Saturday, September 17, 2011

Allegations Of Illegal Bankster Break-Ins Continue As Couple Levels 'Cat Burglar' Charges Among Other Accusations Against Trash-Out Contractor In Suit

In Pittsburgh, Pennsylvania, the Pittsburgh Tribune Review reports:
  • Contractors working for an Ohio property management company broke into a couple's West End home at least three times, stole their cat and other items and damaged the property, the couple claims in a federal lawsuit filed on Wednesday in Pittsburgh.

  • The complaint by Ken and Margaret Karpa of Windgap is the second lawsuit filed by Monroeville attorney Jeffrey Suher that claims a mortgage holder hired Safeguard Properties of Brooklyn Heights, Ohio, to secure a property that was in foreclosure proceedings.

  • The Karpas claim the PNC Financial Services Group hired Safeguard and that Safeguard hired unnamed local contractors who broke the lock on the Karpas' back door and took a coin collection and their cat. The contractors also damaged their china and stepped on pictures of their daughter, the lawsuit says.

  • Pamela Vukman, 47, of Shaler filed a federal lawsuit in August that says a Safeguard Properties contractor attempted to break into her home until a neighbor intervened. Megan Greenwalt, a spokeswoman for Safeguard Properties, and Fred Solomon, a spokesman for PNC, declined comment.

Source: Contractors broke into Windgap home, couple says in suit.

Trust Account Ripoffs, Unrefunded Unearned Fees Among New Charges Piled On By State Bar Against Attorney Already Facing Mortgage Fraud Allegations

In San Francisco, California, The Sacramento Bee reports:
  • Elk Grove lawyer Sean Patrick Gjerde, already facing criminal charges, was accused Monday of 36 counts of misconduct by the State Bar of California.

  • Among other things, he was accused of misappropriating $84,000 from a client's trust account and "repeatedly" violating a court order prohibiting him from working on bankruptcy cases without a judge's permission. He also was accused of failing to return unearned fees to clients.

  • The Bar said Gjerde, 35, agreed in June to a 60-day suspension in a separate disciplinary case. In that case, he was accused of billing an insurance company for services he never performed.

  • With the new accusations, Gjerde could lose his law license, said State Bar spokeswoman Diane Curtis. The new charges aren't related to the criminal matter. In that case, a federal grand jury in June 2010 charged Gjerde and nine others in a $5.5 million mortgage fraud. Prosecutors said the defendants arranged to buy 30 homes from Oakley to Olivehurst using doctored loan applications. All but two of the homes wound up in foreclosure, prosecutors said.

  • Gjerde was accused of writing letters on behalf of three homebuyers in which he falsely verified their job status and claimed to have prepared their tax returns. He has pleaded innocent and has been free on bond. Gjerde couldn't be reached for comment.

Source: State Bar accuses lawyer of misconduct.

Fannie Screw-Up Leads To Sale Of Occupied REO; Tenant In Possession Refuses To Move Until Expiration Of 90-Day Notice, Leaving Homebuyer 'Homeless'

In Lithonia, Georgia, WSB-TV Channel 2 reports:
  • Officials with government mortgage giant Fannie Mae said they're investigating a DeKalb foreclosure sale gone horribly wrong. The new buyer can't move in because a renter won't move out. Channel 2's Jim Strickland was there when they clashed in the driveway.

  • "This signifies that I actually own this property. That means it belongs to me," said Katrice Elliott as she displayed the closing papers. Elliott said she bought the home of Princeton Park Drive in Lithonia two weeks ago. Fannie Mae is the listed seller.

  • Fannie Mae's renter suddenly showed up, and Strickland greeted him. "I'm doing a story here with Ms. Elliott about the fact she owns this home and you're living in it," Strickland told the renter.

  • "That's a wonderful thing," replied four-year tenant Drew Walker. "I wish you no harm or ill toward you, Ms. Elliott. However, the law's on my side in this case," Walker said.

  • Strickland confirmed a 2009 federal law gives foreclosure tenants 90 days' notice to move after a sale. "The management company issued a leave the property order July 15th. If you count July 15th, 90 days is Oct. 15th. Not now," Walker said.

  • "Well, who are you paying for rent?" Elliott asked in a heated exchange with the tenant. "Nobody. I don't have an agreement with you," replied Walker.

  • In a second complication, Elliott's loan agreement with HUD said she has to live in the home within 30 days of purchase, or it's a federal crime. "Fannie Mae is now telling me it's my problem," Elliot told Strickland.

  • Elliott gave Strickland an email from a Fannie Mae staffer, who instructs a local management company: "Please discontinue all efforts with the tenant. The agent should not have closed with the tenant in the property. The property is disposed."

  • Walker said she found validation in the email. "Technically they should (not) have sold it while I was in there, but they did and they are admitting culpability. And (Elliott's) there calling me a squatter and every other thing," Walker said.

  • Strickland was still awaiting a call back from a Fannie Mae representative authorized to speak with the media at the time of this posting.

For the story, see Tenant, owner get in heated exchange over foreclosure.

Home Pledged By Mom To Secure Bond To Spring Bailjumping Cop/Son Not In Her Name, Leaving Feds Holding The Bag

In Miami, Florida, The Miami Herald reports:
  • The mother of fugitive cop David Britto used her Coral Springs home as collateral to get her son out of jail. Now it turns out she didn’t own the house. The mix-up appears to be yet another misstep in the saga of the Boynton Beach police officer who bolted for Brazil late last month rather than stand trial on charges of trafficking methamphetamine.

  • As expected, Britto, 28, was a no-show for the start of his trial Tuesday in Miami federal court. After a brief, 10-minute proceeding, U.S. District Judge Donald L. Graham issued a warrant for the officer’s arrest.

  • Behind the scenes, lawyers and other officials were trying to sort out how Britto’s mother, Janiber Vieira, 51, was able in July to use the house to secure a $50,000 corporate surety bond for her son when her name is not on the deed. It is in only the name of her husband, Mariorlando F. Vieira, Broward County records show.

For more, see Fugitive cop’s mom didn’t own house she put up for his bond.

Ex-'Monster House' Owner Gets Probation On Grand Theft Charge Alleging $1M In Fixture Ripoffs After Mansion Foreclosure

In Vista, California, The San Diego Union Tribune reports:
  • A woman accused of stealing $1 million in fixtures from an Olivenhain mansion that became known as the “Monster House” pleaded no contest Monday to a misdemeanor grand theft charge in Vista Superior Court and will serve three years’ probation and pay a $968 fine.

  • Suzy Brown was also sentenced to four days of custody, but received credit for time served, said Deputy District Attorney Robert Eacret.

  • Brown in 2006 completed a $13 million, 16,000-square-foot home in Encinitas that was to be used as a high-end drug rehab center. Neighbors complained and quashed those plans, while dubbing the home the “Monster House.”

  • Without income from the potential patients, Brown and what she has said were 60 other investors defaulted on the loan in 2009 when Capital One was still owed $6.5 million. The home sold for $2 million to a couple last year.

  • After foreclosure, Brown was accused of stealing several fixtures from the house, including a 300-year-old Egyptian door, brass faucets and toilets and hand-carved cabinets. She moved out March 22, 2009; the items were reported missing four days later.

For the story, see Former Encinitas Monster House owner sentenced.

Hotel In Foreclosure To Shut Down, Forcing At Least 12 Families To Relocate On 24 Hours Notice Without Affordable Options

In Eureka, Missouri, KTVI-TV Channel 2 reports:
  • The America's Value Inn in Eureka is closing it's doors and the people who live there were told they have less than 24 hours to pack up and leave. Fox 2 stopped by the hotel to find out why.

  • It turns out the hotel is in foreclosure and those who rent rooms have no place to go. Wife and mother of 4 Melissa Cadotte says she's devastated because this was the only place her family could afford. They moved out of their apartment in June after having problems with mold.

  • "We got a phone call a couple of hours ago telling us that we had to hurry up and get our things and get out and we asked why and they said the bank is foreclosing and we all have to be out of the building by tonight." said Cadotte.

  • Renters also say workers lost their jobs and at least 12 families lived on the property.

For more, see Hotel Closure Leaves People Homeless In Eureka.

Mobile Home Residents Face Utility Shutoffs After Landowner Stiffs Water & Power Companies Out Of Nearly $100K

In Hamilton County, Ohio, WKRC-TV Channel 12 reports:
  • A local landlord was ordered to court [] and then ordered to stay in his seat by a Hamilton County judge. Judge Steve Martin wants proof that residents of the Compton Hills Mobile Home Park don't have to worry about Duke Energy disconnect notices issued Friday, and staggering water bills.


  • According to residents of Compton Hills and court documents, attorney and landlord Holbrook owes Duke and Cincinnati Water Works nearly $100,000. He also has unpaid debts and judgments all over the Tri-State. Residents of Compton Hills and Judge Steve Martin want assurances that their utilities are not going to be cut off next Friday.(1)

For more, see Alleged "Slum Landlord" Blames Bad Economy For Unpaid Bills.

(1) Lack of electricity and running water could give the local municipal code enforcement authorities (ie. building/health departments) grounds to storm in and immediately give all the residents the boot over health and safety issues.

Pennsylvania Mobile Home Owners To Meet In Effort To Combat Land Lease Ripoffs That Force Residents From Homes

From the Pennsylvania Coalition of Manufactured Home Residents (PAMHOA):
  • If you lease land and own the home:

    o You are in constant danger of losing your home and contents!
    o You are coerced into paying rent increases and accepting unreasonable demands by the land owner!
    o If the land owner decides to sell the community, you can be evicted without advance notice or compensation!
    o If evicted, you cannot access your own property and must continue to pay rent!?!

Meet with us to:

  • Learn current, pending, and future legislation.
  • Share your concerns with people who are working on protecting your rights.

Open to all Pennsylvania manufactured home residents (mobile home, manufactured home, modular home, leased land residents) and people who want to help.

Registration $10 – Chance to win Staples Gift Card – Light Refreshments; Speakers include PA legislators, Regional Housing Legal Services attorney(s), Housing Alliance of PA, PAMHOA staff.(1)

Contact Yvonne at 610-965-6579 or
PAMHOA Website

(1) Date: September 24, 2011
St. Nicholas Greek Orthodox Church
1607 West Union Blvd, Bethlehem, PA
Open 1:30-5:30, Meeting 2-4 PM – Actual Times and Speakers Subject To Change

Dog Dispute Takes $90K Bite Out Of Largest NYC Housing Complex For Refusal To Allow Resident With Certified Mental Health Issues To Keep Companion Pet

In Co-Op City, The Bronx, the New York Post reports:
  • Co-Op City plans to review its pet policy after the city’s Human Rights Commission found it had discriminated against a tenant with a certified psychiatric disability who wanted to keep a dog. The city’s largest housing complex now faces extraordinary penalties of more than $90,000.

  • We get the message,” said Jeffrey Buss, a lawyer for the 15,372-apartment Bronx development. “This is not what we’re about. We’re a very tolerant and inclusive community. We’re going to be reviewing our policy.”

  • Co-Op City has a no-pet policy but makes exceptions for companion animals for medical reasons. A tenant identified only as L.D. in legal papers filed for such an exception based on a long history of depression and other mental-health issues. But she was rejected in what an administrative law judge concluded was a “superficial” review.

  • Buss called the $90,150 in penalties “harsh and disproportionate” and said an appeal was in the works, noting that the tenant was allowed to keep her pet.

Source: Court bites Co-Op City.

Go here for a summary of recent cash settlements for those aggrieved by violations of the New York City Human Rights Law.

Friday, September 16, 2011

NJ Supreme Court: Mortgage Servicer's Conduct Related To Post-Foreclosure Judgment Forbearance Agreement Subject To State Consumer Fraud Act

Lexology reports:
  • In its August 29, 2011 opinion in Gonzalez v. Wilshire Credit Corp., et al., the New Jersey Supreme Court held that a servicer’s post-foreclosure forbearance agreement was subject to the New Jersey Consumer Fraud Act (CFA), which covers, among other things, unconscionable lending practices.(1)


  • The Court held that a servicer’s action toward collection or enforcement of a loan constitutes activity falling within the coverage of the CFA. Finding that the forbearance agreements were “nothing more than a recasting of the original loan” and separately constituted the extension of credit, the Court held that Wilshire’s conduct in connection with the subsequent performance of that loan fell within the CFA.

  • The Court rejected Wilshire’s and amicus New Jersey Bankers Association’s contention that such a holding would discourage work-outs by lenders and lead to more sheriff’s sales, stating its view that lenders “want a return on their capital, not to buy and sell homes.”

  • The Court also emphatically noted that “lending institutions and their servicing agents are not immune from the CFA; they cannot prey on the unsophisticated, those with no bargaining power, those bowed down by a foreclosure judgment and desperate to keep their homes under seemingly any circumstances.”

For more, see New Jersey High Court applies Consumer Fraud Act to forbearance agreements (requires paid subscription; if no subscripion, GO HERE, or TRY HERE - then click the appropriate link for the story).

See also, Day Pitney LLP: NJ Supreme Court Rules Consumer Fraud Act Applies To Post-foreclosure Judgment Forbearance Agreements.

(1) The New Jersey Supreme Court affirmed the ruling of the state intermediate appeals court in Gonzalez v. Wilshire Credit Corp., 411 N.J. Super. 582, 988 A. 2d 567 (App. Div. 2010).

Maine High Court Hears Arguments In Bogus Foreclosure Affidavit Case

In Portland, Maine, The Portland Press Herald reports:
  • The "robo-signing" foreclosure case of a Denmark woman represents such a serious attack on the integrity of the state's judicial system that an investigation of the mortgage servicer's practices is warranted, the woman's lawyer argued before the Maine Supreme Judicial Court on Wednesday.

  • Nicolle Bradbury's attorney, Thomas Cox, also said a lower court erred when it failed to find GMAC Mortgage in contempt because one of its employees signed a sworn document in support of foreclosure on her home without reviewing the relevant records. Cox, who discovered the flawed process, argued that it was part of a pattern and that the trial court should have considered remedial or punitive action against GMAC.

For more, see Appeal pushes for sanctions in foreclosure.

See also The Maine Public Broadcasting Network: Maine's High Court Hears Appeal in GMAC Foreclosure Case.

Massachusetts High Court To Review Another Foreclosure Case On Direct Review From Trial Court

From The Boston Globe's Real Estate Now blog:
  • Could Eaton v Fannie Mae be the next US Bank v Ibanez? Attorney Richard D. Vetstein explains the next important foreclosure case coming down the Pike:

    In a rare direct appellate review, the Massachusetts Supreme Judicial Court has agreed to hear an appeal considering the controversial “produce the note” defense in foreclosure cases. Perhaps more importantly, the court may also consider whether a foreclosing lender must possess both the promissory note and the mortgage in order to foreclose. This is especially important for MERS mortgages.

    The case is Eaton v. Federal National Mortgage Association (Fannie Mae), The court will hear arguments in October, with a decision coming several months later. The court is also seeking amicus, or friend of the court, briefs from interested parties.


  • Superior Court Justice Francis McIntyre, wrote a 10 page opinion, explaining that Massachusetts has long recognized that although the promissory note and the mortgage can travel different paths after the borrower signs them, both instruments must bereunitedto foreclose.

    The mortgage note has a parasitic quality, in that its vitality depends on the promissory note,” the judge ruled. As is becoming increasingly prevalent, neither the foreclosing lender nor Fannie Mae, which held the loan, could located the original signed promissory note; they were only able to produce a copy endorsed in blank without an amendment, or allonge, indicating when it was endorsed or who held it at the time of the foreclosure. Without the note properly endorsed and assigned to the foreclosing lender, the foreclosure was a nullity, the judge held.

For more, see Produce the note defense. Another SJC case.

Idaho Regulator Issues Cease & Desist Order Against Out-Of-State Loan Modification Outfit Alleging Upfront Fee Ripoffs

From the Idaho Department of Finance:
  • The Idaho Department of Finance announced the issuance of a cease-and-desist order today against Minnesota-based Freedom Companies Lending, Inc., for allegedly engaging in mortgage modification activities in Idaho without a license and targeting Spanish-speaking Idaho homeowners by unlawfully charging them large upfront fees.

  • Department of Finance Director Gavin Gee said Freedom Companies Lending goes by several different names, including "Freedom Financial Mortgage Corporation," "Freedom Companies, Inc.," and "Freedom Companies Marketing, Inc."

  • "We’ve had several Idaho homeowners report that they have lost a lot of money by responding to solicitations by these companies," Gee said. "They seem to be targeting Spanish-speaking homeowners, and they use a Chicago mailing address."

For the entire press release, see Minnesota Company Ordered to Cease and Desist Mortgage Modification Activities in Idaho.

Thursday, September 15, 2011

Stench From Activities Involving NYC Public Administrators Remains Unrelenting As Allegations Of More Ripoffs Of Dead People Without Wills Continue

In The Bronx, New York, the New York Daily News reports:
  • Surrogate Judge Lee Holzman let cronies loot the estates of Bronx residents who died without wills, the court's watchdog agency charged Monday. Holzman repeatedly approved dubious fees for a lawyer pal who was his chief campaign fund-raiser and allowed estate cases to languish for up to 10 years, the State Commission on Judicial Conduct charged.

  • Commission probers recommended the agency's board take disciplinary action against Holzman. The penalty could range from reprimand to removal.

  • The charges come two years after the Daily News exposed Holzman's lax oversight of estates in the Bronx, revealing fees the judge approved for his top fund-raiser, lawyer Michael Lippman. Lippman, who raised $125,000 for Holzman's 2001 campaign, was for years counsel to the Bronx public administrator, whose office oversees estates.(1)

  • In a complaint Monday, the commission said that between 1995 and mid-2009, Holzman repeatedly approved Lippman's fees without documentation that Lippman had done anything to earn them. Over several years, Lippman collected "advances" on these fees at a time when he faced daunting debts, including foreclosure on a $400,000 mortgage and $1 million in gambling losses.

  • Last year, Lippman was arrested on charges of billing for $300,000 in work he hadn't performed. He's denied wrongdoing and awaits trial.

For more, see Surrogate Judge Lee Holzman let lawyer pal loot estates, panel finds.

(1) The stench is not limited to The Bronx. See NYC Controller Urges All Brooklyn Residents To "Make Out A Will ASAP!" To Avoid Risk Of Getting Fleeced By Public Administrator's Office.

For one New York Times story in this regard dating back over 20 years involving the alleged illegal clipping of dead people, see 3 in Surrogate's Office Charged With Thefts:

  • Three investigators from the Brooklyn and Bronx Public Administrators' offices were arrested [] and charged with falsifying public records and stealing valuables from rooms they believed had been occupied by people who died without leaving a will.

For similar stories of alleged state-sanctioned ripoffs of the dead, as well as the elderly, infirm and others deemed by government bureaucrats to be unable to take care of themselves, see:

Suspected SE Michigan Land Contract Racket Leaves Would-Be Homebuyers Holding The Bag On Homes In Imminent Foreclosure, Families Facing The Boot

In Detroit, Michigan, WXYZ-TV Channel 7 reports:
  • Many are discovering what they thought was a blessing, has turned into a curse. The homes they thought they were buying are in various stages of foreclosure – and they say the man who sold them, Leonard Bale, never told them.


  • Kimberly Ostrander is a cancer survivor who thought she was buying a home where she could heal and raise her disabled son, she explains while sitting on the porch outside her house in Garden City. “I put new flooring in, put the gutters up. We put a brand new back deck on, everything,” says Ostrander.

  • Amee Ravetto has a similar story. She was happy to find a house in the Woodhaven neighborhood where she has friends and relatives nearby. She also wanted a home for her three boys in a section of town that would provide comfort and convenience. “I have friends that I’ve known since childhood that still live in this neighborhood, so it was a big deal,” says Ravetto.

  • Their stories have both a common theme and a common problem: They all signed a land contract—an agreement to make monthly payments to the owner instead of getting a mortgage loan from a bank. They say they had a land contract with Wolverine Investments, which is owned by Bale and that he didn’t tell them the truth about the properties.

  • Bale is well known in Southeastern Michigan, and now on Craigslist, as a property owner with dozens of houses to sell or rent. But, On Face book, you’ll find theLen Bale Defrauded Me” site where dozens of people complain about Bale.

  • [Homeowner Shannon] Edmonds is now worried that her family only has a few more months to live in the house she wanted to own for years to come. “Three weeks ago we got a postcard in the mail saying the house was in foreclosure,” she says. “It’s up for sheriff’s sale on the 16th of September.” Edmonds says she has no means to buy it again. “I’m going to lose my house,” she says. “I’ve put money into this house.”


  • The Action News investigators went to Bale’s half-million dollar home in Farmington Hills to ask him a few questions but no one answered the door or returned our phone calls. But at a Westside Detroit house Bale was trying to sell, we met Jeff Opperman. The buyers recognize Opperman as the man who worked closely with Bale, collecting monthly payments and dong work on Bale’s properties. Opperman would not talk to Action News.

  • Bale property buyers say they paid Bale between $5000 and $10,000 down payments.(1)

  • Jackie Antolak says she bought a home from Bale in Lincoln Park. “I moved in June 2010,” she told Action News. “End of July, beginning of August 2010, Chase Bank showed up to my door looking for Leonard Bale the home was in foreclosure, and now, I cant’s get a hold of anybody to get my money back.”

For more, see They thought they were buying homes for their families, but a dream come true has become a nightmare.

(1) If the allegations made against Bale & Opperman are true, they appear to be prime candidates for, at a minimum, criminal charges of theft by deception/theft by false pretenses and organized fraud, charges that could be brought by local and state law enforcement authorities. They could also be looking at federal conspiracy charges, as well as federal wire and mail fraud charges if they employed telephonic communications or mail delivery if the allegations of them pulling off this racket are true.

Prosecutors Cut Loose Duo Pinched In Home Hijacking Racket Targeting Vacant Foreclosed Homes After 'No Contest' Pleas, Credit For 'Time Served'

In Fort Pierce, Florida, TC Palm reports:
  • Two men charged with taking over and renting out houses going through foreclosure pleaded no contest Monday to a charge of organized fraud under $20,000 and were sentenced to the time they've already served behind bars and probation.

  • Robbie Jay Hughes, 37, and Issiac Rivers, 47, were arrested in February 2010 on more than a dozen charges of first- and third-degree grand theft in addition to a charge of first-degree organized crime.

  • According to Port St. Lucie Police Department reports, Hughes and Rivers would find houses under foreclosure, break in and change the locks, do any necessary maintenance and rent the houses for cash or money orders.

  • The men were charged in connection with eight houses, but Ashley Minton, Hughes' defense attorney, said there probably were a dozen or more houses involved.


  • Rivers was adjudicated guilty because he has a prior conviction on an unrelated case and sentenced to the 587 days he's already served in jail while awaiting trial. Circuit Judge James McCann sentenced Hughes to the 498 days he's already spent behind bars and agreed to withhold adjudication because he has a clean record.

For the story, see Two Port St. Lucie men plead to renting out houses in foreclosure.

Loophole Allowing Detroit-Area Property Owners To Stiff County On R/E Taxes, Water Bills To Continue As Befuddled Officials Refuse To Ban Racket

In Detroit, Michigan, The Detroit News reports:
  • State officials and area county treasurers say Wayne County already has the authority to stop a growing number of property owners from ditching tax debt by buying their land back for pennies on the dollar at the annual foreclosure auction.

  • But Wayne County officials said they don't want to ban the practice, arguing it would be too hard to enforce and could hurt poor homeowners. "We have no plan to do that at this point," said Wayne County Chief Deputy Treasurer David Szymanski. "The enforcement mechanism for not allowing people to buy back is a nightmare." "We are trying the do the best we can in trying economic times."

  • The Detroit News reported last week that Detroit property owners are using the little-known loophole to erase tax debt, interest, fees and unpaid water bills by letting properties go into foreclosure and then buying them back at the Wayne County treasurer's auction, sometimes for as low as $500.

  • The News identified about 200 of nearly 3,700 Detroit properties sold at auction last year that appeared to be bought back by owners, wiping away about $1.8 million in tax debt. That included one Detroit landlord who lost seven rentals after he didn't pay $131,800. He bought them back a month later for $4,051.

For more, see Counties can ban owners from foreclosure resales (But Wayne officials say they don't want to prohibit practice).

Wednesday, September 14, 2011

Minnesota AG: 'No Way To Liablility Releases On Securitization Screw-Ups;' Joins Counterparts In Other States Against Free Pass For Banksters

Bloomberg reports:
  • Banks shouldn’t be protected from liability for mortgage securitization as part of a national foreclosure settlement, said Minnesota’s attorney general, joining other states voicing concern over the issue.

  • Any settlement shouldn’t release the banks from liability for the bundling of mortgages into securities or for the use of a mortgage registry known as MERS, Attorney General Lori Swanson said in a Sept. 9 letter obtained by Bloomberg News.

  • The banks should not be released from liability for conduct that has not been investigated and is not appropriately remedied in any settlement,” Swanson wrote to her counterparts in New York and Iowa.


  • We have received Attorney General Swanson’s letter and agree that any agreement must not prevent attorneys general investigating the mortgage crisis from following the facts wherever they lead,” Danny Kanner, a spokesman for New York Attorney General Eric Schneiderman, said in an e-mail today.


  • Besides Schneiderman and Swanson, other attorneys general who have spoken out about liability releases are Martha Coakley of Massachusetts, Delaware’s Beau Biden, and Catherine Cortez Masto of Nevada.


  • In her letter, Swanson commended actions by individual attorneys general and lawsuits against banks filed by the Federal Housing Finance Agency(1) over losses on mortgage-backed securities sold to Fannie Mae and Freddie Mac.

For more, see Foreclosure Deal Shouldn’t Waive All Claims, Official Says.

(1) See Unaccountable To Executive Branch, Federal Agency May Be The Needed 'Loose Cannon' To Hold Banksters Personally Responsible For Roles In Fin'l Crisis.

Desperate BofA Resorting To Forum Shopping In Search Of Better Outcome From Federal Court In Response To Nevada AG's Recent Misconduct Allegations?

In Reno, Nevada, the Reno Gazette Journal reports:
  • The state of Nevada upped the ante against the nation's largest bank, filing a second complaint that accuses Bank of America of lying to borrowers, misrepresenting its authority to foreclose on homes and reprimanding employees for spending too much time with distressed borrowers over the phone.

  • But with Bank of America successfully kicking up the original case to federal court earlier this year -- and potentially skipping the state courts -- Nevada's amended complaint against the bank faces a more uncertain outcome, if past federal judgments are any indication.

  • "This is such a big deal because 99-plus percent of these cases in federal court are disposed of without evidence ... and in summary fashion," said Geoffrey Giles, a Reno lawyer. "Banks are actually winning these cases hands down and they will do anything to get their case removed to federal court because they know they can get a better deal. It's the most rank example of forum shopping."

  • Forum shopping is the practice of trying to get a case heard in a court that is more likely to render a favorable verdict. The case's removal from state court to the U.S. Ninth Circuit was opposed by Nevada Attorney General Catherine Cortez Masto. Bank of America violated state law -- not federal law -- so the case should be decided by Nevada courts, Masto said.

  • Now the state is pursuing all legal avenues to bolster its chances for success against the bank. "We argued in federal court that the case be remanded back to the state but the federal judge disagreed," Masto said. "We're appealing that decision ... but we're also moving forward with the case in federal court."


  • Although the Nevada has a pretty solid case against Bank of America in state court, the removal of the case to federal court changes the equation, Giles said. All one needs to do is see the track record private lawyers have had when bringing up the same complaints against banks in federal court.

  • "The allegations in the (Nevada Attorney General's complaint) look very, very similar to allegations private counsel have been making all along and are getting thrown out in federal court left and right," Giles said. "I'm actually working on an appeal on this very issue right now."

  • At the heart of Giles' appeal and Masto's argument to have the Bank of America case remanded is a long-standing debate on whether federal courts should be allowed to remove cases directly related to state law from state courts. The debate is at the center of an ongoing case, "Chapman vs, Deutsche Bank," which is being heard at the Nevada Supreme Court.

  • The case could potentially put the brakes on state court cases being snatched by federal courts, with the exception of class-action lawsuits. "The issue is, should federal judges be making rulings on Nevada state law?" Giles said. "You basically have federal courts telling Nevada how its foreclosure statutes work and that's wrong. That should be up to the Nevada Supreme Court, but federal courts have consistently refused to buy those arguments."

For more, see Nevada AG accuses Bank of America of widespread misconduct.

Oregon Trial Judge: Court Can Consider Title Issues In Post-Foreclosure Eviction Action; Points To Dubious Assignments To Deny Bankster's Boot Request

In Hood River, Oregon, The Oregonian reports:
  • Another Oregon woman successfully halted a post-foreclosure eviction after a judge in Hood River found the bank could not prove it held title to the home.

  • Sara Michelotti's victory over Wells Fargo late last week carries no weight in other Oregon courts, attorneys say. But it illustrates a growing problem for banks -- if the loans's ownership history isn't recorded properly, foreclosed homeowners might be able to fight even an eviction.

  • "There's this real uncertainty from county to county about what that eviction process is going to look like for the lender," said Brian Cox, a real estate attorney in Eugene who represented Wells Fargo.

  • Michelotti's case revolved around a subprime mortgage lender, Option One Mortgage Corp., that went out of business during the housing crisis. Circuit Court Judge Paul Crowley ruled that it was not clear when or how Option One transferred Michelotti's mortgage to American Home Mortgage Servicing Inc., which foreclosed on her home and later sold it to Wells Fargo.

  • Since the loan's ownership was not properly recorded in Hood River County records, as required by Oregon law, Crowley ruled that Wells Fargo could not prove it had valid title to the property to evict. Crowley presides over courts in Hood River, Gilliam, Sherman, Wasco and Wheeler counties.

For more, see Court rulings complicate evictions for lenders in Oregon.

For Judge Crowley's letter ruling/opinion, see Wells Fargo v. Michelotti, No. 11-0015FD (Hood River Cty. Cir. Ct. September 8, 2011).

Filing Proof Of Claim Not Necessary To Move Forward With Foreclosure In Bankruptcy Proceedings, Says Federal Appeals Court

Lexology reports:
  • The failure to timely file a proof of claim can have significant ramifications on a creditor’s right. Recently, the Seventh Circuit in In the Matter of Richard Louis Alexander, 2011 U.S. App. LEXIS 17110 (7th Cir. Aug. 16, 2011), held that a secured creditor who is only looking to proceed with a foreclosure action against the mortgaged property need not file a proof of claim to protect its rights to the collateral. As such, the failure to file a proof of claim was irrelevant to the secured creditor’s request for relief from the automatic stay to pursue a state court foreclosure action.


  • On appeal, the Seventh Circuit dismissed the notion that filing a proof of claim was required in order to seek stay relief to proceed with a foreclosure action against the mortgaged property:

    “A secured creditor need not file a ‘proof of claim’ unless the creditor wishes to take part in the distribution of estate assets; here the creditors sought to separate the mortgaged property from the bankruptcy estate and vindicate their claims in foreclosure proceedings in state court, as the bankruptcy code permits. See 11 U.S.C. § 506(d)(2); In re Penrod, 50 F.3d 459, 461 (7th Cir. 1995) (‘A secured creditor can bypass his debtor's bankruptcy proceeding and enforce his lien in the usual way, which would normally be by bringing a foreclosure action in a state court. This is the principle that liens pass through the bankruptcy unaffected.’); In re Pence, 905 F.2d 1107, 1110 (7th Cir. 1990).”

For more, see Seventh Circuit: failure to file proof of claim does not foreclose your rights (may require paid subscription; if no subscription TRY HERE - then click the appropriate link).

Tuesday, September 13, 2011

Tucson Feds Score Indictments Accusing Pair Of Abusing Bankruptcy Court In Peddling Foreclosure Rescue Services, Hijacking Vacant Freddie, Fannie REOs

From the Office of the U.S. Attorney (Tucson, Arizona):
  • A federal grand jury in Tucson returned a 10-count superseding indictment this week against Marshall E. Home and Margaret Elizabeth Broderick of Tucson for bankruptcy fraud, mail fraud, and wire fraud.

  • The indictment alleges that Home and Broderick operated "The Individual Right Party; Mortgage Rescue Service" which offered, for a $500 fee, relief for people facing mortgage foreclosure. Rather than providing relief, the pair filed false documents in U.S. Bankruptcy Court, making false claims against the United States. The false claims totaled over $250 billion.(1)

  • In addition, the indictment alleges that the defendants essentially tried to assume the identities of the Federal National Mortgage Association (better known as "Fannie Mae") and the Federal Home Loan Mortgage Corporation (better known as "Freddie Mac.")

  • The defendants then filed deeds purporting to transfer title to real estate owned by Fannie Mae and Freddie Mac to an entity controlled by the defendants. The defendants attempted to steal at least 28 properties from Fannie Mae and Freddie Mac in this manner.

For the U.S. Attorney press release, see Pair Charged In Fraud Scheme In Tucson.

(1) For more on the various foreclosure rescue rackets that employ fraudulent filings and other abuses of the bankruptcy court process, see Final Report Of The Bankruptcy Foreclosure Scam Task Force.

Banksters' Bad Faith Bargaining In Loan Modification Talks During Foreclosure Proceedings Draws Ire From Some Judges

In New York City, the New York Daily News reports:
  • Dental hygienist Charmaine Davis' ordeal with Deutsche Bank began soon after she found herself facing foreclosure while helping her mother deal with cancer. After 17 negotiation conferences, her effort to modify her loan had gone nowhere - until a Brooklyn judge stepped in and punished the bank for "bad faith" bargaining.

  • Davis' case is hardly unique. Banks have come under increasing fire for mishandling the growing number of foreclosed properties on their books.


  • In 2009 a New York law began requiring banks to make a "good faith effort" to negotiate with homeowners and try to work something out. In recent months judges have begun cracking down on banks that don't make that "good faith" effort.

  • From November 2009 through last month, New York judges have slammed banks for their lack of good faith in at least seven cases. In one case a judge ordered the mortgage debt wiped out. In the others substantial sanctions were imposed or threatened.

For more, see Judges crack down on banks for 'bad faith' as homeowners face threat of foreclosure.

Bankster-Created Housing Market Mess Leads To Improper Home Loss For Many, Pension Hit For Others While Some Get Belted On Both Ends

The New York Post reports:
  • It’s the flip side of foreclosure fraud: Not only is the city fireman in danger of losing his home, he also might wind up with smaller retirement checks because his pension invested in home-mortgage-backed bonds that were bundled and sold off by banks during the real-estate bubble.

  • Pension funds, insurance companies, university endowments, charities, community banks and other investors are believed to be out hundreds of billions of dollars because of the mess big banks made of the housing market.

  • Although lawsuits against banks are mounting, the disputes over the almost $1 trillion in mortgage securities may take years to resolve -- and most investors are likely to wind up with only cents on the dollar.

  • It comes out of our pockets,” says Peter Henning, a Wayne State University law professor and securities-law expert. “No one reached into your wallet and took out cash, but it impacts all of us. If you’re a mutual-fund holder with a bond fund, you’ve probably taken a hit. Insurance companies have losses, and that cost has to get passed on.”


  • Every layer of this onion you peel is rotten,” says Talcott Franklin, a Dallas lawyer who is representing the 129-year-old Catholic charitable organization, Knights of Columbus,(1) and other investors in lawsuits against banks. “It’s hard not to feel wronged.”

For more, see $1T in sour notes (Banks being squeezed by mortgage investors).

(1) For more on the Knights of Columbus case, see Investor Files Amended 'Securitization Screw-Up' Suit; Believes Bankster's Knowing Bungle In Mortgage File Exchange Led To Purchase Of 'Unbacked' MBS.

Monday, September 12, 2011

Nevada AG Bags Suspect For Allegedly Refinancing Equity Out From Under Unwitting Homeowner

From the Office of the Nevada Attorney General:
  • The Office of the Nevada Attorney General announced an indictment [] against Shafik Hirji, 53, who unlawfully obtained financing on the home of one of his acquaintances. Hirji, of Las Vegas, was indicted on three counts of forgery and one count of theft for obtaining a loan on the victim’s home and embezzling the proceeds.

  • The indictment alleges that Hirji completed loan documents in the homeowner’s name and used them to effectuate the loan transaction. In the process, Hirji induced a notary public to certify that the signatures contained on the documents were true and then presented these documents to the lender. The indictment further alleges that Hirji retained the proceeds of the loan, directing that they be deposited into a bank account under his control.

  • "The facts surrounding this particular crime are especially troubling," said Attorney General Catherine Cortez Masto. "The fact that the owner was unaware his home had been refinanced indicates the crime was committed by someone the victim trusted. My office continues to place a high priority on prosecuting fraud in Nevada."

For the Nevada AG press release, see Attorney General Announces Indictments In Mortgage Refinancing Scam.

Suspect Learns Upfront Fee Foreclosure Rescue Ripoffs Not A 'Civil Matter;' Slammed w/ $100K Bail Hold After Getting Pinched For Burglary, Grand Theft

In Ventura County, California, the Ventura County Star reports:
  • A Fontana man was arrested Thursday on suspicion of stealing thousands of dollars from an Oxnard woman as part of a foreclosure-rescue operation, prosecutors said.

  • Juan Alvarado Cervantes, 49, was arrested by Fontana police, then booked into Ventura County jail on suspicion of residential burglary and grand theft, the Ventura County District Attorney's Office said.

  • Prosecutors said Cervantes went to the home of an Oxnard woman struggling to make her mortgage payment, collected thousands of dollars in upfront fees, promised to save her home from foreclosure but provided no services. The woman eventually lost her home, officials said.

  • The charges against Cervantes stem from a long-term investigation by the District Attorney's Real Estate Fraud Unit into foreclosure-rescue operations in Ventura County, prosecutors said.

  • Cervantes was being held in county jail Thursday in lieu of $100,000 bail. If convicted, he faces a maximum of six years and eight months in prison, prosecutors said.

Source: Fontana man accused in Ventura County foreclosure case.

Go here for the Ventura County DA press release.

Kentucky Attorney Cops Plea To Ripping Off Clients, Forging Deed In Effort To Score 66 Acres At Deep Discount

In Covington, Kentucky, the Cincinnati Enquirer reports:
  • Covington lawyer pleaded guilty Wednesday to stealing thousands of dollars from his clients and forging a state senator’s name.

  • Patrick Moeves, 42, admitted in Kenton Circuit Court that he took fees for legal work he did not do and forged state Sen. Jack Westwood’s name on a land deed – allowing the land to be sold to Moeves’ cousin.

  • Moeves, who has been held in the Kenton County jail for more than eight months, faces up to eight years in prison when Judge Martin Sheehan sentences him next month.


  • Commonwealth’s Attorney Rob Sanders said he agreed to accept the guilty plea because Moeves will likely serve more than five years in prison. Sanders is seeking a total of eight years in prison – one four-year sentence and two, two-year sentences consecutively.

  • I think the court, as does the Commonwealth, understands that we have to be able to trust attorneys,” Sanders said. “Contrary to what many people think, a license to practice law is not a license to steal. To maintain the public’s trust in the system it’s important that anyone with a law license that violates that trust goes to prison.”


  • In December, Moeves was removed as co-executor of the estate a Park Hills woman after the other co-executor, state Sen. Jack Westwood, said his name was forged on a deed.

  • The forgery allowed 66 acres in Harrison County to be sold to Moeves’ cousin for less than half its taxable value of $289,000. Sanders said Wednesday that because Moeves admitted to the forgery in court, the land sale should soon be voided.

For the story, see Covington lawyer guilty of theft, forgery.

Real Estate Agents Cautioned Against 'Reverse Staging' Short Sale Fraud

Robert Freedman, Senior Editor at REALTOR® Magazine writes:
  • If you’re thinking about working with a financially distressed seller and the house he wants to sell is trashed, take the extra time to be sure he didn’t trash it himself.

  • One of the types of short sale fraud that Fannie Mae is seeing these days is “reverse stagedhouses. In these cases, owners trash their house to knock down the property value.

  • A buyer with whom the owner is colluding then comes in with a low-ball offer, buys it and fixes it back up, then flips it for its real market value. That seems like a brazen scheme, but mortgage fraud by its nature is a brazen activity.(1)

For more, see Fraud: Are Your Clients Using Reverse Staging?

(1) According to Kim Ellison, Fannie Mae senior industry relations manager for the mortgage fraud program, Fannie conducts post-closing reviews and do proactive database searches looking for patterns and trends by pulling in MLS data and public records and looking at listing information compared to what they've been told, but that the majority of the information comes from tips, the story reports. Fannie's tip line is 800/7-fannie, and e-mail,

Sunday, September 11, 2011

Unaccountable To Executive Branch, Federal Agency May Be The Needed 'Loose Cannon' To Hold Banksters Personally Responsible For Roles In Fin'l Crisis

Reuters reports:
  • By suing 131 individuals in its effort to recover losses on $200 billion of mortgage debt that went sour, the federal agency overseeing mortgage giants Fannie Mae and Freddie Mac is doing one thing that the U.S. government has largely left alone.

  • It is trying to hold actual people, not just companies, responsible for their roles in the global financial crisis. The 18 lawsuits(1) by the Federal Housing Finance Agency, including 17 filed last week and one in July, signal a change from prior federal efforts to punish banks and bankers for their roles in the financial crisis.

  • That difference may stem in part from the FHFA's belief that it has enough evidence to pursue civil claims against banking executives. Its lawsuits draw on information generated by 64 subpoenas issued last year for details on pools of mortgage securities that Fannie Mae and Freddie Mac bought. They also draw on probes by a U.S. Senate investigation subcommittee and the Financial Crisis Inquiry Commission, among other sources.

  • Most of the higher-profile financial crisis cases brought by the Department of Justice, such as its civil fraud against Deutsche Bank AG, or the Securities and Exchange Commission have named few or no individual defendants. So far, no top executives at major banks have been criminally charged.

  • "Each agency has its own statutory authority, and its own particular evidence," said Peter Swire, a law professor at Ohio State University and former special assistant to the president for economic policy in the Obama administration.

  • "The FHFA is not part of the executive branch," Swire added. "It does not report to the president. If the FHFA finds the right evidence, it decides on its own to move forward."

For more, see Analysis: Mortgage cases target people, not just banks.

See also:

(1) For a link to the 18 lawsuits, please click here.

'Stunning' Decision On 'Unremarkable' Issue Of Law In Recent Florida Foreclosure Case

From a recent post in Reality Check:
  • [T]he District Court of Appeal for the 4th District in Florida issued a wholly unremarkable ruling in Glarum v. LaSalle that nonetheless could massively complicate banks’ efforts to foreclose in Florida.(1) When foreclosing, the court said, a bank has to use evidence, not hearsay. In this case, the hearsay was LaSalle’s claim about how much the homeowner owed it–the bank’s “affidavit of indebtedness.”

  • What is hearsay? Split the word in two and it’s obvious: the witness hears something, and then says it to the court. Hearsay’s prohibited for a basic reason: you can’t trust it to be true, as anyone who has played “telephone” knows. The hearsay rule has a 500+ year pedigree, so it’s not possible that any lawyer or judge in Florida thought it was okay to use hearsay to win a case.


  • Ruling that LaSalle’s affidavit of indebtedness was inadmissible hearsay was unremarkable as a matter of law. But in a state where some judges have displayed pro-bank bias so powerful they don’t require the banks to follow the rules, the decision is stunning. In fact, banks are likely to be far more than stunned by it; they may be stopped in their tracks for a long time.

  • That’s because the affidavit represented normal business practice: have an employee look at a piece of paper, look at a computer screen, and sign. By rejecting Orsini’s affidavit, the court is forcing the banks to overhaul their basic foreclosure processes. Don’t be too sympathetic to those poor banks, however. The hearsay nature of these affidavits is obvious, and the only way banks could think it would be alright to use them would be to think they are above the law.

  • That is, a business with a healthy respect for the rule of law would have said to itself at the very beginning: ‘hmm, we need to submit evidence, not hearsay, so let’s set up our business to allow us to do that. Let’s verify the data we get from previous servicers; let’s have quality control procedures that insure the data we enter is accurate and not altered later; let’s make sure that we have employees who really understand how we do all this make the affidavits we give courts. Instead, the banks said, ‘here’s how we do business. Courts better accept it.”

For more, see Florida Appeals Court Rules Banks Must Follow.

(1) See also, Florida Trial Judge Fumbles Another F'closure Ruling; Sworn Affidavit By One Without Personal Knowledge Of Facts = Inadmissible Heresay: Appeals Court on the latest misadventure in a foreclosure ruling for the Palm Beach County trial judge whose ruling in Glarum v. LaSalle was overturned on appeal, Judge Meenu Sasser.

Brakes Temporarily Slammed On Attorneys Allegedly Peddling Participations In Mass Joinder Foreclosure Relief Suits; One Target Of AG Probe Responds

In Los Angeles, California, The Associated Press reports:
  • A Los Angeles judge has issued an injunction prohibiting several lawyers, direct marketers and call center operators from continuing with an alleged nationwide scheme to dupe desperate homeowners into paying thousands of dollars to join dubious lawsuits against big banks.

  • Superior Court Judge Louis Meisinger also ruled Tuesday that the assets of foreclosure attorney Philip Kramer, the direct marketing firm Pate, Marier and Associates and other defendants would remain frozen while a receiver retains stewardship over their businesses.

  • Orders against another lawyer accused in the civil suit filed in August, Mitchell Stein, are being considered in a separate hearing later this month. Stein filed a series of lawsuits this week in California, Florida and New York(1) accusing California Attorney General Kamala Harris of filing the complaint against him at Bank of America’s behest.

  • Prosecutors accuse Kramer, Stein, Pate, Marier and Associates and more than a dozen other individuals and businesses of ensnaring borrowers in a scheme that falsely promised a cut of future legal settlements in lawsuits alleging malfeasance by their banks.

  • The lawyers and their associates sent mailers that looked like official class-action lawsuit notifications and stated that their recipients could cut their mortgage to as little as 70 percent of their value, prevent foreclosure and get $75,000 in damages, according to the lawsuit.

For more, see Judge’s ruling keeps Calif. lawyers’, marketers’ assets frozen after bank suit complaint.

(1) See:

Foreclosure Case Pending Before Ohio Supreme Court Now A Moot Issue?

An earlier story posted here(1) referenced the mortgage loan at issue in the foreclosure action currently pending before the Ohio Supreme Court.

Specifically, the mortgage loan in foreclosure, initially reported as mysteriously 'disappearing' has apparently been somehow satisfied, arguably making the issue moot (However, details as to exactly how the loan was satisfied - ie. payment, cancellation, etc. are apparently still a mystery).

How this affects the Ohio Supreme Court in deciding whether to simply dismiss the suit, or go forward and address the issue anyway remains to be seen.

For more, see:
  • Notice of suggestion of mootness filed by homeowner/defendants Antoine Duvall & Madinah Samad.

  • Court Order that appellant may file a response to the notice of suggestion of mootness.

  • Memorandum regarding notice of suggestion of mootness per the Court's 8/8/11 order filed by U.S. Bank, N.A.

  • Ohio Public Radio: 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):

    "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

Go here for links to all the briefs filed with the Ohio Supreme Court in this case.

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