Saturday, July 25, 2015

Nevada Landlord Who Placed Ads Indicating Preference For Adult Tenants, & Who Refused To Rent Single Family Home To Family Because They Had Young Kids Gets Tagged With Fair Housing/Discrimination Suit By Civil Rights Feds

From the U.S. Department of Justice (Washington, D.C.):
  • The Justice Department [] filed a lawsuit against the owners of rental properties in Carson City, Nevada, alleging violations of the Fair Housing Act.

    he lawsuit, filed in the U.S. District Court for the District of Nevada, charges that Betty Brinson and Hughston Brinson, the owners of a single-family rental home, discriminated against families with children by placing a series of advertisements in the local newspaper indicating a preference for adult tenants, and by refusing to rent the home to a family with three children because they did not want children living at the property.

    The suit also alleges that Ms. Brinson placed discriminatory advertisements for another property she owns – a 36-unit apartment complex – indicating a preference for adult tenants.

    The lawsuit arose as a result of a complaint filed with the Department of Housing and Urban Development (HUD) by the family who alleged they were refused the opportunity to rent the single-family home because they were a family with children. After HUD investigated the complaint, it issued a charge of discrimination and the matter was referred to the Justice Department.

    The lawsuit seeks an order prohibiting the defendants from engaging in future unlawful discrimination. It also seeks the payment of a civil penalty and monetary damages for individuals who were refused the opportunity to rent because their children would be living with them.
Source: Justice Department Sues Nevada Housing Provider for Discriminating Against Families with Children.

For the lawsuit (including the alleged text of the newspaper ads that got these landlords in hot water), see USA v. Brinson.

Civil Rights Feds, Fair Housing Testers 'Sting' Illinois Mobile Home Park Operator Out Of $250K+ In Settlement Of Suit Accusing Landlord Of Discrimination Against Blacks, Families w/ Kids

From the U.S. Department of Justice (Washington, D.C.):
  • The Justice Department [] announced an agreement with the owners and operators of Four Seasons Estates Mobile Home Park in Effingham, Illinois, to settle allegations of race and familial status discrimination. Under the consent order, which must still be approved by the U.S. District Court of the Southern District of Illinois, the defendants must pay $217,500 to victims of discrimination, who intervened in the lawsuit, to account for the harm they suffered and their attorneys’ fees, and an additional $34,000 to the government as a civil penalty.

    The lawsuit alleged that the mobile home park’s manager, Barbara Crubaugh, refused to let an African-American individual be added as a resident at the park when he moved in with his white girlfriend and her uncle. The lawsuit also alleged that while the African-American individual was staying at the mobile home park, he was subjected to harassment by the manager’s son, David Crubaugh. The family moved out after the park threatened them with eviction if the African-American individual did not move out. They contacted HOPE Fair Housing Center, an organization in Illinois that advocates for equal opportunity in housing, who in turn contacted the Department of Housing and Urban Development (HUD) and the Justice Department. HUD referred the complaints to the Justice Department for further investigation as a potential pattern or practice of discrimination.

    The lawsuit also alleged discrimination on the basis of race based on fair housing testing conducted by the Department of Justice’s Fair Housing Testing Program. The testing revealed that Barbara Crubaugh treated prospective residents differently based on their race by, for example, requiring African-American testers to fill out applications while not requiring white testers to do so, asking African-American testers if they had felonies but not asking the same of white testers, informing African-American testers that she would have to inspect their mobile home while not so informing white testers and quoting higher move-in costs to African-American testers.

    Until this lawsuit was filed, there had been no African-American residents at the mobile home park since at least 2007, when Barbara Crubaugh became manager.

    Additionally, the lawsuit alleged, and the defendants admitted, that they discriminated on the basis of familial status (having children under the age of 18) by prohibiting families with children from living on one of the four rows of lots at the mobile home park.

Developer/Landlord Accused Of Building 23 Apartment Complexes w/ Features Inaccessible To People w/ Disabilities Agrees To Make Substantial Retrofits, Build New Complex w/ 100 Accessible Units, Pay $205K Buy-Off To Settle Discrimination Suit Brought By Civil Rights Feds

From the U.S. Department of Justice (Washington, D.C.):
  • The Justice Department announced [] that developer Biafora’s Inc. (Biafora) and several affiliated companies have agreed to pay $205,000 and make substantial retrofits to remove accessibility barriers at multifamily apartment complexes. This agreement resolves the United States’ claims that Biafora violated the Fair Housing Act and the Americans with Disabilities Act by building 23 apartment complexes in West Virginia and Pennsylvania with a variety of features that made them inaccessible to persons with disabilities.

    Under the terms of the agreement, which must still be approved by the U.S. District Court for the Northern District of West Virginia, Biafora and the other defendants must take extensive actions to make the complexes accessible to persons with disabilities, including wheelchair users.

    These corrective actions include replacing excessively sloped portions of sidewalks, installing properly sloped curb walkways to allow persons with disabilities to access units from sidewalks and parking areas, replacing cabinets in bathrooms and kitchens to provide sufficient room for wheelchair users, widening doorways and reducing door threshold heights.

    The settlement also requires the defendants to construct a new apartment complex in Morgantown, West Virginia, with 100 accessible units. The defendants will pay $180,000 to establish a settlement fund for the purpose of compensating individuals with disabilities who have been impacted by the accessibility violations and $25,000 as a civil penalty.

Friday, July 24, 2015

Consumer Feds Score $27.7M Judgment Against 'Boiler Room' Loan Modification Law Office Run By Non-Attorney For Peddling Bogus Mass Joinder Lawsuits; Lawyer Who Acted As Nothing More Than "Just A Name On A Door" Agrees To Fork Over Law License, Slamming Door Shut On 30+ Year Career

In West Palm Beach, Florida, WKMG-TV Channel 6 (Orlando) reports:
  • A federal judge has awarded the U.S. Consumer Financial Protection Bureau and the Florida attorney general a $27.7 million judgment against a law firm accused of scamming homeowners trying to fight foreclosure.

    The agencies sued the Hoffman Law Group and its operators last year after dozens of the law firm's clients came forward claiming they were misled about loan modification services.

    Federal investigators now believe nearly 2,000 homeowners may have been defrauded by the firm, records show.

    A judge froze the firm's assets in July 2014. The $655,737 remaining after administrative costs, along with the proceeds from the auction of jewelry, watches and electronics, will be used to reimburse some of the fraud victims, according to the judgment.

    The court order also forbids attorney Marc Hoffman and his business partners, Michael Harper and Benn Wilcox, from engaging in any mortgage or debt-relief business.

    "These companies preyed on vulnerable consumers who were trying to save their homes from foreclosure," CFPD Director Richard Cordray said in a prepared statement. "The false promises made by these companies lured struggling homeowners into scams that led to greater financial hardship."

    When Alvin Carr purchased a $276,000 home in Apopka six years ago, the retired civil servant thought he would live there a long time.

    "This is what my wife always dreamed of," said Carr. "It was happiness."

    But the couple soon fell behind on their mortgage payments, prompting their mortgage lender, Wells Fargo, to begin foreclosure proceedings.

    The Carrs eventually sought help from the Hoffman Law Group, a North Palm Beach firm that specializes in "holding mortgage companies accountable," according to the firm's website.

    "The understanding we had was that they were going to file all the necessary papers through the courts to prolong the foreclosure until we could get things right," said Kathy Carr. "They were going to save the home. They were going to stop the foreclosure."

    Every month for six months, Hoffman Law Group deducted $1,200 from the Carrs' checking account.

    On May 5, the law firm took out another $600. That very same day, Wells Fargo sold the Carrs' home at auction to an investor.

    "I was shocked. And when I called the attorney, they acted like they weren't aware of it," said Alvin Carr, who claims he had no idea the foreclosure had been finalized until the new owner of the house knocked on his front door.

    Within weeks, the couple were forced to move into a small motel room.

    No attorneys from the Hoffman Law Group intervened in the Carrs' foreclosure case, according to Orange County Circuit Court records. That's likely because the law firm’s retainer agreement does not promise to get involved with the foreclosure process.

    Instead, the Hoffman Law Group files separate lawsuits against mortgage lenders in federal court. According to the company's website, "Our firm will demand a new mortgage loan to reflect positive equity, a lower fixed interest rate, a cash settlement for punitive damages, a reinstatement of credit rating, and a waiver of all delinquent payments/penalties/interest and other economic benefits for all plaintiffs."

    "I believed it. And I communicated that to the clients. And they believed it. It sounded legitimate," said Michele Stephens, a lawyer who moved from Kentucky to Florida in 2013 to take a job at the Hoffman Law Group as a case management attorney.

    Stephens said she quit less than a year later, believing the law firm was scamming clients

    "My heart bleeds for them," said Stephens, who began to cry as she described clients on the verge of losing their homes while giving what little money they had to Hoffman Law Group. "I prayed for clients every night when I came home."

    According to Stephens, salespeople who work in a "boiler room" call center located in the law firm's North Palm Beach office building sign up clients and collect money; typically a $6,000 retainer fee followed by a $495 monthly charge.

    "I know at one point there were 1,500 active clients," said Stephens.

    Some of those clients' names would eventually end up on federal lawsuits alongside the names of numerous other plaintiffs on what are known as "mass joinder" lawsuits. That type of lawsuit is different from a class-action case because all plaintiffs must pay legal fees in advance.

    The Federal Trade Commission cautions homeowners against taking part in mass joinder lawsuits for mortgage issues. The consumer protection agency warns that clients are often left in even worse financial shape.

    "It's a scam. It's a money scam," said Stephens. "I don't know how people can sleep at night knowing that you're scamming them. And these people and their little kids are going to be out on the streets."

    Records show one of Hoffman Law's clients was successful in saving their home. Four months after Nicholas D'Angelis was added to a mass joinder lawsuit, the New York man was dropped from the case because the bank gave him a permanent loan modification. However, D'Angelis's wife told Local 6 the Hoffman Law Group had little to do with their victory.

    "They got me in touch with the right people, but I had to do all the paperwork myself," said Ruth D'Angelis, who believes she could have arranged the mortgage modification without paying around $10,000 for an attorney. "I probably wouldn't use them again."

    Attorney Marc Hoffman, who opened the West Palm Beach firm in 2012, agreed to give up his law license as part of the judgment against him. He had been practicing in Florida since 1974.

    "Mr. Hoffman was just a name on a door," said Stephens.

    The former employee claims the law firm was actually run by Michael Harper, who is not licensed to practice law in Florida. State records show Harper managed a marketing company located in the same West Palm Beach office building as the law firm.

    Days after Alvin Carr contacted the Florida attorney general's office last year to complain about Hoffman, the law firm mailed him a check for $3,000.

    Carr, who has since moved into a rental home in Apopka, claims he still wasted nearly $5,000 in the hopes that Hoffman Law Group would be able to help him. Besides losing his home to foreclosure, Carr's name was never added to one of Hoffman's mass joinder lawsuits during the six months he was paying the firm.
Source: Government wins $27.7 million judgment against law firm (Lawyer ordered to reimburse victims of mortgage scam).

Federal Jury Convicts Revenge-Seeking Sovereign Citizen For Filing Over $6 Million In Retaliatory Liens Against Prosecutor, Judge For Their Roles In Prior Criminal Case Involving Defendant

From the Office of the U.S. Attorney (San Antonio, Texas):
  • In Houston [], a federal jury convicted 44–year-old Tyrone Eugene Jordan, a sovereign citizen residing in Houston, for retaliating against a federal judge and prosecutor by making false claims announced Acting United States Attorney Richard L. Durbin, Jr., and Federal Bureau of Investigation (FBI) Special Agent in Charge Perrye K. Turner, Houston Division.

    The jury convicted Jordan of three counts of retaliation against a federal officer or employee by false claim. Evidence and trial testimony revealed that in October 2014, Jordan filed a fraudulent lien--a Uniform Commercial Code (UCC) Financial Statement--with the Texas Secretary of State which claimed that a federal prosecutor in the Southern District of Texas owed the defendant $6,534,500.

    Furthermore, in January 2015, the defendant knowingly filed two separate fraudulent documents (Affidavit of Obligation Commercial Lien) with the Harris County Clerk’s Office—Real Property Department claiming that the federal prosecutor mentioned above and a U.S. District Judge in the Southern District of Texas were Lien Debtors to the defendant. Testimony also revealed that the defendant filed the fraudulent documents against the victims in retaliation for their roles as prosecutor and sitting judge in a prior criminal case involving the defendant.

    “Jordan’s sole purpose was to harass these public servants for having done their jobs. Such malicious harassment of public officials is intolerable,” stated Acting United States Attorney Richard L. Durbin, Jr.

    In April 2010, Jordan was convicted following a jury trial of conspiracy to commit money laundering and conspiracy to commit alien smuggling. He was subsequently sentenced to 63 months in federal prison followed by three years of supervised release.

    As a result of [the] verdict, Jordan faces a maximum ten years in federal prison for each charge.

Thursday, July 23, 2015

Pennsylvania Woman Gets Six Months To Five Years For Abusing POA Over Unwitting Octogenarian; Fallout Includes $64K+ Ripoff, Loss Of Victim's Home To Foreclosure

In Clearfield County, Pennsylvania, Gant Daily reports:
  • A Clearfield woman accused of taking more than $64,000 from an elderly woman while serving as her power of attorney pleaded guilty during plea and sentencing court.

    Kathy Ann Martin, 57, 301 Ogden Ave., Clearfield, pleaded guilty to 15 counts of theft by unlawful taking and was sentenced to serve six months to five years in state prison.

    Originally she was charged with 763 counts each of theft by unlawful taking, theft by deception, receiving stolen property and 549 counts of other reason access device is unauthorized by user. She must pay $64,668.18 in restitution.

    Prior to sentencing, attorney Chris Pentz stated that it was “not a plan” for her to take these funds and commented that sometimes people just step over the line. Now she has been snapped back to reality and is ready to accept her punishment, he said. He noted that the recommended sentence was six times the sentencing range for someone with no criminal record.

    Judge Fredric J. Ammerman responded that the 89-year-old victim lost her home due to foreclosure and this case was not just a mishandling of funds.

    The victim “asked for money for glasses and special shoes and was told she did not have the money for that,” Ammerman said. This was while Martin was using the victim’s money for gambling and taking trips.

    No restitution has yet been made and Ammerman noted that the victim will not get her money back in her lifetime.

    He said the guideline sentencing in this case did not match the crime. When he started sounding as if he were going to send her to state prison, Pentz asked to withdraw the plea, but Ammerman refused.

    Martin apologized and as she cried, admitted she made a mistake.

    The charges stem from her actions while serving as power of attorney for the victim from March 29, 2001 to Oct. 1, 2013.

S. California Man Coughs Up $30K In Restitution While Copping Guilty Plea To Felonies For Running Phony Short Sale Racket, Bilking Distressed Homeowners Out Of Thousand$ In Illegal Upfront Fees

From the Office of the Ventura County, California District Attorney:
  • District Attorney Gregory D. Totten announced [] that Orange County resident Sergio Sanchez Santibanez (DOB 9/17/81) has pleaded guilty to felony grand theft and felony foreclosure consultant fraud. The Charges are the result of an investigation conducted by the District Attorney' Real Estate Fraud Unit.

    The charges arose from a fraudulent short sale and foreclosure rescue program called Foreclosure Legal Services (FLS) based in the city of Orange. Santibanez lured struggling homeowners with false promises to save their homes from foreclosure. FLS promised to purchase distressed properties for less than what was owed (a short sale) and to later sell the properties back to the victims at a reduced price. Once lured in, victims were charged thousands of dollars in illegal up-front fees but received no actual services.

    The District Attorney's Fraud Unit secured $30,000 in victim restitution from Santibanez at the time of his plea. At the time of sentencing, he will be ordered to pay any outstanding restitution.

Wednesday, July 22, 2015

Two Aging Nuns Take On L.A. Catholic Head In Wrestling Contest Over Title, Possession, Control Over $15 Million, 8-Acre Mediterranean Villa-Style Hilltop Convent; Sisters Say Allowing Archdiocese To Sell Retreat To Pop Star "Violate[s] Our Canonical Vows To The Catholic Church!"

In Los Angeles, California, The New York Times reports:
  • Poverty, chastity, obedience — and they are still barring the door to Katy Perry.

    In a pair of legal filings on Friday, two nuns who object to Ms. Perry’s proposed purchase of their order’s convent on eight acres here disclosed an email describing any sale to the saucy pop singer as a breach of their sacred vows.

    “In selling to Katy Perry, we feel we are being forced to violate our canonical vows to the Catholic Church,” Sister Catherine Rose Holzman wrote to an official of the Archdiocese of Los Angeles on May 22, as competing deals for the property, valued at about $15 million, were being considered.

    Whether the Los Feliz-area Mediterranean villa and acreage go to Ms. Perry or to her rival, the developer Dana Hollister, may depend on a decision by Judge Robert H. O’Brien of Superior Court in Los Angeles County. Judge O’Brien is expected to consider arguments in a case filed against Ms. Hollister by José H. Gomez, the Roman Catholic archbishop of Los Angeles, at a hearing on July 30.

    Friday’s filings by Sister Catherine Rose, 86, and Sister Rita Callanan, 77, include a memorandum opposing the archbishop, and declarations peppered with intimate details about church dealings. They add heat to a dispute that is already complicated by a possible clash between canon and civil law, and the decision by the nuns to reveal their distaste for Ms. Perry in public interviews late last month.

    The court papers include claims by several of five surviving nuns in the Sisters of the Most Holy and Immaculate Heart of the Blessed Virgin Mary that the archdiocese is betraying them and bullying them into supporting a sale other than their preferred transaction with Ms. Hollister.

    That deal would pay about $10 million for the convent, but with little cash up front, while giving the archdiocese more than $5 million to buy out its long-term lease on a retreat house for priests that also occupies the hillside plot on Waverly Drive. Under its terms, the nuns contend in their filings, they would directly control the proceeds, rather than having them administered by officials of the archdiocese.


    In a deposition last Monday, Ms. Hollister acknowledged that she had received a deed from the sisters in return for a $100,000 cash payment, more than half of which they used to cover a transfer tax, and a $9.9 million note. The note, she agreed, did not require her to start making $300,000 annually accruing interest payments until 2018. But she said she would honor oral commitments to begin paying sooner.

    In any case, Friday’s filings serve as a declaration of independence by women for whom a vow of obedience stops short of a sale to Ms. Perry.

Brooklyn DA Targets 2,700 Unit NYC Co-Op In Probe Of Possible Financial Hanky Panky As Investigators Parade Into/Out Of Premises, Hauling Away Files, Computers, Other Evidence

In East Williamsburg, Brooklyn, DNAinfo reports:
  • The board of one of the city's largest middle-income housing co-ops, Lindsay Park, is being investigated by the Brooklyn District Attorney's office, according to locals and a law enforcement source.

    Authorities showed up at the more than 2,700-unit complex after 10 a.m. on Thursday, hauling away files and computers from apartments, the chief superintendent's office and the board's office, according to Lindsay Park residents.

    The action was part of an ongoing investigation against Lindsay Park's board, the law enforcement source said.

    Carlos Estronza, who used to work as a security guard there and whose fiancee lives in the complex, said he saw at least six badge-wearing officials in the office of Marvin Daniel, Lindsay Park's chief superintendent.

    The men identified themselves as being there from the District Attorney's office and said they were investigating the board for "mistreated money" and potential corruption, Estronza added.

    The DA's office did not have further information.

    On Friday morning, a moving truck was also hauling away filing cabinets from the housing complex's office at 202 Union Ave.

    Cora Austin, the president of Lindsay Park's board, denied that she was being investigated and said she didn't know anything about a probe against the board. "They are all allegations," she said.

    She also claimed that the co-op's shareholders who have been speaking to press are "disgruntled" and "the most hated people ever" at Lindsay Park, before referring a DNAinfo reporter to the board's attorney.

    The attorney did not immediately respond to a request for comment.

    Lindsay Park, a Mitchell Lama housing development near Boerum Street and Lorimer Street, is managed by the board and supervised by the Department of Housing Development and Preservation. It receives tax exemptions to maintain affordability.

    The housing complex has recently been mired in conflict, as hundreds of shareholders have repeatedly and publicly complained about the board's management.

    Last year, some 900 residents signed a petition asking the board to be more open about its election policies, accusing Austin of using tactics that would result in her reelection as president. The campaign for fairer elections earned the support by Councilman Antonio Reynoso.

    Just this month, a group called Shareholders for the Betterment of Lindsay Park protested that the board wasn't being open about a $30 million loan for which it was applying.

    "Select shareholders were invited to participate at this meeting but then were promptly disinvited when they requested a copy of the loan application so shareholders could be better informed to participate at this meeting," a flier for the protest said. "DO NOT LET THEM FINALIZE THIS LOAN WITHOUT THE BOARD HEARING FROM US."

    Many Lindsay Park residents have long been suspicious of how the board manages money.

    "Ever since Cora [Austin] has been board president, she's kept everything secluded," said resident Carmen Padilla, who's a member of the shareholders group. "We don't know anything until after the fact."

Condo Manager Facing Civil Lawsuit For Allegedly Pilfering $225K+ From HOA's Till Takes To The Road, Goes On Lam As Court Now Issues Grand Theft Arrest Warrant

In Hollywood, Florida. WPLG-TV Channel 10 reports:
  • Kristin Glansen used to run condo associations – now she's running from the law.

    Hollywood police have put out a grand theft warrant for the arrest of the 35-year-old condo manager, who allegedly embezzled more than $225,000 from The Waterway condominium on Hollywood Beach over a two year period.

    A police spokesman said her whereabouts are unknown but that detectives are following "investigative leads" in an attempt to find her.

    "I'm hoping they catch her, but it sounds like she's gotten a pretty good jump on things," said Waterway resident Dan Brucki. "If I was her, I'd probably be out of the country by now, but here's hoping they catch her."

    Police said Glansen created a bogus company called Willis Homes, which has a very similar name to the condo's actual insurance company, Willis of Florida. She then began cutting big check after big check – one of them as high $47,000 – to the fake company, according to a civil lawsuit that has been filed in the case.

    "The prior manager here walked away with a lot of money wrongfully," said condo attorney Eric Glazer, who filed the complaint. "She cut the checks basically to Willis or Willis Homes and put it in her very own bank account, making it appear as if insurance bills were getting paid."

    Glazer said a big mistake made by the condo board was giving Glansen the power to sign checks. Along with a former board president, Glansen signed each of the checks in question.

    Glazer said that now residents must hope not only that they win a judgment against Glansen, but hope that she hasn't spent all of the money and they can collect on their alleged losses.

    Anyone with information on Glansen's whereabouts should contact the Hollywood Police Department at 954-967-4411.
Source: Police search for Hollywood Beach condo manager (Kristin Glansen allegedly embezzled more than $200,000 from condo).

Tuesday, July 21, 2015

California Appeals Court: Homeowners Incurring Legal Fees When Scoring Preliminary Injunctions In "Dual Tracking" Foreclosure Suits Are Entitled To Stick Bankster With Tab

From the Money & Dirt blog (California):
  • Cases featuring “dual tracking” claims under California’s Homeowner Bill of Rights seem to be all the rage these days.

    [An earlier] post, Tender Not Required for a “Dual Tracking” Claim, highlighted a recent Court of Appeal opinion holding that a borrower need not tender the loan amount in order to allege a dual tracking claim — a claim based on the lender foreclosing while negotiating a modification with the borrower.

    Another recent decision illustrates why lenders should not want to be on the wrong side of a dual tracking claim: the dreaded award of attorney fees. In Monterossa v. Superior Court, the California Court of Appeal (Third District in Sacramento) held that a borrower who obtains a preliminary injunction at the outset of the case can recover attorney fees against the lender.(1)
For more, including a discussion of the facts of the case, and an analysis of the applicable California law, see Lenders Face Attorney Fee Liability for Preliminary Injunction Stopping “Dual Tracking”.

For the court ruling, see Monterossa v. Superior Court, No. C077683 (Cal. App. 3d Dist. June 12. 2015).

(1) From the court ruling:
  • In 2012, new legislation imposed specific limitations regarding the nonjudicial foreclosure of owner-occupied residential real property.[1] Among other things, the statutory scheme provides that a court may award reasonable attorney fees and costs to the "prevailing borrower," indicating: "A borrower shall be deemed to have prevailed for purposes of this subdivision if the borrower obtained injunctive relief or was awarded damages pursuant to this section." (Civ. Code, § 2924.12, subd. (i).)[2]

    In this case, the respondent superior court concluded the petitioners were not prevailing borrowers because they obtained only a preliminary, rather than permanent, injunction. The court erred. We hold that a borrower who obtains a preliminary injunction enjoining, pursuant to section 2924.12, the trustee's sale of his or her home is a "prevailing borrower" within the meaning of the statute.

Slow-Moving Litigation, Risk Of Case Dismissal, Failure To Promptly Refile, Statute Of Limitations Considerations Turn Foreclosing A Mortgage Into A Real Crapshoot For Some Sloppy Banksters

In Sound Beach, Long Island, Newsday reports:
  • A small but closely watched number of Long Island homeowners are asking judges to dismiss foreclosure cases against them, saying lenders missed New York's six-year deadline to file such lawsuits.

    Already, a judge has thrown out a Sound Beach couple's foreclosure case because the lender took too long to file its second lawsuit, after the first one was dismissed. The case has drawn intense scrutiny from attorneys who represent homeowners and lenders. In interviews with Newsday, attorneys said more homeowners have filed court papers seeking the same result.

    As Long Island struggles to emerge from its yearslong foreclosure crisis, the deadline could mean a yet-to-be-determined number of Long Island homeowners win their foreclosure cases and stay in their homes.

    It also could give some homeowners leverage to negotiate more affordable loan terms.

    In a typical scenario, a lender first sues to take back a home in 2007. Years later, a judge throws the case out because of problems with the lawsuit. The lender eventually files a new case. But by then, six years have passed -- and the statute of limitations may have expired.

    The deadline was never much of an issue before the 2007-2009 recession, since foreclosure cases rarely encountered yearslong delays, state Supreme Court Justice Dana Winslow in Nassau County said in an interview.

    Three to four years ago, when judges began warning lenders about the statute of limitations, the lenders "looked at it as so far in the future that they didn't need to be reactive," Winslow said.


    With New York's foreclosure process now taking an average of four years, the looming deadline raises fundamental questions about what is fair -- to homeowners and to lenders -- and about the proper resolution of long-drawn-out foreclosure cases.

    "There's a perception, which is false, that people are looking for free houses, and that is not true," said Ivan Young of the Young Law Group in Bohemia, who represented Fred and Theresa Tovar, the Sound Beach couple who won their foreclosure case in December.

    Lender plans to appeal

    The Tovars' mortgage company, Beneficial Homeowner Service Corp., an affiliate of HSBC, has filed court papers indicating it plans to appeal. The lender still has a lien on the home. The Tovars and Beneficial both declined to comment.

    "The bank is forcing [homeowners] into a situation where they have no choice but to raise the statute of limitations defense, because the bank has consistently refused to offer a loan modification," Young said.

    The Tovars cannot sell the property without paying off the lender's lien on their home. They could ask a judge to throw out the lien, but it is unclear how the case would be decided. "We are venturing into uncharted waters here regarding the statute of limitations defense," Young said..
For the rest of the story, see LIers hope six-year deadline will block foreclosures.

Monday, July 20, 2015

121 Victims Of San Diego-Area Sale-Leaseback/Land Grant Racket That Falsely Promised To Help Homeowners Dodge Foreclosure To Pocket $820K In Restitution

In San Diego, California, The Press Enterprise reports:
  • Restitution checks that will collectively total $820,000 will be mailed to 121 victims, among them some from the Inland area, of a foreclosure avoidance scheme that put William Hutchings(1) and nine others behind bars, San Diego County prosecutors say.

    The case, prosecuted in 2009, had Hutchings and others convincing people who wanted to avoid foreclosure to turn over grant deeds to their homes in Riverside and San Diego counties. Most of the victims spoke little English.

    As part of the scheme, the homeowners rented back their homes from Hutchings or paid $10,000 in lease-back or land grant fees. Most lost their homes anyway. The $10,000 fee and rent money rarely, if ever, made its way to pay victims’ mortgages, prosecutors say.

    Only nine of the 121 victims in the felony theft case were able to retain their homes, prosecutors say.
For more, see Restitution for Inland foreclosure fraud victims (San Diego County to distribute checks to 121 scammed victims in real estate scheme; some victims are from Riverside County, lead prosecutor says).

(1) See California Appeals Court Affirms 46-Year Prison Sentence For Sale Leaseback Peddler Who Ran Purported Federal Land Grant Home-Saving Racket.

Recently-Convicted Scammer Bagged For Hijacking Possession Of Home & Renting It Out Now Suspected In Rent-To-Own Racket; Victim Says He Began Remodeling Home After Paying It Off Only To Discover He May Not Have Clean Title

In Chicago, Illinois, WLS-TV Channel 7 reports:
  • He was convicted of hijacking a home - and now the I-Team has learned the same man is being accused in another real estate scheme known as "deed shifting."

    It involves a program in which people can rent-to-own a home - a less expensive way to achieve the American Dream. But one homeowner discovered that a house he paid for was never really his.

    Lauren Lake takes pride in his home on the city's far South Side. He started remodeling it after paying it off in May. "I can't even explain to you the joy of owning a home because I had been homeless before," Lake said.

    So imagine Lake's devastation when he learned the home isn't his. "My dream could have been a nightmare," he said.

    The Cook County Recorder of Deeds says Lake is a victim of what's known as "deed shifting." Recorder Karen Yarbrough and her fraud investigators say Ralph Schrader gave Lake a deed after completing his rent-to-own program.


     The recorder says Schrader shifted the deed from his personal name to his company "Chicagoland Rent to Own Homes" before Lake could record his deed, making Lake's worthless and giving Schrader the ability to sell the home again or take a mortgage out on the property.

    "It is individuals who are many ways the most vulnerable individuals who cannot go to a traditional bank and get the financing, are looking to take advantage of what Schrader is offering," said Mario Reed, Cook County Recorder of Deeds Office.

    In May, Schrader slammed the door on the I-Team when asked about a separate case - a guilty plea to a charge of theft by deception.

    The Cook County State's Attorney said he broke into Joanne Simmons' vacant home last September, changed the locks and falsely posed as a landlord. The renters refused to leave and Simmons lost her home to foreclosure.

    The Cook County Recorder of Deeds says Schrader owns at least 20 other properties, many being offered as rent-to-own homes.

    "These properties are vacant and, in some cases, I don't think the banks even want them, the banks don't even want them at all," Yarbrough said. "And sometimes they haven't even gone through, they are called zombie properties, in between foreclosure."

    Schrader says there is nothing illegal about his business, but he did admit that he owes property taxes.

    "Based on public records we have found, with 20 properties, he owes over $40,000 in property taxes," Reed said.

    Fraud investigators say their priority now is to convince Schrader to come in to the Cook County Recorder of Deeds Office to properly put Lake's home in his name.

    "To take a poor person's , hard-working person's dream, their money, and have no regard for that - you are a very heartless person," Lake said.

    The Cook County Recorder of Deeds says it's handed over evidence on Schrader to the Cook County State's Attorney.

    If you're buying a home directly through an owner, you should hire an attorney and quickly register your deed with the Cook County Recorder of Deeds. You can also check their website to verify the owner of a property and sign up for fraud alerts.

    The office says it's easier to steal a home than it is to steal a car.
For the story, see Deed shifting: Man convicted in real estate scheme faces new allegations.

Arizona Real Estate Operator Gets Six Years In $3.5M+ Contract For Deed Ripoff That Duped Nearly 40 Unwitting Victims; Scammer Targeted Unsophisticated Homebuyers, Pocketing Monthly Installments While Failing To Disclose Or Make Payments On Pre-Existing Mortgages, Or Provide Title Insurance Policies

From the Office of the Arizona Attorney General:
  • The Arizona Attorney General’s Office recently reached a plea agreement with Zavier Kay Hafiz, after an FBI-led investigation revealed his company fraudulently misled nearly forty victims to whom he sold real estate throughout Arizona. Mr. Hafiz, while doing business as ZK Group, plead guilty on May 7, 2015 to Fraudulent Schemes and Artifices and was sentenced to six years in prison, followed by another seven years of probation. In addition, he was ordered to pay $3,554,838.40 in restitution.

    Hafiz’s guilty plea was a result of a fraudulent house sale in early 2012. While preying on “generally unsophisticated real estate buyers”, Hafiz sold a house to and provided the loan for the purchase to a Phoenix victim. Throughout his negotiations with the victim, Hafiz fraudulently represented that title to the house was good, and clear from any other claims.

    The truth however, was that Hafiz had already taken out a mortgage from a hard money lender on most, if not all, of the properties he sold
    , including this one. Hafiz perpetuated this cycle of fraudulent misrepresentation repeatedly in ZK Group’s business dealings. (1)

    While his victim consistently made payments on his loan to Hafiz, Hafiz himself failed to make payments to the mortgage holder on the property. After the default, the mortgage holder began foreclosure proceedings against the victim and his house. It was only when Hafiz learned of the FBI investigation that he paid the remaining balance to the mortgage holder, stopping the foreclosure proceedings. As a way to settle with the victim, he also then transferred title of the house to the victim, trying to erase the previous loan.

    Hafiz’s guilty plea followed an in-depth FBI investigations going back several years. Following the investigation, a Grand Jury indicted Hafiz on four separate charges related to the fraud. The Attorney General’s Office prosecuted Hafiz on all four counts related to just this one victim. As part of the plea agreement, the Attorney General’s Office agreed to drop the three less serious charges in exchange for his guilty plea to the most serious fraud charge.(2)
Source: Attorney General's Office Reaches Plea Agreement with Serial Fraudulent Real Estate Investor.

Go here for:
Go here for earlier stories on screwed over homebuyers who have been peddled properties through the use of the predatory instruments of choice for real estate scammers:
(1) According to page 5 of the plea agreement, a key element in this racket, in addition to the targeting of generally unsophisticated homebuyers, was the conducting of sale closings without the use of a traditional title company, and without the issuance of title insurance policies to protect the buyers. In effect, the unwitting victims were left buying a pig in a poke.

(2) According to the indictment, the other three charges were forgery, theft by extortion, and residential mortgage fraud. The guilty plea related to the charge of Fraudulent Schemes and Artifices.

Sunday, July 19, 2015

Pair Plead Guilty To Scam That Fleeced Hopeful Homebuyers Out Of $900K+ Falsely Promised To Be Used As Downpayment Money; Suspects Pocketed The Cash, Failed To Buy The Homes

From the Office of the Nevada Attorney General:
  • Nevada Attorney General Adam Paul Laxalt announced that Orlando Vera, 55, of Whittier, CA, pleaded guilty to one felony charge of mortgage lending fraud, a category “B” felony. His plea was a result of his role in a scheme to cheat several hopeful homebuyers out of $904,861. A month earlier, Vera’s co-defendant, Juan Robles, 35, of Las Vegas, pleaded guilty to a gross misdemeanor for the same scam. Their crimes were committed between November 2012 and January 2014.

    Vera schemed to defraud potential Nevada homebuyers by promising to purchase houses using their substantial savings as down payments, but ultimately failed to buy the houses. [...] A third co-defendant, Christian Delgado, 39, of Las Vegas, will stand trial on April 4, 2016 for his role in the scheme.

Bankster To Pay Over $200 Million, Permanently Halt Squeeze On 500K+ Consumers' Accounts In Settlement Of Charges That It Peddled 'Zombie Debts' To Collection Scavengers & Robo-Signed Related Documents

The Office of the Consumer Financial Protection Bureau recently announced (via Public Citizen's Consumer Law & Policy Blog):
  • [T]he Consumer Financial Protection Bureau and Attorneys General in 47 states and the District of Columbia took action against JPMorgan Chase for selling bad credit card debt and illegally robo-signing court documents. The CFPB and states found that Chase sold “zombie debts” to third-party debt buyers, which include accounts that were inaccurate, settled, discharged in bankruptcy, not owed, or otherwise not collectible.

    The order requires Chase to document and confirm debts before selling them to debt buyers or filing collections lawsuits. Chase must also prohibit debt buyers from reselling debt and is barred from selling certain debts. Chase is ordered to permanently stop all attempts to collect, enforce in court, or sell more than 528,000 consumers’ accounts.

    Chase will pay at least $50 million in consumer refunds, $136 million in penalties and payments to the CFPB and states, and a $30 million penalty to the Office of the Comptroller of the Currency (OCC) in a related action.

    Chase sold bad credit card debt and robo-signed documents in violation of law,” said CFPB Director Richard Cordray. “Today we are ordering Chase to permanently halt collections on more than 528,000 accounts and overhaul its debt-sales practices. We will continue to be vigilant in taking action against deceptive debt sales and collections practices that exploit consumers.”
For more, see CFPB, 47 States and D.C. Take Action Against JPMorgan Chase for Selling Bad Credit Card Debt and Robo-Signing Court Documents (Chase Ordered to Overhaul Debt Sales and Halt Collections on 528,000 Consumers’ Accounts).

For the consent order, see in re Chase Bank, USA N.A.