Saturday, October 01, 2011

Federal Suit Accuses Bankster Of Targeting Latino, Black, Poor Immigrants With Predatory Loans That Ended In Default; Class Action Status Sought

In Newark, New Jersey, The Record reports:
  • A lawsuit filed by a Ridgefield Park couple and three other New Jersey home buyers alleges Cresskill-based 1st 2nd Mortgage Co. of New Jersey targeted Latino and African borrowers and deceived them into taking out so-called predatory loans that eventually defaulted.

  • The suit, which seeks class-action status, alleges the loans failed because the borrowers earned too little to make the payments, which inflated dramatically after several years as adjustable mortgage rates kicked in.

  • The company targeted poor immigrants with limited education and little or no English, who knew little or nothing about mortgages, the suit, filed Monday in U.S. District Court in Newark, alleges.

For more, see Lenders accuse Cresskill mortgage co. of fraud, predatory lending.

Florida AG Release Of Records In Firing Scandal Of Office's F'closure Fraud Fighters Shows Squat; State Officials Remain Tight-Lipped In Ongoing Probe

In Orlando, Florida, columnist Scott Maxwell writes in the Orlando Sentinel:
  • When last we checked on Attorney General Pam Bondi, she was being investigated for forcing out two of her top-producing investigators, and legislators had asked her to produce records to justify her actions. Well, the investigation is still going, and state officials are tight-lipped about when it might be complete.

  • But public records are starting to trickle out. And if there was a smoking gun to justify these ousters, there's no paperwork to show it.

  • To the contrary, state Rep. Darren Soto said his reading of the documents show that Bondi's office ousted "forceful champions who were slugging it out in the trenches on behalf of Floridians. "They were doing a good job — and should have been able to keep it."

  • "They" refers to June Clarkson and Theresa Edwards — two assistant AG's who made national news for their zeal and success in the world of foreclosure fraud. [...] Yet at the height of their success, Bondi's office forced them out.


  • [S]oto, D-Orlando, and other legislators filed a records request, asking for anything that might justify the expulsions. What Bondi released this week was thin. The lead document was a complaint from an attorney representing a company being investigated for something else.

For more, see Lawyers fought corruption, then lost their jobs.

Allegedly Faulty Roof, Force-Placed Insurance Could Drive Financially Strapped Homeowner Into Foreclosure; New Insurer Rule Requires Inspection

In New Port Richey, Florida, The Tampa Tribune reports:
  • Jeff Zilinski says he can't afford to replace his roof until he gets his income tax return next year. But it may be too late by then. If he doesn't have a new roof by Oct. 28, his insurance company, Citizens Property Insurance Corp, says it won't renew his policy. If that happens, Zilinski's mortgage company would assign him insurance that could cost triple the amount he pays now.

  • "I work paycheck to paycheck, like most people I know," Zilinski said. "I just got out of bankruptcy. I'm not behind on my mortgage, and this company is going to make me lose my home."

  • Zilinsky is one of thousands across Florida who have had to pass a roof inspection before getting a policy renewal with Citizens, the state's insurer of last resort. Anyone with a home 25 years old or older must get an inspection and prove to Citizens that their roof is expected to last at least three more years.

  • Replacing a roof on a typical home can cost several thousand dollars. In Zilinsky's case, he got four estimates on his 1,200 square-foot-home, and he said the best price was about $5,000.

  • The relatively new requirement for the roof inspection has some customers letting their insurance lapse, local insurance agents said. That decision could push Florida's already high foreclosure rate even higher.

For more, see Citizens Insurance roof rule may cost man his home.

Philly Feds Pinch Pastor In Straw Buyer Mortgage Fraud Scam; Suspect's Criminal Track Record Indicates 'Man Of Cloth' Had Trouble Telling Truth

In Philadelphia, Pennsylvania, the Philadelphia Inquirer reports:
  • A former television evangelist who served prison time before starting a church in Chester County was charged Thursday by federal authorities with engaging in a $6.4 million mortgage-fraud scheme.

  • Michael Wilkerson, 45, is pastor of the New Millennium Life Restoration Fellowship, with centers in Spring City and Phoenixville. He also owned the Agape Development Co., which said it developed real estate.

  • According to an indictment returned Thursday, Wilkerson recruited several church members and their families to act as "straw" purchasers of houses in Schwenksville and Glenmoore. If they had good credit, and could sign loan documents and pose as home buyers, Wilkerson would pay them $15,000, prosecutors said. He promised them $5,000 more if they corralled other straw purchasers, prosecutors said.

  • Wilkerson is accused of overstating the net worth of the congregants on the loan applications. Based on the fraudulent paperwork, Chase Manhattan Bank issued loans, most of which were for more than $1 million each, to the straw buyers, the indictment says.

  • Investigators said that after each settlement, Wilkerson, his wife, and two others manipulated the closing documents. The congregants were listed as co-owners of the newly purchased properties with the pastor's wife, Joyce.

  • The Wilkersons then took possession of the homes, living in one and renting out four others. The pastor allegedly paid the mortgages with rental income for about six months, then told the straw purchasers that they had to start paying the mortgages. The loans fell into default and then foreclosure, resulting in a loss of approximately $3 million, prosecutors said.

  • Joyce Wilkerson was charged along with her husband, as were Denise Haines, a mortgage broker, and Lee Garell, a real estate broker. If convicted, each defendant faces a sentence of up to 180 years, five years' supervised release, and a fine of up to $6 million.

  • Michael Wilkerson served three years in prison for a 2002 conviction in the duping of contractors who were building his Berks County mansion, the Pottstown Mercury reported.

  • Last month, he was convicted of a felony count for writing a bad check for $111,000 to a Fort Washington Mercedes-Benz dealer. At the time of his arrest in that case, in 2009, he was still on parole.

Source: Pennsylvania pastor accused in $6.4M fraud.

Alleged 'Storm Chaser' Among Several Contractors Tagged By Illinois AG In Suits Claiming $600K+ In Home Repair Ripoffs

From the Office of the Illinois Attorney General:
  • Attorney General Lisa Madigan [] filed three lawsuits against fraudulent home repair businesses that cheated Chicago area homeowners out of more than $600,000 for repairs that were never completed. Madigan filed the lawsuits in Cook County Circuit Court on behalf of consumers in Cook, DuPage, Kane, Lake and Will counties.


  • Madigan's lawsuits were filed against alleged storm chaser Ricky Shattuck, of Mundelein, who solicited home repair service as RLCC, and James D. Johnsen, operating as Thermal Construction, based in Des Plaines. The Attorney General also filed suit against Janeen Heilman, Erick Zerse and Chris Bidigare, operating as Fairway Construction and Maintenance Services LLC, based in Oak Park, and Rock Construction Management LLC, based in Westchester.

  • Madigan alleges Shattuck targeted homeowners for solicitation in the wake of severe weather, offering repair service to fix damage caused by storms that he never completed. Consumers living in Cook, Kane and Lake counties reported losses of more than $8,900 to Madigan's office and the Better Business Bureau. Some consumers said Shattuck required them to sign over their storm-damage insurance checks as upfront payments for the work.

  • Madigan is alleging in her lawsuit against Johnsen that he cheated homeowners living in Cook, DuPage and Lake counties out of more than $148,000 for repair work he never completed. Fifty-four consumers reported to Madigan's office, the BBB and Angie's List that Johnsen failed to complete repairs, despite requiring them to pay an upfront payment for half of the contracted work.

  • And in her lawsuit against Heilman, Zerse and Bidigare, the Attorney General said consumers living in Cook and Will counties reported losses of more than $511,000 for work that was never completed. They reported to Madigan's office and the BBB that the defendants accepted upfront sums from $1,050 to more than $174,000.

For the Illinois AG press release, see Attorney General Madigan Sues Three Chicago Area Home Repair Contractors (Consumers Bilked Out of Over $600,000 for Work Never Completed).

Wet Weather Dooms Cash-Crunched Condo Plagued By Unit Foreclosures; Collapsed Crappy Roof Leads To Condemnation; Two Dozen Families Booted From Homes

In Miami, Florida, WSVN-TV Channel 7 reports:
  • Firefighters condemned a condo building after the wet weather caused the roof of the structure to collapse, forcing out two dozen families. On Saturday, waters rushed into a number of units inside the Ola Condo building, near 152nd Street and Northeast Sixth Avenue. As a result, Miami-Dade firefighters condemned the building.

  • According to firefighters, the recent string of heavy rains leaked through the roof of the condo building, which made the structure unsafe to live in.

  • About 25 families now have to find another place to live. One of the forced-out residents, Ebony Walker, said, "I try to hold my composure because crying doesn't lead to nothing no more."

  • A few hours later, however, Walker's eyes were filled with tears. "Oh, my God," she cried. "Me and my kids lost everything, and they don't want to do nothing about it. This is crazy."

  • Resident Mario Govants expressed concern. He said, he does not know where he and his four daughters will stay. "I only got $120 on me right now to rent a hotel for two days. After that, I don't know what to do," he said. "If it was me, by myself, I don't care, but I got kids. They come first."

  • Firefighters said, none of the displaced families have insurance. A woman with the condo association said, there were plans to fix the building's roof, but there was not enough money to do so.

  • Also, many of the units are in foreclosure, and many residents do not pay rent.

Source: Condo building condemned; 25 families displaced.

Court Grants Class Action Status To 100's Of Ex-Employees Accusing Defrocked Foreclosure Mill Sweatshop King Of Illegally Giving Them 'Walking Papers'

In Miami, Florida, The Associated Press reports:
  • Hundreds of former employees at a shuttered South Florida foreclosure law firm have been permitted by a judge to pursue a class action lawsuit involving labor law violations.

  • A Miami federal judge this week approved class action status for the case against attorney David J. Stern. Stern's firm was one of the biggest handling foreclosures in Florida, but it collapsed amid investigations into so-called "robo-signing" of documents and other alleged irregularities.

  • Hundreds of Stern's employees were laid off. The lawsuit contends the firm did not follow federal labor laws when it began mass firings. The case involves at least 700 of Stern's former workers. They are seeking back pay, benefit reimbursements and other damages. Stern's lawyers say the layoffs were done properly because of unforeseen circumstances.

Source: Ex-workers at Fla. foreclose firm get class action.

Bomb Squad Called To Apparently-Booby-Trapped F'closed Home; Probe Reveals Set-Up Merely Simulated Hazard; Cops Suspect Unhappy Ex-Homeowner In Prank

In Seattle, Washington, KOMO-TV Channel 4 reports:
  • The police bomb squad has cleared a South Seattle home where suspicious materials were found. Lt. Greg Sackman said investigators found several propane tanks, most of them empty, and jerry-rigged fire extinguishers at the home at 3217 S. Edmunds St.

  • "The way they were set up, it initially looked like somebody had placed them in a position that either something would go off if we tried to make entry or something like that," said Sackman. Sackman said one of the fire extinguishers "was rigged so if you pulled the wire and opened up the gate (to the house), the fire extinguisher would go off."

  • No explosive devices were found at the home. Investigators did find powder, which was determined to be a mixture of sugar and chemicals from the fire extinguisher.

  • Officers initially believed the house may have been booby-trapped, but later determined it had only been made to look like a threat by the former homeowner, who'd recently undergone foreclosure.

  • "(The former homeowner) was not happy, pretty much made it more difficult for the cleanup crew," Sackman said. Officers were called to the scene by a cleaning crew just before 1 p.m. The crew became sick while cleaning the foreclosed house on Friday, but did not report the problem until Monday afternoon.

  • Police have identified the 51-year-old former homeowner, who is a suspect in the case. He remains at large. Members of the Seattle Police Department SWAT team were also at the house to provide security, officials said.

Source: Police: Foreclosed homeowner to blame for haz-mat scare.

State Agricultural Officials Declare War On Giant House-Eating Snails Invading South Florida; Exploding Population Poses Threats To Health, Structure

In Miami, Florida, WPLG-TV Channel 10 reports:
  • State and federal agriculture officials are working to stop the spread of destructive giant snails whose population is exploding in South Florida.

  • The giant African land snail, Achatina fulica, was first found in South Florida on Sept. 8. The Florida Department of Agriculture and Consumer Services now has a crew of 70 people in South Florida snail hunting. Thousands of the snails have been collected on 85 properties in five areas in Miami-Dade County. "We've surveyed 8,000 properties. We've found 10,000 snails," said Agriculture Commissioner Adam Putnam.


  • "We're working diligently to keep this outbreak from spreading and impacting our Everglades and other natural areas. It impacts our agricultural commodities. It feeds on 500 different plants. It affects human health. It is a known carrier of meningitis," Putnam said.

  • Officials said the snails also can cause structural damage to plaster and stucco.

For more, see Officials Work To Stop Spread Of Giant Snails (Snails Cause Destruction, Carry Disease).

See also, WPLG-TV Channel 10: Giant Snails Invade South Florida (Snail Can Grow Up To 8 Inches In Length).

Friday, September 30, 2011

Court's Failure To Conduct Evidentiary Hearing On Motion To Vacate Foreclosure Deed Leads To Another Appeals Panel Reversal Of Trial Judge Screw-Up

A Florida appeals court has once again issued a reversal of a lower court ruling that unfairly screwed over a homeowner in foreclosure.

The appeals court noted that the trial judge improperly failed to grant a verified motion to vacate the certificate of title (ie. the type of deed issued after a foreclosure sale in Florida):
  • because the Clerk of the Court issued the title to the winning bidder while the homeowners' filed objection to the foreclosure sale was still pending,(1)

  • where the foreclosing bankster had failed to offer any evidence opposing the motion, and

  • because the court did not conduct an evidentiary hearing on the homeowners' objections.

The appeals court further noted that even though the trial judge recognized such failure on the bankster's part to offer evidence to oppose the homeowners' motion, he denied the motion anyway.(2)

The guilty trial judge in this case, Broward County Circuit Court Judge Michael L. Gates.

For the ruling, see Regner v. Amtrust Bank, No. 4D11-1281 (Fla. App. 4th DCA, September 28, 2011.

(1) The homeowners' objection was based on claims that:

  • they did not receive notice of the sale;
  • the bank breached the parties' settlement agreement by wrongfully rejecting the defendants' final redemption payment; and
  • the bank's purchase price was inadequate.

(2) After hearing the homeowners' arguments asserting that the trial judge screwed up, the appeals court made these pithy observations (bold text is my emphasis, not in the original text):

  • We agree with the defendants' arguments and reverse.

    Compare § 45.031(5), Fla. Stat. (2010) ("If no objections to the sale are filed within 10 days after filing the certificate of sale, the clerk shall file a certificate of title . . . ."), with § 45.031(8), Fla. Stat. (2010) ("If timely objections to the bid are served, the objections shall be heard by the court."); see also Opportunity Funding I, LLC v. Otetchestvennyi, 909 So.2d 361, 362 (Fla. 4th DCA 2005) ("The Clerk of the Court lacks authority to issue a certificate of title . . . when an objection to a foreclosure sale is timely filed."). "For the court to `hear' objections, it must provide both notice and an opportunity for any interested party to address those objections." U.S. Bank Nat'l Ass'n v. Bjeljac, 43 So.3d 851, 853 (Fla. 5th DCA 2010) (citations omitted).

    Further, "`it is reversible error for a trial court to deny a party an evidentiary hearing to which [the party] is entitled.'" Avi-Isaac v. Wells Fargo Bank, N.A., 59 So.3d 174, 177 (Fla. 2d DCA 2011) (quoting Sperdute v. Household Realty Corp., 585 So.2d 1168, 1169 (Fla. 4th DCA 1991)).

Bankster May Be Changing Tune In Refusal To Cooperate w/ Criminal Probe Of Suspected Crackpot Claiming Adverse Possession To Hijack Vacant F'closures

In Atlanta, Georgia, WSB-TV Channel 2 reports:
  • The foreclosure boom has forced tens of thousands of Georgians from their homes, but a Channel 2 Action News investigation has found one case where the bank is backing down and the woman who says she now owns the home got it for free.

  • Susan Weidman is under indictment in Cobb County and under criminal investigation in DeKalb County. Investigators say she filed court documents declaring a million-dollar foreclosed home to be abandoned and assumed ownership by Adverse Possession -- basically squatters’ rights.

  • Now she appears to have taken over another home in Cumming. Forsyth County sheriff’s deputies told Channel 2 investigative reporter Jodie Fleischer that they did find evidence of a crime and that prosecutors wanted to file charges. The home, at 6645 Shade Tree Way, is owned by Chase Bank. Authorities told Fleischer the bank was not cooperating but that changed once they found out about the Channel 2 investigation.


  • I would hope the victim would come forward so justice will prevail. And that we take these people off the street because ultimately they’re robbing not only from the bank or the owner, but their robbing it from everybody,” said [Forsyth County Sheriff’s Capt. Tim] House.

  • He added, “If other people were to get wind of this type of crime, you could have the copycat out there that’s going to do it. That just creates a major issue for law enforcement and for property owners and property owners’ rights."

For more, see Woman renting homes she doesn't own.

St. Louis Feds Squeeze Guilty Pleas From Alleged Loan Mod Scammer Accused In $265K+ Upfront Fee Ripoff Targeting 80+ Hawaiian Homeowners

In St. Louis, Missouri, reports:
  • A Wentzville woman pleaded guilty Tuesday to a scam that saw her target Hawaiians with promises of mortgage and foreclosure "rescue." Marien Brown, 41, also known as Marien White, owned 1st Financial Resource LLC and 1st Federal Resource LLC. The businesses were registered at a UPS store that provides commercial mailbox services.

  • Brown researched homeowners in Hawaii who were behind in mortgage payments or at risk of foreclosure, according to court documents. She sent out mailings promising "mortgage rescue" and "foreclosure rescue" services.

  • More than 80 clients sent money to Brown, believing the funds would be used as part of mortgage rate renegotiations on their behalf, but the money was not forwarded to lenders. Instead she used the money for herself.

  • Clients called her but couldn't reach her unless they said they wanted to send more funds, according to authorities. They called lenders but found out that they had not heard of Brown or her companies.

  • Authorities say Brown is responsible for more than $265,000 in losses, but as part of her plea she will be responsible for any additional losses discovered and restitution for those losses.

  • Brown pleaded guilty to three felony counts of mail fraud before U.S. District Judge Rodney W. Sippel. She could be sentenced to up to 20 years in prison and $250,000 in fines on each. Sentencing is set for Dec. 22.

Source: Wentzville woman pleads guilty in 'mortgage rescue' scam.

Illinois AG Tags Four Alleged Loan Mod Rackets w/ Suits Claiming Attorneys Were Used To Create Impression Homeowners Were Getting Legit Legal Services

From the Office of the Illinois Attorney General:
  • Attorney General Lisa Madigan [] filed lawsuits against four Chicago area companies and licensed attorneys for operating fraudulent mortgage rescue or loan modification schemes that illegally charged consumers as much as $375,000 for little, if any, help to stay in their homes and avoid foreclosure.(1)

  • Madigan’s actions are part of a multi-agency effort to crack down on a growing number of Illinois attorneys and loan modification operators who illegally exploit a provision in the 2006 Mortgage Rescue Fraud Act that allows lawyers to collect upfront fees from homeowners for mortgage rescue services in the course of legitimate legal work.

  • While the businesses use attorneys as the face of their operations in order to charge upfront fees, in reality the attorneys performed no legal work on behalf of homeowners. Madigan said their failure to provide legal services left consumers at an even greater risk of losing their homes to foreclosure.


  • To date, Attorney General Madigan has filed 46 lawsuits over the illegal collection of upfront fees by mortgage rescue operations.(2)

For the Illinois AG press release, see Madigan Conducts Mortgage Fraud Sweep, Files Four Lawsuits Against Chicago Area Mortgage Scams (Attorney General Joins Multi-Agency Task Force to Crack Down on Foreclosure “Rescue” and Consumer Debt Schemes).

(1) The Attorney General filed suit in Cook County Circuit Court against ZeTrust Legal Services, of Chicago; Legal Modification Network LLC, based in Woodridge; Loan Litigators International LLC, a now defunct company that operated out of Lombard; and Exelpol Management & Consulting Inc, a dissolved corporation based in Schaumburg.

As part of a task force effort, the Cook County State’s Attorney’s Office filed a similar lawsuit in Cook County Circuit Court against an Arlington Heights-based loan modification and debt settlement company, Legal Housing and Debt Advisor LLC, along with Jason Tong, its managing member and principal owner.

(2) Given that law enforcement agencies typically operate with a shortage of financial resources, prosecuting these alleged lowlifes by bringing 46 civil lawsuits is probably much cheaper and easier than having to prosecute them with criminal charges (ie. theft by deception, obtaining money or property by false pretenses, conspiracy to defraud, etc., etc., etc.), which may require more time and effort, and where, given the burden of proving the case is greater (ie. "proof beyond a reasonable doubt" vs. "proof by a preponderance of the evidence"), the risk of losing the case is also greater.

Thursday, September 29, 2011

Bankster Seeks Review From WV Supremes Of Ruling Canceling Note & Mortgage, Awarding $2.6M In Punitive Damages, Attorney Fees In Predatory Loan Case

In Charleston, West Virginia, The West Virginia Record reports:
  • The CEO of Quicken Loans Inc., the nation's largest online home lender, says a West Virginia circuit court judge's decision to award one of its former customers $2 million in punitive damages "made absolutely no sense."

  • Bill Emerson, who was promoted to CEO of the company in 2002, says Quicken plans to fight the verdict, which stems from a lawsuit filed in Wheeling in 2009. The plaintiff, Lourie Brown, had applied for a mortgage with the company, hoping to refinance her home.

  • Based on an assessment of her home -- completed by a licensed West Virginia appraiser -- Quicken loaned Brown $144,800. The loan reduced her monthly mortgage payments by about $300 a month, reduced her interest rate and provided her with cash to buy a new car.

  • "The client was happy and rated us very high," Emerson said. Then, two to three months after the transaction closed, Brown stopped making payments. That's when Quicken received notice of a lawsuit by Brown. In it, she accused the company of lending her too much money and that it took advantage of her. "We, of course, disagreed with that," Emerson said. "And we fought the lawsuit."

  • However, Quicken eventually was found liable for $18,000, and the entire note and mortgage was canceled. On top of that, Circuit Judge Arthur Recht awarded punitive damages in the amount of $2 million, plus $600,000 in attorney fees. In the end, the total awards ended up being more than 25 times higher than the entire loan amount.


  • Now, Quicken is taking its fight to the West Virginia Supreme Court of Appeals. It filed a 47-page appeal brief with the state's high court on Sept. 6.

For more, see Quicken Loans taking fight to state Supreme Court.

Bankster's $30K Payoff Offer To Out-Of-State, Non-Owner Occupant On Proposed Short Sale Of Home In Foreclosure While Taking $1M Bath Draws Attention

In Tampa, Florida, FOX 13 reports:
  • Homeowners who stop paying their mortgages typically get nothing when their delinquent home ultimately sells at a loss. But Chase Bank has quietly begun offering some of those homeowners tens of thousands of dollars at the closing table.

  • Even house-flipping, home-gambling, recession-causing investors are eligible for a windfall. In what the bank has quietly dubbed an “Outreach Incentive,” customers who’ve stopped paying their mortgage can receive complete debt forgiveness plus a $10,000, $20,000 or $30,000 payout -- in cash. To get the money, the seller must arrange a ‘short’ sale,’ which is real estate lingo for selling a home at a price that is less than the mortgage balance.

  • Chase has not publicized the payouts and declined to discuss specifics. After repeated requests, a spokesperson would only confirm its existence as an invitation-only program.


  • George Lin is one of Chase’s chosen customers, an Arizona resident. According to court documents, Lin bought a Madeira Beach home in 2007 as an apparent investment. He paid $1.7 million, according to public records, and signed a Chase mortgage for $1.36 million. By 2009, Lin had stopped paying and Chase filed for foreclosure. In a standard filing, Chase said it was suing to take possession of the home, which it has yet to do.

  • But now, in a stunning u-turn, Chase is offering Lin $30,000 cash if he can sell the home for roughly $420,000. A letter obtained by FOX 13 outlines the deal: Chase clears $350,000 on its $1.36 million loan; Lin walks away with $30,000. Repeated attempts to reach George Lin were unsuccessful. His realtor also did not respond to our inquiry.

  • There is no evidence Lin ever lived in the American Legion Drive home. A recent appraisal noted that dead birds were strewn about the main floor, and that those aviary occupants had built a nest in a kitchen cabinet. Fixtures are missing, the pool is algae ridden, and the yard is overgrown, the property appraiser said.

  • Chase, a bank taxpayers bailed out during the depth of the housing crisis, declined to explain how an investor who has shirked his obligation and has let his home fall into such disrepair could qualify for a $30,000 payout.

  • Georges Lin’s Madeira Beach foreclosure is not his first in Florida. Bay County public records reveal a Panama City Beach house with a similar story. Lin paid $1.1 million for the house in 2007, but by 2009 was facing a foreclosure suit brought by HSBC bank. HSBC took the home in 2010, leaving George Lin nothing. That’s the way most foreclosure cases end -- with the delinquent owner empty-handed.

  • Madeira Beach will be different, though: George Lin stands to gain $30,000 cash for a bad bet in which Chase will lose about a million dollars.(1)

For more, see Chase offers $30K to delinquent homeowners.

(1) The story is silent as to whether Chase is actually the beneficial owner of the mortgage (in which case, the bank itself is taking the financial bath), or whether it holds the mortgage or is otherwise involved merely as a trustee and/or servicer for some unwitting securitized mortgage investors who have no clue that they're the ones actually getting slammed for the $1 million.

Promoting F'closure Relief Rackets With Authoritative-Sounding Names Implying Government, Non-Profit Link Provides Lucrative Career For Some Scammers

The Huffington Post reports:
  • From the looks of the mortgage relief companies Christopher Mallett has marketed in recent years, offering lower payments and new loan terms to troubled homeowners, one might easily get the impression that he has the backing of the federal government or is running non-profit help groups.

  • Mallett is the driving force behind and He also founded The Department of Consumer Services Protection, U.S. Debt Care, the U.S. Mortgage Relief Council and several other operations with similarly authoritative if not auspicious-sounding names.

  • But people who turned to them for help didn’t receive services, according to court documents filed by the Federal Trade Commission in U.S. District Court this month. Their names were instead sold to companies that almost universally scam distressed homeowners, federal regulators say.

  • Consumer advocates inside and outside the federal government say Mallett appears to be part of a rapidly growing network of customer lead generation, foreclosure rescue and debt settlement companies aggressively marketing their services to a crop of cash-strapped consumers that's grown out of the housing crisis.

  • Many of these companies break the law by portraying themselves as agents or partners of the federal government and by guaranteeing relief that they fail to deliver, FTC officials said.

  • In the last three years, The FTC has accused Mallett and nearly 40 other company owners of deceiving consumers about foreclosure prevention services. This year alone, attorneys general in Virginia, Idaho, Ohio, Michigan and North Carolina have brought cases against foreclosure rescue companies. In most cases, the companies collected up front fees for their services. That practice has been banned by the FTC since January. But new mortgage relief services are constantly evolving.(1)

For more, see Mortgage Relief Scams Proliferate After Recession.

For the Federal Trade Commission press release, see FTC Asks Court To Halt Defendant from Impersonating Federal Agencies While Steering Consumers to Mortgage, Tax, and Debt Relief Services (Scheme Used Fictitious Federal Agencies and Misrepresentations about Debt Relief, FTC Alleges).

For the lawsuit, see FTC v. Mallett.

(1) In connecton with criminal prosecutions (which this particular case is not), intentionally using such authoritative-sounding names in carrying out foreclosure rescue scams carried significant weight with a Federal appeals court when it recently affirmed a stiff sentence against a foreclosure rescue ripoff scammer, ruling that a lower court did not err in finding that the scammer used his falsely assumed position as a nonprofit foreclosure-relief coordinator to manipulate and intimidate his victims into believing that his purported solution to their financial problems was their only remaining option, and, in doing so, caused the victims to be more susceptible to signing the exorbitant mortgage contracts, thereby constituting an abuse of his falsely assumed position of trust with the victims. U.S. v. Porcelli, No. 10-14777 (11th Cir., September 21, 2011) (unpublished).

Wednesday, September 28, 2011

Colorado County Public Trustees Sold Out Public In Drafting, Promoting Changes In State F'closure Law Kiboshing Right To Challenge Banksters' Standing

In Denver, Colorado, The Denver Post reports:
  • Michael and Ann Rudnick wanted to know that Bank of America was really entitled to foreclose on their Denver home. After all, the couple had borrowed $265,000 from New Century Mortgage in late 2006, yet it was Bank of America foreclosing three years later.

  • "They simply wanted to know how Bank of America came to have their mortgage, but they couldn't find out during the foreclosure," said Steven Brunette, the couple's Colorado Springs attorney who's taken up their cause.

  • The Rudnicks learned that the Legislature years earlier had basically removed a consumer's right to challenge a lender's standing to foreclose on a house.

  • The changes happened in 2002 and 2006 in paragraphs buried deep inside dense pieces of legislation designed to shore up Colorado's foreclosure laws. The changes meant banks no longer had to provide original documents at a foreclosure, just affidavits from lawyers saying the bank owned the notes and got them legally.

  • Interviews and documents reveal that the changes to foreclosure due process in Colorado were drafted and promoted by county public trustees, who serve as administrators of the foreclosure process in Colorado and are supposed to hold as a key objective the protection of the public.

  • Such a failure of oversight prompted one housing official to question the competence of the trustees and the foreclosure process they oversee, a system that's unique in the country.

For more, see Colorado public trustees pushed to make it easier to foreclose on homes.

Hubby's Federal Tax Lien Leads To Foreclosure Sale Of Family Home Owned Jointly With Spouse; Innocent Wife Gets Boot, But Splits Loot

From a publication from The Bureau of National Affairs:
  • In U.S. v. Barczyk, No. 10-1498 (6th Cir. 8/17/11), the Sixth Circuit found that the federal government could force the sale of real property held as tenants by the entirety where only one spouse was delinquent and that the sale proceeds should be distributed equally between the federal government and the non-delinquent spouse.

  • Accordingly, not only can joint creditors reach property held as tenants by the entirety, the federal government can also force a sale of property held as tenants by the entirety that is subject to a federal tax lien even if only one spouse is delinquent.

  • Since 1979, Husband and Wife owned a residence in Troy, Michigan ("the Troy Property"), as tenants by the entireties. The Troy Property was free and clear of debt, and worth approximately $200,000.

  • From 1996 to 2006, inclusive, Husband and Wife filed individual federal tax returns under the status of "married filing separately." During this period, Husband failed to pay large amounts of federal income taxes. As a result, several tax liens were created in favor of the federal government, which attached to Husband's property and property rights, including the Troy Property.

  • In March 2009, the federal government brought an action to have the Troy Property foreclosed and sold, with proceeds distributed according to the parties' respective interests.(1)

For more, see U.S. v. Barczyk: Sixth Circuit Finds Property Held as Tenants By the Entirety Subject to Forced Sale and Equal Distribution.

(1) Typically, an unsecured creditor's judgment lien that attaches to the interest of a co-owner of real estate can lead only to a foreclosure sale of that co-owner's interest, leaving the ownership interests of the other co-owners unaffected. Further, such a lien against a property owner on real estate co-owned with a spouse as tenants by the entirety cannot lead to a sale of even the judgment debtor's interest.

The rules are different when it comes to the enforcement of Federal tax liens. From the story (statute references are to Title 26 of the U.S. Code):

  • Under §6321, if an individual fails to pay outstanding taxes after a demand, the federal government may place a lien "upon all property and rights to property, whether real or personal, belonging to such person." The federal government may then enforce the lien in court under §7403(a) and (b).

  • If the court finds in favor of the federal government, then, under §7403(c), the court may enforce the lien by directing sale of the property, with the proceeds of the sale being distributed in respect to the interests of the parties and of the federal government.

Foreclosed Homeowner Scores Lawsuit Settlement With Predatory Lender Requiring Bankster To Rescind Sale, Return Title To Home

In Chico, California, the Chico Enterprise Record reports:
  • Very soon, Jan Poythress should once again hold the title to her home in northeast Chico, her attorneys said last week.


  • Faced with hefty debts, Poythress fell prey to a persistent salesman who convinced her over the phone to take out a loan she could not repay. When she didn't make the loan payments, several companies that were involved took legal action against her. As a result, one firm, Instant Mortgage Lending of San Diego, foreclosed on the home, took possession of it, and tried to evict Poythress.

  • Lawyers from Legal Services in Northern California,(1) which is based in Chico, blocked the eviction. Evanne O'Donnell, managing attorney for Legal Services, said Poythress got invaluable pro bono help from two private attorneys, Douglas Jacobs of Chico and Wayne Silver of Sunnyvale.

  • The lawyers sued Instant Mortgage Lending, accusing it of fraud and "predatory lending," which, among other things, refers to lending without regard for a borrower's ability to repay.

  • Jacobs said last week a settlement had been reached in the case, in which Instant Mortgage agreed to rescind the foreclosure and return the house to Poythress. Jacobs said Silver has demanded that Instant Mortgage make good on its promise and return the title to Poythress.

For more, see Chico woman wins fight against "predatory lender" to keep home.

(1) Legal Services of Northern California is a federal, state and local-funded legal services program providing civil representation to low-income clients in 23 counties in Northern California.

Tuesday, September 27, 2011

Sacramento Feds Continue Scoring Guilty Pleas In Northern California Foreclosure Sale Bid Rigging Scams That Violate Sherman Act

From the Office of the U.S. Attorney (Sacramento, California):
  • A real estate investor pleaded guilty [] in U.S. District Court in Sacramento, Calif., to conspiring to rig bids and commit mail fraud at public real estate foreclosure auctions held in San Joaquin County, Calif., Christine Varney, Assistant Attorney General of the Department of Justice’s Antitrust Division, and Benjamin B. Wagner, U.S. Attorney for the Eastern District of California, announced.

  • Robert Rose, 47, of Danville, pleaded guilty to conspiring with a group of real estate speculators who agreed not to bid against each other at certain public real estate foreclosure auctions in San Joaquin County.(1)

  • The primary purpose of the conspiracy was to suppress and restrain competition and to obtain selected real estate offered at San Joaquin County public foreclosure auctions at non-competitive prices, the department said in court papers.

  • According to the court documents, after the conspirators’ designated bidder bought a property at a public auction, they would hold a second, private auction, at which each participating conspirator would bid the amount above the public auction price he or she was willing to pay.

  • The conspirator who bid the highest amount at the end of the private auction won the property. The difference between the price at the public auction and that at the second auction was the group’s illicit profit, and it was divided among the conspirators in payoffs. According to his plea agreement, Rose participated in the scheme beginning in or about August 2009 until in or about October 2009.(2)

For the U.S. Attorney press release, see California Real Estate Investor Pleads Guilty To Bid Rigging At Public Foreclosure Auctions.

Go here for other posts & links on bid rigging at foreclosure and other real estate-related auctions.

(1) According to the U.S. Attorney press release, Rose pleaded guilty to bid rigging, a violation of the Sherman Act, which carries a maximum penalty of 10 years in prison and a $1 million fine. The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine. Rose also pleaded guilty to conspiracy to commit mail fraud, which carries a maximum sentence of 30 years in prison and a $1 million fine.

“Perpetrators of schemes like the one charged here do not compete fairly,” U.S. Attorney Wagner stated. “Instead, they muscle out honest bidders who don’t play along. Such schemes not only drive down the price of the auctioned properties, they steal equity from those homeowners trying to weather the financial storm. Rose is the eighth defendant charged in this case. Prosecutions like this one send a clear message to those who may be tempted to cheat at auction: Don’t.”

The U.S. Justice Department urges anyone with information concerning bid rigging or fraud related to real estate foreclosure auctions to contact the Antitrust Division’s San Francisco Office at 415-436-6660 or visit, the U.S. Attorney’s Office for the Eastern District of California at 916-554-2700 or the FBI’s Sacramento Division at 916-481-9110.

(2) For indications that these bid-rigging rackets at foreclosure sales appear to be pretty blatant activities all over the country that are often perpetrated with impunity, see:

A story earlier this year in the San Francisco Chronicle (FBI looks into bid rigging at courthouse auctions) contains this excerpt describing the observations of one individual who attended one of these auctions:

  • A real estate agent who attended some San Francisco auctions in hopes of buying investment property described what he witnessed.

    "If you start to bid, there are about five guys who work together and who box you in," said the man, who asked not to be named for fear of retribution. "One guy came up to bid who clearly was not part of that crew. The guys were bidding. At some point, (their ringleader) turned to (the outsider) and said, 'You must really like this property. It must be really important to you.' He had a piece of paper in his hand; he showed it to the guy. The guy nodded OK and then disappeared into the building."

Felony Plea Deal In Loan Mod Scam Has Sentence 'Buy-Down' Of No Jail, Misdemeanor Treatment Upon $192K Paymnt; Stiffing Victims Could Cost 1 To 10 Yrs

In Las Vegas, Nevada, KLAS-TV Channel 8 reports:
  • The head of a Las Vegas company that claimed it could stop foreclosure has accepted a plea deal that includes restitution for his victims. In 2009, the I-Team first reported consumer complaints and then criminal charges against Jack Ferm of the U.S. Justice Foundation.

  • The I-Team sat down with Jack Ferm in 2009 as he insisted his company could help homeowners help themselves by filing lawsuits against their lenders. Trouble was most, if not all, of the suits went nowhere and many of Ferm's clients thought he was a lawyer when he wasn't.

  • Fast forward two years and Ferm agreed to a deal to repay his victims nearly $200,000. Ferm pleaded no contest to one count of felony theft before Judge Donald Mosley Wednesday morning. As part of the deal the court will delay adjudication of the case as long as Ferm makes restitution to 80 victims.

  • When and if he repays all $192,000 worth, the Attorney General's Office will reduce the charge against him to a gross misdemeanor.

  • Judge Mosley made it clear to Ferm he held a "dim view" of those who commit mortgage fraud. "Restitution is important to this court. We don't just talk about it, walk out the door and make some haphazard attempt and say, 'Gee whiz, I can't do it.' You understand me?" he said.

  • Mosley ordered Ferm to pay at least $7,000 by January 1, 2012. If he doesn't live up to his end of the deal he could face one to 10 years in prison. The AG's Office says in addition to punishing those who commit mortgage fraud they work to get the victim's their money back.
Source: Head of Mortgage Modification Takes Plea.

Federal Appeals Court To Subprime-Peddling Developers: 'Not So Fast, Guys - You're Not Off The Hook On Homebuyers' Fraud Claims Just Yet!'

In San Francisco, California, Courthouse News Service reports:
  • California homeowners can sue many of the nation's largest builders over the economic and social fallout of the housing bubble, the 9th Circuit ruled Wednesday, finding that the penchant for marketing to high-risk buyers could be responsible for today's plummeting home values and blighted neighborhoods.

  • The federal appeals court in San Francisco reversed a lower court's dismissal of claims brought by 19 homeowners against D.R. Horton, Richmond American, Shea Homes, Lennar Homes, and other top developers, their parent companies and subsidiary mortgage companies.

  • The homeowner plaintiffs each put down at least 20 percent on a home in a new development between 2004 and 2006. They seek damages and the option to rescind their purchase based the builders' alleged fraud, misrepresentations and violations of state law.

  • Though developers allegedly promised that they were building "stable, family neighborhoods occupied by owners of the homes," they actually sold houses to unqualified buyers and investors prone to foreclosure.

For more, see Court Revives Claims of Developers' Subprime Fraud.

For an earlier report on the appeals court litigation, see Subprime Showdown in 9th Circuit Hearing.

For the ruling, see Maya v. Centex Corporation, No. 10-55658 (9th Cir. September 21, 2011) (for publication).

Monday, September 26, 2011

'Criminal Charges Coming To A Mortgage Servicing Racket Near You!': Nevada AG

HousingWire reports:
  • Mortgage servicers could soon face criminal actions in Nevada, according to the state Attorney General Catherine Cortez Masto.

  • Masto reportedly opposed releasing the largest servicers from future criminal liability. Earlier in September, Iowa AG Tom Miller, who is leading the settlement talks, pledged the final agreement would not indemnify the banks from any criminal actions and not all civil suits. Miller's office further clarified that immunity from criminal prosecution is not and never has been part of the settlement negotiations.

  • "Criminal actions are likely coming to the industry soon," a spokesperson for Masto's office told HousingWire Wednesday, though no other details were provided.

For more, see Nevada AG: Criminal actions coming to servicing industry soon.

WPB Cops Pinch Now-Disbarred Title/Closing Attorney For $800K+ In Real Estate Escrow Account Ripoffs

In West Palm Beach, Florida, The Palm Beach Post reports:
  • A disbarred Wellington attorney defrauded clients out of more than $800,000 while representing them in real estate transactions,(1) West Palm Beach police said. Christian N. Scholin, 45, was booked into the Palm Beach County Jail Tuesday night after being charged with grand theft, organizing a scheme to defraud and practicing law while disbarred or suspended.

  • Scholin's alleged actions date back to 2004, when he was operating International Title Company of the Palm Beaches in West Palm Beach, a probable cause arrest affidavit stated.

  • According to the affidavit, Scholin represented a woman living in Finland with the sale of her Lake Worth home in May 2004. The house closed for $800,000, and she was due $733,125. Scholin allegedly deposited the money into a Wachovia account and made several payments from the account to the client. But $468,000 was not delivered and instead was deposited into another bank account, the affidavit stated.

  • Scholin's actions led to his suspension from practicing law in October 2009, and he was disbarred by the Florida Supreme Court in July 2010, the affidavit stated. During his suspension, Scholin represented another woman during the attempted short sale of a Royal Palm Beach townhouse. The closing occurred in February of 2010, with the woman and a buyer from Finland believing that $245,158.66 in unpaid principal had been negotiated by Scholin and satisfied by the short sale.

  • The buyer wired $74,000 to Scholin, the affidavit said. But Scholin did not use the money to satisfy his client's mortgage and kept it instead, the affidavit said. The woman's home went into foreclosure, causing a judgment against her in the amount of $277,790, according to the affidavit.

Source: Disbarred Wellington attorney charged with defrauding clients out of $800,000.

(1) The Florida Bar's Clients' Security Fund was established to reimburse clients who have suffered a loss due to misappropriation or embezzle­ment by a Florida-licensed attorney.

For similar "attorney ripoff reimbursement funds" that sometimes help cover the financial mess created by the dishonest conduct of lawyers licensed in other states and Canada, see:

Maps available courtesy of The National Client Protection Organization, Inc.

NYC-Area Title Insurance Agency Operator Gets 20 Months For Misappropriating Million$ In Client Cash From Escrow Accounts In Real Estate Transactions

From the Office of the U.S. Attorney (New York City):
  • PREET BHARARA, the United States Attorney for the Southern District of New York, announced that BRIAN H. MADDEN, the former president and co-founder of a title insurance agency, Liberty Title Agency, LLC [...], was sentenced [...] to 20 months in prison for misappropriating and embezzling escrow and other client funds from Liberty Title and two other insurance agencies he controlled and operated in New York and Suffolk counties.


  • Beginning around early 2008, MADDEN misappropriated millions of dollars of escrow and other client funds by transferring and commingling those funds among various bank accounts held by Skyline Title, GNY Liberty, and Liberty Title. MADDEN then used the misappropriated funds to sustain LibertyTitle's operations and to make significant withdrawals of monies for his personal use.

For the U.S. Attorney press release, see President Of Title Insurance Agency Sentenced In Manhattan Federal Court To 20 Months In Prison For Misappropriating Millions Of Dollars Worth Of Client Funds.

Closing Agency Owner Gets 3+ Years For Snatching Escrow Cash; Took $200K To Buy Out Prior Owners; Says 'I Didn't Steal The Loot, I Only Borrowed It!'

In Missoula, Montana, the Ravalli Republic reports:
  • The owner of a Florence escrow company will spend 3 1/2 years in prison and be required to pay close to $500,000 in restitution after being convicted of wire fraud and money laundering. Stacey M. Hebuck, 37, of Florence, pleaded guilty earlier this month before U.S. District Judge Donald W. Molloy in a plea agreement that dropped seven additional counts.

  • Court records said Hebuck manipulated financial transactions associated with five different real estate closings handled by her company, New Pinnacle Title LLC, and its predecessor, Pinnacle Title and Escrow, between June 2008 and January 2009.

  • Hebuck was charged with diverting funds obtained by the escrow companies into her personal bank accounts. The diverted funds were wired to banks outside of Montana.

  • Rather than spending the money to pay off existing mortgages, Hebuck used the money to buy a $31,000 pickup truck, $41,000 horse trailer and $17,000 for facial plastic surgery. She also used $90,000 to pay off her parent's mortgage on land at Seeley Lake.

  • The first $200,000 she diverted while still an employee of Pinnacle Title and Escrow was spent to buy the business from its previous owners.(1)

  • In some cases, Hebuck continued to make monthly mortgage payments on loans that were supposed to be closed. Twice she paid the entire balance on mortgages with smaller payoff amounts.

  • When investigators interviewed Hebuck about the fraud in February 2009, she admitted the essence of what she'd done, but referred to her actions as "business practices." She told investigators she planned pay off all five loans as her business grew.

  • In a written statement, Hebuck said she felt she was borrowing the money, not stealing it.

For the story, see Florence woman sentenced to prison for fraud, money laundering.

(1) Go here for the Notice of Proposed Action from the office of the Montana insurance regulator containing more details about Hebuck's antics, including the fact that she had a previous felony conviction in California for welfare fraud, and the fact that, in ripping off the escrow account of $200K+ to buy out the escrow agency owners, she took ownership of the outfit under her sister's name.

Sunday, September 25, 2011

U.S. Labor Department To BofA: 'You Illegally Fired Mortgage Fraud Whistleblower For Doing Her Job - Now Pay Her $930K & Give Her Back Her Job!'

Michael Hudson of the The Center for Public Integrity's iWatch News reports:
  • In the summer of 2007, a team of corporate investigators sifted through mounds of paper pulled from shred bins at Countrywide Financial Corp. mortgage shops in and around Boston.

  • By intercepting the documents before they were sliced by the shredder, the investigators were able to uncover what they believed was evidence that branch employees had used scissors, tape and Wite-Out to create fake bank statements, inflated property appraisals and other phony paperwork. Inside the heaps of paper, for example, they found mock-ups that indicated to investigators that workers had, as a matter of routine, literally cut and pasted the address for one home onto an appraisal for a completely different piece of property.

  • Eileen Foster, the company’s new fraud investigations chief, had seen a lot of slippery behavior in her two-plus decades in the banking business. But she’d never seen anything like this.


  • More surprises followed. She began to get pushback, she claims, from company officials who were unhappy with the investigation. One executive, Foster says, sent an email to dozens of workers in the Boston region, warning them the fraud unit was on the case and not to put anything in their emails or instant messages that might be used against them. Another, she says, called her and growled into the phone: “I’m g--d---ed sick and tired of these witch hunts.”

  • Her team was not allowed to interview a senior manager who oversaw the branches. Instead, she says, Countrywide’s Employee Relations Department did the interview and then let the manager’s boss vet the transcript before it was provided to Foster and the fraud unit.

  • In the end, dozens of employees were let go and six branches were shut down. But Foster worried some of the worst actors had escaped unscathed. She suspected, she says, that something wasn’t right with Countrywide’s culture — and that it was going to be rough going for her as she and her team dug into the methods used by Countrywide’s sales machine.

  • By early 2008, she claims, she’d concluded that many in Countrywide’s chain of command were working to cover up massive fraud within the company — outing and then firing whistleblowers who tried to report forgery and other misconduct. People who spoke up, she says, were “taken out.”

  • By the fall of 2008, she was out of a job too. Countrywide’s new owner, Bank of America Corp., told her it was firing her for unprofessional conduct.”

  • Foster began a three-year battle to clear her name and establish that she and other employees had been punished for doing the right thing. Last week, the U.S. Department of Labor ruled that Bank of America had illegally fired her as payback for exposing fraud and retaliation against whistleblowers. It ordered the bank to reinstate her and pay her some $930,000.

For more, see Countrywide protected fraudsters by silencing whistleblowers, say former employees (iWatch News investigative series reveals legacy of corruption that still plagues Bank of America).

F'closing Banksters Score Another Big 'Win' As Lender Dodges Bullet, 'Games' Judicial System, 'Buys Off' Homeowner; Ohio Supremes Declare Issue "Moot"

Foreclosing banksters throughout the U.S. are presumably in a celebratory mood as they have recently succeeded in buying off another homeowner in foreclosure who had the temerity to bring a dubiously-conducted foreclosure case to the attention of a state supreme court.(1)

Go here for the one-page ruling issued by the Ohio Supreme Court declaring the case of U.S. Bank v. Duvall moot.(2)

Thanks to OHIO FRAUDclosure, who contributed a 'friend of the court brief" in this matter, for the heads-up on the ruling.(3)

Editor's Note:

According to U.S. Bank's Memorandum regarding notice of suggestion of mootness filed in this matter, there are at least two other cases percolating through the Ohio judicial system that present the same issues. It may be that the Ohio Supreme Court merely dismissed this case with the view of addressing the issues by hearing one or both of the other two cases.

Interestingly, according to footnote 1 of U.S. Bank's Memorandum regarding notice of suggestion of mootness, counsel representing the bankster in this case notes that it also represents the banksters involved in the other two cases. It remains to be seen if the banksters in those cases are equally successful in 'buying off' the respective homeowners in foreclosures with a 'free house.'

(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:

See also, F'closure Mill Dodges Appellate Court Reversal On Merits; Opts To 'Confess Error' Instead In Agreeing To Reversal Of Rubber-Stamped Lower Court Ruling, where, in an appeal by a homeowner of a lower court ruling favorable to a foreclosing bankster, the bankster agreed to 'confess error,' thereby leading a Florida intermediate appeals court to boot the case back to the lower court without actually ruling on the merits of the appeal. In effect, the foreclosure mill law firm/sweatshop may have intentionally thrown the case to avoid even more negative precedent and publicity that these faulty foreclosure cases have been generating.

(2) For earlier posts on this story, see:

(3) For some commentary from OHIO FRAUDclosure on the dismissal of this case, see Ohio Supreme Court's Shocking Decision in Landmark Case.

Federal Agency Inspector General: Fannie Had Chance To Catch Its Law Firms Manucaturing Phony Foreclosure Documents & Blew It!

The Associated Press reports:
  • Fannie Mae missed chances to catch law firms illegally signing foreclosure documents and its government overseer did not take the right steps to ensure Fannie was doing its job, federal regulators say.

  • The Federal Housing Finance Agency's inspector general said in a report Friday that Fannie failed to establish an "acceptable and effective" way to monitor foreclosure proceedings between 2006 and early 2011. Government regulators then failed to ensure it was complying with demands that it clean up its programs.

  • Mortgage industry employees — including law firms employed by Fannie Mae — signed documents they hadn't read and used fake signatures on foreclosure cases across the country.

  • The practices, known collectively as "robo-signing," resulted in a suspension of foreclosures last fall and a probe by all 50 state attorneys general into how corners were cut to keep pace with the crush of foreclosure paperwork.

For more, see Fannie Mae cited for failing to stop robo-signing.

For the Federal Housing Finance Agency Inspector General's report, Evaluation of Whether FHFA Has Sufficient Capacity to Examine the GSEs (EVL-2011-005, September 23, 2011).

Government Suits Targeting Banksters' Recording Fee Dodge Begin To Attract Interest, Gain Traction

Bloomberg reports:
  • Bank of America Corp. is among a group of lenders that may face a wave of new lawsuits claiming cash-strapped counties were cheated out of millions of dollars by a system used for more than a decade to register mortgages.

  • Dallas County District Attorney Craig Watkins said state attorneys general and county officials across the U.S. have expressed interest in his lawsuit against Mortgage Electronic Registration Systems Inc. and Bank of America, filed in Texas state court on Sept. 21. Dallas County could be owed as much as $100 million in filing fees, he said.(1)

  • This is a big new front,” said Christopher L. Peterson, associate dean and professor at the University of Utah S.J. Quinney College of Law. “This case is scary because if Dallas wins then there are a lot of other counties around the country that are going to follow.”


  • Dallas County called that crisis “a direct result of the financial system’s commoditization, packaging, securitization and sale of tens of millions of mortgages throughout the U.S.,” according to the complaint. “Without the fiction of the MERS system, these activities would not have been possible.”

For more, see BofA Case May Be Followed by More Mortgage Suits by Counties.

(1) See also: