Saturday, October 20, 2012

"It Has To Be A Halloween Joke!" Says Georgia Homeowner In Response To BofA's Loan Modification Offer To Lower Mortgage Payments By $1.61/Month

In Stone Mountain, Georgia, WXIA-TV Channel 11 reports:
  • Kimberly Smith was relieved to learn that she would finally get her interest rate down so she could stay in her home. What surprised her was that the adjustment was only a mere: $1.61. Yes, only $1.61.

    Smith couldn't believe it. "It has to be a Halloween joke. They have got to be kidding.
    " Smith said. "I mean they wasted more on postage and FedEx than what I am getting as a reduction."

    Smith's mortgage modification program with Bank of America is through the federal Making Homes Affordable program.

Local TV Station Buys Delinquent Debt, Immediately Begins Foreclosure On Next-Door Neighbor In Effort To Stop Strip Club Developer From Building 'Jiggle Joint'

In North Bay Village, Florida, The Miami Herald reports:
  • The parcel on the JFK Causeway where a developer wants to open a strip club is once again in hot dispute. This time, Sunbeam Realty President Ed Ansin, owner of next-door neighbor WSVN-Channel 7, is looking to foreclose on the mortgage.

    Last year, Ansin appeared in a televised video speaking against the strip club, and several of his on-air reporters showed up at a North Bay Village meeting to persuade planners not to approve the plans. Now, his company is taking legal action.

    Sunbeam Realty filed a foreclosure lawsuit Aug. 10 in Miami-Dade County. About a week before filing suit, Sunbeam Realty acquired the property’s mortgage, records show.

    Isle of Dreams bought the land for $1.3 million in 2004, and it took out a $4.8 million mortgage in 2008, according to Miami-Dade County records. But the developer has defaulted on the mortgage, Sunbeam Realty argues in the complaint.

    As the new mortgage holder, Sunbeam Realty says in lawsuit documents that it has demanded all payments due under the note, or $4.8 million plus interest and other fees, from Isle Of Dreams. The developer has not paid, according to the complaint.

    We view this as a litigation tactic by Sunbeam and intend to vigorously defend our rights in the courts,” Isle of Dreams Manager Scott Greenwald said. WSVN and Sunbeam declined to comment.

    Isle of Dreams has proposed to build a five-story complex at 1415 JFK Causeway, including two floors for a strip club. Besides WSVN, which does not want a strip-club next to its studios, residents have spoken against the plans at city meetings. Isle of dreams has been fighting to open the club. In the past year, the company has twice sued the city.

    In the first suit, the company claims that part of the city’s zoning requirement violates the First Amendment right of freedom of expression because it gives commissioners too much discretion in deciding whether to approve the strip club. The U.S. District Court for the Southern District of Florida dismissed that lawsuit. Isle of Dreams has since appealed.

    It has also filed a second lawsuit against North Bay Village in which it claims the city is using the site-plan approval process to prohibit an adult-entertainment establishment, Greenwald told The Miami Herald in July.

    The City Commission has passed changes to its zoning laws that clarify the language of the ordinance and eliminate parts of the zoning requirements. Commissioners voted to add a new chapter in the city’s code that requires a business license for an adult-entertainment establishment, and prohibits full nudity within the building as well as the sale, service and consumption of alcohol.
Source: Strip club opponent tries a new tactic: foreclosure lawsuit (The company that holds the mortgage on land where a developer wants to build a strip club has filed suit).

Delinquent Debt, Deteriorating Conditions Fuel Property Acquisition Strategy For Some Real Estate Operators Targeting Bronx Buildings

In The Bronx, New York, Crain's New York Business reports:
  • The senior debt collaterized by two overleveraged buildings in the Morrisania section of the Bronx has been sold for $31 million. Brokerage Massey Knakal Realty Services represented LNR, the special servicer which took over the debt about two years ago, in the deal.

    The two rent-regulated towers—Fordham Towers and Robert Fulton Terrace—are at 530 and 540 E. 169th Street and 490 E. 188th St., respectively. The two total 434,000 square feet and together boast 490 apartments. The pair were just two of many properties across the city, where owners overpaid for rental buildings during the height of the real estate market and pinned their hopes on their ability to hike rents.

    When the market crashed, Fordham Towers and Robert Fulton Terrace fell into foreclosure. According to sources, the buyer of the note was real estate investment firm United Realty Trust.

    "This was a complicated transaction given the dynamics of the assets and how long the note was in default," Massey Knakal Chairman Robert Knakal said, declining to identify the buyers. United Realty Trust executives Jacob Frydman and Eli Verschleiser did not return calls for comment.

    All but 39 apartments at Fordham Towers and Robert Fulton Terrace are rent-stabilized. Almost all of the apartments that are no longer rent stabilized are vacant, according to Massey Knakal Realty's marketing material for the note. It's unclear if United Realty Trust has moved to acquire the deed of the properties.

    In 2007, real estate investor Mark Karasick bought Fordham Towers and Robert Fulton Terrace for $44 million. At the time tenants at the complexes were concerned about the deal and the inflated price. CIBC lent Mr. Karasick $36.5 million for the transaction and later sold the loan to J.P. Morgan Chase. Two years after buying the properties Mr. Karasick defaulted on his mortgage, according to public records, and the properties were foreclosed on. That is when LNR stepped in to take over the properties.

    Meanwhile, tenants have reportedly complained of the deteriorating conditions of the buildings. According to city records, as of mid-September there were 389 housing violations at Fordham Towers and Robert Fulton Terrace.
Source: Debt on two Bronx apt. buildings sells for $31M (The price is nearly 20% less than the amount a buyer paid five years ago for the pair, which boast 490 apartments. The loans had been in foreclosure for three years).

In a related story, see Bronx is burning over failed deals (Overleveraged buyers of rent-regulated apartments create one big mess across city).

Push To Crack Down On Tax Cheats Claiming Improper Homestead Exemptions Continues

In Huntington County, Indiana, The Huntington County Tab reports:
  • Property owners in Huntington County have one last chance to keep their homestead exemptions intact. If they don't, they may see their property taxes double in 2013.

    The push is a result of the tough economic times, says Huntington County Auditor Cindy Yeiter, whose office is responsible for making sure that those who claim a homestead exemption on a property are, in fact, using that property as their primary residence.
  • The "homestead verification form" - a pink piece of paper - was mailed out to property owners along with the tax bills in 2010, 2011 and 2012. It asks them to verify that they do, in fact, live in the property for which they are claiming the deduction.

    Yeiter estimates that of the approximately 8,000 residential properties in Huntington County, about 6,150 people have returned the verification form. That leaves about 1,850 taxpayers who have not yet returned the form and are in danger of losing the deduction.
  • This is the last time that property owners will receive a homestead verification form. Property owners who are living in the home listed on the form must return the completed form to the auditor's office no later than Dec. 31. Those who do not return the form will lose their homestead exemption, which will double their property tax bill, Yeiter says.

    Yeiter says her office mailed out the 1,850 homestead verification forms on Oct. 1. The forms are printed on pink paper. They are being sent only to property owners that did not return the forms in previous years. Homeowners must return the forms even if their taxes are paid by a mortgage company, Yeiter says.
  • The verification is required to prevent fraud. The auditor may request proof that a home is the applicant's principal place of residence. If proof is not provided, the owner could be ordered to pay the amount by which property taxes were reduced over the previous three years because of the improper homestead deduction along with a 10 percent penalty.

Local Cops, Realtors Join Forces To Raise Awareness About Rent Scams Involving Vacant, Foreclosure Homes

In Naples, Florida, the Naples Daily News reports:
  • If it looks too good to be true, it probably is. In the wake of recent arrests of people charged with illegally renting and leasing foreclosed homes, the Collier County Sheriff's Office and Naples Area Board of Realtors are partnering to raise community awareness about rental scams so nobody becomes a victim.

    Both agencies will take steps to warn the public to be wary of ads for rental homes or condominiums, but no further plans about the recent partnership geared toward educating the public were immediately released.

    It's typical for the person behind the scam to post a notice on Craigslist, in local newspapers or on other social media sites advertising homes for rent, often using the legal owner's name in the return email address, according to a Sheriff's Office's statement.

    David Spahl, a Collier sheriff's Organized Crime Bureau investigator, said deputies are being proactive about monitoring vacant properties and researching the Internet for suspicious advertisements. Spahl said the majority of the scams discovered during the summer were posted on Craigslist and originated in Nigeria.

    In the summer, there were at least 15 victims of foreclosed home rental scams. "I'm reasonably certain there were more that we never learned about," Spahl said.

Owner Of Now-Destroyed Dry Cleaning Shop Facing Charges Of Failing To Clean Up Rubble Buys Out Of Jail Time w/ Back Tax Installment Payment Promise

In Lockport, New York, The Buffalo News reports:
  • It’s going to cost Patrick McFall a lot of money to stay out of jail. Jury selection was to have begun [] in his second trial on charges of violating the city’s property maintenance code by not cleaning up the wreckage of his partly collapsed dry cleaning shop, but McFall decided to plead guilty as charged last week.

    Under terms of a settlement with the city, McFall must pay $5,000 by the time of his City Court sentencing Nov. 15. That’s a down payment on the money he owes the city: [...] – a total of $42,909. Defense attorney Jon R. Wilson said that after the down payment, McFall will have to pay at least $200 a month until the taxes are paid in full.

    Based on McFall making the $5,000 payment, City Judge Thomas M. DiMillo has agreed not to send him to jail, Deputy Corporation Counsel Matthew E. Brooks said. [...] Next month, DiMillo could give McFall a one-year conditional discharge or three years of probation, Brooks said. During those periods, McFall would risk jail if he missed a monthly payment.

    The money he still owes after the period of supervision would be converted into a civil judgment, and the city could garnishee McFall’s wages or seize his assets if he doesn’t pay it all off, Brooks said.  "There’s no reason he should get off scot-free for something every citizen has to pay,” Brooks said.

    McFall owned Peters Dry Cleaning, [...] part of which collapsed Dec. 15. McFall was cited for not cleaning up the pile of bricks, which McFall said he couldn’t do because the city insisted on an asbestos survey. “Money has always been an issue for him. He didn’t have $50,000 to clean up the asbestos. He didn’t have $40,000 to pay the back taxes, thus the payment plan,” Wilson said.

    Corporation Counsel John J. Ottaviano said he expects the state Department of Environmental Conservation to stick McFall with the tab for cleaning up the property, which is listed as a Class 2 inactive hazardous waste site because of dry-cleaning chemicals poured onto the ground decades ago.

    We’re working with the DEC to clean it up and take it down,” Mayor Michael W. Tucker said. “We’re going to start a foreclosure process.” Ottaviano said the city intends to eventually take ownership of the land but won’t do so unless it’s cleaned up.

    McFall transferred the property earlier this year to Eddie Person, a city resident whom Ottaviano believes had no idea what was happening with the deal. Person owes $2,691 on this year’s school taxes, the City Treasurer’s Office said.

    Ottaviano said Person has hired an attorney, Brian J. Hutchison, to try to cancel the transaction. Ottaviano said it might take a year before the transaction and the demolition are completed. Then the city would be left owning a vacant lot in a residential neighborhood.
Source: Dry cleaner must pay city taxes to avoid jail (Monthly plan set in Lockport debris case to cover $42,909).

DA's Office Scores Add'l Cash To Fund Probes, Prosecutions Of Local Real Estate Ripoffs

In Stockton, California, the Stockton Record reports:
  • Real estate fraud prosecution requires months of work before the schemers - more often they involve a band of perpetrators - are brought to justice, prosecutors say. And San Joaquin County's foreclosure problems certainly have made the area vulnerable to those crimes. The District Attorney's Office can handle only a few with its staff levels.

    But the backlog of pending investigations may go to court sooner than had been expected.

    County supervisors have approved allocating money to hire a deputy district attorney and an investigator to take on cases sitting on the back burner. Money for the two new positions comes from the state's $5.2 million Foreclosure Crisis Recovery Fund, the result of a settlement from Countrywide Financial Group. San Joaquin County's portion is $382,239.

    "These one-time funds provided by the settlement must be solely utilized to enhance the District Attorney's ability to investigate and prosecute real estate fraud," District Attorney James Willett said in a staff report.
  • The county combats real estate crimes with funding from the state's Real Estate Fraud Prosecution Program, and for the county, the team consists of one attorney, one investigator and one paralegal. The additional positions will allow the District Attorney's Office to trim down the backlog and carry out its work more effectively.

    Funding was generated through a lawsuit filed by the state against two ex-Countrywide Financial Corp. executives accused of predatory lending. The executives settled for $6.5 million, of which $5.2 million was to be used for homeowner education and fraud prosecution.
For the story, see S.J. gets funding to go after real estate fraud (DA gets staff from settlement of state suit against lender).

Friday, October 19, 2012

California AG Bags, Charges Pair With Grand Theft, Burglary, Conspiracy Etc. For Running Alleged Loan Mod Racket That Left Homeowners Getting The Boot

From the Office of the California Attorney General:
  • Attorney General Kamala D. Harris [] announced the arrest of two suspects who have been charged with grand theft, burglary, unlawful collection of advance fees, tax evasion and conspiracy in a wide-ranging mortgage fraud scheme. Both suspects also face special enhancements for excessive taking and aggravated white-collar crime for losses to victims exceeding $350,000.

    The arrest declaration alleges that Joana Sosa, age 54 of Gardena, and Zoila Ortega, age 31 of Gardena, ran a criminal mortgage fraud enterprise mainly against Spanish-speaking victims and targeted members of their own Spanish-speaking community. Many of the victims were often referred by other family and friends.
  • Joana Sosa and Zoila Ortega are charged with 41 criminal felony counts. If convicted, they each face 36 years in prison, including fines and restitution.
  • From 2008 to 2010, Sosa and Ortega charged their victims thousands of dollars in up-front fees and monthly payments, promising to protect their victims from eviction by purchasing their property from their lender and becoming their new "lender." Sosa and Ortega promised the victims a modified loan they could afford with the opportunity to buy back their home in the future.

    No services were rendered by Sosa and Ortega, resulting in consumers being evicted from their homes. Additionally, Sosa and Ortega instructed several consumers to stop making their mortgage payment, and in some instances, to stop paying their bills all together. Consumers were told this would allow them to qualify for a loan modification. Over the last three years, Sosa did not file corporation income taxes. Many of the victims only spoke Spanish and were instructed to sign contracts in English.

Recently-Raided Law Office Under FBI Probe For Running Illegal Loan Modification Rackets Tagged By Now-Foreclosed Utah Couple In Civil Suit

In Salt Lake City, Utah, The Salt Lake Tribune reports:
  • Following up on a raid by federal agents, a lawsuit has been filed against a group of lawyers and others alleging they defrauded a Salt Lake City-area couple in a home loan modification scheme.

    The couple sued CC Brown Law, attorney Charles Craig Brown and other attorneys and nonlawyers, alleging they participated in a scam in which homeowners facing foreclosure paid to get a loan modification only to find no legal work was done on their behalf. The couple ended up losing their home.

    In June, federal agents raided CC Brown or affiliated offices in Midvale, West Valley City and Salt Lake City as part of an investigation into the mortgage loan modification business. That investigation is ongoing, said Melodie Rydalch, spokeswoman for the U.S. Attorney’s Office for Utah.

    The lawsuit also names attorney Wilford T. Lee and the law firm WT Lee & Associates, Utah Litigation Counselors, the JL Martin Law Group, Century Law, and Sentry Law. Also included are John McCall, Chad Gettel and Kasey Rasmussen, who the lawsuit says operated the CC Brown loan modification program.

    The lawsuit alleges the law firms worked together and “basically created a scam where they would recruit people with financial difficulties with respect to their mortgages [and] get them to hand over thousands of dollars to one of the law firms,” said John Bogart, the Salt Lake City attorney who filed the suit on behalf of homeowners Jared and Vanessa Osborn.

    The law firms ran a scam where they basically had nonlawyers answering the phone and selling products, but no one actually did anything to get loan modifications.” [...] The Osborns ended up losing their home even after paying CC Brown $8,000 to $9,000, Bogart said.
  • Last year, the Maryland Commission of Financial Regulation issued a cease-and-desist order against CC Brown Law and Charles Brown, allegedly for violations of that state’s laws that included offering unlicensed credit services.

    In 2010, the Utah Division of Real Estate issued a cease-and-desist order that accused Brown and his law office of operating without a mortgage license. Brown agreed to settle the allegations with a $5,000 fine and to discontinue negotiating loan modifications without a license.
For the story, see Suit targets Utah lawyers in alleged mortgage scam (Allegations » Couple claims they paid thousands but that no legal work was performed).

Virginia AG Tags Another Loan Modification Outfit With Suit Alleging Illegal Clipping Of Dozens Out Of Upfront Fees

In Virginia Beach, Virginia, The Virginian Pilot reports:
  • Attorney General Ken Cuccinelli on Tuesday filed a civil lawsuit accusing a Virginia Beach mortgage loan modification company of charging illegal advance fees for providing foreclosure rescue services. The lawsuit alleges that National Foreclosure Solutions, with an office at 4605 Pembroke Lake Circle, has been violating the Virginia foreclosure rescue law, which prohibits fees charged "prior to the full and complete performance of the services it has agreed to perform."
  • The suit says the company collected advance fees from about 200 customers. The lawsuit, filed in Virginia Beach Circuit Court, requests that the court stop NFS from its alleged violations of the law and that any illegally collected money be returned to consumers. The suit also seeks civil penalties of up to $2,500 per violation plus the costs of the investigation of up to $1,000 per violation.
  • The Attorney General's Office and the U.S. Attorney's Office have been targeting fraudulent mortgage rescue companies since the real estate market collapsed and foreclosures skyrocketed. Many cases have resulted in civil penalties. Others have been prosecuted as criminal cases.
For the story, see Attorney general sues Va. Beach foreclosure rescue service.

For the Virginia Attorney general press release, see Attorney General Cuccinelli announces suit against Virginia Beach-based mortgage modification company (Company allegedly charged illegal advance fees for "foreclosure rescue" services).

Banksters' Premature Lockouts Victimize Another Homeowner Behind In House Payments

In Jacksonville, Florida, First Coast News reports:
  • Pushpa Verma, a realtor who purchased her home in 2008 as her primary residence, has turned it into a rental to generate income after the housing market crashed. "I lost my prospective tenant," said Verma.

    Two weeks ago, Verma tried to show the property to a potential renter and discovered that the locks on her home were changed. [...] She found blue stickers everywhere from the front door to the garage that stated that the house was being winterized. [...] Winterization is a process where the bank sends in a company to secure property that has been abandoned or foreclosed on.

    Verma said she is behind on her mortgage, but does not fit into any of those categories. "My house is not in foreclosure," said Verma.

    Verma tried to get answers from the winterizing company and her lender but said no one has explained what happened, and why. [...] Verma hired a company to replace the locks, [...] and she has placed her home back on the market for rent.

    The company that changed the locks is Lender Processing Services field services.

Thursday, October 18, 2012

Equifax, Outfit That Peddled Lists To Loan Mod Rackets Conatining Consumers' Credit Info Prescreened For Mortgage-Delinquent Homeowners Settle FTC Charges

The Federal Trade Commission recently announced:
  • One of the largest U.S. consumer reporting agencies, Equifax Information Services LLC, has agreed to settle Federal Trade Commission charges that it improperly sold lists of consumers who were late on their mortgage payments.

    In two separate actions, both Equifax and the companies that allegedly bought and resold the information from it will pay a total of nearly $1.6 million to resolve charges that they violated the FTC Act and the Fair Credit Reporting Act (FCRA).

    The two settlements are part of the FTC’s ongoing efforts to protect consumers in financial distress and to protect consumer privacy. Equifax will pay $393,000 to resolve allegations that its inadequate procedures led to the sale of lists of consumer information to firms that should not have received them.

    According to the FTC, Equifax sold more than 17,000 prescreened lists of consumers to companies including Direct Lending Source, Inc., which subsequently resold some lists to third parties, who used their data to pitch loan modification and debt relief services to people in financial distress.

    As part of a separate settlement, Direct Lending Source will pay a $1.2 million civil penalty, and will be barred from using or selling prescreened lists without a permissible purpose, or in connection with solicitations for debt relief or mortgage assistance relief products or services.
For the FTC press release, see FTC Settlements Require Equifax to Forfeit Money Made by Allegedly Improperly Selling Information about Millions of Consumers Who Were Late on Their Mortgages (In Separate Actions, Equifax and Its Customers Will Pay a Total of $1.6 Million).

Financially Weak High End Home Builder To Customers: Cough Up 15% More Than Contract Calls For To Finish Job Or I'm Going Belly-Up!

In Sarasota, Florida, the Sarasota Herald Tribune reports:
  • The owner of Paradise Homes, while acknowledging that his company is on the verge of collapse, is hoping to bring in another builder to complete customers' houses.

    But owner Jim Butler's plan has a catch: Paradise customers who have already purchased homes and in many cases arranged financing will have to pay up to 15 percent more than their contracts call for to finish the jobs.

    On a $600,000 house, a prospective homeowner would have to come up with another $90,000 -- half of it up-front -- before construction would begin again.
  • Donald Staley put down more than $200,000 to build a $957,000 home in the Royal Valley section of the planned community's Country Club East. Construction has yet to begin, and he said he will not pay the builder any more.

    "That is like putting bad money on top of bad money," said Staley, a part-time resident who plans to move here from Ohio. "He says there is no money in the bank account. But there should be for my house."

    Rob Nielsen, a commercial contractor from the Washington, D.C., area, was fuming after learning of Paradise's problems. He was looking to build a $700,000 home in the Lake Club, another upscale Lakewood Ranch community, and the builder was pressing him just two weeks ago to make a sizable downpayment.

    He has hired another local company to build his house.

Texas Appeals Court: Trial Judge "Abused Its Discretion" By Ordering Bankster To Pay Homeowner $300K In Sanctions In Ongoing Litigation Centering On Alleged Loan Modification Jerk-Around

In Beaumont, Texas, The Beaumont Enterprise reports:
  • A Fannett woman's courtroom fight with a mortgage company over her foreclosed home could end up before a jury.

    Ninth Court of Appeals justices on Thursday released an opinion saying the 58th District Court "abused its discretion" when Judge Bob Wortham sanctioned Bank of America on June 27, ordering the company to pay Trudie Crutchfield $300,000 in a breach of contract settlement.

    The company could have been fined up to $600,000 more if it did not correct Crutchfield's credit within 90 days and if she received another foreclosure notice, per Wortham's ruling. Court records show Wortham also ordered Bank of America to pay $20,000 to Crutchfield in attorney's fees.

Wednesday, October 17, 2012

Central Florida Pair Pinched For Moving Into Temporarily Unoccupied Home & Claiming Ownership Thru Adverse Possession; Homeowner/Victim An Active Duty Servicemember

In Hillborough County, Florida, ABC Action News reports:
  • Squatters are getting creative in Hillsborough County. It's illegal to move into an unoccupied or abandoned home, but some have looked for a way to justify it.

    Over the weekend, deputies arrested two women, Tami Robinson and Samantha Gavin-Magras, accused of breaking into a Riverview home, changing the locks, and living there.(1)

    When the owners caught wind, investigators say they moved on to another home nearby on the brink of foreclosure. "There's always going to be those that think they can take that risk," said Larry McKinnon, spokesman for the Hillsborough County Sheriff's Office.

    Their squatters' defense: A century old law called adverse possession -- other squatters have tried it before. "It's quite rare. It's a very arcane theory of law and real property," said Charles Gallagher III, a St. Petersburg lawyer. He says the old law was designed more for farmers to claim land, not squatters to claim vacant homes.

    "You can't go ahead and trespass on somebody's property, take up residence there, pay the taxes, fill the forms out, and expect to have 7 years of uninterrupted residence there," he said.

    Seven years is how long it takes someone to take ownership of a piece of property if they filed out the paperwork and paid taxes the entire time.

    Last month, ABC Action News got a tour of a home where a squatter tried the same trick. The sheriff's office describes it as their way to put legitimacy in squatting, but it doesn't work. "No one should be able to leave their home and come back and for whatever reason find somebody living in it," McKinnon said.

    While the problem has tapered off some, the sheriff's office says it still exists, and they rely on the public's help. Anyone who sees someone move into an abandoned or unoccupied home should call police.
Source: Squatters turn to century-old law to try takeover of unoccupied home (Lawyer: Adverse Possession law meant for farmers).

For the Hillsborough County Sheriff's Office press release, see Women Try To Assume Possession Of Vacant Homes.

(1) According to the Hillsborough County Sheriff's Office press release, the pair were pinched for:
  • Invasion by False Impersonation (2 Counts),
  • Organized Fraud (2 Counts),
  • Burglary of an Unoccupied Dwelling (2 Counts),
  • Grand Theft (2 Counts).
The property owner/victim is an active member of the United States Air Force and currently on active duty, the press release states.

Lack Of Funds Forces Homeowner To Live With Squatter Who Moved Into Her Temporarily Vacated Home, Made Repairs, Filed Construction Lien On Premises & Now Refuses To Leave

In Detroit, Michigan, WJBK-TV Channel 2 reports:
  • Heidi Peterson always dreamed of living in a historical home. In May of 2010, she bought one in Detroit's Boston-Edison District for $23,000. After being away for a year, she said she returned to her house last week and found a woman living there. Peterson learned from neighbors she had been living there for a few months.

    Peterson claims the squatter changed the locks, reworked the plumbing, replaced her appliances, put a lien on the house and even changed the curtains, and now this squatter won't leave. So now they are forced to sleep one room away from each other, Peterson with her one-year-old daughter.

    The alleged squatter's name is documented all over the house as Missionary-Tracey Elaine Blair, a write-in candidate for president. We asked Peterson whether she feels safe. "I don't know what the capabilities are. We're afraid of her mindset of entitlement."

    A squatter doesn't have a legal right to the property, but under the law the homeowner cannot remove a squatter by force. In most cases, the homeowner has to file a civil action in court, prove it's their property and evict the squatter. That is what Peterson is trying to do. "She thinks that this is a program in Detroit to take people's homes and fix them up and then she gets to keep them," Peterson said.

    Since Peterson spent all of her money on the house, she said she can't afford to go anywhere else, and until she can legally kick the woman out, they are forced to live under the same roof.

    "I thought if the house is not safe, how can I come here with my child? There's an issue with that. But should I lose my house to a squatter because I don't have rights to my property or should I fight to get it back," said Peterson.

    As our story was going to air, we had a chance to talk to the alleged squatter. She denied that she was squatting and said she has a lease.

    "I have a construction lien for the repairs that I put into the house. Someone had (broken) into the house on July the Fourth and they stripped the radiators and I made a report," she added.

    "In February 2011, we had to vacate because the boiler was damaged," she continued. "I took all my books and my writings, but my (furniture was) still left in (there)."

    We also asked her whether she thinks there is a program where anybody can go into Detroit, take over an abandoned house and live there. "I'm an advocate for affordable housing. That's a part of my campaign," she said. "I've believed that since the first time I met her when I was running for state Senate (in) 2010 and she was also running for a political office, that was a part of my belief. I signed an oath pledging that I would fight for affordable homes."

    We're told Peterson leased the house to tenants in 2010, including this alleged squatter, but had to evict everyone when it was found not fit to live in.

    We're also told the alleged squatter filed papers with the city claiming the property was abandoned.

Criminal Slander Of Title Among Charges Facing Crackpot Who Found Vacant Lakefront Pool Home In Foreclosure, Filed Adverse Possession Affidavit To Claim Ownership & Moved In

In Meanasha, Wisconsin, the Appleton Post-Crescent reports:
  • A Fox Cities woman is facing criminal charges after she and her adult son moved without permission into a vacant lakefront home in Menasha.

    Marsha L. Anthony, 45, is charged with criminal slander of title as a party to a crime(1) and misdemeanor charges of criminal trespass and criminal damage to property.

    According to the criminal complaint, Menasha police were called to the residence at 822 Emily St. on Aug. 12 for a report of open windows and music at the residence on Little Lake Butte des Morts where no one was supposed to be living. When an officer arrived, he found the electricity and water had been turned on and a lock bolt used to secure a doorknob was lying on the floor.

    When Anthony arrived at the residence, she questioned the authority of officers to be there and showed them a notarized affidavit of adverse possession, which she claimed gave her legal rights to the property’s title. Anthony’s 24-year-old son also was living at the residence. The son has not been charged with a crime.

    During the course of a month-long investigation, police learned that Anthony’s 24-year-old son worked as a subcontractor for a Minnesota-based inspection firm and was given the keys to the residence to inspect it as part of a foreclosure action by Wells Fargo Bank.

    The chief executive officer of the company confirmed the son had been given keys to the residence to conduct an inspection and had not returned the keys. The company sent a second inspector to the property, who reported he was confronted by a man matching Schroeder’s description who threatened “to release the dogs on him,” according to the complaint.

    Police had asked Anthony and her son to voluntarily vacate the property several times during the investigation, but they refused. The son voluntarily went to speak to police on Sept. 13 after he and his mother got into an argument. He told officers he no longer wanted to live at the residence. He said his mother was with him the day he went to inspect the residence.

    She called it her “dream home” and said she always wanted a home on the lake with a pool, the complaint states. He told police he moved into the home on Aug. 9, one or two days after his mother gained access to the property by opening an unlocked patio door. He said he and his mother both had poor credit and had lost their previous place.

    Anthony is due back in Winnebago County Court on Oct. 18. If convicted, she faces 11 years, six months imprisonment and $30,000 in fines. Her son has not been charged with a crime.
Source: Woman, 45, faces charges for occupying Menasha foreclosure (Son given keys to inspect residence).

(1) Section 943.60 of the Wisconsin Statutes provides in part:
  • 943.60  Criminal slander of title.

    (1) Any person who submits for filing, entering or recording any lien, claim of lien, lis pendens, writ of attachment, financing statement or any other instrument relating to a security interest in or title to real or personal property, and who knows or should have known that the contents or any part of the contents of the instrument are false, a sham or frivolous, is guilty of a Class H felony.

Tuesday, October 16, 2012

Some Widows Now Face The Boot From Homes After Being 'Left Off The Deed' When Hubbys Obtained Reverse Mortgage Loans

The New York Times reports:
  • The very loans that are supposed to help seniors stay in their homes are in many cases pushing them out.

    Reverse mortgages, which allow homeowners 62 and older to borrow money against the value of their homes and not pay it back until they move out or die, have long been fraught with problems. But federal and state regulators are documenting new instances of abuse as smaller mortgage brokers, including former subprime lenders, flood the market after the recent exit of big banks and as defaults on the loans hit record rates.

    Some lenders are aggressively pitching loans to seniors who cannot afford the fees associated with them, not to mention the property taxes and maintenance. Others are wooing seniors with promises that the loans are free money that can be used to finance long-coveted cruises, without clearly explaining the risks. Some widows are facing eviction after they say they were pressured to keep their name off the deed without being told that they could be left facing foreclosure after their husbands died.
  • Joan Serioux-Forde, 72, thought that she couldn’t feel more devastated after her husband, Christopher, died last year. Then, roughly a month after the funeral, she received a letter from Generation Mortgage, a reverse mortgage lender, informing her that unless she paid $293,000, she would lose her home in San Bernardino, Calif. Ms. Forde said she was never informed that if she wasn’t on the reverse mortgage deed, she would have virtually no right to stay in her home unless she bought it outright. “It’s a nightmare,” she said. Generation Mortgage declined to comment.
  • Some solicitations reviewed by the Consumer Financial Protection Bureau present reverse mortgages as “free money” or mistakenly tell seniors that they could never lose their home. [...] Officials at the bureau, which issued a report on the industry in June, said they heard from a number of seniors who claimed that lenders encouraged them to make their older spouses the sole borrower on the loan. The brokers earn more money when they make larger loans with the older spouse as the only borrower.

    Some surviving spouses complained that brokers told them they could be added later, but they were not. The bureau says those seniors are at greater risk of losing their homes. The complaints, according to elder-care advocates and federal officials, have been rising during the past year, although there are no exact numbers.

    Linda McMahon, a 65-year-old widow, watched helplessly as the locks were changed on her home in St. Croix Falls, Wis., last month. She said that in 2005, when her husband was 82 and she was 58, a mortgage broker from Wells Fargo promised her that she could add her name to the mortgage once she turned 62. That never happened because that year, in 2009, she didn’t have time to deal with it as her husband’s health quickly deteriorated and he died from a heart condition, she said. Soon, she was unable to pay any of the property taxes and insurance. “I am devastated,” said Ms. McMahon, who is retired, living on Social Security income and now renting an apartment.

    A spokeswoman for the bank declined to comment. Reverse mortgages also have troublesome incentive structures that might encourage brokers to steer seniors toward lump-sum loans, which carry a fixed interest rate, rather than a line of credit with a variable interest rate, the bureau found. In a lump sum arrangement, the interest charges are added each month, and over time the total debt owed can far surpass the original loan.

    Brokers earn higher fees on these loans and even more money when they sell the loans into the secondary market, where they can get rates nearly double those for variable loans, according to rate sheets obtained by the consumer bureau.
  • Ms. Forde, who lives in fear of losing her San Bernardino home, said she could not afford to save her house by paying the full $293,000 debt. Now, she said, she spends much of her day standing guard by the window. Her home is already in foreclosure proceedings. With a wavering voice, she said: “I have nowhere to go.”

Scammer Pinched For Running Loan Modification Racket Pleads No Contest To 12 Felony Grand Theft Charges, Three Felony Foreclosure Consultant Violations

In Santa Barbara, California, KEYT-TV Channel 3 reports:
  • The Santa Barbara County District Attorney's office announced [last week] that Jessica Lynn Orca has been convicted of 15 felony charges related to real estate fraud. The judge in the case indicated that he will sentence Orca to 7 years in prison.

    Orca violated state law by collecting fees in advance from clients who wanted loan modifications. Orca would require them to pay with a money order or cashier's check and told them the money would go directly toward house payments and foreclosure services. However, investigators for the District Attorney's office discovered that Orca embezzled the money instead for her personal use.

    Orca pleaded no contest to 12 felony counts of Grand Theft, 3 felony counts of Engaging in Prohibited Practices of a Foreclosure Consultant and 2 misdemeanor counts of Unlawfully Collecting Advance Fees.

    Although Orca will be sentenced to 7 years in prison, she will likely only serve two years in county jail and the remaining five years under supervised release because of California's new Public Safety Realignment Law.
Source: Woman Convicted of Real Estate Fraud.

For the Santa Barbara District Attorney press release, see People v. Jessica Lynn Orca: Real Estate Fraud Case.

Foreclosure Rescue Racket Requiring Homeowners To Sign Over Deeds Into Trust Ends In Guilty Pleas For Pair

From the Office of the Santa Barbara County, California District Attorney:
  • Santa Barbara County District Attorney Joyce E. Dudley announced the plea [] of Franklin David Marquez and Sisy Aragon. Franklin David Marquez pled to one felony count of violating Civil Code section 2945.4, commonly known as Loan Modification Fraud/Foreclosure Assistance Fraud.

    Sisy Aragon pled to one misdemeanor count of Penal Code section 32, Accessory After The Fact. Aragon was sentenced to three years of probation and ordered to make restitution in the sum of $27,500. Marquez will be sentenced on November 29, 2012.

    The foreclosure scheme associated with these subjects involves contacting homeowners in distress and offering to save their homes from foreclosure. To do so they require Quit Claim Deeds and Power of Attorney documents.

    They tell the homeowner that for a fee, usually in the thousands of dollars, their homes will be put into a trust. They tell the victim they no longer need to make house payments but instead make payments directly to the trust or company managing the trust. The victims are told that attorneys are aggressively working with the banks to get their homes back. These companies then file documents that potentially cloud title and slow down the foreclosure process and/or file bankruptcies to slow down the process.(1)

    While the foreclosure process is stalled, the victims continue to make payments to these companies and are assured that their homes are actually being rescued. Eventually the lenders successfully foreclose on the property but not before the victims/homeowners have paid thousands of dollars to the fraudulent companies.
For the Santa Barbara District Attorney press release, see People v. Franklin Marquez and Sisy Aragon: Loan Modification/Foreclosure.

(1) For what sounds like a similar racket that may be going on in Florida (but currently being prosecuted by the state attorney general only as a civil - not criminal - matter), see:
  1. Homeowners Lament Handing Over Their Deeds & Cash To Now-Shut Down Outfits That Peddled Programs Purporting To Eliminate Mortgages By Filing 'Quiet Title' Lawsuits
  2. Florida AG Files Civil Suits Tagging So-Called Land Trusts Peddling Schemes Purportedly Designed To Make Underwater Mortgages Disappear,
  3. Mortgage Cancellation Rackets That File Suits To Obtain Default Judgments To Wipe Out Banksters' Liens Gain Steam In Florida,
  4. Title Insurers Red-Flag Homes w/ Quiet Title Suits In Ownership History; Add'l Scrutiny Required As One R/E Operator Peddles Mortgage Elimination Plan.

    Monday, October 15, 2012

    BofA's "Independent" Foreclosure Review Based Largely On Work It Does Itself? Crucial Judgment As To Compensation Entitlement "Only A Matter Of Double Checking" Bankster's Work: Report

    Investigative reporter Paul Kiel writes in ProPublica:
    • Late last year, the country's bank regulators launched a massive program to evaluate millions of foreclosure cases and compensate homeowners who fell victim to the banks' flawed or illegal practices. Regulators dubbed it the "Independent Foreclosure Review" to emphasize that the banks would not be making key decisions about loans they had made or serviced.

      But a raft of evidence — internal Bank of America memos and emails obtained by ProPublica, interviews with two bank staff members who have worked on the review, and little-noticed documents released late last year by a federal banking regulator — throw the independence of the review into serious doubt. Together, they indicate that Bank of America — the financial giant with the largest number of homeowners eligible for the program — is performing much of the work itself.

      The ultimate decision as to whether and how much a homeowner will be compensated is not made by Bank of America, the evidence shows, but is based largely on work that the bank itself performs. One current employee called that crucial judgment "only a matter of double checking" the bank's work.

      Moreover, the bank gets a chance to challenge that key decision before it becomes final — an opportunity not given to homeowners.

    Non-Profit Attorney Group Tags Network Of Suspected Loan Modification Rackets In Civil Suits Saying Homeowners Were Illegally Clipped For Upfont Fees & Failed To Get Positive Results

    The Lawyers' Committee for Civil Rights Under Law recently announced:
    • The Lawyers' Committee for Civil Rights Under Law (Lawyers' Committee) has filed a lawsuit in Riverside County, California against a network of for-profit loan modification companies on behalf of 16 homeowners from California and five other states.

      The suit alleges that defendants defrauded vulnerable homeowners out of tens of thousands of dollars by falsely promising to obtain—for substantial upfront and monthly membership fees—much-needed mortgage modifications on the homeowners’ behalf, but consistently failing to deliver results. Plaintiffs also sought and obtained a temporary restraining order against the defendants enjoining their illegal operations. Attorneys in the San Diego office of Latham & Watkins LLP are providing pro bono counsel on the case.

      In exchange for sizable advance fees of up to $3,700 collected in violation of California law and also, in addition, monthly membership fees required from a number of homeowners, defendants promised to work directly with plaintiffs’ lenders to renegotiate their home loans and to secure lower monthly payments and interest rates, and, in some instances, avoid impending foreclosure.
    • The complaint alleges that the loan modification scam in this case is operated by multiple corporate and individual defendants, managed by principals Michael Wayman and Don Brokaw. The corporate defendants named are Certified Financial Protection Group, LLC, Financial Hope for America, Inc., Safehouse 911, LLC, d/b/a Safehouse Professional Mortgage Restructuring 911, and U.S. Financial Advantage, all of which are California companies.
    • Cox v. Certified Financial Protection Group is the Lawyers’ Committee’s ninth loan modification scam lawsuit and second in California. As part of the Lawyers’ Committee’s work with the Loan Modification Scam Prevention Network (LMSPN), this litigation effort has sought to put an end to the fraudulent and deceptive behavior of so-called loan modification “specialists” in California, Florida, Georgia and New York.

      LMSPN is a broad coalition that also includes representatives from key governmental agencies, such as the Federal Trade Commission, the U.S. Department of Housing and Urban Development (HUD), the U.S. Department of Justice, the U.S. Department of the Treasury, the Federal Bureau of Investigation, and the offices of numerous state Attorneys General.

    Feds' Civil Suit: Outfit Acquired 17,000 Lists Conatining Consumers' Credit Info Prescreened For Mortgage-Delinquent Homeowners, Then Peddled Lists To Loan Modification Operators

    In San Diego, California, Courthouse News Service reports:
    • Two people and their three companies paid Equifax for credit reports on millions of delinquent consumers, then sold the lists to bad actors in the "debt relief" business, the United States says in Federal Court.

      The United States sued Robert M. Bailey Jr., Linda Giordano, and Direct Lending Source, Bailey & Associates Advertising, and Virtual Lending Source.
    • The defendants "purchased over 17,000 prescreened lists containing the consumer report information of millions of consumers from Equifax," according to the complaint. "The lists included, among other things, consumers' credit scores and whether they were 30, 60, or 90 days late on their mortgage payments.

      "Defendants sold these prescreened lists to third parties. For example, defendants sold over 2,400 lists to entities that target consumers in financial distress for loan modification, debt relief and foreclosure relief services. Some of the lists were sold to entities with names such as: 'Save Me From Foreclosure,' 'SOS Modification,' 'Stop Your Lender,' 'Virginia Foreclosure Preventing,' 'Making Homes Affordable, 'Fight Your Credit Co.,' and 'Debt Regret.'"

      Equifax is not a party to the complaint.

      People may not obtain consumer reports without a "permissible purpose," under the Fair Credit Reporting Act.

    Sunday, October 14, 2012

    S. Georgia Feds Pinch Foreclosure Rescue Operator; Found In Arizona, Suspect Faces Charges Of Screwing Over Distressed Homeowners Out Of Their Equity, Investors

    In Augusta, Georgia, the Augusta Chronicle reports:
    • A former Augusta businesswoman has been indicted on federal charges of mail fraud and money laundering in connection with a “foreclosure rescue” business she ran.

      Regina M. Preetorius is scheduled to make her initial trip to U.S. District Court in Augusta next week. She faces 10 counts of mail fraud and three counts of money laundering. The indictment accuses Preetorius of cheating investors out of more than $1.7 million and defrauding homeowners trying to stave off foreclosures.

      The Augusta Chronicle first wrote about Preetorius and her company, SDA & Associates, in August 2008. Her foreclosure rescue business left a wake that included more than 40 foreclosure filings and about a dozen bankruptcies, including her own.

      According to the federal indictment, Preetorius solicited people to invest in SDA, saying the money would be used to buy houses from distressed homeowners, then the houses would be sold at a profit that would guarantee investors a minimum return of 12 percent.

      According to the indictment, Preetorius “misapplied the investors’ money and converted those funds to her own use” and “defrauded a number of distressed homeowners by using their homes without their authorization as collateral for investors’ loans.” The indictment says Preetorius and others ran the scheme from 2004 to 2009.

      People in danger of losing their homes were sought out and convinced that SDA could save them from foreclosure because its staff would work out a payment plan with the mortgage holders and sell the homes for them if they signed aspecial power of attorney,” the indictment said. Preetorius then enticed investors to loan SDA money to purchase and renovate those homes, the indictment said.

      Investors were lured into a false sense of security because they were promised their money would be protected by legally recorded deeds. According to the indictment, they were also promised that the houses had sufficient equity to cover their investments and that each property’s value was assured by proper real estate appraisals. In reality, according to the indictment, there was neither.

      What investors didn’t learn until it was too late was that each home already had a mortgage from a financial institution that stood first in line for any value of the property, leaving their deeds worthless.

      Preetorius previously said she did nothing wrong and was trying to help homeowners. At one of her bankruptcy court hearings, she told investors that she got caught short by the real estate market crash.

      She and her husband, Charles, who also worked at SDA, filed for bankruptcy in 2008, claiming $2.47 million in liabilities and zero assets. Though there were several legal challenges to the bankruptcy petition by people who believed they were cheated out of money and homes, the couple’s debts were discharged by the court.

      According to court documents, the Preetoriuses moved to Arizona in 2009.

    Long Island Woman: Elderly Mom Fell Victim To Sale Leaseback Equity Stripping Scheme, Leaving Both Facing Homelessness

    In Bohemia, New York, WCBS-TV Channel 2 reports:
    • The new wave of mortgage rescue scam operators targets homeowners who are facing possible foreclosure. “They prey on the fact that people are feeling desperate. The goal of these foreclosure rescue scam artists is to make a quick profit from these vulnerable home owners,” Jessica Wollman with Long Island Housing Services told WCBS 880 Long Island Bureau Chief Mike Xirinachs. The organization is warning people to be on alert for scammers.

      Nicole Garafalo told Xirinachs that her elderly mother was a victim. “Stole the ownership of our home and put a mortgage in his name at an inflated value. He drained the equity out of the property and pocketed the money that he had promised to leave in an escrow account,” she said. “It changed our lives forever. We lost our home and we’re now facing homelessness.”

    Suit: Social Service Volunteer Used Forged Deed To Steal Title To Financially Distressed Owner's Home, Then Flipped It For Big Buck$

    In Lakewood, New Jersey, The Associated Press reports:
    • Not so long ago, he was a successful carpenter and handyman, with a lagoon-front home at the Jersey shore, a small fishing boat that was the lifelong dream of his and his wife, and a solid middle class existence.

      Now he lives in a teepee made of plastic tarpaulins atop a plywood platform, deep in muddy, mosquito-infested woods. He has no money and no belt; a length of thin red rope holds his pants up.

      Hardman is suing a volunteer with a homeless assistance program, and a real estate company, accusing them of cheating him out of his home, selling it without giving him any of the proceeds.

      "I worked my ass off all my life; I never stole a thing," he said. "Everything was stolen from me, right down to my underpants. It all went straight to hell."

      When his wife died of cancer, Hardman started drinking to escape the pain, and soon developed a drinking problem. He fell behind on the payments on his Bayville house, and it went into foreclosure.

      While living in temporary housing in 2010, he met two real estate investors and agreed to sell his house to them for $115,000, even though it was worth far more. Soon afterward, he ended up at Tent City, an encampment of homeless people in the woods of Lakewood that township officials have tried for years to shut down.

      Hardman's troubles worsened at Tent City; it was there that he met Wallace Doman III, a Jackson Township man who volunteered as housing director with a social service agency that works to help the homeless. Doman is also a real estate investor who buys distressed properties, fixes them up and re-sells them.

      At issue is an April 6, 2010, deed that purports to transfer title to Hardman's house to a company Doman owns, Platinum Home Management, for the sale price of $50. Hardman swears he never signed it. But in court papers, Doman insists that's exactly what happened, and that he has witnesses to the transaction.

      Doman returned a call seeking comment but hung up as soon as a reporter identified himself. He did not answer subsequent calls.

      In court papers filed in response to the lawsuit, Doman maintains Hardman signed the house over to him of his own free will. Doman also claims he tried to end the deal and sign the house back to Hardman once he found out that Hardman had already signed a contract to sell the house to the two real estate investors, but that Hardman refused to take it back.

      The house was sold for $215,000 to the two investors, who are not named as defendants in the lawsuit. They later sold it to a third party for $355,400. Hardman and his lawyer, Benjamin Dash, say not a penny of that went to Hardman.

    Suit: Mortgage Holder Fails To Remit Property Tax Escrow Payments To County, Leaving Homeowner Facing Tax Lien Foreclosure

    In Chicago, Illinois, the Post-Tribune reports:
    • An East Chicago woman claims her mortgage company never paid her property taxes, sending her house into a tax sale and furthering her bankruptcy troubles.

      Arlene Nunez’s estate and Paul Chael, a bankruptcy trustee, filed a lawsuit Tuesday in U.S. District Court in Hammond against Juan Martinez and Guadalupe Zuniga-Martinez, the owners of the now-defunct JNRC Capital Investments, an Illinois firm. The company, based in Plainfield, Ill., was involuntarily dissolved in 2010.

      The suit claims that JNRC never paid her property taxes and failed to give her a detailed accounting of what happened to her monthly payments, including money that was supposed to be used to pay the property taxes.

      Nunez bought her home in the 4500 block of Baring Avenue in 2005. The loan was transferred about a year later to JNRC, and, the suit claims, Nunez continued to pay the money meant for taxes. The company never sent those payments to Lake County, however. That led Nunez’s house to be placed on a tax sale list, which in turn caused Nunez to file for bankruptcy, according to the suit.

      Nunez had filed for bankruptcy in the past, according to court records. She filed again in 2007, and JNRC claimed Nunez owed the company about $2,856.

      Nunez’s lawsuit says she asked the company for a breakdown of her payment history, the claimed arrears and foreclosure fees, but the company never sent the information.

      Nunez’s attorney Adam Sedia said federal law dictates that banks and financing companies have to share information with their customers about their mortgages. “It’s all about openness,” Sedia said. “The financing entity has to let you know what you’ve paid, where it’s gone and how much you owe.” He added that Nunez had been paying her taxes as part of her Chapter 13 bankruptcy case.

      She is asking for treble or punitive damages and attorney fees.