General Eric Schneiderman in stepping up investigations of the bank. In addition to initiating a broad investigation of banks' securitization practices, he recently filed a suit charging that Bank of America had fraudulently foreclosed on homeowners.

For more, see Nevada Wallops Bank of America With Sweeping Suit; Nationwide Foreclosure Settlement in Peril.

Go here for links to other articles by Paul Kiel on the rackets involving bank foreclosures and loan modifications.

Cops: Scam Used Title Searches To Find 'High-Equity' Homes For Rent, Tenant 'Posers,' I.D. Theft To Rip Off Landlords' Equity In Rental Homes

In Southern California, The Orange County Record reports:
  • Authorities have arrested seven people, including some in the United States illegally, on suspicion of posing as owners of at least 20 homes they were renting, taking out $5.9 million in home-equity loans and pocketing the cash.

  • The suspects,(1) some of whom are Korean and Chinese nationals, reportedly stole the homeowners’ identities to conduct the transactions, authorities said. One of the suspects is believed to be a resident of Garden Grove, Los Angeles County Sheriff’s Detective Christopher Derry said.

  • Two of the targeted homes were in Orange County: a five-bedroom house on Spartan Street in Mission Viejo and a four-bedroom house on Threewoods Lane in Fullerton, he said.

  • A loan for $200,000 was taken out on the Mission Viejo home and one for $250,000 was taken out on the Fullerton home, Derry said. The rest of the homes are in Los Angeles and San Bernardino counties. Individual law enforcement agencies had been working on their respective cases for a while and had recently begun cooperating, Derry said.


  • Derry said the case was especially hard to crack because the suspects used prepaid cell phones and web-based email addresses, the homes were spread across several law enforcement jurisdictions, and the homeowners learned of the fraud months after the loan transactions, when lenders started the foreclosure process.


  • In a scheme that lasted at least two years, Derry said, the suspects used title searches to find homes for rent that had small or no mortgages on them. Using fake identities and documents, they signed leases and paid security deposits and first month’s rent to gain access to the homes.

  • Then, using “really good” fake IDs, Derry said, the suspects took on the homeowners’ identities, applied for home-equity loans and ordered appraisals. They typically sought loans from “hard-money” lenders who lend for shorter periods and at higher interest rates than commercial financial institutions. Hard-money lenders base funding decisions on property value, equity and salability rather than creditworthiness and income of a borrower.

  • When the loans were funded, escrow companies were directed to transfer the money into several bank accounts opened by the suspects in the real homeowners’ names. From there the money was withdrawn in small amounts as cash or checks.


  • Title companies – which insured the mortgage liens against invalidity or unenforceability – have been paying out millions of dollars to reimburse the lenders for their losses, and homeowners are spending thousands of dollars in court to clear their homes’ titles, Derry said.

For the story, see Police: Renters pose as owners, steal home-equity cash.

(1) According to the story, Federal magistrate John E. McDermott has ordered all seven suspects held without bail. According to McDermott’s order, the suspects are considered flight risks because:

  • Joon Hwan Kim, 24, is a Korean national with no legal status. Kim declined to be interviewed by pretrial services staff.
  • Guang Chen Jin, 37, is a Chinese national and has been unemployed for eight months.
  • Hyung Kyu Lim, 48, is in the U.S. illegally. His mother and four siblings live in Korea.
  • Suhua Lin, 54, is a Chinese national, has recently traveled to China and has family there.
  • Kyounghoon Kim was using multiple identities at the time of arrest, unknown bail resources, family ties to Korea and immigration status issues.
  • Andrew Byun Yoo, 56, has been unemployed for 10 years, has no relevant bail resources and has lived in four other states.
  • Ju Young Chung, 36, has a prior failure to appear and an outstanding warrant.

Pair Pinched, Accused Of Clipping Homeowners For Upfront Fees In Mortgage Elimination Racket, Then Forging & Recording Phony Lien Satisfactions

In San Bernardino, California, The San Bernardino Sun reports:
  • Two men suspected of scamming homeowners struggling to avoid foreclosure will be arraigned [] in San Bernardino Superior Court on a 45-count criminal complaint. Prosecutors say Stephen Andrew Easterly, 47, and Emanuel Percival, 36, defrauded at least 25 people with their Fontana business and affected more than $17 million in home loans. "Basically, they were getting people to try to redo their loans," Deputy District Attorney Michael Fermin said.

  • The people were on the verge of foreclosure or wanted a lower payment, he said. The alleged victims reportedly paid between $3,500 and $7,000 to participate in a process they believed would pay off their home loans and save them from foreclosure, according to a news release Monday from the San Bernardino County District Attorney's Office. In the end, they would end up with two outstanding home loans and the houses went into foreclosure, prosecutors said.


  • The search warrant was the result of an investigation into fraudulent Substitution of Trustee and Full Reconveyance and Release of Lien documents - which are usually recorded by a bank when a mortgage is paid in full - with the county Recorder's Office.

  • In this case, Easterly and Percival signed documents as "authorized representatives" of various banks, according to prosecutors. Between the pair, more than 70 fraudulent documents are alleged to have been recorded.

  • Prosecutors said Easterly also created fictitious checks, mailed them to banking institutions and told victims he was paying off their loans.

  • Easterly faces 21 counts of forgery and 16 counts of procuring or offering a false or forged document from Oct. 25, 2010, to June 29, according to the criminal complaint. Percival faces four counts each of forgery and procuring or offering a false or forged document between March 23, 2010, and Nov. 24.(1)

For the story, see Two men accused of scamming struggling homeowners.

For the San Bernardino County DA press release, see Pair Arrested For Real Estate Fraud.

(1) According to the story, both men were being held Monday at West Valley Detention Center in Rancho Cucamonga. Bail for Easterly was set at $1 million, and Percival's bail was set at $500,000, prosecutors reportedly said.

Trio To 'Enjoy' Federal Prison Time For Scheme Designed To Steal Home Equity Out From Under Two Unwitting Property Owners

From the Office of the U.S. Attorney (Los Angeles, California):
  • A North Hollywood man was sentenced [] to 15 months in federal prison for his role in a mortgage fraud scheme in which the schemers used stolen identities to “purchase” homes that were not for sale.

  • Venedie Roberto Valencia, 27, who worked at Bank of America at the time of the offense, was sentenced by United States District Court Judge Dale S. Fischer. In addition to the prison term, Judge Fischer ordered Valencia to pay $51,688 in restitution.

  • Previously in this investigation, two of the Valencia’s co-conspirators were convicted and sentenced to prison. Felix Pichardo, 29, of Lancaster, was sentenced to eight years in federal prison in 2009 and Latrice Shaunte Borders, 31, of Long Beach, was sentenced to two years in federal prison in 2010 for their part in the scheme (see December 14, 2009 U.S. Attorney Press Release).

  • According to court documents, Pichardo, a licensed real estate agent, and Borders participated in two separate fraudulent real estate sales transactions. Pichardo, using identities appropriated from other people, caused loan applications to be submitted to AmTrust without the property owner’s knowledge for real estate which was not for sale.

For the U.S. Attorney press release, see Former Bank Employee Sentenced To 15 Months In Federal Prison For Role In Mortgage Fraud Scheme.

Wednesday, August 31, 2011

Double-Talking Judge To Foreclosure Mill: "Lying Is Unacceptable!" But Then OKs Use Of False Affidavits Anyway, Proceeds To Ratify Forced Sale Of Home

In Baltimore, Maryland, The Daily Record reports:
  • Lawyers at Shapiro & Burson LLP repeatedly lied by signing each other's names to foreclosure affidavits, but their actions did not alter the rights of the lender or the homeowners, a Baltimore County judge has ruled.

  • Circuit Court Judge Susan Souder wrote in her Aug. 11 opinion that she did not believe monetary sanctions were appropriate, and that she would leave any punishment levied against the plaintiffs -- all lawyers -- to bar counsel at the Attorney Grievance Commission.

  • Souder dismissed an order requiring the plaintiffs to show cause why the case should not be dismissed and why they should not be sanctioned and ratified the sale of the home.

  • Anthony DePastina, director of litigation for Civil Justice Inc., a Maryland-based public interest legal association, said he understands that these homeowners and others in the foreclosure process have not paid their mortgages and that if another attorney had signed the documents correctly, the whole process would be "copacetic," but, he said, that's not what happened here.

  • "The reality is we're lawyers. We're supposed to play by the rules and know what the rules are," said DePastina, who is not involved in this case. "When we don't, we compromise the integrity of the entire game. And it's not a game."

  • Souder said she could not comment on the case or whether it was the first decision in the county regarding signatures on foreclosure affidavits, many of which have been questioned with show-cause orders.


  • Souder wrote that the "most disturbing" revelation in this case (John S. Burson, et al. v. Grosso) was that Murphy falsely signed Yoder's name to affidavits regarding military status for Frank and Patricia Grosso, the notice of intent to foreclose and the appointment of substitution of trustees.

  • She found it "very disturbing" that the plaintiffs argued that their lies were proper under Maryland rules. "No case, no statute, and no rule cited by Plaintiffs supports the argument that it is proper for a person to sign another person's name to an Affidavit. That Plaintiffs are attorneys who concluded that such lies are 'entirely proper' is astounding .... It is a lie. And lying is unacceptable," she wrote.

  • Despite her shock at the lawyers' behavior, Souder agreed with the plaintiffs that the false affidavits "did not alter the rights of the parties."

For more, see Home sale ratified despite faulty affidavits (requires paid subscription; if no subscription, GO HERE).

Two Notorious Players In Nationwide Foreclosure Robosigning 'Phenomenon' Receive Appeals Court Recognition For Their 'Contributions' To The Effort

A recent federal appeals ruling from the 3rd Circuit Court of Appeals reinstating a bankruptcy judge's hammering of a foreclosure mill for its use of robosigned documents.(1)

While not directly involved in the litigation of the appeal, two notorious players in the foreclosure robosigning 'phenomenon' that's swept the nation nevertheless received recognition by the court for their apparently 'less-than-meritorious' contibutions to this once fast-growing industry.

Although the court 'buried' the recognition of these 'fine' outfits in two footnotes, the court's observations with regard to this pair arguably deserve some highlighting here.

In footnote 2 of the ruling, the court gives a foreclosure mill law firm its due (alterations in the original):
  • Moss Codilis is not involved in the present appeal. However, it is worth noting that the firm has come under serious judicial criticism for its lax practices in bankruptcy proceedings. "In total, [the court knows] of 23 instances in which [Moss Codilis] has violated [court rules] in this District alone." In re Greco, 405 B.R. 393, 394 (Bankr. S.D. Fla. 2009)(2); see also In re Waring, 401 B.R. 906 (Bankr. N.D. Ohio 2009).

In footnote 5 of the ruling, a notorious foreclosure document sweatshop gets its due:

  • LPS is also not involved in the present appeal, as the bankruptcy court found that it had not engaged in wrongdoing in this case. However, both the accuracy of its data and the ethics of its practices have been repeatedly called into question elsewhere. See, e.g., In re Wilson, 2011 WL 1337240 at *9 (Bankr. E.D.La. Apr. 7, 2011) (imposing sanctions after finding that LPS had issued "sham" affidavits and perpetrated fraud on the court); In re Thorne [and try here for more on In re: Thorne], 2011 WL 2470114 (Bankr. N.D. Miss. June 16, 2011); In re Doble, 2011 WL 1465559 (Bankr. S.D. Cal. Apr. 14, 2011).

For the court ruling, see In Re Taylor, No. 10-2154 (3d Cir. August 24, 2011).

(1) See Federal Appeals Court Reinstates Reversed Ruling Hammering Foreclosure Mill For Littering Courtroom With Robosigned Docs; Bankruptcy Judge Vindicated.

(2) See In re Greco, footnote 1, where U.S. Bankruptcy Judge John K. Olson lists the following nine cases filed in the Southern District of Florida which he ties to Moss Codilis 'handiwork:'

  • (1) In re Kearse, 07-21486-BKC-JKO; (2) In re Nicholson, 08-11474-BKC-JKO; (3) In re Greco, 08-13051-BKC-JKO; (4) In re Kassar, 08-13077-JKO; (5) In re Morton, 08-18853-BKC-JKO; (6) In re Studer, 08-19300-BKC-JKO; (7) In re Buhagiar, 08-19610-BKC-JKO; (8) In re Vargas, 08-20302-BKC-JKO; and (9) In re Imburgia, 08-17153-BKC-JKO.

In footnote 2 of the same case, Judge Olson lists the following additional fourteen cases filed in the Southern District of Florida which he connects to Moss Codilis:

  • (1) In re Cecil, 08-10925-BKC-RBR; (2) In re Bertke, 08-16351-BKC-RBR; (3) In re Woods, 08-11231-BKC-PGH; (4) In re Salandy, 08-12866-BKC-PGH; (5) In re Lissandrello, 08-13372-BKC-PGH; (6) In re Biggers, 08-13780-BKC-PGH; (7) In re Colon, 08-14903-BKC-PGH; (8) In re Noble, 08-15675-BKC-PGH; (9) In re Sao, 08-16549-BKC-PGH; (10) In re Shank, 08-18596-BKC-PGH; (11) In re Vega, 08-16381-BKC-AJC; (12) In re Espinoza, 08-21253-BKC-AJC; (13) In re Hargis, 08-21366-BKC-EPK; and (14) In re Brown, 08-23103-BKC-EPK.

Fla. AG, State Bar Begin Probe Into Alleged Rackets Purportedly Peddling Participations In Mass Joinder Suits Offering F'closure, Home Mortgage Relief

The Palm Beach Post reports:
  • The Florida attorney general's office is investigating the use of mass joinder lawsuits marketed to homeowners facing foreclosure, a new practice that got a California lawyer with ties to a prominent Tallahassee lobbyist shut down earlier this month.

  • Homeowners in 17 states, including Florida, received mailers from companies connected to California attorney Philip Kramer telling them they could join in lawsuits against banks for a retainer fee of between $5,000 and $10,000, according to a complaint filed earlier this month by California Attorney General Kamala Harris.(1)


  • Kramer was featured as "of counsel" on the website of the Tallahassee-based Ramba Law Group, which is led by David Ramba. The website also touted the use of mass joinder lawsuits and linked to several of the court filings. Ramba is a lobbyist for Callery-Judge Grove LP and the Loxahatchee Groves Water Control District. Neither Ramba nor his law group is named in the California complaint.

  • Although Ramba previously defended the mass joinder suits, on Monday he said Kramer's firm unlawfully used his name and created the website without his permission. "I have hired an attorney to unwind whatever this guy was doing," Ramba said Monday.

  • He also said he was unaware until last month that offices in Boca Raton and Pinellas Park had been opened with his name on them to speak with homeowners about joining the lawsuits.

  • A person claiming to be an employee in the Pinellas Park office filed a complaint in June with the attorney general's office claiming that homeowners are falsely told a team of attorneys will review their case to see if it qualifies for the mass joinder lawsuit.

  • "No one reviews their information, especially attorneys, and we are instructed to call these people back the next day and tell them attorneys will accept the case but you must pay $5,000 to join," the complaint says. "The whole thing is a scam."

  • The Florida Bar confirmed it has an open investigation into Ramba's involvement with the mass joinder lawsuits and the Florida attorney general's office said it is looking into whether Florida law was violated.

For the story, see Attorney general investigating lawsuits pitched to distressed homeowners.

(1) For the California AG civil lawsuit, see People v. The Law Offices of Kramer and Kaslow, et al.

See also, Cal. AG Tags Alleged Nat'l 'Mass Joinder Lawsuit' Racket With Civil Suit, Shuts Down Operation That Attempts To Circumvent Upfront Fee Bans, Some Say.

Plot Owners Remain Lingering In Limbo After Cancellation Of Cemetary Foreclosure Sale; Ripoff By Now-Convicted Prior Owner Plays Role In Turmoil

In Calvert County, Maryland, the Maryland Independent reports:
  • The foreclosure auction on the lawn of the Calvert County Circuit Court for Southern Memorial Gardens was canceled [last week] and some upset plot owners could not get answers as to what will happen next.


  • I don’t know the answer to that,” the bank trustee said to several people who asked what will happen to their plots, who now owns the cemetery and if someone dies now can they be buried on their plot. The 50 or so people were varied in dress from business suits to shorts; many of the plot owners say they are in limbo and do not know where to find answers.

  • Eileen Wilson, who said she paid $47,000 for 16 plots, was upset that she could not get answers and was worried that the bank or someone who bought the cemetery would resell her plots. “There’ll be a war down here,” she said, if that happens. “The Office of Cemetery Oversight did not do their job in the first place,” said Wilson, whose husband is buried in the cemetery.


  • Peggy Bekavac of Dunkirk, whose husband is buried at the cemetery and owns a plot next to him, said that she has been so upset. “People are scared to die. A lot of people are worried,” she said. Bekavac said she bought the plots 17 years ago and wants someone to purchase the property so she can be assured that she will be buried next to her husband. "These people just want what they paid for,” she said.

  • The foreclosed cemetery owner Danny Martin, who was at the auction, blamed the OCO for the foreclosure, saying, “They forced us into foreclosure.” Martin said that he had an agreement with the bank to continue to own the cemetery, but the board would not allow him to do so. Martin said they have had a difficult time due to the economy, but have seen a 67 percent increase in revenue over the last year. If the OCO would give Martin back his license, he said that he could work out a deal with the bank.

  • Martin has also had to contend with services that were not rendered but with fees collected by past cemetery owner Larry Deffenbaugh, who was convicted of theft for a case that had more than 550 victims who were defrauded. Deffenbaugh stole about $2 million, but only had to pay the cemetery $1 million, which was court ordered restitution, he said.

  • Martin said he himself now has 35 criminal charges against him assessed by the OCO, and other employees who worked for Southern Memorial Gardens also have charges against them. “We are not authorized to do business. We can’t even cut the grass,” Martin said.

For the story, see Dunkirk cemetery auction canceled.

Tuesday, August 30, 2011

'Biggest Case In Ohio F'closure Law In A Century' Takes Unusual Turn; Homeowner's Mtg. Debt Mysteriously Disappears; Banksters, Lawyers: 'No Comment!'

In Cleveland, Ohio, Ohio Public Radio reports:
  • The Ohio Supreme Court is getting ready to take on what some are calling the biggest issue in state foreclosure law in a century. The question before the justices is what paperwork does a lender need to force an owner out of his home? For Ohio Public Radio, WCPN’s Mhari Saito reports that what the state's justices decide could have huge implications for the financial services industry.

  • Antoine Duvall and his wife and young son waited until after Christmas to move into their freshly renovated two-story house in Cleveland’s Collinwood neighborhood. It was 2006 and Duvall, a salesperson for a legal document services company, had just happily signed a mortgage and a promissory note to get his loan from Wells Fargo. But soon, he started to get letters about his loan.


  • The Duvall case seemed like a good one for the state Supreme Court to rule on to settle the issue but it has taken an unusual twist. You might even call it another bank snafu. The homeowner, Duvall, now owes nothing on his mortgage because - in an action unrelated to the Supreme Court case - the loan servicer cleared his debt completely in June.

  • Duvall doesn’t know why it happened and neither his loan servicer nor US Bank’s attorneys are commenting. It’s not clear what the state Supreme Court will do, but attorneys for both sides say the legal question is not going away. The court could still take up the Duvall case or it could address several other cases on the same issue, waiting in the wings.(1)

For more, see Who owns the deed? (The Ohio Supreme Court is taking up the question of what a bank needs to prove to force someone from his home).

(1) The use of '11th hour' legal maneuvers to dodge a potentially adverse court ruling in the foreclosure context by the sleazy banksters is not unheard of. In a recent Florida foreclosure case involving the use of dubious documents to obtain a foreclosure judgment, the banksters and their foreclosure mill avoided having the Florida Supreme Court hear an appeal of a case by reaching a settlement with the screwed over homeowner shortly before the case was presented to the Florida high court (keep in mind that this was a case the banksters had won decisively at the intermediate appeals level). See:

More Observations On Proposed 50-State AG Foreclosure Fraud Settlement, The Booting Of NY AG From Probe Committee & The Buying Off Of Tom Miller

From a recent column in The Huffington Post:
  • John O'Brien, Registry of Deeds for Southern Essex County in Massachusetts is asking that Tom Miller, Iowa Attorney General, step down. Miller is the lead AG in the controversial settlement with the big banks on mortgage servicing fraud.

  • In his most recent obscene act Miller kicked Attorney General Eric Schneiderman off of the 50-state task force probing foreclosure abuses and negotiating a possible settlement agreement with the mortgage firms.


  • Schneidernan getting kicked off the committee should come as no surprise to anyone following the foreclosure negotiations and is sickeningly similar to Pam Bondi, Florida's Attorney General firing Theresa Edwards and June Clarkson, who were heading up investigations on a series of mortgage related crimes for over a year. While Bondi insists that the firings were a result of poor job performance, Miller points more towards attitude and that Schneiderman is somehow not a team player.


  • Schneiderman's removal will likely make it easier for state and federal officials to reach an accord with the five banks. However, the potential amount of money they'll be able to extract will likely decrease. American Banker posted the 27 term sheet of the negotiations presented to the banks with major servicing operations by the AGs and Federal Banking Regulators.

  • The deal completely handcuffs state attorneys general whose constituents are suffering serious economic damage as a result of the foreclosure fiasco and fraud by the banks and servicers.

  • When the investigation into robo-signing and fraud, Tom Miller had a brief moment of righteous advocacy until he received $261,445 in campaign contributions from out-of-state law firms and donors from the finance, insurance, and real estate sector shortly after he announced he was seeking criminal charges and retribution from the banks for mortgage fraud -- that's 88 times what he has received in the past decade.

For more, see John O'Brien MA Registry of Deeds: AG Tom Miller Should Step Down.

Convicted Real Estate, Check Scammer Now Faces Charges Of Ripping Off His Sister In Dubious Home Deal, Leaving Her & Kids Facing The Boot

In Peyton, Colorado, KRDO-TV Channel 13 reports:
  • Target 13 Investigates has warned you about him before, and now a former mortgage broker convicted of theft and forgery has been arrested again. Michael Hoskisson is accused of pocketing over $25,000 from his sister who said she thought she was making mortgage payments to him.(1)

  • Kammie Hoskisson-LaRose said she was stunned when she learned her Peyton home was in foreclosure, after she had been making payments to Hoskisson since 2009. "I'm overwhelmed," said LaRose. "I've put everything I have into re-doing the home."

  • LaRose said she had always been close to her older brother and trusted him when he said he could help her own her dream home. LaRose said her credit score wasn't high enough to get her own mortgage, so Hoskisson told her that his mortgage company would buy the home from its owner, then LaRose would make payments to him and eventually apply for her own mortgage.

  • According to Hoskisson's arrest affidavit, both LaRose and the home's owner, Michael Hill, believed Hoskisson had finalized the sale of the home. The Fourth Judicial District Attorney's Office said that never happened, and the last mortgage payment on the house was made by Hill in 2008. Hill's name is on the foreclosure documents.

  • The D.A.'s office said the mortgage payments LaRose thought she was making had gone into her brother's personal bank account. [...] LaRose said she's trying to work something out with the bank, but it's not looking promising.

  • "My name's not on anything, so I really don't have a say," she said. "They could tell me I'll be evicted in 30 days."

For more, see Springs Man Accused Of Stealing 25K From Sister (Woman May Lose Her Home).

(1) According to the report, Hoskisson is due in court for a hearing on September 16, and is facing charges of theft, identity theft and forgery. Reportedly, Hoskisson lost his mortgage broker license after pleading guilty to theft with a real estate transaction in 2009, and in 2011, he was convicted of forging over $73,000 in checks from an at-risk adult he befriended. Hoskisson was sentenced to five years probation and ordered to pay over $92,000 in restitution to the man's family, the story states.

Virginia AG Cites Another Loan Modification Outfit For Allegedly Pocketing Illegal Upfront Fees, Failing To Deliver Promised Services

From the Office of the Virginia Attorney General:
  • Attorney General Ken Cuccinelli announced today that he has filed a lawsuit against R.L. Brad Street, LLC, a mortgage loan modification company based in Chesapeake, for allegedly charging illegal advance fees of up to $3,000 before performing "foreclosure rescue" services for its customers.

  • The attorney general alleges that R.L. Brad Street violated the Virginia Foreclosure Rescue Law by charging advance fees in connection with services to avoid or prevent foreclosure. Section 59.1-200.1 of the foreclosure rescue law prohibits a supplier of foreclosure avoidance or prevention services from "charging or receiving a fee prior to the full and complete performance of the services it has agreed to perform, if the transaction does not involve the sale or transfer of residential real property."

  • R.L. Brad Street allegedly collected fees of up to $3,000 in the form of checks made payable to Rhonda Wyland, the company's member/manager, from consumers before performing any services for them.

  • Cuccinelli also alleges that R.L. Brad Street violated the Virginia Consumer Protection Act (VCPA) by failing to deliver on promises to assist consumers in obtaining mortgage loan modifications. The Virginia Consumer Protection Act generally prohibits suppliers from using any deception, fraud, false pretense, false promise, or misrepresentation in connection with a consumer transaction.

For the Virginia AG press release, see Attorney General Cuccinelli sues Chesapeake-based mortgage modification company (Company allegedly charged illegal advance fees for "foreclosure rescue" services).

Monday, August 29, 2011

Federal Appeals Court Reinstates Reversed Ruling Hammering Foreclosure Mill For Littering Courtroom With Robosigned Docs; Bankruptcy Judge Vindicated

In Philadelphia, Pennsylvania, Dow Jones Daily Bankruptcy Review reports:
  • A federal appeals court has reinstated sanctions against a New Jersey law firm and attorney for attempting to foreclose on a suburban Philadelphia couple using "robo-produced" mortgage data that was fraught with errors.(1)

  • In a case that was one of the first to expose trouble in the high-tech, high-volume mortgage foreclosure industry, the Third U.S. Circuit Court of Appeals sided with a bankruptcy judge who punished the Udren law firm and attorney Lorraine Doyle for showing up in court with unverified, computer-generated mortgage data that was wrong.


  • The Udren case highlights the role of foreclosure law firms, whose lawyers walk the robo-produced mortgage data into court, without checking whether it is correct or not. The law firm said it was not able to verify the data under the system established by client HSBC, using technology from Lender Processing Services Inc.


  • The appeals court and the bankruptcy judge found the flawed high-volume system that handles mortgage data does not excuse an attorney's failure to verify information before presenting it to a court.

  • "Where a lawyer systematically fails to take any responsibility for seeking adequate information from her client, makes representations without any factual basis because they are included in a 'form pleading' she has been trained to fill out, and ignores obvious indications that her information may be incorrect, she cannot be said to have made reasonable inquiry," the court of appeals wrote.


  • The case began in January 2008, when the Urden firm presented a bankruptcy judge with the wrong mortgage note, wrong monthly payment information and wrong value for the home of Niles and Angela Taylor, and sought permission to foreclose.


  • The decision is a vindication for Judge Diane Weiss Sigmund, a veteran bankruptcy judge who became irritated when a young attorney sent to court by the Udren firm couldn't answer basic questions about the Taylor's Loan and couldn't get an answer from the client.

  • She summoned the firm and others to answer for falsehoods about the status of the Taylors' mortgage and wrote a detailed opinion about the technology-heavy system that made it impossible to pin down and correct errors.

  • A district court judge overturned her ruling, saying Sigmund was more concerned about "sending a message" to the foreclosure firms than seeing justice done in the Taylor case.(2) The appeals court disagreed, finding her detailed conclusions were supported by the evidence.

  • It's also a victory for the U.S. trustee's office, an arm of the Department of Justice that monitors the bankruptcy courts. The bankruptcy watchdogs appealed the district court decision overturning the sanctions, noting that the sanctions imposed were "lenient," and educational in nature. The Udren firm and Doyle were not fined.

For the story, see Appeals Court Restores Sanctions Against Foreclosure Law Firm (may require paid subscription; if no subscription, TRY HERE).

For the ruling of the 3rd Circuit Court of Appeals, see In Re Taylor, No. 10-2154 (3d Cir. August 24, 2011).

(1) It should be noted that the appeals court did, in fact, sustain the reversal of the sanctions originally imposed on one of the attorneys involved, Mark J. Udren.

(2) For Judge Sigmund's original 58-page ruling, see In re Taylor, 407 B.R. 618 (Bankr. E.D. Pa. 2009).

See also, Data Management Firm, Assembly Line Law Firm Scorched By Scathing Court Ruling That Shines Light On Filing Screw-Ups In Consumer Foreclosure Cases.

Wisconsin Attorney Pinched In Alleged Foreclosure Surplus Snatching Scam; Illicitly Scored $542K In Unclaimed Net Proceeds On 43 Sales: Investigators

In Milwaukee, Wisconsin, the Wausau Daily Herald reports:
  • A Brookfield attorney is accused of stealing $542,000 in unclaimed foreclosure funds by falsely claiming that he represented the rightful owners, prosecutors in Milwaukee County said Wednesday.

  • Thomas E. Bielinski, 52, was charged Tuesday with theft of at least $10,000 by fraud. The charge carries a maximum sentence of five years in prison and a $25,000 fine. He is scheduled to make an initial court appearance on Wednesday.

  • According to the criminal complaint, Bielinski targeted mortgage-foreclosure cases in which the owners of surplus funds had failed to file claims for the money. Prosecutors said he claimed that he represented the owners, filed claims on their behalf and kept the money.

  • In a five-year period, he filed 47 fraudulent claims and got paid out on 43, according to the complaint.


  • Prosecutors said Bielinski had crafted what amounted to an elaborate identity-theft scheme. They accused him of forging claimants' signatures and notary stamps, and then covering his tracks by removing the subsequent court documents from official files.

  • Authorities executed a search warrant on Bielinski's home last month. They said they found a list of civil cases in Milwaukee County Court that included the dollar amount of unclaimed funds and handwritten notes identifying people who were dead.

  • Investigators contacted the people in whose names Bielinski had collected money. Although some were dead, others weren't and generally said they did not know they were owed any surplus funds. None of them knew Bielinski or had hired him to represent them.

For the story, see Brookfield attorney charged with stealing $542,000.

Clerk Of Court Issues Plea To Foreclosed Cook County Property Owners To Come Forward, Claim Their Cash; Says $16M In Sale Surplus Sits Unclaimed

In Chicago, Illinois, the Chicago Sun-Times reports:
  • About $16 million is sitting in a Cook County court fund, just waiting for the rightful owners — namely home and business owners who lost their property to foreclosure, officials said Thursday.

  • The money is part of a mortgage foreclosure surplus fund — profits generated when foreclosed property is sold for more than what the original owner owed the bank.

  • Nearly 2,000 property owners have an average of $2,000 coming to them from foreclosures that date back to the 1990s. Amounts range from 13 cents to $460,000 owed to a business, Brown said.

  • For two years, Clerk of the Circuit Court Dorothy Brown has been trying to get the word out to former property owners to call her office or go to her website and use the search engine to see if they have money coming to them.

  • By state law, her office maintains the account. But having had only marginal success in finding those to whom money is due, she announced Thursday that a task force of city, county and state officials is working on a better marketing strategy. “We need to find a better way, even a more effective way to get the word out,” Brown said Thursday at a news conference with other elected leaders.


  • A lot of people just don’t look back” once they lose a property, she said. “They don’t leave a forwarding address because they have creditors” seeking payment.

  • To see if you are owed mortgage surplus funds, call Brown’s office at (312) 603-5030 or go to [Cook County Mortgage Foreclosure Surplus Search].

For more, see Property foreclosed? Cook Co. hold $16M in fund waiting to be claimed.

See also, Chicago Tribune: Cook Co. reaching out to those due money after property foreclosure ("Brown noted that her office contacted one homeowner who was owed a $200,000 surplus. The homeowner never returned the call.").

Law "Was Designed To Be A Noble Profession," Says Cal. AG In Announcing Civil Action Against 3 Firms Bringing 'Mass Joinder' Foreclosure Relief Suits

In San Francisco, California, The Bay Citizen reports:
  • California Attorney General Kamala Harris stood before a bank of news cameras [one recent] morning and declared war on unscrupulous lawyers. The occasion: a new lawsuit against three Southern California law firms, who stand accused of taking millions of dollars from homeowners who expected the lawyers to help them get mortgage relief. But the attorneys simply pocketed the money, Harris said.

  • Law "was designed to be a noble profession," Harris told reporters. Instead, she said, the accused attorney, Philip Kramer, and lawyers at two other firms took advantage of borrowers who were already "deeply disappointed, frustrated and hurt."

  • According to officials, the defendants extracted retainer fees of up to $10,000 from each of 2,500 homeowners to participate in lawsuits that actually hurt their chance of staying in their homes. Because these homeowners gave their meager savings to Kramer and his associates, they were less able to make their mortgage payments and more likely to lose their home to foreclosure.

For mor, see State Cracks Down on Unscrupulous Mortgage Lawyers (Law "was designed to be a noble profession").

Sunday, August 28, 2011

Obama Administration 'All In' With Push To Let Banksters Off The Hook & Bulldoze Through Proposed 50-State AG Settlement In Foreclosure Fraud Probe?

Rolling Stone columnist Matt Taibbi chimes in with his views and observations on the $20 billion proposed foreclosure fraud settlement that appears to let the banksters off the hook for their dirty dealings in creating this mess:
  • The idea behind this federally-guided “settlement” is to concentrate and centralize all the legal exposure accrued by this generation of grotesque banker corruption in one place, put one single price tag on it that everyone can live with, and then stuff the details into a titanium canister before shooting it into deep space.

  • This is all about protecting the banks from future enforcement actions on both the civil and criminal sides. The plan is to provide year-after-year, repeat-offending banks like Bank of America with cost certainty, so that they know exactly how much they’ll have to pay in fines (trust me, it will end up being a tiny fraction of what they made off the fraudulent practices) and will also get to know for sure that there are no more criminal investigations in the pipeline.

  • This deal will also submarine efforts by both defrauded investors in MBS and unfairly foreclosed-upon homeowners and borrowers to obtain any kind of relief in the civil court system. The AGs initially talked about $20 billion as a settlement number, money that would “toward loan modifications and possibly counseling for homeowners,” as Gretchen Morgenson reported the other day. The banks, however, apparently “balked” at paying that sum, and no doubt it will end up being a lesser amount when the deal is finally done.

  • To give you an indication of how absurdly small a number even $20 billion is relative to the sums of money the banks made unloading worthless crap subprime assets on foreigners, pension funds and other unsuspecting suckers around the world, consider this: in 2008 alone, the state pension fund of Florida, all by itself, lost more than three times that amount ($62 billion) thanks in significant part to investments in these deadly MBS.

  • So this deal being cooked up is the ultimate Papal indulgence. By the time that $20 billion (if it even ends up being that high) gets divvied up between all the major players, the broadest and most destructive fraud scheme in American history, one that makes the S&L crisis look like a cheap liquor store holdup, will be safely reduced to a single painful but eminently survivable one-time line item for all the major perpetrators.

  • But Schneiderman, who earlier this year launched an investigation into the securitization practices of Goldman, Morgan Stanley, Bank of America and other companies, is screwing up this whole arrangement. Until he lies down, the banks don’t have a deal. They need the certainty of having all 50 states and the federal government on board, or else it’s not worth paying anybody off.

  • To quote the immortal Tony Montana, “How do I know you’re the last cop I’m gonna have to grease?” They need all the dirty cops on board, or else the whole enterprise is FUBAR.

For more, see Obama Goes All Out For Dirty Banker Deal.

Buffett Sees Buffet In Ever-Rotting BofA Carcass; Opportunistic Financier To Feast Off Recent $5B Investment In Beleagured Bankster?

Fox Business reports:
  • Berkshire Hathaway’s investment of $5 billion in Bank of America comes with a costly price tag for a bank that has a host of real estate problems, as did Berkshire’s $5 billion investment in Goldman Sachs at the height of the financial crisis (even though Berkshire’s warrants in this deal would create losses for Buffett’s company if exercised today).

  • The way the Bank of America deal is structured, Warren Buffett’s Berkshire will get 50,000 preferred shares in a private offering that carries a sweet dividend of 6% a year; Bank of America can buy those shares back at any time by paying Berkshire a 5% premium.

  • Along with that, Berkshire gets warrants to buy 700 million shares in Bank of America at an exercise price of $7.14 each. The warrants may be exercised in whole or in part over a very long 10 years, following the close of the deal.

  • The shares are moving higher on the news, and Berkshire had a $546 million paper profit based on BofA’s share price of $7.92 by late morning. Fully exercised, the warrants would give Berkshire an estimated 7% stake in the company.

  • A 6% dividend is a high price to pay, and along with the 5% premium, is expensive capital on any measure. The deal is a red flag that Bank of America is struggling through a portfolio of mortgage, home equity, and commercial real estate loans it is having difficulty getting out from under.

  • The Bank of America deal is similar to a $5 billion investment Berkshire made in Goldman in September 2008, at the height of the financial crisis. Goldman paid a rich 10% dividend, or interest, on those preferreds to Berkshire. Goldman had to get Federal Reserve approval to buy back Berkshire’s $5 billion in preferreds this past March, and it did so by also paying a $500 million fee.

For more, see Buffett’s Big Bet Comes at a Hefty Price for Bank of America.

(1) In a possibly related story (one I'm sure is pure concidence, right?), it's been recently reported that, according to two Democratic officials not authorized to speak publicly about the event, billionaire Warren Buffett plans to hold a Sept. 30 fundraiser in New York City to help beef up President Barack Obama’s campaign chest (possibly to 'grease the wheels' of communication btween Buffet & the administration? Possibly as an 'insurance policy' on his $5B BofA deal?). See Bloomberg: Buffett to Host Obama Fundraiser in New York.

Michigan AG: Upfront Fee F'closure Rescue Ripoffs Not A 'Civil Matter' As Prosecutors Score Criminal Convictions On False Pretenses, Conspiracy Counts

In Allegan County, Michigan, The Holland Sentinel reports:
  • A Fennville woman was convicted Thursday on nine charges relating to a mortgage fraud rescue scheme, according to the state attorney general’s office.

  • Tonia Raisbeck, 36, was accused of collecting upfront fees of $795 to $1,500 from homeowners with the promise of securing new mortgages with lower interest rates. She never secured the mortgages, however, and several victims lost their money and their homes to foreclosure, authorities said.

  • Raisbeck was found guilty on nine counts Thursday, including false pretenses and conspiracy to commit false pretenses, as well as for violating the Credit Services Protection Act and conspiracy to violate the Credit Services Protection Act.

  • Raisbeck will be sentenced at 9 a.m. Sept. 23 before Circuit Court Judge Marge Baker in Allegan County Circuit Court.

Source: Fennville woman convicted for mortgage scheme.

Miami Outfit Among Three Alleged Upfront Fee Loan Modification Rackets Shut Down By Feds In Civil Lawsuits

In Miami, Florida, the South Florida Sun Sentinel reports:
  • Federal regulators have shut down three mortgage modification operations nationwide, including one in South Florida. The operations took millions in upfront fees while falsely telling homeowners they could get their loans reduced or stop their foreclosures, but then did little or nothing to help them, according to the FTC.

  • Two of the owners of Truman Foreclosure Assistance of Miami were ordered, as part of a settlement with the Federal Trade Commission, to pay $1.8 million toward consumer restitution. They also were banned from marketing, or helping others to market, mortgage modification or foreclosure relief services, the FTC said Thursday. Truman Foreclosure could not be reached for comment despite several attempts by phone.

  • Federal officials allege Truman salespeople took $1,500 to $3,000 in upfront fees, a violation of federal law, and falsely claimed a 90 percent success rate and a full money back guarantee. In most cases, the company either didn't contact the homeowners lenders, refused to tell their clients what was going on with their modifications, or refused to grant refunds, according to court documents.

  • Owners Eli Hertz and Benzion Jack Itzkowitz were prohibited, under the agreement, from sharing or using their customers' personal information and ordered to destroy those records. Richard Zafrani also was named in the action.Truman Foreclosure also did business as Truman Mitigation Servcies and Franklin Financial Group US.

  • The two other settlements reached included: One for multiple companies based in California that marketed debt relief and mortgage modification services under a web site called; and another for multiple defendents that federal regulators say set up false web sites that impersonated the government-backed site, which helps distressed homeowners refinance their properties.

Source: FTC shuts down Miami mortgage loan modifiers.

See also Marketers Falsely Claimed to Be Affiliated with Federal Assistance Programs, Agency Alleges; Operators in One Case Required to Pay $1.8 Million for the Federal Trade Commission press release and links to related court documents.

Virginia AG Cuts Loose Suspected Upfront Fee Loan Modification Racket By Signing Off On $6,500 Civil Suit Settlement

In Virginia Beach, Virginia, The Virginian Pilot reports:
  • A Virginia Beach-based company has agreed to pay more than $6,500 to settle allegations that it charged homeowners facing foreclosure illegal upfront fees to help save their homes, Virginia Attorney General Ken Cuccinelli announced Thursday.

  • Cuccinelli filed a lawsuit in Virginia Beach Circuit Court a little more than a year ago against Real Estate Resolutions LLC. The suit alleged that the company had illegally demanded money upfront for services and, in some cases, never performed. Virginia law prohibits a company that provides foreclosure-prevention services from charging a fee upfront.


  • This is the third settlement the attorney general's office has reached with a mortgage loan-modification company related to illegal upfront fees. Last month, Virginia Beach-based Nationwide Loan Modification Bureau LLC agreed to pay a total of $54,200 to settle similar allegations; and in December, Chesapeake-based American Neighborhood Housing Foundation agreed to pay more than $109,000.

For more, see Va. Beach company agrees to repay homeowners.

For the Virginia Attorney General press release, see Attorney General Cuccinelli announces settlement and permanent injunction against third mortgage loan modification company.