Saturday, November 26, 2011

State High Court Gives Florida Attorney 90 Days In 'Penalty Box' For Representing Homeowner In Foreclosure Without Latter's Knowledge, Consent

In Tampa, Florida, the St. Petersburg Times reports:
  • Tampa condo owner Alejandro Salazar was surprised to learn that Clearwater lawyer Bruce Harlan was representing him in a foreclosure case. Surprised because Salazar never met Harlan, didn't hire him and didn't even want the condo.

  • But someone else did — Lori Polin, a real estate agent with a checkered past who paid Harlan $1,500 to delay the foreclosure because she hoped to buy Salazar's condo in a short sale.

  • Because of Harlan's actions in the case, the Florida Supreme Court this month suspended him from practicing law for 90 days starting in mid December. "Even if Mr. Harlan had good intentions, his clients, Mr. Salazar and Ms. Polin, had adverse interests and Mr. Harlan was representing both of them at the same time,'' the Florida Bar said in finding Harlan guilty of a conflict of interest.

  • The bizarre chain of events started in 2007 when Salazar's architectural design business foundered and he and his wife moved to her native Spain, defaulting on their mortgage and condo maintenance fees. The Westchase Community Association took title to the condo and deeded the unit to Polin after she paid the back fees.

  • At the time, Polin was about to go into foreclosure on her own Westchase condo. She moved into the Salazars' unit and rented out hers, collecting more than $14,000 in rent, but not making payments on either property. Instead, Polin hired Harlan to delay the foreclosure on the Salazars' condo while she negotiated with the bank to buy it for far less than the $137,000 the couple then owed.

  • When Salazar returned to Tampa for a visit in 2009, he called the bank to see why its foreclosure suit had dragged on for so long with steadily mounting fees. "Because,'' the bank told him, "your attorney has been fighting us for a year.''

  • Salazar pieced together what happened and complained to the Bar.

For more, see Clearwater attorney is suspended for involvement in agent's dubious real estate deal.

See The Florida Bar v. Harlan for the Report Of The Referee Accepting Consent Judgment.

City: BofA The Biggest Culprit In Ignoring City Ordinance To Ensure Maintenance Of Vacant Homes; Bankster Heads List Of Worcester Scofflaws

In Worcester, Massachusetts, the Worcester Telegram & Gazette reports:
  • A national bank that city officials say is the biggest culprit in ignoring a city ordinance to ensure vacant properties are maintained and secured has been ordered to comply with the local law.

  • Charlotte, N.C.-based Bank of America was ordered by a Worcester Housing Court judge last week to obey the city’s vacant and foreclosing property ordinance for 1 Blodgett Place. The city’s Department of Inspectional Services has issued orders on 124 other properties owned by Bank of America. If the bank does not comply, those cases they will be forwarded to Housing Court for adjudication.

  • The city has taken other banks to court and they have lost too, but none was as large as Bank of America, according to city officials. The move comes as the city tries to hold owners of vacant and foreclosed properties accountable for the condition of those properties.

  • You would hope there was a sense of responsibility in these mega-institutions for the mess they all contributed to, but I gather that is asking too much,” City Manager Michael V. O’Brien said. “Look, these banks, ‘too big to fail,’ as the regulators say, got billions and billions and billions of taxpayer dollars rewarding them for their excesses and largesse, faulty lending practices and exotic financial products that collapsed our economy.”

For more, see Bank of America faces local order (City seeks compliance with vacancy ordinance).

Victimized Florida Foreclosure Defense Attorney Points Finger Of Blame At BofA For Role In $100K+ Ripoff; Says Bankster Was Asleep At Wheel

In Fort Lauderdale, Florida, WTVJ-TV Channel 6 reports:
  • A Fort Lauderdale attorney says she was duped out of more than $100,000 by her former trusted accountant. Carolyn Hochberg owns the Foreclosure Defense Law Group. She says the accountant, who worked in her office, opened his own bogus business called Foreclosure Defense Loss Mitigation Group and then opened a bank account to go along with it.

  • Hochberg says the accountant would take checks written out to her business and deposit them into his account. Since the names of the two businesses were similar, Hochberg says bank employees never questioned it.

  • "If somebody at Bank of America had read the name on the check, he wouldn't have been able to do that," she said. Hochberg says Bank of America took those checks for about one year. She told NBC Miami the accountant opened his own account at a branch right near her office on Commercial Blvd. in Fort Lauderdale.

  • Hochberg is angry at the bank, and she feels the institution has not responded appropriately. "They're taking no responsibility. They don't realize their negligence. They want to pass it off on everybody," she said.

  • Fort Lauderdale police are investigating, and they say this type of check fraud is not so rare. They say the most common check fraud crime is old-fashioned check printing. Bank of America is also investigating.

  • "Simply when somebody compromises your account, makes up checks and circulates them to individuals to go into banks or other check cashing places and basically withdraws funds from your account, " said Det. Steve Sceolfo. Hochberg has a list of more than 60 checks for $110,000, all of it stolen, she says, by her former trusted accountant.

Source: Woman Claims She Was Duped by Former Accountant (Carolyn Hochberg claims she was duped by a former employee).

Tenants In 100-Unit Apt. Complex In F'closure Left Out In Cold As Landlord Skips Town, Closes Utility Account, Leaves Residents w/out Heat, Hot Water

In Bethany, Oklahoma, The Oklahoman reports:
  • When tenants saw the moving trucks outside their landlord's apartment at Rockwell Arms, they became concerned. When their heat and hot water was shut off a few days later, they panicked.

  • Would the residents of all 100 units be evicted? With Thanksgiving just around the corner, where would they have their holiday meal? “I saw her moving van, but all of us tenants thought, ‘Oh, we must be getting new management,'” said Sarah Shamblin, who has lived in the apartments at 2500 N Rockwell Ave. for more than a year. “We didn't think anything about her moving.”

  • Shamblin said living without heat and hot water for the past four days has been a challenge, especially with her 6-year-old daughter. “To keep warm and hot I clean my house even though it's already cleaned,” Shamblin joked. “We have electricity and we got some heaters. Some of us have central heat and air, a lot of us don't. I have heaters, five of them, but it's still freezing cold.”

  • The tenants pay for their own electricity, but the property manager paid the gas bill and before she skipped town in the midst of a foreclosure, she called the gas company and had the service turned off.

  • Oklahoma Natural Gas Co. received a shut-off order on Nov. 11, asking that service be terminated Nov. 18, spokeswoman Cherokee Ballard said. Gas service was shut off Nov. 19 because the utility company did not know anyone was living at the apartment complex. "Had we known ... that people still lived there, we wouldn't have done that,” Ballard said.

  • She said ONG tried to restore gas service to the apartments, but the boiler room was locked. It took a judge intervening to get the gas restored to tenants Tuesday afternoon. However, while the units had hot water, the heating systems still weren't working Tuesday evening.

For the story, see Bethany landlord facing foreclosure moves, leaves tenants in the cold (Rockwell Arms tenants spent the last four days without heat after their landlord moved out of town and had the gas shut off to the complex).

New Haven Slumlord Continues Pocketing Taxpayer-Subsidized Sec. 8 Rent Despite Stiffing Tenant Out Of $30K Lawsuit Award For Ceiling Cave-In Injuries

In New Haven, Connecticut, the New Haven Independent reports:
  • It’s been more than two years since the bathroom ceiling in Delwanna Wiggins’ apartment caved in on her. It’s been four months since Apple Holdings LLC—one of New Haven slumlord Michael Steinbach’s corporate aliases—was ordered to pay her $30,665.50 in damages. Wiggins never got a cent.

  • Steinbach, on the other hand, continued to collect rent for her apartment from the government long after the ceiling collapsed—courtesy of the taxpayer. Wiggins lives in a property with rents subsidized by the federal Department of Housing and Urban Development’s (HUD) Section 8 program.

  • Her encounter is the latest example of the individual impact of a string of problem properties controlled by Steinbach and his partner Janet Dawson, with the generous help of government officials. “I was going through a hell of a lot of pain,” said the 34-year-old Wiggins, who was pregnant at the time of the accident. She miscarried a few months later.

  • She called her lawyer about the accident, gave her testimony. They filed suit. They won. She thought justice had been served. But when her attorney, Loren Costantini, sent out a notice to Michael Steinbach to collect the $30,665.50 judgment in September, all he got in return was a notice of Chapter 11 bankruptcy.

  • It turned out that Apple Holdings, LLC had filed for bankruptcy in August. That would make it far more difficult for the damages to be collected, Costantini said. “I’m disgusted by the situation.”

  • Since then, Wiggins has given up hope of getting any money. She has an infant son to care for. Her mother, who lives in the apartment directly below her, has cancer and visits the doctor as often as twice a month. Before the accident Wiggins was a store manager at McDonald’s making good money; she hasn’t been able to work since then.


  • Michael Steinbach and his business partner, Janet Dawson, own hundreds of rental properties in New Haven under a never-ending string of corporate aliases. Rents at many of the properties are paid for by the government’s Section 8 program, which means they must pass regular housing inspections. Tenants allege rampant abuse by the landlords, who they say just “barely” fix what needs to be fixed and then let the problems rot until the next year’s inspection.

  • City inspectors consider them among the most notorious of New Haven’s problem landlords and have been chasing them for years to take better care of their properties. The two are listed as defendants in more than 100 lawsuits in Connecticut. Many of those are foreclosure lawsuits that they’ve managed to drag out for years while continuing to collect government rent.

  • Others allege defective premises and were filed by people like Wiggins. (Click here to read a story in the New Haven Advocate about more of those lawsuits.)

For more, see Ceiling Fell. Baby Died. Slumlords Paid Nothing.

Pair Pinched For Allegedly Ripping Off, Pawning Property From Home In Foreclosure They Were Hired To Winterize

In Pahrump, Nevada, KTNV-TV Channel 13 reports:
  • A couple that was hired to winterize a home in Pahrump has been accused instead of stealing property from it. A company had been hired by a bank to winterize a home in Pahrump that was scheduled for foreclosure. The company in turn hired a couple, Ricardo and Jenny Muniz, to do the work.

  • Witnesses said these individuals appeared to be winterizing the property at first and then stealing from it after the fact. Ricardo then allegedly pawned some of the stolen property from the home.

  • Nye Country Sheriff's Deputies arrested and booked both Ricardo and Jenny Muniz on the charges of grand larceny, burglary, conspiracy to commit a crime and transfer of stolen property. Susequent to their arrest, NCSO Detectives recovered several additional stolen items from the Muniz residence in Las Vegas.

Source: Couple hired to winterize home in Pahrump accused of burglary.

Florida 'Ana Nicole' Judge Accused Of Attempting To Hijack Now-Deceased Widow's Estate Settles Civil Action

In Fort Lauderdale, Florida, the South Florida Sun Sentinel reports:
  • The civil case accusing former Broward Circuit Judge Larry Seidlin of fleecing a wealthy, widowed neighbor of money and property worth hundreds of thousands of dollars has been resolved by way of a confidential settlement, according to one of the attorneys involved in the case.

  • Barbara M. Kasler, who lived in the same Fort Lauderdale condo as the onetime judge, his family and in-laws, died Nov. 7, 2010, at age 84. A confidential mediation settlement agreement was signed by the parties in September and October.

  • The civil lawsuit filed in Kasler's name, estimated her wealth at $5 million, and accused Seidlin — who gained national notoriety over his televised tearful handling of the Anna Nicole Smith death case — of feigning friendship with the widow, siphoning off her money and trying to hijack her estate.

  • The suit also accused Seidlin's in-laws, Oren and Barbara Ray, of buying a condo from Kasler at an unfair discount.

For more, see Former judge accused of exploiting elderly neighbor settles lawsuit.

Repeatedly Kissing Co-Worker, Representing Mom In F'closure After Stiffing Her On Illegal Campaign Loan Among Antics Meriting Pink Slip For Judge

In Tallahassee, Florida, Florida Today reports:
  • The state Supreme Court removed a central Florida judge from the bench [], ruling that he was unfit to hold office because of a pattern of unethical and illegal conduct.

  • One of the high court’s findings was that Circuit Judge N. James Turner of Osceola County repeatedly hugged and kissed a female court worker, Heather Shelby, without her permission.

  • Turner became involved in her personal life by asking to visit her home and her son in the hospital, as well as inviting her to lunch and to his office for a personal discussion while he was dressed in a T-shirt and shorts, the justices said in an unsigned unanimous opinion.

  • Judge Turner refused to take no for an answer on several occasions,” the justices wrote. "Moreover, Judge Turner’s interest in Ms. Shelby was well known throughout the court, causing Ms. Shelby extreme embarrassment and requiring changes to her professional life.”

  • The high court also found Turner violated judicial ethics by representing his mother in a foreclosure case while a sitting judge and the state’s campaign finance law by accepting and failing to report a $30,000 campaign loan from her.(1) The loan violated a $500 contribution limit.

For more, see State Supreme Court removes Osceola judge (Justices: Turner unfit for office due to unethical, illegal conduct).

For the Florida Supreme Court ruling, see In Re Inquiry Concerning A Judge Turner, No. SC09-1182 (Fla. November 18, 2011).

(1) It is interesting to note that the $30,000 loaned to Turner came as a result of him talking his presumably elderly mother into refinancing her condo in Miami-Dade County, Florida, enabling him to get his hands on the cash needed to help him pay off the outstanding campaign debt he incurred in his successful run for his seat on the Osceola County bench (In Re Inquiry Concerning A Judge Turner, Count 7). It was this refinanced mortgage that his mother had subsequently become unable to repay that drew Turner into his ill-advised representation of her in the associated foreclosure action (In Re Inquiry Concerning A Judge Turner, Counts 8-9).

Friday, November 25, 2011

Sacramento Feds Put Pinch On Sale Leaseback Foreclosure Rescue Peddler In Connection With Alleged Equity Stripping Ripoff

In Southern California, the Central Valley Business Times reports:
  • John Marcus Desenberg, 44, formerly of Newbury Park, has been arrested by FBI agents in Southern California on a ten-count federal indictment alleging mail fraud on connection with a Central Valley foreclosure scheme. According to the indictment, Mr. Desenberg was purportedly in the business of rescuing homeowners from foreclosure in Merced and Placer couties.

  • Doing business as Creative Lending Solutions, Mr. Desenberg offered homeowners a “Fresh Start” program that would find an investor to purchase homes from distressed homeowners, says U.S. Attorney Benjamin Wagner.

  • Some of the proceeds of the sale would be used to make mortgage payments for the next 12 months and the property owners were allowed to stay in the homes and work on repairing their credit so that at the end of the period, they could obtain new mortgages and purchase their homes back from the investors.

  • But. according to the indictment, Mr. Desenberg [lied] when he said that he would be monitoring the situation for the next 12 months, and that he would ensure the investor made the mortgage payments.

  • In fact, says the grand jury, he did not monitor the 12-month credit-repair period, nor did he ensure the mortgage payments were being made. Eventually homeowners lost their homes to foreclosure, with more than $300,000 in equity lost.

  • Mortgage fraud schemes victimize homeowners, not just mortgage lenders. Foreclosure rescue schemes target homeowners when they are most vulnerable — when they are in fear of losing their homes,” says Mr. Wagner. If convicted, Mr. Desenberg faces a maximum statutory penalty for each count of mail fraud of 20 years in prison, a $250,000 fine and up to three years supervised release following incarceration.(1)

Source: Arrest made in Central Valley foreclosure scheme (Homeowners thought they were being ‘rescued’, ‘Foreclosure rescue schemes target homeowners when they are most vulnerable).

For the U.S. Attorney press release, see Merced And Placer Counties Foreclosure Rescue Scheme Results In Arrest.

(1) For more on sale leaseback equity stripping ripoffs, see:

Municipal Insurer Coughs Up $884K To Cover 90% Of County Employee/Bookkeeper's Theft In Foreclosure Surplus Snatching Scam

In Memphis, Tennessee, The Commercial Appeal reports:
  • Shelby County government's insurance carrier has issued a check for $884,306 to cover about 90 percent of losses incurred in a Chancery Court embezzlement scheme. County Chief Administrative Officer Harvey Kennedy said Tuesday that Traveler's Insurance cut the check last week.

  • "We've been paying premiums all these years. It's one of these things where you never expect to need it," Kennedy said.

  • Former Chancery bookkeeper Brandon Gunn, 47, pleaded guilty in federal court last month to three counts of theft, conspiracy and money laundering in connection with a three-year scheme that tapped $1,063,903 from trust funds owed to Shelby Countians who lost homes in tax foreclosure sales. A second man, Correy Isom, 35, a Hickory Hill restaurant employee, also has been charged. Isom has pleaded not guilty and awaits trial.

  • Although Gunn admitted to stealing more than $1 million, Kennedy said the "net theft'' amounted to $982,548 because Gunn repaid $81,355. That happened last spring when Gunn, still working for the county, funneled two large cashier's checks written under disguised names to the county after his bosses asked him to repay money.

  • Following the payment from Traveler's, the county is left with $98,242 in losses resulting from the embezzlement scheme. "We will ultimately be responsible for that,'' Kennedy said. "The (former home) owners are entitled to that money."

Source: Insurer covers 90 percent of loss in Chancery Court embezzlement.

Home Refi Scam Lands Mortgage Broker In Hot Water After Alleged Escrow Cash Ripoff; Unwitting Couple Ultimately Left Homeless By Foreclosure

In Los Angeles, California, The Modesto Bee reports:
  • Authorities arrested a Los Angeles man Tuesday after a federal grand jury indicted him in connection with a mortgage fraud scheme that victimized a Tuolumne County couple who lost their home.

  • Secret Service agents arrested Steve Zaven Kessedjian, 48, in Los Angeles on suspicion of mail fraud, according to the U.S. attorney's office in Sacramento. Kessedjian's company, Amerilend Inc. in Woodland Hills, helped homeowners secure loans to refinance their homes. When a loan was funded, Amerilend would use Targa Escrow, another business owned by Kessedjian, to disburse the escrow funds, federal prosecutors said.

  • In December 2007, an Amerilend employee helped the Tuolumne County couple to refinance their home to consolidate their credit card bills. Prosecutors said the bank paid off the first mortgage and then wired the remainder of the loan, $57,343, to Targa Escrow. Instead of disbursing the rest of the loan to the credit card companies, Kessedjian took the funds for his own purposes, according to the indictment.

  • The prosecutors said the victims lost their home to foreclosure and their home-based business, as they could not make payments for the refinanced loan and pay the creditors who were supposed to have been paid.

  • If convicted, Kessedjian faces a maximum sentence of 20 years in federal prison, a $250,000 fine and up to three years of parole.

Source: Suspected scammer of Tuolumne couple arrested in fraud case.

For the U.S. Attorney press release, see Los Angeles Mortgage Broker Arrested For Stealing Escrow Funds From Tuolumne County Couple.

Thursday, November 24, 2011

Fiduciary Illegally Doctored Land Docs To Hock 101 Acres Of Fla. Land Held In Trust To Pocket $17M, Say 52 Investor/Beneficiaries Now Facing F'closure

In Cape Coral, Florida, WINK News reports:
  • Investors in the Pine Island 101 Land Trust call for action after finding out their land was mortgaged and is in foreclosure. They say the land was worth millions of dollars and want to know why the trustee of the land, Cape Coral realtor Greg Eagle, mortgaged the land in the first place.

  • The Pine Island 101 Land trust is 101 acres of property near the German American Club on Pine Island Road in Cape Coral. It is owned by 52 investors who bought the property together in the 1990s for 3 million dollars.


  • Cape Coral Realtor Greg Eagle arranged the Pine Island 101 deal and is the trustee for the property. Investors told WINK NEWS Eagle's reputation for managing these land trusts made this property attractive.

  • Investors told us they were surprised to receive a letter in April of 2011 telling them the property had been mortgaged and was in foreclosure. In that letter to the 52 investors, Eagle apologizes for using the property as collateral to get a 17 million dollar loan for a project to bring a private homeland security training facility Florida. The bank who issued the loan, First National Bank of Pennsylvania, filed for foreclosure on the property after not receiving payment.

  • Dr. Charles Curtis, one of the investors in the property, said the property wasn't to be mortgaged. "We have a trustee for the property and it had been paid off. So we as a group owned it," said Curtis. The original trust obtained by Wink News shows 52 people with a percentage interest in the property.

  • However, Wink News has uncovered court documents challenging the foreclosure showing Eagle signed and had notorized a document saying he had full ownership of the property and permission to mortgage it. "It's a pretty serious case," said Attorney Michael Whitt, the attorney challenging the foreclosure on behalf of one of the investors, "I mean what we have uncovered the trail of documents and and doctored documents. It's a pretty scary thing what has happened."

  • Whitt says many of the beneficiaries or investors in the trust invested their life savings into the trust. He also says the property is still very valuable. The most recent appraisal done in December of 2008 valued the land at 22 million dollars.

  • CALL FOR ACTION contacted Greg Eagle. He declined our request to go on camera saying he is currently out of town. However, over the phone he told us as trustee he feels he did have the right to mortgage the property. He told WINK NEWS that he signed that affidavit to simplify the process of getting the loan.

For more, see Investors say land trust wrongfully mortgaged.

California High Court Passes On Hearing Attorney Gripe That State Bar Illegally Shut Down 'Mass Joinder' Lawsuit-Peddling Operation

The San Diego Union Tribune reports:
  • The California Supreme Court on Tuesday said it will not hear the case of a Calabasas-based attorney who says the State Bar of California illegally shut down his law practice in August in connection to mortgage fraud.

  • Authorities from the State Bar and the California Department of Justice sued Philip Kramer, other attorneys, and their marketers for allegedly defrauding thousands of U.S. homeowners who thought they were getting mortgage relief but instead lost money, and in some cases, their homes. Among the "non-attorney defendants" in the lawsuit is Clarence John Butt, a 44-year-old Oceanside man.

  • Kramer, whose firm was placed into receivership in August, had his petition refused on Tuesday. "This decision reinforces the State Bar’s determination to aggressively pursue attorneys who mean to take advantage of vulnerable consumers in foreclosure distress," said State Bar Assistant General Counsel Mark Torres-Gil, in a statement.

  • State Bar officials said Kramer’s practice was taken over for "abdicating his professional responsibilities with false advertising and by using non-lawyers to bring in clients, set fees, provide legal advice and evaluate cases."

  • The lawsuit against Kramer and others says the defendants mailed what looked like official materials to homeowners facing foreclosure in California and other states that said they could take part in a mass joinder lawsuit against mortgage lenders or loan servicers. Troubled borrowers paid $3,500 to $10,000 to take part in the lawsuits, State Bar officials said, but they ultimately received no mortgage relief.

Source: Calif. Supreme Court won't hear case of attorney tied to mortgage-fraud lawsuit.

Reports Of Bailiff Blockades, Proceedings Conducted In Locked Rooms Suggest Public Still Faces Obstacles When Seeking Access To F'closure Proceedings

In Tampa, Florida, the St. Petersburg Times reports:
  • Hillsborough County's chief judge is taking extra steps to allow the public into foreclosure proceedings after watchdog groups raised concerns about hearings taking place in locked rooms.

  • "There is no policy in place to exclude people," Judge Manuel Menendez said. "Anybody who wants to be in there can be in there."

  • The Florida Press Association, the First Amendment Foundation, the American Civil Liberties Union and the Florida Society of News Editors complained in a letter to Menendez last week that bailiffs blocked people twice from "hearing rooms" to witness foreclosure cases. The groups said the practice violates Florida law, and they welcomed Menendez's pledge to make the hearings more accessible.

  • "For a homeowner, a foreclosure case carries incredibly high stakes, and all parties deserve an open hearing," said Larry Schwartztol, an ACLU attorney in New York City.

  • Hearing rooms are smaller offices near judges' chambers. Because of a large backlog of foreclosure cases, the rooms are used for convenience when routine paperwork is done on cases, the judge said.

  • Court administrators have questioned bailiffs and other court workers and believe the incidents were isolated, Menendez said. He plans to schedule the hearings in courtrooms when space is available. Signs will also be posted directing people to call court officials if they are blocked from entering any public hearing. "It should not have happened," the judge said.

Source: Hillsborough County takes extra steps to keep court hearings open.

Wednesday, November 23, 2011

F'closure Mill A Subtle Surplus Snatcher? Suits Say Outfit Failed To Cough Up Overage From Forced Sales; Agrees To Fork Over Loot After Media Inquiry

In Brooklyn, New York, the New York Post reports:
  • What’s in this law firm’s wallet? New York state’s beleaguered, largest foreclosure law firm -- which [] announced plans to shut down in the face of a firestorm of legal action -- has allegedly failed to turn over about $130,000 owed to three people whose co-ops were foreclosed on, and could be sitting on millions of dollars of hundreds of other people's money without those people knowing, The Post has learned.

  • Steven J. Baum P.C.'s move to shutter came a week after it was made ineligible to get new referrals on any Fannie Mae or Freddie Mac mortgages -- essentially a death knell for the controversial firm. The two federally backed mortgage giants moved in the face of numerous complaints about questionable legal filings by Baum.

  • On Friday, a Brooklyn lawyer sued Baum claiming that the firm repeatedly ignored his attempts to obtain about $130,000 for three people whose co-ops were foreclosed on and later sold off in Baum-supervised auctions.

  • The lawyer, Andrew Tilem, said that given Baum's vast foreclosure business there could actually be “millions of dollars” more being withheld from hundreds of others. “I think this is the tip of the iceberg,” said Tilem, who filed the three suits in Brooklyn Supreme Court on behalf of the three former co-op owners Friday after his phone calls and letters to Baum went unanswered for months.

  • Tilem insisted that he already knows of about a dozen other people who are each owed between $2,000 and $100,000 by Baum’s firm, which handled the sales of their foreclosed co-ops on behalf of lenders. The money was left over after payments to the mortgage holder, maintenance fees and other costs. Baum already is under investigation by the New York Attorney General's Office for foreclosure work unrelated to the money allegedly being withheld from foreclosed co-op owners.

  • There’s nobody you can trust anymore. It’s disappointing,” said retiree Richard Adler, 69, one of Tilem’s clients who is suing. Richard Adler said he is owed about $80,000 from Baum for the February 2010 sale of his foreclosed Queens apartment. “I could use the money because I have a lot of expenses. My wife has liver cancer. You know how much that costs, all the medicines and everything?” he said.

  • Another Tilem client, guitar-store worker Eugene Glebas, 63, of Manhattan said he is suing Baum to reclaim the $45,000 he’s allegedly owed from the 2007 sale of his foreclosed co-op. “I don’t understand how somebody lets [Baum] hold my money,” he said.

  • Last month, the firm, without admitting wrongdoing, agreed to pay $2 million to the federal government to settle the Manhattan US Attorney’s investigation into its alleged misleading documentation in foreclosures. The US Justice Dept. put the firm under monitorship and supervision under the settlement.

  • In the past two weeks, federally backed lenders Fannie Mae and Freddie Mac also banned Baum’s firm from getting any new foreclosure or other legal business from banks that service their mortgages.

  • When notified Friday by The Post of Tilem’s claims, Baum within hours agreed to pay his clients, asked him not to file the suits and wrote that they “apologize for the delayed response.”

  • A company spokesman noted that the regulation that controls how co-ops are foreclosed “does not address how surplus monies — money left over after the sale of a unit — should be handled. “The firm places such surplus funds in its [trust account]. Upon appropriate demand, the funds are released,” the company said. “The firm’s operating procedures in these matters are proper.”

  • But when asked how much total money was in such accounts, the company replied,, “We cannot provide a total amount because that account is used for other things such as deposits on contracts and other matters.”

  • A spokesman for state Attorney General Eric Schneiderman — asked of the AG was aware of Baum potentially holding huge amounts of money from foreclosed co-ops — said, "While we cannot comment on ongoing investigations [Schneiderman] will continue to bring accountability to the firms responsible for the mortgage crisis, and put an end to the abusive foreclosure practices that have devastated families across the state."

For the story, see Foreclosure mill law firm Steven J. Baum P.C. shuts down.

Suit: Missouri Foreclosure Mill's Conflict Of Interest In Trustee Role Screwed Financially Strapped Homeowners Challenging Legitimacy Of Sale Process

In St. Louis, Missouri, Courthouse News Service reports:
  • The Millsap & Singer law firm, "one of Missouri's largest foreclosure firms," violates its role as a neutral trustee in foreclosures by serving as attorney-in-fact for lenders, a class action claims in City Court.

  • Lead plaintiff Nurdin Beganovic says that in Missouri no court proceeding is needed for a foreclosure, and the trustee is the only neutral party involved. The trustee must work for the benefit of both parties, but Beganovic said Millsap does not.(1) Millsap, which operates out of Chesterfield, Mo., "is one of Missouri's largest foreclosure firms," the complaint states.

  • Beganovic claims Millsap attorneys, who handle thousands of foreclosures, have or should have knowledge of the increasing evidence of widespread fraud and negligence by lenders. But instead of investigating lenders, Beganovic says, Millsap looks the other way due to the profits it receives from foreclosures and because the firm will get more money from unlawful detainer lawsuits on the same homes it foreclosed on.

  • "Millsap & Singer has an ongoing relationship with many of the parties who bid on the properties at the foreclosure sale including, in many cases, an ongoing attorney-client relationship," the complaint states.

  • "Millsap & Singer has appeared as an advocate against debtors who contest the validity of foreclosures while simultaneously and purportedly serving as the trustee regarding those exact same properties. "In addition, upon information and belief, Millsap has actual knowledge of complete files of debtors, the irregularities that exist in said files, the widespread problems with fraud and negligence by mortgage industry actors, evidence suggesting the non-validity of purported note transfers, the non-existence of notes, and the lack of right to initiate foreclosures it has handled."

  • The class consists of all people who have been foreclosed upon in Missouri in which Millsap served as the trustee while it was also the attorney in fact for the party who initiated the foreclosure.

For the story, see Class Blows Whistle on Foreclosure Firm.

For the lawsuit, see Beganovic v. Millsap & Singer, P.C.

(1) In support of the allegations that the law firm has violated its duties as a trustee, the plaintiff cites Citizens Bank v. West Quincy Auto Auction, 742 SW 2d 161 (Mo. 1987), which describes the nature of the trustee's obligations to both the debtor and the creditor:

  • In Goode v. Comfort, 39 Mo. 314, 325 (1866), the Court noted:Trustees are considered as agents of both parties—debtors and creditors—and their action in performing the duties of their trust should be conducted with the strongest impartiality and integrity. They are entrusted with the important function of transferring one man's property to another, and therefore both reason and justice will exact of them the most scrupulous fidelity.

  • Six years later the Court, speaking through the same author, Wagner, J., in Graham v. King, 50 Mo. 22 (1872), struck down as void a foreclosure sale under a deed of trust where the named trustee was not at the sale and the sale had been conducted by the trustee's son. In so doing, the Court laid down the rule which has been followed in Missouri throughout the years:

    The office and duties of a trustee are matters of personal confidence, and he must exercise a just and fair discretion in doing whatever is right for the best interests of the debtor. He must in person supervise and watch over the sale, and adjourn it if necessary, to prevent a sacrifice of the property and no one can do it in his stead unless empowered thereto in the instrument conferring the trust. A trustee cannot delegate the trust or power of sale to a third person, and a sale executed by such delegated
    agent is void. (Perry Trusts, Section 779 and notes) Id. at 24. (Emphasis added.)

  • In case after case this settled principle of law affecting title to real estate has been considered by the courts of this state. The decisions have recognized that the named trustee in a deed of trust is a fiduciary—of the debtor and the creditor; that the trustee is vested not only with the power to sell the property but must exercise his discretion in so doing for the benefit of both parties. The power of sale given to the trustee is personal and cannot be transferred or delegated.

Yahoo, Microsoft's Bing Come Under Scrutiny In Ongoing Criminal Probe Into Online Foreclosure Rescue, Loan Modification Rackets

The Associated Press reports:
  • A criminal investigation into mortgage swindlers has expanded beyond deceptive advertising on Google's Internet search engine to root out con artists who were luring their victims on Bing and Yahoo, too.

  • Monday's news of the widening probe confirmed that the Internet's three largest search engines had been turned into tools of prey for crooks looking to bilk homeowners scrambling to avoid foreclosure. The scams involved online ads making bogus promises of help people hold onto their homes under a government-backed program to modify mortgage payments.

  • After finding their victims using ads triggered by phrases such as "stop foreclosure," the swindlers extracted upfront fees or arranged to have the mortgage payments sent them without providing any assistance. The ruses had become increasingly common.


  • The identities of the alleged swindlers haven't been disclosed, partly because the criminal investigation is still open. A spokesman for agency steering the investigation declined to provide any further details Monday.

For more, see Criminal probe into online mortgage scams widens.

Tuesday, November 22, 2011

NY Foreclosure Mill To Shut Down; Loss Of Fannie, Freddie Business Over Dubious Practices Dooms Controversial Sweatshop

In Buffalo, New York, Buffalo Business First reports:
  • The embattled Steven J. Baum P.C. law firm is the closing its doors after a series of missteps that included mortgage industry giants Freddie Mac and Fannie Mae cutting off business with the Amherst-based firm.

  • Baum has filed a Worker Adjustment and Retraining Notification notice with several government agencies, saying it plans on shutting its doors. The firm has 67 full- and part-time employees at its Northpointe Parkway offices and another 22 full- and part-time workers at its Long Island office.

  • We will fulfill all of our obligations under WARN and during this process we will also fulfill our remaining work on behalf of our clients,” Baum said in a prepared release. "Disrupting the livelihoods of so many dedicated and hardworking people is extremely painful, but the loss of so much business left us no choice but to file these notices.”

  • The Baum agency focused on real estate foreclosure transactions. The firm has been under fire from federal agencies and the public, including members of the local “Occupy” movement, for its alleged business practices.

  • Last month, the Baum firm settled a federal claim relating to alleged mishandling mortgage filings on behalf of his clients. Baum agreed that the firm would pay $2 million in fines and promised to change business practices at the firm.

  • The Baum agency was also working under a cloud of suspicion concerning allegedly misleading pleadings and affidavits, some of which led to people having their homes foreclosed under what was deemed unfair circumstances.

  • The New York Times also ran a photo of Baum employees dressed and apparently mocking homeless people during a company-sponsored Halloween party.(1) The photo attracted national attention, drawing criticism.

  • But, the largest blow came on Nov. 10 when Freddie Mac and Fannie Mae cut off all business with the Baum firm because of its business practices.

Source: Baum law firm to close.

(1) See Joe Nocera: What the Costumes Reveal (October 29, 2011).

Rumble Over Crappy Home Mortgage Loan Buyback Demands Escalates As Bank Of America Tells Fannie To Take A Hike!

Bloomberg reports:
  • Bank of America Corp. told Fannie Mae it refuses to cooperate with the U.S. mortgage firm’s new stance on loan buybacks, setting the lender up for a potential surge in claims and penalties.

  • The bank is disputing Fannie Mae’s demand that lenders repurchase mortgages or cover any losses themselves if an insurer drops coverage, Bank of America said this month in a regulatory filing. The lender, ranked second by assets among U.S. banks, said it “does not intend to repurchase loans” under what it deems to be new rules, and the refusal may trigger penalties or other sanctions.

  • At stake is Bank of America’s ability to contain costs from faulty mortgages, which have reached about $40 billion for refunds, lawsuits and foreclosures. The company set aside $278 million for loan buybacks in the third quarter, the least since Chief Executive Officer Brian T. Moynihan took over almost two years ago. Those expenses may rebound if Fannie Mae’s rules stand, the bank said.

  • Fannie Mae didn’t enforce this policy before because “it was a different economic time,” said David Felt, a former deputy general counsel at the Federal Housing Finance Agency, the regulator for Fannie Mae. Defaults were fewer and the firm didn’t want to harm relations with lenders by being too picky, he said.

  • They’d overlook the small things. Well, they’re no longer small things, and they’re no longer the old Fannie Mae.”


  • According to Fannie Mae, lenders were always contractually required to ensure that mortgage insurance was maintained. A guide dated June 30 requires lenders to alert the Washington- based mortgage financing firm of coverage withdrawals within a month of the event and gives them 90 days to appeal a repurchase demand. After June 2012, banks have just one month for appeals.

  • Our contracts are clear that when a mortgage insurance company rescinds the required mortgage insurance, the loan is subject to repurchase by the lender,” said Amy Bonitatibus, a spokeswoman for Fannie Mae.

For more, see BofA Clash With Fannie Mae Escalates Over Loan Buyback Stance.

Unwitting Denver Couple Left Holding The Bag On Recent REO Buy As Foreclosing Lender Unloads Meth-Infected Time Bomb On Young Family

In Denver, Colorado, KMGH-TV Channel 7 reports:
  • Josh and Areli LeFevre have spent tens of thousands of dollars renovating a house in the south side of Denver as a new home for their growing family. But they didn’t know the previous tenants cooked methamphetamine in the house until a neighbor brought it up. “We were just outside talking about what we were going to do to the house, and he came up to us and just told us it was a meth lab,” Areli LeFevre said.

  • The couple called their Realtor who told them the house had been cleaned up and had a certificate of the cleanup filed with the Denver Department of Environmental Health. But CALL7 Investigators retested the house, finding it still tested positive for the drugs. The attic was 10 times over what the state regulations say are acceptable.

  • The LeFevres are at a loss for what to do. "We’re just concerned about it because we have a baby,” Areli said. "We live here. I’m trying to get pregnant again so we’re just mad about it."

  • An expert, who testified about meth contamination and clean up at the General Assembly when lawmakers passed the regulations in 2006, said the state certification process does not ensure a house is safe to inhabit. The owner of a meth house must have it cleaned and then that company certifies that the property is safe for people to inhabit. A certificate of the cleanup is filed with the county. But the county never verifies the house was properly cleaned up because the legislature never provided funding to check the houses. And the seller doesn’t have to notify a buyer that there was a meth lab in the house because it is certified as cleaned up.

  • The LeFevres’ house wasn’t the only one meth testing consultant Caoimhín Connell found was certified cleaned but still had high levels of meth residue.


  • The LeFevres’ house was a foreclosure they bought from a bank, and Connell said the banks often have an incentive to get the affidavit and sell the house whether it’s safe or not.

  • "My experience is that if (it's) a foreclosure and banks want to move that along, they’re hoping to get someone to issue a letter and say it’s OK even when it’s not OK," Connell said. (Sellers) "hold up that affidavit and say we’re off the hook, we did our best and (the affidavit) may never be seen again."(1)

For more, see Meth May Remain In Homes After Certified Cleaning (CALL7 Investigators Find Meth In Home Despite Certificate With City Saying It's Clean).

(1) For other stories relating to the unwitting purchase of homes infected with methamphetamine residue, see:

Monday, November 21, 2011

Rent-To-Own Ripoffs, Short Sale 'Flopping', Rent Skimming, Deceptive Trade Practices Among Charges Flying At Suspected Foreclosure Rescue Racket

In West Palm Beach, Florida, The Palm Beach Post reports:
  • The Nationwide Investment Firm peddles foreclosure rescue to South Florida's most desperate homeowners, offering to beat the banks while maintaining dignity and peace of mind.

  • Amid the wreckage of this once vibrant real estate market, the 3-year-old Boca Raton company persuades struggling borrowers to quit claim-deed their properties to Nationwide. In return, the for-profit firm promises to streamline a short sale and negotiate a debt-free ending for the homeowner.

  • Instead, homeowners say in at least five lawsuits filed this year in Palm Beach and Broward counties, they've been pulled into a game of real estate musical chairs in a short sale ruse that has grown to involve dozens of homes in Palm Beach, Broward and St. Lucie counties. The lawsuits describe variations of alleged real estate wrongdoing, but mostly revolve around one business model.

  • While Nationwide negotiates a short sale, often with the intent to buy the property itself at the cheapest possible price, the homeowner is shuffled into another Nationwide property where he or she puts 20 percent down to enter into a rent-to-own style contract.


  • [A]ttorneys who filed the suits against the firm and its president, Guilfort Dieuvil, say the company, in truth, is violating arm's-length short sale rules meant to prevent the type of house flipping partly responsible for the economy's epic failure.

    Affidavit aims to prevent abuses

  • Most major lenders require an " arm's-length" affidavit be signed at closing. While the affidavit may differ by lender or servicer, it must generally include language that says the short sale transaction has been negotiated by unrelated parties, who do not share business or familial relationships, and that there have been no prior agreements for the owner to remain in the property as a tenant or to regain property at any time after the sale.

  • According to national mortgage backer Freddie Mac, the short sale addendum is to prevent "common schemes where the borrowers sell their property to a prearranged straw buyer or family member who allows them to stay in the home after the short sale, with a greatly reduced mortgage obligation."

  • Two of the recently filed lawsuits include charges of "flopping" ­­- defined as when the company negotiating the short sale tells the bank it is getting less for the property than what the buyer is actually paying, thus the company pockets the difference.

  • Other specific charges in the lawsuits include violations of Florida's Deceptive and Unfair Trade Practices Act, statutory disclosure requirements that apply when buyers assume fee obligations to homeowners associations, and the state's equity skimming statute that is supposed to prevent people from applying rents from foreclosed dwellings for the person's own use, according to one lawsuit.

For more, see Investment firm offers salvation to distressed homeowners, but some say they were misled.

Florida Lawyer Cops Plea To Ripping Off At Least $2.4M In Client Cash From Trust Account

From the Office of the U.S. Attorney (Fort Myers, Florida):
  • United States Attorney Robert E. O'Neill announces that Joseph A. Troiano, (63, Fort Myers) pleaded guilty last week to six counts of wire fraud and one count of mail fraud. Troiano faces a maximum penalty of twenty years in federal prison for each count of wire and mail fraud.

  • According to the plea agreement, Joseph A. Troiano was a licensed lawyer in Florida. From in or about late 2005, through in or about January of 2010, Troiano, without his client's authority, or consent, used funds belonging to his clients and their beneficiaries for his own purposes, including investing money in various real estate projects. In all, Troiano misappropriated at least $2.4 million for his own use.(1)

For the U.S. Attorney press release, see Fort Myers Attorney Pleads Guilty To Fraud.

(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 Cops Pinch Flipper For Pocketing $200K Selling Same Home Twice Before Deal Documents Were Recorded

In Staten Island, New York, the New York Post reports:
  • A scam artist twice sold the same property in Woodrow, and profited $200,000 from the sales before the transactions were recorded by the County Clerk’s Office, authorities said.

  • Dariusz Mruczynski, 44, first sold the home at 263 Edgegrove Ave. on Dec. 16 before flipping it on Dec. 30, according to court records. He pulled off the scheme by fraudulently obtaining two mortgages, cops said. He failed to pay $29,527 in taxes for 2008 and 2009, records show. He was busted Tuesday for grand larceny and tax fraud, said a spokesman for DA Dan Donovan.

Source: NYPD Blotter (Staten Island).

Attempt To Peddle Recently Tax-Foreclosed Home Squleched By Cops; Unlicensed Sales Agent Says She Had No Idea Of Change In Property's Ownership Status

In St. Paul, Minnesota, the Pioneer Press reports:
  • The sign said the home at 806 Edmund Ave. in St. Paul was for sale and the buyer could get it "cheap" - at a 50 percent discount. Cash only.

  • But there's a catch: The seller doesn't own the house. The state of Minnesota does. The state took ownership of the home Aug. 2 after the owner failed to pay taxes, said Kris Kujala, a supervisor for tax-forfeited land in Ramsey County, which manages the state-owned property.

  • County employees were tipped off Nov. 1 when they drove by the home and saw the for-sale sign. "We just came to a screeching halt and thought, 'What is going on here?' " Kujala said.

  • City police were called, and a meeting was set up with the seller, she said. The woman, who said she was working on behalf of the owner, apparently didn't know the state had acquired the home.

For more, see St. Paul house's sale price a steal - but seller didn't own it.

Sunday, November 20, 2011

Shameless Head Of Embattled NY F'closure Mill Sweatshop Acknowledges Being On Road To Ruin; Responds To Recent Revelations By 'Shooting The Messenger'

Author and columnist Joe Nocera writes in The New York Times:
  • Mr. Nocera — You have destroyed everything and everyone related to Steven J. Baum PC. It took 40 years to build this firm and three weeks to tear down.”

  • Thus began a lengthy e-mail that I received, on Thursday evening, from Steven J. Baum, the owner of his eponymous law firm, the largest “foreclosure mill” in New York State. Foreclosure mills, of course, are firms that represent banks and servicers trying to foreclose on the millions of homeowners who have defaulted since the housing bubble burst.

  • Baum was referring to a column I had written in late October after a former employee had sent me some photographs of the firm’s 2010 Halloween party.(1) They showed employees wearing costumes that mocked people who had lost their homes; the ex-employee who forwarded the pictures had described them as “appalling.”

  • A lot of people agreed. Representative Elijah Cummings, a Maryland Democrat, wrote the firm a letter demanding documents and records. In New York, the attorney general’s office ratcheted up its investigation of the firm; I heard that investigators were looking for more photographs of Baum Halloween parties.

  • Occupy Buffalo protesters picketed Baum’s offices in nearby Amherst, N.Y. And, not least, Fannie Mae and Freddie Mac, which own or guarantee half the country’s mortgages, issued new rules forbidding servicers of their mortgages from using Steven J. Baum.

  • None of which was why I had contacted Baum’s press spokesman earlier this week. What had caught my eye was an article in The Buffalo News headlined, “Foreclosure law firm is battling rule on accuracy.”

  • The article described a court hearing a few weeks ago during which the Baum firm asked the judge to reject — as unconstitutional! — a year-old rule that foreclosure lawyers must attest to the validity of the mortgage documents held by their bank and servicer clients.

  • You would think that any lawyer worth his salt would be happy to affirm that his client was using valid documents to toss someone out of a house. But not, apparently, Steven J. Baum.

  • In fact, this case matters a lot more than a creepy Halloween party. In October 2010, reacting to the robo-signing scandal, the judge overseeing the New York State court system had issued an order commanding that lawyers representing banks and servicers sign a document “affirming” that their clients had reviewed the accuracy of the documents and records — and that the documents were, indeed, accurate.


  • There is blood on your hands for this one, Joe,” he wrote at the end of that second e-mail. “I will never, ever forgive you for this.”

  • I think that’s what they call shooting the messenger.

For the column, see Baum Weighs In After Uproar.

(1) Joe Nocera: What the Costumes Reveal (October 29, 2011).

Google Gets Hammered By Negative Publicity For Role In Loan Modification, Other Internet Scams As Feds Shut Down Dozens Of Rackets

The Associated Press reports:
  • The federal government has shut down dozens of Internet scam artists who had been paying Google to run ads making bogus promises to help desperate homeowners scrambling to avoid foreclosures.

  • The crackdown announced Wednesday renews questions about the role that Google’s massive advertising network plays in enabling online misconduct. It may also increase the pressure on the company to be more vigilant about screening the marketing pitches that appear alongside its Internet search results and other Web content.

  • The criminal investigation into alleged mortgage swindlers comes three months after Google agreed to pay $500 million to avoid prosecution in Rhode Island for profiting from online ads from Canadian pharmacies that illegally sold drugs in the U.S.

  • A spokesman for the U.S. Treasury Department division overseeing the probe into online mortgage scams declined to comment on its scope other to say it’s still ongoing. Google Inc. also declined to comment Wednesday.

  • No company wants to be tainted by a criminal investigation, but the prospect is even more nettlesome for Google because it has embraced “don’t be evil” as its corporate motto. That commitment may make it difficult for Google to fend off a call by Consumer Watchdog to donate the revenue from fraudulent mortgage ads to legitimate organizations that help people ease their credit problems. Consumer Watchdog is an activist group that released a report in February asserting that Google was profiting from ads bought by mortgage swindlers.(1)

  • Google should never have published these ads, but its executives turned a blind eye to these fraudsters for far too long because of the substantial revenue such advertising generates,” said Consumer Watchdog’s John M. Simpson, a frequent critic of the company.

  • To fight future abuse, Google has suspended its business ties with more than 500 advertiser and agencies connected to the alleged scams, according to the U.S. Treasury Department’s Office of the Special Inspector General for the Troubled Asset Relief Program.

  • The evidence collected in the current investigation led to the government’s closure of 85 alleged mortgage scams. The identities of the businesses and people involved in the scams weren’t disclosed Wednesday.

  • The con artists are accused of duping people into believing they could help lower their home loan payments under a government-backed mortgage modification program created to reduce the foreclosures that have made it more difficult for the slumping real estate market to recover. The alleged rip-offs typically relied on collecting upfront fees or getting victims to transfer their monthly mortgage payments to the scam artists, according to the Office of the Special Inspector General for the Troubled Asset Relief Program. In some cases, the swindlers passed themselves off as being affiliated with the government.

  • Google’s name popped up because the scam artists relied on the company’s vast advertising network to bait their victims. About two out of every three Internet search requests are made through Google, making its ad network a prime outlet for finding people hoping to save their homes, according to Christy Romero, deputy special Inspector General for the Troubled Asset Relief Program.

  • The first place many homeowners turn for help in lowering their mortgage is the Internet through online search engines, and that’s precisely where they are being taken advantage of and targeted,” she said.

For the story, see Government regulators shut down alleged mortgage swindlers who baited victims with Google ads.

(1) See Consumer Watchdog: Liars and Loans: How Deceptive Advertisers Use Google.

See also The Wall Street Journal: Mortgage Fraud Underscores Online Ad Challenge for Consumers:

  • Last February the group produced a report that said that Google was profiting from deceptive advertising to homeowners. The report, entitled “Liars and Loans: How Deceptive Advertisers Use Google,” counted 20 foreclosure rescue or mortgage modification companies advertising on Google search results pages between September 10 and September 30, 2010. “Google’s practice
extensive,” said the report.

California AG Hits Fannie, Freddie w/ Subpoenas; Demands Information About Conduct Towards Renters In F'closed Homes, Involvement With Toxic Mortgages

In Los Angeles, California, the Los Angeles Times reports:
  • Investigators with the California attorney general's office have subpoenaed information from mortgage titans Fannie Mae and Freddie Mac as part of a wide-ranging inquiry into lending and foreclosure practices in the state.

  • The subpoenas ask the government-controlled finance companies to answer a series of questions about their activities in California, including their roles as landlords who own thousands of foreclosed properties.

  • The attorney general's office is also seeking details of Fannie and Freddie's mortgage-servicing and home-repossession practices, according to a person familiar with the matter.

  • In addition, investigators want to learn more about the companies' purchases and sponsorship of securities holding "toxic mortgages" in the Golden State, said the person, who was not authorized to speak on the matter and requested anonymity.

For more, see California attorney general's office subpoenas Fannie, Freddie (Information is sought on the mortgage giants' roles as landlords who own thousands of foreclosed properties in California. Also sought are details of their mortgage-servicing and home-repossession practices, a source says).

Notary Nabbed In Nevada Criminal Robosigning Probe Cops Guilty Plea

From the Office of the Nevada Attorney General:
  • The Office of the Nevada Attorney General announced [] that Tracy Lawrence, 43, a local notary, has pled guilty to one count of notarizing the signature of an individual not in her presence, a gross misdemeanor in violation of NRS 240.155.

  • Notary fraud carries a potential jail sentence of one year and/or a fine of up to $2,000. "The case against Lawrence was based on an investigation by the Attorney General’s mortgage fraud task force which revealed that between 2005 and 2008, tens of thousands of fraudulent documents were filed with the Clark County Recorder’s office”, said Chief Deputy Attorney General John Kelleher. Lawrence pled guilty on November 14, 2011.

For the Nevada AG press release, see Office Of The Attorney General Announces Notary In Robo-Signing Scheme Pleads Guilty.

For the criminal charges, see State of Nevada v. Lawrence.

Suit: Credit Union Snatched Borrower's Auto In Response To Default On Home Mtg Loan Obtained From Same Lender, Despite Car Note Payments Being Current

In St. Petersburg, Florida, ABC Action News reports:
  • A Tampa Bay teacher is filing a lawsuit against the Suncoast Schools Federal Credit after they repossessed her car, despite her loan payments being up to date. In a statement released Friday, Attorney Charles Gallagher explains that the bank repossessed Angela DiNapoli’s car in response to her defaulting on a separate mortgage loan, also financed through the same bank.

  • DiNapoli discovered that her car was missing after she had returned home from a vacation. She called police thinking that her car had been stolen, but found out that the bank had taken the car.

  • Suncoast Schools Federal Credit Union had not even filed a foreclosure lawsuit with regard to her mortgage or sent any demand for payment on her car loan when it took her car, according to the press release. “This is an new tactic for lenders," DiNapoli’s attorney stated in the release.

  • "There is absolutely no legal justification for taking her car, when she was up to date on her payments." The release goes on to say that after the repossession, Suncoast later filed a foreclosure lawsuit and DiNapoli counter-sued Suncoast for the wrongful repossession and other bank misconduct.

Source: Teacher suing Suncoast Schools Federal Credit Union for wrongful repossession of car.