Saturday, February 25, 2012

'Insurer Stiffed Me On My Property Damages Claim!' Says Lightning-Victimized Homeowner In Lawsuit

In Jefferson County, Texas, The Southeast Texas Record reports:
  • A woman claims her insurance company failed to pay her an adequate amount for damages caused to her home after it was struck by lightning. Valetta Cartwright filed a lawsuit Feb. 9 in Jefferson County District Court against Texas Farm Bureau Underwriters and Jared Carter.

  • In her complaint, Cartwright alleges her home [...] in Beaumont was struck by lightning on Sept. 29. As a result, a large number of her electronics, including her computer, television, DVD player and hot water heater, were destroyed, according to the complaint. In addition, a pipe burst because of the lightning strike, the suit states.

  • Following the incident, Cartwright submitted a claim to Texas Farm Bureau Underwriters for contents, structural and water damages, the complaint says. The insurance company then sent an adjuster, Carter, to inspect Cartwright's home. It subsequently failed to pay Cartwright an adequate amount for her damages, she claims.

  • Cartwright seeks an unspecified judgment, plus costs, pre- and post-judgment interest and other relief the court deems just.

Source: Woman sues insurer over payment for lightning strike to home.

Operating License Revocation, Foreclosure Force Frail Residents Out From Assisted Living Facilities

In Hayden, Idaho, the Coeur D'Alene Press reports:
  • The operator of the two Autumn Haven assisted living facilities in Hayden has been notified by the state of Idaho that its operating license has been revoked. A bank is foreclosing on the properties and taking them over in March, said Idaho Department of Health and Welfare spokesman Tom Shanahan. The properties will be auctioned off by the bank, he said.

  • Twenty residents had been living at the facility when the bank began foreclosure action. About half have already moved out. The bank contacted the state in December to notify officials of the foreclosure.

  • Shanahan said an official from the department visited the facilities last week, and determined all residents currently living there have at least one option for alternative housing. "Many are probably in the process of moving out," Shanahan said.

For the story, see Assisted living facility loses license (Tenants moving out; bank forecloses on two Hayden facilities).

Foreclosed Homeowner Charged With Felony Theft After Appliances, Fixtures, Etc. Found Missing From Home One Day After Move-Out

In Oakdale, Minnesota, the Oakdale Patch reports:
  • The owner of an Oakdale home was charged with stealing more than $1,000 worth of items from a home that she had agreed to vacate after it fell into foreclosure. Jennifer L. Schiemann, 32, had agreed to move out of the home by June 5 of last year as part of a settlement agreement, according to the Washington County District Court complaint.

  • The man who was taking ownership of the home (he was not identified in the court complaint) took photographs there on June 1, which showed that all of the fixtures and appliances were present, the complaint says.

  • On June 5 Schiemann called him and asked for one more day to move out of the home, which he said was OK, the complaint says. On June 6, when he went to the home, he discovered that a doorbell, fan and light kit, deadbolt, storm door, light fixtures, chandelier, thermostat, doorknobs, kitchen and bathroom cabinet drawers, a refrigerator, a shower head and other items totaling $3,699 in replacement value had been stolen from the home.

  • Schiemann is charged with felony level theft, which carries a maximum sentence of five years in prison and $10,000 in fines.

Source: Homeowner Charged With Stripping House Before Vacating (Woman allegedly stole items including a refrigerator, light fixtures and even doorknobs from the home).

Ohio AG: Contractor Grabbed Cash Upfront, Failed To Deliver Promised Work; Homeowners Say Vendors Either Never Showed Up Or Installed Leaky Windows

From the Office of the Ohio Attorney General:
  • Ohio Attorney General Mike DeWine [] announced a lawsuit against basement window seller Best Choice Industries LLC, operating as Best Choice Egress Windows, for multiple violations of Ohio consumer law, including failure to deliver.


  • In complaints filed with the Ohio Attorney General’s Office, consumers say they paid the company for windows they never received, or that the company installed windows that leak when it rains. In some cases consumers paid in full or made large down payments, but never heard from the company again.


  • The lawsuit charges the business and its owner Daniel Perley with multiple violations of Ohio’s Consumer Sales Practices Act, including failure to deliver, providing shoddy services, making misrepresentations about its services, and violating the Deposits Rule. It also charges the business with violating the Home Solicitation Sales Act by failing to provide notice of consumers’ right to cancel. The lawsuit seeks injunctive relief, consumer restitution, and civil penalties.

For the Ohio AG press release, see Attorney General DeWine Sues Columbus Window Company for Failure to Deliver.

For the lawsuit, see State of Ohio v. Best Choice Industries LLC.

Friday, February 24, 2012

Two Nabbed In Alleged Schemes Taking Upfront Cash From Homeowners Seeking Foreclosure Help, Investors Looking For Distressed Real Estate Deals

In Westminister, California, The Orange County Register reports:
  • Two women arrested Wednesday morning have been charged with stealing more than $2 million from victims in what is described as a real-estate scheme targeting Vietnamese Americans who were investing in foreclosed properties or those in the process, authorities said.

  • Loan Thituong Nguyen, 43, of Westminster and Lynn Eichenberger, 42, of Chatsworth were each charged with 15 felony counts of grand theft, two felony counts of money laundering, and one felony count of conspiracy to commit grand theft with sentencing enhancements for property loss of more than $1.3 million, aggravated white collar crime over $500,000, and money laundering of more than $1 million.

  • Nguyen, a real estate broken who managed Suncoast Mortgage and Suncoast Investment Realty, faces one additional felony count each of forgery and the false recording of documents.


  • Prosecutors accused the women of conspiring to defraud 17 investors using two different schemes, between August and December 2009.

  • In one, Loan Thituong Nguyen is accused of soliciting investors interested in properties in foreclosure. Nguyen would claim to have investment opportunities of foreclosed properties and would take 50 percent of the cost of the homes upfront from the victims, prosecutors said.

  • In the second, prosecutors say, Nguyen collected 50 percent of the mortgage balance from the victims who were in foreclosure with the promise of fixing the foreclosure and reducing the loan payments, prosecutors said. The victims borrowed money from friends and relatives in order to pay Nguyen.

For more, see 2 charged in $2 million real-estate fraud (The women were arrested Wednesday morning and are accused of targeting Vietnamese Americans).

For the Orange County District Attorney press release, see Two Women Charged With $2 Million Real Estate Investment Fraud Scheme Targeting Vietnamese-Americans.

Cops Bag Two In Alleged Mortgage Refinance Scam Involving Use Of Forged, Fraudulently Notarized Deeds Of Trust To Pocket Cash

From the Office of the Ventura County, California District Attorney:
  • The felony complaint charges Pena with two counts of grand theft and one count of money laundering. Pena is also charged with excessive taking enhancements for stealing over $65,000 in one transaction, and stealing over $200,000 in a second transaction. Pena is also charged with an aggravated white-collar crime enhancement for having stolen more than $100,000 while committing two or more related felonies.


  • The felony complaint charges Gil with three counts of forgery and two counts of fraud related to a deed of trust.


  • The charges arose out of a fraudulent real estate transaction that closed escrow in 2005 concerning a home located at 4855 Penrose Avenue in Moorpark. Pena used a straw borrower to obtain two mortgage loans totaling over $500,000 in the course of refinancing the debt on the Penrose Avenue property. After the loans funded, Pena took the excess proceeds from the refinance transaction and caused a portion of these monies to be deposited into a financial institution.

  • Gil forged the signatures of multiple individuals involved in this real estate transaction and fraudulently notarized signatures on deeds of trust that were recorded at the Ventura County Recorder's Office.

Go here for the Ventura County DA press release.

Trio Pinched In Alleged R/E Fraud; Racket Purportedly Peddling Deals In F'closed, Tax-Distressed Properties Used To Pocket Cash From Duped Investors

In Miami, Florida, Miami New Times reports:
  • It was an Only-In-Miami scam first reported by New Times. Three women promised local and out-of-state investors luxurious homes in foreclosure at super awesome discounted prices by claiming they had inside sources at the Miami-Dade County Clerk's Office that could get them the properties before going to auction.

  • They also claimed they could secure tax certificates for homes with delinquent property taxes. Ayda Young, Yohany Garcia, and Zoraida Abreu collected $2.4 million from at least 10 victims.

  • But in reality, the women never had any rights to the homes and just stole the money, according to an multi-count indictment announced by the Miami-Dade State Attorney's Office [...].

  • The trio, and a fourth accomplice, Johnny Bou-Nassar, have been criminally charged with racketeering, grand theft, forgery, and criminal use of personal information.

For more, see Ayda Young and Cronies Go Down For Pulling a $2.4M Foreclosure Scam.

Thursday, February 23, 2012

Operator In Foreclosure Rescue Racket Involving Unwitting Homeowners, Forged Deeds, Rent Skimming Frog-Marched Off To State Prison For 12-Year Stay

In San Diego, California, KGTV Channel 10 reports:
  • A man was sentenced on Tuesday to 12 years in state prison for participating in a multimillion-dollar foreclosure fraud scheme in which notaries' identities were stolen and hundreds of deeds forged across California.

  • John Zepeda, 60, pleaded guilty last year to multiple felony charges, including rent skimming, forgery, identity theft and conspiracy to commit grand theft. Zepeda agreed to pay $6 million in restitution, but further hearings are needed to verify the loss amount.

  • Zepeda's 59-year-old brother, David, is charged in a related case with co-defendants Carlos M. Torres and Patricia Torres.

  • The conspiracy, which prosecutors called "huge" and "brazen," involved hundreds of victims in San Diego, Santa Barbara, San Bernardino, Orange, Ventura, Riverside and Los Angeles counties, as well as Nevada's Clark County.

  • According to prosecutors, the defendants would hold seminars for people hoping to save their homes from foreclosure. Authorities allege the Zepeda brothers identified properties in foreclosure and acquired title either by forging a quitclaim deed – which transfers the property into a trust – or convincing homeowners to transfer the property to them by promising the homeowner they would help avoid foreclosure. Once they had acquired the title, the Zepedas would rent out the property, prosecutors said.

For more, see Man Sentenced For Foreclosure Fraud Scheme (John Zepeda Sentenced To 12 Years In Prison).

NYS High Court: No Due Process Violation Where Municipality Fails To Inform Property Owners Of Buyback Rights In Tax Foreclosure

The New York Law Journal reports:
  • [O]n Feb. 21, a unanimous Court agreed that a couple's due process rights were not violated when Orange County took possession of two acres without informing the couple directly of a local law allowing them to buy back the land if all taxes, interest and penalties were paid.

  • The Court determined that Jeanette and Ola Helseth had proper knowledge that a tax lien foreclosure was pending on the property and that a municipality is not obligated to give proper notice during every stage of the foreclosure process.

  • "We agree with the County and hold that it was only obligated to give singular notice of the foreclosure action as that was the underlying governmental action threatening the Helseth's property interests," Judge Jones wrote for the 7-0 Court in Matter of the Foreclosure of Tax Liens by Proceeding in Rem Pursuant to Article Eleven of the Real Property Tax Law, by Orange County Commissioner of Finance v. Helseth, 9.

  • The Helseths had argued that repeated notice during a foreclosure is needed to satisfy property owners' due process guarantees, citing Jones v. Flowers, 547 U.S. 220 (2006). But Judge Jones said the county's notification that a repurchase option for the property might be available—the county legislature would have had to sign off on such a transaction—"was not the underlying taking or an extension of such action, but a subsequent, optional measure."

  • The county had argued that upholding two lower court rulings allowing the Helseths to move for repurchase after the option had expired would impose a new burden on foreclosing municipalities and conflict with case law in tax foreclosure matters.

Source: Tax Lien Foreclosure Notice (2nd story from the top).

"Amazing Opportunity" In Detroit Real Estate Peddled To European Investors Nothing More Than 'Motown Money Pit' Of Looted Homes, Squatters, Tax Bills

In Detroit, Michigan, The Detroit News reports:
  • The sales pitch resonated during the depths of the recession: Detroit's dirt-cheap housing represented "an amazing opportunity" and "an ethical investment." So said brochures sent to European investors by Assetz International, an English firm specializing in international real estate investments, whose chief executive often is quoted in the British media. The sales pitches said the houses would be renovated, thanks to an alliance with Home Depot, and "quickly" filled by low-income residents.

  • But now at least a dozen overseas investors say their more than $2 million in investments have become a trans-Atlantic money pit. They are left with empty, unrepaired houses in Detroit and have tried to convince local law enforcement officials to take action. To date, none have.

  • Several investors said they have compiled evidence to show as many as 30 investors and 60 Detroit properties are involved in the alleged scam.

  • "It's ruined my life," said Les Young, 53, a disabled British military veteran, who bought two homes for $90,000 in July 2010 that are in foreclosure. He has spent an added $12,000, evicting a tenant and for other costs. "These were the investments meant to allow me to live a basic life. Now, I can't even afford all my medicine."

  • Assetz International blames British resident Mark Demby and local businessman Tom Smith, who was supposed to renovate the houses, for the problems. Smith said in an email through his lawyer that Demby is to blame. A Swiss couple have filed a lawsuit in Wayne County Circuit Court against Nuevo Skye/NSUK, a firm with offices in Detroit and England run by Demby.


  • The investors contend they are left with property tax bills, squatters and looted homes, according to the lawsuit and information provided to the Wayne County Prosecutor's Office.

  • At least 11 of the 13 houses for which the investors provided addresses appeared to be empty when The Detroit News viewed them during the past month. Between 400 and 600 Detroit properties were sold to European investors since 2008, said Stuart Law, chief executive of Assetz International.

For more, see Foreign investors upset by Detroit home sales.

Wednesday, February 22, 2012

Bay State High Court Ruling Expected Soon On Need To Hold Note In Order To Foreclose Mortgage

Bloomberg reports:
  • The highest court in Massachusetts is poised to rule as soon as this month on a foreclosure case that could lead to a surge in claims from home owners seeking to overturn seizures.

  • The justices are deciding whether to uphold a lower court ruling that gave a Boston home back to Henrietta Eaton after Sam Levine, a 25-year-old Harvard Law School student, argued in front of the nation’s oldest appellate court that the loan servicer made mistakes when it foreclosed because it didn’t hold the note proving she was obliged to pay the mortgage.


  • A ruling in favor of Eaton would show how a $25 billion settlement reached this month with state and federal officials still leaves banks exposed to liabilities tied to home repossessions. It also underscores the challenge of resolving a foreclosure process that Federal Reserve Chairman Ben S. Bernanke said in a study last month is plaguing the housing recovery.

  • At issue in Eaton v. Federal National Mortgage Association,(1) also known as Fannie Mae, are two documents borrowers sign to get a home loan. The first is the mortgage establishing the right to seize a property. The second is the promissory note that creates an obligation to pay the debt. While the servicer had the mortgage when it foreclosed, it didn’t have the note. One without the other is known as a naked mortgage.


  • The Massachusetts Supreme Judicial Court justices signaled last month they may rule in favor of Eaton when they asked parties in the case to submit briefs arguing whether such a decision should be applied retroactively or only to future lending. If retroactive, it would cloud the titles of the 40,000 Massachusetts properties seized in the last five years and while the ruling only applies to the state, it could serve as a model for homeowners trying to overturn foreclosures in other states.


  • Copies of promissory notes aren’t enough to establish rights, just as copies of dollar bills wouldn’t be honored by a bank, said Kathleen Engel, a professor at Suffolk University Law School in Boston. If an original note can’t be found, attorneys must file a lost-note affidavit and provide evidence to establish a claim.

  • In last year’s decision, the lower Massachusetts court said it wasn’t troubled by the separation of the two documents after homeowners signed them. The problem was the failure to rejoin them before foreclosing on a property.

  • Massachusetts courts have historically held that one must hold both the mortgage and the mortgage note before initiating foreclosure,” Superior Court Justice Frances McIntyre in Boston wrote in a June 17 decision. “This rule flows from the fact that a mortgage, by definition, is simply a security for the note.”


  • The Massachusetts Supreme Judicial Court last year ruled on two other foreclosure cases. Both handed properties back to owners because of botched foreclosures. In each case, the servicers didn’t hold the mortgages when they seized the properties.

  • In an October decision on Bevilacqua v. Rodriguez, the Massachusetts Supreme Judicial Court handed a foreclosed apartment building back to a prior owner five years after its sale to an investor who turned it into condominiums. The high court’s ruling meant people who bought the condo units lost their homes with no compensation. The brick building now stands vacant, its front door blocked with piles of old mail.

  • In a January 2011 case, U.S. Bank v. Ibanez, the high court handed back two other properties to former owners.

For more, see Seizures Threatened in Massachusetts With Naked Loans Challenge: Mortgages.

(1) Go here for links to the briefs filed in this case.

Robosigning Scandal To Surface With Commercial Real Estate Mortgage Securitizations?

CBS News Moneywatch reports:
  • The nation's banks are looking at a robo-signing problem with commercial real estate which may dwarf the one for home mortgages, according to a new study.

  • Research by Harbinger Analytics Group shows the widespread use of inaccurate, fraudulent documents for land title underwriting of commercial real estate financing.

  • According to the report:

    This fraud is accomplished through inaccurate and incomplete filings of statutorily required records (commercial land title surveys detailing physical boundaries, encumbrances, encroachments, etc.) on commercial properties in California, many other western states and possibly throughout most of the United States.

For more, see Banks face crisis in bungled commercial mortgages.

Ohio AG: Contractor Pocketed Thousand$ In Upfront Payments From Homeowners For Roof Improvements, Then Performed Either No Or Substandard Work

From the Office of the Ohio Attorney General:
  • Ohio Attorney General Mike DeWine [] announced a lawsuit against Hamilton-based roofing company Salyers Complete Contracting LLC for multiple violations of Ohio consumer law, including failure to deliver.


  • In complaints filed with the Ohio Attorney General’s Office, consumers report paying Salyers Complete Contracting $1,350 to $13,000 to install, repair, or replace their roof. After making the payment, consumers said the business either did no work at all or did a poor job.

  • The lawsuit charges Joshua Salyers and Salyers Complete Contracting LLC with multiple violations of Ohio’s Consumer Sales Practices Act, including failure to deliver, performing shoddy work, making misrepresentations, and falsely stating work was covered by a warranty. In the lawsuit, the Attorney General seeks injunctive relief, consumer restitution, and civil penalties.

For the Ohio AG press release, see Attorney General DeWine Sues Roofing Company for Failure to Deliver.

For the lawsuit, see State of Ohio v. Salyers.

Tuesday, February 21, 2012

Prison Time Buy-Down Possible As Defendants In Loan Mod/Forensic Loan Audit-Peddling Racket Agree To Cough Up $30K Each In Pre-Sentencing Restitution

From the Office of the U.S. Attorney (San Diego, California):
  • Three individuals charged with conspiracy to commit wire fraud and mail fraud for their roles in operating a fraudulent mortgage loan modification business pled guilty [] in federal court in San Diego, [...].

  • According to the plea agreements, Ziad Nabil Mohammed Al Saffar and Sara Beth Bushore Rosengrant admitted that they operated the fraudulent loan audit and modification business, located in San Diego, California, under the names "Compliance Audit Solutions, Inc." ("CAS") and CAS Group, Inc., ("CAS Group"). Daniel Al Saffar admitted that he worked as a sales representative in connection with the operation.

  • According to court documents, the defendants targeted homeowners who were unable to afford their mortgage payments and falsely advertised to them that CAS and CAS Group were affiliated with the federal government.

  • The defendants admitted to using false and fraudulent statements and representations to induce customers to purchase an "audit" of their home mortgage loans, supposedly to identify "violations" in the loan documents that could then be used to force banks to renegotiate their loans. The audit fees ranged from $995 to $3,500.(1)


  • As part of their plea agreements, defendants agreed to pay restitution to the victims of their criminal conduct to be determined by the Court. Each defendant also agreed to make a restitution payment in an amount of $30,000 prior to the sentencing hearing.

For the U.S. Attorney press release, see Operators of Mortgage Loan Modification Business Plead Guilty To Conspiracy To Commit Fraud.

(1) More from the press release:

  • According to court records, among the misrepresentations made to customers were claims that CAS and CAS Group were affiliated with the United States Department of Housing and Urban Development (HUD), that they were participating in a federal program called "Hope for Homeowners," that the audit fees were tax deductible, and that CAS and CAS Group had an "attorney" on staff who could finalize negotiations with banks on behalf of homeowners. The indictment further alleged that, as part of the conspiracy, the defendants fraudulently induced certain homeowners to make payments to CAS or CAS Group by falsely promising that such "good faith" payments were necessary to reduce their loan balance and interest rate, and that those payments would be kept in an "escrow account" by CAS or CAS Group. The false representations also included telling homeowners that banks demanded a "settlement fee" in order to modify a first mortgage and eliminate a second mortgage; that a one-time payment to cover taxes and insurance on the property was needed; and that the homeowners should make their monthly mortgage payments to CAS or CAS Group, instead of to their lender, and that the funds would be held in an escrow account for the benefit of a new lender.

Central Florida Adverse Possession-Claiming Vacant Home Hijacker Dodges Prison Time With Plea Deal; Gets Two Years House Arrest, Five Years Probation

In Tampa, Florida, News Channel 8 reports:
  • During the past few years, George Williams and his company, Brevkam Ventures, laid claim to several vacant homes throughout Hillsborough County. He said Florida's adverse possession law allowed him to break into the houses, move in tenants and collect rent without the knowledge or permission of the property owners.

  • He was wrong. Williams, 42, was arrested a year ago, and this week he pleaded guilty to organized fraud, six counts of grand theft and five counts of burglary. His plea deal with the State Attorney's Office calls for two years of house arrest and five years probation, but no jail time.

  • "We thought it was a fair resolution," Assistant State Attorney Mark Cox said. Cox said this was not an easy case. "A lot of tenants and homeowners had no interest in being involved in this case anymore," he said.

  • The Hillsborough County Sheriff's Office, which poured resources and time into the investigation, had no comment on the plea deal. An investigator said he is disappointed Williams did not go to prison.


  • An 8 On Your Side investigation found Williams' Brevkam Ventures was one of three companies gobbling up vacant properties in the Tampa Bay area. The others were Chateau Lan, run by Chris McDonald, 47, of Plant City, and Homes for Americans, run by Joel McNair of Sarasota.

  • McDonald and McNair both claimed that by taking over vacant houses, their companies were helping neighbors, property owners, banks and people looking for low-cost housing. McNair, facing multiple charges of organized fraud, committed suicide in May.

  • The Florida Attorney General's office filed organized fraud charges against McDonald last December. McDonald told News Channel 8 he had taken possession of at least 20 houses in Hillsborough County. McDonald failed to show up for a January hearing. An arrest warrant was issued. A squad of detectives located him in Valrico on Thursday morning and arrested him.

For the story, see Man pleads guilty in vacant homes plot.

State AGs Take 'Robosigner' Approach To Reaching Foreclosure Fraud Settlement: Rushing To Bulldoze Through Incomplete, Flawed Document

The New York Post reports:
  • It looks like the US regulators are taking their cue from the robo-signers. More than a year after the scandal broke over the rapid signing of thousands of foreclosure documents without reviewing their accuracy, New York Attorney General Eric Schneiderman and his cohorts, along with the Justice Department and the Department of Housing and Urban Development, are crowing. They claim they’ve clinched a $25 billion deal to punish five big banks for robo-signing and other wrongdoing in the foreclosure mess.

  • Trouble is, the regulators don’t have a final deal, just a provisional one. Important elements could change — likely for the worse for homeowners and investors — before the army of bank and government lawyers involved signs off.

  • This means the regulators essentially rushed to push through an incomplete and flawed document, just like robo-signers did, without all the critical facts at hand. Instead of a detailed term sheet, there’s only a “coming soon” tag on the National Mortgage Settlement Web site.

  • The shocking thing is, there is no written agreement at this point,” said North Carolina attorney O. Max Gardner III. “That creates so many more questions than answers.”

For more, see AGs foreclosure deal still being tweaked.

Monday, February 20, 2012

U.S. Taxpayers To Help Subsidize Banksters' Obligations Under Recent Foreclosure Fraud Settlement

The Financial Times reports:
  • US taxpayers are expected to subsidise the $40bn settlement owed by five leading banks over allegations that they systematically abused borrowers in pursuit of improper home seizures, the Financial Times has learnt.

  • The deal, agreed last week, calls for Bank of America, JPMorgan Chase, Wells Fargo, Citigroup and Ally Financial to pay about $5bn in cash fines and to reduce monthly payments and loan balances for distressed US borrowers by as much as about $35bn.

  • However, a clause in the provisional agreement – which has not been made public – allows the banks to count future loan modifications made under a 2009 foreclosure-prevention initiative towards their restructuring obligations for the new settlement, according to people familiar with the matter.

  • The existing $30bn initiative, the home affordable modification programme, or Hamp, provides taxpayer funds as an incentive to banks, third party investors and troubled borrowers to arrange loan modifications.

  • Neil Barofsky, a Democrat and the former special inspector-general of the troubled asset relief programme, described this clause as “scandalous”. “It turns the notion that this is about justice and accountability on its head,” Mr Barofsky said.

  • BofA, for instance, will be able to use future modifications made under Hamp towards the $7.6bn in borrower assistance it is committed to provide under the settlement. Under Hamp, the bank will receive payments for averting borrower default and reimbursement from taxpayers for principal written down.


  • [P]eople familiar with the matter told the FT that state officials involved in the talks had had misgivings about allowing the banks to use taxpayer-financed loan restructurings as part of the settlement. State negotiators wanted the banks to modify mortgages using Hamp standards, which are seen as borrower-friendly, but did not want the banks to receive settlement credit when modifying Hamp loans. Federal officials pushed for it anyway, these people said.

For more, see US taxpayers to subsidise $40bn housing settlement.

Homeowner Threatened w/ Loss Of Home Over Crappy Title Issue Arising Years After Purchase; Bkptcy Trustee Says Land Was Subject Of Fraudulent Transfer

In St. Petersburg, Florida, The Tampa Tribune reports:
  • Charlene Thomas chose her new home, in part, because it had a spacious backyard where her children could play. But now, a bankruptcy trustee for a former owner of the property claims the land underneath Thomas' home was sold illegally and belongs to the trust.

  • "I love my house," Thomas said. "I love my land. I want my land. It's scary to hear there's a possibility that I may lose my house because this is my dream, to own my house."

  • Thomas paid $140,000 for the home in 2007, and the land was included in the price. The trustee, Angela Stathopolous, has sued Thomas and sent documents warning she could be ejected from the property. How it all happened illustrates how hectic property closings were during the housing boom and why it's so important to buy title insurance.

  • The builder, New Millennial Homes, also is named in the lawsuit. Executive Keith Collins says his company is a victim, too. "There were no issues that came up with anything that said something would cloud this title," Collins said. "This is about a clouded title, and that never came up."

  • Court documents show New Millennial paid $14,000 for the land in 2005, and no one objected to the sale. Shortly after Thomas bought the home two years later, she began getting letters from the trustee, and she was named in a lawsuit the next year. She said she was assured by attorneys and the builder that it would all be cleared up.

  • Nothing happened with the suit for a year. Then, last month, the trustee filed court documents saying she intended to move forward with taking back the land. Keith Mather, an attorney for the trustee, said he couldn't comment on the case but has asked the court for a mediation meeting with Thomas and the builder.

  • The trustee's position, according to the lawsuit, is that an owner who ended up filing for bankruptcy fraudulently transferred the land to a family member so it wouldn't be taken by the court. That person later sold it to New Millennial. The trustee maintains that the land always was supposed to go to the trust and never should have been sold.

  • So what about title insurance? Anyone buying a house with a mortgage is required to purchase title insurance. A title search is supposed to catch this kind of thing. Thomas closed her sale through Tampa's Fuentes and Kreischer Title Co. Fidelity National Title holds her title insurance policy.

  • Kathy Anderson, with Fidelity, said the company just learned of the problem this week and sent the information to its claims department for an investigation. Ron Donalson, a long-time Tampa title agent, said it's unusual for a bankruptcy trustee to try to reclaim property so many years later. The former property owner filed for bankruptcy in 2003.

  • If it's found that the title company really did miss something big, Donalson said, that's unusual, too. But that's what title insurance is for, he said. Once a mistake is made with respect to a title, Donalson said, it's easy for that error to be repeated the next time the property is sold. "They just took the policy forward, and in searching it forward, they may not have picked up on the prior problem," Donalson said.

  • Jack McCabe of McCabe Research & Consulting in Deerfield Beach said he agrees Thomas' dilemma is unusual. But he added he's not surprised by it, given that both sales were during the housing boom. "I'm hearing more and more of this sort of thing," McCabe said. "I think a lot of liens and judgments weren't caught because title agents were so busy."

  • Donalson says it's unlikely the trustee really wants Thomas' home. He thinks the trustee is just looking for money. Fortunately for Thomas, her title insurance policy should cover it. But first, a judge will have to decide if the trustee has any right to the property.

  • "I did everything I was supposed to do here," Thomas said. "I shouldn't have to deal with this."

Source: Murky land sale puts woman's home at risk.

Thanks to Deontos for the heads-up on the story.

Homeowner Cops Guilty Plea To Forging Document Purporting To Release $256K Federal Tax Lien Encumbering Property In Effort To Pocket 2nd Mortgage Cash

From the Office of the U.S. Attorney (Beckley, West Virginia):
  • A Rocky Gap, Virginia woman pleaded guilty [] in federal court [...] to mortgage fraud. Janet Damewood, 60, admitted that in February 2007, she applied for a second mortgage from CitiFinancial, Inc. (now known as OneMain Financial, Inc.) on a home she owned in Princeton, West Virginia.

  • At the time the defendant applied for the mortgage, the Internal Revenue Service (IRS) had filed a $256,000 Federal Tax Lien at the Mercer County Courthouse against the property for Damewood’s failure to pay back taxes.

  • Damewood admitted that she did not disclose the Federal Tax Lien, which was later discovered by CitiFinancial during the underwriting process. Damewood further admitted that she created a false and fraudulent document which claimed to be a release of the Federal Tax Lien.

  • The defendant subsequently provided the false document to CitiFinancial as proof that the lien had been released. Based on her false representations, CitiFinancial funded a $37,000 loan to the defendant.

For the U.S. Attorney press release, see Virginia Woman Pleads Guilty to Mortgage Fraud.

Jury Takes Less Than An Hour To Convict 'Don Juan' Accused Of Fleecing $370K Of Home Equity From Two Woman With False Promises Of Love, Marriage

In Fort Lauderdale, Florida, the South Florida Sun Sentinel reports:
  • A man accused of wooing two women and convincing both to marry him while fleecing them out of a combined total of more than $370,000 was convicted Thursday of organized fraud and two counts of grand theft.

  • Paul Francois, 57, faces 30 years in prison on each count, a total of 90 years. Deputies took him into custody immediately after the verdict was read. Sentencing is scheduled for March 1.

  • Jurors took less than an hour to reach a verdict in a case that comprised three days of testimony featuring dry bank statements interspersed with the accounts of two women who thought they found in Francois the man of their dreams.

  • Francois was accused of romancing Rose Marie Anglade, 52, and Sheila Brissault, 45, while convincing them to turn over money leveraged from homes they owned in New York in the summer of 2007.

  • Anglade sold her home, gave Francois the money and moved to Miramar to be with him. Brissault, who testified Wednesday, took out a home equity line of credit and gave Francois $100,000. He proposed to both women and promised each that he would buy a home in South Florida with them.

  • Defense lawyers Alex Hunt and Frank Negron painted their client as sincere in his affections for both women and classified his misdeeds as civil, not criminal. But prosecutors Don Tenbrook and Al Guttmann said love had nothing to do with Francois' actions.

  • Now awaiting foreclosure, Anglade remained in court throughout the day Wednesday and Thursday, even though she was through testifying. Before Thursday's verdict was read, she sat outside the courtroom and wondered aloud how long the jury would be and whether they would see in Francois the con man she now believes him to be.

  • As soon as the verdict was read to Broward Circuit Judge Cynthia Imperato, a court deputy put Francois in handcuffs. Anglade gave an audible sigh when she heard the click. "Justice is served," she said minutes later, looking across the courtroom as deputies fingerprinted the man who talked her into selling her house in Astoria, New York and moving to Broward with her then-16-year-old daughter. Outside the courtroom Thursday, Anglade called Francois a con man who deserves to spend the rest of his life in prison. "Everything was a lie," she said.

  • Anglade and Brissault testified that they did not know about each other until their relationships with Francois began to crumble. When Anglade asked for her money back, she said Francois threatened her and gave her a black eye. Brissault said he threatened to kill her and her children.

  • Defense lawyers said Francois was ready to be sentenced immediately after the verdict was read, but Imperato put off the sentencing when prosecutors said the victims deserved a chance to tell the judge directly how Francois' fraud affected their lives.

Source: Miramar man convicted of fraud, theft in 'Don Juan' case.

See also, Man wooed women, then swindled them, prosecutors say.

Sunday, February 19, 2012

Sacramento Feds Close Books On Mortgage Fraud Scam That Screwed Unwitting Investors, Lenders In Scheme Purporting To Assist Credit-Impaired Homebuyers

From the Office of the U.S. Attorney (Sacramento, California):
  • United States Attorney Benjamin B. Wagner announced [] that Gabriel Viramontes, 49, of Elk Grove, was sentenced [...] to four years and nine months in prison and ordered to pay restitution to his victims for a mortgage fraud scheme.

  • On March 31, 2011, a federal jury found Viramontes guilty of six counts of bank fraud and seven counts of mail fraud. Three co-defendants pleaded guilty to related charges before the trial.

  • According to testimony presented at trial, Viramontes and his co-defendants engaged in a Sacramento-area mortgage fraud scheme that involved at least 19 homes with loans of more than $8 million. From July 2006 through October 2006, they used VFM Investment Group, Esnian Mortgage Realty, and Freedom Capital Mortgage to engage in a mortgage fraud scheme.

  • They solicited people to purchase with no money down single-family homes on behalf of others with bad credit who wished to purchase homes. Those solicited were told they would benefit financially from the transactions.

  • The defendants then defrauded lenders such as Washington Mutual Bank, Long Beach Mortgage, and Fremont Investment and Loan by submitting fraudulent loan applications that inflated the buyers’ income, falsely stated that a buyer was employed at a specific job, and falsely stated that the properties would be owner-occupied.

  • The purpose of the scheme was to ensure that the home-purchase transactions closed, so that the defendants would receive substantial loan broker commissions and illegal kickbacks from real estate sales commissions.

  • Co-defendants James Roy Martin, 34, and Mario Fellini III, 42, who pleaded guilty and testified against Viramontes at trial(1) were also sentenced []. Martin was sentenced to 20.5 months in federal prison and Fellini was sentenced to six months prison and five months home detention. The fourth defendant, Joseph Salvatore Gallo, 38, was sentenced last month to five years probation. All are from the Sacramento area.

For the U.S. Attorney press release, see Elk Grove Man Sentenced In Mortgage Fraud Scheme.

See also, The Sacramento Bee: Elk Grove man sentenced in mortgage fraud.

Thanks to Tim McDaniel for the heads-up on the story.

(1) Another example of squealing defendants abandoning the conspiracy, not unlike like rats jumping off a sinking ship, to win the race to the prosecutor's office and take a fellow co-defendant down by 'throwing him under the bus' to score a better break on a plea deal.

  • "When a conspiracy is exposed by an arrest or execution of search warrants, soon-to-be defendants know that the first one to "belly up" and tell what he knows receives the best deal. The pressure is to bargain and bargain early, even if an indictment has not been filed." United States v. Moody, 206 F.3d 609, 617 (6th Cir. 2000) (Wiseman, J., concurring) (referring to the not-uncommon phenomenon some refer to as the 'race to the courthouse' (or 'race to the prosecutor's office') that breaks out among participants in an 'about-to-collapse' criminal conspiracy).

Loan Modification Ripoffs Not Considered A Civil Matter In Michigan As State AG Continues Bagging Scammers With Criminal Charges

In Lansing, Michigan, WILX-TV Channel 10 reports:
  • "It was just lies. They led me on and before I knew it, it was too late," said Aaron Winchell. Like many homeowners, he wanted a better interest rate. So a radio ad guaranteeing one sounded great.

  • "There was a $2100 fee up front. Never seen it again," said Winchell. "It ended up being a total scam. They led me on for probably about five months, and told me to disregard any foreclosure information, sheriff sales and all that."

  • The scamster told him not to pay his mortgage and that he was making offers on the house. "He was real good at what he was doing. He befriended me," said Winchell. The scamster worked at Michigan Modification in Lansing. "I went back to the company and told them what was going on. They told me they had no record of me even being in their office," said Winchell.

  • "They're literally just putting the money in their own pocket and walking away," said John Sellek, spokesperson for Attorney General Bill Schuette. Thanks to the AG's office, the person who scammed Winchell is now behind bars. But the damage to him and his family is done.

  • "We lost a wonderful home because of it. Me and my wife and two children. It really affected them as well, losing their house, changing schools. We had two weeks to find somewhere to live," said Winchell.


  • The attorney general has filed criminal charges against more than two dozen Michigan based companies and individuals. Many of them sound very convincing and legitimate. It's important to know that it is illegal in Michigan to ask for a payment up front before providing the service. If that happens, it's likely a scam.

Source: Mortgage Rescue Scams Target Michigan Homeowners ("Mortgage Rescue Scams" are sprouting up across mid-Michigan. Homeowners hear the promise of help avoiding foreclosure or locking down a better rate...and get taken advantage of).

Irate Homebuyer Wants Cash From Seller's Bank After It Locked Her Out Of Her Newly-Purchased Home That Had Recently Fallen Into Foreclosure

In Powder Springs, Georgia, WSB-TV Channel 2 reports:
  • A woman says she no longer feels safe in her own home after the locks were changed a week after she purchased it. Dashi Goodloe purchased a home in Powder Springs on Feb. 2, but a little over a week later, she could not open her own front door.

  • I just bought the home and a week and a half later, I can’t access it. So, I was a little upset,” Goodloe said. Goodloe called the selling agent, who informed her that the seller had received paperwork from Citibank about a week earlier saying the property was in foreclosure. “The closing attorney told her, ‘Everything is OK. The bank is going to take care of it, so don’t worry about it.’ And then Monday, they changed the locks,” Goodloe said.

  • Channel 2 Action News reporter Eric Philips contacted the closing attorney, who said there must have been a miscommunication between the bank and the foreclosure attorney, so the foreclosure was never halted. While the problem is being resolved, Goodloe has been given the lockbox code to get into her home, but she said that does little for her peace of mind.

  • I have to pay bills. The lights are on. The heat is on. The water is on. The mortgage is due. So, I would like to be compensated for me not being able to feel comfortable enough to live in this home,” Goodloe said.

  • The closing attorney told Philips this is a fixable problem, but he said the bank did not tell him how long it would take to fix.

Source: Foreclosure on previous owner locks woman out of newly purchased home.

Unwitting Renter Falls For Rental Ripoff; Pays Scammer $1600+ To Move Into Vacant, Bank-Owned Foreclosed Home Advertised On Craigslist

In Orlando, Florida, WESH-TV Channel 2 reports:
  • It looked like a good deal for a rental, but a single mom got taken by a rental scheme. The woman, who does not want to be identified, said she went on Craigslist looking for a home to rent and thought she found a great deal on a Lazy Hill Drive home in Orlando for $850 per month.

  • The mother of four paid more than $1,600 to a woman who called herself Sherri Copeland. She said Copeland gave her a receipt and what she thought was a lease. Days later, she got a rude awakening.

  • The home is not owned by Copeland or a rental company. The home is in foreclosure and owned by a bank. Deputies believe the scam artists broke the window, changed the locks and claimed it as their own. Now the victim is not only out of the money, but she has to move out.

  • Carlos Morales with the Orange County Consumer Fraud Unit said rental scams have risen with foreclosures.

For more, see Crooks Claim Foreclosure As Rental, Swindle Mom (Woman Out Of Money, Must Move).