Saturday, November 14, 2015

Oops! Media Consumer Troubleshooter Shines Light On $40 Million In Screwed-Up Town Records, Explaining Why Nearly 700 Pittsburgh-Area Homeowners Were Blindsided With Threatening But Incorrect Tax Foreclosure Notices

In Dormont, Pennsylvania, KDKA-TV Channel 2 reports:
  • Hundreds of local homeowners say they were blindsided and told to pay a bill they’d already paid or they would lose their homes. That’s when an entire community decided to “Get Marty.”

    “I was just flabbergasted,” says Lauren Sabo of Dormont.

    Several months ago, Sabo and nearly 700 other Dormont residents received what has been described as a threatening letter from the Jordan Tax Service. The letter states, “30-day notice before legal action taken-lien.” The letter goes on to threaten legal action stating, “Initiation of the lawsuit alone with result in a $450 attorney fee, plus court costs and sheriff’s fees.”

    “This is not the way to treat people,” says Sabo. Her story is amazing. The Jordan Tax Service letter and bill is for garbage fees. Truth is, Sabo’s home in Dormont burned to the ground. There was no home to charge a garbage fee to. “It’s for a home that didn’t exist,” she said.

    Turns out, the Jordan Tax Service took over a now dismantled tax service with more than $40 million dollars in screwed up records. The Jordan Tax Service is only trying to clean up the problem.

    It’s a big mess,” says Dormont Borough Manager Ben Estell. Estell has been working with Jordan to help Dormont residents.

Elderly Long Island Homeowner Returns Home From Extended Absence In Florida After Knee Surgery, Rehab Only To Find His Home Missing, Possessions Gone; Now Homeless, Sues Town For Illegal Demolition Of Alleged Eyesore

In West Hempstead, New York, Newsday reports:
  • When Philip Williams returned in August to his home in West Hempstead -- after knee surgery and a lengthy rehabilitation in Florida -- his house and all his possessions were gone.

    Unbeknownst to him, Williams said, Town of Hempstead officials had ordered the home where he had lived since he was 6 months old demolished, after neighbors complained about its unkempt condition.

    Williams, 69, represented by East Meadow attorney Bradley Siegel, has filed a notice of claim against the town, alleging officials negligently rushed to rid the neighborhood of a home that had stood there since the late 1920s.

    Siegel says he is still assessing the punitive damages he will be seeking.

    "You don't expect to leave and get surgery and come back to find everything gone," Williams said. "I'm outraged," he said, standing on his lot []. "They shouldn't be able to do that. This was preventable. It's unjust and a tremendous disservice to me."

    Town officials say they followed protocol, repeatedly writing to Williams about problems with the two-story home at 27 Garden City Blvd., which was demolished on May 12. "Hempstead Town followed all proper procedures with regard to property owner notification relating to . . . proceedings," Susan Trenkle-Pokalsky, a town spokeswoman said via email. "The structure posed a danger to the public and was taken down in accordance with the law."

    Williams, a retired computer salesman, said he was not having his mail forwarded and never received the notices. He said complications from his knee replacement kept him in Florida longer than expected. He said he went to Florida in December, but two of the notices are dated in October and November 2014.

    He said the town's attempt to reach him was "not adequate" and that "they need to go the extra step if they are going to tear someone's house down." He believes the town was trying to be tough on abandoned and foreclosed houses, a growing scourge on Long Island, but he does not believe his house fit the category.

    Neighbors such as Kathleen Keicher, who lives across the street but did not file a complaint with the town, said the house looked "rundown" and "unkempt." There were holes in the ground and falling siding, she said, describing the house as a "shanty."

    Williams raised his six children in the home and says possessions, such as his late wife's wedding ring, woodcarvings he had designed, and trees that his parents planted in the 1940s, were all gone. "I'm homeless," he said. "I live with a friend, but I don't have a place to call my own at this point."

No Good Deed Goes Unpunished: Central Florida Woman Who Allowed Recently-Evicted Friend To Use Spare Bedroom Ends Up Bullied Out Of Her Own Home & Facing Foreclosure While Friend Wrestles Away Possession Of Premises

In St. Petersburg, Florida, ABC Action News reports:
  • A woman took pity on a friend who was being evicted. But now, she's the one who's been forced to find a new place to live.

    Megan Tharp grew up in a house on 40th Avenue North in the Allendale Terrace neighborhood of St. Petersburg.

    Shortly after her father died, she allowed her friend Carl Thompson to move into a spare room, since he had just been evicted from his apartment.

    I tried to help somebody and it completely blew up in my face,” Tharp said.

    Tharp said Thompson never signed a lease and was never given permission to move in permanently. But unbeknownst to her at the time, Thompson had his mail forwarded to the new address, legally establishing residency there.

    She said he soon started behaving in a controlling manner. “He was doing background checks on my friends, my church members. It’s just ridiculous. He’s just completely a control freak,” Tharp said.

    Tharp said one night, Thompson invited a homeless stranger he met at a fast food restaurant to move in. “He goes out and talks to the kid and says, well we're gonna bring him home with us and I was like you're going to bring him home to the house? He's like yeah. Just for one night,” Tharp said.

    The man was James Edwin Lee, who has a long criminal history. He moved in nearly two years ago. Since then, records show cops have been to the house 15 times. “There's been gunshots fired over here,” said neighbor Loren Wolfsiffer.

    Police also came out because of a fight between Thompson and his ex-boyfriend. That boyfriend went to the neighbor's house. “I look outside, turn the light on, there's a kid out there on crutches, screaming that he needed help,” said Terry Gowen, who lives behind the home.

    Tharp says she was so stressed out that she had to go rent an apartment.

    At her family's home, nobody's paying rent or the mortgage and nobody’s mowing grass or doing maintenance.

    In the meantime, records show that Thompson and Lee have formed a marijuana research company that is headquartered at the home. “The thing that really gets me upset is that the neighbors are having to deal with this and I felt so bad for leaving them the way I did,” said Tharp.

    Neighbors have been told there's nothing the city can do until a court throws Thompson out. But Tharp says she can't afford to take him to court.

    Nobody answered the door when we paid multiple visits.

    Thompson said in an email that he had a legally binding verbal agreement with Tharp. Thompson admits that Tharp asked him to leave on two occasions, but says she later told him he could stay.

    He says that because the home is now in foreclosure, "Neither Megan nor any member of her family has any legal say on who lives in the house." Thompson says he plans to hire a landscaping crew to clean up all the mess. He also says he hopes to buy the house from the bank.

    Tharp is contacting a pro-bono legal services organization to seek help getting Thompson out of the house for good.
Source: Woman says friend became squatter and drove her from her family home (City says established legal residency at home).

Landlord Charged With Illegally Pocketing $7,900+ In Food Stamp Benefits While Failing To Report $83K In Rental Income To Welfare Authorities

In New York City, the New York Post reports:
  • A Bronx landlord has been busted for receiving nearly $8,000 in food stamps — without disclosing that she was also collecting $83,000 in rent from two apartment buildings she owned in upstate Troy, investigators said [].

    Authorities also discovered that landlord Alina Griffen-Dowe, 36, earned at least $12,880 at a part-time job at a law firm that she did not report to the government.

    “This defendant collected food stamps in the Bronx while collecting rent payment from her tenants in Troy, allegedly manipulating the welfare system to improperly divert public benefits to which she was not entitled,” said state Welfare Inspector General Catherine Leahy Scott.

    State investigators conducted the probe with the city Human Resources Administration, which administers welfare benefits in the five boroughs. The Bronx DA’s office is prosecuting the case.

    Griffen-Dowe, a resident of Tryon Avenue in the Bronx, was charged with several counts of welfare fraud, grand larceny, filing a false instrument and petit larceny. [...]

    The probe determined that Griffen-Dowe allegedly collected $7,927 in food stamp benefits from January 2012 to January 2015. During the same period, she failed to report $83,000 in rental income from tenants residing in her two Troy buildings, as well as income from her law firm job. [...]

Friday, November 13, 2015

Despite Original Attorney Having Been Bought Off By Bankster w/ Job Offer, Houston Homeowner Scores Nearly $5.4 Million Jury Award In Robosigning Case That Violated Texas Law Barring Filing Fraudulent Documents About Real Property Interests

In Houston, Texas, Texas Lawyer reports:
  • W. Craft Hughes learned about allegations in a lawsuit four years ago, when his neighbor knocked on the door of his home. This started the chain of events that led to his clients winning a nearly $5.4 million jury verdict against Wells Fargo Bank and a mortgage servicing company on Nov. 6.

    "My clients live five doors down, but I didn't know them," recalled Hughes, a partner in Houston's Hughes Ellzey.

    Mary Ellen Wolf was the neighbor who knocked and became Hughes' client, along with her husband. At that first meeting, Wolf told Hughes that she faced a foreclosure proceeding initiated by Wells Fargo, even though she alleged that she and her husband had never signed a mortgage with that institution.

    "'I can't help. I'm too busy and I don't do that kind of work,'" Hughes recalled telling Wolf. As it happened, the lawyer whom the Wolfs hired instead of Hughes subsequently had to withdraw because she accepted a position with Wells Fargo.

    That turn of events so interested Hughes in the Wolfs' allegation that he took a second look and agreed to represent the couple. He not only took their case but also those of other similarly situated clients and filed class actions in federal court against Wells Fargo and other banks based on allegations of voided transfer of liens due to robo-signing. Those federal court claims, however, were dismissed based on a ruling that Hughes' clients didn't have standing.

    But the outcome was much different in the Wolfs' case in the 151st District Court in Harris County. During a three-day trial, the Wolfs argued that because of the robo-signing, their mortgage was never transferred to Wells Fargo and that the bank and a mortgage service company had violated a Texas statute barring the filing of fraudulent documents about real property interests.

    As they had successfully done in federal court, the defendants denied the allegations and argued that the Wolfs didn't have standing. Peter Smart, a partner in Houston's Crain, Caton & James, who represents Wells Fargo and the mortgage services company, did not return a call for this story.

    In its verdict, the jury found that the transfer of the lien was void and awarded $5 million punitive damages and nearly $400,000 in actual damages and attorney fees.

    At trial, Hughes said the biggest challenge was countering arguments made by the defense that his clients had not paid their mortgage since 2009 and were simply looking for free housing. Hughes had an exhibit to counter that, a letter he wrote to the bank's lawyer in 2012 asking to establish a escrow account in which the Wolfs could pay a mortgage. The bank's lawyer never responded to the offer, and Hughes made sure that the jury knew that. "This has been a long battle and a long road," said Hughes.

Montana Jury Slams Bankster With $1.6 Million In Punitives As Part Of $2.05 Million Award For Wrongfully Foreclosing On Mortgage-Free House; Homeowners Bought Premises From Empty-Headed Lender In All-Cash Deal Two Years Earlier; Appeal Expected

In Billings, Montana, KRTV-TV Channel 3 reports:
  • A District Court jury has awarded a Billings man just over $2 million in his action against a bank that foreclosed on and sold a house that he and his wife had purchased outright for cash two years earlier.

    After a four-day trial in the court of Yellowstone County District Judge Ingrid Gustafson last week, the jury unanimously awarded Jason Norman $350,000 in lost profitability, $100,000 for emotional distress and $1.6 million in punitive damages against Deutsche Bank National Trust Co, reports Last Best News.

    Also named as defendants were Ocwen Loan Servicing, which handled the sale of the Normans’ house, and MOM Haven 6 LLP, the company to which the house was sold.

    In 2010, Jason and Liz Norman moved back to Billings, Jason’s hometown, from Austin, Texas, where they’d spent 15 years.

    They bought a 120-year-old farmhouse at 633 Howard Ave. for $50,000 and spent two years and $40,000 renovating it themselves. Three years ago this month, with the house by then valued at $230,000, they began the process of obtaining a home equity loan on it. With that loan money, they planned to buy another property they could renovate and re-sell.

    That’s when they were told by the Montana Department of Revenue that the house on Howard was no longer theirs, that it had been foreclosed on and sold.

    Their attorney, John Heenan of the Billings firm Bishop and Heenan, said his clients were perplexed.

    “They kind of wondered, well, how’s that, since we paid cash for it?” he said.

    They had made the $50,000 cash payment to Deutsche Bank and then were told two years later that the house had been foreclosed on and sold to a company called MOM Haven 6 LLP.

    They soon found out—Jason Norman worked in the mortgage business during their years in Austin—what had gone wrong: an error had been made on a quitclaim deed for a house in Butte that had been foreclosed on. That deed correctly listed the address of the house at 618 W. Platinum St., in Butte, but a legal description of the property, attached to the deed, described the property at 633 Howard that was owned outright by the Normans.

    Because of the erroneous legal description, the deed was filed in Yellowstone County, and the Department of Revenue consequently transferred ownership of the house on Howard to MOM Haven 6. MOM Haven 6 had purchased 36 properties from Ocwen Loan Servicing, which was associated with Deutsche Bank.

    In a pretrial “order and memorandum,” Judge Gustafson ruled on several motions in the case, meanwhile summarizing some of the facts in the case. In it, she said the erroneously prepared quitclaim deed had been signed by Robert Kaltenbach, a senior manager for Ocwen and attorney-in-fact for Deutsche Bank.

    On April 9, 2013, MOM Haven 6 executed another quitclaim deed for the Howard property, which would have transferred the property back to the Normans, but they rejected it because it listed the company as an “LP” rather than the correct “LLP.”

    Another quitclaim deed was prepared, but the Normans rejected it as well because it included language saying that the previous mistakes were the result of a “scrivener’s error.” Heenan said the language would have had the effect of leaving the bank blameless.

    The Normans knew they wanted some kind of compensation because from the day they found out their house had been foreclosed on mistakenly, they had been effectively barred from doing anything with it.

    They were denied the home equity loan they had originally applied for, and since they no longer had the deed to the house, they couldn’t list the home for sale and no property management company would consider renting it under the circumstances. And even though they figured the house needed only about three more weeks of trim work to be fully renovated, they couldn’t work on property they no longer owned.

    There was also the difficulty of knowing that the house could be seized by the new owners at any time.

    “We were just out of our minds with paranoia,” Jason said.

    All those considerations, and the fact that they weren’t making any money in Billings, prompted them to move back to Austin, where Jason went to work painting cars.

    As part of their legal battle against Deutsche Bank, the Normans were granted a motion for summary judgment for quiet title, and the bank signed a “disclaimer of interest” in the property on May 8, 2014. The trouble was, Heenan said, the bank did not actually record the disclaimer with the Yellowstone County clerk and recorder until August of this year.

    At trial, Heenan maintained that the defendants’ actions, far from being merely a series of mistakes, constituted an intentional disregard of facts that were likely to cause injury to the Normans, and that “disregard or indifference” amounted to malice.

    The 12-person jury agreed, and [] it unanimously awarded the compensatory damages totaling $450,000, then went into deliberations again on Friday and unanimously awarded the punitive damages of $1.6 million.

    Cal Stacey, the Billings attorney who represented Deutsche Bank, could not be reached for comment, but Heenan said he expects the bank to appeal the jury verdicts.

    “They haven’t done anything voluntarily,” he said, “so I’d be surprised if they paid the jury verdict voluntarily.”

    On Monday, for the first time since Nov. 20, 2012, the Normans did a little finish work inside the house on Howard, and they are hoping to complete the renovation in the coming weeks.

    When they originally left Billings to move to Austin 20 years ago, they rented out the 750-square-foot home they owned on the 900 block of Howard. Later, after Jason’s grandmother died, they inherited her small house on the first block of Alderson Avenue.

    During the trial, Heenan said, Deutsche Bank tried to portray them as out-of-staters and “land barons.” The defendants also tried to cast doubt on the Normans’ claims that they had renovated the old farmhouse at 633 Howard for just $40,000.
For more, see Bank will pay Billings man $2 million for ‘mistaken’ foreclosure.
(1) For those homeowners who've been screwed over by wrongful conduct by foreclosing lenders (and their confederates) and seek some possible guidance on how much their cases might be worth if they seek to sue, see:

Banksters' Use Of Trash-Out Contractors To Harass Yet-To-Be Foreclosed Homeowners Remain Unabated As Two More Central Florida Families Find All Their Possessions Gone

In Orlando, Florida, WFTV-TV Channel 9 reports:
  • Many Americans have stories to tell about losing their homes to foreclosure. Channel 9 found out that some homeowners who haven't yet been foreclosed have come home to find all their belongings gone.

    "It was a crime because no one had permission to take those items from the house," homeowner Bill Gullbrandson said.

    Gullbrandson was in the early stages of foreclosure on his Wildwood home. The house was still in his name when he said he walked inside and found that his belongings had been taken.

    "How much did they take off with?" Channel 9's Jamie Holmes asked. "Approximately $6,000 worth of new furnishings and appliances that had been placed in the house," said Gullbrandson.

    The same thing happened to Jonathan Axtell.

    In both cases, the men's attorney claims that the items were taken by a clean-out company hired by the bank to secure the property.

    The company cleaned out Axtell's Orlando home of about $20,000 worth of belongings. "I have nothing there. All my couches, my furniture, and my kids' brand-new -- well, almost new playground," Axtell said.

    Attorney Justin Clark said he's seen the scenario many times at his firm in the last few months. "That foreclosure process takes a long time. The bank has no right to come into your home and take your stuff. They don't own the house," said Clark.

    Gullbrandson's foreclosure is still pending, but he still owns the deed. The foreclosure was eventually reversed in Axtell's case. Gullbrandson and Axtell's belongings cannot be found, they said.

    The attorney is moving forward with two separate lawsuits in order to get compensation for the men's belongings.(1)
Source: Homeowners say houses were emptied before being foreclosed.

(1) For those homeowners who've been screwed over by wrongful lockouts by foreclosing lenders (and their confederates) and seek some possible guidance on how much their cases might be worth if they seek to sue, see:
For examples of filed lawsuits involving illegal bank break-in, "trash-out" lockout cases, see:

    Lawsuit: Loan Servicer Unlawfully Used Threats, Deception To Squeeze $10K+ Out Of Homeowner Without Applying Money Towards Unpaid Debt Balance

    In Allendale, New Jersey, reports:
    • An Allendale couple facing possible foreclosure says their loan was acquired by a Staten Island real estate investment company that unlawfully used threats and deception to get them to make more than $10,000 in loan payments that were never applied to their debt.

      William and Terri Rabolli filed a federal lawsuit on Oct. 9 in Newark alleging that Cornerstone Realty Partners Inc. of Staten Island convinced the homeowners that only by paying mortgage-servicer Cornerstone could they get a lender to refinance their loan and avoid foreclosure. Between April and August 2012, the Rabollis say they paid Cornerstone $10,268 in four separate checks. However, the money was never applied to their mortgage loan account, and the homeowners stopped making payments, despite demands that they continue to pay, the Rabollis allege.

    Thursday, November 12, 2015

    Con Artist Masquerading As Attorney Peddling Loan Modification Services Gets 1 To 3 Years After Grand Larceny Plea For Ripping Off Two Homeowners Out Of $25K+

    From the Office of the Nassau County, New York District Attorney:
    • Acting Nassau County District Attorney Madeline Singas announced the sentencing [] of a New York City man charged with pretending to be an attorney and tricking his victims into giving him thousands of dollars in legal fees and for the payment of real estate taxes.

      Mario Tolisano, 65, of the Bronx, pleaded guilty on June 25 to Grand Larceny in the 3rd Degree (a D felony). District Court Judge Susan Kluewer sentenced Tolisano []to 1 to 3 years in prison.

      “This defendant pretended to be a real estate attorney, but he was in fact a con artist who swindled hardworking Long Island families out of thousands of dollars,” Acting DA Singas said. “Phony attorneys deprive victims of proper representation and my office will continue to hold these criminals accountable for their actions.”

      Acting DA Singas said that in January 2012, and then again in September 2013, Tolisano contracted with two Nassau County residents to assist them in obtaining loan modifications while falsely representing himself to be an attorney duly admitted to practice law in New York State.

      The first victim, a New Hyde Park woman, learned of Tolisano through the recommendation of a work colleague. In January 2012, the victim signed a contract with Tolisano and paid $3,000 for his services. In June 2013, Tolisano told her to give him $20,000 so that he could pay her real estate taxes, and assured her that the payment would be placed in his escrow account and used to pay her taxes within the next six weeks. The victim attempted to contact him numerous times to determine if the taxes had been paid and to determine the status of the loan modification.

      In January 2014, the New Hyde Park victim discovered that the taxes had never been paid by Tolisano, but had actually been paid by the company that purchased her mortgage. The victim further discovered that the checks that were to be deposited into Tolisano’s escrow account had been deposited and withdrawn from another’s account.

      In September of 2013, a Valley Stream woman retained Tolisano and paid him $2,500 for his “legal services.” The victim received a letter from her bank on March 5, 2014 stating that Tolisano had never contacted her bank to negotiate a loan modification.

      After receiving complaints from the two victims, the Nassau County Police Department Crimes Against Property Squad referred the case to the DA’s office for prosecution. Tolisano was arrested on June 23 by members of the Nassau County Police Department.
    Source: New York City Man Sentenced for Stealing Thousands of Dollars by Pretending To Be an Attorney (Mario Tolisano, 65, of the Bronx, will face one to three years in prison).

    Alexandria Feds Score Big Sentences (135 & 151 Months) For Duo That Hosed 400+ Victims Out Of Over $3.8 Million In Loan Modification Racket That Purported To Be Affiliated With U.S. Gov't

    From the Office of the U.S. Attorney (Alexandria, Virginia):
    • Kristen Michelle Ayala, aka Amber Lynch, aka Olivia Benet, aka Grace Williams, 30, and Joshua Manuel Sanchez, aka Nelson Cruz, aka Chris Ward, aka Daniel Mora, 34, both formerly of Las Vegas, were sentenced [] for conspiracy to commit wire fraud for their role in a $3.8 million dollar mortgage modification scam.

      Ayala was sentenced to 135 months in prison, while Sanchez was sentenced to 151 months in prison. Both defendants were also sentenced to three years of supervised release and ordered to pay full restitution to the victims of their crime.

      “This nefarious crime, rooted in dishonesty and greed, ruined the lives of the victims while simultaneously enriching the lives of Ayala and Sanchez,” said Dana J. Boente, U.S. Attorney for the Eastern District of Virginia. “Their deceitful actions targeted extremely vulnerable individuals, causing trauma and stress in their lives which led to divorce, severe health issues, and extreme despair to children, parents, combat veterans, and people who were already struggling to make it. I want to thank our prosecutors and the investigative team at SIGTARP for their outstanding work on this case.”

      In a statement of facts filed with the plea agreement, from in and around October 2012 through September 2014, Ayala, Sanchez, and others, executed a scheme that deliberately targeted extremely vulnerable individuals who were in dire financial straits, desperate and literally on the verge of losing their homes. Ayala and Sanchez developed fraudulent documents, telephone scripts, and aliases in an effort to defraud the victim homeowners.

      Their scheme lulled victim homeowners into believing that the defendants were part of the legitimate U.S. Government “Home Affordable Modification Program” (HAMP) by using the Department of Treasury’s seal and other government markings. During the execution of the ruse, Ayala and Sanchez used documents containing fraudulent government seals, made statements regarding modification of the victims’ mortgages through the HAMP program, and the victims’ mortgage payments to their own accounts rather than to the victims’ lenders. The scheme defrauded more than 400 victims and caused losses of over $3.8 million dollars and resulted in many victims losing their homes, despite the victims’ efforts to modify their mortgages and continue to make payments on their loans.

      "SIGTARP special agents initiation and investigation of this TARP fraud scheme resulted in the arrest and convictions of Joshua Sanchez and Kristen Ayala for stealing money from over 400 desperate homeowners seeking to modify their mortgage by posing as US government representatives for TARP's housing program HAMP” " said Christy Goldsmith Romero, Special Inspector General for the Troubled Asset Relief Program (SIGTARP). "Sanchez and Ayala targeted struggling homeowners, used business names such as “Neighborhood Counseling Services of America” and “Residential Community Outreach Services”, and told victims to send three alleged trial modification payments to them, even going so far as using the Treasury Seal on some of the mortgage payment coupons to convince the homeowners that their scheme was legitimate.

      Sadly, they scammed hundreds of homeowners into believing they were getting help. They made no homeowner’ payments to mortgage lenders and instead stole over $3.8 million from homeowners who were trying to do the right thing to modify their mortgages causing many to lose their homes and devastating their lives. SIGTARP commends U.S. Attorney Boente and the prosecution team for standing united with SIGTARP against crimes related to TARP.”

    Nassau DA Bags Long Island Man For Allegedly Running Loan Modification Racket That Fleeced Over $725K From 31 Homeowners; Defendant Suspected Of Duping Victims Into Making Mortgage Payments To Him In Cash Or Check w/ Payee Section Left Blank

    From the Office of the Nassau County, New York District Attorney:
    • Acting Nassau County District Attorney Madeline Singas announced the arrest [] of a Dix Hills man who operated a mortgage modification business and is alleged to have stolen approximately $728,330 from more than 30 homeowners in Nassau, Suffolk, Brooklyn, the Bronx, Queens and Westchester.

      Mark Savransky, also known as Mark Savran, 56, of Dix Hills, surrendered [] to the District Attorney’s Office Investigators and was arraigned by Nassau District Court Judge James Darcy on the following charges:

      • Four counts of Grand Larceny in the 2nd Degree (a C felony)
      • 24 counts of Grand Larceny in the 3rd Degree (a D felony)
      • Two counts of Grand Larceny in the 4th Degree (an E felony)
      • Scheme to defraud in the 1st Degree (an E felony)

      Judge Darcy set bail in the amount of $250,000 bond or $125,000 cash and asked the defendant to surrender his passport. If convicted of the top charge, Savransky faces a maximum sentence of 7 ½ to 15 in prison. If sentenced consecutively, he faces to 10 to 20 years in prison. He is due back in court on August 31.

      “This defendant preyed on vulnerable homeowners who had subprime mortgages and some of the victims nearly lost their homes,” Acting DA Singas said. “The victims made honest attempts to renegotiate their mortgages, yet the defendant lied to them and stole more than $728,000 to line his pockets.”

      Acting DA Singas said that the defendant operated a mortgage modification business in Nassau County, using the name Mark Savran. Between 2008 and 2013, he promised numerous homeowners in Nassau County and elsewhere that after securing modifications, he would hold their mortgage payments in trust and forward them to the financial institutions servicing the homeowners’ mortgages.

      Instead, the defendant converted the funds for personal use, stealing approximately $728,330 from these homeowners. Among other things, Savransky used the funds for ATM cash withdrawals, credit card payments, child support, car payments, gasoline, travel expenses, restaurants, grocery stores, department stores and Netflix.

      Savransky’s clients were typically residential homeowners who had purchased their homes using a sub-prime adjustable rate mortgage sometime between 2006 and 2009. When the payments became more than the homeowner could afford, homeowners hired the defendant to assist in obtaining a mortgage modification.

      Savransky requested that all the paperwork from the bank be given to him and if additional paperwork was sent by the bank to the victim, he would demand that it be given to him immediately, preferably unopened.

      The defendant then counseled clients to give him the monthly mortgage payment that was due under the modified mortgage. Savransky would inform his clients that he would make the payments on their behalf and, in doing so, create a record of payment that would prevent a lender from denying that payments had been made or from reneging on any mortgage modification that had been obtained. At the defendant’s request, these payments were mostly made in cash or by check that would leave out the payee. Savransky would later complete the payee portion of the check, thereby giving him the means to misappropriate the funds.

      As a consequence of the mortgage payments not being made, lenders started to foreclose on the properties belonging to the defendant’s clients. When some the homeowners complained to him, some of them would receive a limited amount of a repayment.

      This case was initially referred to the Nassau County District Attorney’s Office by the Bronx County District Attorney’s Office. Additional cases were also referred by the Suffolk County District Attorney’s Office in conjunction with the Suffolk County Police Department.

      Savransky is also currently charged with Grand Larceny in the 3rd Degree involving a theft of mortgage payments from another homeowner, which arose from a Nassau County Police Department arrest and which will be prosecuted with the charges described above.

      Savransky’s victims include residents from Amityville, Baldwin, Bayside, Brentwood, the Bronx, Brooklyn, East Northport, Farmingdale, Hempstead, Hicksville, Huntington, Levittown, Lynbrook, Malverne, Merrick, Mount Vernon, New Hyde Park, Queens Village, Richmond Hill, Riverhead, Uniondale and Westbury.
    Source: Suffolk Man Arrested for Swindling 31 Homeowners out of More than $700K in Mortgage Scheme (Mark Savransky, 56, used money for credit card bills, car payment, travel and more).

    Advertising Company Owner Gets 3 Months House Arrest, Agrees To Cough Up $175K For Running Deceptive Ads To Create Source Of Leads Used By Unaffiliated Loan Modification Rackets To Target Financially Distressed Homeowners

    In New Haven, Connecticut, The Day reports:
    • An East Lyme man was sentenced to two years of probation [] after using his New London-based media agency to produce and disseminate false advertisements, according to the U.S. attorney's office.

      Forty-six-year-old Matthew Goldreich's sentence includes three months of home confinement as well as a $100,000 fine and $75,794 in restitution.

      The federal misdemeanor to which he pleaded guilty, false advertising or misuse of names to indicate federal agency, makes it illegal to use the word "national" in the name of a business or firm that deals with loans.

      According to court documents, Goldreich, owner of advertising production firm National Media Connection, used his company to produce commercials for National Mortgage Help Center, a shell company Goldreich created that existed only on paper. The commercials in question aired between May 2009 and February 2013.

      Those commercials, the U.S. attorneys' sentencing memorandum alleges, misled viewers to believe NMHC was affiliated with the federal government in an effort to "to capitalize on the Home Affordable Modification Program ... announced by the United States Department of the Treasury on or about March 4, 2009."

      That program encourages people and businesses to modify their mortgages in order to keep their properties out of foreclosure.

    Wednesday, November 11, 2015

    Use Of LLC Secrecy Plays Key Part In Proliferation Of Snatch & Flip Home Hijacking Rackets Throughout NYC

    In New York City, The New York Times reports:
    • [I]n Bedford-Stuyvesant and other pockets of the city, white-collar criminals are employing a variety of schemes to snatch properties from their owners. Often, they use the secrecy afforded to shell companies to rent out vacated properties until they are caught or sell them to third parties. Victims are left groping for redress, unable to identify their predators or even, in some cases, to prove a crime has been committed.

      Attention lately has focused on the growing use of shell companies to buy prized real estate in Manhattan and other glittering destinations for global wealth. But the stealthy practice of deed theft illustrates another way that limited liability company law used to create such entities has been twisted and stretched to conceal the ownership of real estate. This is particularly true in Brooklyn neighborhoods where profits in the hundreds of thousands of dollars from quick turnaround sales have become common.

      “Sham LLCs are a huge problem in terms of their lack of transparency, in terms of who is behind the property and who is behind these schemes,” said Jennifer Sinton, a lawyer with South Brooklyn Legal Services, which is representing [one victimized homeowner] in an effort to reclaim her home.

      A review by The New York Times of several dozen cases, and interviews with lawyers, prosecutors and others knowledgeable about fraudulent deed transfers, suggests they are accelerating even as officials struggle to address them. The city’s Department of Finance said it was investigating 120 cases, many of them hard to crack because of the role played by LLCs, officials said. Underscoring the rising alarm over the problem, the state attorney general, Eric T. Schneiderman, and the Brooklyn borough president, Eric L. Adams, held a forum last month to warn property owners about it.

      Deed thieves often scan legal notices for mortgages in arrears, typically targeting properties like Ms. Campbell’s that are in poor repair or abandoned. Vulnerable homeowners — including older and disabled adults — are sometimes tricked into signing over their properties, while believing they are getting financial relief.

      In other cases, signatures are simply forged on deeds. The thieves, meanwhile, hide behind inscrutable mazes of limited liability companies, rented post office boxes and fake addresses.

      Coming amid waves of gentrification, the reports of deed theft have helped feed the unease felt in neighborhoods where longtime residents — blacks and Hispanics, the poor and middle class — are increasingly being priced out. A report last year by the Lawyers’ Committee for Civil Rights Under Law and the Center for NYC Neighborhoods found that the schemes disproportionately affected black and Hispanic homeowners.

      When LLCs are taken to court, those behind them often remain a step ahead — and impossible to find. “They’re shell companies,” said Jomo Gamal Thomas, a lawyer who has represented several deed fraud victims. “There’s no guarantee you’ll get your money back.”

      Some schemes are particularly brazen, with thieves forging homeowners’ signatures and filing fraudulent deeds with the city to register transfers. Among the telltale signs of forgery, according to Toby M. Cohen, a Brooklyn lawyer who has represented clients attempting to reclaim stolen properties: “a deed transferred for no consideration to an LLC or a corporation and scribbled signatures you can’t read.”
    For more, see Real Estate Shell Companies Scheme to Defraud Owners Out of Their Homes (Relying on the secrecy of limited liability companies, white-collar thieves are targeting pockets of New York City for fraudulent deed transfers, leaving the victims groping for redress).

    Atlanta-Area Real Estate Operators' Abuse Of System Essentially Converts "Super Liens" Into "Hijack Liens" In Connection With Homes Bought At Tax Foreclosures; Called "Legalized Theft" Of Homes As They Abscond With Both Tax-Delinquent Houses & The Surplus Funds Generated By The Auction Sale

    In Atlanta, Georgia, WSB-TV Channel 2 reports:
    • Channel 2 investigative reporter Erica Byfield has uncovered an alarming trend sweeping through the metro area that is leaving homeowners homeless.

      So-called “super liens” change the process after the tax sale of a home, allowing a lien-holder to ask a judge for foreclosure in just weeks, instead of months. And it is completely legal.

      “We didn't have time to do anything,” Jessica Davis Sims told Byfield.

      Sims said her family inheritance was a brick home in Cherokee County. After her father passed away, the property was left to Sims, her brother and an uncle who lived in the home.

      Her grandparents built and paid off the Canton home decades ago. Sims said she did not know her uncle was $14,000 behind on tax payments. “We had two days and it was being auctioned off on the courthouse steps,” Davis said.

      When a tax deed is typically auctioned at tax sale, there are a number of rules crafted to help protect homeowners. Owners have one year to attempt to redeem the property. If the owner cannot redeem and loses the property, they can receive what is called excess funds— money left from the auction after the debt with the tax commissioner is satisfied.

      Records show a company bought their tax deed for $130,000 in early June 2014. The law gives homeowners 12 months to recover.

      But Sims was in a different situation. An investor was able to take a “super lien” on her property. “It's like waking up from a really bad nightmare and then it’s true — you lost your family's inheritance,” Sims said.

      There was a problem: Her uncle had a medical lien.

      A second company, called Trintec, bought it and the deed from the first company, creating a super lien and bypassing the waiting period. Trintec asked a judge to let allow the company to foreclose on the property less than a month later.

      It is absolutely legalized theft,” state Rep. Scot Turner told Byfield. “I think that the people who do this are scumbags.”

      Turner is backing a bill he hopes guts the industry. It would stretch out how long it takes to push a super lien through to 300 days. “It's happening more and more because it's easy money,” Turner told Byfield.

      A Channel 2 investigation found a number of companies play this game in Fulton, Gwinnett, Cherokee, DeKalb, Cobb and Clayton counties.

      Cherokee County Tax Commissioner Sonya Little said she didn't believe it when she first saw it. She will be the first to tell you paying taxes is important, but it's super liens she doesn't agree with. “You don't rob people of their homes, it's just not right,” Little said.

      She was astounded to learn these companies don’t want just the home, they want the excess money from the tax sale. Little tried to keep Trintec from getting the excess funds in court, but ultimately lost. “They're just making their money and they don't care who they hurt in the process,” Little said.

      Sims hired an attorney and fought for a year before she gave up.

      According to court documents, a judge ordered that Sims and her brother split $19,000 of the excess funds and give the remaining $94,000 and her family’s house to Trintec. Trintec is based outside of Jacksonville, Florida.

      Byfield spoke with the owner, Rob Storm, by phone. He said he did not know what a super lien was and directed Channel 2 investigators to his attorney.

      Storm's attorney, John Clark, sent us this statement:
      “The three Davis heirs inherited property in 2009. They elected to never pay taxes on it. My client paid two of the three heirs for their ownership and they gladly signed deeds. Those same folks, through their lawyers, agreed that my client should foreclose their uncle out of the property and signed a court order to that effect. Eventually, after not paying taxes for six years, the third Davis heir was finally foreclosed. His lawyer sent me an email stating that he would not oppose the foreclosure. He could have paid off what he owed, but simply elected not to. Had he expressed any desire to remain in the property, my client would have worked with him to keep him there.”(Read full statement here)
      Rep. Turner’s bill was introduced in the last legislative session, but did not make it to the Senate floor last year in time to become a law.

      Even though that law won’t help Sims, she hopes it makes it through to keep other families from losing their homes to a super lien.

      My grandparents worked hard for this house. And for it to be out of the family now is a big deal,” Sims said. “I just don’t want it to happen to anyone else.”
    Source: Elected officials call Georgia lien practice ‘legal theft’.

    For an earlier post on the "super lien" racket, see Atlanta-Area "Super Lien" Rackets Openly Use Collusion, 'Quite Auctions' In Connection With Tax Foreclosure Auctions To Wrestle Away Homes, Accumulated Equity From Hapless Homeowners Behind On R/E Taxes:
    • It’s basically a hijack lien,” said Hugh Wood, a real estate attorney who defended clients from super liens in five separate incidents. “(Investors) can structure the super lien in a way that it’s impossible to get your property back.”
    Editor's Note: It is difficult to believe that, given the apparent collusive nature of this scheme between/among real estate investors aimed at eliminating competition at tax foreclosure auctions, no one has reported this racket to the Antitrust Feds for a probe into possible violations of the Sherman Act.

    Further, the Antitrust Feds, along with the Atlanta office of the United States Attorney are already conducting an ongoing probe into collusive schemes/bid rigging at bank foreclosure sales. See, for example, Bid-Rigging Real Estate Operators Continue Going Down In Ongoing Probe By Antitrust, Atlanta Feds.

    Anyone with information concerning bid rigging or fraud related to public real estate foreclosure auctions should contact the Antitrust Division’s Atlanta Field Office at 404-331-7100 or visit

    Central Florida Title Snatcher Facing 18-Month Prison Sentence Buys Out Of Jail Time; Deeds Back 94-Year Old Victim's Home Back To Her, Agrees To Pay $100/Month Restituition For Ten Years

    In Orlando, Florida, WFTV-TV Channel 9 reports:
    • A woman accused of stealing a home from a 94-year-old woman was who living in a nursing home has accepted a plea deal that will keep her out of prison.

      Vivian Smith’s friends came to Channel 9 after a neighbor saw Vanessa Russell removing all of Smith’s belongings from the house she owned for decades in 2014.

      Russell had forged a deed and moved into the home, but police weren’t able to immediately get her out. A search warrant was served weeks later, and authorities removed Russell and her family from Smith’s home.

      Russell recently accepted a plea deal with prosecutors. She was sentenced to 18 months in prison, but won’t serve the time if she follows the terms of her 10-year probation and pays Smith back.

      Smith is still in a nursing home in failing health and won’t be moving home.

      The deed has been transferred and Russell will have to pay Smith $100 a month over a period of 10 years, totaling $12,000 in restitution.

      Smith’s friends said they had hoped Russell would get jail time, but said everyone, including Smith, is glad that the ordeal is over.

    Ten Years After Losing Home To Tax Foreclosure, Ex-Homeowner Scores Unexpected Payday By Collecting The Surplus Funds Generated By The Auction Sale That She Didn't Know Belonged To Her

    In Buffalo, New York, WIVB-TV Channel 4 reports:
    • Homeowners know if you don’t pay your property taxes, you could lose your home to a tax foreclosure sale. But what thousands of former Erie County property owners don’t seem to understand is, whatever a buyer pays–above and beyond the back taxes–goes back to the previous owner.

      Bottom line: If your home is sold at a tax auction to pay taxes you owe, it is only to ensure the back taxes get paid. But since those properties are sold at auction, the bidding usually takes the final sale price well above the amount of the back taxes.

      Erie County officials believe those surplus funds amount to millions of dollars owed to thousands of former property owners.

      “Crystal” of Buffalo lost her house in a tax foreclosure sale 10 years ago, and just collected her surplus funds two weeks ago.

      The single mother of two grown sons asked us not to use her last name, but was very happy with the big check she got from the State Comptroller’s office.

      Crystal had left her house in the care of friends, to take a job in another state, but they let her down—neglecting to keep up with the taxes and mortgage, which quickly led to a bankruptcy filing, and the house was sold by the city at a foreclosure auction in 2005.

      “I didn’t know what to do, so I just took the advice of others and it didn’t go very well,” Crystal recalled. But fast forward to 2014, and she learned, in a letter, the foreclosure sale had a silver lining.

      “Just a random letter, and I didn’t believe it. I thought it was a scam. So I kind of put it aside and left it there.”

      That letter was from a local business known as a “finder”, or “searcher” that scours the Internet for unclaimed funds and unclaimed property all over the country, and it turned out Crystal had a substantial amount of money—she is keeping the amount to herself–in the New York State Comptroller’s Unclaimed Funds account.

      But Crystal needed the help of Paulette Cooke, an attorney for the Western New York Law Center (1) to get those surplus funds–her money–from the sale of her home. It requires a court order.

      “Once the bidder pays the money, the city taxes are paid, the county taxes are paid, and then that money left over is the surplus money, and the old property owner is entitled to that money.”

      But before Crystal’s money was turned over to the state, city officials turned over her funds–and the surplus funds owed thousands of other former property owners–to the Erie County Comptroller’s office, where the money is held in an unclaimed funds account for 5 years.

      Why does the county hold onto all that money, instead of giving it to the former homeowners? Comptroller Stefan Mychajliw said, they have no way of contacting a foreclosed owner like Crystal, because all they get from the city is a list of addresses, a court order, and a check for the surplus funds.

      “Even if we went to that address, obviously the person is no longer living there. We can go to every single address on that list, but because they were evicted and the house was sold, they are obviously not even there anymore.”

      Mychajliw said, the county is holding about $14 million in unclaimed funds from tax auctions, mortgage foreclosures, and other legal proceedings, which the government is not allowed to touch.

      After 5 years, the county turns the money over to the state, which can make it even tougher to claim. Theoretically those unclaimed funds can remain with the State Comptroller’s Office forever, if it is not claimed by court order.

      The Western New York Law Center is offering to help homeowners who recently lost their homes through tax foreclosure sales, and former homeowners who are owed surplus funds from tax sales. The Western New York Law Center can be contacted by phone at 855-0203, ext. 118.
    Source: Foreclosed homeowners could be owed millions from tax sales.

    (1) Western New York Law Center is a non-profit law firm providing legal representation to low-income Western New Yorkers in civil matters.

    Tuesday, November 10, 2015

    Ex-Real Estate Developer Gets 70 Months In Mortgage-Stacking Scheme That Left Unwitting Homebuyers w/ Multiple Liens & Screwed Title Insurers Out Of $8M+; Co-Conspiring Title Agent (45 Months In Slammer) Knocks 18 Months Off Prison Sentence By Cooperating w/ Feds To Convict Former Scam Partner

    In Grand Rapids, Michigan, reports:
    • Former real-estate developer Charles Patrick Gahan was sentenced Wednesday, Nov. 4, to five years and 10 months in federal prison in an $8 million "mortgage-stacking" scheme.

      Gahan, 52, was remanded to the custody of U.S. Marshal's Service after sentencing by U.S. District Judge Robert Holmes Bell. The judge ordered Gahan to spend five years on supervised release when his prison sentence ends and to pay $8,205,405 in restitution.

      Co-defendant Scott Hoeft, formerly the owner of Prime Title Services, is serving 45 months in prison for his role in the scheme.

      The government said the two conspired to defraud banks, lenders and title companies by obtaining multiple mortgages on property without disclosing prior liens. Hoeft wrote title insurance policies for First American Title and Old Republic National Title Insurance.

      The insurers lost over $8 million.

      "This was a very sophisticated and long-running title insurance fraud scheme that involved numerous residential developments," U.S. Attorney Patrick Miles Jr. said in a statement.

      "Innocent homeowners arrived home to find foreclosure notices on their doors, from banks they had never heard of, solely because Gahan fraudulently diverted closing funds from those banks to his own pocket. The Court's sentence [] reflects the seriousness of this financial crime."

      Old Republic and First American in 2005 began receiving title insurance claims from homeowners who bought homes in the many developments of GBW Development. Gahan was part owner of the company.

      These homeowners reported that liens existed against their properties that were not disclosed on the title commitments issued as part of the closing process for their homes, Assistant U.S. Attorney Ronald Stella said.

      Investigation by the title insurers showed Hoeft intentionally failed to disclose or satisfy preexisting liens on the residential properties. The funds at closing were diverted to Gahan.

      Among Gahan's projects was a 2003 development of Cornerstone Estates in Caledonia Township, the government said. The government says the fraud occurred from 2002 to 2006.

      Defense attorney Helen Nieuwenhuis said the fraud started small.

      "It was fraud and Mr. Gahan admits it was wrong," she wrote. "Over time the fraud became so large it virtually became impossible to keep up payments and pay outstanding liens or meet obligations related to properties. ... (A)s some of the banks and private lenders began to discover the ongoing fraud, in an attempt to meet obligations and owed money Gahan and Hoeft began using Prime Title's escrow account to trade in currency markets."

      He told a probation officer that he "made horrible decisions out of greed and fear of failure," his attorney said.
    Source: Michigan developer sentenced in $8M mortgage fraud.

    For the U.S Attorney (Grand Rapids, Michigan) news release, see Real Estate Developer, Charles P. Gahan, Sentenced To 70 Months For Eight Million Dollar Title Insurance Fraud Scheme:
    • The two title insurance companies that Hoeft used to issue the title insurance policies suffered over $8,000,000.00 in losses to provide clear title to the homeowners.

      Hoeft was previously sentenced to 63 months’ imprisonment for his role in the scheme, which was reduced to 45 months’ imprisonment for his cooperation in the prosecution of Gahan.

    Nearly 400 Homeowners In One Neighborhood Face Foreclosure Over One Old Lien Allegedly Totalling Over $60 Million Covering Entire Subdivision; Seek Help From Their Title Insurers

    In Georgetown, Texas, KVUE-TV reports:
    • Hundreds of homeowners in the Crystal Knoll Terrace area of Georgetown are worried they could be forced out of their homes. JB Mortgage Company is suing the homeowners, claiming they don't own the land because there's still a lien to be paid.

      "It's not a pleasant situation to have your granddaughter come up and ask you, 'Papa are we going to have to move?'" said Mike Grant, who has lived there for 10 years.

      Valerie Jamie has lived here for about 14 years, and said she's already starting to pack just in case. "We're not very happy, my kids are very upset, worried that we're going to lose the home they grew up in, I told them no no don't worry about it, we'll figure it out," said Jamie.

      Over the past two weeks Grant, Jaime, and nearly 400 of their neighbors have been served with lawsuit papers. Marc Pollack, a lawyer representing JB Mortgage, said they've filed a declaratory action, meaning they want the judge to decide if there is still a lien on the property.

      According to the lawsuit, Georgetown ISD filed a foreclosure suit on the property, but since the government-owned asset management company Resolution Trust Corporation (RTC) didn't officially approve, JB Mortgage claims the transaction was null and void.

      In the lawsuit, JB Mortgage claims the homeowners owe the initial loan of $5.2 million dollars, plus the 10 percent compounding interest, making the total more than $60 million dollars.

      "We've all done what was required of us, we've been through the title companies, we've been through the mortgage companies, we've paid our payments on time, we've paid our title insurance, and here we are in doubt every day," said Grant.

      "We've owned the houses, we've been the ones paying the taxes for 20 years, so if it was initially a tax lien, you haven't paid the taxes for 20 years, we have," said Jamie.

      Now the homeowners are contacting their title companies, and hope the insurance will pay the debt.

      The lawsuit states title insurance companies issued statements during that time, and that if a foreclosure took place on a property in which the FDIC or RTC had interest, then consent must be in the file for the policy to be issued without exceptions.

      While many of the homeowners have title insurance, there are some people who own their home free and clear. The lawyer for JB Mortgage said in those cases they will try to work with those homeowners individually to get it resolved.

    Philly Feds Score Jury Verdict Against Trio Who Peddled Bogus Sale Leaseback Arrangements Purporting To Save Homeowners From Foreclosure, But Swiped The Deed & Stripped The Equity In Their Homes Instead

    From the Office of the U.S. Attorney (Philadelphia, Pennsylvania):
    • A federal jury, [] returned guilty verdicts against a Cherry Hill, NJ woman and her parents for a mortgage fraud scheme that stripped the equity from the homes of desperate homeowners facing foreclosure. Silver Buckman, 37, of Cherry Hill, NJ, her parents, Vincent Foxworth, 70, and Cynthia Foxworth, 64, of Turnersville, NJ, were found guilty of bank fraud, wire fraud, and conspiracy to commit bank fraud and wire fraud. Their scheme caused losses to mortgage lenders of approximately $3.8 million. U.S. District Court Judge R. Barclay Surrick scheduled a sentencing hearing for January 29, 2016.

      The defendants offered to help financially-vulnerable individuals save their homes from foreclosure or obtain money from the equity in their homes but, instead, defrauded the homeowners and mortgage lenders. Buckman owned and operated Fresh Start Financial Services (“FSFS”), in Mount Laurel, NJ and was an employee of American Home Lending as well as a mortgage broker for American One Mortgage (“AOM”). Her father is an experienced Realtor.

      Between October 2006 and November 2009, Buckman and her co-defendants allegedly targeted financially vulnerable homeowners and represented to them that they could improve their credit, save their homes from foreclosure, or provide them with money through Buckman’s lease buyback program.

      The homeowners were told that “investors” would be used to temporarily refinance their homes and that they could repurchase the homes in one year, or once they regained their financial footing. The defendants also allegedly induced the homeowners into signing documents related to the sale and lease of their homes by their representations that the homeowners would remain on the title to their homes, that the equity from their homes would be placed into an individual escrow account in their names, and that new mortgages would be paid from the escrow accounts to establish their timely payment histories.

      In order to carry out the scheme, Buckman recruited Vincent Foxworth and Cynthia Foxworth and others to be straw borrowers. Buckman submitted false financial and employment information about the straw borrowers to mortgage lenders. Once lenders agreed to fund the mortgage loans, Buckman prevented the homeowners from receiving the settlement proceeds and did not put money into escrow accounts for the homeowners.

      Instead, the defendants distributed the proceeds amongst themselves. Buckman used only a fraction of the homeowners’ monies toward the payment of the mortgages obtained by the straw borrowers for the homeowners’ homes and thereby caused the loans to go into default.(1)
    Source: New Jersey Woman And Her Parents Convicted In Multi-Million Dollar Mortgage Fraud.

    (1) For more on this type of foreclosure rescue ripoff, see:

    NJ Couple Regrets Falling For Refinance/Bill Consolidation Opportunity That Turned Out To Be Disguised Sale Leaseback Foreclosure Rescue Scam

    In Fair Lawn, New Jersey, WCBS-TV Channel 2 reports:
    • Imagine living in your home for 20 years, making payments every month, then one day having a sheriff show up with a moving truck to force you out.

      It sounds impossible, but as CBS2’s Dick Brennan reported, it’s a lot easier than you might think to end up the victim of a stolen home. “It’s a nightmare,” Josephine Nisevic said.

      Nisevic and her husband, Nick, were technically trespassing on their own property when they looked at the empty house with CBS2’s Brennan.

      “It kills me that I can’t go inside my house,” she said. They can’t go inside, because the Fair Lawn home no longer belongs to them. It was stolen. “You work. You work hard for what you have, and then things like this happen,” Nisevic said.

      It all started in 2005, when the couple received an offer in the mail to refinance and consolidate their bills. “It looked great. My husband said, ‘Oh, look at this, they fix your credit,’ so we went along with it,” Nisevic said.

      What the couple didn’t know was that it was all an elaborate scheme to steal their deed and strip the equity from their house.

      “What happens here in these situations, people start to think that oh, this is part of the process. They end up giving out this information, and then that information can be used to prepare all of these documents, and forge signatures, and all the rest, and then that person is out of a home,” attorney Chris Cabanillas said.

      Dozens of other local homeowners also fell victim to the same scam artists known as Rivertown Financial Service. The company has since been shuttered and the principals sent to jail.(1)

      But Nisevic’s story doesn’t end there.

      “Imagine, losing your home. Your kids grew up there, you put that little line on that doorway every time your little baby girl gets two inches taller,” said the family’s attorney, Nima Ameri, “and then one day there are moving boxes that says, ‘Get out’ because there was a fraudulent mortgage scheme. ‘We want this property, we’re going to sell it at market value.'”

      The home, which eventually fell into foreclosure, was sold at auction. It is now the property of Federal Home Loan Mortgage Corporation.

      Freddie Mac, as the corporation is more commonly known, said they’ll sell the house back to the Nisevics — but at full market price, which is about $160,000 more than what the couple originally paid in 1995.

    Monday, November 09, 2015

    Illinois Appeals Court To Another Empty-Headed Trial Judge In Another Reversed Foreclosure: Lower Court Proceeding "Essentially Amounted To Summary Judgment By Ambush," Your "Explanation Is Inconsistent With Established Binding Precedent;" We've Covered This Issue At Least Six Times In The Last Two Years!

    From a recent client alert from the law firm Maurice Wutscher:
    • The Illinois Appellate Court, First District, recently reversed a trial court’s ruling that lack of standing in a mortgage foreclosure case was not an affirmative defense.(1)  The Court further remanded the case to allow the borrowers to take discovery, which the Court held was improperly denied by the trial judge. [...]

      A mortgagee filed a foreclosure action, alleging that the borrowers failed to make payments when due. In response, the borrowers filed an answer, which included affirmative defenses of alleged lack of standing and alleged lack of capacity to sue.

      At the hearing on the mortgagee’s motion to strike the borrowers’ affirmative defenses, the trial judge stated that “a claim or assertion that plaintiff cannot maintain a cause of action is not an affirmative defense under any definition of affirmative defense.” The judge further stated that “[a challenge to standing] doesn’t say this plaintiff has a cause of action, but [the defendant] can avoid the effect of that cause of action by some other affirmative matter. That’s what an affirmative defense does.” The trial judge continued, “what you’re saying is this plaintiff doesn’t have a right to sue. That’s a basis for dismissal, not an assertion of a defense.”

      The trial judge reasoned that lack of standing might be an “affirmative matter,” but that “it just simply is not an affirmative defense.” Accordingly, the trial judge struck the defenses from the borrowers’ answer with prejudice and did not grant leave to replead.

      Shortly thereafter, the mortgagee filed a motion for summary judgment which was granted, and an order of foreclosure and an order of possession were entered in favor of the mortgagee. The borrowers appealed.

      On appeal, the Appellate Court noted that the Illinois Supreme Court has made clear that a challenge to standing in a civil case is an affirmative defense. Greer v. Illinois Housing Development Authority, 122 Ill. 2d 462, 508 (1988).

      Over the past two years, the Appellate Court noted that it has held on at least six occasions that the assertion of lack of standing in a foreclosure action is an affirmative defense that not only can be raised in an answer, but must be, or else is waived. See e.g., Aurora Bank FSB v. Perry, 2015 IL App. (3d) 130673, ¶ 18.(2)

      Thus, the Appellate Court held that the trial judge’s ruling was inconsistent with established, binding precedent, and that the trial judge erred by striking the borrowers’ affirmative defense for lack of standing as a matter of law.

      Even though striking the affirmative defense was clearly erroneous, the Appellate Court noted it still had to determine whether the trial judge erred in granting summary judgment in the mortgagee’s favor. The Court noted that it is mortgagee’s burden in a mortgage foreclosure case to make out a prima facie case that it is entitled to enforce the underlying instrument. However, the foreclosure defendant has the opportunity to rebut that showing.

      Here, the Appellate Court held that the borrowers were denied that rebuttal opportunity, as they never had an opportunity to explore their defenses in discovery. As the Court put it, “the events leading up to the trial court’s ruling essentially amounted to summary judgment by ambush.”

      Although the trial judge’s decision to not let the borrowers pursue any claim for lack of standing beyond the pleading stage was an error of law, the more concerning issue for the Appellate Court was that the trial judge then prevented the borrowers from taking any discovery on their defenses, or getting a clear evidence of the mortgagee’s right to enforce the note.

      Specifically, mortgagee’s motion for summary judgment was supported by the affidavit of a vice president for loan documentation (“Affiant”). In her affidavit, Affiant asserted that she had reviewed various records that supported her averments. However, none of the records were attached to her affidavit.

      As the Court noted, Ill. S. Ct. R. 191(a) requires that affidavits submitted in support of motions for summary judgment “shall have attached thereto sworn or certified copies of all documents upon which the affiant relies[,]” and requires that Affiant identify and certify the records forming the basis of the attestations.

      The Appellate Court further noted that, despite the borrowers’ attempts to obtain the records relied upon by Affiant, none of the records were provided prior to the trial judge when ruling on the mortgagee’s motion for summary judgment. Moreover, after granting the mortgagee’s motion for summary judgment, the trial judge then granted the mortgagee’s motion to strike the borrowers’ outstanding discovery requests and notice of deposition of Affiant.

      According to the Appellate Court, the cumulative effect of the affirmative defense being improperly stricken, the denial of the borrowers’ requests for discovery, and the mortgagee’s failure to produce the required evidentiary records, resulted in the borrowers being denied the opportunity to defend.

      As the Appellate Court reasoned, to uphold the trial court’s action would require a conclusion that supplying a note indorsed in blank is sufficient to defeat any fathomable defense that a borrower may have to standing, and that no set of facts could entitle a borrower to any relief under those circumstance. Supplying a note in blank, however, is only prima facie evidence of ownership that could potentially be rebutted.

      Accordingly, the Appellate Court reversed the trial court’s judgment and held that, on remand, the borrowers were entitled to take discovery on their challenge to the mortgagee’s standing and to replead their affirmative defense if necessary.
    Source: Illinois Appellate Court reverses trial court ruling on foreclosure standing.

    For the court ruling, see U.S. Bank, N.A. v. Kosterman, No. 1-13-3627 (1st Dist. August 18, 2015).
    (1) Cook County Judge Darryl Simko presiding.
    (2) On this point, the appeals court stated:
    • ¶ 10 The Illinois Supreme Court has made clear that a challenge to standing in a civil case is an affirmative defense. Greer v. Illinois Housing Development Authority, 122 Ill. 2d 462, 508 (1988).

      So the trial judge's explanation is inconsistent with established, binding precedent. Plaintiff nevertheless claims that a challenge to standing is not an affirmative defense in a foreclosure case. Within just the past two years, we have explained on at least six occasions that the assertion of lack of standing in a foreclosure action is an affirmative defense that not only can be raised in an answer, but must be, or else it is waived. See Aurora Bank, 2015 IL App (3d) 130673, ¶ 18; Beal Bank v. Barrie, 2015 IL App (1st) 133898, ¶ 39; Bank of America, N.A. v. Adeyiga, 2014 IL App (1st) 131252, ¶¶ 59-63; US Bank, National Ass'n v. Avdic, 2014 IL App (1st) 121759, ¶ 34; Rosestone Investments, LLC v. Garner, 2013 IL App (1st) 123422, ¶¶ 24, 28; Parkway Bank & Trust Co. v. Korzen, 2013 IL App (1st) 130380, ¶ 24.

      Accordingly, the trial court erred by striking defendants' affirmative defense for lack of standing as a matter of law.

    N. Texas Murder Investigation & Forged Deed Probe Intersect? Human Remains Found In Concrete Buried In Home's Side Yard; Missing Homeowner Hasn't Been Seen In Months; Dubious Deed Recently Used To Convey Home Title; Notary Can't Recall Meeting Homeowner, Then Decides To Clam Up As Questions Arise Around Her Notary Ledger Records

    Editorial Writer Tod Robberson posts on The Dallas Morning News Opinion Blog:
    • As Ricky Ricardo used to say, Lucy, you got some ‘splainin to do. Dallas police have opened a homicide investigation after human remains were found in concrete in the side yard of a north Oak Cliff house last month. It’s not yet confirmed that the remains were those of the house’s owner, who was last seen in late April.

      Former owner, that is. His name is Ronald Shumway, and he is missing. Even though he hadn’t been seen in months, his signature appears on a deed for the June 22 sale of his house. Police told NBC5 that Shumway’s notarized signature on the deed document appears to have been forged. (We’ve been through something similar to this before with southern Dallas properties, where large numbers of house deeds were transferred without the actual owner’s knowledge or consent. Which is why I sit up and take notice on stories like this.)

      The notary in this case, who works in North Dallas, is required by law to keep a ledger of the signatures she certifies and the form of identification used by the signor. People who live in Oak Cliff don’t typically travel all the way to North Dallas to get their documents notarized.

      Failure to keep a ledger is a punishable offense. The ledger will be key in helping police determine who signed Shumway’s name to the deed. The notary told NBC5 that she couldn’t recall meeting Shumway. Now she’s not commenting. Her ledger records, however, are supposed to be public information, and any member of the public is allowed to view her ledger, according to state law. Notaries are official agents of the state.

      What happened after his house was sold? That’s a part of the story that gets really interesting. A visit to the Dallas County public records site, ROAM Dallas, indicates that the forged deed document set in motion a rapid chain of exchanges — all of which occurred, apparently, while bones were solidifying in concrete in the house’s side yard.

      1) A warranty deed dated June 22 but filed June 25 lists Sean Chien, a Plano real estate agent, as the deed recipient for the house at 725 N. Winnetka in Oak Cliff.

      2) On June 25, Chien signed over the property to Alpha 8 Investment Properties in Plano. Alpha 8′s address, PO Box 866802 in Plano, happens to be the exact same address listed for Chien himself. (I called Chien’s office, but the person who answered the phone said Chien wasn’t available.) Other Alpha 8 property documents identify Ivy Lee Chien as a representative of the company.

      3) On July 10, someone went to City Hall and paid off a $56,250 lien that the City of Dallas had placed on Shumway’s property, dating back to 2002. The lien was for a private construction company to carry out work on behalf of the Dallas Housing Department. Who paid off the lien? The document doesn’t say.

      4) Three days later, on July 13, Alpha 8 signed over the property to Donna Savariego Homes, a Dallas company.

      5) On Aug. 10, Donna Savariego Homes signed over the property to True Option Realty, a company based in Allen. No transfers have occurred since then.

      The Oak Cliff Advocate has some additional details regarding Shumway’s background, none of which I’ve been able to confirm.

      The Dallas Central Appraisal District lists the house as having a total market value of $159,020. If someone managed to secure it by paying off the $56,250 lien, that would represent a pretty tidy profit of more than $100,000. Bones notwithstanding.

    • Police sources reveal to NBC 5 that someone forged homeowner Robert Shumway's signature in late June on a legal document authorizing the sale of his house in the 700 block of North Winnetka Avenue.

      NBC 5 has been following this story since late September, when the new homeowner made a gruesome discovery in the backyard. The new homeowner, who had only recently purchased the property, was doing renovation work in the backyard in an effort to flip the property, when he uncovered the remains.

    NYC Sheriff Pushes For More Investigators, Stricter Property Transfer Rules As Forged Deed, Title Hijacking Cases Flood His Office; Says Pinning Crime On Specific Person Tough To Do

    From a recent story in the New York Post:
    • [D]eed theft is the latest rising wave among foreclosure-related scams that have been ravaging New York City, especially southeastern Brooklyn and Queens, since the crisis began. Huge spikes in real estate values and lax standards for property transfers are fueling this scam.

      The New York City Sheriff’s Office now has 900 cases of possible deed fraud, mainly in Brooklyn, and has made 16 arrests. Sheriff Joseph Fucito told The Post that in 175 of the 300 possible deed fraud cases closed in the last year, his office knew fraud had occurred, but couldn’t pin the crime on a specific person. Fucito is pushing for more investigators, as well as stricter property transfer rules.

      “Brooklyn is booming as Brooklyn never has before,” NY Attorney General Eric Schneiderman said about the real estate boom fueling the scams.

    County Recorders Continue Offering Free Document Monitoring Service In Effort To Alert Property Owners Of Possible Fraudulent Filings Against Their Real Estate

    In Benton, Arkansas, the Hot Springs Village Voice reports:
    • Property and mortgage fraud are a growing problem nationally.

      “According to the FBI, there is no faster growing white collar crime in the country than property and mortgage fraud,” says Myka Bono Sample, Saline County circuit clerk and recorder.

      Sample’s office offers a new online subscription service to the public. At no charge, taxpayers can have their name and property monitored within the recorder’s office to track possible fraudulent activity.

      “A common property fraud scenario involves a criminal filing a bogus deed making it appear that the actual owner had transferred ownership of a parcel to someone else. The criminal then takes that deed to a bank, fraudulently obtains a mortgage and then disappears with a large amount of money,” Sample told the Voice.

      “And while it can happen to anyone, perpetrators of property fraud often prey on the elderly, people in long- term care facilities, absentee property owners and owners who spend large parts of the year out of town,” Sample said.

      The property fraud alert system notifies individuals by email or by a phone call when transactions involving their property are recorded in the Saline County Register of Deeds Office. “While property fraud alert does not prevent fraud from happening, it provides an early warning system for property owners to take appropriate actions should they determine possible fraudulent activity has taken place,” she said. “This can include notices of fraudulent liens or mortgages.

      “The best protection we can offer against property fraud is proactive protection,” Sample added. It’s easy to sign up for the service, she said. Property fraud alert is now available on or at The public may also call 1-800-728-3858 or call the recorder’s office at 501-303-5607.

    Sunday, November 08, 2015

    Buyers' Remorse-Afflicted Unit Owners Fire Trump From Management Duties At Panama City Condo; He Responds With Damage Claim For Up To $75 Million

    The Associated Press reports:
    • Donald Trump is demanding as much as $75 million from hundreds of condo owners in Panama City's Trump Ocean Club, alleging that its directors wrongfully fired his company as administrator managing the luxury building that is the tallest in Central America.

      The Republican presidential candidate and celebrity businessman filed his claim confidentially with the Paris-based International Chamber of Commerce court of arbitration, The Associated Press has learned. The court organizes arbitration over complex civil settlements, often involving business deals that cross continents.

      Trump's claim alleged a criminal conspiracy to remove his management company from its unpaid position as building administrator for the luxury property in Panama City. As the AP reported last month, the owners' board of directors had accused Trump's managers of repeatedly exceeding budgets, paying themselves bonuses without permission and improperly passing costs from the building's Trump-controlled hotel.(1)

      At a key vote in May, building investors and residents overwhelmingly rejected a Trump-backed proposal to recoup more than $2 million of building administration debt through a special assessment on the owners. Following the vote, Trump's top Panamanian employee resigned — paving the way to overthrow Trump's management company.

      Eric Trump, who controls the management company along with Ivanka Trump and his father, disputed the investor and owner claims in an AP interview. He said at the time that the Trump Organization had no plans to sue the hundreds of American and foreign condo investors who comprise the owner's association — including owners of hotel condominium units that remain under Trump's control.

      Trump Organization general counsel Alan Garten said Trump has no beef with the owners at-large but had to pursue its claim against them, anyway.

      "Unfortunately, the only way for Trump to exercise its rights was to take the action that it did," Garten said. He said the arbitration action was supposed to remain confidential, and whoever informed the AP would be liable "for substantial damages over and above what is claimed in the statement of claim." Garten confirmed the legal filing and answered the AP's questions about it.

      Trump's claim accused owners led by businessman Gary Lundgren of wrongfully firing Trump's management company in violation of Panamanian law. The filing called Lundgren — the largest single owner of units in the building — a "soulless vulture." The claim also raised numerous allegations of illegal behavior by Lundgren before conceding that "none of these allegations could be verified."

      At the heart of Trump's claim is that Lundgren — an Alaska-born investor in Panama City real estate developments — stands to gain by removing Trump's administrators. Garten said Lundgren told Trump that he intended to request that payments be made to a management firm run by his wife.

      Lundgren told residents and the AP that his wife's firm has not and will not request compensation for its work. In an email to the AP, Lundgren said it was hard to believe that "a man who claims that his net worth is $10 billion finds it necessary to sue a non-profit owners association, which he mismanaged into insolvency."

      Trump's claim also takes aim at Sun International, the South African operator of a casino within the Trump Ocean Club, in addition to the at-large owners. Trump said Sun failed to meet contractual requirements that it would support Trump's management company.

      Representatives of Sun did not respond to emails or phone calls from the AP.

      The claim comes at an awkward time for the building's developer, Newland International. The company is still attempting to sell more than 200 hotel units under Trump's control. Rosella Violi, a sales agent for Newland, said the company supports Trump and hopes for a quick and amicable resolution.

      Trump's claim came as unwelcome news to owners of condos in the building, setting off a sometimes heated debate in an owner's forum over whether to fight back — or try to avoid further antagonizing Trump.

      "I never thought this would happen," said Al Monstavicius, a retired Nevada doctor who bought a hotel unit in the Trump Ocean Club in part because it would be under Trump's control. "I thought it was pretty safe, because we had Trump involved."
    Source: Fired by Panama condo owners, Trump demands $75 million.

    Editor's Note: Over the last decade or so, Trump appears to have left a trail of unhappy customers in other ventures as well. See, for example, What the Legal Battle Over Trump University Reveals About Its Founder.
    (1) See Condo owners in Panama tell Trump: You're fired!