Saturday, January 21, 2012

21 Residents Driven From Homes Into Frigid Cold As Frozen, Bursting Water Pipes, Electricity Short Out Spell Shut Down For Building In Foreclosure

In Cicero, Illinois, NBC Chicago Channel 5 reports:
  • The town of Cicero stepped in Friday after 21 residents, including 12 children, were displaced from their home because of bursting water pipes amid a foreclosure battle.

  • Ahead of the coldest morning of the year, several frozen pipes burst Thursday night in the building in the 5100 block of 30th Street, causing the electricity to short out. For the past year, the residents have been caught in foreclosure proceedings between the building's owner and the city.

  • The owner, who city officials said couldn't be found Friday, is accused of owing thousands in water bills to the city. The town of Cicero paid for hotel rooms for the displaced families. Because of the foreclosure, it's not clear who will pay for repairs in the building.

  • One thing's for sure. The residents can't go home right now. A community service car blocked the building, which has been closed by the town.

  • The fire department said the building is currently a safety hazard for residents.

Source: 21 Cicero Residents Displaced on Frigid Day (The town stepped in to pay for hotel rooms).

Suit: Judgment Debtor Played 'Keep-Away' With Creditor By Fraudulently Transferring Real Estate Ownership To Complicit Mom To Avoid Collection Efforts

In Galveston, Texas, The Southeast Texas Record reports:
  • Claiming fellow Galvestonians Daniel and Rita Higgins committed a fraudulent property transfer, Leslie and Sandra Bartosh have a filed a lawsuit. The lawsuit, filed Dec. 30 in Galveston County District Court, accuses Daniel P. Higgins of turning two pieces of real property on the farther West End of Galveston over to his mother "with the intent to hinder, delay or defraud the plaintiffs."

  • Recent court documents explain that the Bartoshes pursued legal action against the younger Higgins in 2009 and eventually won a settlement in the amount of $67,704 on June 14. "The plaintiffs allege that the foregoing judgment was a valid and subsisting judgment and that the plaintiffs obtained an abstract of judgment," the original petition says.

  • The suit shows the properties in question had a fair market value that was in excess of $67,704 when Danny P. Higgins transferred them by way of quitclaim deed to Rita Higgins on Oct. 25.

  • According to the complainants, said transfer occurred to prevent the defendant transferor's creditors and the plaintiffs from obtaining collection of the claim.

  • They additionally claim Rita Higgins had notice of her son's alleged actions and was aware he was experiencing "serious financial difficulty" at the time of the transfer in question. "The defendant Rita Higgins did not pay adequate or any consideration for the properties," the suit says.

Source: Suit claims property transfer was fraudulent.

Property Owner Sues Sibling/Co-Owner Over Alleged Failure To Cough Up Her Share Of Real Estate Tax Bill; Asks Judge To Order Forced Sale Of Land

In Jefferson County, Texas, The Southeast Texas Record reports:
  • A woman claims her sister failed to pay her half of the property taxes on a piece of Jefferson County real estate the siblings jointly owned. As a result, the property has settled into disrepair, according to recently filed court documents.

  • Susan Manuel filed a lawsuit Dec. 30 in Jefferson County District Court against Gwendolyn Lejunie. In her complaint, Manuel alleges she and Lejunie owned the property at 2010 Seventh St. in Port Neches. They inherited the land from their mother, Bonita Manuel, on Aug. 1, 2005, according to the complaint.

  • Despite her 50 percent share of the property, however, Lejunie has refused to pay property taxes on it, the suit states. She has also failed to keep the property in a "liveable and marketable" condition, the complaint says.

  • Manuel wants the court to order sale of the property. She wants to receive 60 percent of the proceeds as compensation for the loss of market value of the property.

Source: Siblings in dispute over property taxes.

Texas Man Files Suit To Dodge Boot From Home Owned By Another That He's Lived In, Maintained For 35 Years

In Jefferson County, Texas, The Southeast Texas Record reports:
  • A Nome man who has lived on a Jefferson County property for 35 years is asking the court to overturn a woman's eviction orders.

  • Charles Malveaux filed a lawsuit Jan. 5 in Jefferson County District Court against Mary E. Jackson. In his complaint, Malveaux claims he has lived on and maintained a property in Nome for more than 35 years.

  • However, Jackson is now attempting to evict him from the property, claiming she was given 100 percent ownership of it following the death of Sarah Parker, according to the complaint.

  • Malveaux maintains that Parker gave him permission to occupy the land and says he should be granted the right to remain on the property because of the work he has performed for the past 35 years.

For the story, see Nome man sues property owner to stop eviction.

Federal Judge 'Green-Lights' Embattled Foreclosure Sweatshop Operator's Lawsuit Alleging BofA Stiffed Him Out Of $11M In Legal Fees

In Miami, Florida, Courthouse News Service reports:
  • A Plantation, Fla., law firm can seek $11 million in unpaid legal fees for its work on Bank of America foreclosure cases, a federal judge ruled.

  • The Law Offices of David J. Stern says it was the legal counsel for Bank of America's Florida residential foreclosure cases across the state, employing some 1,200 attorneys and support staff at its peak. [...] Stern's 11-count complaint claims that Bank of America and its corporate parent owe more than $1.9 million, while BAC Home Loans Servicing owes more than $8.7 million.

For more, see Bank of America May Owe Lawyers $11 Million.

For the order denying BofA's Motion to Dismiss, see The Law Offices of David J. Stern, P.A. v. Bank of America Corp. et al.

L.A. City Tags Scofflaw Landlord For $322K In Relo Funds For Dozens Of Low-Income Tenants To Assist In Forced Move From 3-Unit Health/Safety/Fire Trap

In Los Angeles, California, the Los Angeles Times reports:
  • The Los Angeles City Council voted [] to provide up to $322,000 in relocation money to dozens of low-income tenants who must move from a South Los Angeles apartment building deemed unsafe by city inspectors.

  • Tenants were given eviction notices last month after housing officials concluded that owner John Callaghan had illegally converted what was supposed to have been a three-unit apartment building [...] into as many as 44 separate living spaces — a warren of narrow hallways; tiny, shared bathrooms; and communal kitchens, much of it laced with unpermitted electrical and plumbing work.


  • The payments, which will range from $7,300 to $18,300, will come from a fund established by the Housing Department for tenants who must move out because of hazardous conditions. Those who receive the maximum must have lived in the apartment for more than three years and qualify as low income.

  • The payments are designed to cover the first month's rent, a rental deposit, moving costs and the likelihood that tenants will be charged a higher rent at their next apartment, said Sonia Pflaster, a lawyer with the Inner City Law Center.(1) Some renters have been paying as little as $350 per month and are finding that similarly sized apartments are now going for $700 to $900, said Pflaster, who represents 35 tenants at the 49th Street property.

  • Although the city's action goes a long way toward helping the tenants, council members still want to know why it took inspectors so long to figure out what had happened at the building — and how many other similar properties might exist.


  • In recent weeks, city officials have required that the owner pay for an around-the-clock security guard on the property to make sure the unpermitted electrical work doesn't spark a fire.

For the story, see Tenants get relocation funds after eviction from illegal units (The l.A. City Council approves up to $322,000 for dozens of people who were living in an illegally remodeled apartment building. Lawmakers are still trying to determine what went wrong with inspections).

(1) Headquartered on Skid Row, Inner City Law Center provides free legal representation and social service advocacy in Los Angeles County to over 2,000 homeless and working poor clients each year.

F'closures Also Affect Dearly Departed; Loved Ones' Final Resting Place Anything But Peaceful As Pending Sale Of Troubled Cemetary Worries Families

In Madison, Indiana, WDRB-TV Channel 41 reports:
  • Grandview Memorial Gardens Cemetery gained attention for water-logged graves and will now go to the highest bidder. The auction is just the latest problem for Grandview, that has many folks wondering what will happen to all of their loved ones.

  • Pictures are all Hazel Wilkerson has of her late husband Fred who died October 22nd. "It will be three months Sunday," says Wilkerson, a secretary at the Madison Airport. She worked alongside her husband, a pilot, for many years. "We'd been married 45 years when he passed away."

  • He is buried next to his mother at Grandview. Hazel already has her plot next to Fred. But their final resting place is anything put peaceful. "I just wonder what's going to happen," wonders Wilkerson.

  • She's wondering because next month the cemetery is going on the auctioning block. Grandview's history is bogged down in controversy. Bodies were exhumed several years ago to fix problems with water logged graves. The actual owner is still in dispute with lawsuits dating back to 2006.

  • "I just don't know. That's up to a judge to decide," says Jim Holt. He thought he sold the cemetery years ago to Keith Mefford and wants nothing to do with it now as it goes up for auction. "When Mefford stopped making his payments to me, then I stopped making the payments to the bank."

  • The bank then filed foreclosure against the cemetery. Holt says he knows of two interested parties.

  • Hazel Wilkerson just hopes the highest bidder holds this sacred ground in high regard. "Somebody's going have to take it over that's going to take care of it cause it's not really been taken care of like it should be." "The sheriff plans to auction off the cemetery on February 23rd.

Source: Troubled Madison cemetery will go to the highest bidder.

Friday, January 20, 2012

Brooklyn Judge Voids Foreclosure Forbearance Agreement; Sneaky Bankster Slicked Unrepresented Homeowner Into Signing One-Sided Deal

In Brooklyn, New York, Reuters reports:
  • A Brooklyn judge has voided what she deemed an "unconscionable" forbearance agreement that required a mortgage holder to drop his legal defense against foreclosure proceedings in exchange for reduced payments that the judge said provided him "little, if any benefit."

  • In a ruling dated January 6, Kings County Supreme Court Justice Marsha Steinhardt slammed the forbearance agreement struck between Brooklyn homeowner Jaime Arroyo and the company that bought his mortgage, Rossrock Fund II LP, saying the company and its counsel took advantage of the unrepresented homeowner to draft a one-sided deal.


  • "An examination of the terms of the agreement and the circumstances of its execution reveal a transaction which is ostensibly designed to ease the foreclosure process in favor of the plaintiff while affording virtually no benefit to Arroyo," Steinhardt wrote. "Under these circumstances, the court finds that the subject agreement is unconscionable and employs its equitable powers to rescind the agreement."

  • Sara Manaugh, a staff attorney in the Foreclosure Prevention Project at South Brooklyn Legal Services,(1) said she had rarely encountered an agreement "so plainly calculated to divest the homeowner or his or her home."

For more, see Brooklyn judge rescinds unfair forebearance deal.

For the court ruling, see Rossrock Fund II LP v Arroyo, 2012 NY Slip Op 50048(U) (NY Sup. Ct. Kings Cty., January 9, 2012).

(1) South Brooklyn Legal Services is a non-profit law firm that provides a range of legal advocacy and information for low-income people in Brooklyn. SBLS is a program of Legal Services NYC.

Mich. Woman Gets Up To 12 Months, Ordered To Pay $36K+ Restitution For Running Loan Mod Racket; Employee Gets 45 Days To Be Served Three Days/Week

In Allegan County, Michigan, The Allegan County News reports:
  • A former Fennville woman will spend up to one year in jail after defrauding several dozen homeowners through her foreclosure rescue company. Tonya Raisbeck, 36, stood before Allegan Circuit Court Judge Margaret Zuzich Bakker on Friday, Jan. 13, and said she knew people questioned her intentions.


  • Through her business, Mobile Modification Inc., Raisbeck accepted payments from homeowners in exchange for what they were told would be help in adjusting the terms of their mortgages; many faced foreclosure and were hoping to keep ownership of their homes. Raisbeck has been self-employed since 1999 and had been a real estate agent.

  • Representing the state attorney general’s office was Scott Teter, who said 43 victims contacted his office; he said 35 lost their homes. The attorney general’s office announced the charges against Raisbeck and her company and eight others in July 2010.


  • Bakker sentenced Raisbeck to one year in Allegan County Jail with credit for one day served for false pretenses, $1,000 to $20,000. Raisbeck will be on probation for five years and, in addition to court costs and fees, will also have to pay $36,417 in restitution.

  • She received similar, concurrent sentences for one other count of false pretenses and one count of conspiracy to commit false pretenses.

  • Bakker also sentenced Raisbeck to concurrent sentences of 90 days jail with credit for one day served for each of five violations of the Credit Services Act.

  • Bakker said Raisbeck economically destroyed her victims. “The extensive, ongoing victimization that’s phenomenal,” Bakker said. She said property crimes like this can trigger a chain of events that can ruin families. “To take away a family’s funds...results in so many ongoing effects; they can lose their mortgage, their home, their job, sometimes their spouse—sometimes their lives (through suicide).”


  • Also on Jan. 13, Bakker sentenced Raisbeck’s one employee at Mobile Modification to 45 days jail to be served Tuesday through Thursday at Allegan County Jail. Jessica Sheldon, 32, pleaded no contest to one count of false pretenses in exchange for the prosecution dropping the remaining charges. Sheldon was also sentenced to three years probation and must pay court costs and fees along with $6,559 in restitution, joint and several with Raisbeck.

For the story, see ‘One-woman crime wave’ sentenced.

Another Homeowner Driven Into F'closure Over Misapplied Mortgage Payments; Bankster Refuses To Admit Error Until Media, State AG, US Senator Intervene

In East Pennsboro Township, Pennsylvania, The Patriot News reports:
  • Citimortgage received a $20 billion government bailout on grounds it’s “too big to fail.” Fortunately, Citi isn’t too big to admit a mistake — although not fast enough to impress Myrna Hoke, whose daughter nearly lost her East Pennsboro Twp. home over an error by Citi.

  • "It’s been unbelievably stressful,” said Hoke, 65, who spent months untangling the situation and sweated until minutes before a planned Jan. 4 sheriff’s sale.

  • Hoke’s daughter, Christina May, went through a divorce and bankruptcy several years ago, and Hoke and her husband took over the $880 monthly mortgage.

  • In 2010, Citi mistakenly applied mortgage payments to bankruptcy-related legal costs that had already been paid and declared the mortgage in default over missed payments.

  • Hoke didn’t know anything was amiss until a foreclosure noticed arrived in late 2010. She spent months figuring out what went wrong, proving the mistake to Citi, and fending off sheriff’s sale of the house where her daughter and three grandchildren have lived for 11 years.

  • It took the involvement of the Pennsylvania Attorney General’s Office, which helped obtain a refund of the five mortgage payments Citi had mistakenly applied to legal fees.

  • Still, in order to reinstate the mortgage and call off a sheriff’s sale scheduled for early December, Citi wanted an immediate lump sump payment covering all missed payments since Citi stopped accepting them in 2010, plus late charges. That amount eventually topped $14,000.

  • Citi turned down requests from The Patriot-News to discuss the situation. Hoke said she wouldn’t pay the fees, on the grounds the situation was Citi’s fault. Hoke, who has a mortgage of her own, further argued Citi should tack the missed payments onto the end of the loan, rather than require her to pay so much at once.

  • Citi called off a sheriff’s sale scheduled for early December at the last minute as Hoke frantically argued her case and The Patriot-News also pressed for information.

  • After reading about the situation in The Patriot-News, the staff of U.S. Sen. Bob Casey Jr. also contacted Citi, which eventually said it would waive late charges and accept $12,481 to reinstate the mortgage and call off the sale, now scheduled for Jan. 4.

  • But Citi wanted the money immediately, and told Hoke that, otherwise, the home would be sold on Jan. 4. Hoke had to cash in an investment and use much of the Christmas bonus of her husband, an electrician who supervises trades workers at a nuclear power plant in Mississippi, where he spends much of the year.

  • After agreeing on the $12,481, Citi called almost daily to ask when she would pay, Hoke said. She said she wired payment to Citi late on Friday, Dec. 31 — just before the New Year’s holiday. But she said she was surprised to call the Cumberland County Courthouse early on Jan. 4 and find the house still scheduled for sheriff’s sale.

  • That prompted another round of panic for Hoke, along with calls to Citi and Casey’s office. It turned out Citi had tried to inform the Cumberland County sheriff’s department by fax the previous day, but the fax hadn’t gone through, said Jody Smith, the chief deputy. However, a lawyer who arrived to represent Citi on several properties said Citi had informed her the sale of the East Pennsboro home was called off.

  • Meanwhile, Hoke said she was appalled by such behavior on the part of a company that received so much taxpayer aid. She contends Citi should have taken more aggressive steps to resolve the problem, and removed the threat of sheriff’s sale as soon as it realized its error caused the foreclosure “They should have said, ‘We were totally wrong, we have to do what we need to do to stop this foreclosure and do what we need to do to correct this,’” she said.

  • In responding to one of The Patriot-News’ requests to discuss the matter, a Citi spokesman said it would require Hoke’s permission. But after Hoke granted permission, the spokesman said it was Citi’s policy not to discuss such cases.

For the story, see East Pennsboro Township woman nearly loses her home over error made by Citimortgage.

Thursday, January 19, 2012

Lawsuit: Bankster Played "Hide & Seek" With Debtors, Judges, Others In Battling Tens Of Thousands Of Bankrupt Homeowners; Action Seeks Class Status

In Los Angeles, California, Courthouse News Service reports:
  • JPMorgan Chase routinely fabricated documents to deceive bankruptcy judges, going so far as to Photoshop documents to "create the illusion" of standing "in tens of thousands of bankruptcy cases," according to a federal class action.

  • Lead plaintiff Ernest Michael Bakenie claims that Chase's "pattern and practice of playing 'hide-and-seek' with debtors, judges and other bankruptcy players" bore rich fruit: that Chase secured motions for relief of stay and proofs of claim in 95 percent of its cases.

  • "Through the use of fabricated assignments, endorsements and affidavits that purport to transfer deeds of trust, notes and the rights to all monies due under the terms of tens of thousands of non-negotiable promissory notes (the 'MLNs'); Chase has demonstrated a pattern and practice of playing 'hide-and-seek' with debtors, judges and other bankruptcy players," the complaint states.

For more, see Chase Accused of Brazen Bankruptcy Fraud.

For the lawsuit, see Bakenie v. JPMorgan Chase Bank, et al.

Foreclosure Sweatshop Operator Takes Scolding From Judge Over Sloppy Work; Ordered To Continue Personal Court Appearances Until Each File Is Corrected

In Poughkeepsie, New York, the New York Post reports:
  • Take that, Steven Baum! The 50-year-old lawyer, who owns New York’s largest home-foreclosure mill, made a rare appearance in a courtroom [recently] — and was promptly ripped by a Bankruptcy Court judge frustrated by his firm’s sloppy work.

  • Baum, whose eponymous firm has filed more than 25,000 foreclosure actions across the state over the past three years — many of which have been attacked for containing bogus documents — was lectured by Judge Cecilia Morris to correct his way of practicing law.

  • How many times do I have to tell you, you didn’t do it right,” Morris said during the afternoon hearing. “Do you not understand ‘do it right’?” she asked Baum.

  • Morris had ordered Baum to appear in her courtroom personally after a steady stream of his firm’s lawyers mucked up several of the 180 foreclosure cases he has before the New York federal courts.

  • The judge accused Baum of “slowing down the court” by failing to properly transfer his cases to other lawyers as he prepared to shutter his Buffalo-area firm. [...] “Please don’t make me angry,” Morris warned.

  • The hearing in the Poughkeepsie courtroom was attended by several bankruptcy lawyers who have sparred with Baum in the past, who said afterwards that they were there just to see Baum sweat.


  • Apparently not happy with his responses to questions, Morris ordered Baum to make repeat appearances in her courtroom until “each file” is corrected. “I’m telling you, you are walking on bad faith,” Morris said.

For the story, see He’s losing his appeal (Judge gives foreclosure king the Baum’s rush).

Bay State Regulator Strips Sticky-Fingered Broker Of Real Estate License; Writing Rubber Check, Failure To Return Buyer's Deposit Among Dirty Deeds

In Marblehead, Massachusetts, The Salem News reports:
  • The state board that oversees real estate brokers has revoked the license of a Marblehead man who allegedly failed to turn over deposits to a seller and a buyer, as well as a commission owed to another broker, in real estate transactions he handled in 2010.

  • Barry A. Rosenberg's license was revoked effective Oct. 8, the Board of Registration of Real Estate Brokers and Salespersons announced in a press release yesterday, after Rosenberg failed to respond to requests for information or documentation concerning the complaints.

  • According to findings issued by the board, Rosenberg handled the sale of a property on Sayward Street in Gloucester, as well as two properties in Chelsea, during the summer and fall of 2010.

  • The board found that in the first Chelsea transaction, Rosenberg sent the seller's attorney a check for $9,665 that later bounced.

  • He then allegedly handled the sale of the Gloucester property but failed to pay a commission to another broker that was spelled out under the Multiple Listing Service agreement.

  • In October 2010, he was given a deposit to put in escrow by the buyer of another Chelsea property, but when the seller backed out of the deal and took the property off the market, Rosenberg failed to return the $10,600 deposit to the potential buyer.

For more, see Marblehead real estate broker loses license.

Wednesday, January 18, 2012

State AG Jumps Into Utah Homeowner's Foreclosure Case; Moves To Intervene, Contesting Adverse Court Ruling Holding Federal, Texas Law Trumps Local Law

In Salt Lake City, Utah, KCSG-TV Channels 14/16 report:
  • The Utah Attorney General has moved to intervene in a case filed by St. George attorney John Christian Barlow on behalf of Utah homeowner Garry Franklin Garrett in which senior Federal Judge David Sam ruled the Bank of America's foreclosure arm, ReconTrust Company, N.A. is operating under the National Bank Act regulated by the Office of the Comptroller of the Currency, is a trustee under the Texas law where ReconTrust is located, rendering Utah Code 57-1-21(3) inapplicable.

  • The Attorney General's Motion to Intervene and Memorandum of Support of Intervention written by Assistant Attorney General Jerrold Jensen said, "Utah is a non-judicial foreclosure State and that most real estate foreclosures in Utah never see the inside of a courtroom."

  • The pleading says that "in the last couple of years, as the number of foreclosures has escalated, there has been an increasing interest among homeowners who believe they have been wronged by their lender or mortgage servicer to challenge these foreclosure actions in court."

For more, see Utah Attorney General Moves to Intervene in Federal Judge's Ruling Utah Foreclosure Trustee Law Inapplicable.

Recent Michigan Appeals Court Foreclosure Ruling Expected To Affect Similar Suits Impacting On Lenders' Failure To Record Mortgage Assignments

In Shelby Township, Michigan, The Oakland Press reports:
  • A Shelby Township couple won a state Court of Appeals precedent-setting ruling that stops a foreclosure and allows them for now to keep their home that was once worth $650,000.

  • Husband-and-wife Eui H. and In Sook Kim gained a reversal of a Macomb County judge’s dismissal of their lawsuit against JP Morgan Chase Bank. The couple won because the bank failed to publicly record its interest in the mortgage after buying it from another bank, and before the sheriff’s sale.

  • The Kims’ attorney, Flint-based Bernhardt “Chris” Christenson, said the “for publication” decision likely will affect the outcome of other similar lawsuits and force banks to reveal it owns a mortgage before it can foreclose on a property. “Somebody will know who’s foreclosing on their house,” Christenson said. “Things (mortgages) change hands so frequently nowadays. You could be talking to one bank and they aren’t even the ones that have the mortgage.”

  • JP Morgan’s acquiring and interest in the property should have been recorded with the Macomb County Register of the Deeds, Christenson said. He said the bank likely avoided recording its interest to save filing costs, which could add up to a large sum of money if done on thousands of foreclosures.

For more, see Precedent-setting ruling that stops foreclosure could help other homeowners.

For the court ruling, see Kim v. JP Morgan Chase Bank, No. 302528 (Mich. Ct. of App., January 12, 2012).

Insurance Squeeze Continues For Florida Homeowners; 'Backdoor' Rate Increases, Industry Campaign Cash To Business-Friendly Governor Pinch Pocketbooks

In West Palm Beach, Florida, The Palm Beach Post reports:
  • Linda Sapp's reaction to her insurance bill was sticker shock: The annual premium doubled to $4,800, adding hundreds to her monthly mortgage payment. Her first thought: "There's no way I can afford my house."


  • In Boynton Beach, retiree Thomas Spatafora is on a fixed income and said he has never filed a property claim. But annual premium increases just keep on coming from the state's insurer of last resort, Citizens. "How the hell much is enough?" Spatafora said. "They keep increasing the cotton-picking premiums. Are they going to price us out of existence so we can't afford it?"

  • Affordability is not as popular a word as it once was in Tallahassee, where the emphasis these days is on encouraging insurance rates to rise. That is particularly true with Citizens [Florida's property/casualty insurer of last resort], the state's biggest carrier with 1.5 million policyholders.

  • "The true cost of living close to the coast, where hurricanes are most destructive, is much higher than Citizens policyholders have been paying," said Lane Wright, spokesman for Gov. Rick Scott. "That's because the rates have been held artificially low by politicians who've postponed the inevitable and kicked this can down the road. [...]"

  • Insurance interests gave more than $94,000 to Scott's campaign in the 2010 cycle, among the four industries most generous to him, according to online data compiled by the National Institute on Money in State Politics.

  • Private insurers stand to benefit as Citizens' bills climb, influencing the market as a whole. Scott wants legislators to consider letting Citizens raise rates beyond the 10 percent a year currently allowed.

  • For many customers, bigger hikes are already coming through what consumer advocates characterize as backdoor rate increases.

  • One way to boost premiums is to raise the projected cost of rebuilding homes, though existing home prices in many parts of Florida continue to fall and the construction industry has struggled. Software that Citizens uses to determine replacement costs is under review in South Florida and Tampa this month following consumer complaints.

  • Then there are reinspections that overwhelmingly tend to find homeowners no longer qualify for storm-resistant features that bring discounts, despite protests from homeowners they followed the rules the state set and later repeatedly changed. Reinspections raised Citizens premiums an average of 24 percent, or $718 a year, for 63 percent of 78,000 homes visited through Nov. 30. In 2012, reinspections are scheduled for 209,000 homes - adding $94 million to premiums at 130,000 homes statewide if trends hold.

For more, see Wind-less storm brews over skyrocketing premiums.

Tuesday, January 17, 2012

Homeowner In Foreclosure Has Possession Of Vacated Home Swiped Out From Under; Cops Refuse Help, Say It's A Civil Matter

In Bakersfield, California, KGET-TV Channel 17 reports:
  • A viewer e-mailed 17 News, saying squatters have taken over his southwest Bakersfield home. He says no one will help get them out. "I was very naive, foolish you might say. I wanted to help them," said Juan Medina.

  • Juan Medina is packing up for a new life in Tehachapi. A messy divorce in 2008 left him with a house payment he could no longer afford. While trying to modify his loan, his southwest Bakersfield home was empty. Two months ago, he says he returned and discovered people living there.

  • "I went to the garage and the garage was locked with a different padlock, went to the front door and my keys did not work. I felt really bad for them. I had heard so many families get in trouble because they had been lied to. My first thought wasn't to kick them out. My first thought was to help," explained Medina.

  • The family told Medina they have a rental agreement with a local relator, but has yet to show him the document. Medina showed 17 News the deed to his home. He is the legal owner. But, he is trying to turn it over to the bank to avoid foreclosure.

  • However, that can't happen because Medina says the bank requires it to be empty and clean. "There's an unaccountable amount of dogs and cats running through the house, in the backyard, large dogs. It smells like feces and urine inside," he continued.

  • We followed Medina to his home. A man told us his sister lives in the home and has a rental agreement. "The cops were here yesterday and she showed cops. It has nothing to do with you guys," he said. A woman inside the home wouldn't come out and no one showed us the rental agreement. "I just want to speak to you for two minutes," Medina told the woman through the door. "Serve me a 30-day notice. Please leave me alone," she responded.

  • Medina said Bakersfield police officers came to the home, but they couldn't kick the family out. "Unless we can prove that the proclaimed renter knew that the situation was fraudulent from the very beginning, our hands are tied. It's a civil situation," said Sgt. Mary DeGeare, Bakersfield Police Department.

For the story, see 17 News investigation: Man says squatters have taken over his home.

NM Homeowner Seeks State High Court Review Of Subprime Refinance Involving No Appriasal, Income Check That Left Couple With Unaffordable Payments

In Santa Fe, New Mexico, NewsOK reports:
  • A Chimayo, N.M., couple remain in their home into the new year as their 2007 default on their refinanced mortgage wends its way to the New Mexico Supreme Court.

  • Their attorney, Joshua Simms of Albuquerque, N.M., said Joseph and Mary Romero continue to make minimal payments to the Bank of New York to stay in their family home until the legal fight is concluded.

  • They haven't had much success so far in the court system with their case, which has gotten the support of such groups as the Santa Fe Neighborhood Law Center, Somos Un Pueblo Unido and the Roman Catholic Archdiocese of Santa Fe.

  • The law center, in a court brief, called the Romeros' loan “a wild home mortgage refinancing loan based on no appraisal and no income verification.” The groups supporting the Romeros hope the case can lead to more support from the court system for those enticed into risky home mortgages.

For more, see New Mexico Supreme Court will rule on foreclosure case (A Chimayo, N.M., couple remain in their home into the new year as their 2007 default on their refinanced mortgage wends its way to the New Mexico Supreme Court).

Pair Cop Guilty Pleas in Scams Involving Use Of Forged Mortgage Satisfactions, Rent Skimming To Screw Over Banks, Landlords

From the Office of the U.S. Attorney (District of Columbia):
  • The owners of a property management company, Bryan W. Talbott, 48, and Chester D. Ransom, Jr., 44, have pleaded guilty to defrauding their clients, mortgage lenders, and the government out of more than $2.8 million.


  • According to the government’s evidence, Talbott was the president and Ransom was the vice president of a property management company located in Washington, D.C., that operated under multiple names, including Esquire LLC, Federal City Mowbray, and Private Properties Inc. (collectively referred to as “Esquire”). The defendants also lived together at a residence on North Portal Drive NW, Washington, D.C.

  • From 2004 to the present, the defendants engaged in three separate fraudulent schemes, resulting in more than $2.8 million in losses to the victims.

  • As part of [one of] their fraudulent scheme[s], the defendants frequently collected rental payments from tenants but did not pay the bills for the properties, despite falsely representing to the property owners that the bills had been paid. Instead, the defendants used these funds for their own benefit. In addition, the defendants also sent forged bank statements to some of their clients, misstating the balances in their clients’ accounts.

  • Through this fraudulent scheme, the defendants defrauded at least 54 clients out of a total of $1,269,278.

  • [In another fraudulent scheme,] On June 30, 2004, Ransom purchased the property on North Portal Drive NW for $975,000, financing the purchase, in part, with two loans in the total amount of $731,250 from WMC Mortgage Corp. , a mortgage lender. Ransom executed two deeds of trust on the property, granting WMC a security interest in the property.

  • On December 29, 2005, Ransom filed with the District of Columbia Recorder of Deeds two forged Certificates of Satisfaction, purporting to release the WMC liens on the Portal property.

  • Then, on January 13, 2006, Ransom sold the Portal property to Talbott for $1,110,000. The defendants provided copies of the forged lien releases to the settlement company. Talbott obtained a loan in the amount of $750,000 from Fremont Investment and Loan. Talbott executed a deed of trust on the property, granting Fremont a security interest in the property. Ransom received a check in the amount of $515,034 from the settlement.

  • Less than a month later, on February 2, 2006, Ransom again “sold” the Portal property to Talbott, this time for $1,250,000, despite the fact that Talbott was already the legal owner.

  • The defendants provided copies of the forged lien releases to the settlement company. Talbott obtained a loan of $890,000 from First National Bank of Arizona. Talbott executed a deed of trust on the property, granting First National Bank of Arizona a security interest in the property. Ransom received a check in the amount of $801,280 from the settlement.

For the U.S. Attorney press release, see Owners of Property Management Company Plead Guilty To Defrauding Clients, Mortgage Lenders and Government (Scheme Involved More Than $2.8 Million).

Monday, January 16, 2012

Recent Florida IG Report Adds More Proof Of State Officials' Fear Of Prosecuting Foreclosure Fraud

In West Palm Beach, Florida, The Palm Beach Post reports:
  • The Nevada attorney general calls signing another person's name on documents used to repossess a home "forgery" and a "scheme."

  • Michigan's attorney general launched a criminal investigation that includes whether "falsified signatures" were used in foreclosure cases.

  • But Theresa Edwards and June Clarkson were forced to resign their jobs as foreclosure fraud investigators for the Florida Attorney General's Office, in part, for referring to so-called "surrogate signing" as forgery.

  • According to a Florida Inspector General report that cleared Attorney General Pam Bondi's office of wrongdoing in the firings, the duo repeatedly used the word "forgery" in a 2010 presentation that included documents from the Jacksonville-based Lender Processing Services. The company complained and drew the attention of economic crimes boss Richard Lawson.

  • Lawson says in the inspector general's Jan. 6 report that surrogate signing as it relates to Lender Processing Services, also called LPS, is not forgery, which requires an intent to defraud. The practice was authorized by the company, more evidence, Lawson said, that no forgery occurred.

  • Homeowner advocates who support Edwards and Clarkson are now questioning portions of the 83-page report. They point to the LPS signature issue as an example of what they say is Florida's resistance to go after foreclosure fraud.

For more, see Is signing foreclosure documents for others forgery?

NJ Feds Squeeze Guilty Plea From Another Sale Leaseback Peddler In Equity Stripping Ripoff Of Homeowners In Foreclosure Having High Equity, No Cash

From the Office of the U.S. Attorney (Newark, New Jersey):
  • A former employee of a Parsippany, N.J., mortgage lender admitted [] to taking $138,402 in illegitimate proceeds of multiple home sales as a result of a mortgage fraud scheme, U.S. Attorney Paul J. Fishman announced.

  • Jorge Abbud, 33, of Dover, N.J., pleaded guilty before U.S. District Judge William H. Walls in Newark federal court to an Information charging him with wire fraud.

  • According to documents filed in this case and statements made in court:

    In 2008, Abbud was an employee of a Parsippany mortgage lender. He admitted that he targeted homeowners in New Jersey who had equity in their homes, but were facing foreclosure because of their inability to pay their monthly mortgage payments.

    Abbud falsely promised to help these homeowners avoid foreclosure, keep their homes, and repair their damaged credit. He instructed the homeowners to permit the titles of their homes to be recorded in the names of third-party purchasers ( “straw buyers”) for approximately one to three years, promising the homeowners that he would improve their credit scores during that time, obtain mortgages with more favorable interest rates for them and return the titles of the homes to the homeowners.

    Abbud said he then recruited straw buyers with good credit scores to act as buyers of the homes facing foreclosure. He told the straw buyers they were helping the homeowners keep their homes, and that the straw buyers would make money when the homes were sold back to the original homeowners.

    Abbud admitted that on certain occasions, and notwithstanding his promises to the homeowners and straw buyers, the homes fell into foreclosure.

For the U.S. Attorney press release, see Former employee of Parsippany, N.J., mortgage lender pleads guilty to fraud.

For the formal criminal charges, see Information - U.S. v. Abbud.

Michigan Appeals Court: Failure To Record Mortgage Assignment Prior To Sale Sinks Foreclosure

From a press release from the Michigan law firm Warner Norcross & Judd:
  • On January 12, 2012, the Michigan Court of Appeals issued its opinion in Kim v. JP Morgan Chase Bank, No. 302528. The foreclosure-by-advertisement statute, MCL 600.3204, provides, “If the party foreclosing a mortgage by advertisement is not the original mortgagee, a record chain of title shall exist prior to the date of sale under section 3216 evidencing the assignment of the mortgage to the party foreclosing the mortgage.” MCL 600.3204(3).

  • In Kim, the defendant was the assignee of the mortgage, and it failed to record its ownership of the mortgage before foreclosing by advertisement.

  • Thus, the Court held that the foreclosure sale was invalid because the defendant had not complied with MCL 600.3204’s requirements.

For more, see Court Sets Aside Foreclosure Sale Where Assignee Of Mortgage Failed To Record Its Interest Prior To Sale.

For the court ruling, see Kim v. JP Morgan Chase Bank, No. 302528 (Mich. Ct. of App., January 12, 2012).

Sunday, January 15, 2012

Unimpressed w/ Progress In Current Negotiations, State AG Group Meets To Discuss Enforcement Options/Strategies Around Various F'closure Fraud Issues

The Huffington Post reports:
  • Attorneys general or representatives from nearly 15 states met in Washington, D.C., on Tuesday to discuss and share different enforcement options and strategies around various mortgage-related issues, according to sources familiar with the conversation.

  • The meeting was prompted by the slow pace at which a national foreclosure settlement led by the Obama administration is progressing, and is likely to be the first in a series, said these sources.

  • The participating attorneys general, from states including California, Nevada, Delaware, Massachusetts and New York, discussed how they could possibly join together to investigate and potentially file lawsuits against abusive mortgage lenders and servicers. Principals or representatives also attended from Hawaii, New Hampshire, Missouri, Mississippi, Maryland, Kentucky and Minnesota.

  • "This past Tuesday, a group of like-minded Attorneys General met in D.C. to discuss ongoing and future investigations into the mortgage finance and foreclosure industries," said Delaware Deputy Attorney General Ian McConnel.

  • "The talks weren't just about investigations," said a source with knowledge of the discussions. "They were also about the attorneys general offices feeling uninvolved in a process by which their federal colleagues have been negotiating on their behalf."

For more, see Attorneys General, Frustrated With National Foreclosure Settlement, Consider Alternate Course.

Process Server's Failure To Keep Adequate Records Sinks NY Foreclosure; May Open Floodgates In Effort To Vacate Judgments

In Nassau County, New York, Reuters reports:
  • A process server working for a once-prolific foreclosure law firm in upstate New York broke the law by failing to keep any record of papers served in a 2008 foreclosure case, a Long Island judge has ruled, giving defense attorneys a new angle to explore in foreclosure cases as they seek to buy time for their financially beleaguered clients to modify or refinance their mortgages.

  • Gary Cardi, a former police officer contracted by A&J Process Service -- which has offices on the same floor in the same building as the foreclosure firm Steven J. Baum PC -- admitted in Nassau County court last October that he didn't have any record of serving foreclosure papers on Soledad Murillo in 2008. In fact, he told state Supreme Court Justice F. Dana Winslow during an October hearing, he hasn't kept records of any of the "thousands" of cases he served over the last six years.

  • An attorney for the Baum firm, Victor Spinelli, representing foreclosing bank U.S. Bank NA, told Winslow that he thought the failure to keep tabs on service wasn't a reason to overturn a foreclosure judgment against Murillo under New York law.

  • But Winslow disagreed. Not only was Cardi required to keep some record of his attempts to serve Murillo, Winslow ruled, but his failure to do so violated New York General Business Law Article 8, which defines and outlines the duties for process servers -- including, Winslow said, the need to keep "legible" records of service.

  • "The duty to keep comprehensive records may have been unnoticed, or underestimated, by litigants and the courts," Winslow wrote in a ruling dated Dec. 22. "Past practice, however, cannot be the motivating force for future conduct and determinations.

  • "The need, particularly in this economic environment and under these telling circumstances, for valid and reliable proof of service, mandates the rejection of 'trust me,' and the adoption of 'show me,'" Winslow wrote.


  • Traverse hearings -- which are held to determine whether parties were properly served -- are still a relative rarity in foreclosure cases, said Rebecca Grammatico, an attorney at the Empire Justice Center who works on foreclosure issues.

  • But defense attorneys in foreclosure cases may find a useful new approach in the wake of Winslow's ruling, Grammatico said. "Time is frequently the thing you really need," she said. "This will, for many petitioners across the state, become the tool."

  • It is possible that other defendants who were served by Cardi or another server who failed to keep records could use Winslow's ruling as a way to get judgments against them vacated, Grammatico added.

For the story, see NY judge: Sloppy service has legal consequences.

Squatters Score With Vacant Foreclosed Homes; Use Phony Leases To Get Free Temporary Housing, Squeeze Banks For 'Cash For Keys' 'Walking' Money

In Antioch, California, NBC Bay Area reports:
  • It's a problem plaguing our country. Squatters moving into foreclosed homes and banks paying them to get out. It's happening in one Antioch neighborhood. Neighbors formed a neighborhood watch program in part because they noticed lots of homes being foreclosed in he area.

  • They were apparently right to be worried. Police arrested three people Tuesday on Bedrock Way in Antioch.

  • Police said the people in the home tried to show them a phony lease, but they weren't fooled. A following search of the home netted stolen goods and a stolen car.

  • Authorities believe the people arrested were involved in what is called cash for keys. That's when criminals move into foreclosed homes and banks end up paying them thousands of dollars to move out.

  • "I think most of the bank agents know that these folks shouldn’t be there it’s easier just to pay them get them out and everything’s left there," Capt. Leonard Orman with Antioch police said. Orman said cash for keys happens all the time in his city where there are hundreds of bank owned homes nestled in nice neighborhoods.

Source: Squatters Plaguing Foreclosure Neighbors (The latest crime wave to hit Antioch is called cash for keys).

Cops Pinch Pair For Illegally Hijacking Possession Of Temporarily Vacated Rental Home; Landlord Was In Process Of Remodeling Unoccupied Premises

In Taylorsville, Utah, KSTU-TV Channel 13 reports:
  • Amanda Booth and Tony Hoskins face criminal charges related to squatting in a Taylorsville home. The two suspects apparently took up illegal residence November by allegedly squatting at a home on 5200 South and 3700 West.

  • The rental property was vacant and being prepared for a new tenant, according to Taylorsville Police Sgt. Tracy Wyante. Wyante says the owner was upgrading the space by having it remodeled.

  • Crews doing the remodeling noticed something was wrong when thousands of dollars worth of new carpet was missing. They informed the owner, who called police. "The case was investigated as a burglary, unfortunately we could not prove the burglary element of the case, which certainly existed, but we couldn't prove it," says Wyante.


  • Police say it is becoming more common to see individuals squat in homes while hundreds of properties sit vacant due to foreclosure, from owners who walked away from an upside-down mortgage, or, such as this case, a home that is being renovated.

For the story, see Police say squatters allegedly took up residence in vacant Taylorsville home.